JPMorgan's internal investigation into trading losses associated with the trader known as the London Whale is far from over, and has required the efforts of more than 100 hundred lawyers, Reuters reports. U.S. authorities have also begun interviewing witnesses, and a high-quality internal probe may be helpful in dealing with the government.

As Knight Capital was reeling in the aftermath of a $440 million trading loss, JPMorgan refused to accept thousands of securities Knight hoped to use to obtain financing to stay afloat, The Wall Street Journal reports. JPMorgan's hesitance came amid a review of the banks dealings with brokerages that use JPMorgan to clear trades.

The Journal gathered economists' expectations for Fed chairman Ben Bernanke's speech in Jackson Hole.

Rumor is that Bundesbank President Jens Weidmann, a strident critic of proposed intervention by the European Central Bank in sovereign debt markets, may resign.

Nomura will take $1 billion of costs out of its wholesale unit, which includes investment banking and trading operations, according to Bloomberg.

Spain is considering pumping its own money into Bankia SA, the failed lender thought to be headed for a European bailout, in a move that would protect junior creditors, Bloomberg reports. Does Spain have enough cash?

Greece announced plans to slash public sector wages, pensions and social spending to find the savings needed to satisfy European rescuers.

The unemployment rate in the eurozone rose to a record 11.3 percent in July.

Nobody knows anything about investing, according to an SEC study on financial literacy, and so leave the stock-picking to the experts, writes Kevin Roose.

Deposits in German banks rose 4.4 percent against the year before, as uh, Greeks, Spanish and Irish wised up.

European takeovers are down 23 percent year-to-date, by the way.

Ben speaks: Federal Reserve Chairman Ben Bernanke said the central bank was watching the European situation closely, but gave no indication that further monetary stimulus was imminent.

The Fed will hold all U.S. banks to the regulatory schema known as Basel III, and The Wall Street Journal is shocked that smaller lenders weren't exempted.

Mr. Bernanke also warned Congress not to ignore the so-called fiscal cliff that arrives when Bush tax cuts expire at the end of 2012. “If you all go on vacation, it’s still going to happen,” he said.

Here all week: The New York Times' Peter Lattman reports on Goldman Sachs CEO Lloyd Blankfein's testimony yesterday in U.S. v. Gupta. “You became the No. 1 person at Goldman Sachs,” [defense counsel Gary P.] Naftalis said. Mr. Blankfein corrected him. “Chairman and chief executive is my official title,” Mr. Blankfein said. He then broke into a smile. “No. 1’s not an official title.” Blankfein will testify today, as the trial drags on.

Shareholders spring: Chesapeake Energy holds its annual shareholder meeting today in Oklahoma City. Could be a good one.

So sorry: Nomura Holdings apologized to shareholders for its involvement in three insider-trading cases.

Oops: Floyd Norris says MF Global was yet another case of accounting practices that "produced profits that vanished before they were actually realized."

After Goldman: Paul Deighton, a Goldman Sachs investment banker for 22 years, is the guy running the show at the London Olympics.

Banker passes: Former Wachovia chief executive officer John Medlin died at 78.

It's the most passive-support possible for the protest, which he didn't refer to by name. But it's still support, or at least what you can bet will definitely be construed as support. Via billionare George Soros' site, ThinkProgress:

The quote:

I would just say very generally, I think people are quite unhappy with the state of the economy and what’s happening. They blame, with some justification, the problems in the financial sector for getting us into this mess, and they’re dissatisfied with the policy response here in Washington. And at some level, I can’t blame them.

To briefly editorialize: If only. If #OccupyWallStreet became #OccupyTimGeithnersBackyard, they would represent dissatisfaction with policy response. But they're going after a private sector held accountable (or not) by a government. And the entire capitalist system. That whole "government" thing in the middle seems to be mostly missing from the protest, in fact, likely because the first person to hold accountable for employing the kind of people who proliferate pro-Wall Street policy (like, say, Tim Geithner) and letting the ones who hold the kind of people who antagonize pro-Wall Street policy resign in frustration (like, say, former FDIC head Sheila Bair) would involve holding accountable the one person whose on-the-line job they need to keep employed: The American President.

Either way, while he may be no Thom Yorke, Ben Bernanke lending some credence to Occupy Wall Street is a pretty big deal. Between Jeff Mangum showing up last night, and this, Zuccotti Park's newest residents are undoubtedly having a decent week.

fkamer@observer.com|@weareyourfek

"L8R."

Three hours before President Obama's "eff an S & P" presser, a tidbit of news broke about a staffing change at the Federal Reserve: Nathan Sheets, the Fed's chief international economic adviser—or: the director of the Division of International Finance—is getting out of dodge. Mr. Sheets, who started with the Federal Reserve Board in 1993 as an economist, had been there for 18 years. More importantly, he's the third in a trend of (take a guess)...

...top advisers of Fed chair Ben Bernanke's to step down in the last 13 months.

Notes Bloomberg:

The departure means all three of Bernanke’s top staff advisers have left their positions or announced their departures in the last 13 months. Brian Madigan, former director of the Division of Monetary Affairs, retired last year, while the Fed said in May that David Stockton, director of the Division of Research and Statistics, is retiring Sept. 30.

