Who's Afraid of the Big, Bad Fed?

The financial world is about to turn its attention to the regular meeting of the Fed's open market committee, which wraps up tomorrow. If share prices of the big four banks in today's trading are any indication, though, it seems investors aren't too anxious about the results one way or another.

They don't seem too anxious about much at the moment, come to think of it. The Dow's essentially flat in lazy summer trading, and the same could be said for the major financials.

For example, JPMorgan Chase (NYSE: JPM  ) is down about $0.40 at the moment, or less than 1% from yesterday's close. Investors might be chewing over yesterday's news that the company is strongly considering some kind of divestment of its commodities business. This is a glass half-empty/half-full situation, which is reflected in the hardly budging share price -- commodities are a sturdy and occasionally lucrative business, yet they can require a lot of manpower and resources, and hence be expensive to maintain.

The timing is hardly accidental, though. Over the past few months, regulators have been cranking up their oversight of the commodity dealings of big banks. This morning, JPMorgan Chase announced it's dodged a bullet by agreeing to pay a $410 million settlement to the Federal Energy Regulatory Commission. That agency had been investigating the electricity trading activities of a subsidiary, J.P. Morgan Ventures Energy Corporation. The glare of government scrutiny is getting hotter, and it's becoming increasingly unpleasant to withstand the heat.

JPMorgan Chase isn't the only big gun unloading some of its arsenal. Wells Fargo (NYSE: WFC  ) announced last week that one of its subsidiaries, Wells Fargo Ventures, was retreating from a series of joint ventures. This being Wells Fargo, those JVs are naturally involved in mortgage lending. The bank said its reason for doing so is, yes, government regulation. According to the company, "changes in state and federal oversight have increased the complexity and difficulty of operating mortgage joint ventures." Keeping it simple, stupid, will probably not have a huge impact on the bank, as the JVs contribute only around 3% to its overall mortgage production.

All is relatively quiet on the Bank of America (NYSE: BAC  ) and Citigroup (NYSE: C  ) fronts. B of A is unchanged at $14.52 a pop, while Citigroup's added a little over a dime ($0.14), or barely 0.3% on the day. The only news marginally of interest from the two is on a court of a much different type -- this year's Citi Open Tennis Tournament is in full swing.

Coincidentally, the tourney's home is Washington, DC. Maybe those Fed governors and energy regulators could catch a little of the action between rounds of policy crafting and commodities trading scrutiny.

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