Reports say buyout firms looking to acquire Fidelity National Information Services Inc. (FIS)

Posted: May 6, 2010 – 1:19pm Jacksonville.com

By Mark Basch

Two large private equity firms are in talks to buy out Jacksonville-based Fidelity National Information Services Inc., according to news reports today.

The Wall Street Journal reported that Blackstone Group LP was considering the deal along with other firms. Bloomberg News later reported that Thomas H. Lee Partners LP is joining Blackstone in the bid.

Fidelity said the company’s policy is to not comment on speculation about acquisitions.

Fidelity National Information Services, or FIS, provide technology services for financial companies. It was spun off from title insurance company Fidelity National Financial Inc. Another publicly-traded company, Lender Processing Services Inc., was spun off from FIS.

The two Fidelity companies and LPS are all headquartered in Jacksonville, but all three operate independently.

Bloomberg reported that “two people with knowledge of the situation” said the deal is “under discussion and may not happen.”

mark.basch@jacksonville.com, (904) 359-4308

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Car bomb causes terror scare, forces evacuation in Times Square: New York Post

Nothing to do with Foreclosures, but this is a wake up call for all us to watch our backs!

By LARRY CELONA, FRANK ROSARIO and TIM PERONE

Last Updated: 10:32 AM, May 2, 2010

Posted: 9:28 PM, May 1, 2010

A car bomb nearly caused a bloodbath in the heart of Times Square yesterday as a homemade explosive device in an SUV parked outside the doors of “The Lion King” fizzled out.

The bomb caused a terror scare that forced thousands of people to evacuate the Crossroads of the World and turned Times Square into a ghost town for hours.

 Bomb squad members wearing protective suits examine the suspicious vehicle.
Christopher Sadowski
Bomb squad members wearing protective suits examine the suspicious vehicle.

Photos: Times Square bomb scare

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Photos: Times Square bomb scare

 Police Officer Wayne Rhatigan, the mounted patrol cop who first investigated the smoking Nissan Pathfinder at around 6:30 p.m. last night.
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Police Officer Wayne Rhatigan, the mounted patrol cop who first investigated the smoking Nissan Pathfinder at around 6:30 p.m. last night.

Photos: Times Square bomb scare

An unidentified T-shirt vendor, who is a Vietnam veteran, saw smoke billowing from a Nissan Pathfinder and alerted Police Officer Wayne Rhatigan, a mounted patrol cop, who looked inside the smoldering vehicle at around 6:30 p.m. on West 45th Street near Seventh Avenue in front of an entrance to the Minskoff Theatre, which houses the hugely popular Disney musical, Mayor Bloomberg said early this morning.

Rhatigan, who has been on the force for 19 years, the last four in the Mounted Unit, smelled gunpowder and called in the Fire Department, which put out the car fire as he and two patrol officers cleared the area of civilians.

Bomb Squad members then searched the SUV, which bore Connecticut license plates that were actually registered to a Ford F-150, and found two gasoline cans, three propane tanks, electrical wires, black powder, consumer grade fireworks and two clocks, Police Commissioner Ray Kelly said.

PHOTOS: TIMES SQUARE BOMB SCARE

VIDEO: TIMES SCARE

“I think the intent was to cause a significant ball of fire,” Kelly said.

A Bomb Squad robot was used to handle the suspicious package in the back of the vehicle, officials said.

Bloomberg called the device “amateurish” but said that the city was “very lucky” because of the quick-thinking actions of the hero T-shirt vendor and Rhatigan.

There was a “box within a box” in the car, a 2X2X4 black gun locker, Kelly said.

Officials dismantled the first device and were in the process of rendering the second box safe this morning at the department’s firing range in the Bronx.

An NYPD security camera caught the Pathfinder travelling west on West 45th Street at 6:28 p.m. and at 6:34 p.m. the 911 call came in, Kelly said.

The Mayor added that the cameras, “couldn’t detect who was in the vehicle, how many were in the vehicle and what was in the vehicle.”

