Europe Banks Fail to Cut as Draghi Loans Defer Deleverage (Bloomberg)
European banks pledged last year to cut more than $1.2 trillion of assets to help them weather the sovereign-debt crisis. Since then they’ve grown only fatter. Lenders in the euro area increased assets by 7 percent to 34.4 trillion euros ($45 trillion) in the year ended July 31, according to data compiled by the European Central Bank. … “Thanks to Draghi, the massive shrinkage that was looming six months ago across Europe isn’t happening — at least not yet,” said Nikolaos Panigirtzoglou, an analyst at JPMorgan Chase & Co. in London. “That’s what the economy needed on the short term.”

Crude Oil’s Quick Fall Leaves Trail of Queries (WSJ)
Oil prices dropped more than $3 in less than a minute late in the trading day on Monday, just as trading volume spiked. The move also dragged down prices of gold, copper and even the euro. … The move sparked talk of an erroneous trade—called a “fat-finger” error in industry parlance—or a computer algorithm gone awry.

Morgan Stanley infrastructure fund hit by Volcker rule (Reuters)
A U.S. regulation that limits how much of its own capital a bank can put at risk is causing headaches for Morgan Stanley as it prepares to raise a new multi-billion-dollar global infrastructure fund, people familiar with the situation said. The regulation, called the Volcker rule, puts a cap on the amount of capital that Morgan Stanley can pledge to the new fund. That means senior executives at Morgan Stanley Infrastructure Partners will have to make do with a smaller share of the fund’s profits, the sources said. While the majority of the executives have so far accepted the new reality and Morgan Stanley is in talks to increase the fund managers’ share of profits, a few have left the bank.

A Mighty Wind: Sizing Up Fund Manager’s Sway (WSJ)
The Wall Street Journal reviewed the performance of 22 stocks after they were mentioned by [David] Einhorn in television interviews, investor conferences, other public events and letters to Greenlight investors. The nine companies where analysts and investors saw his comments as negative fell by a median of 4.9% on the same day, the analysis shows. Thirty days later, the median decline was 13%. … “It’s a pathetic indication of how shallow the stock market is right now, how uninvested people are,” says Tim Ramey, an analyst at D.A. Davidson & Co.

Romney Tells Millionaire Donors What He REALLY Thinks of Obama Voters (MoJo)
During a private fundraiser earlier this year, Republican presidential candidate Mitt Romney told a small group of wealthy contributors what he truly thinks of all the voters who support President Barack Obama. He dismissed these Americans as freeloaders who pay no taxes, who don’t assume responsibility for their lives, and who think government should take care of them. Romney went on: “[M]y job is is not to worry about those people. I’ll never convince them they should take personal responsibility and care for their lives.”

Bigamist busted: first wife discovers second wife when Facebook suggests her as possible friend (NYDN)
A Washington man pleaded guilty to bigamy after his wife learned he was married to a second woman by looking at Facebook’s “people you may know” notification. The second woman’s profile picture showed her with the first bride’s husband standing near a wedding cake.
Read more »

Draghi Euro Humbles Thought Leaders Seeing End of Union (Bloomberg)
“Over the years, global investors have learned that it does not pay to fight the Fed,” Holger Schmieding, chief economist at Berenberg Bank in London, said this month in an interview. “Those betting on the demise of the euro may now have to realize that the ECB is as mighty as the Fed.”

Probe focuses on JPMorgan’s monitoring of suspect transactions (Reuters)
A U.S. regulatory probe of JPMorgan Chase & Co’s anti-money laundering systems is focusing on potential lapses in how the largest U.S. bank monitors suspect money transactions, according to people familiar with the situation. The probe appears to be focused on the systems and personnel that JPMorgan uses to safeguard against illicit money flows.

