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AP – The head of the government agency that packages federally backed mortgages into investments is stepping down for a new job, people familiar with his plans said.
Joseph Murin, president of the Government National Mortgage Association, known as Ginnie Mae, is leaving his job this week after 13 months. The people declined to be identified because his departure was not yet official, and would not say where Murin is going to work next.
Ginnie Mae sold more than $200 billion in mortgage securities in the first six months of 2009, double last year’s level.
Caribbean Net News – The UK Serious Fraud Office is investigating sales of credit-default swaps and structured-finance products, including collateralized debt obligations, prior to the credit crisis, following up an earlier investigation into a hedge fund and a related British Virgin Islands-registered company.
The SFO is looking into whether banks sold such products with flawed valuations, said Sam Jaffa, a spokesman for the government agency in London. No specific companies or credit rating agencies have been targeted under the investigation, he said.
“We’re looking generically at what might give us a cause for concern or a possible lead for finding out more,” Jaffa said in an e-mail Monday. “There’s no suggesting that across- the-board valuations were flawed. However, how valuations are arrived at, what is bundled into the funds and how they were sold are areas of interest.”
Conde Nast Portfolio – You think things are bad now? Just you wait: the chart above gives you a very good indication of what Christine Williamson calls the "bloodbath ahead" in the hedge-fund industry.
No one wants to be invested in an underperforming hedge fund right now — and half of the hedge funds in America are underperforming. What happens when investors decide to take their money out tomorrow, as they’re generally allowed to do on the first day of any quarter?
Sources said they expect the body count to total as many as 2,000 hedge funds and 500 hedge funds of funds between now and the end of March… Most hedge funds operate on an end-of-quarter deadline for requests from clients to have their money returned. If experts’ predictions of very large collective redemptions come true, managers will have to liquidate their holdings en masse, pushing down prices and forcing many smaller hedge funds or those with poor returns out of business. The wave of closures could span six months, likely beginning in earnest in November and December at the end of the typical 45- or 65-day waiting period when fund managers have to return investor cash.
