HousingWire.com, July 2nd, 2012
HousingWire’s Morning Radar provides a look at issues trending on the Internet.
Housing may lead economic recovery
Yes, the above line reads correct. This weekend a few articles claimed housing may soon lead the nation’s economic recovery.
Bloomberg published the comments of KB Home CEO Jeffrey Mezger, who recently pointed to a stronger homebuilding market as pushing a larger economic recovery. The financial news source said Mezger’s comments echo an argument they made last week pointing to housing as leading the nation’s economic recovery.
And some local reports are echoing the Bloomberg piece. Buffalo News states that it’s area is doing better, housing-wise, despite a terrible job market. “Our housing market remains a bulkhead of stability for the region, while our job market is sputtering like a car about to run out of gas,” the colum states.
One call, that’s all, to cheat LIBOR
LIBOR is the key rate, determine by banks, at which banks lend to one another. It’s vital to global liquidity. And, it’s possible the CEO of Barclays Capital, Bob Diamond, felt he had the green light from regulators to make misleading claims about its costs when using LIBOR.
It seems the two shared a telephone conversation back in 2008 where Diamond walked away feeling he could exercise some regulatory leeway.
According to the BBC, in making false submissions about borrowing costs, managers at Barclays believed they were operating under an instruction from Paul Tucker, deputy governor of the Bank of England.
“A central question, which MPs are likely to probe, is why Barclays’ managers came to believe, after the conversation between Mr Diamond and Mr Tucker, that the Bank of England had sanctioned them to lie about what they were paying to borrow when providing data to the committees that set the LIBOR rate,” write Robert Preston, business editor of the BBC.
Countrywide buy “worst deal” ever
The Wall Street Journal ran a piece critical of the Bank of America decision to pay $2.5 billion for mortgage lender Countrywide Financial Corp.
According to the article, the ill-fated decision has already cost the Charlotte, N.C., lender more than $40 billion in real-estate losses, legal expenses and settlements with state and federal agencies.
The losses led to one academic pulling no punches on where this deal rates in the history of takeovers.
“It is the worst deal in the history of American finance,” said Tony Plath, a banking and finance professor at the University of North Carolina at Charlotte. “Hands down.”
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