Receiving Wide Coverage ...
Hard Ball: Don't be fooled into thinking that U.S. Attorney General Eric Holder will end up strong-arming JPMorgan Chase's CEO Jamie Dimon. While Dimon has largely agreed to provide $4 billion in "soft dollar" relief for borrowers, the DOJ wants more than the proposed $7 billion in penalties. But wait. Dimon also wants California prosecutors to drop a criminal investigation into the bank's mortgage practices, a request that Justice has not yet agreed to, says the NYT's Dealbook. The WSJ says the biggest sticking point is whether JPMorgan will admit wrongdoing, which Dimon has resisted. Only the Washington Post mentions that the deal still represents a sliver of the damage wrought by the bank for selling mortgage securities "that it allegedly knew were worthless."
The meeting was variously described as "a rare step," and "hourlong" by the NYT, "constructive," but lasting two hours says the FT, and "not something that came together overnight," says the WSJ, which says it lasted 45 minutes.
The face-to-face, held at a long conference table beneath a portrait of former AG Janet Reno, was "remarkable" because Dimon has been actively involved in the discussions from the get-go. The NYT's Business section ran a front-page photo of Dimon presenting his New York state driver's license to a security guard outside the Justice Department's headquarters just after 9 a.m. Priceless. Wall Street Journal, Financial Times, New York Times, Washington Post ?ref=business&_r=0
A WSJ opinion piece quips that government lawyers "are backing up the truck again" at JPMorgan Chase.
Hold Out: In a rare public dissent, Federal Reserve Governor Jeremy Stein says he would have been comfortable if the Fed had pared its bond purchases last week, and that the Fed could do better in communicating its thinking to the public. Stein called the decision not to scale back the pace of purchases "a close call," but says he voted to leave the purchases unchanged "to help the recovery along."
Stein says there may be "room for improvement," in communicating its message. Cutting monthly bond purchases by a fixed amount is one way to make the transition easier, he said in prepared remarks at a conference in Frankfurt.
Wall Street Journal
Wedbush Securities was ordered to pay a broker $4.3 million in damages and legal fees for soured collateralized debt obligations that the firm presented as safe.
Bankers are warning of chaos in the U.S. derivatives markets because regulators are shifting to electronic exchanges on Oct. 2, though it appears that market participant just want to escape the rules.