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Fed To Twist Again, In A Fashion Similar To Last Summer: Seven And A Half Things To Know

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Thing One: Fed Prepares Money Cannon: We now come to the part of our program where the Fed starts blasting money into the stands with one of those t-shirt cannons, and the crowd screams for more.

Federal Reserve policy makers today wrap up a two-day meeting to talk about the economy and what the heck they should do about it. The Wall Street intelligentsia is pretty sure the Fed's policy announcement, due at 12:30 p.m. ET, will include a promise to extend a program called "Operation Twist." That's when the Fed swaps some of the mountain of short-term debt it has on its balance sheet for some longer-term debt, in order to drive down longer-term interest rates. This is a step just shy of out-and-out firing money into the crowd with "unsterilized" bond purchases, also known as "quantitative easing." But it's a step on the road to QE, which got the stock market very excited yesterday.

Because having the Fed firing money at you with a t-shirt cannon is always awesome, right? Except! If the Fed is firing money at you, it's because it thinks the economy is at risk of tipping back into recession. I'm no economist, but I think that might not be such a good thing. Anyway, it's not like high interest rates are choking off the recovery. And Operation Twist hasn't really done all that much noticeable good, notes Spencer Jakab in the Wall Street Journal. Every little bit from the Fed helps. But as Ben Bernanke -- who will hold a press conference at 2:15 p.m. ET today -- would tell you, the Fed needs some help from Congress. Lawmakers should be doing some money-firing of their own, if only to help stop the bleeding at the state and local levels, which, as The New York Times writes, continue to be a drag on the economy.

Thing Two: Europe, A New Hope, Quite Similar To The Old Hope: At least the Fed doesn't have to worry about Europe any more, because everything there is apparently solved, again. And to think all it took was a very strongly worded communique from the G-20. The leaders of the world's most-bestest nations gave Europe a good talking-to about the need to take several years to form a stronger fiscal union. But the task will not be easy, and it will require Angela Merkel to convince Germans to ride herd on the rest of Europe, when she doesn't really seem to care all that much for the whole "euro" thing herself, Reuters writes. But Spanish borrowing costs, which soared to new records yesterday, are down a little this morning. And Greece is close to forming a pro-euro governing coalition. So hope springs eternal.

Thing Three: Recovery For Some: You may have heard that the housing market is recovering, and depending on where you live, you might even believe it. Mitra Kalita and Nick Timiraos of the Wall Street Journal write that the housing market's recovery is moving at different speeds: "Homes in sought-after neighborhoods, including those near transportation corridors and with top-notch public schools, are finding buyers. But others in neighborhoods just a few miles away, including so-called exurbs or areas that never fully gentrified, are languishing."

Thing Four: Dull Dimon: JPMorgan Chase CEO Jamie Dimon sat yesterday for another round of questioning by lawmakers about his bank's big loss in credit derivatives, this time in the House. He stuck doggedly to his script, The New York Times points out, often ignoring actual questions by lawmakers. And many of those questions were clown questions anyway. So, as usual, not a great deal was learned, except that regulation is a lot like masturbation and JPMorgan will survive until the moon crashes into the earth.

Thing Five: Tapping The Trading Brakes: Watch out, high-speed traders: Today the Commodity Futures Trading Commission is expected to issue a proposed definition of what "high-speed trading" is, exactly. It's sort of a big deal because that definition will then be used in setting regulations and limits on trading activity, Scott Patterson and Jenny Strasburg of the Wall Street Journal write: "Much as the proposed 'Volcker rule' has spurred sweeping changes on trading desks, the official definition of high-frequency trading likely will guide regulators as they seek to crack down on trading that allegedly is manipulative or undermines investor trust."

Thing Six: No Niche For The Nook: In the "what else is new" department, a store that sells physical books is struggling. Barnes & Noble reported disappointing quarterly sales and a wider-than-expected loss yesterday, Julie Bosman of The New York Times writes. B&N has pinned its hopes on the Nook e-reader, but Nook sales were down more than 10 percent in the quarter from a year earlier.

Thing Seven: Paternity Testing Made Easy: Prenatal paternity tests that involve only the use of blood samples, and not invasive procedures, are gaining scientific acceptance, The New York Times writes: "Besides relieving anxiety, the test results might allow women to terminate a pregnancy if the preferred man is not the father — or to continue it if he is."

Thing Seven And One Half: Happy Birthday, Jaws: On this day in 1975, Steven Spielberg's film "Jaws" was released. It was the first-ever summer blockbuster, and one of the few summer blockbusters that also happened to be a great movie.

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Calendar Du Jour:

Economic Data:

12:30 p.m. ET: FOMC Rate Decision

2:15 p.m. ET: Fed Chairman Ben Bernanke press conference

Corporate Earnings:

After Market Close:

Bed Bath & Beyond

Red Hat

Heard On The Tweets:

@mattyglesias: Dimon says the difference between gambling and investing is that "the house wins" but this is also true of investing.

@moorehn: Jamie Dimon is smart-very smart. These hearings show how few lawmakers can match wits with the top bankers. That's why regulation fails.

@zerohedge: "JPM's bankers will go to Singapore and China if it is not allowed to rehypothecate assets up to an infinite number of times in London"

@ddayen: Dimon: Regulation should happen in "closed rooms, I don't think you make progress in open hearings like this" easier 2 write regs in private

@neilbarofsky: LOL. Dimon once again essentially claims that Ina Drew's $15mm CIO salary influenced by recruitment and mentoring.

@LaMonicaBuzz: Psst. Did you hear Germany is/isn't in favor of eurobonds and Greece will/won't form new government and Spain will/won't need full bailout?

-- Calendar and tweets rounded up by Khadeeja Safdar.

And you can follow us on Twitter, too: @markgongloff and @byKhadeeja

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