Acceleration

Leon “Lee” Cooperman is one of the Largest Investors in Non-Bank Mortgage Servicers and Related Companies Like Ocwen Alter-Ego Altisource Portfolio Solutions

Leon Cooperman founded Omega in 1991 after 25 years at Goldman Sachs. As of Oct. 31, 2018, the firm had $3.3 billion in assets under management, down from about $9.4 billion in 2015.

LIT responds with an OPEN RESPONSE to CNBC’s video and ARTICLE with Leon Cooperman crying and saying “He Cares” about America….

Of course, he spent 25 years with Goldman Sachs first…and now as He Sets up his Business as a Home Office, his investments are notably targeting non-banks like AltiSource, Ocwen and Mr. Cooper.

2019

Ocwen Financial Corporation, a financial services holding company, originates and services loans in the United States, the United States Virgin Islands, India, and Philippines. Its Servicing segment provides residential and commercial mortgage loan servicing, special servicing, and asset management services to owners of mortgage loans and foreclosed real estate. Read More…

INDUSTRY, SECTOR AND SYMBOL

Stock ExchangeNYSE
IndustryMortgage bankers & correspondents
Sub-IndustryThrifts & Mortgage Finance
SectorFinance
Current SymbolNYSE:OCN

Ocwen Financial (NYSE:OCN) Frequently Asked Questions

WHAT IS OCWEN FINANCIAL’S STOCK SYMBOL?
Ocwen Financial trades on the New York Stock Exchange (NYSE) under the ticker symbol “OCN.”

HOW WERE OCWEN FINANCIAL’S EARNINGS LAST QUARTER?
Ocwen Financial Corp (NYSE:OCN) released its earnings results on Tuesday, August, 6th. The financial services provider reported ($0.67) earnings per share for the quarter, missing the consensus estimate of ($0.36) by $0.31. The financial services provider earned $274.34 million during the quarter, compared to analysts’ expectations of $288 million. Ocwen Financial had a negative return on equity of 35.88% and a negative net margin of 15.76%. The business’s revenue was up 8.2% on a year-over-year basis. During the same period last year, the business earned ($0.22) earnings per share. View Ocwen Financial’s Earnings History.

WHEN IS OCWEN FINANCIAL’S NEXT EARNINGS DATE?
Ocwen Financial is scheduled to release their next quarterly earnings announcement on Tuesday, November 5th 2019. View Earnings Estimates for Ocwen Financial.

WHAT PRICE TARGET HAVE ANALYSTS SET FOR OCN?
2 brokerages have issued 12 month target prices for Ocwen Financial’s stock. Their forecasts range from $4.00 to $4.00. On average, they anticipate Ocwen Financial’s share price to reach $4.00 in the next year. This suggests a possible upside of 127.3% from the stock’s current price. View Analyst Price Targets for Ocwen Financial.

WHAT IS THE CONSENSUS ANALYSTS’ RECOMMENDATION FOR OCWEN FINANCIAL?
2 Wall Street analysts have issued “buy,” “hold,” and “sell” ratings for Ocwen Financial in the last year. There are currently 2 hold ratings for the stock, resulting in a consensus recommendation of “Hold.” View Analyst Ratings for Ocwen Financial.

HAS OCWEN FINANCIAL BEEN RECEIVING FAVORABLE NEWS COVERAGE?
Headlines about OCN stock have trended neutral recently, InfoTrie Sentiment Analysis reports. The research firm identifies negative and positive news coverage by analyzing more than six thousand blog and news sources in real-time. The firm ranks coverage of public companies on a scale of -5 to 5, with scores closest to five being the most favorable. Ocwen Financial earned a news sentiment score of 0.2 on InfoTrie’s scale. They also assigned headlines about the financial services provider a news buzz of 0.0 out of 10, indicating that recent news coverage is extremely unlikely to have an impact on the company’s share price in the immediate future. View News Stories for Ocwen Financial.

ARE INVESTORS SHORTING OCWEN FINANCIAL?
Ocwen Financial saw a decrease in short interest in September. As of September 30th, there was short interest totalling 2,370,000 shares, a decrease of 11.6% from the August 30th total of 2,680,000 shares. Based on an average trading volume of 379,700 shares, the days-to-cover ratio is currently 6.2 days. Currently, 2.3% of the shares of the company are sold short. View Ocwen Financial’s Current Options Chain.

WHO ARE SOME OF OCWEN FINANCIAL’S KEY COMPETITORS?
Some companies that are related to Ocwen Financial include Palomar (PLMR), Urstadt Biddle Properties (UBA), SURUGA BANK ADR REP 10 (SUGBY), General American Investors (GAM), PJT Partners (PJT), VGI Partners Global Investments (VG1), Blackrock Muniyield Insured Fund (MYI), Franklin Street Properties (FSP), Third Point Reinsurance (TPRE), Stewart Information Services (STC), Federal Agricultural Mortgage (AGM), Republic Bancorp, Inc. KY (RBCAA), PPDAI Group (PPDF), Ambac Financial Group (AMBC) and Forestar Group (FOR).

WHAT OTHER STOCKS DO SHAREHOLDERS OF OCWEN FINANCIAL OWN?
Based on aggregate information from My MarketBeat watchlists, some companies that other Ocwen Financial investors own include GT Advanced Technologies (GTATQ), Mobileye (MBBYF), GoPro (GPRO), Pandora Media (P), Groupon (GRPN), General Electric (GE), MannKind (MNKD), Tesla (TSLA), Sirius XM (SIRI) and Ford Motor (F).