Cops were looking at other security videos from various cameras in the area that may have captured images of the suspect.

Authorities searched the immediate area for any possible secondary devices, but no other areas were evacuated. Also an NYPD and federal manhunt for the suspect began.

Investigators interviewed the person who had the license plates before they were put on the Pathfinder. That person is not a suspect and told officials that he dropped the plates off at a junkyard. Police are trying to track down the owner of that junkyard.

Honey, I Lost the House. Now It’s Time to Party

 
Caroline Baum

Honey, I Lost the House. Now It’s Time to Party: Caroline Baum

Commentary by Caroline Baum

April 22 (Bloomberg) — “What a relief, Marge, not to have that huge mortgage payment hanging over our head anymore.”

“You can say that again, Harry. Let’s celebrate. Maybe take a nice vacation. Or buy a new car.”

“What if the bank forecloses on our house? We could be living on the street next year.”

“Exactly. Which is why we need a new car. Maybe something roomy like a Chevy Suburban.”

By now you’ve probably seen the analysis, if you can call it that, on how mortgage defaults are driving consumer spending.

Yes, you read that correctly. Those deadbeat homeowners, facing possible eviction and in some cases unemployed, are throwing caution to the wind — and money at retailers.

In an attempt to explain strong retail sales in the face of high unemployment, depressed consumer confidence and declining real incomes, Paul Jackson, publisher of HousingWire, alit on an idea that he conceded might sound far-fetched: “People are spending their mortgages,” he opined in an April 5 column.

Because the consequences of missing a mortgage payment are so far in the future, thanks to the multitude of government assistance programs, consumers are behaving as if they’ve just been handed a free lunch, he said.

Other economists jumped on the bandwagon. Mark Zandi, chief economist at Moody’s Economy.com, told the Wall Street Journal this week that 5 million households aren’t making payments on their mortgages, giving them “as much as $60 billion to spend.”

Nonsense Exposed

Economists at Goldman Sachs Group Inc. came at it differently. In an attempt to explain how consumer spending exceeded their forecast, they acknowledged their “standard net worth model overstated savings” if households treated residential investment as just another form of consumer spending. Uh-huh.

Blogger Barry Ritholtz called the proponents of the defaults-are-good theory on the carpet, saying in an April 16 post that the analysis got it backward. “Those people voluntarily not paying their mortgages are not buying luxury goods, for the simple reason they cannot afford them,” Ritholtz wrote.

Maybe it’s my age or my upbringing, but I can’t imagine frittering away the interest payments on a delinquent mortgage when the sheriff might show up any day with an eviction notice.

Not everyone lives that way or acts rationally all of the time, the housing bubble being a case in point. After biting off more home than they could afford, consumers are more likely to compensate by being overly cautious. Once bitten, twice shy.

Just ask the banks, which, after an extended period of lax lending and big loan losses, tend to tighten credit standards to an extreme.

Double-Entry Bookkeeping

There’s an even bigger problem with the idea that mortgage defaults are driving consumer spending. When a homeowner misses a mortgage payment, “somebody’s not getting a payment” on the other side, said Thomas Lawler, founder and president of Lawler Housing and Economic Consulting in Leesburg, Virginia.

A mortgage lender or bank experiences reduced cash flow, which means less money flowing to shareholders who, the last time I checked, were consumers in their own right.

Sure, one can argue that the borrower has a greater propensity to consume than the lender, but this is a case of what Lawler calls “single-entry analysis for double-entry bookkeeping” and what I view as an example of Bastiat’s broken window. (See Bastiat, Frederic, “That Which is Seen and That Which is Unseen.”)

It’s like robbing Peter to pay Paul or, more applicable to the current situation, borrowing or taxing the public and calling it “fiscal stimulus.” There is no net gain from transferring spending power from one entity to the next.

Reductio Ad Absurdum

Lawler, a man after my own heart when it comes to carrying an idea to its logical conclusion, offered the following advice to President Barack Obama:

If you believe what the economy needs is a boost to spending, “forget the stupid stimulus,” he said. “Let’s get everyone to stop paying their mortgage.”