Mr. Sheets is stepping down after four years in his capacity as Chief International Economic Adviser, and as Bloomberg noted, a single day before the Federal Open Market Committee (the cleverly-named component of the Fed that oversees how our country's famously awesome open market works) convenes to meet. Also as Bloomberg noted, a reason for Mr. Sheets' depature was not given. We rang up his office and were told he was in a meeting, and left a message. We'll update if we receive quote.

fkamer@observer.com | @weareyourfek

"The Federal Reserve has been looking for ways to increase its transparency for years, and we've made a lot of progress," Mr. Bernanke responded to a question about the difference between facing the press and facing Congress. For the record, he was speaking to the revolutionary innovation that is holding a press conference. He later attributed the push for transparency to Fed Vice Chair Janet Yellen, who's clearly poked around on the issue before. While CNBC expressed concerned about the chair's chair, noted feminist John Carney pointed out the gender disparity in reporting, and Sarah Palin expressed concern over your focus, there would be only one true indicator of exactly just how well this thing went, and Zero Hedge was glad to provide it:

That's a score of 0.62% gold thumbs up, for those counting at home. Other reviews?

• "You can't give Ben Bernanke a grade lower than an A-. It's not like we're watching Mr. Excitement."
• "The market says 'whatever.'" 
• "No news presser. Congradulations."
• "Next time Bernanke could come on to dry ice and thumping soft rock to placate those who think Fed explaining itself isn't entertaining enough."
• "If he does another one, he needs to get a better podium."
• "Bernanke wimps out."
• "Oh well fuck you Paul Krugman. You are just bitter grape nuts."

Tough crowd.

[fkamer@observer.com | @weareyourfek]

• Moody's downgraded Ireland's credit rating five notches and said more downgrades could come if the country didn't figure out how to deal with all its debt. [WSJ]
• If Ron Paul proceeds to hector the pants off Ben Bernanke in his new role as congressional Federal Reserve overseer, he'll be following a long-established tradition of berating central bankers. [NYT]
• It sounds ridiculous, but someone's asking the question: Could the Dow Jones Industrial Average hit an all-time high next year? It's theoretically possible! [AP]
• Congress has passed the tax cut extensions. [Reuters]
• New York required foreclosure mills to certifiy the validity of their paperwork following revelations that some foreclosure paperwork was not valid. They are not really doing this. [Naked Capitalism]

mtaylor [at] observer.com | @mbrookstaylor

Employers remain reluctant to add to payrolls. The housing sector continues to be depressed. Longer-term inflation expectations have remained stable, but measures of underlying inflation have continued to trend downward.

As such, the creation of additional money to buy Treasuries will continue at a rate of about $75 billion a month. The target interest rate will remain between 0 and 0.25 percent. All the Federal Open Market Committee members voted in favor of the policy, with the exception of super inflation hawk and perennial dissenter Thomas M. Hoenig.

mtaylor [at] observer.com | @mbrookstaylor

• The one Federal Reserve member who thinks printing more money is a bad idea can't shake memories of the horrendous and rampant inflation the U.S. experienced in the 1970s. [NYT]
• The Republicans who just entered Congress may want to put a check on all that money printing, a development that would surely furrow the brow of Fed Chairman Ben Bernanke. [Bloomberg]
• The lawyer for Austrian banker and Bernie Madoff look-alike Sonja Kohn said that the $19.6 billion lawsuit against Kohn by Madoff trustee Irving Picard is a groundless flight of fancy. [WSJ]
• Democrats in Congress are really annoyed with Barack Obama's recent decision to compromise on extensions of the Bush-era tax cuts. [AP]
• Web company Yahoo! -- which is either a national joke or a turnaround story, depending on your point of view -- is preparing for across-the-board job cuts that will impact 5 percent of its workforce. [FT]

mtaylor [at] observer.com | @mbrookstaylor

• The government bailout of financial institutions is wildly unpopular and perceived to be highly wasteful. Which is funny, the Treasury Department reckons, because so far it has yielded a profit of $35 billion. [AP]
• Americans want drastic action taken against the deficit; they just don't want to pay more taxes or reduce spending on the military, entitlements or farm subsidies, according to a poll. They'd rather soak the rich. [Bloomberg]
• Self-employment has been on the decline since the recession ended. Where is America's can-do spirit? [NYT]
• Since Fed Chairman Ben Bernanke took the widely questioned step to embark on a $600 billion round of quantitative easing, long-term interest rates have gone up. That's bad, because the point of quantitative easing was to lower interest rates. [WSJ]
• Senator Carl Levin says that in 2007 Goldman Sachs was manipulating the prices of credit default swaps. He is also in possession of some emails that make one Goldman senior trader look like kind of a jerk. [FT]

mtaylor [at] observer.com | @mbrookstaylor

• The finance minister of Belgium is saying that maybe it'd be a good idea to expand the European Union's $1 trillion bailout fund as concerns about the Great Debt Contagion continues to menace Spain and Portugal. [NYT]
• "Who will audit the auditors?" is a question the Securities and Exchange Commission has been asking itself for a year now. The answer may come soon, so interested parties should get acquainted with former SEC general counsel James R. Doty and John J. Huber, who used to helm the SEC's corporation finance division. [Bloomberg]
• Federal Reserve Chairman Ben Bernanke went on "60 Minutes" Sunday night to reassure America that with our staggeringly high unemployment and extreme economic fragilitiy, we really, really don't need to worry about inflation right now. [WSJ]
• Groupon, the coupon website with the cartoon cat that makes "jokes," has turned down a buyout offer from Google. [AP]
• Bank of America says it has met a $3 billion capital requirement that was outlined as a condition of its exit from the Troubled Asset Relief Program. [FT]

mtaylor [at] observer.com | @mbrookstaylor