Opening Bell: 08.28.13

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Regulators Ready Fines Over London Whale Case (WSJ)
JP Morgan Chase & Co.'s penalties for the "London whale" trading fiasco are expected to total $500 million to $600 million as part of a far-reaching settlement that could wrap up as soon as next month, according to people close to the situation.

Currency Spikes at 4 P.M. in London Provide Rigging Clues (Bloomberg)
In the space of 20 minutes on the last Friday in June, the value of the U.S. dollar jumped 0.57 percent against its Canadian counterpart, the biggest move in a month. Within an hour, two-thirds of that gain had melted away. The same pattern -- a sudden surge minutes before 4 p.m. in London on the last trading day of the month, followed by a quick reversal -- occurred 31 percent of the time across 14 currency pairs over two years, according to data compiled by Bloomberg. For the most frequently traded pairs, such as euro-dollar, it happened about half the time, the data show...fund managers and scholars say the patterns look like an attempt by currency dealers to manipulate the rates, distorting the value of trillions of dollars of investments in funds that track global indexes.

Fed Candidates Worth Millions (WSJ)
Janet Yellen, the No. 2 at the Fed's Board of Governors, and her husband—Nobel Prize-winning economist George Akerlof—had assets such as stocks, bond-fund shares and bank accounts valued at roughly $4.8 million to $13.2 million in 2012, according to financial disclosures released by the Fed on Tuesday. The disclosure forms use ranges rather than specific amounts. Former Treasury Secretary Lawrence Summers, 58 years old, is also wealthy. As a private citizen, he doesn't have to publicly disclose his current net worth, but he had assets valued at roughly between $7.9 million and $31.7 million when he joined the Obama administration in 2009, according to a disclosure released by the White House that April. Mr. Summers also reported receiving about $5.2 million of compensation from hedge fund D.E. Shaw & Co. in 2008 and 2009, and a further $2.7 million in speaking fees in 2008. Since leaving the government, he has earned hefty fees for speeches and has served as a paid consultant to a number of financial firms.

Mongolia Warms To Foreign Investors (WSJ)
Under the changes, the landlocked Asian nation would lower barriers for foreign investors in "strategic" sectors including mining, telecommunications and finance—though it would still closely scrutinize deals involving government-controlled companies such as China's big state-owned enterprises.

Brothels In Nevada Shrivel As Web Disrupts Oldest Trade (Bloomberg)
In a dim parlor furnished with red velvet couches and a stripper pole, Brooke Taylor is having a sale on herself. “I offer a lot more specials and discounts and incentives for people to come in to see me,” said Taylor, 32, a brunette prostitute in a short, green dress at the Moonlite Bunny Ranch outside Carson City, Nevada. “People are looking for deals.” Nevada’s legal brothels, which took root in the mid-1800s silver-mining boom, are dwindling, down to about 19 from roughly 36 in 1985, according to George Flint, an industry lobbyist. Many have been the highest-profile businesses in their sparsely populated regions, and their decline hurts already-stretched county budgets and marks the end to local institutions -- though not the universally beloved sort. The state’s flagging economy, decreased patronage by truckers squeezed by fuel costs and growing use of the Internet to arrange liaisons are to blame, managers say...Susan Austin, who said she became a prostitute at 49 before becoming a madam, said the Mustang Ranch is seeing fewer clients than five years ago, though she wouldn’t provide figures. “They’re getting less services because they’re paying less, but they’re still seeing their favorite ladies,” Austin said in the brothel’s Italian suite, which features a four-poster bed, tiger-print carpet and hot tub. “It’s like anything: When the economy takes a dive, you just live with less frills.”

Swiss Give Nod To Possible Tax Deal With US (Reuters)
The government said on Wednesday the signing of the joint statement should enable Swiss banks to resolve the dispute with the United States while complying with existing Swiss laws. It gave no further details.

Regulators To Fine JP Morgan $80 Million Over Consumer Dealings (Reuters)
The regulators are investigating reports that the bank sold an identity-theft protection with false promises to credit card customers through a third-party vendor, the paper reported. In another set of actions, the regulators are targeting the bank for flooding state courts with lawsuits that used faulty documentation to substantiate the amount owed by consumers, the people told the paper.

