Tuesday, 14 Dec 2010 | 2:54 PM ET

SHOCKER: Fed Holds Rates Unchanged, Keeps on Easing Quant-Style

Posted By: Ash Bennington

Remember when you waited on tenterhooks when the Federal Reserve’s Open Market Committee was meeting. Would they raise rates? Lower them? Leave them unchanged? How should you trade the announcement?

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These days are just plain boring. No one is shocked that the Federal Reserve will not alter its 0 to1 /4 percent federal funds rate target. And we knew all the back in November that quantitative easing was back on.

Even the Fed seems bored with its actions. Rather than opening their statement with an enumeration of policy actions, the Fed led with this: "Information received since the Federal Open Market Committee met in November confirms that the economic recovery is continuing, though at a rate that has been insufficient to bring down unemployment."

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  Tuesday, 14 Dec 2010 | 1:34 PM ET

‘Immoral’ Fees for British I-Bankers—the Argument Considered

Posted By: Ash Bennington

"No one can suck margin out of a deal faster than a banker."

This is typically said—with a wry smile—after a few cocktails.

Often by the bankers themselves.

It's an inside joke, of a kind, couched in banker speak. But the point is clear: Bankers are compensated handsomely for the deals they facilitate.

In London, that compensation is currently under fire, as Anita Raghavan reports in a New York Times DealBook post today.

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  Tuesday, 14 Dec 2010 | 1:10 PM ET

Forbes on Tax Bill: Quit Whining, You GOP Babies

Posted By: Nicole Lapin

Evoking a little Jack Nicholson, Steve Forbes told me the tax bill is "as good as you're going to get."

Steve Forbes
Tomas Hudcovic | isifa | Getty Images
Steve Forbes

If a tax increase had been allowed to take place in January—the alternative to extending the current tax policy — “the US economy would have taken a real hit,” Forbes told me as my guest host on Worldwide Exchange this morning.

“The fact that the Republicans got a reduction in the death tax from 55 percent to 35 percent I think made the deal even better,” he said, adding that, “I’m a little surprised that some Republicans are scoffing at it.”

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  Tuesday, 14 Dec 2010 | 10:58 AM ET

Did Mortgage Note Request Leads to Credit Downgrade?

Posted By: Ash Bennington

Did a request for information involving a mortgage note lead to a credit score downgrade for a Bank of America client?

Tom Grill | Photographer's Choice RF | Getty Images

Barry Ritholtz is reporting this morning that a Bank of America customer attempted to research who owned his mortgage and got a major surprise—a 40 point drop in his credit score.

According to the report on TheBigPicture.com, the customer in question held a jumbo mortgage, made timely payments, and banked with Bank of America.

If this story proves out, it may turn into a major headache for BofA.

Before we unpack the implications, two quick points.

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  Tuesday, 14 Dec 2010 | 10:24 AM ET

Wall Street Bonus Bloodbath

Posted By: John Carney

It looks like it is going to be an ugly bonus season on Wall Street.

Here's the latest breakdown from Robert Frank from the Wall Street Journal :

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  Tuesday, 14 Dec 2010 | 10:11 AM ET

Adding a Little Ice to Your Portfolio

Posted By: Lori Ann LaRocco

Diamonds may be a girl's best friend, but for the ultra wealthy, they're an investment of a lifetime where the right gem could return staggering results.

Over the last couple of years, we've seen one record breaking auction sale after the other. Just recently, London dealer Laurence Graff obliterated all records with the $46 million sale at Sotheby's auction house for a 24.78-carat pink diamond.

"The Graff Pink" as it is now called is the most expensive jewelry ever sold at auction. I decided to sit down with Henri Barguirdjian President and CEO of GRAFF to talk about not only this latest acquisition, but how the luxury jewelry is doing this holiday season.

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  Tuesday, 14 Dec 2010 | 9:21 AM ET

Hawkish Hoenig Still Says 'No'

Posted By: Ash Bennington

Fed Reviews QE2 at Last Scheduled Meeting of 2010 (Yahoo Finance via AP) Many investors believe policies will remain unchanged—but will focus on modifications in language to signal future actions. "Since the Fed announced its second round of stimulus on Nov. 3, stocks have risen. That's encouraging for the economy because larger stock portfolios make people, especially the wealthy, more inclined to spend. On the other hand, rates on mortgages have risen, defying one of the Fed's stated goals of the bond-buying program. The average rate on a 30-year fixed mortgage has climbed to 4.61 percent. It's up sharply from 4.17 a month ago, the lowest rate in in some 40 years of recordkeeping. And "Since the Fed announced its second round of stimulus on Nov. 3, stocks have risen. That's encouraging for the economy because larger stock portfolios make people, especially the wealthy, more inclined to spend."