WHO ARE OCWEN FINANCIAL’S KEY EXECUTIVES?
Ocwen Financial’s management team includes the folowing people:
Mr. Glen A. Messina, CEO, Pres & Director (Age 57)
Mr. John V. Britti, Exec. VP & Chief Investment Officer (Age 59)
Ms. Catherine M. Dondzila, Sr. VP & Chief Accounting Officer (Age 56)
Mr. Scott William Anderson, Exec. VP & Chief Servicing Officer (Age 50)
Mr. Arthur C. Walker Jr., Sr. VP of Global Tax (Age 48)

HOW DO I BUY SHARES OF OCWEN FINANCIAL?
Shares of OCN can be purchased through any online brokerage account. Popular online brokerages with access to the U.S. stock market include Vanguard Brokerage Services, TD Ameritrade, E*TRADE, Robinhood, Fidelity and Charles Schwab.

WHAT IS OCWEN FINANCIAL’S STOCK PRICE TODAY?
One share of OCN stock can currently be purchased for approximately $1.76.

HOW BIG OF A COMPANY IS OCWEN FINANCIAL?
Ocwen Financial has a market capitalization of $236.90 million and generates $1.06 billion in revenue each year. Ocwen Financial employs 7,200 workers across the globe.

WHAT IS OCWEN FINANCIAL’S OFFICIAL WEBSITE?
The official website for Ocwen Financial is http://www.ocwen.com/.

HOW CAN I CONTACT OCWEN FINANCIAL?
Ocwen Financial’s mailing address is 1661 WORTHINGTON ROAD SUITE 100, WEST PALM BEACH FL, 33409.

The financial services provider can be reached via phone at 561-682-8000

Or via email at shareholderrelations@ocwen.com.

MARKETBEAT COMMUNITY RATING FOR OCWEN FINANCIAL (NYSE OCN)
Community Ranking: 2.2 out of 5 (star star)

MarketBeat’s community ratings are surveys of what our community members think about Ocwen Financial and other stocks. Vote “Outperform” if you believe OCN will outperform the S&P 500 over the long term. Vote “Underperform” if you believe OCN will underperform the S&P 500 over the long term. You may vote once every thirty days.

This page was last updated on 10/18/2019 by MarketBeat.com Staff

2019

Cooperman Leon G Buys 44,567 Shares of Altisource Portfolio Solutions S.A. (NASDAQ:ASPS)

Published: Oct 8th, 2019

Cooperman Leon G boosted its holdings in Altisource Portfolio Solutions S.A. (NASDAQ:ASPS) by 4.9% during the 2nd quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission.

The fund owned 947,503 shares of the business services provider’s stock after purchasing an additional 44,567 shares during the period. Cooperman Leon G owned about 5.92% of Altisource Portfolio Solutions worth $18,628,000 as of its most recent SEC filing.

Other hedge funds have also bought and sold shares of the company.

GSA Capital Partners LLP purchased a new position in Altisource Portfolio Solutions in the second quarter worth $245,000.

CQS Cayman LP lifted its position in shares of Altisource Portfolio Solutions by 2.6% during the 2nd quarter. CQS Cayman LP now owns 200,000 shares of the business services provider’s stock valued at $3,932,000 after buying an additional 5,000 shares during the last quarter.

Jacobs Levy Equity Management Inc. purchased a new position in shares of Altisource Portfolio Solutions during the 2nd quarter valued at $370,000.

Quantamental Technologies LLC purchased a new position in shares of Altisource Portfolio Solutions during the 2nd quarter valued at $32,000.

Finally, Renaissance Technologies LLC lifted its position in shares of Altisource Portfolio Solutions by 11.5% during the 2nd quarter. Renaissance Technologies LLC now owns 547,200 shares of the business services provider’s stock valued at $10,758,000 after buying an additional 56,500 shares during the last quarter. 60.66% of the stock is currently owned by institutional investors and hedge funds.

ASPS has been the topic of a number of recent research reports. Zacks Investment Research cut Altisource Portfolio Solutions from a “buy” rating to a “hold” rating in a research report on Tuesday, September 24th.

BidaskClub cut Altisource Portfolio Solutions from a “buy” rating to a “hold” rating in a research report on Saturday, September 21st.

Finally, ValuEngine raised Altisource Portfolio Solutions from a “hold” rating to a “buy” rating in a research report on Thursday, August 1st.

Three investment analysts have rated the stock with a hold rating and one has issued a buy rating to the company. The stock currently has an average rating of “Hold” and a consensus target price of $27.00.

Shares of NASDAQ ASPS traded down $0.22 during trading on Tuesday, reaching $19.85. 62,027 shares of the stock traded hands, compared to its average volume of 75,114. The company has a 50-day moving average of $20.44 and a 200-day moving average of $21.45. The stock has a market capitalization of $320.94 million, a P/E ratio of -62.03 and a beta of 1.08. The company has a debt-to-equity ratio of 1.12, a current ratio of 2.10 and a quick ratio of 2.10. Altisource Portfolio Solutions S.A. has a 52-week low of $18.31 and a 52-week high of $32.50.

Altisource Portfolio Solutions (NASDAQ:ASPS) last issued its quarterly earnings data on Thursday, July 25th. The business services provider reported ($0.36) earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.56 by ($0.92). The company had revenue of $196.54 million for the quarter, compared to analysts’ expectations of $169.90 million.

