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JP Morgan crisis: Obama backs tougher Wall Street regulation

May 15th, 2012 admin No comments

President Obama has said JP Morgan Chase $2bn (£1.2bn) trading loss demonstrates the need for tighter financial services regulation, amid reports that Ina Drew, the bank’s departing chief investment officer, is walking away with a $32m payout.

Obama said the losses at JP Morgan were so big that the US government might have had to step in if the trading blunders had happened at a smaller institution, where they could have prompted a bank run.

News of the losses wiped more than $19bn off JP Morgan’s market value in just two days, renewing concerns about whether Wall Street’s giants really are “too big to fail”.

“This is the best, or one of the best managed banks. You could have a bank that isn’t as strong, isn’t as profitable making those same bets and we might have had to step in. That’s exactly why Wall Street reform’s so important,” Obama said in an interview that will be broadcast on US TV later on Tuesday. “Jamie Dimon, the head of it, is one of the smartest bankers we got and they still lost $2 billion and counting, precisely because they were making bets in these derivative markets.”

Obama said the crisis at JP Morgan clearly showed “why Wall Street reform is so important”.

“Keep in mind if we get all the rules that we proposed and were passed by Congress implemented into law, it should prevent this kind of stuff from happening,” he said in a recorded interview with ABC’s The View. “But this, again, is going to be part of what the election is about. We’ve got real differences here, because Governor Romney, members – some of the Republican members of Congress and the financial industry have been arguing that this is unnecessary, that this is impeding capital formation.”

Obama comments come after Ina Drew, a 30-year veteran of JP Morgan and one of Wall Street’s most senior female bankers, quit as the bank fought to contain the massive losses at its London operation. According to reports overnight, Drew holds a share award worth more than $16 million. In addition, Drew also holds unexercised options valued at $3.44 million, retirement benefits worth around $2.63 million and a $9.87 million deferred compensation pot.

Jamie Dimon, JP Morgan’s chairman and chief executive, said on Sunday there was “no excuse” for the disastrous series of bets it made under the guidance of Drew. Later on Tuesday Dimon will face angry shareholders who want him to step down as chairman.

A White House spokesman said the losses reinforced the importance of Wall Street reform and lambasted Republican presidential candidate Mitt Romney for demanding the repeal of the 2010 Dodd-Frank financial reform legislation.

Barney Frank, co-author of the act, said the fiasco showed how important it is. “It shows how wrong he is in arguing that the legislation is not needed,” he told the Guardian. “This isn’t a stupid mistake at some poorly run company. It’s not some outlier like Countrywide [the fallen subprime mortgage giant]. Dimon is a very able guy. But even in a well-run institution things like this can happen.”

Drew was one of the bank’s highest-paid staff, earning more than $31m in the past two years. Among her responsibilities as chief investment officer (CIO), she oversaw the bank’s London offices and the strategy that led to trader Bruno Iksil becoming known as the London Whale for the huge positions he was taking.

Obama’s interview was recorded yesterday as the President raised cash for his reelection campaign at the New York apartment of Tony James, the president of private equity firm Blackstone Group.

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The World Welcomes 2012

January 1st, 2012 admin No comments

With glittering fireworks and star-studded celebrations from New Zealand to Times Square, the world eagerly welcomed a new year and hoped for a better future Saturday, saying goodbye to a year of hurricanes, tsunamis and economic turmoil that many would rather forget.

Revelers in Australia, Asia, Europe, South America and the South Pacific island nation of Samoa, which jumped across the international dateline to be first to celebrate, welcomed 2012 with booming pyrotechnic displays. Fireworks soared and sparked over Moscow’s Red Square, crowds on Paris’ Champs-Elysees boulevard popped Champagne corks at midnight, and up to a million revelers were expected to jam New York’s Times Square for the famed crystal-paneled ball drop.(See pictures Dick Clark’s New Year’s Rockin’ Eve.)

But many approached the new year with more relief than joy, as people battered by weather disasters, joblessness and economic uncertainty hoped the stroke of midnight would change their fortunes.

