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JPMorgan staff that allegedly hid $6B in losses to be jailed

Two arrests are finally set to be made in JPMorgan’s “London Whale” case wherein the bank allegedly covered up $6B in losses – will more arrests follow?

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JPMorgan employees about to be in cuffs

Two former JPMorgan Chase & Co. employees are on the verge of being arrested by federal authorities on charges that they attempted to hide the size of the bank’s $6 billion trading loss in 2012. The trading debacle has been dubbed the “London Whale,” which is finally going belly up as prosecutors seek ways to penalize the bank for their criminal acts, starting with jailing traders who allegedly lied about losses.

Subject to arrest are London employees Javier Martin-Artajo, one manager who headed the trading strategy and Julien Grout, a low-level trader in London, both of whom are being charged with falsifying bank accounts. Martin-Artajo will likely be extradited from the UK, but Grout is in France where no extradition treaty is in play. Bruno Iksil is a third trader said to be cooperating with Feds, with many suspecting he will be handed lesser charges, while others believe he will never be charged.

The massive losses hidden last year could result in the bank being penalized with hefty fines and a reprimand for allegedly being fully aware of wrongdoing but allowing employees to cover up losses. The bank may also be forced to adopt internal controls and the Securities and Exchange Commission has already filed civil charges which may result in a settlement in this calendar year.

While sources have indicated to various news outlets that the bank is not in talks to settle, the arrests today may change their course.

How the London Whale exploded

The individuals in JPMorgan’s London offices bet big on large american corporations like American Airlines, by wagering derivatives, and when their gamble failed in 2012, the two employees understated the value of their trades, keeping their failure secret from JPMorgan’s headquarters in New York.

The Feds say they have emails and phone recordings wherein the traders acknowledge they cooked the books to cover up the massive losses.

Most point to the bank’s complicity in the case based on their Q1 2012 earnings being revised downward by $459 million, acknowledging the valuation mistakes.

Many have hoped for the current administration to be tougher on banks, specifically executives that covered up their part in the economic crash, and while this is one step toward righting the wrongs, arresting two foreigners is far from the tip of the potential iceberg, with the White House’s will being tested. Will more arrests follow, or will this single headline satisfy a nation who many believe has been victimized by banks?

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

Austin

Austin tops the list of best places to buy a home

When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?

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Looking at the bigger picture

(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).

That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).

They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.

“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”

Click here to continue reading the list of the 12 best places to buy a home…

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Housing News

Average age of houses on the rise, so is it now better or worse to buy new?

With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.

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aging housing inventory

The average home age is higher than ever

(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.

With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.

Prices of new homes on the rise

Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.

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Housing News

Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?

The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.

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Why Realtors are vulnerable to these rapid changes

(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.

Note: We’ll let you decide which company plays which role in the image above.

So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.

1. Zillow poaches top talent, Move/NAR sues

It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.

Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.

2. Two major media brands emerge

Last fall, the News Corp. acquisition of Move, Inc. was given the green light by the feds, and this month, Zillow finalized their acquisition of Trulia.

…Click here to continue reading this story…

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