UK Regulators Could Split Banks (WSJ) U.K. Treasury chief George Osborne on Monday will announce new powers for regulators to split up banks that flout rules designed to ring-fence retail banking from riskier investment-banking activity. In a wide-ranging speech on banking in Bournemouth, England, Mr. Osborne is expected to say the new powers are needed so that taxpayers will never again be on the hook when banks fail, as they were during the financial crisis. "We're not going to repeat the mistakes of the past. In America and elsewhere, banks found ways to undermine and get around the rules," Mr. Osborne will say, according to the extracts of his speech. "We could see that again—so we are going to arm ourselves in advance. In the jargon, we will "electrify the ring fence." New Details Suggest a Defense in SAC Case (NYT) In bringing its charges, the government said that SAC not only sold out of its position, but also bet against — or shorted — the drug companies' stocks before the public announcement of the bad news. The SAC short position, according to prosecutors, allowed it to earn big profits after shares of the companies, Elan and Wyeth, plummeted. "The fund didn't merely avoid losses, it greedily schemed to profit further by shorting Elan and Wyeth stock," said April Brooks, a senior F.B.I. official in New York, during a press conference on Nov. 20, the day Mr. Martoma was arrested. Internal SAC trading records, according to people directly involved in the case, indicate that the hedge fund did not have a negative bet in place in advance of the announcement of the drug trial's disappointing results. Instead, the records indicated that SAC, through a series of trades, including a complex transaction known as an equity swap, had virtually no exposure — neither long nor short — heading into the disclosure of the drug data. Blackstone To Become Investment Bank? (FT) Blackstone, one of the world's largest alternative asset managers, has quietly secured a securities underwriting licence as its expanding capital markets operation strays into investment banking territory. The licence marks the latest stage in the transformation of big listed private equity groups as they become more broadly based alternative asset managers. Apollo and KKR , two of Blackstone's biggest rivals, also have securities underwriting licences. The move highlights the pressure listed private equity groups are under to generate new sources of fee income to satisfy their public shareholders. "The private equity business is lousy for shareholders," says the head of capital markets for one buyout firm that is not listed. Obama: more tax revenue needed to address deficit (Reuters) President Barack Obama said on Sunday more tax revenue would be needed to reduce the U.S. deficit and signaled he would push hard to get rid of loopholes such as the "carried interest" tax break enjoyed by private equity and hedge fund managers. Herbalife Is The Subject Of 'Pending' Probe (NYP) The Los Angeles-based distributor of nutritional products is the subject of a law enforcement investigation, The Post has learned. The existence of the probe emerged after the Federal Trade Commission, responding to a Freedom of Information Law request by The Post, released 192 complaints filed against Herbalife over the past seven years. New Orleans Braces From Fallout From Blackout (AP) The outage, blamed on an unspecified "abnormality" in the Superdome's power system, was an embarrassment for New Orleans, which was hosting its first Super Bowl since 2002 and was eager to show off how it has been rebuilt since Hurricane Katrina. Mayor Mitch Landrieu called Sunday night's outage "an unfortunate moment in what has been an otherwise shining Super Bowl week for the city of New Orleans." He said he expected to receive "a full after-action report from all parties involved" in the coming days...For 34 minutes, the players tried to stay loose, the fans milled about in darkened corridors, and stadium officials scrambled to figure out what went wrong. The Ravens barely hung on for a 34-31 victory over the San Francisco 49ers, needing a goal-line stand in the closing minutes to preserve the championship. "It really hurt us," Baltimore fullback Vonta Leach said. "We had lot of momentum." There is sure to be some fallout for the city and the Superdome — especially since New Orleans plans to bid for the title game in 2018, in conjunction with the 300th anniversary of its founding. Escalators stopped working and credit-card machines shut down, though auxiliary power kept the playing field and concourses from going totally dark. "We sincerely apologize for the incident," Superdome spokesman Eric Eagan said. Most fans seemed to take the outage in stride, even starting up the wave to pass the time. "So we had to spend 30 minutes in the dark? That was just more time for fans to refill their drinks," said Amanda Black of Columbus, Miss. Question of Aiding Cyprus Places Germany in a Bind (NYT) In recent days, Germany has signaled that it is reluctantly edging toward a bailout for Cyprus, a haven for Russian cash, after lifelines have been extended to Greece, Ireland and Portugal to prevent potentially calamitous defaults. While Cyprus makes up just a sliver of the euro zone economy, it is proving to be a first-rate political headache. "I don't think that Germany has ever in the history of the euro zone crisis left itself so little wiggle room," said Nicholas Spiro, the managing director of Spiro Sovereign Strategy in London. "But Germany wants the euro to succeed and survive, and they are saying we can't afford a Cyprus bankruptcy." BlackRock Sued by Funds Over Securities Lending Fees (Bloomberg) BlackRock is accused in a lawsuit by two pension funds of reaping “grossly excessive” compensation from