Big Banks Screw Disabled Veterans

This is truly unreal. Regardless of what Dimon says, the foreclosure machine is out of control



From the NY Times, by Diana B. Henriques

In violation of a law intended to protect active military personnel from creditors, agents of Deutsche Bank foreclosed on his small Michigan house, forcing Sergeant Hurley’s wife, Brandie, and her two young children to move out and find shelter elsewhere.

When the sergeant returned in December 2005, he drove past the densely wooded riverfront property outside Hartford, Mich. The peaceful little home was still there — winter birds still darted over the gazebo he had built near the water’s edge — but it almost certainly would never be his again. Less than two months before his return from the war, the bank’s agents sold the property to a buyer in Chicago for $76,000.

Since then, Sergeant Hurley has been on an odyssey through the legal system, with little hope of a happy ending — indeed, the foreclosure that cost him his home may also cost him his marriage. “Brandie took this very badly,” said Sergeant Hurley, 45, a plainspoken man who was disabled in Iraq and is now unemployed. “We’re trying to piece it together.”

In March 2009, a federal judge ruled that the bank’s foreclosure in 2004 violated federal law but the battle did not end there for Sergeant Hurley.

Typically, banks respond quickly to public reports of errors affecting military families. But today, more than six years after the illegal foreclosure, Deutsche Bank Trust Company and its primary co-defendant, a Morgan Stanley subsidiary called Saxon Mortgage Services, are still in court disputing whether Sergeant Hurley is owed significant damages. Exhibits show that at least 100 other military mortgages are being serviced for Deutsche Bank, but it is not clear whether other service members have been affected by the policy that resulted in the Hurley foreclosure.



A spokesman for Deutsche Bank declined to comment, noting that Saxon had handled the litigation on its behalf. A spokesman for Morgan Stanley, which bought Saxon in 2006, said that Saxon had revised its policy to ensure that it complied with the law and was willing to make “reasonable accommodations” to settle disputes, “especially for our servicemen and women.” But the Hurley litigation has continued, he said, because of a “fundamental disagreement between the parties over damages.”



In court papers, lawyers for Saxon and the bank assert the sergeant is entitled to recover no more than the fair market value of his lost home. His lawyers argue that the defendants should pay much more than that — including an award of punitive damages to deter big lenders from future violations of the law. The law is called the Servicemembers Civil Relief Act, and it protects service members on active duty from many of the legal consequences of their forced absence.

Even though some of the nation’s military families have been sending their breadwinners into war zones for almost a decade, some of the nation’s biggest lenders are still fumbling one the basic elements of this law — its foreclosure protections.

Under the law, only a judge can authorize a foreclosure on a protected service member’s home, even in states where court orders are not required for civilian foreclosures, and the judge can act only after a hearing where the military homeowner is represented. The law also caps a protected service member’s mortgage rate at 6 percent.

By 2005, violations of the civil relief act were being reported all across the country, some involving prominent banks like Wells Fargo and Citigroup. Publicity about the violations spared some military families from foreclosure, prompted both banks to promise better compliance and put lenders on notice that service members were entitled to special relief.

But the message apparently did not get through. By 2006, a Marine captain in South Carolina was doing battle with JPMorgan Chase to get the mortgage interest rate reductions the act requires. Chase eventually reviewed its policies and, earlier this month, acknowledged it had overcharged thousands of military families on their mortgages and improperly foreclosed on 14 of them. After a public apology, Chase began mailing out about $2 million in refunds and working to reverse the foreclosures.

For armed forces in a war zone, a foreclosure back home is both a family crisis and a potentially deadly distraction from the military mission, military consumer advocates say.

“It can be devastating,” said Holly Petraeus, the wife of Gen. David Petraeus and the leader of a team that is creating an office to serve military families within a new Consumer Financial Protection Bureau.

“It is a terrible situation for the family at home and for the service member abroad, who feels helpless,” Mrs. Petraeus said. “I would hope that the recent problems will be a wake-up call for all banks to review their policies and be sure they comply with the act.”

Chase’s response, however belated, is in sharp contrast to the approach taken by Deutsche Bank and Saxon in the Hurley case.

"Goldman Sachs, Heaven Help Them"-- Says Jim Simons

A slip of the lip from Jim Simons ??

Will Larry Page Ruin Google?

originally published by Beacon Equity Research
http://www.beaconequity.com/will-larry-page-ruin-google-buy-sell-or-hold-2011-01-24/





Google (Nasdaq:GOOG) is clearly one of the greatest success stories of all time. This once tiny, private company focused on the then esoteric subject of internet search has morphed into one of the most valuable and pivotal firms of our era. Entrenched in the public's collective unconsciousness, the very name of the company has become a popular verb indicating a worth far greater than even its billions of market valuation. With recent blow out positive earnings and growth, it appeared that nothing could stop this modern day juggernaut and its well chosen management team. However, this it appears that the positive sentiment may be changing due to a shakeup in management.

The current CEO Eric Schmidt is being replaced by one of the company's co founders, Larry Page. Schmidt is moving into an executive chairman role, which seems more symbolic than actual hands on. In fact, The New Yorker reported that he plans on exiting Google(Nasdaq:GOOG) completely after a year. It's important to remember that Schmidt is responsible for growing Google into the behemoth it is today. Although Larry Page and Sergey Brin created the company, it was Schmidt who ran the day to day operations during the massive growth. Even worse news hit the wire when it was announced that he plans on selling $335 million in shares this year, his first sale in 3 years. Does this indicate that the top is in place for the iconic search engine? Schmidt has indicated a desire to go into a career in television. I say good for him, but what's going to happen to Google?

There is much trepidation on the Street regarding Larry Page being capable of his new Google role starting April 4th. The stock market has already indicated its displeasure with the change. Shares have reversed their entire earning announcement driven gains. They are currently trading down by nearly one percent on the second trading day of the week after the announcement. The next technical support level exists at $598.67 on the 50 day moving average. The question is, will Larry Page be able to restore confidence in the brand or is this the start of a downward slide for Google?

Get Ready For The Light Pools

The following article by Jim McTague of Barrons clearly indicates a change is in the works for dark pools. Credit Suisse's revolutionary Light Pool, launched in April, endeavors to shut out high frequency traders. Will this market altering change result in across the board transparency improvement? Will it collapse upon itself due to lack of volume? Time will tell....





http://finance.yahoo.com/banking-budgeting/article/111903/shutting-out-the-new-traders?mod=bb-budgeting&sec=topStories&pos=4&asset=&ccode=
Yummy, yummy! The good news for high-frequency traders is that juicy retail sheep again are grazing in the domestic equities market, just waiting for the slaughter.

The latest data show the first major weekly inflow of retail investment money into domestic equity funds since the flash crash this past May. These investors plunked down $3.8 billion into the equity funds the week ending Jan. 12, according to the Investment Company Institute. During 2010, they withdrew an estimated $82 billion, in part because they were spooked by the flash crash, when the Dow plunged more than 700 points in 10 minutes and then climbed 300 points in the next 10. That thrill ride was aided and abetted by high-frequency traders using over-clocked computers to front-run panicked retail investors.

These traders program their computers to buy and sell millions of shares of stock every minute, based on short-term trends, not the underlying fundamentals of the companies. Risk-averse to an extreme, their goal is to make a penny or so on each trade. It's easier for a machine to predict correctly if it is looking ahead only by a second or two. If the traders execute the same trades simultaneously, they can trigger dramatic market swings.

High-frequency trading firms love to buy from and sell to "dumb" individual and institutional investors. Individuals tend to place market orders rather than using limit orders at or below the bid price. Thus, they pay the maximum. As for mutual funds and other institutional investors, they are easily front-run by the new trading operations, which have faster access to market data as well as faster trading computers. If the funds are buying a particular stock, the traders' computers can detect this activity, buy up shares ahead of the fund and sell it back to the fund for a profit of a cent or two. This runs up the costs for mutual fund investors.

THE SECURITIES AND EXCHANGE COMMISSION has been mulling some curbs on high-frequency trading to shield long-term investors. But the plodding agency likely will take a year or two to enact any changes, and by then the math whizzes at the trading firms will have figured out another way to make chops out of the retail and institutional lambs.

Fortunately, there is a promising free-market response. Credit Suisse in March will launch what it calls the Light Pool, a trading venue for mutual funds and institutional investors that purposely puts high-frequency traders at a disadvantage. This is revolutionary. High-frequency traders are courted by the 13 major stock exchanges because they deliver trading volume and pay big bucks for concierge services, like the direct data feeds from the exchanges that give them a crucial informational head start of several milliseconds. Dan Mathisson, managing director of Credit Suisse's advanced-execution services, says the trading firms will have to route trades to the Light Pool through an outside stock exchange. "That extra hop could add 100-to-200 milliseconds to a trade, enough time to be very discouraging to high-frequency traders," he says.

High-frequency firms claim they bring benefits to the market, such as liquidity, and thatcritics exaggerate their alleged abuses. Yet Light Pool is getting strong indications of interest from institutional investors. Sal Arnuk of Themis Trading in Chatham, N.J., compares the new venue to the "tipping of a hat" to criticisms of the new traders that he and colleague Joe Saluzzi raised in 2008.

Too bad there's no Light Pool for individuals yet. Out among the wolves, they're apt to get eaten up again and again.

Carlos Slim Says Gates & Buffet Are FOS Regarding Charity

The world's wealthiest man, Mexican Carlos Slim is rejecting Bill Gates and Warren Buffet's pleas to give his wealth to charity. Instead, Carlos rightly believes that capitalists serve society better by fighting poverty directly via creating jobs and opportunities--- not by charity. Finally, a bright light to counteract the buffett/gates nonsense. The following is an article by CNBC on Mr. Slim.

Carlos Slim, the world's wealthiest man, is bullish on Mexico and says he is staying in the country despite the dramatic rise in violence. And a mansion that he bought in New York is too big to live in-it's purely for investment.



In a wide-ranging interview, the telecom magnate also put to rest rumors about a large mining acquisition, explained his rationale for buying nearly $200 million in New York real estate, and why he is not making the pledge to give away half his wealth like Warren Buffett and Bill Gates.

A wave of violence has left more than 30,000 dead in three years in the Latin American country, as President Felipe Calderon wages an all-out war against the countrys drug cartels. As a result, Mexican executives, especially those living near the US border are said to be moving to places like Texas and Florida.

Slim says he is not one of them. Instead he is investing heavily in Mexico, buying real estate and just this month spinning off two companies that are newly listed on the Mexican Stock Exchange.

In fact, he says those choosing not to invest in Mexico are making a big mistake: They will lose. "If they are already here, they will lose market share. If they are not here they will lose a very big market. We are 110-112 million people, and growing the economy," Slim says.



On donating half his fortune to charity, which other billionaires like Buffett and Gates are doing, Slim says it's the wrong way to resolve the world's problems.

"What we need to do as businessmen, is to help to solve the problems, the social problems," he explains. "To fight poverty, but not by charity"

In addition, he says, donating the money to charity will result in huge tax deductions, depriving governments of much-needed tax revenue.

"I think it will be a big mistake that companies like Microsoft (NASDAQ: msft), Apple (NASDAQ: aapl)-the leaders of the world in technology-be sold by the founders to put the cash to fund charities. They shouldn't. It is more important that they continue manage the companies."

As for his recent purchase of a mansion on Fifth Avenue in New York for $44 million, he scoffed at the notion that someone would live there, suggesting that it was too big, because it has at least eight floors. Instead, he is going to turn it into several apartments and perhaps lease part of the building to a restaurant at the street level.



Slim himself lives in a modest home in Mexico City and says he doesn't like owning homes outside the country because they are too much of a headache. He says he would rather stay in a hotel.



Slim said rumors that he wants to buy the Fresnillo mining company, listed in London, are completely untrue. Slim already has a mining company that he just spun off and listed on the Mexican stock exchange this month, Minera Frisco. Its products include zinc, silver, and gold.

He is very pleased with his investment in The New York Times (NYSE:NYT - News) he says, and is not interested in trying to buy the company in the way that Rupert Murdoch bought Wall Street Journal owner Dow Jones. Slim owns 10 million shares and lent the company $250 million with a 14 percent interest rate in late 2009.

He is making $35 million in interest payments alone every year. Plus, he received warrants giving him the rights to 15.9 million shares.

"It was a financial investment. We made a convertible bond, a bond with warrants. We are very happy with the formula," he says.

Slim added, "We are not asking them how the business is going. We are looking from the outside. What they are going to do? What are their plans? We are not asking about that. We know that they are doing a good job."

When it comes to his telecom companies, his next goal is broadband penetration levels of up to 70 percent in Latin America. Currently the number stands at less than 20 percent. Now that wireless penetration is nearing 100 percent or more (because some people have more than one phone), the next step is to be able to provide internet connections via smart phones on a large scale.

Billy Walters: The Greatest Sports Gambler Of All Time

Thor Beats High Frequency Traders To A Pulp

It was only a matter of time before latency arbitrage ran its course, in case you did't know. According to the article below from The Globe & Mail, Canada's Royal Bank RBC has revealed a system named aptly enough, Thor, that beats the HFT boys at their own game.

http://m.theglobeandmail.com/globe-investor/putting-the-hammer-to-high-frequency-traders/article1871294/?service=mobile



Kelly Reynolds has found a way to turn the tables on high-frequency traders who have been using their speed advantage to grab profits from slower investors.

As the head trader at Hillsdale Investment Management in Toronto, she sees a lot of offers to buy or sell stocks that she knows are from high-frequency traders, firms that use ultra-fast computers to trade stocks thousands of times a day to make money from tiny market changes. She also knows that the HFTs are bluffing: their orders are an attempt to get her to reveal what she wants to buy and sell.

