. >>> jp morgan facing a record fine, the allegation it manipulated energy markets but the only firm accused of wrongdoing. is there any way to stop businesses from behaving badly but first, how the international markets closed today. >>> jp morgan chase faces what could be the biggest fine ever to settle allegations that it manipulated electricity markets in the midwest and california. the federal agency committee is closer to a deal with the bank that could mean a fine of nearly a half billion but remember, jp morgan made 6 billion in profit last quarter. so a half billion-dollar fine would be less than 10% of one quarter's profits. some legal experts say fines for misconduct need to get better to detour corporate misbehavior of which there has seemingly been a lot lately. >> reporter: what's a $500 million fine or settlement to jp morgan chase? not so much says this attorney. >> on the other hand, the companies being find as stra no, ma'am -- fined these amounts can afford it. >> reporter: she defends companies accused of behaving badly. >> sometimes companies do decide, ever a fi

jp morgan may be moving toward a break-up. friday, reports surfaced that jp morgan chase is pursuing strategic alternatives for its physical commodities business. it follows a recent new york times report the bank has warehouses filled with commodities such as gold and aluminum and may be inflating prices. the federal reserve said last week it's re- visiting a 2003 decision allowing banks to trade commodities. "for people who cover the fed, this was a one-sentence statement on the one hand, but on the other hand, it really showed how this surge of media attention surrounding this was creating political pressure. up until now, the fed wouldn't really even acknowledge that it was reviewing morgan stanley and goldman sachs' commodities activities." according to cnbc, jp morgan could spin off or even sell its commodity assets. jp morgan says it's committed to traditional banking. a major bank in the uk may be scrambling to come up with capital. the wall street journal reports barclays plans to raise billions in new money to cover

jp morgan, city. those are the banks everyone thinks are going to be the best. >> they're not necessarily the cheapest. >> they're not but you're going to go with momentum. i think the earnings power is probably not running out of gas. >> i agree with you but maybe the regional banks have some room to go. if you believe the economy is on the rise improving gradually -- >> and you do? >> i do. you're not going to see nim increases in improvement this quarter. you want to be buying them because i think by the fourth quarter and into 2014 you will see better nim and loan growth. the three rule that came out today for the banks with $250 billion in assets or below, the capital ratios -- the requirements were much more favorable for them. the capital ratios are going to improve in the second half of the year. focus on reorganizations like a key bank, focus on mnt bank which is about to close the hudson city deal and those kinds of things. >> what is your opportunity? if you believe that the economy is impr

. >> do you expect the earnings picture will be reasonably good beginning tomorrow with jp morgan and wells fargo in the banking sector and then as you look out, bob, beyond this past quarter into the second half of this year and 2014, do you think there's going to be more earnings momentum or a continued slog? >> i feel a lot better about the second half of this year and into next year in terms of earnings improvement, highest single digit earnings gains. the quarter that we're about to report could be slop by again, particularly, tyler, the revenue level. revenue gains in the first quarter left something to be desired and we may have not quarter of the sloppiness which is part of the reason they may be back before it moves substantially higher. >> we get excited when we see the stock march yet going up and hitting records but the individual investor stayed out of the picture as you know. wondering what your take is on this wall street journal piece by the ceo and founder of swab, the title why individual investors are fleeing stocks. are there ways to fix things so the individual co

jp morgan profits surged 31% to $1.60 a share, 16 cents more than analysts estimates. revenue also better than expected, up 14%. wells fargo posted a gain of 19% or 9 8 cents a share, a nickel higher and the recent jump in interest rates and drop off in lending in the mortgage market but the ceo of jp morgan said they will continue to do well as interest rates move higher. >> all equal, it may knock down mortgage origination but have you have a healthy economy that will filter through. all things equal, a good thing as long as the economy is growing. >> as for the outlook for the u.s. economy, diamond is also pretty upbeat. >> the american economy is getting -- slowly getting stronger, so the lending will come back when people have more confidence and do more capital investing. we're confident you'll see growth over the years as america recovers. >> we'll learn more about the outlook for the banking sector next week. citi group reports it's earnings on monday. >>> here to give us more analysis on those bank earnings today and a look ahead to next week, fred cannon, dir

