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Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to for 100% free stock alerts Chase Bank has moved to limit cash withdrawals while banning business customers from sending...

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Richemont chairman Johann Rupert to take 'grey gap... Billionaire 62-year-old to take 12 months off from Cartier and Montblanc luxury goods groupRichemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the...

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Cambodia: aftermath of fatal shoe factory collapse... Workers clear rubble following the collapse of a shoe factory in Kampong Speu, Cambodia, on Thursday

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Spate of recent shock departures by 50-something CEOs While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted upOn approaching his 60th birthday...

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UK Uncut loses legal challenge over Goldman Sachs tax... While judge agreed the deal was 'not a glorious episode in the history of the Revenue', he ruled it was not unlawfulCampaign group UK Uncut Legal Action has lost its high court challenge over the legality...

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New York court casts doubt on resale of digital music in ReDigi case

Category : Business

Judge says ‘second-hand’ service infringed on Capitol Records’ right to reproduction but experts suggest issue is not resolved

The legality of selling digital music in the same way as an old book or CD has been called into question, after a New York court ruled that the act is in violation of the copyright act. A New York federal district court judge, Richard Sullivan, ruled that the digital music reselling company ReDigi had infringed on Capitol Records’ rights to reproduction.

“Right now, there is no future for reselling digital music, but I don’t think this is the last word,” said Christopher Jon Sprigman, a law professor who is a co-author of the Knockoff Economy.

Capitol Records filed a complaint against ReDigi in January 2012, instigating a challenge to protections of the first sale doctrine – which gives owners of copies of products the ability to lawfully sell or lend a product, thereby allowing used bookstores, libraries and video rental stores to exist.

ReDigi, which launched in October 2011, allows people to sell digital music files at a lower price than that for which they were purchased. To resell digital music, users download software that determines if their music is eligible to sell. People can only resell music purchased on ReDigi and iTunes, and cannot sell music ripped from CDs or downloaded from file-sharing sites. The software continues to run scans on the user’s computer, to make sure users do not keep digital music files they have sold; people caught violating this rule have their accounts suspended.

The court determined that ReDigi is not protected by first sale because to resell music on ReDigi, the file must be transferred to the company’s servers in Arizona – which requires a technical, unauthorized recreation of the file. Sprigman said: “Yes, it’s making a copy, but only in the driest, most formal sense of making a copy.”

Sprigman said ReDigi’s process was “fairly reliable” and offered a way to transact digital goods without resulting in the proliferation of copies of a product. “From an economic basis that’s no different from taking the book that’s sitting on your bookshelf and putting it in a used bookstore,” he said.

If the digital reselling of music becomes a successful industry, the recording industry will likely see an increase in competition – just as the book industry has seen with an increase in second-hand bookstores. “Capitol Records doesn’t want the price of digital music to be disciplined,” Sprigman said. “In other words, it doesn’t want competition.”

Amazon, which includes the sale of used books as part of its business, recently patented an electronic marketplace that would permit the reselling of digital goods. The move sparked uproar from those who fear it will steer money away from the book and music industry.

Judge Sullivan said in his summary that his decision would not exclude all digital works from resale and that people could still sell a product that contains a musical recording, “be it a computer hard disk, iPod, or other memory device onto which the file was originally downloaded.” While he admitted that this presented obstacles to resale, he said it was up to Congress, not his court, to determine whether this was an outmoded way of thinking.

“The first sale defense does not cover this any more than it covered the sale of cassette recordings of vinyl records in a bygone era,” he wrote.

This case is the second of two closely watched first sale cases this year. In mid-March, the Supreme Court ruled that the first sale doctrine protected someone who made a business by selling textbooks he had purchased overseas.

Brother of billionaire Raj Rajaratnam indicted on insider trading charges

Category : Business

Rengan Rajaratnam – currently living in Brazil and likely to be extradited – was frequently mentioned in his brother’s 2011 trial

US authorities have charged the brother of fallen hedge fund billionaire Raj Rajaratnam with participating in his insider dealing scam.