Why stop there? Instead of sticking it to renters, who tend to be less well-off than homeowners, Obama should make the plan fairer by spreading some of the wealth around. “Nobody has to pay,” Lawler said. “Let’s have a rent moratorium as well.”

Now there’s a stimulus plan that won’t cost the taxpayer a dime!

(Caroline Baum, author of “Just What I Said,” is a Bloomberg News columnist. The opinions expressed are her own.)

Click on “Send Comment” in sidebar display to send a letter to the editor.

To contact the writer of this column: Caroline Baum in New York at cabaum@bloomberg.net.

Last Updated: April 21, 2010 21:00 EDT

Move Over Fannie Mae…Revealing the “TRIPLETS” Maiden Lane, Maiden Lane II and Maiden Lane III

Fed Reveals Bear Stearns Assets It Swallowed in Firm’s Rescue (Bloomberg)

By Craig Torres, Bob Ivry and Scott Lanman

April 1 (Bloomberg) — After months of litigation and political scrutiny, the Federal Reserve yesterday ended a policy of secrecy over its Bear Stearns Cos. bailout.

In a 4:30 p.m. announcement in a week of congressional recess and religious holidays, the central bank released details of securities bought to aid Bear Stearns’s takeover by JPMorgan Chase & Co. Bloomberg News sued the Fed for that information.

The Fed’s vehicle known as Maiden Lane LLC has securities backed by mortgages from lenders including Washington Mutual Inc. and Countrywide Financial Corp., loans that were made with limited borrower documentation. More than $1 billion of them are backed by “jumbo” mortgages written by Thornburg Mortgage Inc., which now carry the lowest investment-grade rating. Jumbo loans were larger than government-sponsored mortgage buyers such as Fannie Mae could finance — $417,000 at the time.

“The Fed absorbed that risk on its balance sheet and is now seen to be holding problematic, legacy assets,” said Vincent Reinhart, a resident scholar at the American Enterprise Institute in Washington who was the central bank’s monetary- affairs director from 2001 to 2007. “There is both an impairment to its balance sheet and its reputation.”

The Bear Stearns deal marked a turning point in the financial crisis for the Fed. By putting taxpayers at risk in financing the rescue, the central bank was engaging in fiscal policy, normally the domain of Congress and the U.S. Treasury, said Marvin Goodfriend, a former Richmond Fed policy adviser who is now an economist at Carnegie Mellon University in Pittsburgh.

‘Panic’ Cause

“Lack of clarity on the boundary between responsibilities of the Fed and of the Congress as much as anything else created panic in the fall of 2008,” Goodfriend said. “That created a situation in which what had been a serious recession became something near a Great Depression.”

Central bankers also created moral hazard, or a perception for investors that any financial firm bigger than Bear Stearns wouldn’t be allowed to fail, said David Kotok, chief investment officer at Cumberland Advisors Inc. in Vineland, New Jersey.

Policy makers’ resolve was tested months later by runs against the largest financial companies. Lehman Brothers Holdings Inc. collapsed into bankruptcy in September 2008. The ensuing panic caused the Fed to take even more emergency measures to push liquidity into markets and institutions. It rescued American International Group Inc. from collapse and allowed Goldman Sachs Group Inc. and Morgan Stanley to convert into bank holding companies, putting them under greater oversight by the central bank.

Early Failure

“Letting somebody fail early would have been a better choice,” Kotok said. “You would have ratcheted moral hazard lower and Lehman wouldn’t have been so severe.”

The Bear Stearns assets include bets against the credit of bond insurers such as MBIA Inc., Financial Security Assurance Holdings Ltd. and a unit of Ambac Financial Group, putting the Fed in the position of wagering companies will stop paying their debts.

The Fed disclosed that some of Maiden Lane’s assets were portions of commercial loans for hotels, including Short Hills Hilton LLC in New Jersey, Hilton Hawaiian Village LLC in Hawaii, and Hilton of Malaysia LLC, in addition to securities backed by residential mortgages.