Altisource Portfolio Solutions had a negative return on equity of 3.95% and a negative net margin of 1.52%. The business’s revenue for the quarter was down 10.1% on a year-over-year basis. During the same period last year, the company posted $0.60 EPS. Analysts expect that Altisource Portfolio Solutions S.A. will post 0.04 earnings per share for the current fiscal year.

Altisource Portfolio Solutions Company Profile

Altisource Portfolio Solutions SA operates as an integrated service provider and marketplace for the real estate and mortgage industries in the United States and internationally. It operates in two segments, Mortgage Market and Real Estate Market. The company offers property preservation and inspection, real estate brokerage and auction, title insurance and settlement, appraisal management, broker and non-broker valuation, foreclosure trustee, mortgage charge-off collection, residential and commercial loan disbursement processing, and residential and commercial construction inspection and risk mitigation services, as well as valuation data; residential and commercial loan servicing, vendor management, marketplace transaction and payment management, and default services technologies; and document management platform.

2018

Leon Cooperman Buys 3 Stocks As Omega Closes To Outside Investors

November 29, 2018

Leon Cooperman’s Omega Advisors established three holdings in the third quarter as it converts to a family office, filings showed.

Leon “Lee” Cooperman, chief executive officer of Omega Advisors Inc., will manage primarily his personal wealth after decades in the investment industry.

The firm, which plans to return all outside investor capital by the end of the year, chopped 38 positions from its portfolio. Cooperman made the decision to close his hedge fund where he is chairman and CEO earlier in the year, saying in a client letter, “I don’t want to spend the rest of my life chasing the S&P 500.”

The investor faced $4.95 million in fines from the U.S. Securities and Exchange Commission for insider trading in May 2017.

Cooperman founded Omega in 1991 after 25 years at Goldman Sachs. As of Oct. 31, 2018, the firm had $3.3 billion in assets under management, down from about $9.4 billion in 2015.

The long portfolio, valued around $2.31 billion at third quarter-end, listed 51 stocks, with 24.09% in the industrials sector, 17.52% in tech and 17.31% in energy. Cooperman’s largest holdings were: United Continental Holdings Inc., AMC Networks Inc. and Alphabet Inc.

In October, Cooperman said he thought “the whole structure of the market is broken” due to quantitative trading systems. Nevertheless, he thought it was adequately valued at the time.

“Basically, the things I look at suggest that the market is OK. It is not cheap, but it’s not expensive,” he told CNBC. “You know it’s not an exciting message when I tell you the market’s in a zone of fair valuation. Basically it doesn’t excite you, but that’s kind of where we’re at.

In the third quarter, he bought: Nielsen Holdings PLC, Cigna Corp. and Mr. Cooper Group Inc.

New buys

Nielsen Holdings PLC

Cooperman purchased 100,494 shares of the company, giving it 4.35% portfolio weight. The stock’s third-quarter share price averaged $27.

Nielsen Holdings PLC has a market cap of $9.69 billion; its shares were traded around $27.31 Thursday with a price-earnings ratio of 30.69 and price-sales ratio of 1.49. The trailing 12-month dividend yield of Nielsen Holdings PLC stocks is 5.10%. The forward dividend yield of Nielsen Holdings PLC stocks is 5.36%. Nielsen Holdings PLC had an annual average earnings growth of 9.40% over the past five years.

Cigna Corp.

Cooperman purchased 107,500 shares of the company, giving it 0.97% portfolio weight. The stock’s third-quarter share price averaged $185.

Cigna Corp. has a market cap of $54.38 billion; its shares were traded around $223.30 Thursday with a price-earnings ratio of 19.86 and price-sales ratio of 1.25. The trailing 12-month dividend yield of Cigna Corp. stocks is 0.02%. The forward dividend yield of Cigna Corp. stocks is 0.02%.

Mr. Cooper Group Inc.

Cooperman purchased 12,719 shares of the company, giving it 0.55% portfolio weight. The stock’s third-quarter share price averaged $17.

Mr. Cooper Group Inc. has a market cap of $1.32 billion; its shares were traded around $14.54 Thursday with a price-earnings ratio of 30.96.

It is a coincidence the former brand called Nationstar, a mortgage servicer  and originator, rebranded as “Mr Cooper” and Cooperman is well known in the industry? We think not.

This article originally appeared HERE.

Bill Erbey unloads his Ocwen shares; Leon Cooperman steps in

About: Ocwen Financial Corporation (OCN)

Exiled Ocwen Financial (NYSE:OCN) founder Bill Erbey discloses the sale of about 10M shares, bringing his stake in the company to just under 6M.

Alongside, Leon Cooperman discloses he’s built his stake in Ocwen to 10.5%.

Shares up 2.2% premarket to $3.26.

2019

Leon Cooperman says the stock market would drop 25% if Elizabeth Warren is elected

PUBLISHED WED, OCT 16 2019

Billionaire investor and major OCWEN shareholder (who recently increased his stake substantially)  Leon Cooperman took aim on Wednesday at what an Elizabeth Warren presidency would mean for the stock market.

“If Elizabeth Warren is elected president, in my opinion, the market drops 25%,” Cooperman told CNBC’s “Squawk Box.” “Bernie Sanders, same thing.”

Warren has risen in some recent polls to the top of the crowded Democratic field. Her wealth tax has become a rallying force. It calls for an annual 2% tax on wealth over $50 million and 3% on wealth over $1 billion. Taxpayers would be expected to estimate the current value of everything from cars to real estate to art, private equity portfolios and private businesses.

