Receiving Wide Coverage ...
AmEx Deal Upset: Sometimes even "burn after reading" instructions aren't enough to cover up improper behavior. A federal judge threw out the proposed $79 million antitrust settlement between American Express and merchants Tuesday, finding that negotiations were "fatally tainted" when lawyers from opposing sides shared confidential documents. That's a big win for merchants hoping to reach an alternative deal that will give them more leeway in passing the cost of interchange fees onto customers. The fate of a related $6 billion settlement between the same group of merchants and MasterCard and Visa may also be imperiled by the judge's decision. Wall Street Journal, New York Times
Wall Street Journal
The paper takes a fairly friendly look at presidential candidate Jeb Bush's dealings with Wall Street. Bush served as a paid advisor for Lehman Brothers, and subsequently Barclays, after stepping down from the Florida governor's seat in 2007. He "was seen as a 'commercial,' almost a term of endearment on Wall Street meaning he understood how bankers prepared for meetings, advised clients and made money," the paper reports.
The article highlights Bush's unsuccessful efforts to persuade billionaire Carlos Slim to invest in Lehman just two weeks before the firm's collapse. (Bush has said he was kept out of the loop on Lehman's troubles as it lurched toward bankruptcy, although the firm's chief executive reportedly considered asking him to ring up his brother.) The article also notes, with a hint of irony, that Bush appeared alongside then-presidential candidate John McCain shortly after Lehman filed for bankruptcy as the elder statesman vowed to "clean up Wall Street."
JPMorgan Chase is easing credit score and down payment requirements for jumbo mortgages in an effort to better compete with its big-bank rivals. The market for more expensive mortgages has made a strong comeback in the aftermath of the financial crisis, according to the paper, compared to a more muted recovery for lower-priced homes.
Atlanta Fed president Dennis Lockhart thinks the chances of an increase in short-term interest rates are looking good. "It will take a significant deterioration in the economic picture for me to be disinclined to move ahead," he tells the paper.
Freddie Mac's financial performance leaves a lot to be desired, according to John Carney of "Heard on the Street." He says that while the company boosted profits to $4.2 billion in the second quarter, most of the increase was driven by its "volatile and opaque investments segment" rather than by its core guarantee business.
British authorities notched a win with the conviction of former trader Tom Hayes in the Libor rate-rigging scandal this week. But "Pete the Greek," another ex-trader accused of taking part in the conspiracy, is getting off the hook. The Financial Conduct Authority failed to build sufficient evidence against Panagiotis Koutsogiannis, according to the internal committee that vets the FCA's cases. The paper notes the committee also shot down the FCA's attempt to bring charges against "London Whale" trader Bruno Iksil earlier this summer.
The Lex team says conflict of interest is built into a system wherein banks pay financial consultancies like Promontory Financial to investigate them for misconduct. The paper suggests regulators should either start treating consultants' reports with more skepticism or else start forcing banks to pay for regulators to perform the investigations themselves.
Bloomberg: Wells Fargo has invested in a video-game startup that uses data gleaned from GPS trackers and other sensors in consumers' mobile devices to predict their behavior. The idea is bank customers "may be more receptive to offers or notifications if phone sensors show they are commuting by train, watching soccer practice or otherwise in a place where they can look at their phone," according to the report.