QE3 hit by mortgage processing delays (FT)
The Federal Reserve’s attempt to push aid into the heart of the US economy is being blunted by banks struggling to process mortgage applications fast enough, keeping rates on home loans elevated, according to the largest lenders. … “In the very near term [QE3] has virtually no transfer mechanism whatsoever to the customer,” said one executive at a leading lender, who requested anonymity. “Originators are massively backlogged in terms of origination volumes.”

Occupy Wall Street Kicks Off One-Year Anniversary With Discussions, March, and Arrests (DI)
Occupy Wall Street kicked off its one-year anniversary on Saturday with an afternoon of group discussions in sunny Washington Square and an evening march to Zuccotti Park. To those who have followed the movement, much was familiar: Chants of “Whose street? Our street!” and “We are the 99 percent!”; long talks about ideas and tactics conducted via the People’s Mic; and, eventually, shouts of “Shame! Shame! Shame!” directed at the dozens of NYPD officers assembled around the protest. … By the end of the night, 18 protesters had been arrested — seemingly at random.

U.S. to File W.T.O. Case Against China Over Cars (NYT)
The Obama administration plans to file a broad trade case at the World Trade Organization in Geneva on Monday accusing China of unfairly subsidizing its exports of autos and auto parts, a senior administration official said late Sunday, in a move with clear political implications for the presidential elections less than two months away. The W.T.O. case accuses China of providing at least $1 billion worth of subsidies from 2009 to 2011 for exports of autos and auto parts.

The Return of Facebook’s Winklevoss Twins (WSJ)
“The band is back together,” Tyler Winklevoss said over lunch at Manhattan’s Ace Hotel with his brother Cameron and Mr. Narendra.

Shoe-loving poker player Beth Shak starting own shoe line (NYP, related)
“My almost-18-year-old daughter wasn’t happy having a mom that traveled and was gambling,” Shak told The Post. “She kept saying, ‘Why don’t you design a shoe line?’ and one day I was like, ‘You know, she’s right.’” Shak, who has competed in the World Series of Poker, has a collection of some 1,200 pairs of shoes that she keeps in password-protected closets in her home in Bryn Mawr, Pa. The collection includes about 700 Christian Louboutin pairs and is valued at nearly $1 million. Her ex-husband, former New York hedge-fund manager Daniel Shak, sued her over the shoes earlier this year, claiming she didn’t disclose their value in their divorce. But the suit was dropped over his laughable claim that he had never noticed her museum-sized collection because it was in a “secret room.” “He is saying he didn’t know the closet in our master bedroom existed,” Beth Shak said at the time. Read more »

Ray Dalio: US Economy Out Of Intensive Care (Reuters)
Hedge fund titan Ray Dalio said the U.S economy had come out of the “intensive care unit,” but he warned against any quick move to “austerity” budget measures. “We were in the intensive care unit,” Dalio, who runs the $120 billion hedge fund Bridgewater Associates, told more than 200 guests at the Council of Foreign Relations in New York on Wednesday. “We are largely healed and largely operating in a manner that is sustainable if we don’t hit an air pocket.” Dalio said a major challenge for U.S. politicians will be dealing with the so-called “fiscal cliff,” the year-end expiration of the Bush-era tax cuts and previously agreed-upon cuts in defense spending and social programs, a combination which some economists say could lead to a recession. Dalio sided with economists who worry that a sharp reduction in government spending could lead the United States back into recession. “We can’t just worry about too much debt,” Dalio said. “We have to worry about too much austerity.”

German Court Clears Rescue Fund (WSJ)
Germany’s highest court cautiously approved the creation of the euro zone’s permanent bailout facility, but insisted that the country keep its effective veto on all of the vehicle’s decisions, a ruling that removes a question mark over two crucial elements of the euro zone’s plans for mastering its debt crisis.

