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Articles by Carrick Mollenkamp
Atlanta Gunman Kills at Least Nine In Rampage Before Committing Suicide
ATLANTA -- A gunman said to be upset over stock-trading losses went on a shooting rampage at two stock-brokerage firms in this city's prestigious Buckhead district, leaving at least nine people dead and a dozen others injured, authorities said. The gunman, identified as Mark O. Barton, 44 years old, killed himself Thursday evening after being stopped in his dark-green van by police at a suburban gas station, Atlanta Mayor Bill Campbell told reporters.
How Subprime Mess Ensnared German Bank; IKB Gets a Bailout
DÜSSELDORF, Germany -- Five years ago, a little-known bank that lent to small and midsize German companies decided it wanted to broaden its business. An affiliate of the bank started buying complex bonds invented in the U.S. The strategy brought a sharply higher industry profile for IKB Deutsche Industriebank AG. Moody's Investors Service endorsed its move, crediting the bank last year with "successfully diversifying." ...
For Hedge Funds, Hunting In Packs Pays Dividends
LONDON -- The world's biggest banking takeover battle began with a letter from a hedge fund with a heartwarming name: The Children's Investment Fund. TCI, as the fund is known, donates a chunk of its profits to charities helping orphans and AIDS victims. The Feb. 20 letter to the board chairman...
Persistent trade failure problem gets partial fix
(Reuters) - Big banks and trading firms that fail to settle certain mortgage-security trades will have to pay a penalty starting Wednesday as part of an effort to fix a persistent problem that adds risk to financial markets. A man walks into the Morgan Stanley offices in New York January 18, 2012. REUTERS/Shannon Stapleton The penalty reflects growing concern that firms are struggling to complete billions of dollars of trades in the most unlikely of places: the world’s most liquid markets.
Special Report: Subprime bond bounces back, leaving behind a subprime borrower
WOLFEBORO, New Hampshire (Reuters) - During the crazy days of the housing bubble in 2006, bankers created a bond called MABS 2006-FRE1. The instrument gave buyers the right to payments on the subprime housing loans of nearly 2,000 borrowers, including Stephen Monzione, a professional wedding photographer in New Hampshire.
Special Report: Pimco shook hands with the Fed - and made a killing
NEW YORK (Reuters) - Through the second half of 2011, debate raged in financial markets over whether the U.S. Federal Reserve would embark on a third round of massive bond purchases, known as “quantitative easing,” to shore up an anemic economy. Pacific Investment Management Co wasn’t waiting to find out.
Insight: Standard Chartered's New York nemesis wins deal but makes enemies
By Carrick Mollenkamp and Brett Wolf and Karen Freifeld (Reuters) - Benjamin Lawsky played hardball with Standard Chartered Plc and a gauntlet of federal and New York regulators and prosecutors right up until the last hours of the $340 million settlement on Tuesday with the British bank over improper and concealed transactions tied to Iran.
Foreclosure 'Tsunami' Hits Mortgage-Servicing Firms
Billionaire Wilbur Ross, who plunged into the mortgage-servicing business with a slew of acquisitions in the past year, is running into problems in a new sign of increasing stress in the business that is on the front line of the U.S. housing crisis. American Home Mortgage Servicing Inc., an Irving, Texas, company controlled by Mr. Ross's private-equity firm, W.L. Ross & Co., was sued Tuesday in Connecticut state court by a hedge fund.
Lehman Files for Bankruptcy, Merrill Sold, AIG Seeks Cash
NEW YORK -- The American financial system was shaken to its core on Sunday. Lehman Brothers Holdings Inc. filed for bankruptcy protection, and Merrill Lynch & Co. agreed to be sold to Bank of America Corp. The U.S. government, which bailed out Fannie Mae and Freddie Mac a week ago and orchestrated the sale of Bear Stearns Cos. to J.P. Morgan Chase & Co. in March, played much tougher with Lehman. It refused to provide a financial backstop to potential buyers.