Rajarengan Rajaratnam, younger brother of the Galleon hedge fund boss, now lives in Brazil and the US is likely to press for him to be extradited to face the charges. The indictment comes as a deadline to bring charges for securities violations approached.

Rajarengan, 42 and known as Rengan, was mentioned on numerous occasions during his brother’s trial in 2011, the largest insider-dealing trial in US history.

Rajaratnam was convicted in 2011 of earning up to $75m illegally from insider tips. He is now is serving an 11-year prison sentence. Rengan Rajaratnam has been charged with conspiracy to commit securities fraud and six counts of securities fraud.

“Along with his brother, Rengan Rajaratnam was allegedly at the heart of an insider trading scheme that swept up an unprecedented number of people in its web of corruption,” Manhattan US attorney Preet Bharara said in a statement.

So far the US authorities investigation of the Galleon Group has resulted in more than two dozen convictions, including Rajat Gupta, a former Goldman Sachs director and boss of the McKinsey management consultant. Several former Galleon traders are now cooperating with the authorities.

At trial it emerged that Rengan had been trading in a fund that held shares of tech firm Clearwire ahead of a deal with chip giant Intel. The court heard that Raj Rajaratnam had been given inside information by Rajiv Goel, an Intel employee and former classmate of his at the University of Pennsylvania’s Wharton School.

After the Wall Street Journal broke news of the deal Rengan Rajaratnam called his brother. In a conversation taped by the FBI he said: “Oh dude, we’re fucked.”

“It just hit the Wall Street Journal.” He said: “I don’t know how much you got in today, but I think it’s gonna rip tomorrow.”

Raj Rajaratnam’s lawyers argued lawyers had taken the conversation out of context. Rengan Rajaratnam’s lawyer was not immediately available for comment.

Fracking debate draws Yoko, Lennon and Sarandon to rural battlegrounds

Category : Business

Artists Against Fracking board bus for magical mystery tour of Pennsylvania as New York and New Jersey decisions draw near

Yoko Ono might not seem the most likely bus traveller. Northern Pennsylvania, on a cold, snowy January day, might not seem a likely destination.

Yet the threat of hydraulic fracturing, or fracking, and its impact on the farm she and John Lennon bought in New York spurred Ono and her son, Sean Lennon, into action. On Thursday the pair, a group of activists and the actress Susan Sarandon formed an improbable troupe for a road trip through towns which have been affected by fracking.

The expedition travelled under the banner of Artists Against Fracking, the group Ono and Lennon set up last summer, when governor Andrew Cuomo was originally due to rule on whether to allow fracking in New York State. Thanks no doubt to the star power of its founders, the group quickly managed to attract backing – from regular celebrity activists such as Sarandon and Mark Ruffalo to Alec Baldwin, the two living Beatles and Robert DeNiro. They also earned the support of the Scissor Sisters.

“It was an incredible response,” Ono said, as the bus picked its way along narrow lanes. “All these artists are starting to come together. These days artists are very much into, and very sensitive to what is happening in society, not just what is happening with their work.”

It was the potential impact of fracking on rural parts of New York State that prompted Lennon and Ono to get involved in the anti-fracking cause last summer. Cuomo eventually delayed his decision, pending further investigation into the practice; he is now due to rule on whether to allow fracking as early as 27 February, following a four-and-a-half year ban.

Ono and Lennon clambered aboard the bus – in fact a relatively luxurious coach – on Thursday as part of their bid to persuade the governor against the practice. Ono and Lennon still spend time at their rural farm, which was bought in the years before John Lennon died. While the farm might have inspired Ono to take up the cause, she said the campaign now went beyond that.

“It’s not just for me, but for New York State and New York City as well. But also when we lose this game we’re losing not just for New York State but for the United States and for Britain. I’m getting letters from Britain saying, ‘Yoko, please do something, they’re starting to frack here.’”

The pair keep secret the exact location of their farm, where Ono and John Lennon famously tended a herd of cows, but they will say that it is in prime fracking territory. The pair established Artists Against Fracking in August and organised the bus tour to show the impact fracking has had in Pennsylvania.

