Banco Popular de Puerto Rico

Receiving Wide Coverage ...Beijing to D.C.: This Isn't Funny: America's political dysfunction has reached such heights that even foreigners are feeling compelled to speak up. China and Japan, which have stocked up on trillions of dollars of Uncle Sam's IOUs, began publicly expressing concerns that the interest payments on them could be in peril. "The clock is ticking," Beijing warned in its first official comments on the stalemate, while urging Washington pols to "ensure the safety of the Chinese investments." China directly held $1.3 trillion in U.S. government bonds as of July, Treasury data indicates. In Japan, which itself is a world leader in political gridlock, finance minister Taro Aso on Tuesday called on "the United States to resolve its debt ceiling stand-off without delay," the Financial Times reports. Japan's Ministry of Finance is worried that a U.S. default could cause investors to dump the U.S. dollar and push up the yen, hurting the nation's international competitiveness, the FT said. Back home, Senate Democrats are planning a vote this week to extend U.S. borrowing authority through 2014 in the latest sign that the political class's attention is shifting from the budget impasse to preventing a government debt default, the Wall Street Journal reports. The Treasury says the debt ceiling must be raised this month or it will be unable to pay all the country's bills. Treasury Secretary Jacob Lew is scheduled to answer questions about the debt ceiling on Thursday in front of the Senate Finance Committee, giving Republicans a chance to press him for potential areas of compromise, the Journal added. Back on Wall Street, traders remain largely of the view that Washington is engaged in political theater rather than mass suicide. The fiscal stalemate continued to weigh on stock prices Monday, but the market's volatility index, known as the "fear gauge," has merely hit a four-month high and remains far below its level during past crises. "We all tell ourselves, 'This is something that is not going to happen,'" David Coard, the head of fixed-income trading at the Williams Capital Group, told the New York Times. "This would be like a black swan event. It's not something that you would have thought that the U.S. could do in a million years." Financial Times, Wall St. Journal, New York Times

Receiving Wide Coverage ...Yellen Picked as Next Fed Leader: President Obama will formally nominate Janet Yellen today to be the chairwoman of the Federal Reserve, the White House announced Tuesday. Yellen, current vice-chair of the Fed, was one of the front runners to replace Ben Bernanke, the current chairman, who is set to step down in January. She became the top candidate after Lawrence Summers withdrew his name from consideration last month. Although Yellen's nomination is expected to garner bipartisan support, she could encounter pushback from some powerful Republicans. Senator Bob Corker, R-Tenn., a senior member of the Senate banking committee, said in widely published statement that he voted against Yellen's 2010 vice-chairman nomination because of her "dovish views on monetary policy," he added,

Receiving Wide Coverage ...A Deal to Be Had? Finally? All eyes remain fixed on Washington this week, as patience wears thin and lawmakers try to come up with an agreement to end the government shutdown and avert the looming debt ceiling. Democrats and Republicans have so far refused to negotiate with one another, but signs of a deal may be starting to emerge. (The game of chicken can only go on so long before the cars actually crash.) GOP Rep. Paul Ryan of Wisconsin shared a plan with fellow conservatives on Wednesday that would raise the debt ceiling temporarily, buying lawmakers more time to come up with a comprehensive deficit-reduction agreement. House Republicans are set to meet with President Obama on Thursday for the first time since the shutdown began on Oct. 1. Wall Street Journal, New York Times, Financial Times

Breaking News This Morning ...Earnings Season Kicks Off: JPMorgan and Wells Fargo reported third-quarter results this morning. A big theme this earnings season, according to the Journal's "Ahead of the Tape" column, will be the upward trajectory of long-term interest rates. That trend's bad for post-crisis profit boosters like mortgage refinancing and fixed-income trading, but generally positive in the long term for, you know, core banking.

Breaking News This Morning ...Citi Earnings: Citigroup's third-quarter earnings are out and the quick take is that results are disappointing, thanks to a slump in bond trading and a decline in mortgage revenue. "Third-quarter net income, adjusted for certain items, slipped to $3.26 billion, or $1.02 per share, from $3.27 billion, or $1.06 per share a year earlier," Reuters summarizes. "We performed relatively well in this challenging, uneven macro environment," CEO Michael Corbat said in a prepared statement. Wall Street Journal, Bloomberg, New York Times

Breaking News This Morning ...B of A Earnings: Bank of America continued the mixed bag of big bank earnings this morning, reporting an increase in third-quarter profit due to improved credit quality, which offset weak fixed income and a decline in mortgage revenue. Wall Street Journal, New York Times, Financial Times

Breaking News This Morning ...Earnings: Goldman Sachs, BB&T, Fifth Third, Huntington

Breaking News This Morning ...Earnings: First Horizon, First Niagara, General Electric, SunTrust, Morgan Stanley

Receiving Wide Coverage ...JPMorgan Chase's Deal: Over the weekend the country's largest financial institution reached a tentative $13 billion settlement with the Justice Department over the bank's questionable mortgage practices. But despite the record penalty, the bank's board is standing firmly behind its chief executive Jamie Dimon, whose role in negotiating the settlement only seemed to cement the board's support. A phone call by Dimon to a top deputy of Attorney General Eric Holder ahead of a planned news conference by the Justice Department helped to spur the record deal, according to accounts by those involved with the negotiations. Despite the tentative deal, the Justice Department could continue to pursue a potential more serious criminal probe into JPMorgan, the Journal reports. The two continue to battle whether the bank must admit wrongdoing in the settlement, the paper says. The monumental fine is unlikely to faze investors though, if finalized. JPMorgan will likely make the case it had been prepared for this given the $9.5 billion charge it took in the third quarter for litigation expense. Helping matters, the banks also disclosed it had a $23 billion legal reserve on hand. The editorial board calls the Morgan settlement a "watershed moment in American capitalism." Not everyone backs the government in this fight, however, as many on Wall Street believe the government pulled off a shakedown with the implicit threat of criminal prosecution, the FT says.

Receiving Wide Coverage ...Naming Names: British authorities have identified almost two dozen individuals at banks as possible co-conspirators in a probe into the manipulation of the London Interbank Offered Rate. The Serious Fraud Office notified the individuals last week that they had been included in court papers related to a case against Tom Hayes, a former trader at UBS and Citigroup. High Court justice Jeremy Cooke also lifted an order from last week that barred the Wall Street Journal from reporting the names of the individuals. Cooke found that there was "no basis" for the restriction, according to the Journal. Under British law, judges can restrict what the media reports if it might prejudice a defendant or potential jurors, according the New York Times. None of individuals have been "formally accused of wrongdoing," the Financial Times reported. Hayes and two others were supposed to plead not guilty to charges on Monday but that has been delayed until December.