Hedge Fund Manager Accuses Goldman Sachs of Causing His $1.5 Billion Fund of Going Under

Now the former manager is a chicken farmer…..

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“WASHINGTON (Reuters) – Mortgage giants Fannie Mae andFreddie Mac are being pushed to reduce borrowers’ mortgagebalances in order to shield U.S. banks from taking losses on distressed housing debt, the companies’ regulator said in a Financial Times interview published on Sunday. “If you do principal forgiveness, who is it benefiting? … Doing principal forgiveness is what would protect the big banks,” said Edward DeMarco, the acting director of the Federal Housing Finance Agency.

DeMarco argued that writing down the principal on first mortgageswould amount to a transfer of taxpayer wealth to the biggest U.S. lenders, whose “second mortgages” are normally subordinate to the primary mortgages backed by Fannie Mae or Freddie Mac.

Some officials in the Obama administration, the Federal Reserve and Congress have called on Fannie Mae and Freddie Mac to write down the value of mortgages they own or guarantee as part of an effort to help the U.S. housing market recover from a deep slump that saw one third of property values wiped out since 2006.

DeMarco has previously resisted those calls, citing concerns it would increase losses at the two companies and undermine his mission of keeping a lid on the costs of their taxpayer-funded bailout. “Certainly the environment of the last number of months have shown substantial attempt to influence or direct an independent regulator,” he told the business newspaper. Fannie and Freddie provide funding for the bulk of U.S. home loans by buying mortgages from banks and repackaging them as securities for investors, which they then guarantee. The Obama administration has proposed using TARP funds to lessen the cost to Fannie and Freddie of doing writedowns. DeMarco is now considering whether the new money the Obama administration is laying on the table changes the equation. Freddie Mac and Fannie Mae were taken over by the government in 2008 after massive mortgage losses at the housing giants threatened the global financial system. Since then, the U.S. government has funneled more than $150 billion in taxpayer funds into Freddie and Fannie, in part to ensure that credit remains available for homebuyers.”

In an effort to restructure Yahoo is actively head hunting and placing people on the board….

GE has sign a memorandum of understanding to build power plants in Nigeria…. 

Thanks to Bush the bankruptcy and debt collection laws were change in ’02-’04; now those rules are playing a role in garnering peoples salaries for debt collection.

Full article

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“(FOX News) – The Green Climate Fund, which is supposed to help mobilize as much as $100 billion a year to lower global greenhouse gases, is seeking a broad blanket of UN-style immunity that would shield its operations from any kind of legal process, including civil and criminal prosecution, in the countries where it operates.

There is just one problem: it is not part of the United Nations.

Whether the fund, which was formally created at a UN climate conference in Durban, South Africa last December, will get all the money it wants to spend is open to question in an era of economic slowdown and fiscal austerity.

Its spending goal comes atop some $30 billion in “fast start-up” money that has been pledged by UN member states to such climate change activities.

A 24-nation interim board of trustees for the Green Climate Fund (GCF) is slated to hold its first meeting next month in Switzerland to organize the fund’s secretariat and to get it running by November, as well as find a permanent home for the GCF’s operations.

The board expects to spend about $6.7 million between now and June of next year.

But before it is fully operational, the GCF’s creators — 194 countries that belong to the United Nations Framework Convention on Climate Change (UNFCCC) — want it to be immune from legal challenges and lawsuits, not to mention outside inspections, much like the United Nations itself cannot be affected by decisions rendered by a sovereign nation’s government or judicial system.

Despite its name, the UNFCCC was informed in 2006 by the United Nations Office of Legal Affairs that it was not considered a UN “organ,” and therefore could not claim immunity for its subordinate bodies or personnel under the General Convention that has authorized UN immunity since the end of World War II.

A UNFCCC resolution granting similar immunities would need to be “accepted, approved or ratified” by each individual member of the Kyoto Protocol before it took effect, the UN legal office advised.