More than a year after Washington Mutual, the largest U.S. savings and loan, was purchased by JPMorgan Chase in a distressed sale arranged by the Federal Deposit Insurance Corp., the home loans that helped bring down the Seattle-based thrift live on in the Maiden Lane portfolio.

Lending Standards

For example, 94 percent of the mortgages in one security, called WAMU 06-A13 2XPPP, required limited documentation from borrowers, meaning the lender often didn’t ask customers for proof of their incomes. Almost 10 percent of the borrowers whose mortgages make up the security have been foreclosed on, and almost a quarter are more than two months late with payments, according to data compiled by Bloomberg.

The portfolio also includes $618.9 million of securities backed by Countrywide, mortgages now rated CCC, eight levels below investment grade. All the underlying loans are adjustable- rate mortgages, with about 88 percent requiring only limited borrower documentation, according to Bloomberg data. About 33.6 percent of the borrowers are at least 60 days late. Countrywide is now part of Charlotte, North Carolina-based Bank of America Corp.

CDO Holdings

Maiden Lane has $19.5 million of securities from a series of collateralized debt obligations called Tropic CDO that are backed by trust preferred securities of community banks and thrifts. CDOs are investment pools made up of a variety of assets that provide a flow of cash.

Trust preferred securities, or TruPS, have characteristics of debt and equity and their interest payments are tax- deductible.

The securities created by Bear Stearns are rated C, one level above default, by Moody’s Investors Service and Fitch Ratings.

CDO securities have tumbled in value as banks are failing at the fastest rate in 17 years, according to data compiled by Bloomberg. The average price of TruPS CDO debt of this rating is pennies on the dollar, according to Citigroup Inc.

“The trust of the taxpayer was abused,” said Janet Tavakoli, president of Chicago-based financial consulting firm Tavakoli Structured Finance Inc. CDOs rated CCC and lower “have a high likelihood of default,” she said.

Bernanke Defense

Chairman Ben S. Bernanke defended the Bear Stearns deal as a rescue of the financial system. He said in a speech at the Kansas City Fed’s annual Jackson Hole, Wyoming conference in August 2008 that a sudden Bear Stearns failure would have caused a “vicious circle of forced selling” and increased volatility.

“The broader economy could hardly have remained immune from such severe financial disruptions,” Bernanke said in the speech. The Fed chief, who took office in 2006 and began his second term as chairman this year, also has repeatedly called for an overhaul of financial regulations that would allow authorities to take over a failing financial institution and oversee an orderly unwinding of its positions.

Bernanke said last year that nothing made him “more angry” than the AIG case, blaming the insurer for making “irresponsible bets” and a lack of regulatory oversight for the debacle. Officials “had no choice but to try and stabilize the system” by aiding the firm in September 2008, he said.

Yesterday’s release by the Fed, through its New York regional bank, also identified securities acquired in the bailout of AIG held in vehicles known as Maiden Lane II and III.

Market Value

Assets in Maiden Lane II totaled $34.8 billion, according to the Fed, which set their current market value in its weekly balance sheet at $15.3 billion. That means Maiden Lane II assets are worth 44 cents on the dollar, or 44 percent of their face value, according to the Fed.

Maiden Lane III, which has $56 billion of assets at face value, is worth $22.1 billion, or 39 cents on the dollar, according to the Fed’s weekly balance sheet. A similar calculation for the Bear Stearns portfolio couldn’t be made because of outstanding derivatives trades.

“The Federal Reserve recognizes the importance of transparency to its financial stability efforts and will continue to review disclosure practices with the goal of making additional information publicly available when possible,” the New York Fed said in yesterday’s statement.

Deal With Chase

The central bank said it reached agreement on “issues of confidentiality” for the assets with JPMorgan Chase, which bought Bear Stearns in 2008, and AIG. New York-based JPMorgan and AIG would incur the first losses on the portfolios.

Joe Evangelisti, a spokesman for JPMorgan, and Mark Herr, a spokesman for AIG, declined to comment.