Cooperman, chairman and CEO of Omega Advisors, takes issue with what he calls Warren’s “war on billionaires.”

“I believe in a progressive income tax structure, I believe rich people should pay more, I have no problem with that. This wealth tax is baloney,” said Cooperman.

“You don’t make poor people rich by making rich people poor,” he added, citing Winston Churchill. “The main vice of capitalism is the unequal distribution of prosperity, the main vice of socialism is the equal distribution of misery.”

Warren said at Tuesday night’s Democratic debate that she doesn’t have a “beef with billionaires,” but added that if you make it to the top, you need to pitch in to help other children reach the same opportunity.

“Education and faster economic growth is the answer,” to the country’s inequality problem, said Cooperman. “At the end of the day, capitalism is what distinguishes America.”

Cooperman has previously addressed a Warren presidency. “There’s unquestionably a shift to the left in this country,” Cooperman said last month. “They won’t open the stock market if Elizabeth Warren is the next president,” he joked.

Warren’s office did not respond to CNBC’s request for comment.

2018

Leon Cooperman Boosts Ownership of Embattled OCWEN

PUBLISHED MARCH 2, 2018

The CEO of Omega Advisors owns more than 15.3 million shares, or over 11%, of Florida-based Ocwen Financial Corp. (OCN). The guru investor purchased over 50,000 shares, based on the most recent update to his portfolio.

Year to date, Ocwen stock is up 18%. Over the last three years, however, Ocwen stock dove 60% after a series of enforcement actions involving attorney generals in multiple states, the Consumer Financial Protection Bureau and others. Just last April, the U.S. Consumer Financial Protection Bureau sued Ocwen for “systemic misconduct at nearly every stage of the mortgage servicing process.” The agency has accused Ocwen of illegally foreclosing on homeowners, botched escrow accounts and failures to credit borrower’s payments. Ocwen has fired back saying the federal agency is unconstitutional and operates without sufficient oversight from the president or Congress.

Among other problems, in 2013, the company reached a $2 billion settlement with California’s attorney general for accusations of mortgage servicing misconduct. Back in October 2013, Ocwen stock was trading at $55 a share. In Friday afternoon trading, Ocwen was up almost 3% to $3.66 a share.

Guru trades

Star investor Cooperman has had his eye on Ocwen for a while. He first began buying shares in 2012. But he sold out on two separate occasions: in the fourth quarter of 2013 and the third quarter of 2014, GuruFocus shows.

In May 2017, he bought roughly 8.4 million shares for an average price of $2 a share.

Months later, on Jan. 19, he bought 5.6 million shares for an average price of $3.11; then, on Jan. 23, sold 235,000 shares for an average price of $3.19 a share.

On Feb. 6, he bought 1.5 million shares for $3.15 a share.

His last buy on Feb. 13 added 54,000 shares for a total of more than 15.38 million shares at an average price of $3.57 a share.

Ocwen is among Cooperman’s largest holdings. Others include Atlas Energy Group (NYSE:ATLSW) and THL Credit Inc. (TCRD).

As of the latest update on Feb. 14, the guru’s portfolio holds 72 stocks and is valued at $2.67 billion.

Controversies

Ocwen hasn’t been the only target of federal regulators.

Last May, Cooperman’s Omega Advisors reached a $4.9 million settlement with the Securities and Exchange Commission for insider trading.

According to the SEC filing, “Cooperman generated substantial illicit profits by purchasing securities in Atlas Pipeline Partners (APL) in advance of the sale of its natural gas processing facility in Elk City, Oklahoma.”

SEC records show Cooperman allegedly used his status as one of Atlas’ largest shareholders “to gain access to the executive and obtain confidential details about the sale of this substantial company asset.

“Cooperman and Omega Advisors allegedly accumulated APL securities despite explicitly agreeing not to use the material nonpublic information for trading purposes, and when APL publicly announced the asset sale its stock price jumped more than 31 percent.”

After the SEC’s action, Cooperman sent a five-page letter to investors. In it, he said he was in disagreement with the commission’s actions. And, nor he or the firm had engaged in anything that was “unlawful.”

“We have done nothing improper and categorically deny the Commission’s allegations,” he wrote.

Ocwen’s financial health

The West Palm Beach-based company is one of the largest nonbank mortgage servicers in the U.S.

It has over 9,000 employees serving more than 1.5 million customers, according to its website. It says it specializes in “helping families achieve their financial and homeownership goals.” It originates traditional and reverse mortgage loans, according to its website.

Ocwen’s price-book ratio is 0.80 versus the median of 1.22 and its price-sales ratio is 0.35 versus a median of 3.50. The price-book ratio is ranked higher than 99% of more than 1,500 of its peers.

According to GuruFocus, its revenue growth has been a loss of 13.50% in the last 12 months. Revenue over the last 10 years has grown by 10.80%, however.

Its growth in book value has declined by 15.90% over the last 12 months. Its free cash flow growth is 437% over the last 12 months.

Its operating margin is -10.21%, and its return on equity is -15.15% while its return on assets is -1.2%.

GuruFocus ranks it 4 out of 10 in financial strength and 6 of 10 in profitability and growth.

It has a market cap of $488 million.

Ocwen announced this week it will buy PHH Corp. (PHH) for $360 million. The goal is to create an industry-leading servicing platform.