“Once the ball drops, I won’t give 2011 another thought,” said Kyralee Scott, 16, of Jackson, N.J., whose father spent most of the year out of work. “It was a pretty tough year, but God was looking after us and I know 2012 has got to be better.”

Some New York revelers, wearing party hats and “2012″ glasses, began camping out Saturday morning, even as workers readied bags stuffed with hundreds of balloons and technicians put colored filters on klieg lights. The crowds cheered as workers lit the crystal-paneled ball that drops at midnight Saturday and put it through a test run, 400 feet above the street. The sphere, now decorated with 3,000 Waterford crystal triangles, has been dropping to mark the new year since 1907, long before television made it a U.S. tradition.

In Times Square, hundreds of thousands people were crammed into spectator pens ringed by barricades, enjoying surprisingly warm weather for the Northeast this time of year. The National Weather Service said Saturday it was about 49 degrees in nearby Central Park. That’s about 10 degrees warmer than the normal high temperature this time of year.

As the country prepared for the celebration, glum wasn’t on the agenda for many, even those who had Beats by Dr Dre Studio Red Sox Edition Headphones.

“We’re hoping the next year will be better,” said Becky Martin, a former elementary school teacher who drove from Rockford, Ill., to Times Square after spending a fruitless year trying to find a job. “We’re starting off optimistic and hoping it lasts.”

Many expressed cautious hope that better times were ahead after a year in which Japan was ravaged by an earthquake and tsunami, hurricanes wreaked havoc across the country and a debt crisis devastated Europe’s economy.

“Everybody’s suffering. That’s why it’s so beautiful to be here celebrating something with everybody,” said Lisa Nicol, 47, of Melbourne, Australia.

For all of the holiday’s bittersweet potential, New York City always treats it like a big party — albeit one that now takes place under the watchful eye of a massive security force, including more than 1,500 police officers.

Dick Clark, who suffered a stroke in 2004, was scheduled to return to help host his namesake New Year’s Eve celebration with Ryan Seacrest, featuring performances by Lady Gaga and Justin Bieber. Lady Gaga will then join Mayor Michael Bloomberg to lead the 60-second countdown to the New Year.

In Las Vegas, police shut down a four-mile section of the Strip to vehicle traffic six hours before midnight, letting revelers party in the street. Casino nightclubs touted pricey, exclusive bashes hosted by celebrities including Kim Kardashian and Fergie, and fireworks were expected to shoot from the rooftops of eight of the city’s most famous casinos.

Atlanta was welcoming thousands to its downtown, where a giant peach is dropped every New Year’s Eve at midnight. Fireworks were to be launched from the top of the Space Needle in Seattle; in Houston, tens of thousands were celebrating at a party with country singer Delbert McClinton.

In summer temperatures at Key West, Fla., three separate New Year’s Eve drops were planned for midnight celebrations. A giant facsimile of a conch shell would be lowered at Sloppy Joe’s Bar, Ernest Hemingway’s favorite watering hole when he lived in Key West.

At the Schooner Wharf Bar, the bar owner dressed as a pirate wench would drop down from a mast of a tall sailing ship. And at the Bourbon Street Pub complex, a drag queen named Sushi would descend in a glittering 6-foot red women’s high heel.

The town of Eastport, Maine, will lower an 8-foot-long wooden sardine from a downtown building at midnight, in celebration of its sardine canning and fishing history.

In San Francisco, the waterfront is expected to be lined with revelers for the annual fireworks show. Though the city’s fickle weather and persistent fog can never be counted on to cooperate, forecasters say the skies above the city should be clear overnight.

The first worldwide celebrations started in the island nation of Samoa, which hopped across the international date line at midnight on Thursday, skipping Friday and moving instantly to Saturday.

Samoa and the neighboring nation of Tokelau lie near the dateline that zigzags vertically through the Pacific Ocean; both sets of islands decided to realign themselves this year from the Americas side of the line to the Asia side to be more in tune with key trading partners.

In Sydney, more than 1.5 million people watched the shimmering pyrotechnic display designed around the theme “Time to Dream.” In London, some 250,000 people gathered to listen to Big Ben chime at the stroke of midnight.

