Banco Popular de Puerto Rico

Breaking News This Morning ...Earnings: Bank of America, State Street

Breaking News This Morning ...Earnings: U.S. Bancorp, Comerica, PNC, Bank of New York Mellon, New York Community, Northern Trust

Breaking News This Morning ...Earnings: BB&T, Fifth Third, Huntington, KeyCorp, TCF

Breaking News This Morning ...Earnings: SunTrust, General Electric, MGIC

Receiving Wide Coverage ...Housing Gloom: Arizona regulators seized PMI Group's flagship U.S. mortgage insurance unit, and are limiting cash payments to policyholders (i.e., banks and the GSEs) to 50% of claims, with the rest to be deferred. The Journal calls this a sign "that the housing bust is not finished taking casualties-and that lenders and investors are likely to suffer more losses." Zooming out to the bigger picture, the Post has a lengthy feature story that takes stock of the Obama administration's failures to help distressed homeowners or the housing market. The overarching error was an incrementalist approach, according to the article. "The president and his senior advisers … decided against more dramatic actions to help homeowners, worried that they would pose risks for taxpayers and the economy. … They consistently unveiled programs that underperformed, did little to reduce mortgage debts owed by ordinary Americans and rejected a get-tough approach with banks." If you accept that "dramatic actions" were required, then it probably did not help when Edward DeMarco took over as (indefinite) acting head of the Federal Housing Finance Agency, the conservator for Fannie Mae and Freddie Mac. As the Post notes, DeMarco "spent much of his career at the Government Accountability Office and the Treasury Department, trying to rein in Fannie and Freddie. Now he had the chance to do it." A veteran of the administration, Lawrence Summers, writes in an op-ed in the Financial Times that the FHFA has followed a "disastrous[ly] procyclical policy" by focusing narrowly on saving pennies at Fannie and Freddie rather than on supporting the housing market. "The narrow financial interest of the GSEs depends on a national housing recovery," Summers writes. Some examples of the FHFA's penny-wise pound-foolishness he gives: Credit standards are overly tight "given that the odds of a further 35 per cent decline in house prices are much lower than they were at past bubble valuations," and "the GSEs have made refinancing very difficult by insisting on significant fees and requiring that any new refinancier take on all the liability for errors in underwriting the original mortgage." The Journal's "Heard on the Street" column makes a case against the Fed trying to juice the housing market with another program of mortgage-backed security purchases. Among other reasons, "high unemployment and overstretched consumer balance sheets have kept housing in the doldrums even with record low rates. And for many existing homeowners, fees and lending criteria, not interest rates, are the main refinancing issue" - see Summers, above. Riding to the rescue (maybe), "federal regulators on Monday plan to unveil a major overhaul of an under-used mortgage-refinance program," according to the lead story on the front page of the Journal. A retuning of the HARP program has been expected for months now.

Breaking News This Morning ...Earnings: Regions Financial, Deutsche Bank

Receiving Wide Coverage ...Big Blue's New Boss: IBM will promote Virginia Rometty to be the first woman chief executive of the 100 year old company on Jan. 1. Currently its top sales executive, Rometty is a 30-year company veteran who's "help[ed] to lead IBM's transformation into a massive services business," according to Wired magazine. As such, the company has become an important vendor in the banking industry. The FT notes Rometty will be "the first head of IBM not to have run part of its traditional hardware business," not to mention "one of only a handful of women to head a large US corporation." New York Times, Wall Street Journal, Financial Times, Wired.

Breaking News This Morning ...Earnings: Synovus, BankUnited, Valley National

Receiving Wide Coverage ...Bailout Redux: While the European bailout plan "set off celebrations" in markets throughout the world, many analysts warned that the plan "remains a work in progress," the Post reported. "Key details are uncertain, they say, and a slowing European economy could throw the program off course." The Journal, like a lot of other media, went full tilt on the European bailout agreement even though - or maybe because - a lot of folks are skeptical it will hold up. Yes, Americans are happy everywhere that their 401(k)s shot up with the market Thursday, but it could take "weeks" for negotiators in Europe to tell us the details of (and to figure out themselves) what they have wrought, the Journal said. Not promising was the warning by a European Central Bank official that the deal's "leverage instruments are similar to those which were among the origins of the crisis, because they temporarily masked the risks." The deal relies on "Byzantine financial engineering," another Journal story said. (A note to Scan's Greek friends: that's not a compliment.) A big push is expected. European officials are going to have to sell sovereign markets on the plan, as sovereign bond markets and others reacted cautiously. Some say the European banks got off too easy, yet others speculated the plan might work despite initial shortcomings if it boosts confidence. The Times said German Chancellor Angela Merkel called bankers' bluff, telling them to take the offer on the table of a 50% write-down in the face value of their Greek bond holdings, or bear the consequences of a default. She was willing to risk a credit event that would have thrown world markets into turmoil, and if that happened, she would blame the banks. Critics say the plan may not deliver as much relief to Greece as promised, and that it may not be sufficient to help troubled banks. "It's another patchwork effort," said Richard Cookson, global chief investment officer of Citi Private Bank. The FT looked at China's role in the rescue, and its demands that other countries be involved and its investment be guaranteed. The article quotes French President Nicolas Sarkozy: "Why would we not accept that the Chinese had confidence in the eurozone and place a part of their surpluses in our funds or our banks. Would you rather they placed it with the US?" Ouch!

Photos of a Halloween office party at a foreclosure law firm, obtained by the Times' Joe Nocera, are nearly as appalling as the Abu Ghraib torture pics.