. >> here to talk more about the fed and economy is david kelly, chief global strategist at jp morgan funds. we come. you heard vince ryan heart say he thinks the fed wants to get out of the stimulus business and begin tapering. i was talking about a half hour ago to a former policy maker who said i don't really think they want to start tapering and probably not until the end of the year at the soonest. what do you think? >> i think they do want to get out of tapering but what they are trying to do is quietly move an elephant out of a room and you can't do that. i was frustrated by the fact they didn't put this timetable, which ben bern fan key announced in june. they didn't put that in the statement so we're wondering are they continuing to remove qes at the end of this year. i think they want to because they have to. people don't talk about enough is the problems they are billing. it's not just status quo. they are adding a trillion dollars a year and those are chickens that will come home to roost. so they do need to get out of it, but they are so sensitive to doing anything to ups

in the deal, jp morgan executives avoid individual penalties. the bank will also now be required to submit annual reports to the commission for three years. a tipster connected to sac capital has landed in jail. sandeep aggarwal has been arrested for allegedly passing on information regarding a microsoft and yahoo deal to sac capitol portfolio manager richard lee in 2009. the sec said in a statement that aggarwal "obtained confidential information from a close friend at microsoft and passed it along to lee knowing that he would likely trade on it." prosecutors are also pursuing criminal charges against sac capital, which has pleaded not guilty. a famous call to short herbalife stock appears to be turning into a headache for hedge fund manager bill ackman. seven months ago, ackman said the stock would collapse and refered to herbalife as a pyramid scheme. scheme or not, the stock has gone from $24 to $60 since his call, and up almost 100% for the year. shares gained speed yesterday on earnings that topped expectations. the nutrion company also ra

jp morgan is admitting to mistakenly suing credit card customers. in a sample review, the bank found errors in 9% of the 1,000 lawsuits it filed against credit card customers for non-payments. the amounts owed by customers are shown as higher than their actual balances. in the near future, jp morgan may be required to do a more thorough investigation. the government is keeping a closer eye on debt collectors. the consumer financial protection bureau is vowing to crack down on illegal practices in the industry. the head of the cfpb, richard cordray, says many collectors try to get ahead by "flouting the rules." this week, the largest debt collection agency was hit with a record $3.2 million fine after wrongly harassing people to pay off debt. aig and g.e. capital are joining the list of firms that need more regulatory oversight. the two join large banks that the treasury department calls "systemically important" to the economy. the companies are now subject to extra supervision from the federal reserve. aig and g.e. are not at risk, but could cause m

jp morgan may be getting hit with a shocking fine. the wall street journal reports that jp morgan and energy market regulators are closing in on a record settlement. the bank is accused of manipulating energy markets in california and the midwest. the figure is reportedly close to a billion dollars. meanwhile, the same regulators slapped barclays with a $435 million fine for energy market manipulation. barclays says it plans to fight that fine "vigorously." a top britsh executive from glaxosmithkline is reportedly being barred from leaving china while chinese officials investigate alleged bribery. the chinese government accuses 4 glaxosmithkline execs of bribing doctors, hospitals and officials to boost drug sales and get regulatory approvals. so far, there have been no arrests. the pharmacuetial giant is coorperating with investigators. president obama will brief the country on the economic benefits of healthcare reform in a speech today. yesterday, new york governor andrew cuomo told residents health insurance costs will be cut in h

jp morgan notes says investors may mouse while the dialysis providers lobby to moderate. the shares were off 6% in the five times. they closed at $114 on the nose. >>> shares of creed the led lighting company touched a high as they touched $65 a share. just in time to see the shock go past that point at the open. cree did give back during the day but closed above at $66.64. that's the nearly 4% gain and one-year move there. >>> a third day in it's existence as publicly traded, noodles jumped again as the colorado based casual dining chain sets a source and investors lined up for seconds, thirds. noodles up 35%, just since friday. up more than 22% today to close at 4$46.20. >>> a set back for dennis today. a new york court rejected a request for a new hearing for the former ceo of tyco. he's accused of orchestrating a 100 million dollar fraud. he's best known for throwing a $2 billion birthday party for his wife and furnishing his apartment with a $6,000 shower curtain and a $15,000 umbrella stand paid for with company money. >>> coming up in the program, would you pay mor