Special Report: How Fed policy enriches private equity, if not workers
MACON, Georgia (Reuters) - Sanders Walker had been working for 13 years at a BWAY Corp factory in Macon, Georgia, when the word came down one September 2011 morning: The company, a maker of plastic and metal containers, was closing the plant. Walker, a quality manager, and about 70 other employees were out of work. After an eight-month search, Walker got a job at another area factory, at sharply reduced pay. "Nobody wants to hire somebody that is 62 years old," he says.
How a U.K. Banker Helps U.S. Clients Trim Their Taxes
LONDON -- At Barclays PLC, a British bank steeped in 300 years of tradition, the work of a team led by banker Roger Jenkins is far from traditional. For instance, in 2003 his team set up a company with no employees, no products and no customers -- just a mailing address in Delaware and a slate of British directors, mostly employees of his office. It was co-owned by Barclays and U.S. bank Wachovia Corp. The following year,...
When Goldman's new CFO talks, insiders listen
In 2004, Harvey Schwartz, who was then head of the financing business at Goldman Sachs Group Inc's investment bank, came up with a new way for the bank to make money from a seemingly mundane activity: helping companies buy back their shares. He created a product that could save companies money by getting them improved pricing on buybacks while generating fees and trading profits for the bank.
Special Report: How the Fed fueled an explosion in subprime auto loans
JASPER, Alabama (Reuters) - Thanks largely to the U.S. Federal Reserve, Jeffrey Nelson was able to put up a shotgun as down payment on a car. Money was tight last year for the school-bus driver and neighborhood constable in Jasper, Alabama, a beaten-down town of 14,000 people. One car had already been repossessed. Medical bills were piling up.
Hedge Funds Try 'Career Trade' Against Euro
Some heavyweight hedge funds have launched large bearish bets against the euro in moves that are reminiscent of the trading action at the height of the U.S. financial crisis. The big bets are emerging amid gatherings such as an exclusive "idea dinner" earlier this month that included hedge-fund titans SAC Capital Advisors LP and Soros Fund Management LLC.
The Wall Street Money Machine
SEC Issues More Fines Over Magnetar Deals – and Appears to Move on There have now been more than $435 million in SEC settlements regarding one of the most notorious groups of mortgage securities deals behind the financial crisis. The Securities and Exchange Commission has charged an asset manager with fraud for its role in one of the most notorious groups of mortgage securities deals behind the financial crisis.
M&A Milestone: $101 Billion Deal For ABN Amro
The biggest banking deal ever is likely to conclude today, resulting in the dismemberment of one of Europe's largest banks. The significance of the deal goes beyond its $101 billion price tag and the demise of 183-year-old ABN Amro Holding NV of the Netherlands. Depending on how the buyers fare, it could become either a symbol of the overexuberance seen in the recent mergers-and-acquisitions boom, or -- as some investment bankers hope...
UK watchdog and BoE may have missed Libor red flags
* Fault lines detailed on at least five occasions NEW YORK/LONDON, July 2 (Reuters) - Officials from the Bank of England and Britain's financial watchdog missed several opportunities to investigate how banks set the London interbank offered rate, now the subject of a scandal that has forced the resignation of the chairman of Barclays, according to U.S. and UK government records.
Bankers Cast Doubt On Key Rate Amid Crisis
LONDON -- One of the most important barometers of the world's financial health could be sending false signals. In a development that has implications for borrowers everywhere, from Russian oil producers to homeowners in Detroit, bankers and traders are expressing concerns that the London inter-bank offered rate, known as Libor, is becoming unreliable. Libor plays a crucial role in the global financial system. Calculated every...
Study Casts Doubt on Key Rate
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LONDON -- Major banks are contributing to the erratic behavior of a crucial global lending benchmark, a Wall Street Journal analysis shows. The Journal analysis indicates that Citigroup Inc., WestLB, HBOS PLC, J.P. Morgan Chase & Co. and UBS AG are among the banks that have been reporting significantly lower borrowing costs for the London interbank offered rate, or Libor, than what another market measure suggests they should be....
