Receiving Wide Coverage ...
Amazon's Card Reader: Amazon head honcho Jeff Bezos is notorious for his predilection for spending money and his apparent lack of concern with making a profit. So it should come as no surprise when the Journal quotes an Amazon analyst saying the e-commerce giant won't make any money off its new Square-like mobile card reader, Amazon Local Register, which American Banker reported on Wednesday. The Journal notes that while Square has become hugely popular with food trucks and indie coffee shops, the San Francisco company's margins are razor thin. But maybe Amazon doesn't care about making a profit from Local Register, and instead just wants the user data, the Financial Times opines. Then there's the fact that many brick-and-mortar retailers, such as bookstores, that might deploy Local Register don't exactly view Amazon as their best friend. But Amazon might be able to make headway with retailers who don't intrinsically see the website as its competitor, namely beauty salons, fast-food restaurants or any other business that sells a service or immediately consumable product. Then there's this observation, made by the New York Times and Bloomberg: What took Amazon so long? Square has been around for years, and eBay's PayPal and even Groupon have already developed and released their own mobile card readers.
Wall Street Journal
The market for repurchase agreements could again cause problems in the wider economy and needs to be restricted, New York Fed President William Dudley and Boston Fed President Eric Rosengren said Wednesday at a conference in New York. Their comments come a day after the Journal reported that Goldman Sachs, Barclays and other large banks were already taking steps to pull back from the so-called repo markets. The Fed should impose further restrictions on repo lending, even though the banks are pulling back already, the two officials said. Somewhat paradoxically, Dodd-Frank made it more difficult for the Fed to take the kind of action it did in 2008 to backstop banks' repo lending.
New York Times
Didn't we learn something from subprime mortgage-backed securities? Apparently the latest hot securities offering isn't as risky as subprime MBS, according to a Times report. Hedge funds and mutual funds have been buying bonds backed by mortgages on homes on the verge of foreclosure. The bonds (which are unrated by the ratings agencies) offer a higher yield than the paltry 2.42% paid out on the 10-year Treasury note. Mutual funds say their risk is comparatively low. Some of the mortgages on which the bonds are based are FHA-backed and were sold by the Department of Housing and Urban Development. Freddie Mac has also sold some of the mortgages. Both HUD and Freddie Mac are looking to finally purge themselves of all remaining ties to the financial crisis.
The paper has a fascinating story about an upcoming trial in federal court in Brooklyn that involves a Jordanian bank accused of facilitating the financing of terrorism. It's the first civil trial against a bank under the Anti-Terrorism Act. The story also includes this nugget about U.S. banks: JPMorgan, Citigroup and Bank of America have all reduced money-transfer services to strife-torn areas, like Mexico.