2016

Ocwen Spinoff Altisource Soars 60%+ as Cooperman Lectures Management

Cooperman asked CEO Bill Shepro ‘whether your testicles are bigger than your brains or your brains are bigger than your testicles.’

PUBLISHED JAN 15, 2016

NEW YORK (TheStreet) — Shares of troubled mortgage technology company Altisource Portfolio Solutions (ASPS) soared more than 60% Friday even as well-known investor Leon Cooperman questioned whether management’s “testicles are bigger than your brains.”

Regulatory trouble for Altisource and its largest client, Ocwen Financial (OCN)  has erased some 80% off the market value over the past year, and much of Friday’s rebound can be attributed to investors simply hearing that management believes the company is on solid footing. Altisource also announced it would buy back shares as CEO Bill Shepro held a conference call with analysts and investors midday Friday.

Altisource was spun out of mortgage servicer Ocwen in 2009 but still gets 65% of its revenues from Ocwen, serving essentially as the technology backbone of Ocwen.

Ocwen, however, has been virtually brought to its knees by New York financial services superintendent Ben Lawsky for not complying with consumer protection laws in collecting from delinquent mortgage holders. While Ocwen settled with Lawsky at the end of last year, it was forced to accept the resignation of its chairman and de facto leader, Bill Erbey. Erbey served those same roles at Altisource and three other closely related companies, all of which have been thrown into turmoil by the fallout from the settlement.

Further, regulatory problems for these companies may be intensifying as a California regulator threatened to suspend Ocwen’s license to operate in the state.

Altisource CEO Shepro, however, said during the call that the likelihood of a suspension of Ocwen’s mortgage license was “very low.”

Shepro also addressed “a recent analyst report,” which he said had “generated a lot of confusion” about “whether Altisource will need to reduce its pricing to Ocwen.” He said the company “firmly believe[s]” it charges market rates to Ocwen.

One of the issues flagged by Lawsky was that there was a conflict of interest between Ocwen and Altisource because of their close relationship. Altisource projected it would earn either $4.40 or $7.95 in 2015 under two different scenarios. Even the lower number was likely encouraging to investors, given the vast uncertainties about the company’s prospects.

The call, while obviously encouraging to shareholders, was also memorable because it featured Cooperman asking Shepro,  “whether your testicles are bigger than your brains or your brains are bigger than your testicles.”

He noted the company had spent $200 million to buy back shares when the stock was at $104, which Cooperman said was “obviously a colossal misallocation of capital.” Cooperman said he wanted to be sure management had analyzed the buyback question issue more thoroughly this time even though he conceded a buyback looked like a “no-brainer.”

As Altisource executives said they would commence the buyback as soon as their lawyers assured them they had made sufficient disclosures to do so, Cooperman said he felt sure that they had, and urged them to “find a law firm with some common sense,” that would give them the go-ahead right away.

“I’d hate to see this company get picked off,” Cooperman said.

Published 31st October, 2019

Leon Cooperman rips Elizabeth Warren in new letter for ‘soak-the-rich positions,’ and treating him like ‘an ungrateful child’

Leon Cooperman sent a critical letter to Sen. Elizabeth Warren, one of the top Democratic presidential candidates, marking the latest salvo in the war of words between the billionaire investor and the economic populist politician.

Cooperman laced into Warren right from the beginning of his letter for her Oct. 23 tweet criticizing him.

“You proceeded to admonish me (as if a parent chiding an ungrateful child) to ‘pitch in a bit more so everyone else has a chance at the American dream,’” Cooperman writes.

He went on to say “your tweet demonstrated a fundamental misunderstanding of who I am, what I stand for, and why I believe so many of your economic policy initiatives are misguided.”

Cooperman, chairman and CEO of Omega Advisors, began his critique of Warren by writing: “Now for your soak-the-rich positions on taxes and economic policy.”

Cooperman declined to provide a copy of the letter, or any specific details of it. He sent it Wednesday and intended to reveal it Friday.

Read the letter here.

After this story was initially published, however, CNBC obtained a copy of the letter from people familiar with the matter.

The letter explains Cooperman’s disagreements with her recent criticisms of the influence of wealthy business leaders and her economic policy proposals, the investor said.

Cooperman said he expects the letter to arrive at one of Warren’s offices by Friday and noted, “It’s a very responsible letter on why I disagree with her.”

Asked why he decided to do this, he said, “I’m responding to a tweet,” and insisted he had other phone calls to attend to before he hung up.

In the letter, Cooperman says: “Our political differences aside, your tweet demonstrated a fundamental misunderstanding of who I am, what I stand for, and why I believe so many of your economic policies are misguided.”

Later in the letter, he writes: “However much it resonates with your base, your villification of the rich is misguided, ignoring, among other things, the sources of their wealth and the substantial contributions to society which they already, unprompted by you, make.”

After Cooperman recently told Politico that, while he believes in a “progressive income tax and the rich paying more,” he disagreed with much of Warren’s approach. “But this is the f—ing American dream she is s—-ing on,” he told the publication. Warren later fired back in a tweet, suggesting Cooperman should “pitch in a bit more.”

At the end of the five-page letter to Warren, Cooperman calls on Warren to “elevate the dialogue.”

“The fact is, Senator Warren, that despite our philosophical differences, we should be working together to find common ground in this vital conversation – not firing off snarky tweets that stir your base at the expense of accuracy,” he writes. “Let’s elevate the dialogue and find ways to keep this a land of opportunity where hard work, talent and luck are rewarded and everyone gets a fair shot at realizing the American Dream.”

