Receiving Wide Coverage ...

Citi Blasts Nasdaq About (Not Via) Facebook: Citi is so displeased with Nasdaq's plans for making up for losses caused by the fumbling of Facebook's initial public offering, it sent the Securities and Exchange Commission a 17-page letter about it. According to the Journal, Citi told the SEC Nadsaq's proposed $62 million compensation plan would cover "only a very small fraction" of its total losses. The bank is estimated to have lost about $20 million during the botched IPO due to glitches that Citi deems weren't technical, but instead caused by "grossly negligent, self-serving business decisions." Other companies, including UBS and the nearly-killed-by-computer firm Knight Capital, suffered higher monetary damages and overall $500 million worth of losses is being attributed to the event. Citi is asking the SEC to reject Nasdaq's proposal. The Times reports the exchange disagrees with the bank's position, largely due to the fact that its customers are required to sign a contract agreeing to the exchange's rules. A Nasdaq spokesperson formally declined to comment.

What Will the Fed Do?: We're a bit reluctant to report on the Federal Reserve's latest round of talks about taking action to aid the ailing economy, because, well, been there, scanned that. However, these talks have resumed, which is a good thing, considering the Congressional Budget Office just announced we could very easily fall off the fiscal cliff. The Journal reports the Fed sent during its latest policy meeting the "strongest signal yet" it will spring into action. According to the meeting's minutes, "many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery." Policymakers suggested, among other things, another round of bond-buying intended to promote inflation and "aggressive asset purchases" designed to push down interest rates and spur investors to spend may be in order, says the Times.

Perhaps as tired of the talks as we are, several news outlets focused not on whether (or when) the Fed would actually act, but, rather, if it can really do anything at all. In a Times op-ed, economist John Cochrane suggests the Fed has maxed out all its moves and "is basically powerless to create more inflation right now — or to do anything about growth." He also believes promoting inflation is a bad idea. Others believe the Fed could spur growth if it really wanted to. "Suppose [the Fed] said 'the purpose of this bond buying is to raise inflation expectations above 3 percent and we'll keep on buying bonds until it happens?'" Slate's business and economics correspondent Matthew Yglesias wrote in response to Cochrane's op-ed. "If it wants a bigger effect it needs to communicate that fact, and it'll get the effect."

Derailed: Attempts to regulate money market mutual funds, a product that played "a central role" in the 2008 financial crisis, were thwarted when swing vote Democratic commissioner Luis A. Aguilar said in an interview he didn't support SEC Chairman Mary Schapiro's proposal as is, says the Times. Schapiro, who cancelled a planned vote on the issue following Aguilar's disclosure, was looking to require money funds to either float share prices like other mutual funds or to post capital against losses on their asset holdings, the Journal reports.

Wall Street Journal

It looks like big name retailers have successfully lobbied their way around a Dodd-Frank provision that requires U.S. companies to disclose whether their goods contain "so-called conflict minerals" blamed for fueling violence in central Africa. The SEC voted on Wednesday to adopt a final rule exempting companies that don't exert direct control over the manufacture of the products, after revising its estimates on how costly the disclosures would be.

Royal Bank of Scotland is seeking clarity over just how deep the investigations into its alleged illegal dealings with Iran are. Meanwhile, Commerzbank may be facing "larger-than-expected penalties" from U.S. probes of its possibly illegal dealings with Iran, North Korea and Cuba. Money-laundering allegations have received a higher profile in light of rogue regulator Benjamin Lawsky's $340 million settlement with Standard Chartered.

More retailers may formally take a stance against the proposed Visa/MasterCard swipe fee settlement. The Retail Industry Leaders Association is urging all the plaintiffs in the case to reject the settlement because it is "flawed" and prohibits retailers from suing credit-card companies over the matter in the future.

New York Times

ProPublica, via DealBook, is taking issue with the Treasury Department's continued efforts to wind down the Troubled Asset Relief Program. The big point of contention is the Treasury's decision to "sell off its holdings of preferred stock of the remaining smaller banks" at a loss to taxpayers. The article calls the practice a "quiet bailout" and says there's no good reason why the Treasury can't wait to sell back these stocks, other than the fact that "the current administration is very motivated to unwind its crisis-related investments."

 

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