Fracking involves drilling a hole into shale rock deep underground, then blasting in water mixed with sand and chemicals. This creates fissures in the rock, releasing natural gas that is captured in a well at the surface. Problems can arise if the cement casing around the well-hole is inadequate, allowing chemicals to leak into water supplies. Those who support fracking say that with tougher regulation and stricter controls on the drilling process the practice is safe, although opponents argue that this is too much to risk.

‘Our water was bubbling in our well’

The home of Michael and Tammy Manning in Franklin Forks was one of the bus tour’s first stops – after four attempts to climb a particularly icy hill. The couple say the water in their home, which is sourced from their own well, like many homes’ water supply in this region, became contaminated after fracking was carried out nearby.

“Our water was bubbling in our well. It looked like a full running boil in our well,” said Tammy Manning, 45. Four generations of their family live in the house, a two-storey wood-paneled structure set in perhaps an acre of land. Video taken by Matthew Manning and shown as the anti-fracking entourage crammed into the Mannings’ small living room showed water spurting out of the top of their well as from a fire hydrant. Inside the house, the water ran brown.

Pennsylvania’s department of environmental protection tested the Mannings’ exploding well soon after it began erupting. It found extremely high levels of methane, and told the family to keep all windows and doors open when running the taps or taking a shower – any build-up of the gas could be dangerous. The Mannings said they have received little help beyond that, and have to buy mineral water for drinking and cooking. They shower in tainted water.

“We don’t want to have to leave,” Tammy Manning said. “We just bought the house. But if we’ve no water what can we do.” The reality is that the family has few options. “I don’t think we can sell it with no water. We’re stuck.”

Supporters of fracking argue that the process can produce cheap fuel, promote energy independence and create jobs. The roads of Susquehanna County were certainly busy on Thursday, activists on the bus shouting out “sand truck” or “water truck” time and again, as heavy goods vehicles bearing the key elements of fracking passed by.

Some spoke of the tension within small towns and villages that has been caused by differing opinions over fracking. Companies pay good money for access to mineral rights, but one or two neighbours resisting the deal can deter companies from becoming involved with a whole street or community.

Representing ‘the 1%’?

As the bus arrived in Dimock, where the department of environmental protection ruled in 2010 that fracking wells drilled by Cabot Oil and Gas Corp had leaked into 18 drinking wells, a man who identified himself as living locally shouted and gesticulated animatedly at the members of Activists Against Fracking as they disembarked. The man, who left before the Guardian could ask his name, insisted loudly that money from fracking had paid for his wife’s cancer treatment.

He was not the only fly in the ointment. Filmmaker Phelim McAleer, a vocal critic of those opposed to fracking and something of a courter of controversy, approached the bus with a cameraman, loudly accusing Ono, Lennon and Sarandon of acting in the interests of the “1%” in their opposition to the practice.

As McAleer jogged and jostled for position, heckling Ono, Lennon and Sarandon and being heckled back by activists, the Irish filmmaker – who made the news recently after accusing Matt Damon, the actor whose new film, Promised Land, deals with the subject of fracking, of being a “liar” – became separated from his trilby hat, which he had to collect from the muddy slush.

McAleer shouted to the group that the drinking water in Dimock was safe, citing EPA studies that activists say are incorrect. In any case, Cabot Oil and Gas Corp agreed in December 2010 to pay a $4.6m settlement that required it to fix its leaking wells. The Pennsylvania DEP ruled that Cabot could resume fracking near Dimock in August last year.

McAleer’s arrival marked the only time Ono took advantage of a large V12 Mercedes-Benz which an aide drove behind the coach for the entire trip, and which might raise some questions over the environmental soundness of the exercise. Ono got into the back of the black car as McAleer made himself known nearby, later popping her head out of the window to check all was clear before clambering back on to the bus for the ride home.

