Receiving Wide Coverage ...
London Whale Investigations: Federal probes into JPMorgan Chase's disastrous 'London Whale' trades may finally be coming to a close. The Journal reported that Whale trader Bruno Iksil is "unlikely to face charges" from the fiasco, but that "Mr. Iksil is no longer a focus of investigators, people familiar with the situation said." The FT said the bank is set "to admit wrongdoing in a civil settlement with" U.S. and U.K. officials. The admission "would be a departure from the controversial practice of banks neither admitting nor denying culpability." The Times said such a concession to the Securities and Exchange Commission "would set an important precedent" for the agency. Up to this point, the Post said, "the agency has routinely used boilerplate language that allows defendants to pay fines without acknowledging liability, a policy that has been criticized by some judges."
SAC Bid to Stay Open: SAC Capital Advisors agreed to terms of a deal with prosecutors to allow the hedge fund to maintain certain operations while it is under a criminal indictment. The Journal said a judge has to sign off on the deal, which requires the firm to hold on to at least 85% of its assets. The Times said the protective order preserves "the government's interest in any money that it might seize from SAC in a forfeiture action, while also allowing the firm to continue running its money management business."
Fannie Profits: Following a similarly glowing earnings report by Freddie Mac, Fannie Mae on Thursday reported a $10.1 billion profit for the second quarter and said it would make a $10.2 billion dividend payment to the U.S. government under the terms of its 2008 conservatorship. Wall Street Journal, Financial Times
Wall Street Journal
MBIA's ability to withstand losses and legal battles associated with the financial crisis has been a boon to the hedge fund GSO Capital Partners, which made a $500 million bet that the bond insurer "would emerge intact from a cash crunch."
In the latest fallout from allegations against Goldman Sachs that it "manipulated the aluminum market," two companies a steel-railings manufacturer and a scrap-metal dealer are suing the Wall Street giant.
A Mortgage Bankers Association survey said that delinquencies have fallen to their lowest level since 2008.
New York Times
In "High & Low Finance", Floyd Norris looks at how "independent" federal agencies tend to be independent "sometimes in name only." Focusing on the Securities and Exchange Commission, Norris observes how many agencies have heavy influence from Capitol Hill, in part because powerful lawmakers often recommend appointees to the White House to be nominated for agency posts.
The Federal Reserve reported earlier this week that consumer borrowing is suddenly surging.