Tuesday, April 22, 2014

Wednesday April 23 Housing and Economic stories


Investors Clamor for Risky Debt Offerings - (online.wsj.com) Buyers Grab Securities With Weak Ratings, Tired of Lower Yields on Safer Deals. Risky debt is flying off the shelves. Investors are snapping up low-rated securities backed by companies, home mortgages and car loans at a clip rarely seen since the financial crisis, as fund managers and others tire of paltry yields on safer assets. Buyers poured $3.42 billion into taxable U.S. high-yield mutual funds and exchange-traded funds in the first quarter, outpacing the year-earlier period's $1.76 billion total, said fund tracker Lipper, and following a full-year outflow of $4.98 billion in 2013. At the same time, robust demand for the lowest-rated portions of some asset-backed securities has enabled issuers to cut offered yields, investors said. The actions highlight the widespread expectation that the Federal Reserve will keep interest rates low for at least another year even as the economy picks up speed. The conditions should keep defaults low, investors said, enabling purchasers of the debt to pocket returns above those from more highly rated offerings.

Criminal Inquiry Said to Be Opened on Citigroup - (www.nytimes.com) Just as Citigroup was putting a troubled past of taxpayer bailouts and risky investments behind it, the bank now finds itself in the government’s cross hairs again. Federal authorities have opened a criminal investigation into a recent $400 million fraud involving Citigroup’s Mexican unit, according to people briefed on the matter, one of a handful of government inquiries looming over the giant bank. The investigation, overseen by the F.B.I. and prosecutors from the United States attorney’s office in Manhattan, is focusing in part on whether holes in the bank’s internal controls contributed to the fraud in Mexico. The question for investigators is whether Citigroup — as other banks have been accused of doing in the context of money laundering — ignored warning signs.

How An Alleged San Francisco Gangster Ended Up With A 'Letter Of Congratulations' From US Senator Diane Feinstein - (www.businessinsider.com)  By his own account, Raymond "Shrimp Boy" Chow, one of the central figures in massive criminal probe that ensnared California State Senator Leland Yee last month, once ruled over the criminal underworld in San Francisco's Chinatown. However, after being released from federal prison in 2006, Chow claimed to have turned over a new leaf. He gave speeches to schools and community groups and even created a Facebook page. He described himself as a "reformed soldier" and posted a trio of honors from politicians featuring his name, including what Chow labeled a "letter of congratulations" from Democratic Sen. Dianne Feinstein. In the wake of Chow's arrest on money laundering charges and allegations from the FBI that he "holds a '489' position in the Triad, which is an internationally-based Chinese organized crime group," the official recognitions he has received have raised eyebrows, and a spokesperson for Feinstein explained to Business Insider how Chow ended up with the letter. Chow was named as a "change agent" at the "In The Trenches" award ceremony held July 21, 2012. The awards are presented by Bayview Hunters Point Multipurpose Senior Services and are given to people "who have changed their lives for the better ... change agents, who have made positive impacts in people’s lives ... [and] community leaders." The letter from Feinstein was dated July 21, 2012 and was addressed to the director of the Dr. George W. Davis Senior Center, Suzy Tyner. It featured Chow's name along with all the other "In The Trenches" honorees.

Old Math Casts Doubt on Accuracy of Oil Reserve Estimates - (www.bloomberg.com) Jan Arps is the most influential oilman you’ve never heard of. In 1945, Arps, then a 33-year-old petroleum engineer for British-American Oil Producing Co., published a formula to predict how much crude a well will produce and when it will run dry. The Arps method has become one of the most widely used measures in the industry. Companies rely on it to predict the profitability of drilling, secure loans and report reserves to regulators. When RepresentativeEd Royce, a California Republican, said at a March 26 hearing in Washington that the U.S. should start exporting its oil to undermine Russian influence, his forecast of “increasing U.S. energy production” can be traced back to Arps. The problem is the Arps equation has been twisted to apply to shale technology, which didn’t exist when Arps died in 1976. John Lee, a University of Houston engineering professor and an authority on estimating reserves, said billions of barrels of untapped shale oil in the U.S. are counted by companies relying on limited drilling history and tweaks to Arps’s formula that exaggerate future production. That casts doubt on how close the U.S. will get to energy independence, a goal that’s nearer than at any time since 1985, according to data from the U.S. Energy Information Administration.

Did Michigan Dems Just Slap Victims Of Illegal Foreclosures In The Face? - (www.mfi-miami.com) Likely Democratic Michigan Gubernatorial Candidate Mark Schauer’s campaign announced yesterday that Schauer has picked Oakland County Clerk/Register of Deeds, Lisa Brown as his running mate in the upcoming November election against Republican Governor Rick Snyder. As anyone who follows the MFI-Miami blog knows, I have helped dozens of homeowners battle Brown’s brother Randall S. Miller and his multi-state foreclosure mill, Randall S. Miller and Associates to keep homeowners in their homes on at least a two dozen occasions. I am currently working with at least three homeowners battling Miller’s office for filing bogus vacancy affidavits on public record against people who are fighting their foreclosures and who are still residing in their homes. As I have been writing about for nearly two years, Miller’s firm has also been involved in multiple cases of robo-signing documents on the public record throughout Michigan that were allegedly created by their employees and by their mortgage clients.




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