Barclays To Fight the FERC, MGIC Unit Settles With Freddie Mac: Financial Business Review

On Wednesday, the Federal Energy Regulatory Commission gave Barclays (NYSE:BCS) 30 days to explain why it should not be fined $470 million, on claims that it manipulated Californian power markets by deliberately creating losses on physical electricity prices so as to profit from related swaps positions. It seems that this strategy was once fairly common, and now Barclays pledges to fight the Commission.

American Capital Agency Corp. (NASDAQ:AGNC) Chief Executive Gary Kain says that, “We feel more comfortable than we have in ages,” on his company’s earnings call as he does not anticipate anything but marginal changes to the current low-return regime currently in place. The firm believes that it can continue to bring double-digit returns, but the mix will change — lower spreads will be outweighed by higher book value.

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Shares of MGIC Investment Corporation (NYSE:MTG) jump on word of a resolution of the pool-insurance dispute between one of the firm’s subsidiaries and Freddie Mac (FMCC.OB) that might have prevented MGIC from backing certain loans. The company will make payments to Freddie Mac over four years under the terms, but that requires approval from boards of both parties.

Wells Fargo & Co. (NYSE:WFC) is cleaning up on the refinancing boom and its head of the home lending division Mike Heid says that his business has not yet scratched the surface. In excess of 40 percent of customers in the bank’s $1.9 trillion servicing portfolio have interest rates of more than 4 percent equity in their homes and strong credit. Meanwhile, current discussion in mortgage real estate investment trust conference calls blame the lack of origination capacity as a key factor retarding back refinancing.

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