Gensler Blames Math For 'Flash Crash' (WSJ)
"Usually, high volume indicates high liquidity," Mr. Gensler said a written statement to a Senate subcommittee. "On this day, however, high volume could have been a misleading indicator of liquidity to market participants and their preprogrammed algorithms." As a result, he said, the volume restriction "may have been ineffective and may have had an unintended market impact," he said. Volume between 2:30 p.m. EDT and 3 p.m. was 10 times higher than the average daily trading volume in that period over the previous month, Mr. Gensler said.
German Parliment Approves European Aid Package (Reuters)
A clear majority of lawmakers in the Bundestag lower house backed the bill, but 10 members of Chancellor Angela Merkel's center-right coalition rebelled by either voting against or abstaining, highlighting the domestic pressure she is under.
Barney Frank Thinks President Will Sign Financial Reform Bill By Fourth Of July (WaPo)
Some people don't feel very good about that: "If you want to drive capital out of the United States, this is your bill," Thomas J. Donohue, president of the U.S. Chamber of Commerce, said in a statement. "Today we have taken a significant step in the wrong direction, and it will put American companies and our financial system at a competitive disadvantage to the detriment of our long-term economic growth."
Doomsday Dow (NYP)
"It's a disaster, to be frank," said one fund chief. "Odds are getting very high for a massive event this summer. There are red flags everywhere you look."
Goldman Sachs Fraud Settlement May Hinge on How SEC Can Justify a Penalty (Bloomberg)
Analysts predict Goldman will pay $1 billion or more to settle a Securities and Exchange Commission fraud suit that triggered a 26 percent drop in the firm’s stock. Extracting such a record-setting penalty may be easier said than done.
Citigroup Didn't Say Morgan Stanley Was Short When Selling `Jackson' CDO (Bloomberg)
Marketing documents for the $205 million Jackson Segregated Portfolio, underwritten by Citigroup in 2006, don’t say who picked the underlying mortgage bonds. A Morgan Stanley unit helped select the bonds, the people said, speaking anonymously because the deal was private. Six of the seven series of Jackson bonds later defaulted, costing investors more than $150 million of losses, data compiled by Bloomberg show.
Do you regret having contributed to the crisis by selling complex products? (ET)
Lloyd Blankfein: I regret that we participated in transactions that brought too much leverage into the world. It led to people taking too much leverage. But those were the standards of the moment.
Krugman: Lost Decade Looming? (NYT)
"Recent data don’t suggest that America is heading for a Greece-style collapse of investor confidence. Instead, they suggest that we may be heading for a Japan-style lost decade, trapped in a prolonged era of high unemployment and slow growth."
FDIC: 'Problem' Banks At 775 (WSJ)
There were 702 on the FDIC's "problem" bank list at the end of 2009 and 252 at the end of 2008.