Receiving Wide Coverage ...
Ease on Down the Road: Chairman Ben Bernanke defended the Fed's asset purchases and signaled they will continue until the job market firms up. He addressed concerns that by driving down interest rates for a long period of time, the Fed's easing encourages inappropriate risk-taking: While the central bank is cognizant of that danger, he said, low rates "also serve in some ways to reduce risk in the system, most importantly by encouraging firms to rely more on longer-term funding, and by reducing debt service costs for households and businesses." Wall Street Journal, Financial Times, New York Times, Washington Post
JPMorgan: At its annual investor day, the bank disclosed plans to cut 17,000 jobs by the end of next year. CEO Jamie Dimon also disputed the notion that JPMorgan enjoys a lower cost of funds due to the perception that it is too big to be allowed to fail. "We pay market prices when we borrow money," he declared, according to the FT. And if you followed American Banker National Editor Maria Aspan on Twitter yesterday, you already know what Dimon had to say about the activist shareholders calling to split the chairman and CEO roles (they're "the union investors," not "real money"), analyst Mike Mayo ("I'm richer than you") and JPM's own chief risk officer (unprintable in a family publication). Wall Street Journal, Financial Times
Wall Street Journal
"Builders Fuel Home Sale Rise" — "Developers Overlook Buyers' Credit, Cash Problems, Luring Them to Pricier Houses." No, this isn't a flashback to 2006. New home sales are surging, and while one reason is that investors have scooped up the inventory of existing homes, another factor is that "the nation's home builders have mastered the art of selling. … [M]ore home builders have offered to pay closing costs and arrange home loans through in-house mortgage operations. They have hosted free credit-counseling sessions for buyers with bad credit scores, and made heavy use of government-backed mortgage programs that allow buyers to get a home with little or no down payment," i.e. FHA. "In some cases, that means buyers are ending up paying more than they expected for a house, raising worries that some buyers are biting off more than they can chew." We repeat: The year is 2013. You have not traveled back in time.
"Regulators investigating alleged interest-rate manipulation are hoping to reach settlements with at least three major financial institutions" — Rabobank, Lloyd's and ICAP - "by the end of summer." Cue the inevitable outraged reader comment, complete with Biblical overtones: "What is this talk of 'settlements'? How about some slammer time for these money changers?"