JPMorgan Chase today reported that profits rose in the second quarter for the first time since 2007. Earnings at the second-largest U.S. bank climbed to $2.7 billion, up from $2 billion a year earlier. Record fees from investment banking helped offset rising mortgage and credit-card defaults. Results also reflect last month’s replayment of $25 billion in TARP funds. JPMorgan is the largest bank to have repaid its government loans in full.

Meanwhile, in Washington, one of the architects of the bank bailout got grilled by Congress. Testifying before the U.S. House Committee on Oversight and Government Reform, former Treasury Secretary Henry Paulson admitted he pressed Bank of America to complete the acquisition of Merrill Lynch in December, but said he acted appropriately in doing so. Paulson acknowledged he played hardball with BofA Chief Executive Kenneth Lewis, telling him that backing out would show a “colossal lack of judgment”. Paulson warned Lewis that the Federal Reserve could have him and the rest of the BofA board removed if the deal was aborted.

Sources: Bloomberg, Reuters

U.S. Foreclosure Filings Hit Record

Foreclosure filings hit a record 1.5 million in the first half of 2009, reported RealtyTrac on July 16. That means that one out every 84 households in the U.S. received a filing. The rising tide of foreclosures will continue to put downward pressure on home prices, analysts warned.

Sources: Bloomberg

RIM Settles Patent Dispute

The BlackBerry maker announced on July 16 that it will pay Visto Corp. a href=” http://www.networkworld.com/news/2009/071609-blackberry-maker-settles-patent-suit.html”> $267.5 million to settle a three-year patent infringement dispute. As part of the deal, RIM will receive a perpetual license on all Visto patents, plus a transfer of some of the company’s intellectual property.

Sources: NetworkWorld

CIT Could File Bankruptcy Friday

After conceding on July 15 that it faced no prospects of a hoped-for government bailout, business lending giant CIT may be forced to seek bankruptcy protection as soon as Friday. After nearly a week of intense negotiations, the U.S. government apparently decided that CIT was not “too big to fail” and has chosen to let the market run its course.

Source: BusinessWeek

German Government May Withdraw Support for Opel Deal

Even as news reports suggest that Belgian holding company RHJ International is closing in on a deal to acquire GM Europe’s Opel and Vauxhall units, the German government—which earlier backed a bid from auto parts giant Magna International—hinted strongly on July 15 that it might withdraw its offer of $6.3 billion in loan guarantees for any party other than Magna. On July 16, a government spokesman denied reports that the Economy Ministry had shifted its stance in favor of a bid from RHJ.

Sources: Wall Street Journal, Reuters

Porsche and Volkswagen Close To a Deal

Meanwhile, the drawn-out ownership battle between Porsche and Volkswagen may finally be headed for a resolution. News reports July 16 said that the powerful Porsche and Pieche clans have agreed to the outlines of a plan that would hand control of Porsche to VW and let the Qatari Investment Authority acquire nearly $7 billion worth of Porsche shares and VW options. The supervisory boards of both automakers are scheduled to meet July 23 to discuss the plans. But a Porsche spokesman on July 16 denied reports that an agreement has been reached among the warring family factions over a deal.

Sources: Wall Street Journal, Reuters

Downbeat Results for Nokia and Sony Ericsson

Mobile phone giant Nokia announced grim results July 16, with second quarter revenues down 25%, to €9.9 billion ($13.9 billion) and earnings down more than 65%, to €380 million. The company repeated its prediction that the handset market will shrink 10% this year and warned that its market share and profit margins are likely to decline in 2009. Nokia shares dropped as much as 9% on the news. Also on July 16, smaller rival Sony Ericsson reported a second quarter loss as the number of phones it shipped in the second quarter fell by nearly half compared with a year earlier and it continued to lose market share.

Sources: Bloomberg, MarketWatch

Google Likely Faced Tougher Second Quarter

Analysts say that the Internet giant, set to announce earnings July 16, likely will report tepid revenue growth amid a weak advertising market and stronger competition from Microsoft. Investors will scrutinize Google’s paid-click advertising, which grew 17% in the first quarter, for signs of the company’s future prospects and broader clues about the economy.

Source: Reuters

China’s Economic Growth Accelerates to 7.9%

On the back of growing exports and a $585 billion stimulus plan, China’s economy grew at a 7.9% annualized rate in the second quarter, exceeding forecasts. Analysts say the strong performance—which takes China close to its stated goal of achieving 8% growth in 2009—confirm that the economy bottomed out in the fourth quarter of last year.

Sources: Bloomberg, Guardian

Rio Tinto Accused of Bribing Chinese Steel Industry

In a sharp escalation of a dispute between Anglo-Australian mining giant Rio Tinto and the Chinese government, the China Daily newspaper alleged July 15 that Rio had bribed representatives of 16 Chinese steel companies during negotiations over iron ore prices. The company hasn’t responded to the claim, but on July 16 the Australian Financial Review reported that Rio has evacuated from China staff involved in researching the iron and steel industry.

Sources: Financial Times, Reuters

Wal-Mart Mulls “Green” Labels to Help Shoppers

The world’s largest retailer is set to announced a plan on July 16 to label products in its stores with information about their environmental impact, including their carbon footprint and contribution to air and water pollution. A kind of green equivalent to nutritional labels on food, the tags could help concerned shoppers shift their spending to more eco-friendly products.

Sources: New York Times, AP/Los Angeles Times

Mazda Surges on Report of Toyota Hybrid Hookup

Shares in Japanese automaker Mazda surged July 16 in Tokyo trading on reports that it is nearing a deal to buy hybrid auto components from Toyota. Toyota issued a denial of the report, but Mazda shares held onto their gains.

Source: MarketWatch

Lufthansa Looks to Save €1 Billion by 2011

Facing the same financial pressures from weaker demand and higher fuel prices that have befallen rivals around the world, the German airline giant says it will unveil an aggressive cost-cutting program that aims to save €1 billion ($1.4 billion) in operating expenses by the end of 2011.

Source: Wall Street Journal