Even if UNFCCC members decided to ask the UN General Assembly to grant them similar immunity it would require each UN member state to make changes in domestic legislation, the opinion declared.

According to an official of the US Treasury, which strongly supports the existence of the GCF, the full extent of the immunities still remains to be worked out by the fund board, although the wording of various UNFCCC resolutions indicate that immunities like those held by the UN are clearly envisaged.”

A little hand washing…

“Nearly 40 members of the House of Representatives earmarked $150 million to organizations affiliated with themselves and their family members from 2008 to 2010, according to a government watchdog organization.

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“Curious why futures and PMs both soared out of the gate at 8am? Look no further than the Chairman of the Federal CTRL-Preserve who is speaking at the National Association for Business Economics and just made a very strong hint that the New QE (or is that the NEWER QE) is coming. And there are those mocking Bill Gross for saying the April FOMC would lead to the next QE announcement (something we expounded onextensively yesterday). And here is the most idiotic statement uttered by the Fed: “If this hypothesis is wrong and structural factors are in fact explaining much of the increase in long-term unemployment, then the scope for countercyclical policies to address this problem will be more limited.  Even if that proves to be the case, however, we should not conclude that nothing can be done.” Recall what JPM said about central planning breaking the virtuous cycle just two days ago. The Fed has just admitted it… but it does not mean that the Fed will be forced to print print print infinitely more. After all, it’s all there is.

ES

and Siver

The conclusion form Bernanke’s speech (link):

To sum up:  A wide range of indicators suggests that the job market has been improving, which is a welcome development indeed.  Still, conditions remain far from normal, as shown, for example, by the high level of long-term unemployment and the fact that jobs and hours worked remain well below pre-crisis peaks, even without adjusting for growth in the labor force.  Moreover, we cannot yet be sure that the recent pace of improvement in the labor market will be sustained.  Notably, an examination of recent deviations from Okun’s law suggests that the recent decline in the unemployment rate may reflect, at least in part, a reversal of the unusually large layoffs that occurred during late 2008 and over 2009.  To the extent that this reversal has been completed, further significant improvements in the unemployment rate will likely require a more-rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies.

I also discussed long-term unemployment today, arguing that cyclical rather than structural factors are likely the primary source of its substantial increase during the recession.  If this assessment is correct, then accommodative policies to support the economic recovery will help address this problem as well.  We must watch long-term unemployment especially carefully, however.  Even if the primary cause of high long-term unemployment is insufficient aggregate demand, if progress in reducing unemployment is too slow, the long-term unemployed will see their skills and labor force attachment atrophy further, possibly converting a cyclical problem into a structural one.

If this hypothesis is wrong and structural factors are in fact explaining much of the increase in long-term unemployment, then the scope for countercyclical policies to address this problem will be more limited.  Even if that proves to be the case, however, we should not conclude that nothing can be done.  If structural factors are the predominant explanation for the increase in long-term unemployment, it will become even more important to take the steps needed to ensure that workers are able to obtain the skills needed to meet the demands of our rapidly changing economy.”

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Alexion Pharmaceuticals Inc. (ALXN) : The biotechnology company may stall unless it can expand beyond dependence on its Soliris treatment for rare blood disorders, Barron’s reports in its March 26 edition. The Cheshire, Connecticut-based company’s shares are up 31 percent this year, compared with 77 percent last year and 65 percent in 2010.

Apollo Global Management (APO) (APO US): The private-equity firm may need to increase its offering price for Great Wolf Resorts, Barron’s “Trader” column said, without citing anyone. New York-based Apollo offered $5-a-share on March 13 for Great Wolf, which closed in March 23 trading at $5.59-a-share.

Armstrong World Industries Inc. (AWI) increased 3 percent to $58.50. The Lancaster, Pennsylvania-based maker of floors, ceilings and cabinets said it plans to pay a special cash dividend of $8.55 a share.

