Bank of America Billion Dollar Hustle
BLURB: The U.S. attorney for the Southern District of New York reported
Wednesday they filed a civil lawsuit against Bank of America Corp. (BAC) for
mortgage fraud, alleging BofA cooked up a new loan origination process called
the "Hustle," designed to process loans "at high speed and without quality
The U.S. attorney for the Southern District of New York reported Wednesday
they filed a civil lawsuit against Bank of America Corp. (BAC) for mortgage
fraud, alleging BofA cooked up a new loan origination process called the
"Hustle," designed to process loans "at high speed and without quality
checkpoints." The suit also alleges that Countrywide and later BofA after it
acquired Countrywide, from 2007 through 2009, sold defective residential
mortgage loans to Fannie Mae (FNMA) and Freddie Mac (FMCC) that eventually
defaulted, resulting in more than $1 billion in "losses and countless
United Therapeutics Corp. (UTHR) shares were sharply lower by 14% into
mid-afternoon trading after the Food and Drug Administration declined to approve
their new drug application for an oral formulation of a drug to treat high blood
pressure. United Therapeutics reportedly received a complete response letter
from the FDA that declined to approve the company's application for oral
treprostinil for the treatment of pulmonary arterial hypertension in its current
form. The FDA questioned the clinical importance of the six-minute walk distance
effect size shown in the company's Freedom-M study. The study showed the
inability to demonstrate an improvement in time to clinical worsening in all
three Phase III studies of oral trepostinil and the inability to demonstrate a
statistically significant effect on the six-minute walk distance in two
additional studies. The FDA said it was unsure whether an additional clinical
study would alter its impressions and suggested that United Therapeutics should
consider a fixed dose design as well as, more frequent dosing if the company
undertakes an additional study. "We will continue using our best efforts to gain
approval of oral treprostinil, and we will focus on doing so within the next
four years," said Chairman and Chief Executive Martine Rothblatt.
Facebook Inc. (FB) shares surged higher on Wednesday, up 18% into mid-afternoon
trading after Citi Research upgraded the stock to buy, praising the social
network's quarterly report from a day earlier. "What investors have for the
first time since the FB IPO is fundamentals acceleration WITH a reasonable
valuation," analyst Mark Mahaney wrote in a note to clients. On Tuesday,
Facebook reported a surge in advertising revenue as well as an increase in
mobile monthly active users.
The U.S. Department of Commerce reported Wednesday, sales of new single-family
homes in the U.S. rose 5.7% in September to a seasonally adjusted annual rate of
389,000, striking the highest pace since April 2010. The sales pace in August
was revised lower, down to 368,000 from prior estimate of 373,000. Median sales
price in September declined 3.2% to $242,400. The supply of new homes declined
to 4.5 months at September's sales rate from 4.7 months in August. By region,
sales during September fell only in the Midwest. Despite the gain in September,
the pace of new home sales remains relatively low compared with a peak of almost
1.4 million in 2005.
Text of the Federal Open Market Committee statement issued by the Federal
Reserve on Wednesday:
“Information received since the Federal Open Market Committee met in September
suggests that economic activity has continued to expand at a moderate pace in
recent months. Growth in employment has been slow, and the unemployment rate
remains elevated. Household spending has advanced a bit more quickly, but growth
in business fixed investment has slowed. The housing sector has shown some
further signs of improvement, albeit from a depressed level. Inflation recently
picked up somewhat, reflecting higher energy prices. Longer-term inflation
expectations have remained stable. Consistent with its statutory mandate, the
Committee seeks to foster maximum employment and price stability. The Committee
remains concerned that, without sufficient policy accommodation, economic growth
might not be strong enough to generate sustained improvement in labor market
conditions. Furthermore, strains in global financial markets continue to pose
significant downside risks to the economic outlook. The Committee also
anticipates that inflation over the medium term likely would run at or below its
2 percent objective. To support a stronger economic recovery and to help ensure
that inflation, over time, is at the rate most consistent with its dual mandate,
the Committee will continue purchasing additional agency mortgage-backed
securities at a pace of $40 billion per month. The Committee also will continue
through the end of the year its program to extend the average maturity of its
holdings of Treasury securities, and it is maintaining its existing policy of
reinvesting principal payments from its holdings of agency debt and agency
mortgage-backed securities in agency mortgage-backed securities. These actions,
which together will increase the Committee’s holdings of longer-term securities
by about $85 billion each month through the end of the year, should put downward
pressure on longer-term interest rates, support mortgage markets, and help to
make broader financial conditions more accommodative. The Committee will closely
monitor incoming information on economic and financial developments in coming
months. If the outlook for the labor market does not improve substantially, the
Committee will continue its purchases of agency mortgage-backed securities,
undertake additional asset purchases, and employ its other policy tools as
appropriate until such improvement is achieved in a context of price stability.
In determining the size, pace, and composition of its asset purchases, the
Committee will, as always, take appropriate account of the likely efficacy and
costs of such purchases. To support continued progress toward maximum employment
and price stability, the Committee expects that a highly accommodative stance of
monetary policy will remain appropriate for a considerable time after the
economic recovery strengthens. In particular, the Committee also decided today
to keep the target range for the federal funds rate at 0 to 1/4 percent and
currently anticipates that exceptionally low levels for the federal funds rate
are likely to be warranted at least through mid-2015. Voting for the FOMC
monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice
Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Jerome H.
Powell; Sarah Bloom Raskin; Jeremy C. Stein; Daniel K. Tarullo; John C.
Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker,
who opposed additional asset purchases and disagreed with the description of the
time period over which a highly accommodative stance of monetary policy will
remain appropriate and exceptionally low levels for the federal funds rate are
likely to be warranted.”
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