NYT: Justice Dept. Sets Record In Penalties For Fraud
The Justice Department collected a record $24.7 billion in penalties from fraud and other cases in the 2014 fiscal year, the agency said on Wednesday, as fines against banks for financial misconduct soared. Collections from civil and criminal actions, including money collected on behalf of other agencies, was $8 billion in 2013, and $13 billion in 2012. Collections in 2014 were bolstered by multibillion-dollar payouts from JPMorgan Chase and Citigroup to resolve claims they misled investors about the quality of mortgage bonds in the run-up to the financial crisis, and include $11 billion in payments made to federal agencies or states. Payouts in the 2014 fiscal year, which ended Sept. 30, also include hundreds of millions of dollars in fines levied on UBS and Royal Bank of Scotland.
AP: Bank Of America Agrees To Nearly $17B Settlement
The government has reached a $16.65 billion settlement with Bank of America over its role in the sale of mortgage-backed securities in the run-up to the financial crisis, the Justice Department announced Thursday. The deal calls for the bank, the second-largest in the U.S., to pay a $5 billion cash penalty, another $4.6 billion in remediation payments and provide about $7 billion in relief to struggling homeowners. The settlement is by far the largest deal the Justice Department has reached with a bank over the 2008 mortgage meltdown.
In the last year, JPMorgan Chase & Co. agreed to a $13 billion settlement while Citigroup reached a separate $7 billion deal. At a news conference, Attorney General Eric Holder said the bank and its Countrywide and Merrill Lynch subsidiaries had “engaged in pervasive schemes to defraud financial institutions and other investors” by misrepresenting the soundness of mortgage-backed securities. The penalties, Holder said, go “far beyond the cost of doing business.”
Bloomberg: Housing Starts Rebound In U.S. As Inflation Eases
Home construction rebounded in July and the cost of living rose at a slower pace, showing a strengthening U.S. economy has yet to generate a sustained pickup in inflation. A 15.7 percent jump took housing starts to a 1.09 million annualized rate, the strongest since November, and halted a two-month slide, the Commerce Department said in Washington. The consumer price index increased 0.1 percent after rising 0.3 percent in June, the Labor Department also reported. An improving job market and cheaper borrowing costs are helping revive residential real estate, helping boost sales at companies such as Home Depot Inc. (HD) As inflation continues to run below the Federal Reserve’s target, it gives the central bank room to keep interest rates low well after the projected end of its bond-buying program in October.
The pickup in housing starts in the U.S. exceeded all estimates in a Bloomberg survey of 75 economists. The median projection called for 965,000, within a range of 898,000 to 1.03 million. The Commerce Department also revised June’s reading up to a 945,000 pace from a previously reported 893,000. The report also indicated the building industry will probably consolidate gains in coming months as permits for future projects advanced 8.1 percent to a 1.05 million pace, about in line with the current level of starts. The gain reflected the most applications for single-family dwellings since November.
Bloomberg: Job Market Tilts Toward U.S. Workers In Virtuous Cycle
The balance of power in the job market is shifting slowly toward employees from employers. Bob Funk sees it firsthand from his position as chief executive officer of staffing agency Express Employment Professionals. “We’re short of people in a number of cities,” he said. So he’s changing the focus of his $2.5 billion, Oklahoma City-based business. Instead of concentrating on finding jobs for those who want them, Express Employment is putting more effort into finding workers for companies that need them. “We’re back in the recruiting market again,” Funk said. The 74-year-old industry veteran isn’t the only one to notice the change. Americans who have been hunting for employment for more than six months
are finding they’re having better luck landing a job, while people who had given up looking are returning to the labor force to resume their search. Companies, meanwhile, are beefing up their in-house recruiting teams and increasingly using complicated computer algorithms to scour the Web for prospective job candidates. This is all good news for the economy, according to Nariman Behravesh, the Lexington, Massachusetts-based chief economist for IHS Inc. He said the U.S. has entered a “virtuous cycle” where job gains are leading to increased household expenditures, encouraging employers to hire more workers. Consumer spending rose in June by the most in three months, according to Commerce Department data published Aug. 1.
(Excerpts from his remarks, as provided by the Justice Department)
“We have seen a great deal of progress over the years. But we also see problems and these problems stem from mistrust and mutual suspicion.
I just had the opportunity to sit down with some wonderful young people and to hear them talk about the mistrust they have at a young age.
These are young people and already they are concerned about potential interactions they might have with the police.
I understand that mistrust.
I am the Attorney General of the United States, but I am also a black man. …I think about my time in Georgetown — a nice neighborhood of Washington — and I am running to a picture at about 8 o’clock at night. I am running with my cousin.
Police car comes driving up, flashes his lights, yells, ‘Where you going? Hold it!’ I say, ‘Whoa, I’m going to a movie.’
Now my cousin started mouthing off; I’m like, ‘This is not where we want to go. Keep quiet.’
I’m angry and upset.
We negotiate the whole thing and we walk to our movie.
At the time that he stopped me, I was a federal prosecutor. I wasn’t a kid. I was a federal prosecutor.
I worked at the United States Department of Justice.
So I’ve confronted this myself.
We are starting here a good dialogue. But the reality is the dialogue is not enough. We need concrete action to change things in this country. That’s what I have been trying to do. That’s what the President has been trying to do.
We have a very active Civil Rights Division. I am proud of what these men and women have done. As they write about the legacy of the Obama administration, a lot of it is going to be about what the Civil Rights Division has done.
So this interaction must occur. This dialogue is important. But it can’t simply be that we have a conversation that begins based on what happens on August 9, and ends sometime in December, and nothing happens.
As I was just telling these young people, change is possible. The same kid who got stopped on the New Jersey freeway is now the Attorney general of the United States.
Morning again everyone, have to extend my R&S break for another while, short of time these mornings, but we’ll be updating through the day. So, as ever, if you have any links you’d like to share, please post them in the comments – thank yooooou!
On This Day
President Barack Obama in Rochester, August 18, 2012 ( Photograph by Scout Tufankjian)
President Barack Obama in Manchester, August 18, 2012 (Photograph by Scout Tufankjian)