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They’re Baaack: Cerberus Revives HELOC-Backed Bonds That Went ‘Extinct’ After The Crisis

A generation of Wall Street analysts and traders has come of age without many of the esoteric, mortgage-backed bonds and ‘synthetic’ derivatives that nearly destroyed the global economy in the run-up to the financial crisis. But as more financial firms cast about for products that will help pad their revenues as the Fed prepares to embark on its next rate-cutting cycle, products like these synthetic CDOs are being reintroduced as “safer” iterations of their pre-crisis cousins. In the latest example of this troubling trend, WSJ’s Ben Eisen reported Monday that Cerberus is bringing back bonds entirely backed by home equity lines of credit (or HELOCs) – just in time for a refinancing boom that many expect will be triggered by tumbling mortgage rates. HELOC-backed bonds disappeared in the aftermath of the crisis as issuance dried up, even as some brazen investors reaped massive profits by scooping up the extant bonds for pennies on the dollar. Yet, this troubling legacy didn’t stop four ratings agencies (including Fitch Ratings) from granting Cerberus’s $174 million issue a triple-A rating, indicating that they are among the safest investments available. “There has been some caution from issuers” about introducing new types of mortgage bonds, said Grant Bailey, the head of residential mortgage-backed securities at Fitch. One fund manager described the what’s-old-is-new-again mortgage-backed issues as a “creative” way of taking advantage of a housing market...

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Is Elon Musk Gaslighting America?

Authored by Robert Scheer via, Introduction by Natasha Hakimi Zapata, Tesla, from the get-go, has sold itself as a green dream in our era of rapidly-worsening climate change. But there’s a lot about the electric car company that’s more nightmarish than many of its fans or even the California government, which heavily subsidizes Tesla’s operations with hundreds of millions of dollars in tax exemptions and other incentives, would like to admit. Will Evans, an award-winning journalist with the Center for Investigative Reporting, published a hard-hitting series about Tesla’s flagrant labor violations, exposing Elon Musk’s purportedly progressive business for what it truly is: a green mirage. In the series, Evans reports on the clash between the manufacturing elements of the company and the management that operates like a tech startup, and how this contradiction has created often dangerous conditions for Tesla factory workers. Rather than address these very real issues, however, Musk and his company have chosen to brush them off and hide reports of injuries in order to maintain the illusion its customers buy into when they purchase their luxurious Tesla cars. “We started looking into Tesla because we were hearing that there was safety problems there, people getting hurt,” Evans tells Truthdig Editor in Chief Robert Scheer in the latest installment of “Scheer Intelligence.” “It has this great reputation for being this futuristic, forward-thinking, world-saving company that’s going to bring sustainable energy...

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America’s Adversaries Are Buying Gold Like A Nuke Is Going Off Tomorrow

Having tested $1300 numerous times over the past few years, gold has broken dramatically higher in the last month, hitting 6-year highs as President Trump rhetoric around the world raises tensions and increases the odds of WWIII. The surge in the precious metal has accompanied a collapse in bond yields around the world and a record level of negative-yielding debt… And while Gold volatility is soaring… Demand remains abundant, as Goldman details in its latest note, raising its outlook for gold, countries with “geopolitical tensions with the US” are buying everything: Central bank demand is gaining momentum and we now expect 2019 purchases to reach 750 tonnes vs 650 tonnes last year. Visible gold purchases YTD are running at 211 tonnes until April vs 117 tonnes over the same period last year (see Exhibit 11). Importantly, China just raised its gold purchasing pace from 10 tonnes per month to 15 tonnes for April and May as it aims to diversify its reserve holdings.  With the Fed and ECB now both likely easing monetary policy, more CBs may decide to add gold to their portfolios as they did between 2008 and 2012 (see Exhibit 12). Also, just recently, trade tensions between India and the US have begun to escalate as India retaliated with tariffs on US goods in response to US steel tariffs. Rising tensions with the US often create upside potential to a country’s...

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South Bend Police Call County for Backup After Increased Violence

After six shootings late Saturday night and early Sunday morning, the South Bend police department called in St. Joseph County officers for assistance. The increased violence occurred the same weekend that Mayor Pete Buttigieg held a contentious town hall addressing a June 16 police shooting. SBPD were first called in to respond to a mass shooting at Kelly’s Pub early Sunday morning. Ten people were injured, and one was killed. After the shooting, so many people showed up at South Bend’s Memorial Hospital to check in on the injured that the hospital went on lock down. Police were called in to manage the crowd. At the same time, a number of police officers were called in all over South Bend to respond to five other shootings, including one, where a witness said the shooter was targeting police. “Basically every resource we had was busy,” police spokesman Ken Garcia told the South Bend Tribune. St. Joseph’s County sheriff Bill Redman told the Tribune that the two departments often try to help each other out. “This isn’t something new, we will always try to assist one another,” Redman said. “South Bend was spread thin so they asked us for assistance.” After the weekend, Redman released a statement urging residents to stop the violence. “I strongly encourage the citizens of St. Joseph county to continue meeting peacefully and voice their concerns peacefully and...

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WaPo: Biden’s Had ‘An Explosion of Wealth’ Since Leaving White House

New reporting from the Washington Post details how former vice president Biden has earned millions of dollars since leaving the White House in what the Post described as “an explosion of wealth.”  Biden’s newfound wealth since leaving public office has mostly come from paid speeches, some of which earned him as much as $200,000, and book deals. The book deal for his 2017 memoir Promise Me, Dad was reportedly worth $8 million and covered three books from Biden and his wife, of which two have been published.  The former vice president’s campaign said he has given fewer than 50 paid speeches in the years since serving alongside President Obama but declined to give further details to the Post about how much he made from these speeches. Four contracts unearthed by the Post show Biden making between $150,000 to $200,000 per speaking appearance. According to the Post, Biden requests the same meal of “angel hair pomodoro, a caprese salad, topped off with raspberry sorbet with biscotti,” before delivering his paid speeches. Hosts were asked to have the meal prepared 30 minutes ahead of Biden’s arrival at the speaking venue. Additional requests from the Biden team included a fully stocked beverage selection of bottled water, Coke Zero, Regular Coke, Orange Gatorade and black coffee as well as a full-length mirror and portable steamer.  During his 36-year career in the Senate, Biden consistently referred to...

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