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Wall Street gets a taste of the perp walk

Jeff Brown, Special to CNBC.com
Thursday, 19 Sep 2013 | 3:35 PM ET
Jamie Dimon, CEO of JPMorgan Chase & Co.
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Jamie Dimon, CEO of JPMorgan Chase & Co.

Recapping the day's news and newsmakers through the lens of CNBC.

Jamie Dimon says he's wrong

Notes:

JPMorgan Chase will pay a whale of a fine for the $6 billion "London Whale" trading scandal: $920 million. And, in a departure from long-standing practice, the firm has actually admitted guilt in its settlement with regulators. The firm still faces additional regulatory action over the derivatives debacle, as well as investigations over other issues.

The lingering question: Will a fine this big deter wrongdoing? Regulators working on the Volcker Rule to restrict risky trading are said to be invoking the London Whale in pushing for tighter rules for all Wall Street firms.

Quotes:

"We will continue to strive towards being considered the best bank—across all measures—not only by our shareholders and customers, but also by our regulators. Since these losses occurred, we have made numerous changes that have made us a stronger, smarter, better company."
—JPMorgan CEO Jamie Dimon

"Even though today's action is a big milestone for the firm and regulators, this chapter and this book are not closed just yet."
—CNBC's Kayla Tausche

Fed Chairman Ben Bernanke, speaking at a news conference, is seen on a TV screen on the floor of the New York Stock Exchange.
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Fed Chairman Ben Bernanke, speaking at a news conference, is seen on a TV screen on the floor of the New York Stock Exchange.

The Fed's reverse-Robin Hood complex

Notes:

Who's really getting the most from the Federal Reserve's low-rate policy? The Fed is clearly trying to spur a recovery to provide more jobs for ordinary folk.

But so far the wealthy are benefiting the most, through low borrowing costs and stock market gains, says billionaire hedge fund manager Stanley Druckenmiller. The founder of Duquesne Capital says the Fed's "trickle-down" approach fails to help the poor and middle class.

Quote:

"This [Fed tapering delay] is fantastic for every rich person. This is the biggest redistribution of wealth from the middle class and the poor to the rich ever."
—Stanley Druckenmiller

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A new kind of housing short

Notes:

Sales of existing homes hit a six-and-a-half-year high in August, beating economists' forecasts, while the median sales price rose 14.7 percent from a year earlier, helped by a dramatic drop in the number of "distressed" sales such as foreclosures.

Many buyers had rushed to sign contracts in June to beat the rise in mortgage rates and prices. With the Fed's decision Wednesday not to scale back its bond purchases, mortgage rates could stop going up, but sales may be dampened by shortage of inventory and tough mortgage-approval rules.

Quotes:

"There's an ongoing housing shortage. I don't anticipate this housing shortage to go away."
—Lawrence Yun, chief economist, National Association of Realtors

"[Realtors] expect sales to go lower throughout the fall."
—CNBC's Diana Olick

Job seekers fill out applications at a job fair at a new Target store in San Francisco on Aug. 15.
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Job seekers fill out applications at a job fair at a new Target store in San Francisco on Aug. 15.

The jobs number that cried wolf

Notes:

So, how do this week's jobless figures look? Well, we don't know, exactly. For the past two weeks, Labor Department numbers have been unreliable because of a backlog—from a computer change—of claims in California and Nevada. For the record, today's report showed initial claims rising by 15,000, to a seasonally adjusted 309,000.

Quote:

"I'm not sure how to interpret these numbers. That's up to you."
—CNBC's Rick Santelli

The first Ford Fusion made in the U.S., at Ford's assembly plant in Flat Rock, Mich.
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The first Ford Fusion made in the U.S., at Ford's assembly plant in Flat Rock, Mich.

Optimism unbecoming Ben Bernanke

Notes:

Let's end on two positive notes. The Philly Fed says manufacturing in the mid-Atlantic region gained the most in two years this month, while firms' optimism about the future hit a 10-year high. Meanwhile, the Conference Board said its Leading Economic Index gained 0.7 percent in August, compared with 0.5 percent in July.

Quote:

"If the LEI's six-month growth rate, which has nearly doubled, continues in the coming months, economic growth should gradually strengthen through the end of the year."
—Conference Board economist Ataman Ozyildirim

—By Jeff Brown, Special to CNBC.com

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