Treasury Backs Plan For Standard Chartered Settlement (NYT)
The lawyers approved a potential prepayment amount this week, a crucial step to a final agreement, though it will be much smaller than the $340 million the bank had to pay to New York State’s top banking regulator in a related case, according to three officials with direct knowledge of the settlement talks. The differing penalties stem from determinations by federal authorities and Manhattan prosecutors that the bank’s suspected wrongdoing was much less extensive than the state banking regulator’s claims that Standard Chartered had schemed with Iran to hide from regulators 60,000 transactions worth $250 billion over a decade.

Insiders Get Post IPO Pass (WSJ)
Wall Street underwriters increasingly are allowing corporate insiders to sidestep agreements that prevent them from quickly selling shares after initial public offerings. In the latest instance, several Wall Street banks on Wednesday allowed early investors and management of ExactTarget Inc. to sell more than seven million shares of the online marketing company a week ahead of the planned end of a “lockup” agreement. Under lockup pacts, underwriters bar company insiders from selling their shares, usually for 180 days after an IPO. The lockup restricts the supply of shares, helping buoy IPO prices; releasing more shares on the market can keep a lid on stock prices.

Anna Gristina sits down with TV shrink Dr. Phil, says she won’t talk to prosecutors about associate (NYDN)
The Soccer Mom Madam’s little black book has been whittled down to a single name. In her first major interview since being released from Rikers Island in June, Anna Gristina dishes to TV talk show shrink Dr. Phil about how prosecutors have hounded her for dirt on a just one associate. “They have an agenda to get me to talk about a certain person,” she told the daytime doc. Gristina refused to reveal the mystery man, or woman. Oprah’s former head-shrink sidekick, who sat down at the kitchen table in Gristina’s Monroe, N.Y. farmhouse, asked why the accused flesh-peddler didn’t just save herself and give prosecutors the information they want. “I have a deep sense of loyalty and I’m Scottish.” Gristina denied the criminal allegations during the teary interview, maintaining she was developing an online dating site where married men could meet single women. Read more »

Before Scandal, Class Over Control Of Libor (WSJ)
At an April 25, 2008, meeting with officials at the Bank of England, Angela Knight, head of the British Bankers’ Association, argued that the London interbank offered rate had become too big for her organization to manage, according to minutes of the meeting and a person who was there. Her suggestion went nowhere. Even as Libor’s deep flaws became apparent, regulators resisted a greater oversight role, the BBA’s member banks clung to control of Libor, and BBA executives bickered with one another over whether to hang onto the lucrative business, according to people who were involved and a Wall Street Journal review of hundreds of pages of emails, meeting minutes and other documents.

Treasury Sells Big Chunk Of AIG Stock (WSJ)
The Treasury sold about 554 million shares to the public at $32.50 apiece for a total of $18 billion in one of the biggest global follow-on stock offerings since the financial crisis. The offering was the Treasury’s fifth sale of AIG stock since early last year and reduced the government’s stake in the company to about 22% from 92% in early 2011. The price set Monday was above the government’s cost basis of $28.73 a share, meaning taxpayers will earn a profit on the sale.

New iPhone could boost U.S. GDP by up to 0.5 percent, JP Morgan says (Reuters)
“Calculated using the so-called retail control method, sales of iPhone 5 could boost annualized GDP growth by $3.2 billion, or $12.8 billion at an annual rate,” Feroli wrote. That 0.33 percentage-point boost, he added, “would limit the downside risk to our Q4 GDP growth protection, which remains 2.0 percent.” Feroli laid out his math. J.P. Morgan’s analysts expect Apple to sell around 8 million iPhone 5s in the fourth quarter. They expect the sales price to be about $600. With about $200 in discounted import component costs, the government can factor in $400 per phone into its measure of gross domestic product for the fourth quarter. Feroli said the estimate of between a quarter to a half point of annualized GDP “seems fairly large, and for that reason should be treated skeptically.” But, he added, “we think the recent evidence is consistent with this projection.”