Spanish Bonds Down (Again); Borrowing Costs Rising (Bloomberg) "Spanish government bonds fell for a seventh day as the country paid higher costs to sell more than 2.5 billion euros ($3.3 billion) of securities and prepared to issue more debt later this week."And: "The yield on the 10-year Spanish bond rose eight basis points to 5.57 percent at 12:27 p.m. in London. The 4.85 percent security due October 2020 fell 0.58, or 5.8 euros per 1,000-euro ($1,346) face amount, to 94.61. German 10-year yields were one basis point lower at 2.96 percent, while two-year yields fell two basis points to 1.04 percent."

Distressed Assets Funds Trade Madoff Settlement Claims \(DealBook New York Times\) "The lawsuits filed by the trustee seeking money for Bernard L. Madoff’s fraud victims may be a blow for the defendants — but they are catnip for an obscure breed of Wall Street traders speculating on the outcome of the enormous Madoff bankruptcy case. In recent months, hedge funds and other investment firms have been quietly contacting Madoff victims whose loss claims have been approved by the trustee, Irving H. Picard. These funds — specialists in beaten-down assets known as distressed securities — are offering to buy those claims immediately for cash, but at a sharp discount from their face value. With the latest round of big-ticket lawsuits, however, that quiet market has started to sizzle."

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  Monday, 13 Dec 2010 | 5:03 PM ET

Derivatives Reforms: Breaking Another Market

Posted By: John Carney

It's time to wonder if the decades long war by the government that has allegedly been waged in favor of making financial products and services more competitive might have been a mistake.

Time after time the government has intervened in practices that it has deemed anti-competitive. This happened in the 1970s, when the government effectively got the New York Stock Exchange to abolish fixed trading commissions. It happened in the 1990s, when the government cracked down on NASDAQ market makers. In 2002, corporate bond trading went onto "screens" on the TRACE system after years of pressure from securities regulators.

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  Monday, 13 Dec 2010 | 5:02 PM ET

Investors Start Pricing in Chinese Inflation?

Posted By: Ash Bennington

Tough Blow for the President—Federal Judge Rules 'Central Plank' in Health Law Unconstitutional (Wall Street Journal) "A federal court ruled Monday that a central plank of the health law violates the Constitution, dealing the biggest setback yet to the Obama administration's signature legislative accomplishment. In a 42-page ruling, U.S. District Judge Henry E. Hudson said the law's requirement that most Americans carry insurance or pay a penalty 'exceeds the constitutional boundaries of congressional power. 'The individual mandate 'would invite unbridled exercise of federal police powers,' wrote Judge Hudson, of the Eastern District of Virginia. "At its core, this dispute is not simply about regulating the business of insurance—or crafting a scheme of universal health insurance coverage—it's about an individual's right to choose to participate."

Tax Cut Package Poised to Sail Through Senate \(Reuters\) "President Barack Obama's bipartisan tax plan was on its way to passing its first test in Congress on Monday but a major Wall Street firm warned that damage to America's strained finances would outweigh any short-term economic boost. The $858 billion package, which would keep lowered income-tax rates from expiring at the end of the year, picked up 62 votes in the 100-seat Senate. Voting continued but the tax measure had effectively passed a procedural hurdle and will now go to a full vote in the chamber on Tuesday or Wednesday."Next stop: The House.

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  Monday, 13 Dec 2010 | 4:46 PM ET

Did a Federal Appeals Court Judge Just Send a Warning Shot to the Feds on Insider Trading Crackdown?

Posted By: John Carney
Getty Images

A concurrence by a brilliant judge on the 9th Circuit Court of Appeals may be a warning to federal authorities that they are over-stepping their bounds in pursuit of insider trading.

On the face of it, the concurrence has nothing to do with insider trading. Instead it involves the reversal of a jury verdict in a case where a CFO was criminally convicted of securities fraud by recognizing revenues in violation of GAAP. But it's hard not to notice that Judge Alex Kozinski's concurring opinion resonates with implications for the insider trading dragnet underway inside the federal Attorney General's office in Manhattan.

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  • Jeff Cox is finance editor for CNBC.com.

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    Lawrence Delevingne is the ‘Big Money’ enterprise reporter for CNBC.com and NetNet.

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