Raj Rajaratnam wants to keep medical issues a secret before sentencing

According to the AP lawyers for billionaire hedge fund founder Raj Rajaratnam told a judge Monday that he should not unseal arguments about their client’s medical issues before his insider trading sentencing next week because it may set off a “salacious and morbid media feeding frenzy.”

The lawyers acknowledged that they had turned over “sensitive and private information” to the judge along with their request that he be treated leniently at his Oct. 13 sentencing. But they said federal court rules and court precedent in this part of the country dictate that the information should remain confidential.

Prosecutors said last week it was only fair to unseal the information since Rajaratnam was asking for leniency in part on medical grounds from a potential sentence of up to 30 years in prison. “When a defendant makes such arguments, he waives his right to privacy, particularly if those conditions influence the sentence to be imposed in any way,” they said. Rajaratnam’s lawyers disagreed..…

Read more at http://www.washingtonpost.com/business/industries/ny-hedge-fund-founder-asks-court-to-keep-medical-issues-sealed-before-oct-13-sentencing/2011/10/03/gIQAzdNgIL_story.html

Wait...wait..before you dismiss the Wall Street occupation

According to Reuters, it would seem that a populist uprising against corporate greed would find a widely approving audience, yet the current occupation of Wall Street has mostly been received with a mix of muted support and mockery. The now week old protest, which has been reported to have attracted several hundred activists this past weekend, is struggling to be understood.

There is no leader, by design, and the demands are still being formed by General Assemblies, a loose group of protesters who gather to discuss their grievances with what they see as a system that takes from the middle class and poor and protects the rich. They represent what they call “the 99%,” the population outside of top 1% of income earners.

Protesters complained early on that they were not receiving attention from mainstream media, so they took to social media, using the hashtag #occupywallst (and apparently spreading to #occupyboston #occupyLA #occupydenver #occupytexas #occupynola #occupychi #occupyphoenix as well,) sharing minute by minute accounts on Twitter, posting photos and video, and live streaming nearly the entire time.

The claims that there is a lack of mainstream coverage doesn’t seem to hold water, and could simply be a ploy to encourage even more coverage. The protests have been covered by Reuters, The New York Times, and major networks. Anonymous and Ad Busters are major promoters and loose organizers of the protests but the movement doesn’t appear to be born directly from the groups.

Are they a mob of over-privileged, unemployed trustafarians? Many of them likely are. Does it matter? Dismiss them if you will, they’re motivated and mobilized....

Read more at http://blogs.reuters.com/anthony-derosa/2011/09/26/dont-dismiss-the-wall-street-occupation/

Yikes! BofA, JPMorgan Could Face $13.5B Claim

Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. are among mortgage servicers that may face $13.5 billion in costs if the Federal Housing Administration rejects insurance claims on soured loans, according to FBR Capital Markets Corp, Bloomberg reports.

Denials from the FHA, which insures loans made by banks and private lenders for home purchases, could be the latest expense from U.S. housing programs, Paul Miller, an FBR analyst, said today in a note to clients. The government said in May that it could pursue other lenders after suing Deutsche Bank AG for more than $1 billion, accusing the firm of lying to the FHA while arranging mortgage insurance.

“The servicing of FHA loans comes with highly technical regulatory mandated procedures,” Miller said in the note. “The agency’s narrowly proscribed requirements make it more likely for the servicers, not the originators, to be tripped up. If the agency is looking for a way to deny a claim, the servicing process is an easy target.”

Lenders and servicers have faced surging costs as U.S.- owned Fannie Mae and Freddie Mac demanded that banks repurchase defective loans and the U.S. sued 17 firms to recoup losses on mortgage-backed securities. Bank of America has plunged 59 percent in New York this year, falling below $6 today for the first time since 2009. JPMorgan and Wells Fargo have dropped 32 percent and 25 percent, respectively....