Geithner Holds His Own on Triathlon Front (Dealbook)
Geithner participated in the 7th annual Nation’s Triathlon to Benefit the Leukemia & Lymphoma Society on Sunday, swimming, biking and running his way through the nation’s capital. The race involved a 1.5-kilometer swim in the Potomac River, a 40-kilometer bike ride through the city and a 10-kilometer run. And Mr. Geithner, 51, can boast of a pretty good finish to his race, completing the course in 2:33:07. He placed ninth in his division, men aged 50 to 54, according to the race’s Web site. Individually, he completed the swim in 29:10, the bike ride in 1:13:52 and the run in 45:51.

New Yorker Cartoon Dept Temporarily Banned From Facebook For Violating ‘Nudity And Sex’ Standards (Mediaite)
In a post entitled “Nipplegate,” the New Yorker‘s cartoon editor, Robert Mankoff, detailed how the magazine’s cartoon department became temporarily banned on Facebook: a particular Mick Stevens cartoon violated the social networking site’s community standards on “Nudity and Sex.” Stevens redrew the cartoon, he said, “but the gain in clothes caused too great a loss in humor.” He then noted that Facebook has different standards when it comes to males and females. As “the guidelines say, ‘male nipples are ok.’ It’s the ‘female nipple bulges’ that are the problem.” Read more »

US To Slash Stake In AIG (WSJ)
The U.S. Treasury Department said it will sell $18 billion of American International Group Inc., slashing its stake in the New York company by more than half and making the government a minority shareholder for the first time since the financial crisis was roaring in September 2008.

Banks Rethinking Executive Compensation (WSJ)
At J.P. Morgan, the biggest U.S. bank by assets, directors are considering lower 2012 bonuses for Chief Executive James Dimon and other top executives in the wake of a multibillion-dollar trading disaster, said people close to the discussions. But they also are grappling with the question of how to do that without drastically reducing the executives’ take-home pay, the people said. More than 93% of Mr. Dimon’s $23 million in compensation last year came from either stock- or cash-based bonuses. Citigroup’s board, meanwhile, is expected to decide this fall how to fine-tune next year’s compensation plan to win broader support among investors, people familiar with the situation said.

Former UBS trader faces trial over $2.3 billion losses (Reuters)
Investment banker Kweku Adoboli, who was arrested a year ago when the huge losses came to light, has pleaded not guilty to two charges of fraud and two of false accounting related to disastrous trades that UBS says were unauthorized. “Given how serious the consequences of the incident were, we must assume that UBS’s culture and practices will be examined during the course of the trial,” UBS chief executive Sergio Ermotti told the bank’s staff last week. “As uncomfortable as the entire trial will be for UBS, it will show us what the consequences are when misconduct occurs or when individuals do not take their responsibilities seriously,” he wrote in an internal message published on its website.

Alligators, Bearded Dragons Among Wild Animals Seized in Brooklyn Raid (DNAI)
Police seized 13 exotic animals, including alligators, bearded dragons, and a tarantula in the raid of a public housing unit Friday, police said. On Friday afternoon at 1:30 p.m., Animal Care and Control officers removed five pythons and a boa constrictor, as well as two alligators, two bearded dragons, a gecko, a scorpion, and a tarantula, from the fifth-floor apartment of a Crown Heights public housing complex called the Weeksville Houses, police said, as part of an ongoing investigation. Read more »

Bondholders Put On Speed Dial (WSJ)
At Wall Street giants Morgan Stanley and Goldman Sachs, the quarterly earnings calls for stock analysts tend to get most of the attention. But another kind of call, this one for bondholders, is moving to the fore. The New York securities firms this summer for the first time held conference calls targeting fixed-income investors. Morgan Stanley and Goldman are seeking out new buyers for their debt in an effort to lower interest rates that are now higher than what industrial companies pay.

