May 2024 - cypherpunks@lists.ogf.org

Delinquencies on Office Property Loans at Banks Are at 8 Percent While Office Loans the Banks Sold to Investors Show 31 Percent in Trouble
by Gunnar Larson 13 May '24

13 May '24

https://wallstreetonparade.com/2024/05/delinquencies-on-office-property-loa… By Pam Martens and Russ Martens: May 13, 2024 ~ On Friday, the Federal Reserve released its semiannual Supervision and Regulation Report on banks. Commercial real estate loans at banks – particularly on office properties – continued to rank high on the Fed’s list of concerns. The Fed included the chart above showing that delinquency rates on office property loans held by the banks had skyrocketed from just over 1 percent at the end of 2022 to over 8 percent as of December 31, 2023. (The red text and arrow have been added by Wall Street On Parade.) Banks are major lenders to the commercial real estate (CRE) market, providing almost $3 trillion in financing. According to a February 27 report from S&P Global, as of the end of the fourth quarter of 2023, two megabanks dwarfed all others in their commercial real estate loan exposure. JPMorgan Chase Bank NA, the largest bank in the U.S., held $173.31 billion in CRE loans while Wells Fargo Bank NA held $139.65 billion. Bank of America ranks second to JPMorgan Chase Bank NA in terms of assets, and yet its CRE loan exposure is less than half that of JPMorgan Chase, at $82.80 billion, according to S&P Global. Friday’s Fed report built on concerns expressed by the Fed in its April release of its Financial Stability Report. The Fed voiced the following concerns in the April report in regard to the commercial real estate market: “CRE market conditions continued to deteriorate, especially for the office sector, and prices continued to decline against a backdrop of high vacancy rates and weakening rents… “The CRE office sector has faced strains resulting from an ongoing post-pandemic adjustment, and these strains could contribute to additional weakness in prices and rents going forward. Vacancy rates for offices located in central business districts and coastal cities increased further, and rents continued to decline since the October report.” The Fed also noted that in its March 2024 Senior Credit Officer Opinion Survey, it had added a “special question” related to Commercial Mortgage-Backed Securities (CMBS) that were collateralized with office properties. It said that the answers from senior credit officers pointed to “a tightening of financing terms and weakening of liquidity in the office CMBS market, as collateral quality has weakened and demand for funding has increased.” Just how much pain is being felt in the CMBS market related to office properties was further quantified on May 3 when Scott Carpenter reported the following at Bloomberg Law: “About $52 billion, or 31%, of all office loans in commercial mortgage bonds were in trouble in March, according to KBRA Analytics. “That share is up from 16% a year ago, according to the firm. Some cities have bigger headaches than others, with Chicago and Denver offices having 75% and 65% in jeopardy, respectively.” Pause for a moment and let those surreal numbers sink in. According to the New Capital Journal, Chicago ranks third among U.S. cities for GDP output, after New York City and Los Angeles. But 75 percent of the office proprty loans bundled into CMBS and sold to investors are in trouble? The fact that the Fed is reporting that a little more than 8 percent of the office loans still on the books of the banks are in trouble but somehow 31 percent of the office loans the banks bundled into CMBS and sold to investors are in trouble hints at a replay of the tricked-up operations of the megabanks heading into the 2008 financial collapse. Some banks back then told their sales staff to make it a top priority to bundle and sell their “shitty deals” to investors and then made billions by shorting (betting against) the toxic waste they knew were in those deals. On April 13, 2011, following a two-year investigation, Senators Carl Levin and Tom Coburn, Chairman and Ranking Member of the Senate’s Permanent Subcommittee on Investigations, released a 635-page report on the 2008 financial crisis, which detailed the fraudulent role that Wall Street megabanks had played in crashing the U.S. economy. The report includes this paragraph on how Goldman Sachs attempted to profit from its own “shitty deals”: “When Goldman Sachs realized the mortgage market was in decline, it took actions to profit from that decline at the expense of its clients. New documents detail how, in 2007, Goldman’s Structured Products Group twice amassed and profited from large net short positions in mortgage related securities. At the same time the firm was betting against the mortgage market as a whole, Goldman assembled and aggressively marketed to its clients poor quality CDOs [Collateralized Debt Obligations] that it actively bet against by taking large short positions in those transactions. New documents and information detail how Goldman recommended four CDOs, Hudson, Anderson, Timberwolf, and Abacus, to its clients without fully disclosing key information about those products, Goldman’s own market views, or its adverse economic interests. For example, in Hudson, Goldman told investors that its interests were ‘aligned’ with theirs when, in fact, Goldman held 100% of the short side of the CDO and had adverse interests to the investors, and described Hudson’s assets were ‘sourced from the Street,’ when in fact, Goldman had selected and priced the assets without any third party involvement. New documents also reveal that, at one point in May 2007, Goldman Sachs unsuccessfully tried to execute a ‘short squeeze’ in the mortgage market so that Goldman could scoop up short positions at artificially depressed prices and profit as the mortgage market declined.” See the video clip below from a related hearing, featuring the late Senator Carl Levin questioning a Goldman Sachs executive, Daniel Sparks, on how it pushed its “shitty deal” onto unsuspecting investors. Related Articles: FDIC Data Contradicts Fed Chair Powell: Shows Real Estate Problems Have Skyrocketed at Largest U.S. Banks, Not the Smaller Regionals