securities- lending returns associated with iShares Inc. “Defendants have systematically violated their fiduciary duties, setting up an excessive fee structure designed to loot securities lending returns properly due to iShares investors,” the funds, which invest in iShares, said in a complaint in federal court in Nashville, Tennessee. Two Top Barclays Executives Resign (WSJ) Barclays, whose chairman, chief executive and chief operating officer all resigned last summer in the wake of a series of controversies, said Sunday evening that finance chief Chris Lucas and Mark Harding, its general counsel, will both be retiring in coming months...Messrs. Lucas and Harding were longtime Barclays veterans who worked closely with former CEO Robert Diamond, who resigned last summer after the bank admitted that it had tried to rig benchmark interest rates and paid a roughly $450 million penalty. Youngest American Woman Billionaire Found With In-N-Out (Bloomberg) Lunchtime at the flagship In-N-Out Burger restaurant in Baldwin Park, California, is a study in efficiency. As the order line swells, smiling workers swoop in to operate empty cash registers. Another staffer cleans tables, asking customers if they’re enjoying their hamburger. Outside, a woman armed with a hand-held ordering machine speeds up the drive-through line. Such service has helped In-N-Out create a rabid fan base -- and make Lynsi Torres, the chain’s 30-year-old owner and president, one of the youngest female billionaires on Earth. New store openings often resemble product releases from Apple, with customers lined up hours in advance. City officials plead with the Irvine, California-based company to open restaurants in their municipalities. “They have done a fantastic job of building and maintaining a kind of cult following,” said Bob Goldin, executive vice president of Chicago-based food industry research firm Technomic Inc. “Someone would love to buy them.” That someone includes billionaire investor Warren Buffett, who told a group of visiting business students in 2005 that he’d like to own the chain, according to an account of the meeting on the UCLA Anderson School of Management website. Mint officially ends distribution of Canadian penny (CP) The phasing-out of the penny will lurch ahead today with the Royal Canadian Mint officially ending its distribution of one-cent coins to Canada's financial institutions. The move comes nearly a year after Finance Minister Jim Flaherty announced the demise of the penny, whose production cost came to exceed its monetary value. But as it faces extinction in the pockets and tills of most Canadians, the humble penny is still in demand in some artistic circles where it retains significant value. Renee Gruszecki, a Halifax-based academic and archivist, has spent the past year making a living through a jewelry business devoted primarily to preserving the country's stray cents. About 30,000 strategically sorted pennies fill Gruszecki's home and eventually find their way into the accessories produced at Coin Coin Designs and Co. Gruszecki, a long-time collector of lucky pennies, believes her pieces will help preserve a symbol that is both an object of superstition and a Canadian icon. "The maple leaf is synonymous with everything Canadian. We all identify with it," she said in a telephone interview. "Now it's just no longer going to be present among us, so I'm saddened by that." The Bank of Canada's Currency Museum has already taken steps to preserve the penny's place in Canadian culture. A mural consisting of nearly 16,000 one-cent pieces has been assembled at the museum to commemorate the coin's history, said assistant curator Raewyn Passmore. The mosaic, which depicts a giant penny measuring about two square metres, is comprised of coins ranging from the lustrous to the tarnished.

RBS May Be Bigger Libor Culprit Than Barclays, Says MP (Guardian) John Mann, a Labour MP on the Treasury select committee, said "City insiders" had suggested RBS's involvement may be "noticeably worse" than Barclays.' [...] Mann's comments came as a former RBS trader claimed that the bank's internal checks were so lax that anyone could change Libor rates. Court documents filed in Singapore show that Tan Chi Min, who is suing RBS for wrongful dismissal, claimed that in 2008 a trader for the bank, Will Hall, changed the Libor submission even though he was part of the Japanese yen swap desk in London. The papers show that Tan, who worked for RBS in Singapore, raised the issue at his disciplinary meeting last September, saying the bank's internal procedure in London seemed to be that "anyone can change Libor". Spain Expects to Tap About $75 Billion in Rescue Financing for Its Banks (NYT) Spain expects to use about 60 billion euros, or $75 billion, of the 100 billion euros of bank rescue financing offered by European finance ministers in June, according to the Spanish economy minister, Luis de Guindos. UK Investment Bankers Prefer Singapore (FT) The southeast-Asian city state has become the most favored location for investment bankers who are based in London, research by financial services recruitment firm Astbury Marsden shows. Of the 462 investment bankers that were asked, 31 percent said they would most like to work in Singapore. By comparison, only a fifth preferred New York and only 19 percent opted in favor of London. In the year before, 22 percent named London as their preferred location, underlining how the British capital has lost some appeal among investment bankers amid tighter regulation and a clampdown on bonuses. “A fast growing, low tax and bank friendly environment like Singapore stands as a perfect antidote to the comparatively high tax and anti-banker sentiment of London and New York,” said Mark Cameron, chief operating officer at Astbury