UPDATE 1-Credit Suisse sued by Assured over mortgage losses
* Credit Suisse says to defend itselfOct 17 (Reuters) - Credit Suisse Group AG was
sued by billionaire Wilbur Ross’ Assured Guaranty Ltd
for allegedly misleading it about the quality of mortgage loans
underlying securities it insured, exposing it to hundreds of
millions of dollars in potential claims.In a complaint filed on Monday, Assured said the Swiss
bank’s DLJ Mortgage Capital unit made false representations
about 7,338 mortgage loans, or 93 percent of those it reviewed,
that underlay six residential mortgage-backed securities (RMBS)
offerings marketed by Credit Suisse in 2006 and 2007.Assured said these loans had an original principal balance
of $1.8 billion, that it would not have provided insurance had
DLJ been truthful and that DLJ has refused to buy back the
problem loans.”This failure by DLJ to honor its ‘put-back’ obligations
has resulted in massive harm to Assured,” exposing the bond
insurer to “hundreds of millions of dollars in current and
future claim payments,” the complaint filed with the New York
State Supreme Court in Manhattan said.Assured is seeking to force Credit Suisse to buy back the
problem loans, or else cover its losses.Credit Suisse spokesman Steven Vames said the bank will
vigorously defend against the lawsuit. He said Assured filed
the lawsuit to “evade” its insurance obligations and that
Assured has made only “minimal” payouts to date.”Assured is a sophisticated multibillion dollar insurance
company that received full disclosure about the securities they
chose to insure,” Vames said.Philippe Selendy, a lawyer for Assured, did not immediately
respond to a request for comment.Banks face many lawsuits by investors and insurers over the
quality of loans underlying RMBS. In April, Assured reached a
$1.6 billion settlement of a mortgage-related lawsuit with Bank
of America Corp .The case is Assured Guaranty Municipal Corp et al v. DLJ
Mortgage Capital Inc et al, New York State Supreme Court, New
York County, No. 652837/2011.
No champagne for Ireland until unemployment falls:IMF
Ireland’s unemployment rate is over 14 percent compared to
4.6 percent in 2007 before a property bubble burst and the
economy was brought to its knees.Chopra is in Ireland for the latest quarterly review of
Ireland’s 85 billion euros EU-IMF bailout. The outcome of that
review, conducted by officials from the IMF, the European
Central Bank and the European Commission, will be known late
next week.
Weak miners drag Britain’s FTSE lower
* Banks gain on euro zone debt solution hopesBy Jon HopkinsLONDON, Oct 13 (Reuters) - Britain’s top share index dipped
in volatile early trade on Thursday, with the FTSE 100 index
stalling in another move to break above the 5,450 level, the top
of a near three-month trading range, as weakness in miners
countered gains by banks.Miners , having posted strong gains on
Wednesday, fell back in tandem with the copper price
following weak trade numbers from top metals consumer China.China’s trade surplus narrowed in September for a second
month in a row as growth in exports and imports both came in
below forecasts, reflecting global economic weakness.Anglo American was the biggest sector loser, down
3.5 percent as brokers cut estimates to reflect the likely move
by Chile’s state copper giant Codelco to exercise an option to
buy a 49 percent stake in Anglo American Sur.Rio Tinto failed to buck the sector trend, losing
0.9 percent in spite of reporting record iron ore sales and a 5
percent jump in output for the third quarter, and forecasting
continued strong commodities demand.At 0815 GMT, the UK blue chip index was down 31.08
points, or 0.6 percent at 5,410.72, retreating after an early
rally which took it to a peak of 5,456.09.The index added 0.9 percent on Wednesday and has posted a
gain of about 10 percent since it struck lows a week ago.”The rally, impressive as it is, has been generated by
short-covering and highlighted by thin volume,” said James A.
