BNP
Fine Stirs French Anger, Pressuring Hollande to Act - (www.bloomberg.com) A
potential $10 billion U.S. penalty against France’s largest bank BNP Paribas SA (BNP) for its alleged dealings with Iran and
other sanctioned nations, is stirring outrage in the country. It is putting
pressure on President Francois Hollande, who hosts Barack Obama this week to mark the 70th anniversary of
D-Day, to protect the bank from the American onslaught. Le Monde in its May 31 edition called the possible
fine a “masterful slap.” Le Figaro newspaper said the U.S. was making an
example of BNP to deflect criticism it had been “lenient with the American
banks responsible for the financial crisis.” Hollande may raise the matter with
Obama this week, Les Echos reported today, without citing anyone. U.S.
authorities are seeking to impose the fine to settle allegations that BNP
transferred funds for clients in violation of sanctions against Sudan, Iran, and Cuba, according to people familiar with
the investigation. The fine could be the largest criminal penalty in the U.S.,
eclipsing BP Plc’s $4 billion accord with the Justice Department last year.
RBS
could fail due to ‘£100bn black hole' - with British taxpayers in line to lose
their entire £45bn stake - (www.independent.co.uk) British
taxpayers risk losing their entire £45bn stake in Royal Bank of Scotland (RBS)
which is in grave danger of failing within 10 years, according to an explosive
new book. A new study of the disgraced bank, which brought the UK to the brink
of financial ruin, reveals RBS still has a £100bn “black hole” in its finances
due to “five broad areas of alleged criminality and wrongdoing”. They include
the mis-selling of financial products such as payment protection insurance, the
alleged duping of investors who were persuaded to plough more than £12bn into
RBS shares just before the banking crash in 2008, further fallout from the
Libor scandal, and current criminal investigations into the manipulation of the
£3trn-a-day foreign exchange markets. Shredded: Inside RBS, The Bank That Broke
Britain, by the financial journalist Ian Fraser, concludes that the governments
led by Gordon Brown and David Cameron have “let the people of Britain down” by
failing to reform RBS after it received its mammoth bailout under the
stewardship of former chief executive Fred “The Shred” Goodwin.
U.S.
Making 'Important' Mistakes, Chinese General Says - (online.wsj.com) Chinese
defense officials reacted furiously to U.S. Defense Secretary Chuck Hagel's
assertion that China has undertaken destabilizing actions as it pursues its
territorial ambitions in the South China Sea. Rebutting Mr. Hagel's remarks,
offered in a speech Saturday at the
Shangri-La Dialogue,
a regional security summit in Singapore, Maj. Gen. Zhu Chenghu told The Wall
Street Journal that the charges are "groundless" and that "the
Americans are making very, very important strategic mistakes right now" in
their approach to China. Gen. Zhu, who is a professor at China's National
Defense University, accused Mr. Hagel of hypocrisy in his assessment of the
region's security landscape, suggesting that in his view "whatever the
Chinese do is illegal, and whatever the Americans do is right." Rather
than lecture and accuse China, Gen. Zhu said that the U.S. "should treat
China as an equal partner, instead of as an enemy."
Unstoppable
$100 Trillion Bond Market Renders Models Useless - (www.bloomberg.com) If
the insatiable demand for bonds has upended the models you use to value them, you’re
not alone. Just last month, researchers at the Federal Reserve Bank of New York retooled a gauge of relative yields on
Treasuries, casting aside three decades of data that incorporated estimates for
market rates from professional forecasters. Priya Misra, the head of U.S. rates
strategy at Bank of America Corp., says a risk metric she’s relied on hasn’t
worked since March. After unprecedented stimulus by the Fed and other central
banks made many traditional models useless, investors and analysts alike are
having to reshape their understanding of cheap and expensive as the global
market for bonds balloons to $100 trillion. With the world’s biggest economies
struggling to grow and inflation nowhere in sight, catchphrases such as “new
neutral” and “no normal” are gaining currency to describe a reality where bonds
are rallying the most in a decade.
HUD
to Resolve Key Reverse Mortgage Issues Going Forward - Mandelman Matters – (mandelman.ml-implode.com) Issue
#1: The Non-Borrowing Spouse: “Non-borrowing spouse,” is the term used to
describe the situation when a younger spouse is not included on the reverse
mortgage so that the couple receives more money than would be possible were the
younger spouse included. (The older you are the greater percentage of the
equity you can borrow using a reverse mortgage, in case you’ve forgotten.) When
the older spouse, and only “mortgagor,” died, the younger spouse would have to
either refinance to pay off the reverse mortgage, something most couldn’t do
for any number of reasons, or sell the home and move out… but lately there have
been several younger spouses saying that they didn’t know the ramifications of
not including them on the reverse mortgage, and that they wanted to keep the
home anyway, with having to refinance or sell as the contract dictated. Now, I
would think that the mandatory HUD counseling would have made certain that the
couple knew the ramifications of removing the younger spouse from the
loan. And if that wasn’t enough, it’s also highly likely that the couple
was also required to sign a separate disclaimer acknowledging that they did in
fact know what they were doing by omitting the younger spouse.
Thai
Junta Deploys Troops in Bangkok to Combat Coup Protests - (www.bloomberg.com)
Pro-Russia militia attack Ukraine border post, dead and wounded reported - (www.reuters.com)
Pro-Russia militia attack Ukraine border post, dead and wounded reported - (www.reuters.com)
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