Citigroup Inc. (C) gained 0.4 percent to $37.30. The third-largest U.S. bank by assets expects an impairment charge of $700 million as the lender reduces an investment in Istanbul- basedAkbank TAS. (AKBNK) The sum is about $1.1 billion before taxes, the New York-based lender said in a regulatory filing.

Copa Holdings SA (CPA) : The Panama City-based carrier is among Latin American airlines that may gain as the region becomes an increasingly popular destination for business and tourist travel, Barron’s reported. The company has code-share, marketing ties to United Continental Airlines (UAL) and passenger traffic is up 22 percent in 2012 through February.

Deere & Co. (DE) rose 1.4 percent to $81.97. The Moline, Illinois-based farm-equipment maker may rise to $100 in 12 months as the company takes advantage of opportunities in South America and Central Europe, Barron’s reported. The company has had seven straight quarters of record earnings and plans to build seven plants around the world, according to Barron’s.

International Game Technology (IGT) : The world’s biggest maker of slot machines may be poised to gain 20 percent as more U.S. states move to add casino resorts, Barron’s reported. The Reno, Nevada-based company plans a $100 million stock repurchase this fiscal year.

Lions Gate Entertainment Corp. (LGF) rose 7.9 percent to $15.68. The film and television studio behind TV’s “Mad Men” and the Tyler Perry movies pulled in about $155 million in opening weekend ticket sales for its “Hunger Games” film.

Verisk Analytics Inc. (VRSK) : The Jersey City, New Jersey-based information-services company will buy MediConnect Global Inc., a provider of systems and services for medical- record analysis, for $348.6 million.

Vivus Inc. (VVUS) rose 3.2 percent to $22. The biopharmaceutical company said that a marketing authorization application had been accepted by the European Medicines Agency for the review of avanafil, its investigational drug for the treatment of erectile dysfunction.

Weatherford International Ltd. (WFT) : The Geneva-based oilfield-services and equipment provider named John Briscoe, who joined the company in August, as chief financial officer.

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Baker Hughes Inc. (NYSE: BHI) Cut to Market Perform at Wells Fargo

IntercontinentalExchange, Inc. (NYSE: ICE) named as Bull of the Day at Zacks.

Lexmark International Inc. (NYSE: LXK) Cut to Market Perform at Bernstein.

MGIC Investment Corp. (NYSE: MTG) Started as Market Perform at Keefe Bruyette Woods.

Micron Technology Inc. (NASDAQ: MU) Cut to Perform at Oppenheimer.

Radian Group Inc. (NYSE: RDN) Started as Market Perform at Keefe Bruyette Woods.

Randgold Resources Limited (NASDAQ: GOLD) Cut estimates at Goldman Sachs.

Safeway Inc. (NYSE: SWY) Cut to Neutral at Credit Suisse.

Tesla Motors, Inc. (NASDAQ: TSLA) Raised to Buy at Wunderlich.

XL Group, Plc (NYSE: XL) named as Bear of the Day at Zacks.

In Play

On the Wires

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“Linda Hall of Spokane, Wash. has worked hard all her life but hasn’t earned any respect from the labor market. Laid off for the first time at age 62, Hall has no health insurance, not enough savings for retirement and almost no chance of getting hired again.

“A year ago I was absolutely certain that I had job security,” Hall said. “Change is a part of life. But, truthfully, until a few weeks before [getting laid off], I just didn’t see it coming and couldn’t imagine such a thing happening.”

Like many older workers, Hall is confronting America’s new economic reality.

“If you worked hard, chances are you’d have a job for life, with a decent paycheck and good benefits and the occasional promotion,” President Barack Obama lamented in his 2011 State of the Union Address. “That world has changed.”

Baby Boomers like Hall are more likely than previous generations to keep working, or at least looking for work, as they get older. Since hitting a low of 29 percent in the 1990s, the labor force participation rate for older workers (those who are 55 and up) has risen to 40 percent today. The increase is partly due to employers offering stingier retirement plans than they once did….”

