Breaking News This Morning ...
HSBC Sells U.S. Credit Card Business: Capital One will buy HSBC's credit card business in the U.S. for a premium of $2.6 billion. Analysts expect the deal could raise Capital One's earnings by 10 percent or more. Wall Street Journal, New York Times
Receiving Wide Coverage ...
Wild Day on Wall Street: The Dow rebounded with a 4% gain in the biggest one-day gain in the market since March 2009. The Times said stocks fell until "traders figured out that locked-in interest rates and cheap credit could actually give the economy a more solid footing." Wall Street Journal, New York Times, Washington Post
FOMC Decision: The Federal Open Market Committee said it would keep interest rates at very low for the next two years, though economists doubted whether the plan would stimulate significant growth. The split vote (7-3) on the decision was the first time in about 20 years that at least three members dissented. Wall Street Journal, New York Times, Washington Post
Wall Street Journal
Main Street Bank in Texas is expected to relinquish its charter and sell its four branches to another bank. Bank chairman Thomas Depping is reportedly frustrated by growing regulation and, after a deal closes, will open a lending service supported by the private investment firm of Microsoft co-founder Paul Allen that operates without as much oversight.
With its stock tanking based on concerns about its mortgage portfolio, or more specifically the losses and lawsuits related to the mortgages, Bank of America dumped 400,000 of the loans, valued at $73 billion, selling them to Fannie Mae for more than $500 million, according to the paper. "The bank decided to sell the portfolio at a loss because its value is expected to deteriorate further," the paper reported.
Goldman Sachs said Tuesday regulators are looking into the firm's possible breach of bribery laws. While Goldman didn't elaborate, the paper said the probe relates to Goldman's option trades with Libya's sovereign-wealth fund.
In an attempt to boost the housing market, the White House will seek investors' ideas to rent out homes foreclosed on by government-sponsored enterprises.
Visa is pushing U.S. businesses to install technology at the cash register that accepts a card embedded with a computer chip, a technology much of the world uses. The cards, however, are largely not available in the U.S. because banks there is no demand to justify the added cost.
Option One, an H&R Block mortgage unit now called Sand Canyon, agreed to settle a Massachusetts lawsuit by making $115 million in loan modifications and offering $9.8 million in restitution to settle claims of unfair and discriminatory mortgage lending practices, involving about 5,500 loans.
Bank of America CEO Brian Moynihan and Citigroup CEO Vikram Pandit assured employees Tuesday that the banks are healthier now than before the 2008 financial crisis. In a memo to employees, Moynihan wrote, "The most important point to remember is that our company remains financially strong." Vikram sent a voice mail reminding workers there is "little similarity" to the 2008 crisis and the current situation.
New York Times
Lawmakers want the FDIC, the Fed and the OCC to delete references to specific credit ratings in securities regulations.
Insiders at the European Central Bank and analysts say the bank can legally go as far as it wants in buying sovereign debt, in an effort to contain spreading of the European debt crisis. Meanwhile, money market indicators showed that European banks have not been this reluctant to lend to one another since the Lehman Brothers collapse in 2008.
The Fed's focus on inflation during a time of high unemployment is a "fundamental misreading" of the economy's needs, an unsigned editorial said. There are steps the Fed could take to help the economy, including a shift of its portfolio toward bonds with longer maturities.
GOP presidential hopeful Michele Bachmann may have TCF Financial's William Cooper to thank in part for her career. Cooper, the chairman and CEO of TCF, became chairman of the Minnesota Republican party in the early 1990s, and sought "more ideological purity" in the party, making Gary Laidig, a former state senator, a moderate Republican "persona-non-grata," according to a profile of Bachmann in the New Yorker. This was fortuitous for the staunchly conservative Bachmann; she "was getting interested in politics just as her party was getting interested in people like her," and eventually defeated Laidig in the primary run for his seat.