US To Sue Major Banks Over Mortgage Debt

The U.S. Federal Housing Finance Agency plans to sue "more than a dozen" major banks for billions of dollars over alleged misrepresentation of mortgage-backed securities sold before the housing bubble burst, the New York Times reported late Thursday. Targets of the planned lawsuits include Bank of America Corp. (BAC) , JPMorgan Chase & Co. (JPM) , Goldman Sachs Group Inc. (GS) and Deutsche Bank AG (DB) , the report said, citing three unidentified individuals briefed on the matter. The suits will be filed by Tuesday at the latest, shortly before a deadline expires for the housing agency to file claims, the report said.

Acapulco Teachers Strike To Protest Extortion

ACAPULCO, Mexico (AFP)--Around 600 teachers in Mexico's Pacific resort city of Acapulco went on strike this week after being subjected to extortion, local authorities said Thursday.

Teachers in four areas of the port city, which has been rocked by gangland- style violence in recent years, received anonymous letters seeking half their salaries in return for personal security, said Julio Bernal , the city's top education official.

Teachers in around 80 of Acapulco's 140 schools were taking part in the action, authorities said.

Acapulco's teachers have received several hundred threatening letters in recent weeks, a secondary school teacher who declined to be named said.

"We're in a state of psychosis because we haven't seen some of our colleagues and we don't know if they've been the victims of something or if they're in hiding," she said.

The head of education for Guerrero state, where Acapulco lies, asked the teachers to return to work while an investigation was underway.

The legendary resort city of Acapulco, some 250 miles southwest of Mexico City , is one of the worst hit areas in a wave of drug-related violence across Mexico.

An Unusual Friendship: Stocks, Bonds Rally At The Same Time

--Equities and Treasurys are seeing simultaneous rallies
--But stocks and bonds are driven by two different expectations
--Ahead of next Fed meeting, bad data could fuel optimism for stimulus

NEW YORK (Dow Jones)--Stocks and Treasurys are thriving at the same time, contrary to their typical relationship of traveling in opposite directions. The departure from normal market movement reflects just how divided investors currently are about the U.S. economy's health.

Volatility Protection Getting Cheaper As Far As The Eye Can See

As short-term volatility slides, the VIX is falling back in line with VIX future premiums, a reflection that demand for short-term disaster protection roughly matches demand for longer-term insurance.

Futures on the  CBOE's  Volatility Index are "flattening" as the VIX falls 1.7% to 31.08. This means that "fear" about the next 30 days is roughly in line with "fear" about each month through May.

Typically, "long-term fear outweighs fear over the next 30 days," says OptionsPit's  Mark Sebastian . In an unusual move earlier this month,  S&P's  US credit downgrade pushed the VIX to48, well above its futures readings, meaning investors bid up the price of short-term options protection relative to longer- dated protection.

By Mark Gongloff

Update: Bank Of Canada Injects C$945M Into Financial System Thursday

 Update (15:43PM EST) :

--Liquidity injection increased
--One-day repo transactions done to lower overnight rate
--Spokesman says they are "standard operations"

Money Flow Table For Major U.S. Indexes and Stocks 01/09/2011

MONEY FLOW - UPTICK/DOWNTICK TRADING DOLLAR VOLUME Sep 01,2011 12:05 PM