it follows solid earnings news from jp morgan and wells fargo. friday, shares of jp morgan rallied before losing steam, despite beating wall street expectations on earnings and revenue. wells fargo reported record earnings due to lower expenses and growth in the bank's lending business. senator elizabeth warren has taken to twitter in her battle to divide traditional banks from investment banking. warren tweets banks should be boring again. warren, along with senator john mccain, wants to bring back a section of the glass steagall act. bankers are coming out against this. they strongly contend the financial collapse of 2008 was not their fault and there is no reason to restore glass steagall. juli niemann of smith, more and company is on the line with us this morning. good morning. juli, who is too blame? "dervatives, which the banks use, are about s $700 trillion global market. there's no regulation, no supervisory authority. it's the biggest global financial casino going around. we really don't know the size of it because there is not that much

it's pretty clear that jp morgan can figure out a way to make money no matter what and this time, it made huge amounts of money in trading, both equities and fixed income. meaning that when rates shot through the roof, beginning in may, great volatile situation, it was terrific news for diamond and her team. company profit immensely from the turmoil and that's a large part of how this bank could make 6.5 billion dollars this quarter blowing away the estimates. that alone would make me want to buy the stock. this gigantic commercial bank with the fortress balance he has within its enterprise. you can kick down so many positives. credit cards, incredible. auto loans, amazing. wealth management, fabulous. so then why didn't zoom instead of falling 17 cents as it did at the close. because in the end, banking is lending, and the lending was tepid. first refinances have cooled. that's what a quick rise interest rates is always gonna do. and we do have the highest rates in two years for mortgages. second, diamond reiterated that the country is still doing terrifically. just listen to what h

jp morgan did confirm the settlement reminiscent of a scandal when enron made millions in california. >> san jose earthquakes have been forced to delay the opening of their soccer stadium. crews have encountered what is described as difficult conditions finding water filled underground vaults along with piles of steel beams and concrete. the earthquakes now help to open for the second half of the season. >> little league world series giving tri valley area a nine day economic boom meaning big crowds on, and off the field. we're live with the impact of the series. david? >> this world series is drawing teens and spectator frarntz world including japan, canada and ecuador. but not just here for a long weekend or a few hours they're here nine days in hotels, restaurants and shopping. that translates into millions of dollars. these 11-year-olds to 13-year-old have extended families and supporters. 10,000 descended on livermore valley. >> they like bacon, sausage and pancake autos it's the shot in the arm the businesses lost. a crowd of a thousand inside and out. >> we took care of them, t

jp morgan did confirm the settlement reminiscent of a scandal when enron made millions in california. >> san jose earthquakes have been forced to delay the opening of their soccer stadium. crews have encountered what is described as difficult conditions finding water filled underground vaults along with piles of steel beams and concrete. the earthquakes now help to open for the second half of the season. >> little league world series giving tri valley area a nine day economic boom meaning big crowds on, and off the field. we're live with the impact of the series. david? >> this world series is drawing teens and spectator frarntz world including japan, canada and ecuador. but not just here for a long weekend or a few hours they're here nine days in hotels, restaurants and shopping. that translates into millions of dollars. these 11-year-olds to 13-year-old have extended families and supporters. 10,000 descended on livermore valley. >> they like bacon, sausage and pancake autos it's the shot in the arm the businesses lost. a crowd of a thousand inside and out. >> we took care of them, t