‘I’m not an activist by nature’

Artists Against Fracking have already given Cuomo plenty to consider ahead of his February ruling. In addition to the clutch of celebrity supporters, the group and other anti-fracking organisations collected 200,000 messages during a 30-day public consultation period in December and January. Ono and Lennon helped to deliver the messages to the governor in Albany on 11 January.

The campaign could have an impact in New Jersey too. The Garden State’s year-long moratorium on fracking expired on Thursday, and governor Chris Christie is due to make an announcement on the immediate future of the process before the end of the month.

“I’m not an activist by nature, I’m a musician. What I’m interested in is making music and art,” Lennon said on the bus. “I had no desire to be spending any of my time researching things like benzene, methane and uranium and well-pits and well-casings and what percentage of well-casings fail over how many years.”

Lennon said he had been moved by the stories of people who face having to leave their homes because of a lack of clean water, but like those people, he had the sense of a personal threat. His family’s farm draws fresh water, unfiltered, from its own well, just like the Mannings’ house and the homes in Dimock. To Lennon, fracking poses a risk to the farm at which he can remember spending time with his father as a young boy.

“It would actually change my life,” he said. “I think on some level I might have to consider leaving. I’m so into nature and the country, and having a place in the country where I could drink my own water was really essential to my feeling safe, it means a lot to me. So if that changes, I might leave.”

Lennon said he was unsure if he would leave New York, or leave the US entirely – he has both American and British passports and describes himself as an Anglophile. “But I don’t want to be in a place where I feel like I can’t drink clean water,” he said.

Dominique Strauss-Kahn settles sexual assault case with hotel maid

Category : Business

Hotel maid who alleged sexual assault by the former IMF chief settles civil action case, bringing end to lengthy court battle

A hotel maid who claims she was brutally sexually assaulted by Dominique Strauss-Kahn has settled her civil action against the former IMF chief for an undisclosed sum, in a move that allows her to “move on with her life”, lawyers said.

In Bronx supreme court on Monday, a judge announced that an agreement had been reached just minutes before the session started, adding that the amount – which is rumoured to be as much as $6m – remained “confidential”.

It brings to an end a lengthy New York court battle for the man once tipped to become French president, having earlier seen criminal charges of attempted rape dropped. Nonetheless, Strauss-Kahn’s legal woes are not completely behind him – he is yet to hear if prosecutors in France will be allowed to pursue charges of aggravated pimping related to an alleged prostitution ring in France. A court is due to rule in that case on 19 December.

The lawsuit settled in New York on Monday relates to claims by Nafissatou Diallo, a 33-year-old former housekeeper at the upmarket Sofitel hotel in Manhattan.

She says Strauss-Kahn attacked her on 14 May 2011 as she attempted to clean his room.

Diallo alleges that Strauss-Kahn ran at her naked, molested her and forced her to perform oral sex on him. The claims led to a criminal investigation against the IMF boss last year, and to his house arrest in Manhattan.

But charges of attempted rape, sex abuse, forcible touching and unlawful imprisonment were eventually dropped, with prosecutors citing “substantial credibility issues” with Diallo.

Despite the collapse of a criminal investigation, Diallo continued to pursue Strauss-Kahn through the civil courts, leading to a counter defamation suit by the former IMF head.

At first, Strauss-Kahn’s lawyers tried to claim that their client had diplomatic immunity him from being sued. But that failed, with the courts dismissing his claims of protection.

A settlement in the case was widely expected ahead of Monday’s hearing. Strauss-Kahn’s New York attorneys had previously acknowledged that talks had taken place. But they dismissed as “flatly false” a French newspaper’s report that the amount agreed to was a payment of $6m to Diallo.

In court on Monday, judge Douglas McKeon confirmed that a deal had been struck, but not the amount.

“Ten minutes ago we reached a settlement in this case, which was put on the record,” he said during a brief session.

He added: “The amount of the settlement is confidential.”

McKeon also confirmed that a claim against the New York Post – which had reported that Diallo had worked as a prostitute – had also been settled. Again, the terms were not discussed in open court.

Diallo sat through the court proceedings accompanied by her legal representatives. Dressed in a snow-leopard skin print headscarf and emerald blouse, she made no statement while in the courtroom.