Investors Expect Libor To Be Replaced Within Five Years (Bloomberg)
Forty-four percent of those responding to a quarterly Bloomberg Global Poll said the London interbank offered rate, known as Libor, will be supplanted by a more regulated model within five years. Thirty-four percent predicted the rate will continue to be set by banks in the current fashion, while 22 percent said they didn’t know.

Greek Decline Sharper Than Expected (WSJ)
Greek gross domestic product contracted 6.3% on the year in the second quarter. That is a revision from the 6.2% drop reported in the provisional estimate last month and compares with a 6.5% fall in the first quarter and a contraction of 7.3% in the second quarter of 2011.

Jobless Greeks Resolved to Work Clean Toilets in Sweden (Bloomberg)
As a pharmaceutical salesman in Greece for 17 years, Tilemachos Karachalios wore a suit, drove a company car and had an expense account. He now mops schools in Sweden, forced from his home by Greece’s economic crisis. “It was a very good job,” said Karachalios, 40, of his former life. “Now I clean Swedish s—.” Karachalios, who left behind his six-year-old daughter to be raised by his parents, is one of thousands fleeing Greece’s record 24 percent unemployment and austerity measures that threaten to undermine growth. The number of Greeks seeking permission to settle in Sweden, where there are more jobs and a stable economy, almost doubled to 1,093 last year from 2010, and is on pace to increase again this year. “I’m trying to survive,” Karachalios said in an interview in Stockholm. “It’s difficult here, very difficult. I would prefer to stay in Greece. But we don’t have jobs.”

Private Equity Tests Pension Funds Patience (WSJ)
A new report by a consultant to the California State Teachers’ Retirement System, or Calstrs, shows that returns from large U.S. buyout funds are lagging behind many of the pension’s internal benchmarks.

Vladimir Putin Muses On The Benefits Of Group Sex (Telegraph)
President Vladimir Putin of Russia has mused that group sex is better than one-on-one intercourse because participants can take a break. Mr. Putin made the observation on Thursday in his first interview since his inauguration in May, with the Kremlin-controlled, English-language RT television channel. “Some fans of group sex say that it’s better than one-on-one because, as with any collective work, you can skive off,” he said. The comment came after the Russian leader had spoken about an orgy that was staged in Moscow’s state biology museum in 2008 which involved Nadezhda Tolokonnikova, 22, one of three feminist activists of the Pu**y Riot group who were jailed for two years for hooliganism last month after a politically charged trial. Read more »

Draghi Says Officials Agree On ECB Unlimited Bond-Buying (Bloomberg)
The program “will enable us to address severe distortions in government bond markets which originate from, in particular, unfounded fears on the part of investors of the reversibility of the euro,” Draghi said at a press conference in Frankfurt after the ECB held its benchmark rate at a record low of 0.75 percent. “Under appropriate conditions, we will have a fully effective backstop to avoid destructive scenarios with potentially severe challenges for price stability in the euro area.”

Positive Signs Emerge For Job Market (WSJ)
Private-sector jobs in the U.S. increased by 201,000 last month, according to a national employment report calculated by payroll processor Automatic Data Processing Inc. and consultancy Macroeconomic Advisers. The August number was well above the 145,000 expected by economists. The July estimate was revised to 173,000 from the 163,000 reported last month.

AIG To Sell $2 Billion Of AIA Shares (WSJ)
AIG is seeking to raise around US$2 billion by selling more shares in AIA Group Ltd, its former pan-Asian life insurance unit, as it continues to repay the U.S. government bailout it received during the 2008 financial crisis. The U.S. insurer also said in a statement it plans to buy back another $5 billion in stock from the U.S. Treasury. AIG has been aggressively buying back shares this year and is expected to buy more from the Treasury this fall, as part of a push that could make the U.S. government a minority shareholder before the November elections and enable the company to fully repay its bailout sooner than expected. The Treasury Department sold $5 billion worth of shares in AIG last month, its fourth sale so far, reducing the government’s stake to 55% and bringing down the amount the government needs to recoup from the bailout to $25 billion.