People familiar with the contents of the open letter say that Cooperman is writing it for another reason: to convince voters her proposals will hinder the economy and be a burden on taxpayers. Allies of the investor, who declined to be named in order to speak frankly about the letter, have privately warned him that an effort like this would only embolden Warren’s argument that she is best equipped to take on the rich. Cooperman has privately shrugged off these concerns, these people added.

Representatives for Warren did not immediately respond to a request for comment about the Cooperman letter.

Warren has cut into Democratic front-runner Vice President Joe Biden’s polling lead in recent weeks. After being behind Biden by at least 30 percentage points in the Real Clear Politics poling average, she has surged back to a distance of just over 5 points. Sen. Bernie Sanders is in third.

Warren has also performed better on the fundraising front. She outraised Biden in the third quarter by raking in $24.6 million while he brought in more than $15 million.

 

The politics of class warfare

Cooperman previously wrote a critical letter to President Barack Obama in November 2011, a year before Obama was reelected.

Within that correspondence, Cooperman accused Obama and his allies of encouraging “class warfare.”

“What does matter is that the divisive, polarizing tone of your rhetoric is cleaving a widening gulf, at this point as much visceral as philosophical, between the downtrodden and those best positioned to help them,” Cooperman wrote at the time. “With due respect, Mr. President, it’s time for you to throttle-down the partisan rhetoric and appeal to people’s better instincts, not their worst,” he added.

Obama was known to label Wall Street leaders as “fat cat bankers.”

“They’re still puzzled why it is that people are mad at the banks. Well, let’s see. You guys are drawing down $10 [million], $20 million bonuses after America went through the worst economic year in decades and you guys caused the problem,” Obama said in an interview with the CBS program “60 Minutes” in 2009.

The Cooperman-Warren feud started to boil after he ripped her during the Delivering Alpha conference presented by CNBC and Institutional Investor in New York last month.

“They won’t open the stock market if Elizabeth Warren is the next president,” he joked at the time. “You don’t make the poor people rich by making rich people poor. The Democratic Party seems to be leaning towards the left on policies, which is very harmful for the economy. I don’t like the shift to the left.”

Warren has laid out plans that could curb the influence of finance executives if she becomes the next commander in chief, including a wealth tax. In July, she released a proposal that would make private equity firms responsible for debts and pension obligations of companies they buy.

These ideas have also led Democratic donors on Wall Street to stress that if she wins the primary, they will sit out or back President Donald Trump in the 2020 general election. CNBC’s Jim Cramer reported in September that Wall Street is “terrified” of a Warren presidency.

Read the letter:

Omega Family Office, Inc. 810 Seventh Avenue • 33rd Floor I New York, New York 10019
Tel: 212-495-5200 | Fax: 212-495-5236

Leon G. Cooperman, C.F.A.
Chairman & Chief Executive Officer

October 30, 2019

Senator Elizabeth A. Warren
309 Hart Senate Office Building
Washington, DC 20510

Dear Senator Warren:

While I am not a Twitter user, several friends passed along to me your October tweet in which, after correctly observing that my financial success can be attributed, in no small measure, to the many opportunities which this great country has afforded me, you proceeded to admonish me (as if a parent chiding an ungrateful child) to “pitch in a bit more so everyone else has a chance at the American dream, too.” Our political differences aside, your tweet demonstrated a fundamental misunderstanding of who I am, what I stand for, and why I believe so many of your economic policy initiatives are misguided. Because your tweet was publicly disseminated, I feel compelled to respond in the form of an Open Letter for all who are interested to read.

As I have noted elsewhere, mine is a classic American success story. I have been richly rewarded by a life of hard work combined with a great deal of good luck, including that to have been born in a country that adheres to an ethos of upward mobility for determined strivers. My father was a plumber who practiced his trade in the South Bronx after he and my mother emigrated from Poland. I was the first member of my family to earn a college degree. I benefitted from both a good public education system (all the way through college) and my parents’ constant prodding. When I joined Goldman Sachs following graduation from Columbia Business School, I had no money in the bank, a negative net worth, a National Defense Education Act student loan to repay, and a six-month-old baby (not to mention his mother, my wife of now 55 years) to support. I had a successful, near-25 year run at Goldman before leaving to start a private investment firm. As a result of my good fortune, I have been able to donate in philanthropy many times more than I have spent on myself over a lifetime, and I am not finished; I have subscribed to the Buffett/Gates Giving Pledge to ensure that my money, properly stewarded, continues to do some good after I’m gone. As I told Mr. Buffett when I joined the Pledge, asking for half of my money wasn’t enough; I intend to donate substantially all of it, Apart from my children and grandchildren, I cannot imagine a finer legacy.

My story is far from unique. I know many people who are similarly situated, by both humble origin and hard-won accomplishment, whose greatest joy in life is to use their resources to improve their communities. Many of their names — including those of Ken Langone, Carl Icahn and Sandy Weill, all self-made billionaires whom I am proud to call friends — are associated with major hospitals (NYU Langone Health, Icahn School of Medicine at Mount Sinai, Weill Cornell Medical College, and, in my own case, Saint Barnabas Medical Center and Boca Raton Regional Hospital) which tend to the needs of, among others, many thousands of poor patients each year who could not otherwise afford the best-of-class medical services that those fine institutions, with our support and that of others like us, provide.

