Wall Street Folly

…..Hedge funds and more broadly financial ’speculators’ are finding themselves under attack from politicians and regulators on both sides of the Atlantic, who accuse them – including some of those Goldman chaperoned around Athens in late January – of exacerbating the Greek credit crisis in an effort to spin a quick buck.

It is a charge that sticks not least because of the size and pedigree of some of the names involved. By far the most significant of the 10 analysts present on the January tour were two from Paulson & Co – the $32bn US hedge fund that shot to prominence for its spectacular bets against the US mortgage market in 2008. The problem though, is that far from being short Greece, and hoping to push it towards collapse, hedge funds like Paulson have spent the past few months going long……

Papandreou will play down the latest opinion polls and tell the German leader that the Greek people have accepted tough reforms are needed to rein in the country’s deficit.

In an interview with the German newspaper Frankfurter Allgemeine Zeitung (FAZ) ahead of his visit, Papandreou says the trade unions were not “exactly overflowing with joy” at the prospect of new austerity measures but that there was willingness to change.

“We don’t want to be the Lehman Brothers of the EU. That’s why we have come up with our package of reforms,” he said.

Striking Greek workers shut down transport and tried to storm parliament as lawmakers passed 4.8 billion euros ($6.5 billion) in budget cuts, including wage reductions, needed to trim the region’s biggest budget deficit.

Police with riot shields fired tear gas as demonstrators wearing biker helmets and gas masks pelted them with stones outside parliament in Athens where lawmakers approved the measures. Finance Minister George Papaconstantinou told parliament the cuts will show European Union allies and investors that Greece is making good on its deficit pledges……

Fannie Mae and Freddie Mac may force lenders including Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co. and Citigroup Inc. to buy back $21 billion of home loans this year as part of a crackdown on faulty mortgages.

U.S. banks could suffer losses of $7 billion this year when those loans are returned and get marked down to their true value, according to estimates by Oppenheimer & Co. analyst Chris Kotowski. Fannie Mae and Freddie Mac, both controlled by the U.S. government, stuck the four biggest U.S. banks with losses of about $5 billion on buybacks in 2009, according to company filings made in the past two weeks…..

The Federal Reserve received the most loan requests in six months from investors for the final round of its program that unlocked the market for asset-backed securities.

About $4.1 billion in lending was sought, including $1.8 billion for financing of student-loan securities, the New York Fed said yesterday on its Web site. In total, about $7.1 billion of sales this week were of securities that included eligible classes, according to data compiled by Bloomberg……

Toyota Motor Corp. (TM, 7203.TO) said it has received verifiable information from U.S. authorities that some vehicle owners whose autos have been fixed under two major recalls still had unintended-acceleration incidents.

The U.S. Department of Transportation said Wednesday it was investigating recent complaints of sudden acceleration by Toyota owners whose vehicles have been repaired. At the time, National Highway Traffic Safety Administration chief David Strickland said the agency wanted to hear from owners encountering such instances.

The reports were still considered unverified by the agency on Wednesday. While disclosing on Friday the receipt of verifiable information, Toyota noted that most of reports haven’t been yet and that it “moved quickly to evaluate the vehicles and interview the owners.” That comes amid complaints about the speed and manner in which the company responded to safety concerns…..

Tags: Autos, Fannie Mae / Freddie Mac, Greece, Hedge funds, Lehman Brothers, recalls, Toyota