Federal Reserve to Buy Bonds…Forever? BofA Settles Discrimination Case: Roundup

The Federal Reserve said it will buy $40 billion of mortgage-backed securities each month forever, or until the U.S. job market perks up. This third round of quantitative easing, or QE3, is relatively small to the $1.25 trillion-a-month bond-buying program launched in March 2009 or the Fed’s $600 billion-a-month buying spree beginning November 2010, according to The Wall Street Journal. Kevin Roose and Heidi Moore dumb it down for the rest of us, here and here.

Bank of America settled charges that it discriminated against disabled mortgage applicants without admitting guilt, according to Reuters. The lender was said to have forced loan applicants who relied on disability insurance to jump through extra hoops, including asking borrowers to submit doctors’ notes to document income. The bank will make four-figure payments to eligible applicants, but said policy was contradictory and unclear: “We’re being accused of wrongdoing by the government for following a policy that the government approved,” it said in a statement.

JPMorgan’s share price has recovered losses suffered after the disclosure of massive trading losses in the banks chief investment office. The bank’s shares fell as much as 24 percent after the revealed multi-billion dollar losses that came to be associated with the trader known as the London Whale, according to Bloomberg. The stock climbed to $41.40, beating a pre-Whale price of $40.74.

The private equity business is booming at levels not seen since 2007, according to The Wall Street Journal. One thing: The firms are often selling to and buying from each other.

Russell Wasendorf Sr., the Peregrine Financial Group who attempted suicide in July as his scheme to hide missing funds unraveled, pleaded guilty yesterday, agreeing to a $3.25 million fine and up to 50 years in jail.

Laura Pendergest-Holt, the former chief investment officer at Stanford Financial Group, the firm run by convicted fraudster Allen Stanford, was sentenced to three years in prison.

The trial of a former UBS trader Kweku Adoboli—charged with “unauthorized speculative trading!” er, false accounting and fraud in connection with a $2.3 billion trading loss—opens in London today.

Greece has identified 40 uninhabited islands that can be leased as the nation aims to raise 19 billion euros from state assets sales by 2015.

In always seems like Spain is in need of financial help from its European neighbors, until said help arrives, at which point the Spanish government starts going on about how it can handle it’s own affairs, gracias. Now European finance ministers are asking Spain to clarify whether it needs European Central Bank intervention in its debt markets, according to Reuters. Gracias.

Financial firms and financial regulations are so complex, “it makes you weep blood out of your eyes,” said Sallie Krawcheck, former Bank of America wealth management boss, at the Bloomberg Markets 50 Summit yesterday.