Fresh Scrutiny Of BofA (WSJ)
U.S. regulators have pushed Bank of America Corp. to show what measures it could take if conditions worsen for the Charlotte, N.C., lender, according to people familiar with the situation. Executives of the bank recently responded to the unusual request from the Federal Reserve with a list of options that includes the issuance of a separate class of shares tied to the performance of its Merrill Lynch securities unit, these people said. Chief Executive Brian Moynihan isn't expected to pull the trigger soon, if ever, on the creation of a so-called Merrill Lynch tracking stock. Such a move would raise money from investors but could be viewed as counter to Mr. Moynihan's strategy of knitting together the disparate parts of the franchise into a cohesive whole. Its inclusion on the list as a theoretical option shows the bank is considering all possibilities as it wrestles with an array of problems weighing down its shares.
Big Banks Face Suits On Mortgage Bond Losses (WSJ)
The Federal Housing Finance Agency, which is charged with conserving the assets of the failed mortgage giants, could file the lawsuits in the coming days, these people said. The suits are likely to allege that mortgages that were securitized by Wall Street firms and other issuers misled investors about the quality of the loans. The FHFA filed the first of what could be around one dozen lawsuits in July against UBS AG, seeking $900 million in damages. UBS, in a statement at the time, promised to "vigorously" defend against all charges in court. The lawsuit alleged that UBS made false statements about 16 mortgage-backed securities that it sold to Fannie and Freddie from fall 2005 to summer 2007, including overstatements of borrowers' capacity to repay loans. The agency's acting director, Edward J. DeMarco, declined to discuss the lawsuits in an interview last week but said there were "more to come."
August Was Rotten For Many Hedge Fund Managers (Reuters)
For August, which began with a dramatic market sell-off and ended with tropical storm Irene drenching east coast hedge fund hubs in New York and Connecticut, hedge funds, on average, lost 5.85 percent.
Roubini: We Are In A 'Worse Situation' Than 2008 (CNBC)
Speaking at the Ambrosetti Forum on the shores of Lake Como, near Milan, Roubini said in an interview: “We are in a worse situation than we were in 2008. This time around we have fiscal austerity and banks that are being cautious.”
On 30th anniversary, HP launches limited-edition financial calculator (VentureBeat)
Hewlett-Packard is marking the 30th anniversary of its HP 12c Financial Calculator today by launching a limited-edition version aimed at nostalgic fans. HP calls this machine the “gold standard of business calculation,” and the Museum of HP Calculators calls it the “calculator that wouldn’t die.”
BNY Mellon's New CEO Is Old Hand (WSJ)
The 59-year-old Gerald L. Hassell's age and long run at the bank are raising questions among some analysts and investors about whether he is the right choice for a company that is dealing with acute economic challenges along with legal and reputational headaches. Mr. Hassell "might be too far into the later stages of his career to assume a long-term leadership role as the trust bank business model is rapidly changing," analysts at investment boutique Sandler O'Neill said in a note to clients Thursday.
Economists Call On ECB To Cut Rates (Bloomberg)
“My recommendation is for the ECB to lower the policy rate by 50 basis points as insurance to lower the risk of outright recession re-emerging,” said Julian Callow, chief European economist at Barclays Capital in London. “The economic deterioration has become sufficiently rapid and alarming to warrant an immediate unwinding of the ECB’s rate hikes.”
Madoff Trustee Defends $19B JPMorgan Lawsuit (Bloomberg)
The second-biggest U.S. bank asked a judge last month to dismiss trustee Irving Picard’s suit, citing U.S. District Judge Jed Rakoff’s July ruling that he can’t sue on behalf of Madoff customers, using common-law claims against parties who failed to detect the fraud. Picard, who appealed the ruling, said bankruptcy law gives him the powers necessary to bring his suit.
College professor allegedly led motorcycle gang, drug ring (LATimes)
A Cal State San Bernardino professor who allegedly led a chapter of the Devils Diciples motorcycle gang was charged Thursday with heading up a methamphetamine drug ring that involved several other dealers. (The motorcycle gang intentionally misspells "disciples" in its name.) Stephen Kinzey, a 43-year-old professor of kinesiology, is considered a fugitive and is being aggressively sought by authorities, Sheriff Rod Hoops said at a morning news conference at sheriff’s headquarters in San Bernardino. Nine others involved in the drug ring have been arrested since Friday, he said.