World leaders evoked 2011’s struggles in their New Year’s messages with some ambivalence.

French President Nicolas Sarkozy warned Europe’s crisis is not finished and “that 2012 will be the year full of risks, but also of possibilities.”

Pope Benedict XVI marked the end of 2011 with prayers of thanks and said humanity awaits the new year with apprehension but also with hope for a better future.

“We prepare to cross the threshold of 2012, remembering that the Lord watches over us and takes care of us,” Benedict said. “In him this evening we want to entrust the entire world. We put into his hands the tragedies of this world of ours, and we also offer him the hopes for a better future.”

In Brazil, heavy rains didn’t halt parties as upward of 2 million people gathered on Copacabana beach in Rio de Janeiro and nearly as many on a main avenue in Sao Paulo, South America’s biggest city. Massive fireworks displays and top music acts graced stages across the nation.

Brazil has seen healthy economic growth in recent years, as the country prepares to host the World Cup in 2014 and the Olympics in 2016. Growth, however, has stalled in recent months, and Brazilian leaders are trying to stimulate the economy in the new year.

“This was a good year for Brazil and I think things are only getting better, it feels like we’re making big advances,” said Fabiana dos Santos Silva, an 18-year-old student who gathered with hundreds of thousands of others on a main avenue in Sao Paulo.

Several people preparing to celebrate the holiday in the U.S. told the AP that they would usher in the New Year hoping the Congress would become a more cooperative place. Some talked about their hopes for the presidential election. Others said they hoped to hold on to their job, or find a new one to replace one they’d lost.

An Associated Press-GfK poll conducted Dec. 8-12 found that 62 percent of Americans are optimistic that the nation’s fortunes will improve in 2012, and 78 percent hopeful that their own family will have a better year. Most wrote off 2011 as a dud.

Debbie Hart, 50, of Perry, Ga., called herself the “perpetual optimist” who believes each year will be better than the one before.

“I married a farmer. ‘Wait until next year. Next year will be better.’ That’s what I’ve been hearing for 30 years,” said Hart. “I have faith.”

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Perry shifts abortion views: No exception for rape, incest

December 28th, 2011 admin No comments

Reporting from Osceola, Iowa— Rick Perry, in the midst of a furious late-stage effort to finish strongly in next week’s GOP Iowa caucuses, said at a town hall-style campaign event here that his views on abortion have shifted and that he no longer believes the procedure is acceptable in any circumstances.
Assuredly, the Texas governor has never been a moderate on the issue. But until recently, he had said an abortion might be justifiable in cases of rape or incest or if the mother’s life were in danger.

Tuesday, at the last leg of a four-stop bus trip across southwestern Iowa, Perry was asked a question by a local pastor about his abortion views, noting that the candidate had recently signed a pledge to oppose abortion in every situation and asking whether Perry had changed his mind.

Perry replied that he had. “You’re seeing a transformation,” he said. Recently watching an anti-abortion film had convinced him to alter his view, he said.

The transformation, such as it is, comes at a particularly opportune time. With a week to go until the Jan. 3 caucuses, Perry is trying to court the social conservatives here who have yet to coalesce around a single candidate as they did for Mike Huckabee here four years ago. And he has watched as Rick Santorum, an unyielding opponent of abortion rights, pick up endorsements in the past week from key evangelical leaders in the state.

But the pastor who asked Perry the question, Joshua Verwers, said he believed Perry was sincere. “It was the perfect answer,” said Verwers, who said he had been concerned that the Texas governor was attempting to pander to evangelical voters.

Perry watched the DVD, “The Gift of Life,’ on his campaign bus last week, aides said. The film, which features Huckabee and profiles those who say they were nearly aborted by their mothers, was produced by David Bossie, the conservative activist behind the Citizens United challenge before the Supreme Court that changed the landscape of campaign-finance law.

The Texan, who has been saturating the airwaves with ads in the run-up to the caucuses, spent Tuesday talking tough on another issue: immigration. He campaigned with Joe Arpaio, the Phoenix-area sheriff accused by the Justice Department of abusing the civil rights of Latinos.