Summer Rally Puts The Hurt On Fund Managers (WSJ)
“The gap we are looking at is going to be very hard…for hedge funds to make up,” said Anurag Bhardwaj, head of hedge-fund consulting at Barclays PLC. “At this late stage in the year, when the rally has been around for a bit, do you decide to get into the game now?”

Alec Baldwin’s daughter discusses ‘pig’ call (NYP)
Alec Baldwin’s daughter Ireland has talked for the first time about his infamous 2007 voice mail in which he called her, then 12, “a rude, thoughtless, little pig” — saying he often speaks like that “because he’s frustrated.” Ireland, the 16-year-old daughter of Baldwin and Kim Basinger, thinks the incident — which created a viral scandal and prompted Baldwin to temporarily lose visitation rights — was blown wildly out of proportion. “The only problem with that voice mail was that people made it out to be a way bigger deal than it was,” she tells Page Six Magazine, out today. “He’s said stuff like that before just because he’s frustrated. “For me it was like, ‘OK, whatever.’ I called him back I was like, ‘Sorry Dad, I didn’t have my phone.’ That was it.” Read more »

ECB Plan Said To Pledge Unlimited, Sterilized Bond-Buying (Bloomberg)
Under the blueprint, which may be called “Monetary Outright Transactions,” the ECB would refrain from setting a public cap on yields, according to the people, and a third official, who spoke on condition of anonymity. The plan will only focus on government bonds rather than a broader range of assets and will target short-dated maturities of up to about three years, two of the people said.

Facebook Plays Defense (WSJ)
In a regulatory filing Tuesday, Facebook said Chief Executive Mark Zuckerberg won’t sell any stock in the company for a year, and that two of its directors—Marc Andreessen and Donald Graham—have no plans to sell their personal holdings beyond the amount needed to cover their tax liabilities. Facebook also detailed how it will essentially buy back 101 million shares when it issues previously restricted stock units to its staff in October. At recent prices, it would spend roughly $1.9 billion to keep those shares off the market.

Spain Seeks To Stem Bank Crisis (WSJ)
It’s on the to-do list.

Banks Faces Suits As States Weigh Libor Losses (NYT)
The scandal over global interest rates has state officials like Janet Cowell of North Carolina working intensely behind the scenes to build a case for suing the nation’s largest banks. Ms. Cowell, the state’s elected treasurer, and several of her staff members have spent the summer combing through the state’s investments trying to determine how much the state may have lost because of suspected manipulation of Libor. “We think this could be as big as the mortgage crisis settlement, that this could be a really high impact situation and that we should be aggressive on this,” Ms. Cowell said, referring to the $25 billion settlement that the nation’s biggest banks entered with state attorneys general.

Socialite In Traffic Bust On LI, Husband Shouts From The Sidelines (NYP, related)
Lisa Falcone pleaded with the owner of the Mercedes she hit, Bob Cohen, and Verizon worker Fred Ledermann not to call police, “saying her husband would pay for everything,” the witness said. But Ledermann did call. soon arrived and shouted at cops to wait for a tow truck. A Southampton Town officer got so fed up with the billionaire’s bellowing that he ordered him to the side of the road and called for backup, the witness added. Because she smelled of alcohol and was staggering, the officer asked Lisa Falcone to take a Breathalyzer, according to a police report. From the side of the road, her still-simmering husband yelled, “Don’t take it!’’ When the cop threatened to arrest her because of the refusal, Phil changed his advice to “Take it! Take it!’’ according to the witness. Read more »

Moody’s Gives EU Warning (WSJ)
Moody’s Investors Service has put the European Union’s triple-A credit rating on a negative outlook in a move that reflects actions the ratings firm has taken on some of the euro-zone’s largest members, including Germany and the Netherlands. “Moody’s believes that it is reasonable to assume that the EU’s credit-worthiness should move in line with the credit-worthiness of its strongest key member states considering the significant linkages between member states and the EU,” Moody’s said in a release.