Hyerczyk, analyst at Autochartist.”Given the size of the recent break and the opportunity to
buy equities at low values, it is highly unlikely that those who
missed the rally are going to chase it higher from current
levels. This means that a corrective break is likely over the
near-term,” Hyerczyk added.Fund manager Ashmore Group was the top blue chip
faller, down 6 percent after it lost more than 10 percent of its
assets in the quarter to end-September after the recent sharp
sell-off in emerging markets hit its funds.Banks , however, managed to extend Wednesday’s
gains, led by part-state-owned lender Royal Bank of Scotland
, up 1.2 percent, with the sector helped by hopes Europe
is taking concrete steps to contain the region’s debt woes and
head off a systemic banking crisis.Lawmakers in Slovakia struck a deal on Wednesday to ratify a
plan to bolster the euro zone’s rescue fund by Friday,
effectively ending a crisis that had threatened the currency’s
main safety net. Slovakia is the only country in the 17-nation
bloc left to approve the revamp of the fund.”The Euro debt crisis is the main focus at the moment, any
hope with the situation shrugs off negative news,” said Jordan
Lambert, a trader at Spreadex.JPMorgan will be the first big U.S. bank to report
third-quarter results on Thursday. Analysts are expecting
earnings of 98 cents a share, down 3 percent from a year earlier
and down 22 percent from estimates on Aug. 1.Rolls-Royce was by far and away the top individual
FTSE 100 riser, jumping 6.7 percent after Pratt & Whitney said
it will spend $1.5 billion to buy the firm’s share of the
International Aero Engines consortium that produces the engine
that powers the Airbus A320 plane family.British Airways owner IAG was also in demand, up
2.5 percent as Deutsche Bank upgraded its rating for the airline
to “buy” from “hold” with a raised target price of 260 pence.”We are upgrading … because September premium traffic was
stronger than our expectations and because valuation looks
compelling,” Deutsche Bank said in a note.British trade figures for August will be released at 0830
GMT, with a global trade gap of 8.80 billion pounds expected,
down slightly from July’s 8.92 billion deficit.
Analysis: Debates just may not be Rick Perry’s thing
The Texas governor fought his way through another two-hour session as his top rivals, Mitt Romney and Herman Cain, coasted through relatively unscathed, scoring points, defending their plans.Perry avoided major stumbles that afflicted him at three previous debates, but he did not take advantage of opportunities to land punches on Romney. He specifically did not carry out a sustained assault on the healthcare plan that Romney developed as governor of Massachusetts.Perry, popular with social conservatives looking for a Romney alternative, cannot be written off. His $17 million raised in the third quarter of this year was a powerful testament to his ability to fully fund a campaign in the early voting states.But he may have missed an opportunity to claw back some ground lost to Romney in national polls of Republican voters, after bursting onto the scene in first place in August only to fall behind former Massachusetts Governor Romney and businessman Cain.”I thought he was rather cautious and I think because of that he was treated as somewhat of an afterthought,” said Andy Smith, director of the University of New Hampshire Survey Center.The stage was set for a big Perry attack on Romney when NBC News reported earlier in the day that Romney healthcare advisers had met with President Barack Obama’s healthcare team during the time that Obama was developing the overhaul that conservatives want to repeal.Given the chance to address Romney on the topic, Perry asked about rising insurance premiums for small businesses in Massachusetts as a result of “Romneycare.”It was a fair question, but it gave Romney an opportunity to defend his plan and accuse Perry of running a state with a large number of uninsured children.”I’m proud of what we are able to accomplish,” Romney told Perry. “I’ll tell you this, though. We have the lowest number of kids as a percentage uninsured of any state in America. You have the highest.”MISSED OPPORTUNITIESRepublican strategist Matt Mackowiak said Perry’s debate was better than his previous sessions but that he missed some opportunities, especially on healthcare.”Ultimately Perry didn’t go for the jugular, and I don’t understand why. He had a huge opportunity to do so,” said Mackowiak.And perhaps worst of all, Perry came to a debate about the U.S. economy without bringing a specific plan to trigger economic growth and create jobs, saying instead he would unveil his proposals over the next three days.Asked to name some specifics, Perry stressed the need to increase domestic U.S. energy production: “Well, clearly, opening up a lot of the areas of our domestic energy area. That’s the real key.”New Hampshire Republicans, who will have a big say in who becomes the nominee when they hold the country’s first primary in mid-January, will have to wait to hear the details of his plan.”It strikes me that if you’re going to go to a major debate after you’ve gotten your butt kicked in the previous debates, and you it’s about the economy and jobs, to stand up there and not give any specifics is not helpful,” said Steve Duprey, a New Hampshire Republican who advised Senator John McCain’s 2008 presidential campaign.
