Receiving Wide Coverage ...
So Much for That: Bank of America dropped its plan to charge a monthly debit card fee, the last major bank to do so following widespread outrage. The public mood was clear when Jay Leno joked that on Halloween, "One kid wanted to charge me five bucks to give him candy.… I said: 'Who are you supposed to be?' He said: 'Bank of America!'" However, the impetus for the much-maligned fees — the loss of revenues as a result of new regulations, particularly the Durbin cap on interchange fees — remains. A comment posted by a Journal reader makes a salient point by channeling Milton Friedman: "There's no such thing as a free lunch, so expect to pay your bank for the honor and privilege of having an account." Wall Street Journal, New York Times, Washington Post
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Oops, Where'd It Go? Following MF Global's bankruptcy, the FBI plans to examine whether client funds are missing and the CFTC also voted to issue subpoenas, the Journal reports. CME Group, which owns the two big Chicago commodities exchanges, confirmed that MF Global had "failed to keep customer money separate from company money," the Times' "DealBook" says. According to the Journal story, it's unclear whether the nine-figure discrepancy on MF Global's books (which scuttled a last-ditch attempt to sell the brokerage) "was caused by money being diverted by company officials desperate to meet margin requirements or collateral calls as the financial situation became dire. … Another possibility is that the gap reflects bookkeeping or accounting errors, as well as a delay in recording transactions in MF Global's books given the securities firm's far-flung trading and clearing operations." Another Times story takes a step back and looks at the arc of CEO Jon Corzine's career. "MF Global was supposed to be Mr. Corzine's comeback vehicle" after the former Goldman Sachs chief's stint in politics. But the fall of MF Global, and the missing-funds situation, "have cast a dark cloud" over his legacy. A broader issue: if it turns out that MF Global dipped into customer accounts, "that could erode trust in the brokerage industry as well as its regulators," the Journal's "Heard on the Street" says.
Tighter Belts: Credit Suisse said it would cut 1,500 jobs and Nomura said it would seek to slash costs by $1.2 billion. The moves underscore that "the global finance industry is undertaking a massive retrenchment," the Journal says. The FT describes the latest expense reduction measures as "swingeing," which is our new favorite word. (It means "very large, high, or severe," according to the Merriam-Webster dictionary, which notes the usage is "chiefly British.") Wall Street Journal, Financial Times
Occupy Foreclosures: During the “general assembly” of the Oakland branch of the Occupy Wall Street movement, the protestors voted to encourage occupation of foreclosed properties citywide. There’s also a group called Occupy Vacant Properties, which has been most visible in San Francisco. This form of civil disobedience “is likely to catch on with occupations across the country,” predicts Business Insider, which was the closest thing to a mainstream media outlet we could find that’s covered the story (which may just be because it hasn’t caught on yet, so please, no conspiracy theories about corporate "censorship"). Quite a bit of coverage in the blogosphere, though. Fire Dog Lake, Think Progress, RortyBomb, BNet
Wall Street Journal
In an op-ed, Ralph Nader makes a case for a “Tobin tax” on financial transactions in the U.S. (though he doesn’t call it that or mention the economist who proposed in the 1970s to “throw some sand in the wheels of our excessively efficient international money markets”). The idea’s gaining traction in Europe, Nader notes, arguing that aside from raising revenue “to help with our country's economic recovery,” it could “curb risky speculative trading that contributes little real economic value.”
Also in the opinion section, Gerald O’Driscoll, a veteran of the Dallas Fed and Citi, warns readers not to underestimate the potential reverberations for the U.S. from the European debt crisis. “Americans must not be smug about the suffering of Europeans — our financial system is thoroughly integrated with theirs,” he writes.
Servicers of residential mortgages often have to defend their refusals to grant loan modifications to distressed consumers. But in the parallel universe of commercial real estate, where the borrowers are not quite as defenseless or destitute, servicers have to defend themselves when they do grant loan mods. Hence LNR Property, a servicer of commercial mortgages, has taken exception to a Deutsche Bank analyst’s report claiming that a loan modification on a Manhattan office tower was a sop to borrowers at the expense of the investors in the loan.
Washington Post
The SEC “destroyed internal documents that should have been preserved as official federal records” and “withheld important information about the practice from the National Archives,” the regulator’s inspector general found, basically confirming allegations made by a whistleblower that surfaced a few months ago.