Fears Rising, Spaniards Pull Out Their Cash and Get Out of Spain (NYT)
After working six years as a senior executive for a multinational payroll-processing company in Barcelona, Spain, Julio Vildosola is cutting his professional and financial ties with his troubled homeland. He has moved his family to a village near Cambridge, England, where he will take the reins at a small software company, and he has transferred his savings from Spanish banks to British banks. “The macro situation in Spain is getting worse and worse,” Mr. Vildosola, 38, said last week just hours before boarding a plane to London with his wife and two small children. “There is just too much risk. Spain is going to be next after Greece, and I just don’t want to end up holding devalued pesetas.” In July, Spaniards withdrew a record 75 billion euros, or $94 billion, from their banks — an amount equal to 7 percent of the country’s overall economic output — as doubts grew about the durability of Spain’s financial system. According to official statistics, 30,000 Spaniards registered to work in Britain in the last year, and analysts say that this figure would be many multiples higher if workers without documents were counted. That is a 25 percent increase from a year earlier.

Europe Bank Chief Hints At Bond Purchases (WSJ)
The comments by Mario Draghi in a closed hearing at the European Parliament on Monday came ahead of the ECB’s monthly policy meeting Thursday. That meeting has been keenly awaited in the financial markets for further details of how the bank could help bring down the funding costs of countries such as Spain and Italy to prevent them from having to seek full euro-zone bailouts like Greece, Ireland and Portugal.

Switzerland Flirts With Recession (WSJ)
“Three months ago, the Swiss economy looked charmingly strong against the backdrop of the euro zone and now it is looking on the brink of recession,” said Janwillem Acket, chief economist at Julius Bär in Zurich.

Nigeria Uncovers Cocaine-Stuffed Roasted Chicken (AP)
The roasted chickens had an unusual stuffing — $150,000 worth of cocaine, according to Nigerian police. A Nigerian mechanic who struggled in Brazil for more than six years had hoped the drugs would buy him a life of luxury in his native land, Nigerian authorities said Monday. “This was like a retirement plan for him,” said Mitchell Ofoyeju, spokesman for the National Drug Law Enforcement Agency. The accused was arrested over the weekend at the airport in Lagos after he came in from Sao Paulo with 2.6 kilograms (5.7 pounds) of cocaine, Ofoyeju said. Photos from the agency showed egg-shaped packages wrapped in gold aluminum foil and tucked into the browned chickens. Read more »

JPMorgan Rankled By Risk (WSJ)
JPMorgan is seeking to reduce its risks in a business that provides crucial plumbing for Wall Street’s money flows. The nation’s largest bank by assets, a major player in providing clearing and settlement services to other financial firms, is reviewing its dealings with dozens of brokerages that use the bank to settle trades, according to people familiar with the bank. Clearing and settlement involves standing between buyers and sellers of securities to help manage financial commitments backing hundreds of billions of dollars in transactions daily. J.P. Morgan’s review, which started more than six months ago amid increased regulations, effectively seeks to assess the profits clients generate for the bank versus risks they pose, the people say.

Spain Unveils Financial Reforms (WSJ)
This reform fulfills the commitments made by Spain as part of a €100 billion European Union bailout for Spanish banks agreed in July. As anticipated in the bailout deal, Spain is creating an asset management company, or “bad bank,” that will buy property assets from banks starting later this year at prices below book value.

Euro Faces Judgment Days (WSJ)
The euro zone has seen many pivotal moments since its debt crisis emerged in Greece in early 2010. But there are reasons to think this fall’s events are especially vital. With Spain and Greece on the ropes, European officials face stark choices.

