The U.S. said it is investigating whether soaring oil prices are being unfairly manipulated, the papers report.

The Wall Street Journal on A1 calls the announcement “unusual” because the investigation (or sixty investigations, it says) is still under way and The Washington Post on D1 quotes the regulator, the Commodity Futures Trading Commission, as saying it took the “extraordinary step” of disclosing the probe “because of today’s unprecedented market conditions.” The New York Times on C4 says the regulators are under “enormous political pressure,” including from a letter the Los Angeles Times says was sent last week by twenty-two senators.

Never fear, consumers! The regulators, pushed by politicians, are looking for scapegoats. The WSJ:

Many economists and oil-industry executives say possible shenanigans by market traders have little or nothing to do with the high price of oil. They maintain that the rise is mainly due to fundamental factors such as rising demand, constrained supplies and the weak dollar.

Still, suspicions have lingered that speculators have helped drive oil prices higher. At a series of congressional hearings over the past month, energy consumer groups and some financial insiders have contended that large investments in commodity futures by hedge funds and pension funds are distorting prices.

But, alas, the LAT finds an unnamed CFTC official who admits there may be no heads to mount on pikes.

The commission’s investigation is unlikely to be as deep or sweeping as Democrats have demanded. A commission official, who spoke on condition of anonymity because he is not authorized to discuss ongoing investigations publicly, said the commission’s economists were fairly sure that there had been no criminal manipulation of the market.

It appears certain that speculators are driving up the cost of oil, betting that it’s becoming more scarce though demand keeps on chugging along—about as safe a bet as you can find these days. But as the Post says, speculation “is not illegal.”

“Clean coal” ain’t easy

The Times fronts a story saying the move toward “clean coal” is running into some big problems. Namely, making it clean means scrubbing the carbon emissions when it’s burned and shooting them back into the ground, a process called “sequestration.” And the details about how to do that and who’s liable if it comes back up through the ground like an invisible bubbling crude, still are far from being determined.

Coal is abundant and cheap, assuring that it will continue to be used. But the failure to start building, testing, tweaking and perfecting carbon capture and storage means that developing the technology may come too late to make coal compatible with limiting global warming…

Plans to combat global warming generally assume that continued use of coal for power plants is unavoidable for at least several decades. Therefore, starting as early as 2020, forecasters assume that carbon dioxide emitted by new power plants will have to be captured and stored underground, to cut down on the amount of global-warming gases in the atmosphere.

The Times says the cancellation of major projects in Illinois and several other states leaves “only a handful of small projects” and that “most of this work has come to a halt.” It also says another type of carbon saver (compared to a typically, dirty coal plant, of course) called gasification is in trouble, too.

Oil boom not always a boon

In other energy news, the WSJ fronts news that a BP joint venture in Russia is running into problems with its partners, who want the venture’s CEO switched. The paper says the outcome of the dispute will reflect just how much Russia’s economic policies have changed under new President Medvedev from Putin, who moved toward nationalizing its oil industry.

And even the Arabs are feeling the woes of the oil boom. The WSJ on A9 says record oil prices are “a blessing and a curse” for Gulf countries, which are getting hit with high inflation. Rents were up 16 percent in Dubai last year, while overall Saudi prices jumped 10.5 percent.

The Journal reports on A10 that riders are flocking to public transit to avoid putting gas in their cars, but the systems are getting hit by high fuel prices, too. Reuters says MasterCard showed 5.5 percent less gas pumped on its cards from a year ago.

Banking on failure

The Financial Times fronts a report on the Federal Deposit Insurance Corporation, a banking regulator, that raises more concerns about the industry’s health, and the NYT puts it on C8.

The NYT says banks raised their loan-loss reserves to $37 billion, the most in twenty years, but that still wasn’t enough to keep a key coverage ratio from falling to its lowest since 1993.

Federal banking regulators are concerned banks’ credit losses will worsen as problems spread from the housing sector to other areas of the economy. Borrowers are now falling behind on payments on auto, credit card and other types of consumer debt. Home values, meantime, continue to decline. A report released this week showed housing prices fell about 14 percent nationwide in the first quarter.

Federal regulators are bracing for what could be several dozen bank failures as the industry’s troubles mount. Real estate and construction loan losses have been growing. Home equity loans are souring at levels far higher than expected. And many banks, especially smaller institutions, have been slow to recognize the extent of their woes.

UBS ready to roll over

The former UBS banker who’s been in the news recently after his indictment for helping billionaires evade taxes, will plead guilty in June and turn state’s evidence. That tightens the screws on UBS, which the Journal on C1 says is discussing settling with the U.S. by giving prosecutors the names of its American clients, a no-no for a Swiss bank.

Despite an information-sharing agreement with the U.S. in 2000, Swiss banks continued to secretly manage the assets of wealthy Americans, according to banking documents, court filings and several people familiar with the arrangements. To keep that work secret from U.S. authorities, the Swiss banks used shell companies and sometimes directed their American customers to put their accounts in Liechtenstein.

The arrangement—outlined in a legal analysis prepared in 2000 by the Swiss Bankers Association and in a separate set of LGT documents—involved setting up companies and trusts to act as the nominal owners of the assets, thereby shielding the identities of U.S. citizens seeking to shelter the funds from the IRS.

The NYT scoops on C7 that Bradley Birkenfeld, the ex-banker, “will implicate others at UBS and other financial institutions,” according to a source. Fun!

But can the U.S. get its hands on the alleged wrongdoers? The FT reminds readers of its scoop that UBS is advising the bankers not to travel to the U.S. to avoid getting swooped up like Birkenfeld.

‘You screwed us, Jimmy’

Bear Stearns finally came to its end yesterday after eighty-five years, as shareholders voted to accept the $10 a share deal from JPMorgan Chase. Apparently, folks couldn’t wait to wash their hands of the mess: the Journal on C1 says the meeting “lasted about 11 minutes.”

Chairman and ex-CEO Jimmy Cayne showed up and even offered a perfunctory apology to shareholders. It was met with “dead silence,” the NYT reports.

“That which does not kill you makes you stronger,” he added. “And at this point we are all like Hercules.”

Again, his words were met with silence.

“JPMorgan is a great organization,” he concluded. “There are better days ahead.”

And then the meeting, which lasted no more than 10 minutes, was over and Bear’s employees headed quietly off to work.

A Quote of the Day Sampler from the “carnival like atmosphere” of T-shirts and signed paintings outside the company’s headquarters:

“You screwed us Jimmy.”

“I worked for Bear Stearns 20 years and all I got was a Cayne-ing.”

“Hubris—thy name is Jimmy!”

We like this best of all, from the NYT:

Entrepreneurs hawked T-shirts with pictures of Mr. Cayne playing a violin on the 19th hole of a golf course.

Discredit bureau

The LAT reports that credit bureau TransUnion Coproration has signed the largest class-action settlement in history. TransUnion had sold lists of consumers based on their credit files to others in violation of federal law.

The settlement will give consumers six months of free access to their credit reports and credit scores—a service it normally sells for $60 or more.

Rachael Ray hates our freedoms!

The Associated Press reports on a bone-headed move by Dunkin’ Donuts, which caved into loony right-wing blog attacks that claimed Rachael Ray (!) was promoting jihadism by wearing a Palestinian-style kaffiyeh while she holds “an iced coffee while standing in front of trees with pink blossoms.”

We’re sorry, but this doesn’t exactly scream “kill the infidels” to us.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.