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“(MONEY Magazine) — Digging into Berkshire Hathaway’s portfolio to see what Warren Buffett has been buying lately — and to gain clues as to what the world’s most successful investor really thinks about the markets and economy — has become a bit of a national pastime.

And the early reaction to Berkshire’s recent moves, revealed through Buffett’s annual shareholder letter and two SEC filings, was that the Oracle of Omaha appears to be putting his money where his bullish mouth is. On the surface, Berkshire seems to be doing everything you’d expect:

Be greedy when others are fearful. Check. While spooked investors pulled more than $140 billion from stock funds in the scary second half of 2011, Buffett’s conglomerate went shopping.

Favor stocks over other assets.Check. Berkshire (BRKA,Fortune 500) has been avoiding gold and Treasuries lately, and its cash stake has shrunk from more than $47 billion at midyear to less than $37 billion at year-end.

Boost ownership of first-class businesses. Hello, IBM (IBM,Fortune 500)! Last year, Buffett made a massive bet on this industry-leading giant and its pristine balance sheet.

Dig a little deeper, though, and you’ll find that appearances aren’t always what they seem. The acquisitions made by Buffett and his new lieutenants — former hedge fund managers Todd Combs and Ted Weschler — show signs of caution that you may want to heed.

Does Warren Buffett really pay just 17% in taxes?

At the very least, you’ll see that while many of Berkshire’s purchases were made at prices that are no longer available since the recent rally, they’re still tailor-made for investors who think a recovery could be at hand, but who want to hedge their bets.

If that sounds like you, consider Berkshire’s following moves:

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“The latest round of green shoots in the economy could wither in the months ahead as U.S. politicians come to terms with huge spending and tax choices they have until now put off, says Mohamed El-Erian, CEO and co-chief investment officer of bond giant Pimco.

The Bush era tax cuts will expire at the end of 2012, as well as the broader payroll tax cut. Meanwhile, the yawning national deficit, so far financed by virtually zero lending rates, could be in danger of shooting much higher.

Long bonds saw a violent sell-off as stocks gained in recent weeks, although yields have since fallen back.

“For starters, the economy is not yet in a position to handle the 4 percent to 5 percent of GDP ‘fiscal cliff’ that is approaching as all of the hard political decisions that were postponed come into view at the end of this year,” El-Erian writes for Project Syndicate.

“The prospect of a disorderly fiscal contraction needs to give way to a more rationally designed approach that avoids undermining the fragile recovery,” he continues. “To accomplish that, the political class must avoid the bickering that almost sent America back into recession in 2011, and that raised major questions about the quality of the country’s economic governance.”

El-Erian also warns that the cost of gasoline will affect the pace of recovery.

“Oil prices are not helping. Having already surged on account of Iran-related geopolitical concerns, they are altering American consumers’ behavior, weakening their confidence, aggravating the country’s payments imbalances, and further reducing policymakers’ flexibility,” he writes.

Oil traded at $107.11 a barrel on Friday after touching above 108 on headlines that Iranian oil exports declined during the month. Oil has risen by $10 a barrel since the beginning of the year and gas is averaging $3.89 a gallon and well above $4 in many metro areas.

Experts are predicting a per gallon price peaking at $4.25 in April, reports the Associated Press.

“The market’s a powder keg with a very short fuse,” oil analyst Stephen Schork told the AP.”

Nasdaq futs are up 12 to the untrained eye, and +17 above fair value.

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“FIVE POINTS, Calif.—Sharp cutbacks in water for farmers threaten to trigger renewed layoffs in a large swath of California, eating into the state’s $40 billion-a-year agriculture industry and damping its nascent economic recovery.

Amid an unusually dry winter, managers of the federal Central Valley Project, which delivers mountain water for agriculture, late last month announced an initial reduction in farmers’ water allowance for this year to 30% of the allotment in the driest southern reaches of the valley, down from 85% last year. Now farmers and local agriculture officials are taking in the economic impact they face.

