Receiving Wide Coverage ...
B of A Buffed Up: Crédit Agricole analyst Mike Mayo summed up Warren Buffett's $5 billion investment in Bank of America by saying, "Bank of America got the Good Housekeeping seal of approval and Buffett got a sweetheart deal, but the company hasn't been able to get its arms around the magnitude of the losses." The Times also noted that B of A's board met less than 24 hours after Buffett called Brian Moynihan to approve the deal. Buffett's Berkshire Hathaway is now in a position to become the biggest shareholder in Bank of America, and it's already the top shareholder in Wells Fargo and American Express. The Journal called the investment "a desperately needed jolt of confidence at a time when investors are questioning" the bank's health.
Time Again for the Grand Tetons: The world's central bankers and top economists are descending upon Jackson Hole for the Federal Reserve Bank of Kansas City's annual symposium. "It was here one year ago that Federal Reserve chief Ben S. Bernanke signaled openness to massive bond purchases, here in 2007 that the Fed leaders plotted a response to the budding financial crisis." This year's theme, decided months ago, is "Achieving Maximum Long-Run Growth," which the story observes is "almost aspirational. If only the world were in position to worry about the long term, rather than the short term!" Ben Bernanke in 2011 should follow the advice of Ben Bernanke in 2000, Times columnist Paul Krugman writes. Back in 2000, Bernanke suggested Japan could attack its economic problems with a series of unconventional policies, including quantitative easing and an announcement that the Bank of Japan was seeking moderate inflation, in an attempt to encourage borrowing and to dissuade people from hoarding cash. Krugman does not expect Bernanke to follow those suggestions, however. Washington Post, New York Times
Wall Street Journal
"Ahead of the Tape" contends that low interest rates have helped companies boost their bottom lines, with corporate profits up 43%, but has done little for the economy or the job market. "Trouble is, companies aren't exactly putting these freed-up funds to productive use."
Former executives at Lehman Brothers are hoping to use insurance funds to settle a lawsuit by shareholders.
JPMorgan and the Treasury Department reached an $88.3 million settlement of charges the bank violated U.S. sanction rules.
Mortgage rates rose this week. A 30-year fixed-rate mortgage averaged 4.22%, up from 4.15%, while 15-year fixed-rates were going at 3.44% up from 3.36% a week earlier.
New York Times
Charles Schwab sued 11 major banks, accusing them of colluding to depress the LIBOR rate. Bank of America, Chase and Citi are among the defendants.
Are eurobonds inevitable? Some influential economists — even German ones — say there's no way around it as the debate on the topic heats up. The story sums up the positions: "the debate pits economically weaker countries in southern Europe, which could win easier access to borrowed money, against stronger ones in the north, which are concerned that they could be on the hook for their neighbors' profligate ways." The story then draws a comparison to United States, where "taxpayers across all 50 states are responsible for the federal government's outstanding debt even though some states may send more money per capita to Washington than others do," which gives U.S. bonds a "liquid premium."
Big banks are planning to sell $5 billion of bonds backed by commercial mortgages. The story cites unnamed sources saying "Goldman Sachs and Citigroup plan to market a $1.5 billion deal in September that was pulled in July after Standard & Poor's yanked its ratings" and that "Bank of America, Morgan Stanley, Wells Fargo, Royal Bank of Scotland and JPMorgan Chase are also planning sales next month."