Receiving Wide Coverage ...
A Probe Within a Probe: Just when you thought we would go a week without learning new details about JPMorgan Chase's regulatory troubles, reports surface that the nation's largest bank is currently being probed about possibly obstructing a probe. As it turns out, the Justice Department's criminal investigation into whether JPM manipulated U.S. energy markets (remember that one?) is really focused on whether the bank withheld information from regulators during the Federal Energy Regulatory Commission's investigation into the matter. JPM agreed to pay $410 million to settle FERC's allegations back in July. The bank didn't admit or deny wrongdoing as part of the settlement. Reuters, which broke the story, reports the DOJ decided to look into whether JPM had impeded that investigation, in part, due to a letter Sens. Elizabeth Warren, D-Mass, and Edward Markey, D-Mass, sent to FERC at the end of July. "The letter asked FERC about why it had allowed JPMorgan to settle the case without admitting wrongdoing and why no individual executives faced regulatory action," the article notes. "[It] also asked FERC why no action was taken against people who 'impeded the Commission's investigations.'" JPM has previously denied that employees lied during the FERC probe. Bloomberg columnist Jonathan Weil argues that little will come from the DOJ's new investigation. "It's unlikely that the government would ever prosecute JPMorgan, for obstruction or anything else, because it's too big to fail," he writes. "If the energy regulator couldn't see fit to file claims against any individuals, it's difficult to imagine the Justice Department would press criminal charges against them later." Meanwhile, the Journal reminds readers: "The Justice Department has at least seven other investigations of [JPM] in the works."
Summers in the Lead for Fed Chair: There seems to be a growing consensus that President Obama will ultimately nominate former Treasury Secretary Lawrence Summers for Federal Reserve chair, despite Senate opposition. "Obama developed great faith in the man who was his top economic adviser as he confronted historic crises at the beginning of his presidency," the Washington Post explains in its new profile of Summers. "Administration insiders say they believe Mr. Obama remains inclined to nominate the man who, as his chief economic adviser through 2009 and 2010, helped him through the worst global financial crisis since the Depression," a New York Times article echoes. "Shorter version of the NYT and WaPo stories about how much the President loves Larry," tweeted Times reporter Binyamin Appelbaum. "Only thing delaying a Summers nomination is Syria."
Nasdaq's Latest Glitch: Nasdaq experienced another glitch on Wednesday when its main data feed went down for three minutes. The incident wasn't as bad as August's software malfunction, where problems with the same data feed actually caused the exchange to shut down for three hours, but its timing was certainly worth noting. "[The glitch] came just hours before a previously scheduled meeting addressing last month's breakdown, in which Nasdaq officials laid out ways the exchange plans to better manage the data feed, a key record of Nasdaq securities' prices," the Journal reports. Reuters, Bloomberg
CFPB Warns of Credit-Reporting Crackdown: The Consumer Financial Protection Bureau warned banks, credit card issuers and other suppliers of credit report data that they must improve their responses to customer credit report disputes in order to avoid potential enforcement or supervisory action. Wall Street Journal, American Banker
Wall Street Journal
For what lending executives believe is the first-time ever, "jumbo" mortgage rates have fallen below traditional ones. A Wells Fargo executive tells the paper "the current inversion between jumbo and conforming rates could last 'for the foreseeable future' so long as banks' cost of funds stays at its current level and loan demand doesn't rise sharply."
Deutsche Bank is currently trying to convince investors and regulators that it is, in fact, adequately capitalized. Analysts attribute the doubts about Deutsche Bank and other European financial firms to "a lack of transparency by banks coupled with a failure by regulators to quickly enact clear methods for measuring risk."
New York Times
Columnist Simon Johnson addresses whether emerging markets could cause an economic crisis. "My answer is a cautious 'no,'" he writes. "But it would be a mistake to dismiss or ignore these questions, in part because they are being asked by smart people in financial markets and in part because sometime in the not-too-distant future the answer could be a decisive "yes" with disastrous consequences."