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Reddit Accused Of Charging Advertisers For Fake Clicks
by Gunnar Larson 13 May '24

13 May '24

Reddit Accused Of Charging Advertisers For Fake Clicks <https://www.law360.com/technology/articles/1835191?nl_pk=2bd720dd-746c-4744…> By Henrik Nilsson An artificial intelligence trading platform hit Reddit with a proposed class action on behalf of advertisers alleging that it has been charged for fraudulent "clicks" while promoting its business on the social media company's website, according to the suit filed in California federal court. Complaint attached | Read full article » <https://www.law360.com/technology/articles/1835191?nl_pk=2bd720dd-746c-4744…> | Save to favorites » <https://www.law360.com/technology/articles/1835191?nl_pk=2bd720dd-746c-4744…>

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Feds Seek 20 Mos. For Ex-Baltimore State's Atty
by Gunnar Larson 13 May '24

13 May '24

Feds Seek 20 Mos. For Ex-Baltimore State's Atty <https://www.law360.com/legalethics/articles/1835664?nl_pk=153d4a8a-6fb9-4a5…> By Elliot Weld Prosecutors asked a Maryland federal court to sentence former state's attorney Marilyn Mosby to 20 months in prison after she was convicted of lying to obtain money from a retirement fund and conning a lender to obtain a vacation home, saying she "could not be trusted to tell the truth" despite her position of public trust. 2 documents attached | Read full article » <https://www.law360.com/legalethics/articles/1835664?nl_pk=153d4a8a-6fb9-4a5…> | Save to favorites » <https://www.law360.com/legalethics/articles/1835664?nl_pk=153d4a8a-6fb9-4a5…>

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Del. Ruling Highlights M&A Deal Adviser Conflict Disclosures
by Gunnar Larson 13 May '24

13 May '24

Del. Ruling Highlights M&A Deal Adviser Conflict Disclosures <https://www.law360.com/banking/articles/1835434?nl_pk=feb6bbba-7878-4d39-be…> The Delaware Supreme Court recently reversed the Court of Chancery's dismissal of challenges to Nordic Capital's acquisition of Inovalon, demonstrating the importance of full disclosure of financial adviser conflicts when a going-private merger seeks business judgment rule review, say attorneys at Debevoise. Decision attached | Read full article » <https://www.law360.com/banking/articles/1835434?nl_pk=feb6bbba-7878-4d39-be…> | Save to favorites » <https://www.law360.com/banking/articles/1835434?nl_pk=feb6bbba-7878-4d39-be…>

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SEC Opposes Quick Appeal Of 'Crystal Clear' Coinbase Order
by Gunnar Larson 13 May '24

13 May '24

SEC Opposes Quick Appeal Of 'Crystal Clear' Coinbase Order <https://www.law360.com/newyork/articles/1836079?nl_pk=ac5a3855-e47c-4403-be…> By Aislinn Keely The U.S. Securities and Exchange Commission on Friday urged a Manhattan federal court to reject Coinbase's bid for a Second Circuit review of an order allowing an agency enforcement action to proceed, saying the company's cries of uncertainty over how securities laws apply to crypto assets ignore the "crystal-clear" order it is trying to contest. Memorandum attached | Read full article » <https://www.law360.com/newyork/articles/1836079?nl_pk=ac5a3855-e47c-4403-be…> | Save to favorites » <https://www.law360.com/newyork/articles/1836079?nl_pk=ac5a3855-e47c-4403-be…>