By Carrick Mollenkamp, Mark Whitehouse Verified, Geoffrey Fowler Verified, Christopher Mims Verified
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The Wall Street Journal
Verified
Pension Funds Didn't Scrutinize Currency Charges
Updated Feb. 15, 2011 12:01 a.m. ET Public pension funds have ramped up currency trading in the past decade but have failed for years to monitor prices banks charge in making these trades—and in one case, appeared to have ignored a consultant's warnings of being overcharged.
Wall Street Wizardry Amplified Credit Crisis
In recent years, as home prices and mortgage lending boomed, bankers found ever-more-clever ways to repackage trillions of dollars in loans, selling them off in slivers to investors around the world. Financiers and regulators figured all the activity would disperse risk, and maybe even make markets safer and stronger.
Special Report: How Fed policy enriches private equity, if not workers
1 of 9. Richard Smith stands in front of a factory owned by Platinum that he worked at for 20 years before it was closed in 2010 by the company in Toccoa, Georgia October 1, 2013. After an eight-month search, Walker got a job at another area factory, at sharply reduced pay. "Nobody wants to hire somebody that is 62 years old," he says. Walker and his wife, Shari, struggled financially. Facing foreclosure, they walked away from their home in July 2012.
Analysis: U.S. banks get ready for the day when deposits shrink
The sun rises to the east of the U.S. Federal Reserve building in Washington, July 31, 2013. Those withdrawals could be fast and painful for banks, which will have to pay depositors with either cash on hand, money borrowed from elsewhere, or in a worst case scenario the proceeds of asset sales. Banks are preparing through steps including borrowing in bond markets and from Federal Home Loan Banks.
How Pimco Shook Hands With The Fed - And Made A Killing
Through the second half of 2011, debate raged in financial markets over whether the U.S. Federal Reserve would embark on a third round of massive bond purchases, known as "quantitative easing," to shore up an anemic economy. Pacific Investment Management Co wasn't waiting to find out. The giant fund-management firm, led by co-founder Bill Gross, started buying tens of billions of dollars in mortgage-backed securities guaranteed by federally sponsored agencies like Fannie Mae and Freddie Mac.
Special Report: Pimco shook hands with the Fed - and made a killing
Former U.S. Federal Reserve Chairman Alan Greenspan (L) watches current Federal Reserve Chairman Ben Bernanke speak at a cocktail reception held in honour of an international economy magazine's 20th anniversary in Washington in this October 18, 2007 file photo. The headquarters of investment firm PIMCO in Newport Beach, California is seen in this January 26, 2012 file photo.
Banks to get third-quarter profit boost from dipping into reserves
Banks including JPMorgan Chase & Co, Wells Fargo & Co and Bank of America Corp said this week that more borrowers are paying their loans on time, which allows the lenders to keep less money on hand to cover loan losses. Dipping into the money they had previously set aside - known as "releasing reserves" - is entirely legal, and banks have been doing it for some time. But it will be particularly handy for banks this quarter.
Underlying Goldman Deal, a Different Set of Risk-Takers
ABERDEEN TOWNSHIP, N.J.—The government's civil-fraud allegation against Goldman Sachs Group Inc. centers on a deal the firm crafted so that hedge-fund king John Paulson could bet on a collapse in U.S. housing prices. It was a dizzyingly complex transaction, involving 90 bonds and a 65-page deal sheet. But it all boiled down to whether people like Stella Onyeukwu, Gheorghe Bledea and Jack Booket could pay their mortgages. They couldn't, and Mr. Paulson made $1 billion as a result.
Analysis: Mortgage bond sell-offs hit U.S. banks with big losses
On Wednesday, Tulsa, Oklahoma-based BOK Financial (BOKF.O), which had nearly a third of its $27.5 billion in assets invested in mortgage bonds earlier this year, saw paper profits from the portfolio drop. It said net unrealized gains on agency mortgage bonds fell 66 percent to $70 million in the second quarter compared to the previous three month period. A BOK spokeswoman wasn't immediately available to comment further.
