4 results found.
Should We Cheer The FHFA Lawsuit?
Last Friday the Federal Housing Finance Agency (FHFA) lawsuits were filed against seventeen banks and financial institutions for $200 billion in subprime loan losses. The victims of the alleged fraud? Fannie Mae and Freddie Mac, and therefore the taxpayers. The suits claim that Fannie and Freddie, then two of the largest investment bodies in the world, had been ruthlessly hoodwinked by bankers into buying low-quality, and potentially fraudulent, mortgage-backed securities. In exchange for fees and commissions, big banks and loan companies stuck the taxpayers with a mountain of bad debt.
The Symptoms of Nuclear Hysteria
Imagine you invented a machine that revolutionized travel. Your invention could cut travel time and improve the ability for business to deliver freight efficiently. The invention would add trillions to global GDP. If released, it would be universally used and admired. However, based on the safety assessments, analysts predict that if used your invention would cause the deaths of 300,000 Americans per year and countless more around the globe. Would you still release it? If not, imagine a world without cars. Now, the bigger question: why isn't this same measure used when judging nuclear energy?
Never Too Big To Fail Their Customers
As a mortgage broker during the manic years of the housing boom, I witnessed reckless financial practices on a wide scale. As a result, I was not surprised by the ?robo-signing? mess that now threatens the mortgage sector. Unfortunately, the scandal is only a small tip of the iceberg that threatens to take down the entire US banking system.
In the Shadow of the Dragon
For investors, the Chinese push into frontier markets may offer promising returns in the medium-term. For example, emerging market bonds have rallied every quarter since the end of 2008, and posted record inflows this year. Unfortunately, accessing frontier markets has historically been difficult for small investors. Poor accounting practices, corruption, lack of local knowledge, and illiquidity are risks to be considered. For the right investor, though, there are increasing opportunities to invest in these markets via enterprising Chinese firms.
4 results found.