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Fuzzy Jurisdiction In Web Cases Has 1st Circ. Judge 'Worried'
by Gunnar Larson 13 May '24

13 May '24

Fuzzy Jurisdiction In Web Cases Has 1st Circ. Judge 'Worried' <https://www.law360.com/cybersecurity-privacy/articles/1835862?nl_pk=3dfd2fd…> By Julie Manganis A First Circuit judge has said uncertainty over how personal jurisdiction rules apply to cases involving the borderless internet may require action from Congress or the U.S. Supreme Court, expressing concern that website operators can "manipulate" the legal requirement in order to avoid accountability. Opinion attached | Read full article » <https://www.law360.com/cybersecurity-privacy/articles/1835862?nl_pk=3dfd2fd…> | Save to favorites » <https://www.law360.com/cybersecurity-privacy/articles/1835862?nl_pk=3dfd2fd…>

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UK Class Actions Face Tougher Test On Distributing Damages
by Gunnar Larson 13 May '24

13 May '24

UK Class Actions Face Tougher Test On Distributing Damages <https://www.law360.com/competition/articles/1835785?nl_pk=6416fd97-1dc4-4e0…> By Joanne Faulkner A decision by the antitrust tribunal to certify a £790 million ($990 million) mass claim against major European power cable suppliers came with the caveat that it intends to take a tougher approach toward claimant lawyers' plans for getting awards into the pockets of consumers. Read full article » <https://www.law360.com/competition/articles/1835785?nl_pk=6416fd97-1dc4-4e0…> | Save to favorites » <https://www.law360.com/competition/articles/1835785?nl_pk=6416fd97-1dc4-4e0…>

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UK Litigation Roundup: Here's What You Missed In London
by Gunnar Larson 13 May '24

13 May '24

UK Litigation Roundup: Here's What You Missed In London <https://www.law360.co.uk/financial-services-uk/articles/1835717?nl_pk=a94fc…> By Laura Stewart Liberty The past week in London has seen Playtech file an intellectual property claim against online casino company OnAir Entertainment amid allegations of corporate spying, a broadcast equipment company sue its former owner amid allegations he conspired to inflate a customer’s finances, and aerospace company Vertical Aerospace hit a manufacturer with a claim following a test flight crash. Here, Law360 looks at these and other new claims in the U.K. Read full article » <https://www.law360.co.uk/financial-services-uk/articles/1835717?nl_pk=a94fc…> | Save to favorites » <https://www.law360.co.uk/financial-services-uk/articles/1835717?nl_pk=a94fc…>

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‘Beyond’ $20 Trillion By 2030—Jack Dorsey’s Plan To Turbocharge The Bitcoin Price
by Gunnar Larson 13 May '24

13 May '24

https://www.forbes.com/sites/digital-assets/2024/05/12/beyond-20-trillion-b… "The most amazing thing about bitcoin, apart from the founding story, is anyone who works on it, or gets paid in it, or buys it for themselves—everyone who puts any effort in to make it better—is making the entire ecosystem better, which makes the price go up," Dorsey said. "It's a fascinating ecosystem and movement, more than anything else. It taught me a lot."

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Costs Of Pension Portals Rise £54M Over Launch Delays
by Gunnar Larson 13 May '24

13 May '24

Costs Of Pension Portals Rise £54M Over Launch Delays <https://www.law360.co.uk/financial-services-uk/articles/1835715?nl_pk=a94fc…> By Martin Croucher The cost of building new online pensions dashboards has risen by £54 million ($67.6 million) in three years as the project has faced delays due to poor governance, a damning report by the public sector audit watchdog said on Friday. Read full article » <https://www.law360.co.uk/financial-services-uk/articles/1835715?nl_pk=a94fc…> | Save to favorites » <https://www.law360.co.uk/financial-services-uk/articles/1835715?nl_pk=a94fc…>

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