Nasdaq Left SEC In The 'Dark' (NYP)
The soon-to-be No. 3 exchange irked regulators at the Securities and Exchange Commission for not immediately tipping its top officials to the technical glitch that forced an unprecedented three-hour freeze last week, sources tell The Post. SEC higher-ups, several sources tell The Post, are unhappy with CEO Bob Greifeld’s lack of promptness in informing Chairman Mary Jo White that its computers were starting to face a systemwide meltdown.

In Oklahoma, Sculptor Has High Hopes For 'The American' (WSJ)
Mr. Gray, a 57-year-old sculptor of Osage tribal heritage, is on a quixotic quest to erect a 217-foot-high bronze rendering of a Native American warrior with an eagle perched on his arm. Titled "The American," the colossal work would be considerably larger than the Statue of Liberty, the nation's tallest statue, which is about 151 feet from torch to toes, not counting her pedestal...Mr. Gray aims to awe with sheer scale. The outer skin of "The American" would be composed of 3,600 bronze panels weighing in total more than 350,000 pounds. The eagle alone would have a wingspan of 103 feet. Visitors would be able to enter at the base, board an elevator and ascend the sculpture. Herds of live buffalo would surround it.

Alec Baldwin gets into street scuffle with NY photographer, pins man against hood of car (NYDN)
“Alec didn’t want them taking any more pictures, so he went over and confronted him,” said Erick Nguyen, 46, who manages Saigon Market, across the street from the faceoff on University Place. “They were jawing,” Nguyen added. “Baldwin grabbed him and threw him against the car.”