Having grown up without much money and valuing highly the public education I received, have donated substantial sums to Hunter College of the City University of New York and to Columbia University’s Graduate School of Business —money for scholarships, libraries, and the construction of new buildings. In 2014, with a very large gift, I established Cooperman College Scholars, a program which identifies academically talented, highly motivated students of Strong character in Essex County (including Newark), New Jersey, who are traditionally underrepresented in higher education. children of color, impoverished children, children facing situational challenges that tug them away from educational priorities — and, through a contribution of high-school counseling, tuition grants, and ongoing cohort-based mentoring to help matriculated students navigate the challenges of transitioning successfully to college life — and by eliminating the negative impact of insufficient financial aid and social support systems on student persistence and graduation rates — enables them to attend college, thrive there and graduate. It is our goal to put 500 district and charter public-school students through college in the next few years. As I stated when my gift was announced, for splendid youngsters such as these to be denied access to a higher education, and to all the opportunities that that can afford, simply because of financial need is a national tragedy. My family feels very privileged to be in a position where we can help at least some of these children’s dreams•come true, and in the process fundamentally change their lives.

However much it resonates with your base, your vilification of the rich is misguided, ignoring, among other things, the sources of their wealth and the substantial contributions to society which they already; unprompted by you, make, Typically, unless born to money or married into it, people become rich by providing a product or service that others want and are willing to pay for.

  • Ken Langone, Bernie Marcus and Arthur Blank founded Home Depot in 1978 with $2 million raised from 40 friends — none of whom were wealthy by your standards (average investment $50,000) — after Bernie (age 49) and Arthur (age 36) had been fired from their previous jobs and — with three children each, no health insurance, no savings, and heavily mortgaged homes — were effectively broke. The rest is history. From nothing, Home Depot has grown into an enterprise with market capitalization of over $250 billion that provides employment to more than 400,000 workers thousands of Whom became millionaires investing in the company’s stock — while the founders have given away in excess of $1 billion in charitable donations (and still counting).
  • In 1981, Mike Bloomberg, whose record of public service and philanthropy are legendary, created a machine that changed the way the financial world —a sector that is the source of much of the tax revenues that fuel your legislative priorities — conducts business. Today, Bloomberg L.P. has morphed into a diversified financial-services company that employs 20,000 people.
  • In 1998, computer scientists Larry Page and Sergey Brin, while still in graduate school, founded Google, now one of the foremost search engines that power the Internet. Today, Google employs more than 100,000 workers, and Page and Brin have donated billions of dollars each to charitable causes.

The list goes on of self-made billionaires — Bill Gates (Microsoft Corporation 144,000 jobs), Michael Dell (Dell Technologies – 145,000 jobs), Mark Zuckerberg (Facebook 39,000 jobs) and Larry Ellison (Oracle Corporation — jobs), among others — who have built huge businesses from the ground up, providing jobs and economic opportunity to hundreds of thousands of taxpaying workers, and voluntarily gift every year, in the aggregate, billions of dollars back to the society that nurtured their success. Their stories, and many more like they are the very embodiment of the American Dream. For you to suggest that capitalism is a dirty word and that these people, as a group, are ingrates who didn’t earn their riches through strenuous effort and (in many cases) paradigm-shifting insights, and now don’t pull their weight societally indicates that you either are grossly uninformed or are knowingly warping the facts for narrow political gain.

Now for your soak-the-rich positions on taxes and economic policy.

The two University of California at Berkeley economists who are advising your campaign, Emmanuel Saez and Gabriel Zucman, have drawn a lot of media attention for their contention that the U.S. federal income tax system is flat, which is to say, regressive and therefore fundamentally unfair to low-income Americans. But their analysis is open to challenge, and the conclusions which they (and you) draw from it are debatable.

  • As others have pointed out, Saez and Zucman focus on gross, not net, taxes, ignoring transfer payments (Social Security, Medicare and Medicaid benefits) which are disproportionately paid to the poor and middle class, and whose inclusion in their tax-burden calculations would materially skew the outcome in the opposite direction.
  • They include excise and taxes which are by their nature regressive (and therefore overstate the outsized tax burden on low-income Americans) but have nothing to do with federal fiscal policy and tax-code structure — it’s simply how state and local governments have chosen to fund themselves; excluding those and similar taxes from their analysis would again yield a result counter to the economist’s thesis.
  • By focusing on current-year rather than lifetime tax burdens, Saez and Zucman understate taxes on the rich (who are taxed both on current year’s income and on future dividends, interest arid capital gains earned on savings) and overstate those on the poor and middle class (since future transfer-payment benefits, which as noted are excluded from the economists’ calculations, comprise an increasing share of their financial resources as they age).

In sum, Saez and Zucman’s economic model appears to be based on highly dubious assumptions and tailored to promote a specific “progressive” policy agenda, and their conclusions are far less definitive and unequivocal than they maintain.

Further undercutting your economists’ fair-share arguments, the Internal Revenue Service recently released data that detail, for tax year 2016 (the latest year for which these data are available), individual federal income tax shares according to income percentile.

  • As a percentage of total individual federal income taxes paid, the top 1% of taxpayers paid a greater share of that total (37 than the bottom 90% combined (30.5%).
  • As a percentage of taxpayers’ adjusted gross income paid in individual federal income taxes, the top 1% of taxpayers paid an effective tax rate (26.9%) which was more than seven times higher than that of the bottom 50% (3.7%).
  • The top 50% of taxpayers paid 97% of all individual federal income taxes; the bottom 50% paid the remaining 3%.