In April 2008, Bloomberg News requested records under the federal Freedom of Information Act from the Fed’s Board of Governors related to JPMorgan’s acquisition of Bear Stearns. The central bank responded that records retained by the New York Fed “were proprietary records of the Reserve Bank, and not Board records subject” to the request, court records show.

Bloomberg filed suit in November 2008 in U.S. District Court in New York, challenging the Fed’s denial, as well as the denial of a separate request made in May 2008, seeking records of four other emergency lending programs.

The district court held that the Fed should release documents related to those four programs, and should search documents held by the New York regional bank to determine whether any of them should be considered records of the board of governors.

The U.S. Court of Appeals on March 19 upheld the district court’s ruling on the lending programs.

Representative Darrell Issa of California said in a statement that yesterday’s disclosure may “signal a new willingness to cooperate with Congress as we investigate how these bailout deals were structured and what the decision making process entailed.”

To contact the reporter on this story: Craig Torres in Washington at ctorres3@bloomberg.net

Last Updated: April 1, 2010 01:34 EDT

Greenspan, Rubin, Prince to Testify for Financial Crisis Panel: Bloomberg

I wonder if wifey Andrea Mitchell will report? NBC?

March 31, 2010, 9:29 PM EDT

By Jesse Westbrook

March 31 (Bloomberg) — Former Federal Reserve Chairman Alan Greenspan, ex-U.S. Treasury Secretary Robert Rubin and Charles Prince, who stepped down as Citigroup Inc. chief executive officer in 2007, will testify next week before the panel probing the financial crisis.

The Financial Crisis Inquiry Commission will hear from Greenspan on April 7, the panel said in a statement today. Rubin and Prince will testify the following day.

The FCIC, charged with determining what caused the worst U.S. economic slump since the Great Depression, is investigating the roles banks and regulators played in spurring or failing to prevent a crisis that led to more than $1.7 trillion in writedowns and credit losses at financial companies worldwide.

Testimony from Greenspan, Rubin and Prince shows the panel is shifting its focus to the Fed, where Greenspan served until 2006, and Citigroup, where Rubin became a senior adviser after serving in the Treasury post under President Bill Clinton. Citigroup got $45 billion in U.S. government bailout funds in 2008 after the collapse of the mortgage market froze credit.

U.S. Comptroller of the Currency John Dugan, whose agency oversees national banks, will also testify on April 8. Former Fannie Mae Chief Executive officer Daniel Mudd will appear April 9 along with former directors of the Office of the Federal Housing Enterprise Oversight.

The U.S. government rescued Fannie Mae in August 2008 after the housing slump threatened the survival of the government- sponsored company.

The FCIC, whose members were appointed by Congress, has been investigating the financial crisis since last year. It is supposed to deliver its findings to lawmakers in December.

–Editors: Gregory Mott, William Ahearn

To contact the reporter on this story: Jesse Westbrook in Washington at jwestbrook1@bloomberg.net.

To contact the editor responsible for this story: Alec McCabe at amccabe@bloomberg.net.

NYC Residents Facing Foreclosure to Receive Free Legal Assistance

nyc

A new initiative spearheaded by mayor Michael Bloomberg aims to provide free legal aid to New York City residents facing foreclosure.

The so-called “NYC Service Legal Outreach” will support homeowners with free legal assistance during the mandatory settlement conference stage, which is a meeting between the bank and homeowner where foreclosure alternatives are negotiated.

Such conferences give homeowners an opportunity to avoid foreclosure, and the presence of legal representatives will likely improve a homeowner’s chances.

The NYC Service Legal Outreach program intends to recruit 300 volunteer attorneys over the next three months – 100 will be stationed at courthouses to screen homeowners and provide counsel.

An additional 200 attorneys will be directly matched with individual homeowners and will advocate for the homeowners throughout the foreclosure settlement process.

“The City’s legal community has a long, proud history of pro bono work, and we are tapping into that tradition to bolster our comprehensive effort to prevent foreclosures,” said NYC Mayor Michael Bloomberg, in a release.