. >>> news with mix wells fargo and jp morgan reported profits. >>> the owner of the online streamerulu is taking that company off the market. it shows tv shows and movies from those network and had about 4 million page of describers. it appears so far those bids have been too low. >>> a be loved bay area bakery restaurant back opening after a fire of closure for two months. the cause of that fire was never determined. employees say they're glad to be back at work. the oakland landmark is open on its regular schedule from 7 a.m. to 10 p.m. everyday. >>> a member of the white house maybe soon on her way to california, rob roth tell us now. >> reporter: homeland security janet appears to be -- she's been dominated of the first president of the california of university. >> the board of search committee, he spoke with her today. >> one of the things she want to to do is visit the campus. i think that's an incredibly a positive step. >> the the ability as a leader is more important. >> she was recruited and she was sought after. >> in a statement, i realized i am a non traditional candida

. >>> details that jp morgan chase manipulated the energy market.he commission accused the banking giant of using 8 different strategies to boost their profits n one of those the commission accuses jp morgan of duping the electricity officials into paying 999 per megawatt hour during the early morning hours when the rate was $12. the allegations come ahid reports that it could settle the claims for $500 million. >>> the suspect in the last year's mass killing in san francisco's is due in court this afternoon. he is accused of killing five people here the san francisco city college in # 012. there are a lot of unsensed'ss in the case. and they could reveal a motive. after hosting, livermore will not put its ring in the hat for next year t decided to back off because of the demands the race had resources and the impact it had of downtown business. the council voted to withdraw 100,000-dollar fos support the race. officials say it's not unusual for a city to take a year off. >>> and the commute is just getting started. >> we are looking at the traffic

four other wall street banks made top ten, including bank of america, jp morgan chase, american airlines and blackberry also made the list. >>> a tomato shortage in argentina has people seeing red. the government has asked people to exit eating tomatoes for -- to quit eating tomatoes for two months because of the shortage. >>> and snack food lovers rejoice. after an eight month hiatus twinkies will be back in stores nationwide starting today. thousands of wal-mart stores across the country unveiled collectible, first batch boxes friday. the iconic snacks have not been made since november when hostess filed for bankruptcy and liquidated the business. a private equity firm bought the company out of business, paving the way for the return of the twirchg can i i don't i feel like even the ones from november are -- of the twinkie. >> they haven't been made since november but i feel like even the ones from november are just fine. >>> hot, humid, you get it all this week. when will the relief >>> talking big box stores. i have gone at 2:00 in the afternoon after i got off work and i'm still jam

jp morgan chase offers more than 100 mutual funds that charge anywhere from less than 0.5% to more than.5% annually. i want to get your reaction to an example that jack bogle gave us, and that is that if you invest over a 50-year investing lifetime in a mutual fund making 7% a year on average, but you're paying 2% in fee for that, that that 2% will erode something like... two-thirds of your gains. >> so the lower fees relative to any given investment will always result in a higher accumulation. >> smith: but is his example correct? i mean, it's shocking that you would be giving up two-thirds of your... >> so i don't know the math behind the example that you're citing. >> smith: but does it sound correct to you? >> it sounds... it sounds high. >> smith: it had sounded high to me as well. so i took bogle's advice, found a compounding calculator online, and used a simple example in order to isolate the effect of fees. take an account with a $100,000 balance and reduce it by 2% a year. at the end of 50 years, that 2% annual charge would subtract $63,000 from your account, a loss of 63%, lea

. >> jp morgan is considering a sale off of products. it comes after the government criticized powerful banks for participating in so many aspects of this business. trading c trading commodities and owning them. why is this important? as you may remember, "nightly business report" brought you a story this week how banks own physical commodities might drive up things like soda cans and car parts and it's getting more scrutiny in washington, as well. the senate held a hearing looking into the impact it might have on consumers. >>> halliburton is looking into the deep water horizon oil spill. the company will pay the maximum fine, $200,000 and subject to three years probation. on two occasions, halliburton directed employees to get rid of simulations that might have focused more attention on the company's role in the still. the still was the largest in u.s. history, nearly 5 million barrels of crude poured into the gulf before the well was capped. our guest will give his opinion on what to do with halliburton shares now. >>> in the news tod