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Opening Bell: 06.21.12

SEC Said To Depose SAC’s Cohen In Insider-Trading Probe (Bloomberg) Cohen, 56, was recently deposed by Securities and Exchange Commission investigators in New York about trades made close to news such as mergers and earnings that generated profits at his hedge fund, said one of the people, who asked not to be identified because the investigation isn’t public. Neither Cohen nor SAC Capital, which oversees about $14 billion, has been accused of wrongdoing. Four-Week Jobless Claims Average Reaches 2012 High (Reuters) Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 387,000, the Labor Department said. The prior week's figure was revised up to 389,000 from the previously reported 386,000. Lawmakers Call For IPO Overhaul (WSJ) A bipartisan group of lawmakers called on regulators to overhaul the way initial public offerings are conducted, concerned that last month's flubbed stock sale by Facebook shows the current system unfairly punishes small investors. In a letter to Securities and Exchange Commission Chairman Mary Schapiro, Rep. Darrell Issa (R., Calif.) prodded the agency to revamp rules for pricing and disclosure in IPOs. Mr. Issa, who wrote the letter on behalf of the House Oversight and Government Reform Committee, said the social-networking company's steep share-price decline since its May 18 offering is a sign that investment banks are able to "dictate pricing while only indirectly considering market supply-and-demand." Separately, the Democratic chairman of a subcommittee of the Senate Banking Committee said regulatory changes are needed to bolster investor confidence sapped by Facebook's botched debut. Facebook’s 22% Rally Helps Stock Avoid Worst IPO Return In U.S. (Bloomberg) So that's something! Riskier Bets Pitched To Asia's Rising Rich (WSJ) In Japan, brokers are dangling what they claim is a tasty product in front of wealthy investors: a "triple-decker" that uses options to squeeze higher returns from stocks, "junk" bonds or other assets. If a triple-decker doesn't suit an investor's fancy, there is the increasingly popular—and slightly less complex—"double-decker." Elsewhere in Asia, so-called hybrid bonds and other high-yield varieties can be had. Investors in Singapore recently could buy so-called perpetual bonds through ATMs. Across Asia, brokers are pushing to sell increasingly complex products to the region's expanding ranks of investors, especially wealthy ones. These types of products appeal to those hungry for yield who normally focus on stocks and real estate but are worried about falling equity markets and the sudden shortage of initial public offerings. BlueMountain Said To Help Unwind JPMorgan’s Whale Trades (Bloomberg) A hedge fund run by a former JPMorgan Chase executive who helped create the credit- derivatives market is aiding the lender as it unwinds trades in an index at the heart of a loss of more than $2 billion. BlueMountain Capital Management LLC, co-founded by Andrew Feldstein, has been compiling trades in Series 9 of the Markit CDX North America Investment Grade Index in recent weeks, then selling the positions to the New York-based bank, according to three people outside the firms who are familiar with the strategy. JPMorgan tapped BlueMountain as a middleman after trades in its London chief investment office grew so large that the bank was creating price distortions that hedge funds sought to exploit, said the market participants, who asked not to be identified because they weren’t authorized to discuss the trades. BlueMountain was one of the funds that benefited from the price dislocations, the people said. US Olympic committee send cease and desist letter to knitting Olympics (TNT) The US Olympic committee has sent a cease and desist letter to the social networking group Ravelry, who had organised a Ravelympics in which contestants would compete in events such as ‘scarf hockey’ while watching the actual Games on TV...The US Olympic Committee has said that “the athletes of Team USA have spent the better part of the entire lives training for the opportunity to compete at the Olympic Games and represent their country in a sport that means everything to them” and that “using the name ‘Ravelympics’ for a competition that involves an afghan marathon and sweater triathlon tends to denigrate the true nature of the Olympic Games”. Romney Campaign Said To Ask Scott To Downplay Job Gains (Bloomberg) Mitt Romney’s presidential campaign asked Florida Governor Rick Scott to tone down his statements heralding improvements in the state’s economy because they clash with the presumptive Republican nominee’s message that the nation is suffering under President Barack Obama, according to two people familiar with the matter. Scott, a Republican, was asked to say that the state’s jobless rate could improve faster under a Romney presidency, according to the people, who asked not to be named. Lonely Hedge Fund Bullish On Greece Tries To Woo Investors (Bloomberg) In March, Elliott met with the investment chief of a family office in London who said within seconds of sitting down that the firm had no interest in giving money to a hedge fund wagering on Greece. The executive merely wanted to hear his story, Elliott, the founder of Naftilia Asset Management Ltd., said in a telephone interview from his office in Athens. Elliott, 39, responded by asking a few questions of his own, including whether the executive had invested in Russia after its 1998 currency crisis, in Argentina 10 years ago after the nation defaulted on its debt or in the Standard & Poor’s 500 Index (SPX) in March 2009, when the benchmark plunged to its lowest point in 13 years. Finally, Elliott questioned whether the family office’s investment chief had ever bought shares of Apple. In all cases, the answer was no. “Then you are not qualified to be discussing Greece with me because you have missed the best investment opportunities over the past 20 years,” Elliott retorted. National Bank Of Greece To Sell Luxury Resort As Slump Bites (Bloomberg) If you know anyone who's interested: The 3.3 million-square-foot (307,000 square-meter) Astir Palace complex has already drawn investors’ interest, according to Aristotelis Karytinos, general manager of real estate at the lender. The Athens-based bank and Greece’s privatization fund, which owns part of the property, will put out a public tender in coming months, he said. Fed Warns Of Risk To Economy (WSJ) Fed Chairman Ben Bernanke made clear in a news conference after the policy makers' meeting that he is prepared to take further action if he doesn't see progress on bringing down unemployment, which was 8.2% in May. "I wouldn't accept the proposition though that the Fed has no more ammunition," Mr. Bernanke said. He added, "if we don't see continued improvement in the labor market we'll be prepared to take additional steps." Australian mega-brothel gets go-ahead (AP) A Sydney brothel has received the green light for a multi-million-dollar expansion which will see it become Australia's largest sex premises, with rooms featuring multiple beds and pool tables. Plans to double the number of rooms at inner Sydney's "Stiletto" into a mega-brothel complex were knocked back late last year by the city council on the grounds that it was too big. But the owners won an appeal to the Land and Environment Court this week, with Commissioner Susan O'Neill ruling the Aus$12 million ($12.2 million) development, including a wing for group bookings, should go ahead...Stiletto promotes itself as "the world's finest short-stay boutique hotel and Sydney brothel". Its standard hourly rate of Aus$370 includes room, lady of choice and beverages.