KeNo's Housing and Economic Portal: Monday December 5 Housing and Economic stories

Sunday, December 4, 2011

Monday December 5 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Anger mounts as MF Global clients see $3 billion still stuck - (www.reuters.com) Three weeks after MF Global's collapsed, furious former customers are still fighting for access to billions of dollars as they question why as much as two-thirds of their money is still stuck. While authorities have touted the fact that they are returning 60 percent of the collateral and cash that had been frozen in the wake of the broker's October 31 bankruptcy, a closer look shows that in fact only about 40 percent of customers' total funds have been authorized for release so far. The remainder, more than $3 billion, ostensibly remains on hand to cover a shortfall originally estimated by MF Global to regulators at just $600 million. Because the bankruptcy trustee, regulators and exchanges have made no comment on the missing funds in weeks -- and have given no information as to how much cash they are retaining -- customers are left guessing exactly how much might end up in the creditors' process of the bankruptcy.

Lawmakers Trade Blame As Deficit Talks Crumble - (www.nytimes.com) With the hours ticking away toward a self-imposed deadline, Congressional leaders conceded Sunday that talks on a sweeping deficit agreement were near failure and braced for recriminations over their inability to reach a deal. The stalemate was the latest sign of partisan deadlock in Washington, which members of both parties do not expect to lift until the 2012 election has clarified which party has the upper hand. Barring an unexpected turnaround before Monday’s deadline, the failure of the special Congressional deficit committee will be the third high-profile effort to fall short of a deal in the last 12 months, including a bipartisan deficit commission and talks last summer between President Obama and Speaker John A. Boehner.

MF Global trustee says shortfall may be bigger - (www.reuters.com) The trustee liquidating MF Global Holdings Ltd's broker-dealer unit said on Monday that the apparent "shortfall" of customer funds may be larger than the futures brokerage had reported prior to its bankruptcy. "The trustee believes that even if he recovers everything that is at U.S. depositories, the apparent shortfall in what MF Global management should have segregated at U.S. depositories may be as much as $1.2 billion or more," the trustee, James Giddens, said in a statement. He added that the amount could change. Giddens also said he expects in early December to transfer 60 percent of what is in segregated customer accounts for U.S. futures positions, pending court approval. He said the transfer would require $1.3 billion to $1.6 billion to implement, exhausting much of the assets under the trustee's control.

Former AIG CEO Sues US Government for $25 Billion - (www.cnbc.com) A company run by former American International Group Chief Executive Maurice "Hank" Greenberg Monday filed a $25 billion lawsuit against the United States, claiming that the government takeover of the insurer was unconstitutional. In its complaint, Greenberg's Starr International said that in bailing out AIG and taking a nearly 80 percent stake, the government failed to compensate existing shareholders. It said this violated the Fifth Amendment, which bars the taking of private property for public use without just compensation. "The government's actions were ostensibly designed to protect the United States economy and rescue the country's financial system," Starr said. "Although this might be a laudable goal, as a matter of basic law, the ends could not and did not justify the unlawful means employed."

Credit Suisse: 'WE HAVE ENTERED THE LAST DAYS OF THE EURO AS WE CURRENTLY KNOW IT' - (www.businessinsider.com) Credit Suisse: 'WE HAVE ENTERED THE LAST DAYS OF THE EURO AS WE CURRENTLY KNOW IT'. "We seem to have entered the last days of the euro as we currently know it," Credit Suisse's Fixed Income Research team writes in a note out this morning. "The fate of the euro is about to be decided." Market pressures are swiftly coming to a head, and EU leaders will be forced to take stronger action to respond to the crisis. Investor fear is causing conditions in the euro area—particularly for Italy and Spain—to deteriorate rapidly, and if EU leaders are to rescue the currency, they probably have to do it by mid-January. Credit Suisse analysts don't see a euro break-up on the horizon, but they do say "some extraordinary things will almost certainly need to happen" for the currency and the monetary union to last. That's because markets will no longer be able to tolerate halfway measures: