Pimco CEO Mohamed El-Erian is worried the Fed won’t be able to end its bond buying program without ‘collateral damage.’
See the article here: El Erian: Fed will struggle to unwind its giant trade
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Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to http://pennystockpaycheck.com for 100% free stock alerts Chase Bank has moved to limit cash withdrawals while banning business customers from sending...
Richemont chairman Johann Rupert to take 'grey gap... Billionaire 62-year-old to take 12 months off from Cartier and Montblanc luxury goods groupRichemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the...
Cambodia: aftermath of fatal shoe factory collapse... Workers clear rubble following the collapse of a shoe factory in Kampong Speu, Cambodia, on Thursday
Spate of recent shock departures by 50-something CEOs While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted upOn approaching his 60th birthday...
UK Uncut loses legal challenge over Goldman Sachs tax... While judge agreed the deal was 'not a glorious episode in the history of the Revenue', he ruled it was not unlawfulCampaign group UK Uncut Legal Action has lost its high court challenge over the legality...
Department for Business, Innovation and Skills accused of retrospectively rewriting rules of loan scheme
The government is facing the threat of a judicial review into its handling of an investigation into Barclays’ involvement in a state-backed loan scheme.
An investigation into a loan made by the bank in 2006 under the small firms loan guarantee scheme was extended last month by the Department for Business, Innovation and Skills after an intervention by Michael Fallon, a business minister.
However, questions have been raised about the latest examination of evidence by the auditors RSM Tenon on behalf of the department. The loan was made to a company owned by Yorkshire businessman Jeffrey Morris who has alleged Barclays did not comply with eligibility rules imposed by the loan guarantee scheme.
“The new report makes no sense to me,” Morris said. “It is selective in the information it relies upon, it is inconsistent with itself and the evidence, it rewrites the scheme rules and it is inconclusive. The only way I can get justice for myself and the taxpayer is to seek a judicial review. I have spoken to my lawyers who believe there is a case for a much wider and fully independent judicial enquiry.”
The scheme for startup businesses, which guaranteed banks a return if their investment defaulted, has cost the taxpayer at least £200m in compensating banks. The Guardian reported on the loan in September, prompting the department to commission RSM Tenon. Papers seen by the Guardian show, allegedly, that Barclays sought collateral for the deal and gave the loan to a long-established business – actions that contravened the scheme’s terms. Morris defaulted on the loan in 2006, but Barclays reclaimed most of the balance owed – £91,667 – from the taxpayer.
Morris argues that an internal email sent by Barclays in May 2006 shows the bank had arranged a loan under the guarantee scheme for his business, Diamond Shape, even though he still had available collateral. Under the terms of the scheme, a loan could be guaranteed by the government only if the borrower had exhausted all other forms of collateral.
The new investigation examined a key email from Barclays, discussing a meeting with Morris, which indicates that the bank sought collateral for the loan. Referring to the department’s former guise as the Department for Trade and Industry, it says: “Looking for NewCo SFLG of £200k asap – this has been sanctioned by DTI. We advised we would need to see at least either share charge or property charge in place prior to drawdown.”
This suggests Barclays was seeking further collateral before making the money available to Morris, in direct contravention of the scheme’s rules. However, the new RSM Tenon report makes no mention of this part of the email. Instead, it focuses on the shares and property Morris was offering to Barclays as additional collateral. The reports admits that Mr Morris had further collateral available at the time the loan was made.
The new RSM Tenon report also appears to suggest that although the bank was seeking further personal collateral from Morris, this did not breach the key rule that any such loan could be made only when all other personal collateral had been exhausted. Barclays has said that the crucial email does not relate to Diamond Shape and had no relevance to the SFLG application.
Referring to the email, the report says: “The extent to which he was being asked to support the borrowing … personally does not, in itself, invalidate the making of an SFLG loan.” The department could not explain how this apparent retrospective rewriting of the scheme’s rules was justified. A department spokesperson said: “The department is satisfied that all relevant and necessary evidence from the loan application process, from all parties, has been properly considered.”
Barclays said: “Barclays co-operated fully with the Department of Business Innovation and Skills and RSM Tenon during their thorough audit of the loan made to Diamond Shape Limited by Barclays in 2006. Weare pleased to acknowledge the findings of the final report which found that ‘the loan and business appear to meet the eligibility criteria of the scheme at the time’. Barclays remains committed to lending and will utilise government schemes, where appropriate, to help make funds available to our customers and clients.”
