ECB, Bank of England Seen Easing Next Week
MarketWatch
Risky assets, including stocks and the euro, rallied Friday after the European Union managed to agree on more policy steps to address the credit crisis than markets had anticipated.
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BOE’s King: Libor Needs ‘Radical Overhaul’
WSJ.com
Bank of England Governor Mervyn King Friday called for a major overhaul of the way in which one of the world’s most important interest rates is set, after it emerged that Barclays PLC paid £290 million ($450 million) to settle claims that some of its staff manipulated the rate in an effort to turn a profit.
http://jlne.ws/MZAXTU

JPMorgan Cushions Drew’s Retirement With $21.5 Million
BloombergBusinessweek
JPMorgan Chase & Co. (JPM) (JPM)’s decision to let Chief Investment Officer Ina Drew retire four days after the bank disclosed a $2 billion loss in her division allowed her to walk away with about $21.5 million in stock and options.
http://jlne.ws/NcZ8Oe

Lehman to generate $1.5bn from Aurora sale
Financial Times
Lehman Brothers has sold the assets of its subsidiary Aurora Bank in a deal which should help generate about $1.5bn for creditors of the failed investment bank.
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Consumer sentiment lowest since December
MarketWatch
With consumers increasingly concerned about economic conditions, sentiment fell this month to the lowest level since December, according to data released Friday by the University of Michigan and Thomson Reuters.
http://jlne.ws/N2ZET7

Customers face fallout from RBS failure
FT.com
Customers affected by the computer failure at Royal Bank of Scotland will have to wait another week before they know whether their credit ratings have suffered because of the bank’s inability to process transactions.
http://jlne.ws/MFmjUw

Buttonwood: Keeping it real
The Economist
ONE of the most remarkable features of the modern economy is that interest rates are negative in real (ie, after inflation) terms and are expected to remain so. This is not unprecedented. Real rates were negative after the second world war and again in the 1970s. But in both cases inflation was much higher than it is today.
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Bank of America’s $40 Billion Mistake
WSJ.com
Bank of America Corp. thought it had a bargain four years ago when it paid $2.5 billion for tottering mortgage lender Countrywide Financial Corp. But the ill-fated decision has already cost the Charlotte, N.C., lender more than $40 billion in real-estate losses, legal expenses and settlements with state and federal agencies, according to people close to the bank.
http://jlne.ws/Lm5e0k

Bond funds could be on borrowed time
MarketWatch
In a world where financial rescues dominate headlines, U.S. government bond funds played hero yet again, rescuing portfolios in a tough second quarter.
http://jlne.ws/OI9Nqh