Marsden. “Far more London-based bankers are now more willing and able to relocate the 6,700 miles to Singapore.” Another Madoff Name Nix (NYP) The second of Ponzi-schemer Bernie Madoff’s daughters-in-law is asking a court for permission to shed her now notorious married name. Deborah West Madoff, who started divorce proceedings against Bernie’s son Andrew back in 2008, has sought permission in Manhattan Supreme Court to revert to her maiden name. The couple have two children. She’s not the first in the family to do so: in 2010, her sister-in-law made a similar court application. Suits Mount In Rate Scandal (WSJ) It won't be easy for the plaintiffs to win in court even though financial institutions are likely to reach settlements with regulators in coming months totaling billions of dollars, according to people close to the Libor investigation. The plaintiffs must prove that banks successfully manipulated interest-rate benchmarks such as the London interbank offered rate, or Libor, and caused the plaintiffs to suffer a loss. Still, some investors and analysts are forecasting huge damages despite the legal hurdles. In a July report, Macquarie Research estimated that banks face potential legal liability of about $176 billion, based on the assumption that Libor was "understated" by 0.4 percentage points in 2008 and 2009. Carlyle Group marketed $25 million deal without license: Kuwaiti firm (AP) A Kuwaiti company suing the Carlyle Group over a $25 million investment that went bad is now accusing the private equity firm of marketing the deal without a license as it seeks to have its case heard in Kuwaiti courts. The latest claim by Kuwait's National Industries Group adds a new twist to its more than two-and-a-half year legal challenge to Carlyle, and could complicate the American company's relationships with other wealthy Mideast investors. NIG's lawsuit focuses on a Carlyle investment fund that was one of the earliest casualties of the financial crisis when it collapsed in 2008. The fund has been the subject of multiple lawsuits against Washington-based Carlyle. Couple in court for disturbing the peace for 'screaming, moaning and swearing during seven-hour sex romps five nights a week' (DM) Jessica Angel and Colin MacKenzie had been issued with an order requiring them to prevent ‘screaming, loud moaning, swearing and raised voices’ after police were called to their flat 20 times in just four months. However, following further complaints from neighbours, the couple were charged under the Environmental Protection Act. They face a £3,000 fine if convicted...Mr MacKenzie, 45, from Sturt, South Australia, said: ‘How can you live in a place where you can’t have sex? It’s ridiculous. Anyway, it’s mostly Jessie. The sex goes from four to seven hours, five nights a week. I’ll probably die of a heart attack – she’s almost killing me.’ German Official Opposes European Debt Purchases (NYT) The president of the German central bank said in an interview published Sunday that he remained staunchly opposed to government bond purchases by the European Central Bank, a position that could make it more difficult to deploy a weapon many economists believe is essential to saving the euro. But in a sign that the mood in Germany could be shifting, Chancellor Angela Merkel adopted a more dovish tone during a separate interview. She told members of her governing coalition to stop talking about Greece leaving the euro. “We are in a decisive phase in the battle against the euro zone debt crisis,” Ms. Merkel told ARD television. “Everyone should weigh their words very carefully.” Fed mulls open season on bond buys to help economy (Reuters) The Federal Reserve is considering a new approach to unconventional monetary policy that would give it more leeway to tailor the scale of its stimulus to changing economic winds. While fresh measures are not assured and the timing of any potential moves are still in question, some officials have said any new bond buying, or quantitative easing, could be open-ended, meaning it would not be bound by a fixed amount or time frame. "I am inclined to think that if the Fed decides on more QE it would be of the open-ended variety," said Michael Feroli, chief U.S. economist at JPMorgan and a former Fed economist. BlackRock Bullish On Thai Bonds, Region’s Worst (Bloomberg) BlackRock is bullish on Thai bonds, Asia’s worst-performing in 2012, saying the central bank has room to ease monetary policy as a global slump cools demand for exports from Southeast Asia’s second-largest economy. Former SC Gov. Mark Sanford to wed ex-mistress Maria Belen Chapur (NYDN) "Yes, we are engaged, and I'm both happy and excited for what that means," Sanford said in a statement obtained by CNN. "I have long expressed my feelings for her, she's a wonderful person. My closest friends have met and love her, and I look forward to introducing her to still many more that have yet to do so." The conservative Republican's political aspirations were dashed in 2009 when he disappeared from South Carolina for five days under the pretense that he was hiking the Appalachian Trail. The father of four, who was once thought to be a potential 2012 presidential contender, later admitted that he was actually visiting Chapur, who he professed to be his "soul mate." "I've been unfaithful to my wife," Sanford said at the time. "I developed a relationship with what started as a dear, dear friend from Argentina."

JP Morgan tops estimates; Five big banks' living wills rejected; Mr. Met loves the Mets, despite being denied National League Championship ring; and more.

Money-laundering and Merkel and Hobbit rings, oh my!

Goldman and Citi beat estimates; Ben Bernanke works for Ken Griffin now; Schwarzman describes Blackstone as "earnings machine"; Stripper School shutdown; and more.