Receiving Wide Coverage ...
Anxious MF: MF Global, the troubled brokerage run by former Senator and Goldman Sachs chief Jon Corzine, was seeking to find a buyer before the markets opened Monday and was reportedly close to a deal for filing Chapter 11 and selling its assets to Interactive Brokers, based in Greenwich, Conn. J. Christopher Flowers earlier was said to be a possible suitor, but the Times reported Interactive was the last bidder standing. A post on the Journal's "DealJournal" blog gives a just-the-facts-ma'am rundown of what any buyer would be getting.
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Fee Fallout: Wells Fargo joined JPMorgan Chase in deciding not to charge a monthly fee for debit cards. The Journal's "Overheard" column notes that Bank of America, which has been pilloried for its $5 debit fee, wasn't the first bank this year to wade into uncharted waters and find it's lonely there; we haven't heard of many, if any banks copying Bank of New York Mellon's fee for giant deposits from large customers. In the Post, the "Capital Business" column looks at efforts by Washington-area credit unions to court frustrated bank customers.
Wall Street Journal
Despite the stereotype of hackers as socially inept moles whose main exposure to light is from the computer monitors in their parents' basements, the Journal reports that many of today's data thieves obtain private customer information the old-school, young-Frank-Abagnale way: schmoozing unsuspecting bank employees. "It's getting harder for hackers to penetrate firewalls and other technological barriers, so they are reverting to lower-tech methods of attack," explains a Diebold executive quoted in the story. Not missing an opportunity to make something sound more complicated than it really is, security experts have dubbed these methods "social engineering." But we'll forgive this pomposity, at least in the case of Social-Engineer.org, which held a "capture the flag" event at which "contestants" demonstrated how easy it is to coax sensitive data out of large companies by pretending to be customers, prospective customers or employees. Rarely is mischief so benevolent.
"Heard on the Street" takes a close look at those outsized third-quarter gains many firms recorded on the value of their debt dropping. These paper profits oddly suggest that "a firm would theoretically mint money while going bankrupt," and could mean big hits to earnings later on if the debt's value rebounds. This unwelcome volatility is the result of an accounting rule change the industry itself lobbied for in the mid-aughts, the column notes. The banks' motivation was narrow: they just wanted the ability to hedge the derivative embedded in the structured notes they were selling. Any rethink of the rules should take broader considerations into account, the column says.
"The Treasury Department is likely to put off its second sale of shares in American International Group Inc., the insurer bailed out by the U.S. government during the financial crisis, because of unfavorable market conditions, according to people familiar with the situation."
New York Times
"The Ethicist" column answers a dilemma of an anonymous reader who supports the goals of Occupy Wall Street but works at a start-up financed by a major Wall Street firm, and thus worries he or she may be a hypocrite. Part of the column's response serves as a helpful reality check for any scorched-earth rhetoric one may hear in certain corners of Zuccotti Park: "The financial industry is so vast, and so inextricably entwined in every aspect of our lives, that to stand apart from it you pretty much have to go off the grid - no possessions, no transactions, no nothing." That would mean no iPads or Twitter, kids.
On the other hand, we felt some OWS-level rage coursing through our veins after reading Joe Nocera's latest column. He obtained photos from last year's Halloween office party at a "foreclosure mill" law firm near Buffalo, where employees mockingly dressed up as evicted former homeowners ("squatters"), complete with dirt on their faces, a liquor bottle in a brown bag and a shopping cart full of junk with a "will work for food" sign. The photos, leaked to Nocera by former employees of the firm, are presented in an accompanying slideshow. They are some of the most appalling images of human callousness we've seen since the smiling soldiers in the Abu Ghraib torture pics. The law firm, Stephen J. Baum, flatly denied to Nocera that its employees "belittle the plight of those who have lost their homes." So they were dressed up that way to show their solidarity for evicted borrowers? Auditioning for a Buffalo dinner theatre production of Les Miz perhaps? Read our extended riff on Nocera's getcha-mad column here.
In "DealBook," two law professors argue that a simpler way than the Volcker Rule to rein in risk-taking would be to "make the most highly paid bankers personally liable for their own banks' debts." This would align incentives the way the old partnership model did for Wall Street firms - or for that matter, we could imagine James Grant adding, the way capital calls for bank shareholders did in the 19th century.
Columnist Gretchen Morgenson says that under the foreclosure settlement being negotiated with federal regulators and state attorneys general, "banks would pay relatively little, proving again that accountability has been mostly A.W.O.L. in the aftermath of the 2008 crisis."
In a preview of this week's upcoming Federal Open Market Committee meeting, Binyamin Appelbaum reminds us that the members are divided on monetary intervention: "Three conservative members say the Fed has already done too much; two liberals say the Fed needs to do much more."
Washington Post
In a first-person account, a manager of foreclosed properties describes his "cash for keys" strategy to get borrowers to vacate homes.
