Receiving Wide Coverage ...
Missing Bank Director: Aubrey Lee Price, an investment adviser and a director of Montgomery Bank & Trust in Ailey, Ga. (which the FDIC seized Friday), has been missing for several weeks. On Tuesday the government accused him of wire fraud related to the embezzlement of $17 million from the bank. He has also been accused of defrauding investors in the funds he managed. Right before his disappearance, Price sent business associates a letter that read like a suicide note. Authorities consider him a fugitive. Wall Street Journal, Atlanta Journal-Constitution
Liborama: The beat goes on.
“US raises fresh concerns over lower Libor” — Yes, even today, the London interbank offered rate is suspiciously low. Which is great if you’re a borrower. If you’re a counterparty paying the fixed rate in an interest-rate swap agreement, not so much. Washington is paying close attention this time. (Financial Times)
Also in FT: Rep. Barney Frank “calls Libor scandal ‘outrageous.’”
If you’ve been on vacation the last couple weeks and don’t get all the jokes your coworkers are making about “clean-clean” versus “dirty-clean,” read Gretchen Morgenson’s Sunday Times column to get caught up on the Libor affair.
For those who have been following along: Today the Bank of England’s Paul Tucker will give a Parliament committee his side of the story about conversations with former Barclays CEO Bob Diamond regarding the bank’s Libor rates. Ahead of his appearance, Tucker has released email correspondence from October 2008 that suggests the central bank was worried about “Barclays’ ability to finance itself at a time of stress, without any tacit suggestion the bank should manipulate its Libor submissions,” according to the FT. Wall Street Journal, Financial Times, New York Times
Wall Street Journal
“A Mexican cocaine-trafficking cartel used accounts at Bank of America … to hide money and invest illegal drug-trade proceeds in U.S. racehorses,” according to a court affidavit filed by the FBI.
Michael Perry and other former executives of IndyMac Bancorp, holding company of the thrift that spectacularly failed four years ago, settled a shareholder suit. The D&O insurer will pay the investors $6.5 million; Perry and his former colleagues will not have to reach into their own pockets. The D&O policy has an estimated $80 million left, and there are other suits pending against Perry and other IndyMac managers, including one brought by the FDIC seeking $600 million.
Financial Times
The European Central Bank’s recent rate cuts prompted JPMorgan, BlackRock and Goldman Sachs to close money market funds to new investors so yields are not diluted for existing funds shareholders. “New inflows would have to be invested in securities issued at extremely low or negative yields,” Goldman told clients.
Bank of New York Mellon agreed to pay $280 million to settle a lawsuit over a structured investment vehicle that tanked in October 2008.
We’re about a month late to this party, but the FT Alphaville blog’s three-part series “Beyond Scarcity” is mind-blowing. The gist is that “abundance is now a key driver of an irreversible and global deflationary spiral that few economists and investors have yet to account for. A deflation which ironically leads only to further technological process and abundance — and thus a future where the need for savings, and stores of value, is increasingly diminished.” Whoa.
New York Times
Congratulations to Barney Frank on getting married. The Times ran a wedding announcement Saturday.
Washington Post
An article says the subprime crash has “wiped out a generation of economic progress” for African-Americans and “could leave them at a financial disadvantage for decades” from damaged credit scores.
