| The Subprime Market: Smart Money Versus Stupid
Most money is running from the subprime market as fast as its can. Not so Goldman Sachs. The firm's CFO indicated that the low-end home loan market may represent a huge investment opportunity as the stock prices of some lending companies have fallen over 80%. A Merrill Lynch analyst made the point to the WSJ that the current turmoil is "exactly the kind of dislocation" brokers look for. The Mortgage Bankers Association was quoted by MarketWatch as saying that "the rate of homes entering the foreclosure process hit a record 0.54% and the delinquency rate on U.S. home loans leaping to 4.95% from 4.67% three months earlier." But, it is fair to ask a question about whether Goldman Sachs is that much smarter than the management at New Century (NEW) or Accredited Home Lenders.
Credit fees on the rise
Several credit card companies operating in the UK have raised a number of charges in the past few weeks, according to new information from Moneyfacts, the online financial comparison service. It named several credit card issuers as introducing higher charges, including Lloyds TSB (LSE: LLOY), Northern Rock (LSE: NRK), Nationwide, Marks & Spencer (LSE: MKS), GE Money (NYSE: GE), and Co-operative Bank. Moneyfacts says that the increases in charges are the companies' response to last year's Office of Fair Trading ruling that cut default fees to £12. Changes include increases in interest rates and cutting short interest-free offers. Moneyfacts pointed to a new requirement from Lloyds TSB as particularly unsavory. In order to be able to take advantage of a 0 percent balance transfer offer, Lloyds is now requiring customers to charge a minimum of £100 on their card within the first three months of issuance.
Woman steals thousands
When Kim Elliston got into debt she tried to get millions of dollars from banks and finance companies by stealing and forging cheques and bank statements.
She did not want any help, started lying and it all spiralled out of control, she told police.
On one occasion she wrote out a cheque for almost $2.6 million and tried to bank it.
The 26-year-old Rotorua housekeeper, who is bankrupt, yesterday pleaded guilty in the Rotorua District Court to 12 charges including forgery, obtaining money by deception and using forged documents.
She forged several bank statements and a receipt to show she had a large amount of funds in a joint account with her husband so her father-in-law would invest his money with her. .
Peace group becomes a house divided
CRAWFORD, Texas (AP) -- A group that has sponsored highly visible war protests in President Bush's adopted hometown has been anything but peaceful, with accusations of money mismanagement, threats of court action and defections by some members. A former member who has rights to the group's name is threatening legal action because the Crawford Peace House continues to operate. Sara L. Oliver and others also want a state investigation as to why only $14,700 is now in the group's bank account, saying tens of thousands of dollars donated during Cindy Sheehan's high-profile 2005 war protest are unaccounted for. "There are people who have said, 'Don't say anything because you'll hurt the peace movement,"' Oliver said. "But if the peace movement isn't pure and transparent and holy as it can be at its heart, then it's just like George Bush: lying, thieving, conniving, backstabbing bastards." John Wolf, who co-founded the Crawford Peace House in 2003 in a house near downtown, denied allegations of wrongdoing.
7:11 am: Alamogordo woman sentenced for embezzlement
ALAMOGORDO, N.M. (AP) _ An Alamogordo woman has been sentenced to three years in prison for using a check kiting scam to steal thousands of dollars from a local dance studio.Ashleigh Trice, a 25-year-old mother of two, was sentenced Friday. She has until Monday to turn herself in to authorities to begin serving her sentence.Trice pleaded no contest last year to 40 embezzlement charges. She had initially been indicted by an Otero County grand jury on more than 183 embezzlement and fraud counts that stemmed from a scam that involved two banks and the Showtime Studios, where she used to work.Some of the money Trice was accused of taking was raised by children so they could attend competitions.During Friday's sentencing, Trice said she was sorry for forcing families to explain how the children's money had disappeared.''Because of the situation that I had caused, you had to teach them this lesson way too soon and I'm also incredibly sorry for that,'' said a tearful Trice.
Turning technology into money
LONDON, England (CNN) -- Technological advances are all around us, everything from increasingly powerful personal computers to the latest in disease-beating drugs. However, coming up with a great new concept and making money from it -- as many bankrupt inventors and innovators over the decades could tell you -- are two entirely different matters. This is something business schools are increasingly aware of, and many of them now have special departments intended to not only help technological innovators profit from their developments but also assist established corporations to keep pace with the dizzying pace of change. A pioneer in this was the Management of Technology Program at the Massachusetts Institute of Technology, initially established in 1981 as a joint program between the university's engineering department and its highly-rated Sloan management school.
Hedge funds wrestle with leverage -- What could go wrong?
Leverage, the use of borrowed money for investing, goes in and out of favor. When times are good and people are making money, it's great. It amplifies returns (positive or negative) and, particularly in real estate, can lead to mind-bogglingly high return on investment numbers. But the downside is also huge, as anyone who lost a job in the wake of a failed leveraged buyout of the 1980s found out. My summary of the positives and negatives of leverage is this: Everything that's good about leverage is also bad about leverage. Having said that, this paragraph from Saturday's New York Times scares the bejesus out of me: Let's say you are very wealthy and have $25 million to invest in a portfolio of hedge funds. Banks like BNP Paribas, Royal Bank of Canada, or Barclays will leverage your investment, say four to one, allowing you to invest $100 million, using derivatives.
N. Korea funds impasse resolved
WASHINGTON (AP) -- Negotiators have agreed on a method to release $25 million (euro18.7 million) in North Korean funds that are frozen in an Asian bank, clearing up a hitch that has stalled nuclear disarmament efforts. After two weeks of talks in Beijing, banking officials from the United States, China, North and South Korea and the Bank of China have agreed on a "pathway" for the money to be returned to Pyongyang, the State Department said Friday. "We support the release of all the funds. It is now a matter of technical implementation," spokesman Sean McCormack told reporters, adding that the actual return of the money would be up to China and North Korea. Previously, U.S. officials had suggested privately that some of the $25 million held in the blacklisted and now-shuttered Banco Delta Asia in the Chinese territory of Macau might be tainted and not released.
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