At an earlier stop in Creston, Iowa, Perry called Arpaio a “great American.”

“They’re zeroing in on me in all directions,” Arpaio said.

His presence appeared to be a bid by Perry to shore up a perceived weakness. His campaign began to go south almost as soon as it began in September partially because of questions from some conservatives over a Texas law that allows children of illegal immigrants to benefit from in-state tuition rates. Perry faced questions about the plan again Tuesday.

And while Perry was touring Iowa, his campaign filed suit in federal court in Virginia challenging that state’s decision to keep him off its primary ballot after Perry’s campaign failed to comply with the state’s strict requirements for signatures. Newt Gingrich also failed to make the ballot.

“We believe that the Virginia provisions unconstitutionally restrict the rights of candidates and voters by severely restricting access to the ballot, and we hope to have those provisions overturned or modified to provide greater ballot access to Virginia voters and the candidates seeking to earn their support,” Perry’s communications director, Ray Sullivan, said in a statement.

Perry spent the day largely avoiding taking shots at his rivals for the GOP nomination and never mentioned any by name. But implicitly labeled Mitt Romney a “Wall Street insider” and a wayward conservative.

“You shouldn’t have to accept anything other than an authentic conservative,” he told the crowd in Creston.

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Taylor Lautner pictured on phony People cover; Lady Gaga sued by former assistant

December 27th, 2011 admin No comments

Taylor Lautner is the target of some photoshop-happy pranksters. A fake People magazine cover featuring the “Twilight” star and the text, “Out & Proud,” circulated on the Web this weekend. “Tired of rumors, the Twilight star opens up about his decision to finally come out,” a blurb on the fake cover reads.

Although the cover is clearly fake, mogul Russell Simmons seemed to believe it, tweeting, “Proud of Taylor Lautner for his bravery and his courage.” Simmons sent another tweet after he realized the cover is a hoax. (THG)

Lady Gaga is accused of being a real monster. (Koji Sasahara – AP) Lady Gaga has been accused by her former assistant of being a real monster. Jennifer O’Neill has sued Gaga and the singer’s Mermaid Touring Company, claiming she is owed $380,000 in overtime, the NY Post reports. During her 13 months as Gaga’s assistant, O’Neill alleges she was required to take cares of the singer’s needs — including “ensuring the promptness of a towel following a shower” — at any time of the day or night, and at any location. She claims she was not allowed to break for meals or, at times, sleep.

A spokeswoman for Gaga told the NY Post the suit is “completely without merit.” (NY Post)

John Legend is engaged to his girlfriend, model Chrissy Teigen. (People)

Jennifer Hudson turned down the title role in 2009’s “Precious” because of the weight gain requirements. “I had done that with Effie,” Hudson writes in her book “I Got This,” referring to her Oscar winning role in “Dreamgirls.” “And as much as I was moved by this film, I wanted to try a role that had nothing whatsoever to do with my weight.” (Uptown)

Mexican actor Pedro Armendariz Jr. has died. He was 71. (AP)

Baz Luhrmann was hurt on the set of “The Great Gatsby,” when he hit his head on a camera. The director needed three stitches. (THR)

Dido is a mom, after the jump.

Dido gave birth to a son this July. He was given the outrageously normal name Stanley. (Daily Mail)

Justin Bieber gave his friend Ryan Butler a Mustang convertible for Christmas. (E!)

Janet Jackson was named PETA’s top celebrity Grinch of 2011 because of her partnership with a fur company. (BuzzFeed)

Demi Lovato was not too happy with Disney after she heard a joke on the show “Shake It Up” that she believed made light of eating disorders. “I could just eat you up, well if I ate,” a female actress said on the show.

Lovato, a former Disney star who battled bulimia, tweeted, “Dear Disney Channel, EATING DISORDERS ARE NOT SOMETHING TO JOKE ABOUT.” Disney PR responded on Twitter, saying they would pull the episode: “It’s NEVER our intention to make light of eating disorders!”

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