As analyzed by the Tax Foundation, a leading independent tax-policy nonprofit, the data demonstrate “that the US. individual income tax continues to be very progressive, borne primarily by the highest income earners.”

Saez and Zucman surface again in the debate over an explicit, recurring wealth tax (as distinct from property and one-time estate taxes — alternative forms of levy on wealth) targeting the richest Americans, e major plank of your economic platform. As numerous economists (if not yours) have observed, the history and prognosis of explicit wealth taxes is not sanguine.

  • In a February 2018 article for the International Monetary Fund, the authors, economists James Brumby and Michael Keen„ noted that “there are now very few effective explicit wealth taxes in either developing or advanced economies; Indeed between 1985 arid 2007, the number of OECD countries with an active wealth tax fell from twelve to just four. And many of those were, and are, of limited effectiveness.”
  • At a recent conference sponsored by the Peterson Institute for International Economics; Saez and Zucman debated their advocacy of:a wealth tax with Harvard economists Lawrence Summers (Bill Clinton’s Treasury Secretary and Barack Obama’s Director of the National Economic Council) and Gregory Mankiw (George W. Bush’s Chair of the Council of Economic Advisers). Your made the case that federal tax revenues should be raised to finance increased expenditures on education, infrastructure and healthcare subsidization but:as Mankiw and Summers argued, whether an explicit wealth tax is the preferred route is at best questionable — plagued by issues of constitutionality, tax avoidance, asset valuation and administrability — and the assumptions underlying Zucman’s analysis are,:as noted, suspect. As Summers put it: “For progressives to use their energy on a proposal that has a more than 50% chance of being struck down by the Supreme Court, little chance of passing through Congress, and whose revenue-raising potential is very much in doubt, is to potentially sacrifice immense opportunities.”

The opportunities to which Summers was referring — opportunities to raise funds for a more progessive legislative agenda that might stand a chance of passing Congress and weathering constitutional scrutiny, and whose revenue-raising potential is unquestionable — could include eliminating the exemption of capital gains from taxation upon death, the carried-interest exemption for private equity and hedge funds, and the capital-gains tax-deferral preference accorded like-kind exchanges under Section 1031 of the Internal Revenue Code.

It may be worth considering that wealth redistribution advocates might be wrong to focus solely on income inequality rather than on income opportunity more broadly. In economics, the most commonly used gauge of economic inequality across a target population is the Gini coefficient (or Gini index), named for the Italian statistician who developed it in 1912. A Gini coefficient of means the country has perfect equality of financial prosperity; a coefficient of one means maximum inequality. The World Bank, in its Gini coefficient-by-country analysis for 2019, ranks a number of countries — including Afghanistan, Albania, Algeria, Kyrgyzstan, Romania, Slovakia, Slovenia and Ukraine, all with Gini coefficients in the 20s — high on its financial equality list. Yet despite the relatively high degree of financial equality implied by their numbers, none of these countries can boast booming economies or generalized income and wealth-creation opportunities. It would therefore appear that may be more aligned than those of most other countries in the fair distribution of wealth, but that does not translate in any meaningful sense into widespread prosperity. So what good is income equality to them? Should that — the narrowing of income inequality as an end in itself, as opposed to income growth for all — really be our fiscal policy imperative?

And that takes me to my final points — what I do, in fact, believe should be our fiscal policy priorities:

  • Rather than adopt an explicit wealth tax whose efficacy has been widely debunked by experience around the world, let’s debate what the maximum individual and corporate: tax rates should be. I believe in a progressive income tax structure. The wealthy should pay more than those of lesser means, but they already do, and at some point, higher effective (federal, state and local combined) rates become confiscatory. That should never be the ethos of this country, I am on record as: having said that I don’t mind working six months of the year for the government and six months for myself, paying an effective combined tax rate of 50% off my income. But many who live in high-tax cities and states pay even more, while some of the nation’s highest earners pay less. A more effective way than a tax to right-size the latter imbalance might be to revisit some form of the Buffett Rule (repeatedly rejected by Congress since it was first proposed in 2012), which would implement a surtax on taxpayers making over a million dollars a year to better ensure that the highest earners pay their fair share.
  • Let’s eliminate loopholes in our code that allow so much seepage through the cracks. A good start would be the short-list enumerated several above.
  • Before levying more taxes of any stripe, candidates should commit to trying to fund their agendas through revenue-neutral proposals that would cull bureaucratic waste. I have seen too much evidence of governmental profligacy to have much faith in Congress’s ability to spend our tax revenues efficiently Frustrated efforts to privatize the U.S. Postal Service, which loses billions of dollars a year as a government-owned corporation, are a case in point. Social progress does not have to come at the cost of further administrative bloat.

I am a registered Independent who votes the issues and the person, not the party. The fact is, Senator Warren, that despite our philosophical differences, we should be working together to find common ground in this vital conversation — not firing off snarky tweets that stir your base at the expense of accuracy. Let’s elevate the dialogue and find ways to keep this a land of opportunity where hard work, talent and luck are rewarded and everyone gets a fair shot at realizing the American Dream.

Sincerely,
Leon G. Cooperman

cc: Senator Elizabeth A. Warren
2400 JFK Federal Building
15 New Sudbury Street
Boston, MA 02203

Senator Elizabeth A. Warren
1550 Main Street
Suite 406
Springfield, MA 01103

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  1. Pingback: Real Estate Investment Trusts (REITs) and Wall Street Bankers Have Stolen Your Families Access to Affordable Housing | Laws In Texas

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