alcoa lead and jp morgan cut on that company because of weak prices for aluminum. shares touched a four-year low. alcoa launches on monday and we'll speak with the ceo after those numbers are released. at the close alcoa was down more than 1% at $7.71. >>> johnson the nutrition firm lead the s&p 500 as china probes whether baby formula companies conspired to fix companies, made johnson down the mlo$68.85. >>> auto nation a big gainer today, thanks to revved up car sales. it reported new vehicle sales up 5% in june, and 7% for the second quarter. auto nation is the country's largest seller of new and used cars. the stock rose more than 1.5% to close at $45.27. so far this year, shares up 14%. >>> chipolte was the biggest gainer increasing to $430 a share. they closed at $384 and change. >>> creating jobs is an on going change in the u.s. to put it mildly, especially in the man e fracturering sector and it's challenging the economics of a traditional education. >> reporter: sherwood is known as a fast growing southern city home to nascar and some of the biggest banks

. >>> we told you yesterday golden sacks, jp morgan made $4 billion in commodity related expenses. they questioned whether big commercial banks should be allowed to control where houses where metals are stored and whether that's harming consumers and businesses. at today's hearing an executive from miller coors described it. >> the banks receive rent each day the aluminum stays in the warehouse. it evers it harder for miller coors to get the aluminum we need to ever the products we sell to keep our employees working. >> aluminum cans $15 billion passed on to consumers over the past three years. >>> a survey of corporate chief financial officers finds a majority gave the u.s. economy the highest score in five years and showed confidence about more growth in 2013. but, when they were asked about the potential negative impacts on the economy this year, an overwhelming number of them sited healthcare costs, and the changes facing companies compiling with changes in the affordable care act. >> and as part of that affordable care about, dozens of states are opening health insurance excha

. >>> jp morgan chase agreed to pay $410 million to federal energy regulators to settle charges traders manipulated electricity markets in california and the middle west and used improper bidding strategies that forced over payments by local agencies running power grids in those areas. the bank did not admit wrongdoing as part of the settlement and none will face sanctions or criminal charges. this is the latest example of a story "nightly business report" brought you last week involving the complicated world of banks operate income commodities markets. you know, last week, we heard about banks that were operating storage facilities for commodities, whether aluminum, copper and others and now the settlementelectricity. >> the banks own trading paper commodities, other things in the financial markets, but they own these commodities like storage and power plants and the point has been to compliment the businesses that they already have, to perhaps give added knowledge, maybe a trading edge in some cases, or just purely as a good investment that's going to make returns. now, though, some o

the comission is investigating the banks, such as citigroup and jp morgan chase. the regulatory agency alleges the investment firms worked together to block attempts by trading exchanges such as cme group that wanted transparent prices on credit default swaps. often the contracts are insurance payments for when a company or country skips out on its debt. citigroup is hit with a massive fine. the bank will pay $968 million to fannie mae over bad mortgage loans. it will apply to over 3.5 million loans from 2000 to 2012 that fannie purchased from the bank. the fine will resolve potential losses from the loans. early this year, bank of america paid a similar fine. citigroup reports earnings july 15th. an elaborate money-smuggling scheme has ended with the arrest of a vatican accountant. it's the lastest corruption scandal to hit the vatican. according to reports, the monsignor, named "don 500" by the italian media, was plotting to carry 20 million euros from a swiss bank account to italy. the plan was he would go unnoticed because of his rank as a vatican official. th

when you compare it to the rivals, city, jp morgan chase, revenue wasn't as strong for b of a. >> bank of america was hit the hardest by the low rate environment. we know what happened in the last two weeks of june. there was incredible volatility as people wondered when ben b r bernanke and the feds would do. they had very low rates, didn't ever as much in interest revenue as previously. they had volatility in the fixed income trading side. they lost some money there where some of their peers faired better. >> could he turn the bank around, the c erkszeo does he h support? >> he built with executives and expertise turning around a big company into something that actually can be a profit machine. he hired a lot of people in the investment bank to do more deals with big corporations. he's putting more loan officers in the branchs even though they have fewer hoping when consumers start to borrow again, they will borrow with bank of america. >> thanks for spending part of your birthday with us tonight. >> thank you. >>> still ahead, why a big american company many invest tors own is the t