RSM Tenon declined to comment.
SINGAPORE–(Marketwire – Aug 28, 2012) – Saxo Bank saw continued growth in clients’ collateral deposits and assets under management during Q2 despite the low overall trader and investor activity level in the first half of 2012. A significant number of new on-boarded clients increased the collateral deposits in Saxo Bank’s trading business from DKK 26.7 billion as of 31 December 2011 to DKK 30 billion at the end of June 2012.
Read the original: Saxo Bank Announces 2012 Half Year Results
Chesapeake (CHK) let Aubrey McClendon profit from Barnett Shale oil and gas wells while denying the same chance to leaseholders on the properties, according to a new lawsuit. The CEO was allowed to purchase a 1%-2% interest in wells drilled by CHK, using his stake in the wells as collateral; CHK was contractually obligated to offer leaseholders a similar deal, the plaintiffs say. 2 comments!
Excerpt from: Chesapeake (CHK) let Aubrey McClendon profit from Barnett Shale oil and gas wells while denying the same chance to leaseholders on the properties, according to a new lawsuit. The CEO was allowed to purchase a 1%-2% interest in wells drilled by CHK,…
NEW YORK (TheStreet) — Moody’s took a pipe wrench to Morgan Stanley’s reputation.
The bank and its defenders, in turn, are claiming that Moody’s has a blinkered perspective, but that carping won’t do much good.
Fact is: Even if Morgan Stanley apologists claim not to give a damn about the firm’s bad reputation, it will have an impact. The effects will obviously be psychological, tarnishing the bank’s image in the eyes of customers and employees. It will also hit Morgan Stanley in the moneymaker, potentially increasing its borrowing and collateral by about $7 billion. …
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Read the original post: They Just Don’t Get Morgan Stanley!
NEW YORK (TheStreet) — The latest sign that Chesapeake Energy could be in a “death spiral” can be summed up this way: the company is damned if they do (sell the assets it needs to sell) and damned if they don’t.
It’s a Catch-22 involving the way that exploration and production company debt covenants with banks are written at a time when the company needs to sell assets to close a big funding gap.
In its 10-Q filed on Friday afternoon, Chesapeake Energy said that low gas prices and a need to hold oil and gas assets as collateral against its outstanding debts could delay some planned oil and gas asset sales that were part of a $14 billion divestiture program to rebuild the company’s waning finances. …
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Continued here: Chesapeake Energy Sales Could Breach Bank Debt Rules
NEW YORK (TheStreet) –Morgan Stanley may see a less severe downgrade from Moody’s than what the market currently anticipates, presenting a short-term, catalyst-driven opportunity for the stock, according to Wells Fargo Securities analyst Matthew Burnell.
Wall Street is bracing for a multi-notch downgrade of investment banks by the rating agency, expected to be announced sometime in June. In February, Moody’s said it was reviewing its ratings of global banks including Morgan Stanley, Goldman Sachs, JPMorgan Chase, Citigroup and Bank of America in the context of their significant capital markets operations.
A downgrade could result in banks having to post more collateral to their counterparties, increasing their cost of funding. Lower rated banks also face the threat of losing clients in their derivatives trading operations because of their higher risk profile. …
Click to view a price quote on BAC.Click to research the Banking industry.
Spain has exposed the limits of the ECB’s LTRO, writes John Plender, adding the program only reinforced a dynamic of weak EU banks propping up overstretched sovereign borrowers. Bank balance sheets are now in even worse shape as lenders pledged so much collateral as security for ECB loans. It’s “back to make do and mend in the eurozone.” 3 comments!
Read more: Spain has exposed the limits of the ECB’s LTRO, writes John Plender, adding the program only reinforced a dynamic of weak EU banks propping up overstretched sovereign borrowers. Bank balance sheets are now in even worse shape as lenders pledged so…
PawnUp.com, the leader in online pawn shop services now includes high-end notebooks (laptops) and tablets (tablet computers) to the list of items they accept as collateral for pawn loans and sales.
See original here: PawnUp.com Online Pawn Shop Now Accepts High-End Notebooks and Tablets