Unstructured Finance

The Federal Bureau of Investigation’s press office has embarked on a bit of customer satisfaction research: The department is asking journalists to rate its performance during the hostage standoff in Alabama that ended last week.

It is a rare glint of cooperative spirit in the traditionally contentious relationship between journalists and public relations specialists.

A public affairs officer sent journalists an online survey asking them to say whether the information the FBI gave them during the early days of the standoff was “sufficient” – enough to do their jobs – or whether it was too little.

The survey also asked journalists to put their overall experience with the FBI’s press officers into categories such as “extremely helpful” or “not helpful at all.”

The FBI initially said the survey was not for publication, but then agreed to let Reuters write about it.

Goldman Sachs Chief Executive Lloyd Blankfein has been sporting a beard lately, which has some people asking: is he on his way out?

The 58-year-old former commodities salesman shaved his beard, lost 50 pounds and quit smoking as he prepared to take over the reins of Goldman Sachs in 2006. He also “started dressing more like a banker and less like a renegade,” according to William Cohan, a former investment banker who wrote a book about Goldman Sachs.

Although Blankfein hasn’t been seen sporting motorcycle jackets or packing on the pounds yet, he surprised crowds at the World Economic Forum in Davos, Switzerland, last month with more than a five o’clock shadow. And on Tuesday he appeared on CNBC again with an even fuller beard.

By Matthew Goldstein

Don’t be surprised if President Obama includes a line or two in his State of Union address this evening about the need for a plan to allow millions of struggling homeowners whose mortgages are packaged into so-called private label mortgage-backed securities to get a chance to either refinance their loans or restructure them.

The Washington Post is reporting today that mortgage refinancing may be one of the laundry list of items Obama will talk about tonight. And for several months now, investors in private mortgage-securities–deals issued by Wall Street banks and financial firms and not guaranteed by Fannie or Freddie–have been quietly bracing for the Obama administration to move forward with a new refinancing effort.

Up until now, the federal government’s main attempts at trying to help homeowners take advantage of the Federal Reserve’s efforts to keep pushing interest rates to zero has been to prod banks and mortgage servicers to refinance home loans held in so-called agency debt guaranteed by Fannie and Freddie. But programs like HAMP and HARP have provided little relief to the millions of homeowners whose loans are held in private label securities.

Ex Wall Streeters talk about the better life working at a startup

Here’s a post from UF contributor and intrepid Wall Street reporter Lauren T. LaCapra, who is on assignment:

By Lauren Tara LaCapra

“One last question,” the moderator asked the panel of former Wall Streeters now working for fast-growing tech startups. “Would any of you go back to banking?”

One by one the five panelists, some of whom work for hot shops like FourSquare and Spotify, each shook their heads: “No…no…no.”

By late January last year, not even the London Whale himself thought the massive derivatives bets that eventually cost the bank $6.2 billion were such a good idea.

The Wall Street Journal reported today that Bruno Iksil, the credit trader nicknamed ‘the London Whale’ for the outsized positions he took in the small market for the CDX Index, warned his bosses a year ago that the size of his desk’s positions had gotten “scary.”

JPMorgan admitted as much in the internal report it released to the public on Jan. 16, but kept Iksil’s name out of emails quoted in the report, supposedly to protect UK privacy laws. The Journal got confirmation that Iksil was indeed the author of the emails, and that he made a presentation expressing his worries to the bank’s chief investment officer, Ina Drew, on Feb. 3, 2012.

Mortgage funds roared home with returns of almost 19 percent last year, trouncing all other hedge fund strategies and beating the S&P 500 stock index, which rose 13 percent.

BTG Pactual’s $245.5 million Distressed Mortgage Fund, which invests primarily in distressed non-agency Residential Mortgage-Backed Securities (RMBS), returned about 46 percent for the year, putting it at the top of HSBC Private Bank’s list of the Top 20 performing hedge funds and making it one of 2012′s best performing funds.  Bear in mind the the average hedge fund gained only 6 percent last year.

HSBC’s hedge fund platform features hundreds of funds, including many of the industry’s biggest and best known managers, and the bank releases regular performance updates throughout the year.

Not everyone agrees that using high-speed machines to trade stocks in less time than it takes the average person to blink is a bad thing, but the people who do might be heartened by the letter a congressman sent the U.S. Securities and Exchange Commission on Friday.

Rep. Edward Markey, a Massachusetts Democrat who has waged a decades-long struggle against computerized trading sent the SEC a hint: The power to curb high-frequency trading has been within its grasp all along.

In his letter, Markey described a law he co-sponsored in 1989 to increase the agency’s power to regulate computerized trading, a precursor to HFT that employed computer programs to make trading decisions without the participation of conscious humans. The law lets the SEC “limit practices which result in extraordinary levels of volatility,” according to Markey’s citation.

By Matthew Goldstein

It’s been a while since we last wrote about the legal struggles of Tyrone Gilliams, the Philadelphia commodities trader/hip-hop promoter/wannabe reality show star/self-styled preacher, whom federal authorities have charged with scamming investors out of $5 million. But the University of Pennslyania graduate is making news again with the scheduled start of his Jan. 22 criminal trial in New York federal court.

Gilliams will be on trial with his former lawyer Everette Scott. Both men are charged with working together to “devise a scheme and artifice to defraud” investors out of their money that was supposed to have been invested in Treasury Strips–a derivative of U.S. Treasury bonds the separates the coupon and principal on the underlying note into different securities.

For the details of where the investors’ money allegedly went, read our earlier special report from May 2011 and this feature article from last year in Philadelphia magazine.

By Matthew Goldstein and Svea Herbst-Bayliss

The WSJ is out today with a big story saying Stevie Cohen and SAC Capital are bracing for up to $1 billion in redemptions, or roughly 16 percent of the $6.3 billion it manages for outside investors. That’s a lot of money but sources are telling us redemptions will likely come in lower than that—think more in the $500 million range.

And more important, no matter what the figure is, don’t look for it to put much crimp in Cohen’s operation.

The deadline for submitting redemptions is Feb. 15, so there is still plenty of time for outside investors make a decision about sticking around or leaving. And even if an investor puts in a redemption notice now, those requests to withdraw money can get pulled at the last minute if the investor has a change of heart.

By Matthew Goldstein

Institutional money keeps rushing into the market for foreclosed homes, with some big players snapping up homes at breakneck speed. But the question is whether the big buyers are throwing money around indiscriminately and Wall Street’s big housing long will come up a bit short.

The other day Bloomberg reported that Blackstone Group has already spent $2.5 billion to buy 16,000 homes to manage as rentals and eventually sell them when prices appreciate high enough. Blackstone says it’s finding that the going price for homes sold at foreclosure auctions and out of bank inventories are rising quicker than anticipated.

But Blackstone, which some believe could spend up to $5 billion on single family home space, isn’t alone in racing to snap-up foreclosed homes in states like Florida, Georgia, California, Nevada and Arizona. American Homes 4 Rent, a firm that has $600 million from the Alaska Permanent Fund, is buying up hundreds of homes a month, industry sources say. Colony Capital, the other big institutional player is no less aggressive.