What we’re reading (7/28)
“Hot Housing Market Lets Banks Sell Mortgage Risk” (Wall Street Journal). “A red-hot housing market is enabling banks to sell a new kind of bond that shares the risk of mortgage and loan defaults with institutional investors. Texas Capital Bank recently sold $275 million of securities to investors looking to cash in on the pandemic-fueled boom in home prices. The bonds are backed by short-term loans the bank makes to mortgage lenders. When those lenders’ borrowers default, the investors in the bonds effectively cover the loss. The transfers are a product of the effort to shield Fannie Mae and Freddie Mac from the risk of a mortgage-market reversal.”
“Mortgage Rates Just Dropped To A Six-Month Low, And Refinances Shoot Higher” (CNBC). “The popular 30-year fixed mortgage rate fell back to the lowest level since February last week, and the 15-year fixed set a record low. That sent borrowers to their lenders, looking to save money on their monthly payments. Applications to refinance a home loan jumped 9% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index…[t]he average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.01% from 3.11%, with points decreasing to 0.34 from 0.43 (including the origination fee) for loans with a 20% down payment.”
“Robinhood Reveals New Regulatory Probes On The Eve Of Its Blockbuster IPO” (CNN Business). “Regulators are investigating the fact that Robinhood CEO Vlad Tenev is not licensed by FINRA, Wall Street's powerful self-regulator, the online trading platform announced Tuesday. News of the probe comes more than five months after CNN Business reported that Tenev, the public face of Robinhood, is not registered with FINRA, short for the Financial Industry Regulatory Authority. That's despite the fact that he presides over one of the nation's largest and most powerful online brokerages.”
“JPMorgan's Head Of Electronic Trading Analytics Left For A Hedge Fund” (eFinancialCareers). “Pascal Tomecek, a JPMorgan managing director who was responsible for electronic trading and data analytics for spread markets in the corporate and investment bank, has left for a hedge fund…Tomecek is joining the New York office of Cubist Systematic Strategies…[a]t JPMorgan he worked across credit securitized products and public finance, incorporating algorithmic market making, machine learning, fixed income analytics and automated trade idea generation. Cubist Systematic Strategies is the quantitative investing arm of Point72, the hedge fund run by Steve Cohen, now also the owner of the New York Mets. Working in a data role for Cohen can be an opening to a whole new baseball career: Sameer Gupta, the head of data solutions for Point72 has also been made the head of data solutions for the Mets.”
“Goldman Sachs Files To Create An ETF Dedicated To DeFi And Blockchain Stocks” (Business Insider). “Goldman Sachs is aiming to create an exchange-traded fund focused on companies developing decentralized finance and blockchain technology, a regulatory filing shows. In an application filed Monday with the Securities and Exchange Commission, the US bank said it plans to use Solactive's Decentralized Finance and Blockchain Index as a benchmark for its Goldman Sachs Innovate DeFi and Blockchain Equity ETF.”
