Receiving Wide Coverage ...
Big Brother and Banking: The financial services industry has made a few cameos in the unfolding story of the National Security Agency's vast surveillance of phone "metadata" and Internet communications. First, Edward Snowden, the (probably now former) Booz Allen contractor who leaked NSA documents to the Guardian and the Washington Post, says he grew disillusioned while working for the CIA in Geneva in 2007. "CIA operatives were attempting to recruit a Swiss banker to obtain secret banking information. Snowden said they achieved this by purposely getting the banker drunk and encouraging him to drive home in his car. When the banker was arrested for drunk driving, the undercover agent seeking to befriend him offered to help, and a bond was formed that led to successful recruitment." A Times article notes that Palantir, a tech firm founded by PayPal vets including Peter Thiel, has been a key partner for the spy agencies. The same article says U.S. privacy laws "offer virtually no protection to non-telephone-related data like credit card transactions." And the Journal reports the NSA has indeed "cataloged credit-card transactions," though it's unclear if the "credit card companies" giving the agency this data are issuers or networks, since none of those "credit card companies" are named.
Wall Street Journal
"The housing-market recovery is here but there's a growing debate among bulls and bears over how long it will last and how strong it will become." The bulls argue there isn't enough housing to accommodate a growing population; bears point to tighter credit standards and the market's reliance on investors.
CDOs and CLOs are staging a comeback, but unlike the disastrous deals of the financial crisis, which sported memorable names like "Timberwolf" and "Abacus," the latest transactions are branded generically (e.g. "Arbor Realty Collateralized Loan Obligation Ltd.").
"U.S. Rules on Swaps Face a Barrier Abroad" This article is framed as a preview of an upcoming meeting between CFTC Chairman Gary Gensler and his European counterparts about the U.S. regulator's cross-border derivatives rules. But the real showdown appears to be between Gensler, on one side, and his fellow CFTC commissioners and the big banks, on the other. Foreign banks, including overseas branches of U.S. institutions, are supposed to comply with the rules by July 12. But the banks are pushing for another extension, and the CFTC's "swing vote" Democrat commissioner has joined his Republican colleagues in questioning the deadline.
"Five years on, the future of Fannie and Freddie is unclear" This "Lex" column is considering that future from an investment, rather than a policy, perspective, following Fairholme Capital Management's purchase of $2.4 billion in GSE preferred stock.
File under "revolving door": A former risk manager at Deutsche Bank claims he was fired for telling the SEC the German bank hid billions of dollars in losses on derivatives. One of the executives named in his discrimination suit is Robert Rice who just started as chief counsel to the SEC.
New York Times
"Some Baby Steps on Money Funds" SEC Chairman Mary Jo White's proposal is "much more incremental than her predecessor's," writes columnist Gretchen Morgenson.