High-frequency traders can then use their faster computers to exploit that information. Once they know Ms. Reynolds or any other investor wants to buy shares of a particular company, they can quickly pull back their offer to sell it to them – only to resubmit it later a fraction of a second later at a less attractive price.

Such bait-and-switch strategies, often grouped under the fancy term “latency arbitrage,” are believed to generate billions a year in profit for high-frequency traders. Critics say those profits come at the expense of longer-term investors such as mutual funds that don’t have the technology to match the speed of high-speed trading firms, which now account for an estimated 30 per cent of stock trading in Canada, and more than 50 per cent in the U.S.

Ms. Reynolds, however, is a test user of a new technology that is just being unveiled by the brokerage arm of Royal Bank of Canada that she says has neutralized that strategy. The new system is built as a specific countermeasure to high-frequency traders, and Ms. Reynolds says that she’s now able to grab those bluff orders before the HFTs can withdraw them – every time. The RBC system is “very, very impressive,” she says.

RBC has applied for a patent on the system, known as Thor. The system has been in development for two years, with RBC adding about 80 people to its electronic trading team as part of the initiative, including some people from the HFT industry.

The HFT strategy of placing and then cancelling orders to gain an information advantage “just created an un-level playing field,” said Greg Mills, head of RBC’s global equity division. “We sought to build a product to try to solve” the unfair advantage.

The result, Thor, is a new twist on a stock-market technology called a smart order router.

In these days of multiple stock markets in every country, brokers such as RBC use smart order routers to blast out orders to all of the trading venues. Want to buy 10,000 shares of XYZ Co. at $10? The router scours the Toronto Stock Exchange, Alpha, Pure and other Canadian markets to find any shares that are on offer at that price. One common type of router, the spray router, then sends out orders for stock on offer on different markets simultaneously.

However, those orders don’t all get to markets at the same time. Some have longer distances to travel. Others travel down slower wires. As a result, the orders arrive in each market at a different time. The differences are only thousandths of a second, but the technology used by high-frequency traders is so fast that their computers can see orders hitting one market and jump ahead to adjust bids and offers on other markets, in order to buy or sell at a better price.

“As a trader, there’s a frustration around feeling like you’re being gamed,” and that led to the research that resulted in the Thor system, said Brad Katsuyama, RBC’s head of global electronic sales and trading and one of the developers.

The Thor system counteracts that gaming by staggering the orders it sends out to ensure they arrive at every market as close to simultaneously as possible. That gives the HFTs no chance to react.

The system continually monitors the time it takes for an order to get from RBC’s computers to five Canadian markets, as well as 13 U.S. markets, and adjusts the timing of orders to compensate for variances. In Canada, the difference between the fastest and the slowest is as little as 10 one-thousandths of a second. Thor has been able to shrink that to as little as 350 millionths of a second, Mr. Mills said. RBC hopes the technology will allow it to gain market share in the business of trading equities.

Still, it's an open question how long it can stay ahead in the technology arms race with the high-frequency traders, who focus on technology first and foremost. The whole HFT business is built around being faster and on continually improving technology, meaning Thor may not be enough to neutralize HFTs for long.

“It probably won’t be long-lived,” Hillsdale’s Ms. Reynolds said. “Everybody is going to have to get to this point, where their routers are as capable as the high-frequency traders out there [but] they’re going to keep developing better and better technology.”

Mr. Mills said he recognizes that, but already RBC has managed to get the difference in arrival times at different exchanges down close to a limit that nobody, not even high-frequency traders, has found a way around.

“It’s rapidly approaching the speed of light,” he said

Sallie Mae Managing Your Loans----Are You Crazy?

The Savings Game: Getting out from under student loan debt
By Anya Kamenetz
Tribune Media Services
Recently, a young woman named Kelli Space made headlines for setting up a website at TwoHundredThou.com begging the world to help with her student loan debt.

Kelli was the first in her family to go to college, which may explain why nobody warned her about the dangers of student debt. Her loans, both federal and private, for her undergraduate degree at Northwestern University total $200,000.

That’s enough to buy a first house, or almost ten times the $24,000 that the average graduate takes home with their diploma. So far, Kelli’s collected a few thousand dollars in donations and a lot of negative feedback for asking for a handout. But I have a few words of advice for her and anyone else in over their head with student loans.

1) Don’t panic and don’t disappear.
It is easy to “forget” about your student loans, especially while the six-month grace period is still in effect after graduation, but this is a really bad idea long term.

continue reading here: http://economy.kansascity.com/?q=node/9397