Chief Goldman Sach economist Jan Hatzius says the recovery of late 2009-early 2010 was a temporary "firm patch" in the economy and now we're in for an anemic recovery, at best. There's also a "sizable risk" that we return to a recession. As a result, the Fed will pour another $1 billion in QE into the economy, probably through Treasury purchases.
Europe's Bank Stress Tests Minimized Debt Risk (Wall Street Journal).
European banks significantly understated their sovereign debt exposure. Although it's unclear how much the banks reduced their exposure by secretly excluding certain bonds, the Journal argues that this finding undermines a primary goal of the stress—reassuring investors about the soundness of Europe's financial institutions.
Stevie Cohen's Ex-Wife Sues Her Lawyer (New York Post)
The former wife of SAC Capital founder Steve Cohen is suing her former lawyer for abandonment and breach of fiduciary duty. The lawyer, who also represents Madoff whistle-blower Harry Markopolos, had been representing Patricia Cohen in a RICO lawsuit against her ex-husband. Guess you don't want to be a "former" anything of Patricias.
HSBC's Chairman to Step Down (Wall Street Journal)
HSBC's Chairman Stephen Green has been tapped to become U.K. Trade Minister. He's agreed to step down, according to people familiar with the matter. The banks has no immediate plan to name a permanent replacement.
Barclays Names Bob Diamond Next CEO (New York Times)
Barclays, the British bank that took over Lehman Brothers after the Wall Street firm collapsed in 2008, said Robert E. Diamond Jr. will succeed John Varley to become its next chief executive. Diamond is heading back to London. Jerry del Missier and Rich Ricci, the co-chief executives for corporate and investment banking, will become head of Barclays Capital, the division of the bank that runs the old Lehman business.
Sorkin: Lehman's Last Days (New York Times)
Was letting Lehman go a requirement of the law? An economic necessity? Was it a policy decision? Politics? Sorkin explores the new evidence from the Financial Crisis Inquiry Commission and boldly concludes that it was definitely...one of those things.
Obama to Propose Tax Write-Off For Capital Investments(New York Times)
Obama will propose that companies be allowed to write off 100% of their new investment in plants and equipment through 2011, in a tax break that could add up to $200 billion for businesses. The total budgetary cost to the government, however, would be just $30 billion since businesses would eventually depreciate the value of the acquired assets anyway.