Latest Regulator Leaks Concerning JPMorganFollowing numerous reports that JPMorgan was ready to pay fines of up to $700 million or $800 million to settle with the Department of Justice and federal bank regulators over misconduct related to the "London Whale" hedge trading losses last year, The Wall Street Journalon Tuesday reported that the Commodity Futures Trading Commission was also conducting a London Whale-related investigation. According to the report -- which as usual cited unnamed sources, as the regulators seek to gain as many anti-JPM headlines as possible -- the CFTC is "focusing on a giant trading position that enforcement officials believe distorted prices and misled investors," during 2012. The Journal also wrote that despite the reported large settlement, JPMorgan -- the company, and not individual employees, some of whom have already been indicted over the London Whale fiasco -- was still facing possible criminal charges from the Justice Department Investors were less than thrilled, sending JPMorgan's down a nickel to close at $53.09. The KBW Bank Index ( I:BKX) rose 0.5% to close at 64.53, with all 24 index components ending with gains, except for JPM and Wells Fargo, which was down three cents to close at $42.86.
All Eyes on the FedInvestors Wednesday afternoon will be focused on the next statement from the Federal Open Market Committee and Federal Reserve Chairman Bernanke's press conference, following the committee's two-day policy. The issue on Wednesday is whether or not the central bank will begin to curtail its "QE3" balance-sheet expansion, which has included monthly net purchases of $85 billion in long-term securities since last September. "No doubt the conversation among Fed officials will center around labor market conditions and whether or not the economy is strong enough to support a rollback in monthly asset purchases," according to Sterne Agee chief economist Lindsey Piegza. In a note to clients on Tuesday, Piegza wrote "there is a clear juxtaposition between strength and weakness in the numbers creating quite the quandary for the Fed. The market is anticipating a 'taper light' announcement of $5-$10bn, suggesting the Fed is unsure of the economy's underlying momentum but also an unwillingness to continue to grow the Fed's balance sheet indefinitely."
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