Update: SEC drops Moody's fraud case

The Securities and Exchange Commission let Moody's off the hook for failing to heed its own rating guidelines.

The SEC blamed "uncertainty" tied to the regulatory reforms enacted last month in dropping the widely watched case, which stemmed from Moody's 2007 failure to fix some European debt ratings after it discovered an error in their calculations. The Dodd Frank Act limits the SEC's jurisdiction to cases with a strong tie to the MORE

The bedridden banking recovery

The banks are feeling less woozy but have yet to get back on their feet -- let alone lend a struggling economy a hand.

Banks had their most profitable quarter in almost three years, the Federal Deposit Insurance Corp. said Tuesday. "The economic recovery that began last year is beginning to be reflected in rising earnings and improved credit quality," FDIC chief Sheila Bair said.

Sidelined

But the happy profit picture belies the many MORE

Lehman ex-chief Fuld to testify

Two years after he ran Lehman Brothers into the ground, Dick Fuld is about to get another chance to explain himself.

Fuld, who led Lehman for 15 years until it collapsed in September 2008, will appear Wednesday before the Financial Crisis Inquiry Commission, the congressionally appointed panel that's writing the definitive account of the financial meltdown.

The Wednesday wallop

Fuld and six others have been called to appear before the FCIC Wednesday, MORE

Sovereign debt for dummies

It's only a matter of time till runaway debtors such as the United States hit the wall, investor Rob Arnott argues.

Arnott, who runs the value-focused Research Affiliates investment manager in Newport Beach, Calif., writes in his monthly newsletter that it's imperative that bond investors diversify away from debt-soaked rich countries such as the United States.

Your Treasury portfolio's future?

The reminder comes at a time when the latest flight to safety MORE

Bank failures take a breather

 Bank regulators are getting a welcome late summer respite.

The Federal Deposit Insurance Corp. reported no bank failures Friday. That marks the first failure-free Friday since the weekend of July 4.

Banks getting more problematic

And because the FDIC tends not to close banks on a holiday weekend – reopening a day late could add to depositor anxieties the agency spends considerable effort minimizing – we seem to be on track for MORE

How CDO games blinded economists

Are we being too hard on the economic forecasters who failed to predict the financial meltdown?

The question comes to mind in the wake of Friday's takedown of the big banks' subprime misdeeds, by ProPublica and NPR. The piece offers the latest glimpse into the games the bankers played to keep their fees and bonuses flowing as cracks started to show in the highflying U.S. housing market.

The sky fell, but MORE

How banks 'super-charged' the bubble

A new report shows how the too-big-to-fail banks gave the housing bubble a final breath of air, at great cost to everything but their bonuses.

They did it by manipulating the market for the yucky subprime-related debt called collateralized debt obligations, say ProPublica and NPR. The CDO boom started early in the last decade, as banks such as Goldman Sachs (GS), Citigroup (C) and the Merrill Lynch brokerage now owned by MORE

The Bernanke trap

Ben Bernanke said last month the economic outlook is "unusually uncertain."

But when it comes to extolling the benefits of aggressive Fed policy, the same might be said for Bernanke himself.

No flight plans just yet.

In Friday's highly touted speech at the annual Federal Reserve retreat in Jackson Hole, Wyo., Bernanke pledged to do whatever is necessary to keep the economy from stumbling down the Japanese path to a debilitating spiral MORE

More money for Mark Hurd

Life after Hewlett-Packard is being good to Mark Hurd.

Three weeks after he was forced out as the CEO of the computer giant, Hurd filed to sell $30 million worth of stock, Bloomberg reported. The sale appears to cover stock options Hurd was granted during his five years atop HP (HPQ) and was allowed to exercise as part of his rich separation agreement.

Rolling in it

The stock sale will allow Hurd to maintain MORE

Fannie-Freddie capital loss: $226 billion

That's how much the government-backed mortgage companies have burned through in the past three years.

So says the Federal Housing Finance Agency, which regulates the government-backed mortgage investors Fannie Mae (FNMA) and Freddie Mac (FMCC) and issued its first-ever quarterly report on the companies Thursday.

Still searching for a solution

The FHFA said the lion's share of the losses, $166 billion worth, come from the companies' guarantees of mortgage loans on single family MORE