ECB Said To Use Greek Myth For Security On New Euro Banknotes (Bloomberg)
The European Central Bank is using an image from Greek mythology to improve security on new euro banknotes, four people familiar with the design said, even as Greece’s near bankruptcy fuels a debt crisis that’s threatening the future of the common currency. Europa, the Phoenician princess abducted by Zeus who gave the continent its name, will replace architectural images as the watermark on the new notes, which the ECB wants to start rolling out next year, said the people, who spoke on condition of anonymity because the plans aren’t public yet.

Shia LaBeouf ‘Sent Director Sex Tapes To Get New Film Role’ (Entertainment)
When Shia LaBeouf took a role in Lars von Trier’s latest movie ‘Nymphomaniac’ eyebrows were raised due to the director’s previous experimentation with putting real sex on film. Until now it seemed that LaBeouf took an occupational risk in joining the movie, but if the actor’s to be believed then he actively looked out for a sexed up role, and involved girlfriend Karolyn Pho…The ‘Lawless’ actor told Handler: “I sent him [von Trier] videotapes of me and my girlfriend having sex and that’s how I got the job.” Read more »

Credit Rating Gadfly Leaves S&P (WSJ)
Mark Adelson, who pushed for tough rating criteria, including those that led to the unprecedented downgrade of U.S. debt last year, left Standard & Poor’s Ratings Services on Monday. The departure of Mr. Adelson, a controversial figure among some market participants and colleagues alike, highlights the rating industry’s difficulties in remaking itself following heavily criticized moves during the financial crisis. Mr. Adelson, S&P’s chief credit officer until late 2011, left the firm to “pursue other interests,” according to an internal company memo. In an email to friends and colleagues viewed by The Wall Street Journal, Mr. Adelson wrote: “I am now a free agent.”

Short Sellers Cry Out For Help (WSJ)
Yelp’s stock soared Wednesday, defying expectations on a day when executives and early investors were allowed to sell millions of new shares. Market participants widely attributed the online-reviews service’s sharp rise to investors who had bet against the stock but then switched their positions en masse, in what is known as a “short squeeze.” These investors appeared to reverse course when it quickly became clear in early trading that the end of a “lockup” preventing certain Yelp shareholders from selling wasn’t going to doom the stock…Some 8.6 million shares changed hands on Wednesday. Though that is about 10 times the typical Yelp volume, it signaled the vast majority of the approximately 52.7 million newly freed Yelp shares weren’t traded. “The lesson for all those people that got short in anticipation of the lockup [ending] is there is no such thing as a sure thing,” said Michael Shea, a managing partner at Direct Access Partners, an institutional brokerage firm.

Paulson’s Gold Fund Faced 22% Losses in July (CNBC)
Paulson’s gold fund, which holds an array of gold miners, fell a whopping 22 percent between the beginning of the year and July 31, according to people familiar with its returns — outsinking the oft-discussed flagship funds, which were down 13 percent and 18 percent respectively during the same period, by a considerable margin.

Buffett, near 82, reflects on staying in Nebraska (AP)
“It’s very easy to think clearly here. You’re undisturbed by irrelevant factors and the noise generally of business investments,” Buffett said. “If you can’t think clearly in Omaha, you’re not going to think clearly anyplace.” In the city of 415,000, Buffett can drive the 20 blocks from his home to his office in about 5 minutes. “I would find a long commute quite irritating even if I did it under favorable circumstances — even if I had a driver,” Buffett said. “I like being in the home and I like being in the office, and I’m not keen on in between.”

Robbers Take Man’s Cash But Leave Bus Fare (DDN)
The victim reported that two men walked up to him while he waited for a bus at West Hudson Avenue and North Main Street at about 5 a.m. Tuesday. According to a Dayton Police incident report, one of the men put a black .22-caliber automatic handgun against the victim’s forehead and said, “Give me everything out your pocket.” The victim handed over his cell phone and $40. Before fleeing on foot, one of the men asked the victim if he had enough money for the bus. When he said no, the suspect handed him back $2 in cash. Read more »