Find out more at http://www.bloomberg.com/news/2011-10-03/bofa-jpmorgan-face-13-5-billion-in-fha-claim-costs-fbr-says.html

Gross: Forget the “New Normal” Recession Risk even worse than that

From Bloomberg: Bill Gross, the manager of the world’s biggest bond fund, said the global economy risks lapsing into recession with the pace of growth falling below the “new normal” level the firm has predicted since 2009.

“Sovereign balance sheets resemble an overweight diabetic on the verge of a heart attack,” Gross wrote in a monthly investment outlook posted on Newport Beach, California-based Pacific Investment Management Co.’s website today. “If global policy makers could focus on structural as opposed to cyclical financial solutions, new normal growth as opposed to recession might be possible. Long-term profits cannot ultimately grow unless they are partnered with near equal benefits for labor.”

Pimco outlined the new normal scenario at its annual Secular Forum in May 2009 that set investment guidelines for the firm for the next three to five years. The forecast predicted that following the market collapse in 2008 the U.S. economy would grow at a below-average pace for the next several years as growth in the developed markets slows, unemployment stays elevated and the “heavy hand of government” would be evident in the markets…..

Read more at http://www.bloomberg.com/news/2011-10-03/pimco-s-gross-says-global-recession-risk-is-overtaking-new-normal-forecast.html

OMG! Zero Bonuses At Goldman

In what is certainly a clear sign of the apocalypse, at least for Wall Streeters, there is now speculation that the holiest of holys, none other than Golman Sachs, may be planning to no bonuses this year following a third quarter which now everyone expects will be the worst for the company in recent history (which is to be expected with the firm's prop trading operation several crippled, although still marginally operational in various other guises) according to zerohedge

According to The Australian: "Goldman Sachs is planning to slash bonuses to almost zero amid growing expectations that the Wall Street bank is about to slide into the red for only the second time in its history. The market meltdown that began in August has hammered the revenues of all the big global investment banks. Analysts have been slashing their forecasts for Goldman's third-quarter results, due on October 18, with most now expecting it to report a loss." And don't tell Morgan Stanley this but... " Morgan Stanley, its closest rival, could also fall into the red." This means no mas dinero at Times Square-o either.

Yet this is nothing compared to the media reaction when mainstream journalism figures out just how many partners and MDs at both Goldman and MS are underwater on loans they have taken out from the company itself in exchange for unvested stock struck at prices anywhere between 50 and 100% higher. Oopsie Daisy....

Read more at http://www.zerohedge.com/news/zero-bonuses-goldman

Fasten Your Seatbelts: American Airlines shares tumble 18 percent on outlook

Reuters reports that shares of American Airlines parent AMR Corp (AMR.N) fell more than 18 percent on Monday as analysts debated the prospects for a bankruptcy filing for the third- largest U.S. airline, which lags its industry peers.

Airline stocks were down broadly on concerns that a weak economy will drain travel demand and hit fares this autumn. But American, seen financially as the weakest major carrier, saw the worst share losses on a percentage basis. The stock was down 15.9 percent, or 47 cents, at $2.49 on the New York Stock Exchange.

"When can they stop the bleeding of cash?" asked Basili Alukos, an equity analyst at Morningstar. The carrier had a second-quarter net loss of $286 million, while rivals showed profits….

Read more at
http://www.reuters.com/article/2011/10/03/us-amr-shares-idUSTRE79249920111003

Hot News You Can Use: 15 Stocks That Everyone's Shorting As The Market Gets Clobbered

UBS is out with its latest list of 15 most shorted stocks based on the highest concentration of clients. Blue chips like Johnson & Johnson, Verizon, and Citigroup make the list. As does Green Mountain Coffee which has frustrated short-sellers, though its stock is off its year's highs.

Note: Stocks listed are from a UBS report, based on its highest concentration of clients, as of September 30, 2011. Data on YTD returns and short percent of float are from Yahoo Finance….

Find out more at : http://www.businessinsider.com/most-shorted-stocks-ubs-2011-10#ixzz1ZkHFHi3j