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Dow Hits Record High; Will Gensler Spend a Second Term at CFTC?

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Receiving Wide Coverage ...

All About the Dow: Despite "tepid economic growth" and "political gridlock" (most recently personified by the ongoing sequester), the Dow Jones Industrial Average hit a record high on Tuesday, climbing 125.95 points, or 0.89%, to 14253.77 and exceeding the previous record set in October 2007. But will the rally last? Maybe, posits the Journal. Or, alternately, should more investors pile in? Possibly, says the Times, due largely to the ongoing efforts of the Federal Reserve. More big picture coverage of the Dow rally: New York Times, Bloomberg, Reuters

A Second Term for Gensler at CFTC?: The Obama administration has asked Gary Gensler to stay on as chairman of the Commodity Futures Trading Commission, but he hasn't decided if he is going to say yes to second term yet, reports the Journal. Anonymous sources familiar with the matter tell the paper Gensler is "interested in taking on a role as a senior economic official elsewhere in the administration" Also unnamed Senate aides and CFTC commissioners believe Gensler "will leave the agency later this year." According to Dealbook, which also spoke to anonymous sources who said (largely) the same thing, other possible jobs for Gensler include deputy Treasury secretary and head of the Commerce Department. Gensler is only willing to guarantee the administration he'll stay "through at least December."

Wall Street Journal

More underwater properties are being sold through short sales, largely due to the fact that "lenders, homeowners and real-estate agents" have become more adept at carrying them out. The shift "has helped keep home prices firm at a time when the real-estate industry is still healing from its multiyear slump." This echoes an argument put forth by Alexander R.M. Boyle in a recent BankThink post, "The More Short Sales Done in Mortgage Settlement, the Better."

The Federal Reserve is sticking to plans to release stress test results in two components a week apart, despite some executives' warning "that the delay could boost volatility in bank shares."

Financial Times

The FBI has joined the Securities and Exchange Commission's probe into high-frequency, algorithm-based trading.

Is Citi getting ready to follow HSBC's lead when it comes to streamlining operations? The paper reports the bank is considering "pulling back from 21 countries" to cut costs. CEO Michael Corbat, who spoke of the possibility of exiting certain business lines at an investor conference in Boston on Wednesday, did not specifically name which countries he currently thought to be "unsustainable" performance-wise, but did alternately identify Mexico, India, China and twenty other countries as places of investment. You can find more on Corbat's talk in this American Banker article.

New York Times

Speaking of HSBC, the U.K. bank has agreed to sell a U.S. consumer loan portfolio of personal unsecured loans and mortgages to Springleaf Finance and the Newcastle Investment Corporation "for $3.2 billion in cash."

Philip Horn, a former Wells Fargo broker, was sentenced to two years in prison after pleading guilty to defrauding clients by executing and cancelling trades in their portfolios, then pocketing the profits.

Washington Post

This article tackles why Fannie Mae and Freddie Mac — soon to be Frannie McRae, perhaps — are still on the government's dime. Per author Neil Irwin: "Too many people benefit from the current system, and too many people have something to lose in any overhaul."

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Big Winners and Losers for Banks on Election Night

Republicans won a sizable victory late Tuesday, retaking the Senate after losing it eight years ago. Banks, too, largely benefited, as an ally of the industry captured a Senate seat in West Virginia, two credit union allies fell and a key Democratic senator squeaked past. Here's how election night played out for banks.

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