“The City has not been hit as hard as some other areas by the foreclosure crisis, in part due to our efforts, but we are seeing a serious impact. No family facing the loss of their home should be without representation.”

Last year, there were 20,773 foreclosure filings in New York City, up from roughly 14,000 in 2007 and 2008.

That compares to less than 7,000 foreclosure filings in the City in 2004.

The NYC neighborhoods most impacted by foreclosure filings include Jamaica, Bellrose/Rosedale, Flatlands/Canarsie, East New York and the North Shore of Staten Island.

Homeowners facing foreclosure who are interested in retaining free legal services should go to www.nyc.gov or call 311.

Source: TheTruthAboutMortgage

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Could Bloomberg Lawsuit Mean Death to Zombie Banks?

Center for Media and Democracy and http://www.BanksterUSA.org

Posted: March 28, 2010 09:43 AM
My recollection is a bit hazy. How does one kill a zombie exactly? Do you stake it? Cut off its head? Nationalize it? Perhaps it’s time to ask the experts at Bloomberg News.

Lost in the haze of the hoopla surrounding the insurance reform bill was some big news on the financial reform front. On March 19, Bloomberg won its lawsuit against the Federal Reserve for information that could expose which “too big to fail” banks in the United States are walking zombies and which banks were merely rotting.

Bloomberg, which has done some of the best reporting on the financial crisis, is also leading the charge on the fight for transparency at the Federal Reserve and in the financial sector. While many policymakers and reporters were focusing their attention on the $700 billion Troubled Asset Relief Program (TARP) bailout bill passed by Congress, Bloomberg was one of the first to notice that the TARP program was small change compared to the estimated $2-3 trillion flowing out the back door of the Federal Reserve to prop up the financial system in the early months of the crisis.

Way back in November 2008, Bloomberg filed a Freedom of Information Act request asking the Fed what institutions were receiving the money, how much, and what collateral was being posted for these loans. Their basic argument: when trillions in taxpayer money is being loaned out to shaky institutions, don’t the taxpayers deserve to know their chances of being paid back?

Not according to the Fed. The Fed declined to respond, forcing Bloomberg to sue in Federal Court. In August of 2009, Bloomberg won the suit. With the backing of the big banks, the Fed appealed , and this month, Bloomberg won again. A three judge appellate panel dismissed the Fed’s arguments that the information was protect “confidential business information” and told the Fed that the public deserved answers.

The Fed is the only institution in the United States that can print money. It can drag this case out as long as it wants, but isn’t it a bid odd that taxpayer dollars are being used to keep information from the taxpayers?

After an unexpectedly rocky confirmation battle, Ben Bernanke kicked off his new term as Fed Chair in February with pledges of openness and transparency. “It is essential that the public have the information it needs to understand and be assured of the integrity of all our operations, including all aspects of our balance sheet and our financial controls,” said Bernanke. President Obama also pledged a new era of transparency when he entered office. What is going on here?

One theory is that Fed is hiding the secret assistance it provided to the financial sector, because it would expose how many Wall Street institutions are truly walking zombies, kept alive by accounting tricks like deferred-tax assets, “a fancy term for pent-up losses that the bank hopes to use later to cut its tax bills,” according to Bloomberg’s Jonathan Wiel. If this is the case, it raises doubts about the wisdom of Congress’ only plan to take care of the “too big to fail” problem by trusting regulators to “resolve” failing banks. If there is no will to resolve them now, why should we think regulators will resolve them in the future?

Another theory is that the Fed is hiding the fact that it broke the law by accepting a boatload of toxic assets as collateral. The law says the Fed is only supposed to take “investment grade” assets as collateral.

In either case, the public deserves answers. “This money does not belong to the Federal Reserve,” Senator Bernie Sanders. “It belongs to the American people, and the American people have a right to know where more than $2 trillion of their money has gone.”

The President and the Fed Chairman must live up to their pledges of transparency. They can start by abandoning this lawsuit and opening the doors on the Secrets of the Temple.