Officials of the 614,000-acre Westlands Water District, near Fresno, say farmers there are expected to leave tens of thousands of acres fallow, only a year after California experienced one of its wettest winters on record.

“Being a farmer in California is worse than going to Las Vegas,” said Mark Borba, as he inspected a barren field he may leave without crops this year because of the water reductions. Mr. Borba, co-owner of Borba Farms, which gets water from the district, expects to reduce his cotton crop by 38% to 1,480 acres from 2,400 last year.

The Central Valley, which is 450 miles long and about 50 miles wide, is home to most of California’s agriculture industry. With much of the valley semi-arid, farms there for decades have depended on irrigated water from the Northern California mountains, but those supplies have long been subject to sharp fluctuations. Environmental regulations have made the water supplies from year to year even more unpredictable.

The mountain snowpack stood at 45% of normal as of last Wednesday, compared with 139% a year ago, according to official estimates. Reservoirs remain full enough from 2011 precipitation so that restrictions aren’t expected to spread to the household water tap yet, officials said….”

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“And for a contrarian take on the US economy, check out this slide from Morgan Stanley, which basically argues that aside from autos, it’s actually hard to be impressed with any aspect of the US economy right now.

That’s a rather different spin than what you get from many other analysts and pundits, who blithely talk about the “improving” US economy, without then further backing that up.

See our comment below…

Morgan Stanley

While all of the above is fair, we think it’s a little narrow. Initial claims continue to improve. Retail sales (despite high gas prices) continue to be strong. Most housing metrics are clearly better than they were the year before. The bright spots aren’t entirely constrained to auto sales, as the chart above implies.”

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“Hedge funds trailing the Standard & Poor’s 500 (SPX) Index for the last five months are giving up on bearish bets and buying stocks at the fastest rate in two years.

A gauge of hedge-fund bullishness measuring the proportion of bets that shares will rise climbed to 48.6 last week from 42 at the end of November 2011, the biggest increase since April 2010, according to data compiled by the International Strategy & Investment Group. The Bloomberg aggregate hedge fund index gained 1.4 percent last month, lagging behind the Standard & Poor’s 500 Index by 2.65 percentage points.

Money managers struggling to catch up with the gains have contributed to the rally that pushed the S&P 500 up 27 percent since October as economic reports beat estimates. Market bulls say they are a continuing source of cash that can move stocks higher. Bears say capitulating hedge funds are further evidence that equities have risen too far, too fast as economic growth remains sluggish, warning that the pool of potential buyers is being depleted.

“It’s encouraged me to gradually increase my exposure to stocks,” Barton Biggs, founder of hedge fund Traxis Partners LP in New York, said in a March 23 phone interview, referring to an improving economic outlook. “The shift has occurred gradually in the six or so months since the beginning of October. I’d be inclined to raise my net long further because the potential to the upside would be greater” should the S&P 500 fall 5 percent to 7 percent, he said….”

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Oil was little changed in New York, halting a two-week slide as an unexpected jump in Germanbusiness confidence stoked hopes that fuel demand will be supported.

The Munich-based Ifo institute said today its business climate index, based on a survey of 7,000 executives, increased to an eight-month high of 109.8 from a revised 109.7 in February. Crude fell as much as 0.6 percent earlier, after Italian Prime Minister Mario Monti warned that Spain may reignite the European debt crisis, while euro-area ministers prepared a deal to strengthen the region’s financial firewall.

Oil for May delivery was at $106.78 a barrel, 9 cents lower in electronic trading on the New York Mercantile Exchange at 12:24 p.m. London time. It had slipped as much as 68 cents to $106.19 a barrel. Prices are up 8 percent this year after advancing 25 percent in the last quarter of 2011.

Brent for May settlement was at $125.30 a barrel, up 17 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to New York-traded West Texas Intermediate was at $18.54.