Subprime bond bounces back, leaving behind a subprime borrower
WOLFEBORO, New Hampshire - During the crazy days of the housing bubble in 2006, bankers created a bond called MABS 2006-FRE1. The instrument gave buyers the right to payments on the subprime housing loans of nearly 2,000 borrowers, including Stephen Monzione, a professional wedding photographer in New Hampshire. Stephen Monzione folds his glasses as he speaks with a Reuters reporter, about how he is being foreclosed, outside of his home in Wolfeboro, New Hampshire April 11, 2013.
Special Report: Subprime bond bounces back, leaving behind a subprime borrower
By Carrick Mollenkamp WOLFEBORO, New Hampshire | Tue May 7, 2013 7:07am EDT WOLFEBORO, New Hampshire (Reuters) - During the crazy days of the housing bubble in 2006, bankers created a bond called MABS 2006-FRE1. The instrument gave buyers the right to payments on the subprime housing loans of nearly 2,000 borrowers, including Stephen Monzione, a professional wedding photographer in New Hampshire.
From Heart of U.K., Four Friends Emerge As Terror Suspects
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Analysis: How Goldman's dollar-store bet reaped a fortune
A Goldman Sachs sign is seen over their kiosk on the floor of the New York Stock Exchange, April 26, 2010. Much of the revenue stems from an equity investment that is lumped into a catchall earnings segment called "Investing and Lending." Goldman created the segment in 2011 to shine some light on how much money it makes from investing its own money, but it still confounds analysts and investors because the bank does not provide details on the performance of individual assets.
HSBC became bank to drug cartels, pays big for lapses
(Reuters) - In February 2008, Mexican authorities told the CEO of HSBC Holdings Plc's Mexico unit that a local drug lord referred to the bank as the "place to launder money," U.S. prosecutors said on Tuesday, as they announced a record $1.92 billion settlement with the British bank.
Taxpayers See Gain As New York Fed Sells Last of AIG Bailout Bonds
The Federal Reserve Bank of New York on Tuesday sold the remaining portion of mortgage-backed securities acquired in the 2008 rescue of American International Group Inc. The sale to a unit of Credit Suisse Group AG means the U.S. government has recovered the entire $19.5 billion loan made at the height of the financial crisis – with interest.
Legal Assault Hits BNY Mellon Shares
Investors punished Bank of New York Mellon Corp.'s stock as legal pressure mounted on the giant bank amid a growing currency-trading crisis. The Justice Department and New York's attorney general filed separate civil lawsuits late Tuesday alleging that BNY Mellon systematically overcharged investors for currency trades, defrauding or misleading them in a decade-long scheme. The suits seek a total of more than $2 billion in damages from the bank. Copyright ©2023 Dow Jones & Company, Inc.
UBS Trader Kweku Adoboli Charged With Fraud; 'Rogue' Trading Lasted 3 Years
LONDON—An alleged trading scheme at UBS AG went undetected for three years before it was finally discovered, triggering a $2 billion loss, U.K. authorities indicated Friday as they charged a 31-year-old trader at the Swiss bank with fraud. Flanked by a newly hired lawyer from a top London firm, Kweku Adoboli briefly gaped at reporters at his court hearing and said little beyond providing his birth date and address.
Sea Island Resort Acquired for $212.4 Million
The assets of Sea Island Co., the Georgia resort that fell on hard times and filed for bankruptcy protection in August, will be acquired by four firms for $212.4 million. The winning bid was submitted Monday night after an eight-hour auction at Atlanta law firm, King & Spalding. The bid has the approval of Sea Island's lenders and unsecured creditors.
Underlying Goldman Deal, a Different Set of Risk-Takers
By Carrick Mollenkamp, Mark Whitehouse And Anton Troianovski Updated April 22, 2010 12:01 am ET ABERDEEN TOWNSHIP, N.J.—The government's civil-fraud allegation against Goldman Sachs Group Inc. centers on a deal the firm crafted so that hedge-fund king John Paulson could bet on a collapse in U.S. housing prices. It was a dizzyingly complex transaction, involving 90 bonds and a 65-page deal sheet.
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