Morning Brief: Stock markets slump in Europe; Bloomberg chronicles the continuing mortgage fraud at Citigroup and one whistleblower’s story
European stock markets are ending the week down sharply, with most major indices down at least a percent.
The German Dax is getting hit hard this afternoon with the index down at 8am EDT over 2.6 percent to 6069.29. While the index is down over 125 percent from a year ago, the DAX is still not at a 52 week low. The French CAC 40 is also down sharply, down 1.87 percent today and closer to its 52-week low.
In Greece, things continue to slide, with the Athens Stock Exchange down 3.79 percent to 505.52, down more than 60 percent from a year ago, and down over 25 percent year-to-date.
U.S. stock futures point to a lower opening today, with Reuters citing a drop in the Eurozone Manufacturing Purchasing Managers’ Index and further signs that the Chinese economy is weakening as contributing to investor concerns. The May employment report is also due to be released at 8:30 am this morning.
Update: the employment report has been released and it is ugly – only 69,000 new jobs were added in the month of May, with previous months revised down. The official unemployment rate, which says almost nothing, is now at 8.2 percent, rising slightly.
Yesterday Bloomberg ran a fascinating report on the settlement between the U.S. Justice Department and Citigroup over mortgage fraud. Citigroup agreed to pay a $158.3 million fine in February after it was discovered that the company had been systematically violating U.S. mortgage regulations by buying mortgages through outside lenders that used “outside lenders with doctored tax forms, phony appraisals and missing signatures,” according to the Bloomberg report authored by Bob Ivry.
The story chronicles the efforts of Sherry Hunt who discovered the fraud and reported it to her superiors at Citigroup. That led to Hunt being threatened by her boss. Hunt struck back by taking Citigroup to court and was joined in her effort by the U.S. Justice Department. After the settlement, Hunt received $31 million out of the settlement.
The story reviews Hunts story and the situation at Citigroup. Sadly, the headline concentrates on the money Hunt received at the whistleblower, though the real story is the criminal activity that occurred at Citigroup right into 2012.
Here is the video from Bloomberg that accompanies the story, which is very much worth reading in full: