Global Banking Under Siege as Nations Tighten Local Rules (Bloomberg) Regulators want to curtail risks exposed after global banks such as New York-based Citigroup, Edinburgh-based Royal Bank of Scotland and Zurich-based UBS took bailouts in the biggest financial crisis since the Great Depression. Forcing lenders to dedicate capital and liquidity to multiple local subsidiaries, rather than a single parent, may undermine the business logic of a multinational structure. “Being big and spread out all over the world isn’t what it used to be,” said Mayra Rodriguez Valladares, managing principal at New York-based MRV Associates, which trains bank examiners and executives at financial firms. “You’ll see global banks jettison divisions abroad and at home.” Paulson Said to Blame Bet Against Europe for Most of Loss (Bloomberg) John Paulson, manager of $20 billion in hedge funds, told investors that the bulk of his losses this year came on bets that the European sovereign-debt crisis would worsen, according to a person familiar with the matter. Paulson, speaking to clients at his firm’s annual meeting yesterday in New York, said he has reduced those positions following European Central Bank President Mario Draghi’s comments in July that the ECB was committed to preserving the euro, said the person, who asked not to be identified because the meeting was private. Paulson said in a February letter to investors that the euro was “structurally flawed” and would eventually fall apart. In April, the founder of New York-based Paulson & Co. told clients he was wagering against European sovereign bonds and buying credit-default swaps on European debt, or protection against the chance of default. No Payback For Singer This Year (NYP) Paul Singer’s last-ditch attempt to get cash from Argentina this year has failed. A motion by Singer’s hedge fund, Elliott Management, requesting that the South American country put up a security deposit of $250 million by Dec. 10 was denied by a federal appeals court yesterday. “Since we will not have a big payment for ages (if ever), this looks like a huge blow to [Elliott’s] strategy,” said sovereign-debt expert Anna Gelpern. In Tax Fight, G.O.P. Seeks a Position to Fall Back On (NYT) Senator Olympia J. Snowe of Maine, who is retiring, joined a handful of other Republicans on Tuesday suggesting that Congress should pass the middle-class tax cut extensions now, then leave the fight over taxes and spending until later. Americans, she said, "should not even be questioning that we will ultimately raise taxes on low- to middle-income people." Congress could take that off the table "while you're grappling with tax cuts for the wealthy," she said. But any move toward compromise with Democrats on fiscal issues quickly comes under attack from conservatives as a surrender and unsettles the rank-and-file. It is a dynamic that has haunted Speaker John A. Boehner throughout the 112th Congress, as he has repeatedly been caught between the imperative to govern and the need to satisfy the restive right. Mr. Boehner, of Ohio, has drawn fire this week for removing a handful of House Republicans who have defied the leadership from their preferred committee seats, a step he took to enforce party discipline. Fed to launch fresh bond buying to help economy (Reuters) The Federal Reserve is set to announce a fresh round of Treasury bond purchases when it meets next week, avoiding monetary policy tightening to maintain support for the weak U.S. economy amid uncertainty over the looming year-end "fiscal cliff." Many economists think the U.S. central bank will announce monthly bond purchases of $45 billion after its policy gathering on December 11-12, signaling it will continue to pump money into the U.S. economy during 2013 in a bid to bring down unemployment. Merkel Wins Party Reelection, Eyes Third Term (Reuters) Merkel, at the height of her popularity, was returned unopposed as CDU chairwoman with 97.9 percent of votes from delegates who stood and applauded her for nearly eight minutes after she lauded Germany's economic resilience in the euro crisis and promised to fight for jobs and prosperity. McAfee Emerges From Hiding in Guatemala (FT) John McAfee, the antivirus software entrepreneur, has revealed that he has fled to Guatemala from Belize where he is wanted for questioning in relation to a murder. Posting on his website on Tuesday, the US citizen and multimillionaire said: "I apologize for all of the misdirections over the past few days . . . I am in Guatemala." His emergence closes one chapter in a bizarre chain of events that started last month when police in Belize, where Mr McAfee has lived for the past four years, discovered the dead body of Gregory Faull, the owner of a house close to Mr McAfee's main property on the island of Ambergris Caye. Mr McAfee - who Belize considers "a person of interest" in the murder investigation - fled, going into hiding and insisting on his innocence. He said he ran from the police because he believed that the Belize authorities were out to kill him. In response, Dean Barrow, the prime minister, said: "I don't want to be unkind to the gentleman, but I believe he is extremely paranoid". Mr McAfee revealed his location on Tuesday after a hacker called Simple Nomad disclosed his whereabouts by analyzing a mobile-phone photograph taken of McAfee on Monday that was posted on the internet. In a second blog post late Tuesday titled "the new fight", Mr McAfee said he had asked Telsforo Guerra, a former attorney-general of Guatemala, to help uncover what he claims is deep-rooted corruption in Belize. Separately, he told Reuters that Mr Guerra was trying to help him obtain political asylum in Guatemala, even though Belizean authorities have not charged him. EU Banks To Repay Cheap Loans (WSJ) Nearly a year ago, hundreds of European banks borrowed a total of more than €1 trillion ($1.3 trillion) from the European Central Bank as it scrambled to defuse an escalating crisis. Today, in a sign of the industry's partial healing, some of Europe's biggest banks are preparing to repay those loans. The push to repay the loans, however, has generated concerns that banks are moving prematurely and could be vulnerable if the euro-zone crisis intensifies again. The ECB activated the emergency loan program—known as the long-term refinancing operation, or LTRO—late last year, doling out two batches of inexpensive loans that are good for three years. Banks are permitted to repay them starting next month. Euro Crisis Feeds Corruption as Greece Slides in Rankings (Bloomberg) The European debt crisis has given way to a new wave of corruption as some of the most hard-hit countries in the turmoil have tumbled in an annual graft ranking, watchdog group Transparency International said. Greece, in its fifth year of recession and crippled by rounds of austerity, fell to 94th place from 80th -- ranking it below Colombia and Liberia, according to the group’s Corruption Perceptions Index. Ireland, Austria, Malta and Italy were also among member states in the single currency to slide. Moynihan: No Stress (Bloomberg) Bank of America CEO Brian T. Moynihan said the firm has plenty of capital and he’s confident it will pass the next US stress tests. “The question will be what to ask for and when, because we’re not going to fail this,” Moynihan said yesterday at a New York investor conference sponsored by Goldman Sachs. Moynihan, 53, is renewing efforts to win approval to raise the company’s dividend or repurchase shares after the Federal Reserve blocked an earlier request. Fed Filcher Gets Timeout (NYP) Bo Zhang, a Chinese-citizen computer programmer who worked for a contractor at the New York Fed, was sentenced to six months of home confinement for stealing Treasury Department software. Snake on a plane forces emergency landing (CNN) ...the incident forced the pilot to make an emergency landing in the Egyptian resort town of Al Ghardaqa on the Red Sea, according to The Jordan Times. An Egypt Air official told the paper an investigation revealed that a 48-year-old passenger, who owns a reptile shop in Kuwait, had hidden the Egyptian cobra in a carry-on bag. The passenger was trying to control the snake after it bit his hand and started slithering under the seats. The Egyptian daily al-Masry al-Youm reported that the man refused medical treatment, claiming his wound was only superficial. The plane resumed its flight to Kuwait after local authorities confiscated the snake. Doctors told the passenger he should spend 24 hours in a hospital for observation, but the man refused, the Egyptian Air official said, according to The Jordan Times.

Spain Prepares More Austerity, Protesters Battle Police (Reuters) Protesters clashed with police in Spain's capital on Tuesday as the government prepared a new round of unpopular austerity measures for the 2013 budget to be announced on Thursday. Thousands gathered in Neptune plaza, a few metres from El Prado museum in central Madrid, where they formed a human chain around parliament, surrounded by barricades, police trucks and more than 1,500 police in riot gear. Police fired rubber bullets and beat protesters with truncheons, first as protesters were trying to tear down barriers and later to clear the square. The police said at least 22 people had been arrested and at least 32 injured, including four policemen. Facebook's Next Fight: Suits And More Suits (WSJ) About 50 lawsuits have been filed against Facebook, Nasdaq OMX Group Inc. and underwriters of Facebook's May IPO, according to lawyers involved in the cases. In addition, securities lawyers who represent Facebook investors say they expect hundreds of arbitration claims to be launched against brokers and securities firms that pitched the company's shares. Credit Suisse Said to Consider Merging Its Asset-Management Unit (Bloomberg) The bank is considering combining its asset-management unit with the private and investment banking divisions, a person familiar with the matter said. SAC Capital Fund Manager Said To Be Uncharged Conspirator (Bloomberg) The role allegedly played by Michael Steinberg emerged in court papers filed by the U.S. in the securities-fraud case of Jon Horvath, a former technology analyst at Cohen’s $14 billion hedge fund who Steinberg supervised. Steinberg, who hasn’t been charged with a crime, is the fifth person to be tied to insider trading while employed at SAC. Horvath faces trial Oct. 29 in Manhattan federal court along with two other portfolio managers for his part in what Manhattan U.S. Attorney Preet Bharara called a “criminal club:” a conspiracy of hedge fund managers, co-workers and company insiders who reaped millions of dollars on illegal tips about Dell Inc. and Nvidia Corp. “The government added four additional co-conspirators,” prosecutors wrote in a Sept. 6 letter filed with the court, with the names blacked out. One of them, the U.S. said, is “the portfolio manager to whom Jon Horvath reported at his hedge fund.” That person was Steinberg, said the people, who declined to be identified because the matter isn’t public. UK Group To Give Up Libor Oversight (WSJ) The council of the BBA, a private trade association, voted earlier this month to give up management of Libor, according to people familiar with the matter. The move clears the way for what is likely to be the biggest change in Libor's 26-year history, and introduces the possibility that British or international regulators could be in charge of overseeing the rate, which is tied to trillions of dollars of financial contracts. Rent-a-reptile: Florida company adds alligators to kids’ pool parties (NYDN) Bob Barrett gives Florida kids pool parties they’ll never forget — because they get to swim with real live alligators. Jump houses? Pizza parties? Boring, says Barrett. “You jump for a while and that’s it, we’ve had that party before,” he told the Daily News. “Clown party, Chuck E. Cheese party, they’ve all been done.” Barrett,who runs Alligator Attractions in Madeira Beach — where visitors get to hold gators — was already bringing his reptiles around to birthday parties when he was inspired to take the next step. “We would do [an alligator demonstration] at someone’s house and they would have a pool,” he explained. “And I said, you know, ‘Hey, let’s put ‘em in the pool.’” Hedge Fund Skeptics Warn on ‘QE Infinity’ (FT) “A man’s got to know his limitations,” says “Dirty Harry” Callahan, the gun-toting, rule book-ignoring cop immortalized by Clint Eastwood in “Magnum Force.” It is a principle the U.S. Federal Reserve – which earlier this month embarked upon its own, third bout of “unorthodox” enforcement, “QE3” – could learn from, according to Stephen Jen, the former Morgan Stanley foreign-exchange guru turned hedge fund manager. “The Fed officials are some of the smartest economists around,” he wrote in his most recent note to clients. The trouble is, said Mr. Jen, “they know everything except their own limitations.” Irish Bank Offers Properties For 70% Less Than 2007 Value (Bloomberg) RBS's Irish unit offered to sell properties, including 640 apartments and a hotel, for about 70 percent less than their value at the market’s 2007 peak, according to the broker managing the sale. The Gemini portfolio, containing buildings in the Irish cities of Dublin and Cork, has an asking price of 75 million euros ($97 million), according to Domhnaill O’Sullivan, a director at Savills Plc (SVS)’s Dublin office. MIT Miscounts Its New B-School Students (WSJ) After realizing they had a student surplus, school officials emailed the incoming class on Aug. 7, offering "guaranteed admission to the class of 2015 for the first 20 admitted students who request it." The school gave them until Aug. 13 to respond, according to one student's copy of the letter, which was reviewed by The Wall Street Journal. But it didn't get enough takers. So, like an airline offering vouchers to travelers willing to hop off oversold flights, the school put money on the table, offering students who expressed an interest a $15,000 scholarship to be applied to next year's tuition. Students still balked, and on Aug. 21, a day after pre-term refresher courses began, Sloan raised the offer to $20,000 for the first 10 respondents. (Tuition for the 2012-2013 academic year is $58,200, with total expenses—including books, housing and food—estimated at just under $89,000.) NFL replacement referee who blew touchdown call in Green Bay Packers-Seattle Seahawks game is a full-time banker (NYDN) ...fans, particular those in Wisconsin, said the 52-year-old southern California banker with no previous professional or major college refereeing experience should have never left his desk to become a replacement during the NFL’s lockout of unionized refs. Even the Lingerie Football League piled on, revealing that some of the scab refs weren’t qualified to work its games. “Due to several on-field occurrences of incompetent officiating, we chose to part ways with a crew which apparently is now officiating in the NFL,” said Mitch Mortaza, commissioner of the female bra-and-panty league. “We have a lot of respect for our officials, but we felt the officiating was not in line with our expectations.”

KPMG Fires L.A. Partner Over Alleged Insider-Trading Tips (WSJ) KPMG LLP has fired a senior partner in its Los Angeles office, saying the unidentified partner had provided inside information about its clients to someone who had used that information in stock trading. In a statement late Monday night, the Big Four accounting firm also said it had resigned as the outside auditor of two of its clients because of the actions of the partner, who it described as the partner in charge of its audit practice in its Los Angeles business unit. KPMG said the partner "was involved in providing nonpublic client information to a third party, who then used that information in stock trades involving several West Coast companies." The firm didn't identify the third party or any of the companies involved. KPMG Said to Resign as Herbalife’s Auditor Over Investigation (Dealbook) Herbalife is poised to disclose on Tuesday that KPMG will have to resign as the company’s auditor, after the accounting firm fired a senior partner, according to a person briefed on the matter. JPMorgan Leads Job Cuts as Banks Seek to Bolster Profit (Bloomberg) Even after the industry posted its best results since 2006, the six largest U.S. banks announced plans in the first three months of this year to eliminate about 21,000 positions, or 1.8 percent of their combined workforce, according to data compiled by Bloomberg. That’s the most since 2011’s third quarter. JPMorgan Chase, whose 259,000 people produced three straight years of record profit, topped the list with 17,000 reductions scheduled by the end of 2014. Fed Warned To Reign In QE (FT) Rick Rieder, who oversees $763 billion in fixed income investments for BlackRock, spoke out as the Fed debates how long to persist with the unorthodox measures it has used to stimulate the U.S. economy. His comments add BlackRock to the growing list of Fed critics who are warning of trouble ahead for the bond market. Fitch Cuts China Debt Rating (WSJ) The credit-rating firm Tuesday lowered China's long-term local currency rating to A-plus from AA-minus, with a stable outlook. It kept the foreign-currency rating unchanged at A+, saying it is well supported by China's massive foreign exchange reserves, worth $3.387 trillion at the end of 2012. KKR, Others In Mega-Deal (NYP) Private-equity titans Henry Kravis and Steven Schwarzman are teaming up on what is likely the biggest leveraged buyout in several years. KKR has joined an investor group of Blackstone, Carlyle, TPG Capital and Temasek to bid more than $12 billion for Life Technologies, a source said. SeaWorld IPO Could Raise $621 Million (Deal Journal) SeaWorld Entertainment plans to sell 10 million shares and Blackstone Group plans to sell the other 10 million, giving each up to $270 million a piece. Following the sale, Blackstone will continue to be the company’s majority shareholder, and would hold about 70.5% of the stock if the underwriter’s sold their full option. Trip to Cuba by Beyoncé and Jay-Z Is Investigated (NYT) The United States Treasury Department has begun investigating whether Jay-Z and Beyoncé — music’s royal couple — violated the trade embargo against Cuba by traveling to the island two weeks ago during their wedding anniversary, according to officials and a person who helped arrange their visit...Questions about the megastars’ trip have been swirling for days, with some Cuban exile bloggers describing the trip as a propaganda mission “carefully planned and controlled by the Castro dictatorship.” Putin Squeezing Out UBS to Deutsche Bank Using Oligarchs (Bloomberg) OAO Sberbank, Russias’s biggest lender, and VTB Group have increased investment-banking fee income more than fivefold since 2005, according to data compiled by Freeman & Co., a New York-based consulting firm. European financial institutions including UBS, Deutsche Bank and Royal Bank of Scotland lost almost half their market share during the period. EU Launches Probe Into MasterCard (WSJ) The European Union has opened an antitrust investigation into MasterCard, following concerns that some of the credit-card company's interbank fees are anticompetitive. Citigroup To Cut Senior Posts In Streamlining (WSJ) Under Mr. Forese's plan, there no longer will be a head of securities and banking, a post that Mr. Forese had held until his elevation to his new position. Also expected to go is the head of transaction services, currently occupied by Francesco Vanni d'Archirafi. Clarence man with frog phobia wins $1.6 million verdict (Buffalo News) “I’m petrified of the little creatures,” said Marinaccio, 65. If that sounds bizarre or far-fetched, consider one of Marinaccio’s childhood memories. He traces his deep-seated fear of frogs to when he was a child in an Italian vineyard, where his parents worked. He remembers wandering to a nearby property for figs and being chased away by a man holding bullfrogs. Decades later, frogs again have Marinaccio on the run. In the spring and summer months, they show up on his driveway and lawn – keeping him inside his home. Marinaccio sued the Town of Clarence and the developer of a nearby subdivision for diverting runoff onto his land and won a $1.6 million award...Neither side knows for sure how Marinaccio’s frog phobia affected the case. But jurors who returned the verdict in his favor heard his startling testimony on the witness stand in 2009. “You people don’t understand,” Marinaccio said in court. “I am petrified. I go home at night, and I can’t get in my garage because of the frogs. They’re right in front of the damn door, OK?” He talked about how he had to call his grown daughter, who lives a few miles away, two or three nights a week to come over and shoo away the frogs. “In the winter, it’s OK, because I know there’s no frogs,” he said. “But in the summertime, I mean I’m a damn prisoner in my own home.”

Kerviel’s Refusal To Be SocGen Scapegoat May Harm Appeal Chances (Bloomberg) Jerome Kerviel began his fight today against a 2010 conviction for Societe Generale’s 4.9 billion- euro ($6.2 billion) trading loss, telling a Paris appeals court that the bank knew about his actions. His lawyers said they’ll show judges at the four-week appeal starting today that the bank knew before the 2008 trading loss that he was exceeding his mandate with risky bets and can’t claim to be an innocent victim. “I think that I’m not responsible for this loss,” Kerviel told judge Mireille Filippini at the start of the hearing today in response to a question about why he was appealing. “I always acted with the knowledge” of the bank. Germany Signals Crisis Shift (WSJ) Germany is sending strong signals that it would eventually be willing to lift its objections to ideas such as common euro-zone bonds or mutual support for European banks if other European governments were to agree to transfer further powers to Europe. China Making Contingency Plans for a Greek Exit (Reuters) The Chinese government has called on key agencies, including the central bank, to come up with plans to deal with the potential economic risks of a Greek withdrawal from the euro zone, three sources with knowledge of the matter told Reuters on Monday. The sources said the plans may include implementing measures to keep the yuan currency stable, increasing checks on cross-border capital flows, and stepping up policies to stabilize the domestic economy. Oversight Of JPMorgan Probed (WSJ) A federal agency that oversees J.P. Morgan Chase is taking heat over how much it knew about risk-taking in the part of the bank that suffered more than $2 billion in trading losses. Sen. Sherrod Brown (D., Ohio) asked Comptroller of the Currency Thomas Curry in a letter Friday for details about the regulator's supervision of trading operations at the largest U.S. bank by assets. Mr. Brown also wants more information about the Office of the Comptroller of the Currency's "process for reviewing trading operations" at J.P. Morgan and other big banks. The Senate Banking Committee, which includes Mr. Brown, is scheduled to hold a hearing Wednesday that will focus on the trading loss. JPMorgan Was Warned About Lax Risk Controls (NYT) A small group of shareholder advocates delivered an urgent message to top executives at JPMorgan Chase more than a year ago: the bank’s risk controls needed to be improved. JPMorgan officials dismissed the warning from the CtW Investment Group, the advocates, who also cautioned bank officials that the company had fallen behind the risk-management practices of its peers. Merrill Losses Were Withheld Before Bank of America Deal (NYT) What Bank of America’s top executives, including its chief executive then, Kenneth D. Lewis, knew about Merrill’s vast mortgage losses and when they knew it emerged in court documents filed Sunday evening in a shareholder lawsuit being heard in Federal District Court in Manhattan: Days before Bank of America shareholders approved the bank’s $50 billion purchase of Merrill Lynch in December 2008, top bank executives were advised that losses at the investment firm would most likely hammer the combined companies’ earnings in the years to come. But shareholders were not told about the looming losses, which would prompt a second taxpayer bailout of $20 billion, leaving them instead to rely on rosier projections from the bank that the deal would make money relatively soon after it was completed. Mets crasher out of jail, says he 'got caught up in the moment' (NYP) Mets fanatic Rafael Diaz said he got such an adrenaline rush from Johan Santana’s no-hitter at Citi Field that “he couldn’t help” himself from running on the field to celebrate. “I was overcome with emotion, just being a die-hard Mets fan,” Diaz said after his release from jail yesterday. “That’s all it was.” Diaz, 32, was charged with trespassing for taking part in the on-field celebration. He spent two nights behind bars before a Queens judge released him and pal John Ries, 25, on their own recognizance. Diaz returned to his Massapequa, LI, home, wearing the same Gary Carter No. 8 jersey he had on Friday night. He hit the showers and donned a fresh Santana jersey before explaining his stunt. After Santana retired the final St. Louis batter on Friday night, Diaz jumped over the railing on from his field-level perch on the first-base side of Citi Field. Moments later, Diaz was rubbing elbows with Santana, R.A. Dickey and Ike Davis in a joyous Mets mob. “I couldn’t help myself,” Diaz said. “I just wanted to be on the mound celebrating the no-hitter.” Diaz paid a stiff penalty, both at home and Citi Field. He missed his 1-year-old son’s birthday party Saturday, and the Mets have banned him for life from their home park. “That’s the bad part,” Diaz said of missing his son’s bash. Feds Eye MFGlobal's False Promise (Bloomberg) Three days before MF Global filed for bankruptcy-court protection, CME Group was assured by the New York company of a $200 million cushion in accounts that ensured customer funds were being kept separate from the firm's own money. But the customer accounts actually were in the red, and the deficit ballooned to more than $900 million on the night of Oct. 30. MF Global tumbled into Chapter 11 on Oct. 31. The bankruptcy trustee trying to recover money for the firm's U.S. customers has estimated that the shortfall now is roughly $1.6 billion. A large chunk of the money is stuck outside the U.S. IPO doubts plague Nasdaq’s Grief-eld (DJ) Companies in the early stages of going public are raising questions about whether they want to list with Nasdaq...The questions, coming two weeks after Bob Greifeld’s exchange botched the largest, most anticipated initial public offering in a generation – Facebook’s $16 billion coming-out party – are the first indication that Nasdaq’s headaches over the snafu are likely to linger. “There’s no question, this Facebook situation has put on the table the question of Nasdaq’s market structure and its market quality,” one exchange expert said. Madoff kin having trouble finding an apartment (NYP) Andrew Madoff and girlfriend Catherine Hooper have tried to cover up their connection to the Ponzi schemer by making appointments under Hooper’s name. She then shows up alone to view the $20,000-per-month pads, brokers said. Hooper speaks generally, saying the space is for her, her fiancé and their children, the sources said. But once the brokers explain who Hooper is to the landlord, the couple is immediately rejected, the sources added. “My owners would never, ever rent to him,” said a broker. “They will go through a lot of rejections.” China Muzzles Online Talk of Tiananmen Anniversary (WSJ) China's Internet monitors have unleashed a broad clampdown on online discussion of the 23rd anniversary of the Tiananmen Square crackdown, restricting even discussion of the nation's main stock market when it fell by a number that hinted at the sensitive date. Officials minding China's popular Twitter-like microblogging service Sina Weibo beginning this weekend began blocking a number of terms that could refer to the 1989 Tiananmen Square crackdown, an incident often referred to as June 4 or 64 in the Chinese-speaking world. Under the crackdown the government ordered troops to fire on unarmed demonstrators, likely killings hundreds. Dennis Gartman: 100% Chance Of Further Fed Easing (CNBC) Gartman believes a third round of quantitative easing could come as early as the Fed’s next meeting on June 19-20, or at the following meeting on July 31-Aug. 1. The central bank will want to ease as “far ahead” of the U.S. presidential election in November as possible, so it doesn't come off as being "politically amenable" to the current administration, he noted. Dutch artist turns dead cat into remote-controlled helicopter, dubbed ‘Orvillecopter’ (NYDN) A Dutch artist, upset over losing his beloved pet, Orville, had the animal stuffed and transformed its body into a remote-controlled helicopter. The “half cat, half machine” piece of art was dubbed the “Orvillecopter.” The cat, who was killed when it was hit by a car, was named after famed American aviator Orville Wright. “After a period of mourning, he received his propellers posthumously,” Jansen said. A video posted to YouTube shows the flying feline slowly hover several feet in the air in a park, it's body permanantely spread eagle with propellors on its front paws. Artist Bart Jansen teamed up with radio control helicopter expert Arjen Beltman after having a taxidermist preserve the pussy cat.

New York Fed Profits On AIG Bonds (WSJ) The Federal Reserve Bank of New York on Thursday sold the last toxic assets it acquired from the bailout of American International Group Inc., closing the book on its most controversial intervention during the financial crisis with a large gain to taxpayers. The regional Fed bank said it reaped $6.6 billion in profits from selling complex mortgage securities that it took on in late 2008 to stem AIG's cash bleed. Merkel Reiterates Greek Stance (WSJ) "The euro is more than a currency, it's an idea, and that's why it's so important," Ms. Merkel said at a news conference in Berlin, where she earlier met with Greek Prime Minister Antonis Samaras. "I want Greece to remain a part of the euro zone and that's what I am working on." Morgan Stanley Funds In Big Facebook Bet (WSJ) U.S. mutual funds run by Morgan Stanley, the lead underwriter in Facebook Inc.'s $16 billion initial public offering, have disproportionately high investments in the social-media company, leaving fund shareholders exposed to the stock's big drop since its May 18 IPO. New data show that eight of the top nine U.S. mutual funds with Facebook shares as a percentage of total assets are run by Morgan Stanley's asset-management arm, according to fund tracker Morningstar Inc. Don't Be Fooled By Short-Selling Bans (FT) ...the conclusions from the research are clear; these economists do not think short selling bans work. For there is precious little evidence that the ban in US markets truly halted share price declines; on the contrary, the impact was (at best) neutral, they claim. However, the ban hurt market mechanisms, as liquidity dried up. HSBC In Settlement Talks With U.S. Over Money Laundering (Bloomberg) HSBC, which is under investigation by U.S. regulators for laundering funds of sanctioned nations including Iran and Sudan, is in talks to settle the matter, two people with knowledge of the case said. The bank, Europe’s largest by market value, made a $700 million provision in July for any U.S. fines after a Senate Committee found it had given terrorists and drug cartels access to the U.S. financial system. That sum might increase, Chief Executive Officer Stuart Gulliver has said. Night of drinking, sexting and a well-placed bullet leads to prison for Oregon City man (OL) The couple drank at home and at two Oregon City area bars before their late night stop at the KC's Midway, a neighborhood watering hole where Lisa Nunes played video poker and enjoyed her 10th beer -- by her count -- of the day. Lisa Nunes spoke with a man she described as a friend, who left the bar but soon began bombarding her phone with text messages and pictures of his genitals. "I'm 54 years old. I have a relationship with my husband that's non-existent," Lisa Nunes testified. Flirting with a younger man "was exciting, she said. "I was just sexting a guy. It was no big deal," she said. Thomas Nunes, 61, said he was stunned when he saw a few of the messages and a photo. He left briefly then returned, grabbed the phone and went home. He read the all text messages and combed his wife's Facebook account looking for proof of infidelity. "I couldn't believe she was doing it right in front of my face," Nunes said. "I felt betrayed." Shaken, he said he smoked marijuana and talked to his cats for about 20 minutes to calm himself and "reason out a plan." Mitt: I’d give Fed boss the heave-ho (NewsCorp) Republican presidential candidate Mitt Romney said yesterday that if elected, he would select a new Federal Reserve chairman, replacing Ben Bernanke, countering advice Tuesday from top economic adviser Glenn Hubbard that Bernanke should be considered for a third term. Return to Gold Standard Is Seen By Some as 'Ludicrous' (CNBC) The Financial Times reported on Friday that the Republican Party plans to set up a commission to look into re-establishing the link between the dollar and gold as part of its platform to be unveiled at the party convention in Tampa Bay, Fla., next week. But analysts told CNBC that the idea would not work. “I think it’s absolutely nonsensical,” Moorad Choudhry, head of treasury at the corporate banking division of the Royal Bank of Scotland told CNBC Friday. “There’s a very good reason they unhooked it in 1971, because their deficit didn’t enable them to maintain it with the supply of gold. In fact, is there enough gold in the world to back the U.S. debt?” Money Funds Test Geithner, Bernanke As Schapiro Defeated (Bloomberg) Money-market mutual funds, an alternative to bank accounts for individuals and companies, will test the resolve of the U.S. Federal Reserve and Treasury Department to prevent another financial crisis after the $2.6 trillion industry successfully lobbied against more regulation by the Securities and Exchange Commission. Fed Governor Daniel Tarullo has said the central bank could tighten rules on banks’ borrowing from money-market funds, and Boston Fed President Eric Rosengren has said officials have the option to force banks to back their money funds with capital. The Fed and the Treasury could also work through the Financial Stability Oversight Council, a new regulatory panel formed under the Dodd-Frank Act, to seize oversight of money funds from the SEC and grant that power to the Fed. Ryan Lochte Discusses Racing Prince Harry (NBC) Lochte had never met the prince until the royal's entourage approached him that night. "His people came over to my table and said, 'Prince Harry wants to meet you,'" he said. "I was like, 'Lets meet him.' I went over there. I was fully clothed, and he says, 'You want to race me in the pool?' I took off my shirt, jumped in and we started racing." Only hours later, all of the prince’s clothes came off in a now-infamous strip-billiards incident that took place in a hotel suite. Lochte did not get the invite to play strip billiards with the prince and his friends. “He never said anything like that,’’ Lochte said. “After our race and everything, we went our separate ways. I’m kind of happy. I don’t need that.’’

Credit Suisse Chief Takes Sharp Pay Cut (WSJ) Mr. Dougan's compensation more than halved to 5.8 million Swiss francs ($6.3 million) from 12.8 million francs a year earlier. Like all of Credit Suisse's top managers, he didn't get a cash bonus. While Mr. Dougan's base salary remained unchanged, his bonus, awarded in the form of deferred stocks, fell 69% to reflect the sharp drop in profits last year and the 41% drop in Credit Suisse's share price in 2011. SEC Probes Rapid Trading (WSJ) Federal securities regulators are examining whether some sophisticated, rapid-fire trading firms have used their close links to computerized stock exchanges to gain an unfair advantage over other investors, people familiar with the matter say. The wide-ranging probe, being handled by the enforcement staff of the Securities and Exchange Commission, is focusing on the computer-driven trading platforms of exchanges, including BATS Global Markets Inc., the people said. Fed’s Bullard Sees Price Threat From G-7 Delaying Tighter Policy (Bloomberg) U.S. monetary policy may be at a “turning point” and the Fed’s first interest-rate increase since the global financial crisis could come as soon as late 2013, Bullard said in a speech earlier today. That view contrasts with a debate among Fed policy makers on whether more stimulus is needed even after the U.S. economy accelerated and the unemployment rate fell. Bales Had Troubled Broker Career Before Allegations (Bloomberg) Robert Bales, the U.S. soldier suspected of shooting Afghan civilians, started selling community-bank stocks in 1996 as a 23-year-old driving a Chevy Cavalier. That may have been the peak of his financial career. Before Bales enlisted in the Army in 2001 after the Sept. 11 terrorist attacks, he worked at five firms in five years. After he left the industry, he was hit with a $1.5 million settlement for his role in swindling a couple out of more than $600,000 from their retirement account. “He wanted to be an investment adviser, and he had a plan as to how he was going to accomplish that,” said Robert K. Cargin, who hired Bales in September 2000 at Quantum Securities Corp. in Westerville, Ohio. “It just didn’t work out.” BofA Tests An Option To Foreclosure (WSJ) Borrowers would agree to a what is known as a "deed-in-lieu" of foreclosure, where they essentially sign over ownership of the property to the lender. This is less costly to the bank and also does less damage to a borrower's credit than a foreclosure. In exchange, former owners would be offered one-year leases with options to renew the leases in each of the following two years at rents that the bank determines are at or below the current market price. Borrowers would have to demonstrate an ability to pay the market rent. ‘Linsanity’ pot nipped in bud (NYP) The Knicks’ new superstar point guard’s legal eagles threw cease-and-desist orders at three California medical-marijuana dispensaries that were offering customers “Linsanity” weed...Two of the dispensaries discontinued the names and the other simply rebranded its grass “Insanity.” Skowron plans to appeal court’s ruling on $10.2M (NYP) Joseph “Chip” Skowron, the former FrontPoint fund manager now jailed for insider trading, plans to fight a judge’s ruling that he pay $10.2 million to his former employer, Morgan Stanley. Skowron’s attorney intends to appeal the ruling handed down Tuesday by Manhattan federal judge Denise Cote, Skowron’s spokesman, Montieth Illingworth, said. Illingworth also blasted Morgan Stanley’s plans to pursue another $33 million, which Cote denied in her decision. The bank, which owned FrontPoint when the scandal hit and clients fled, wanted a total of $45 million in victim’s compensation. UBS Sees ‘Earlier’ Fed Move; Barclays Sees Rates on Hold (Bloomberg) “We regard the trend toward higher yields as a healthy development,” Andrew Cates in Singapore and Larry Hatheway and Christine Li in London wrote in a UBS report yesterday. “It reflects a healing process in the U.S. economy and recognition that the Fed will be able to normalize monetary policy earlier than many envisage.” Investors should buy two-year Treasuries, Ajay Rajadhyaksha and Dean Maki, New York-based analysts at Barclays, wrote in a report yesterday. “We consider the recent rise in Fed hike expectations premature,” they wrote Obama To Tap Kim For World Bank Post (AP) President Barack Obama will nominate Dartmouth College President Jim Yong Kim to head the World Bank, a surprise pick for the international financial institution's top job, senior administration officials said.

BofA Figures In Drug Probe (WSJ) A Mexican cocaine-trafficking cartel used accounts at Bank of America to hide money and invest illegal drug-trade proceeds in U.S. racehorses, the Federal Bureau of Investigation said. The alleged ties between the violent drug gang known as Los Zetas and the second-largest U.S. bank by assets were described in a 35-page affidavit filed in federal court in Texas last month. According to an FBI agent, a horse-buying and training business created to launder drug money had accounts at the Charlotte, N.C., bank. Libor Probe Moves To Political Arena (WSJ) The scandal over banks' manipulation of key interest rates cost the jobs of three senior financial figures last week. On Monday, the deputy governor of the Bank of England will try to ensure it doesn't derail his own career. Paul Tucker, a leading candidate to become the next governor of the Bank of England, will testify Monday afternoon before a Parliamentary committee that is examining how Barclays and other global banks improperly tried to influence interest rates like the London interbank offered rate...Barclays, after reaching a £290 million settlement with U.S. and British regulators over its attempts to manipulate Libor, sought to defend itself by releasing notes from an October 2008 phone call between Mr. Tucker and Robert Diamond. According to Mr. Diamond's notes from the call, Mr. Tucker relayed concerns from "senior" British government officials about Barclays's above-average Libor submissions. "Mr. Tucker stated…that while he was certain we did not need advice, that it did not always need to be the case that we appeared as high as we have recently," Mr. Diamond wrote to two of his colleagues the day after the call. Diamond Antithesis Seen As Key Step To Repairing Barclays (Bloomberg) The British lender faces a criminal probe and political pressure to curb or separate the investment banking unit that Diamond built up during his 16-year career at Barclays from the consumer bank. The unit generated 61 percent of the bank’s first-quarter pretax profit. At a Parliamentary hearing last week, lawmakers asked if the culture at the investment bank was “rotten” and if he lived in a “parallel universe.” Former Barclays CEO: I Too Fell for the Diamond Myth (FT) "It was a close call," Taylor says of his decision to retain Diamond as head of Barclays Capital. "I suspect the subsequent history of the business would have been very different had I asked him to go. I deserve blame for being among the first to succumb to the myth of Diamond’s indispensability, to which some in Barclays were still in thrall only a matter of days ago." SEC set to hand out up to $452M to whistleblowers (NYP) “The SEC is receiving two to three tips every day that are worth pursuing, and they’re farming them out to staffers for investigation,” said Lawrence A. West, a lawyer with Latham & Watkins. “SEC officials are eager to pay out and publicize the first whistleblower award,” said West, whose firm has gathered a number of tipsters under the new law. “Once the first award is publicized, tips to the SEC from disgruntled employees are almost certain to increase substantially.” Romney Mines Hamptons For Political Cash (NYT) EAST HAMPTON, N.Y. — A woman in a blue chiffon dress poked her head out of a black Range Rover here on Sunday afternoon and yelled to an aide to Mitt Romney. “Is there a V.I.P. entrance? We are V.I.P.” (No such entrance existed.)...what was billed as a day of elegant campaign events at the homes of the ultrarich turned out to be an afternoon of curious and clashing tableaus: protesters with their bandannas and Occupy Wall Street-inspired chants (“We got sold out, banks got bailed out!”) standing amid multimillion-dollar mansions, where live bands played “Margaritaville” and donors dined on prosciutto-wrapped melon balls...After that, Mr. Romney attended events at the Southampton homes of Clifford Sobel, the former United States ambassador to Brazil, and David Koch, the billionaire industrialist and longtime benefactor of conservative political causes. The event at Mr. Koch’s home drew about 200 protesters, who...went so far as to hire a local pilot to fly a giant red and black banner over Mr. Koch’s house, which read: “Romney has a Koch problem,” a play on the drug. (Mr. Koch’s name is pronounced the same as the word coke.) A truck, festooned with the logos of big banks like Citigroup and Wells Fargo, circled the neighborhood with a plastic dog on the roof, a jab at Mr. Romney’s much-mocked family vacation in which he traveled with his Irish setter inside a pet carrier on the roof of a car. Barclays mulls split after Libor scandal: report (MarketWatch) Board directors at U.K. bank Barclays PLC BCS -1.72% are considering splitting the company into two units, as regulatory scrutiny mounts in the wake of its role in the Libor interest-rate fixing scandal, The Sunday Times reports without citing sources. The newspaper says Barclays is examining plans to spin off its investment banking arm, which could be floated in New York, with the U.K.-headquartered retail and commercial bank retaining its London listing. (A person familiar with the matter said the story was inaccurate.) Roubini: My 'Perfect Storm' Scenario Is Unfolding Now (CNBC) In May, Roubini predicted four elements – stalling growth in the U.S., debt troubles in Europe, a slowdown in emerging markets, particularly China, and military conflict in Iran - would come together in to create a storm for the global economy in 2013. “(The) 2013 perfect storm scenario I wrote on months ago is unfolding,” Roubini said on Twitter on Monday. Tighter Control For Euro Banks (WSJ) The establishment of a single authority, with a single set of rules for the region's banks, is seen by Germany and other strong economies as an essential condition before they will consider sharing resources with other euro-zone countries. House-crasher sentenced after enjoying Diddy's food, cigars and toothbrush (NYP) A East New York man, busted for sneaking into rapper Sean “Diddy” Combs’ palatial East Hampton spread in April, guzzled the star’s top-shelf liquor, washed with his soap, and even used his toothbrush, officials revealed yesterday. “I brought a cheesesteak, a cheesecake, a bucket of fried chicken — which I ate at the house — and drank a ‘dollar’ bottle of Hennessy and four cans of Pepsi,” Quamine Taylor told prosecutors at his sentencing yesterday. He even slathered Diddy’s Frank’s Red Hot sauce on his grub, and drank a bottle of Hpnotiq, a vodka liqueur, he said, adding, “After I ate, I went upstairs and went to sleep.” He also smoked three of Diddy’s Dutch Masters cigars and drank a can of orange soda. Then he freshened up using Diddy’s soap and splashing on his aftershave.

Greece Plans 'Special Economic Zones' to Boost Growth (Reuters) Greece plans to set up "special economic zones" to attract private investment and help lift its debt-laden economy out of depression, the government said on Tuesday. The zones would offer investors tax and administrative advantages. Athens is already in talks with the European Commission to get approval for the move, Development Minister Costis Hatzidakis told a news conference. "We believe these zones will boost the real economy by creating a special regime to attract investment and generate exports," Hatzidakis said. Spain's Catalonia to Ask for Aid From Madrid (WSJ) Catalonia, Spain's most indebted region, said Tuesday it will ask for €5.02 billion ($6.27 billion) in financial assistance from the Spanish government's liquidity program, as it struggles to pay for basic services such as hospitals, schools and care homes. Catalan government spokesman Francesc Homs said at a news conference that the government will ask for the funding to "face debts maturing in the coming months." ECB's Draghi Stuck At The Office, To Skip Jackson Hole Symposium (WSJ) "ECB President Mario Draghi had hoped to attend the annual economic symposium in Jackson Hole organized by the Federal Reserve Bank of Kansas City, but has decided not to go to Jackson Hole, due to the heavy workload foreseen in the next few days," an ECB spokesperson wrote in an email. Leonardo DiCaprio To Bare All In 'Wolf Of Wall Street' (NYDN) “There will be some pretty illicit sex scenes coming up,” said a set insider. “It involves four guys and two girls.” And there’ll even be a little guy-on-guy action in one of the orgies — but DiCaprio won’t be in those. Not that there would be anything wrong with that. Scorsese’s film follows the rise and eventual imprisonment of drugged-out real-life former stockbroker Jordan Belfort, who is now a motivational speaker and says he has been sober since his life imploded in the go-go late ’90s and he went to prison. The movie started shooting in the Financial District over the weekend and there’ll be more filming in midtown this week. Later this month, the action will move to a Hamptons estate. DiCaprio was spotted rehearsing at Bank of America with co-star Jonah Hill. Matthew McConaughey also stars, as Belfort’s mentor. “They were incognito and Leo didn’t take his sunglasses off the entire time,” said a Merrill Lynch source. There are some scenes you can bet will be shot strictly behind closed doors. “We have a scene in an office with a troupe of hookers during a coffee break,” the set insider told us. “They are in the process of casting a ton of beautiful models, who are willing to bare it all, to portray escorts and strippers,” our source said. “The girls have to be incredibly hot.” Connecticut Homes Biggest Losers As Wall Street Cuts (Bloomberg) Connecticut, for 25 years the state with the highest per capita income in the U.S., is now leading the nation in home-price declines as Wall Street trims jobs and bonuses that had driven multimillion-dollar property sales. Prices in the Fairfield County area, home of the banker bedroom communities of Greenwich and New Canaan, tumbled 12.9 percent in the second quarter from a year earlier, the biggest decline of the 147 U.S. metropolitan areas measured by the National Association of Realtors. Hero Reagan’s Compromise Would Collide With Tea Party Certitude (Bloomberg) Ronald Reagan remains the modern Republican Party’s most durable hero. His memory will be hailed as The Great Uncompromiser by those who insist the GOP must never flag in its support for smaller government, lower taxes and conservative social values. His record tells a different story. During Reagan’s eight years in the White House, the federal payroll grew by more than 300,000 workers. Although he was a net tax cutter who slashed individual income-tax rates, Reagan raised taxes about a dozen times. His rhetoric matched that of many of today’s most ardent Christian conservatives, yet he proved to be a reluctant warrior on abortion and other social issues. Perhaps most tellingly, he was willing to cut deals, working closely with Democratic leaders such as House Speaker Tip O’Neill of Massachusetts to overhaul Social Security and House Ways and Means Committee Chairman Dan Rostenkowski of Illinois to revamp the tax code. Ann Romney Takes Biggest Stage Yet To Humanize Husband (Bloomberg) Mitt Romney’s likability gap was evident in a Washington Post/ABC News poll released yesterday. The poll, taken Aug. 22-25, showed 27 percent of registered voters find Romney to be more friendly or likable among the two candidates, compared with 61 percent for the incumbent. Kidney for Ohio patient's transplant put in trash (AP) A nurse accidentally disposed of a kidney from a living donor this month at an Ohio hospital, and doctors tried unsuccessfully for at least two hours to resuscitate the organ in what medical experts describe as a rare accident, health officials said. "Human error rendered the kidney unusable," University of Toledo Medical Center spokesman Toby Klinger said Saturday, but he declined to give more details, citing the hospital's investigation into what happened and its respect for the privacy of the patients involved. But one of the doctors involved told Dr. David Grossman, a Toledo-Lucas County health commissioner, that a nurse disposed of the kidney improperly. Two nurses have been placed on paid administrative leave while the hospital reviews what happened, Klinger said.