A year after announcing that it would pay roughly $2.6 billion to settle with state and federal regulators over faulty MBS, Morgan Stanley’s taking an additional $600 million hit, putting the figure at $3.2 billion—no chump change, but still well south of the $16.6 billion Bank of America paid in its 2014 settlement – NYTimes and Bloomberg and Law360

Law360 notes that despite the recent Yates Memo’s promise to hold individuals (and not just the companies they work for) accountable for financial misconduct, the Morgan Stanley settlement contains no hint of individual criminal prosecution – Law360

Today’s international culprit for down markets around the globe? 2 points if you said Sweden, whose Riksbank made waves by lowering its short-term interest rate to minus 0.5 percent and heightening “fears that brazen actions by central bankers are now making things worse, not better” – NYTimes

But courage! Maybe, just maybe, Friday brings a little bounce-back news – Bloomberg

Squeaky wheels Carl Icahn and John Paulson have agreed to drop their loud opposition to AIG’s streamlining (vs. breakup) plan in exchange for 2 board seats – WSJ and NYTimes

Day 2 of Dr. Yellen Goes to Washington, and speaking before the Senate this time, the Fed chair acknowledged “convulsions in financial markets” in recent months but refused to back down from the Fed’s anticipated rate hike plans – NYTimes

Markets, meanwhile, are viewing the state of the US economy in a very different light, prompting some concerns that the markets themselves may help pull the US economy into a recession – NYTimes

Things are not looking good for the upstart IEX exchange after Bats Global Markets Inc. has withdrawn its support the “Flash Boys”-inspired market – Bloomberg

More on the current difficulty facing Deutsche Bank which is facing a difficult slog in three distinct areas: shoring up its balance sheet, producing dependable profits, and satisfying frustrated regulators.  John Cryan’s going to be earning that bonus this year – NYTimes

A non-astrophysicist explanation about the amazing news about gravitational waves—yet another Einstein theory that scientists have just now been able to prove – NYTimes

Enjoy Presidents’ Day.  We’ll see you back here Tuesday morning.