But in brief comments on the steps of the Bronx supreme court, Diallo, who was born in Guinea and who is the mother to a teenage girl, thanked her supporters.

“I just want to say I thank everyone that supported me all over the world. I thank everybody; I thank God,” she said.

Her attorney, Kenneth Thompson, said Diallo was a “strong and courageous woman who never lost faith in our system of justice”.

“With this resolution, she can now move on with her life,” he added.

Strauss-Kahn was not in court. Nor did his legal representatives offer any comment after it was announced that settlement had been struck, other than to thank the court.

Monday’s hearing marks an apparent end to Strauss-Kahn’s New York legal battles. But it has come at cost for the 63-year-old. As well as losing his job at the IMF, it ended any realistic chance Strauss-Kahn had at a run at the French presidency as further lurid details of his lifestyle later emerged.

In addition, it led to a raft of other sexual allegations being made against him and likely contributed to his separation from his wife, French journalist Anne Sinclair.

Next week, Strauss-Kahn will hear if a separate attempt to get charges levied against him by French prosecutors thrown out has been successful.

Ivy Asset Management reaches $210m Madoff settlement

Category : Business

BNY Mellon unit Ivy Asset Management ‘violated responsibility’ by advising clients to invest with fraudster Bernard Madoff

US authorities have reached a $210m settlement with the BNY Mellon subsidiary Ivy Asset Management for advising clients to invest with the ex-financier Bernard Madoff, whose multibillion-dollar fraud landed him in federal prison.

The settlement of suits filed by the New York attorney general, Eric Schneiderman, Labour Department and private plaintiffs also provides for about $9m in payments by other defendants. Combined with anticipated future payments from Madoff bankruptcy proceedings, Schneiderman said it expected to return nearly all of the original investments to those who were defrauded, including union pension funds from upstate New York.

“Ivy Asset Management violated its fundamental responsibility as an investment adviser by putting its own pecuniary interests ahead of the interests of its clients,” Schneiderman said.

“Ivy deliberately concealed negative facts it uncovered in its due diligence of Madoff in order to keep earning millions of dollars in fees. As a result, its clients suffered massive and avoidable losses.”

Between 1998 and 2008, authorities say Ivy was paid more than $40m to give advice and conduct due diligence for clients with large Madoff investments.

Michelle Hook, spokeswoman for Schneiderman, said the losses included about $138m by the 78 pension funds, and most would be recovered.

Internal Ivy documents showed the firm had deep but undisclosed reservations about Madoff, authorities said. Its clients lost more than $236m after the businessman’s Ponzi scheme collapsed.

In 2010, then New York attorney general Andrew Cuomo filed a civil complaint, alleging fraudulent conduct by Ivy in connection with securities sales and breach of fiduciary duty, violations of the state’s Martin Act.

Ivy said its advisers had raised questions about Madoff with clients and urged them to reduce their positions. The Ponzi scheme had cost investors an estimated $17.3bn, according to New York authorities.

Madoff pleaded guilty in 2009 and is serving a 150-year prison sentence in Butner, North Carolina.

BNY Mellon did not immediately reply to requests for comment.

Hurricane Sandy begs the question: what is travel insurance good for?

Category : Business

New York declared a state of emergency in the wake of Hurricane Sandy, but insurers refused to pay up for cancellation, as Money writer Jill Papworth found on a half-term break

It was meant to be the family holiday of a lifetime, an expensive, but much anticipated, half-term five-night trip to see the sights of New York with our two children, aged 18 and 14. But it turned into the holiday from hell as we were virtually confined to our hotel, in a city in lock-down, with all public transport systems, tourist attractions and virtually all shops and restaurants, closed as Hurricane Sandy did its worst.

We were not, fortunately, exposed to direct danger, with our hotel – the Radisson Martinique on Broadway – away from the seriously flooded areas. So we tried to make the best of it and kept our British chins up – although having to climb nine floors to our bedroom because the elevators were out of action tested us severely.

What was really galling was that we knew before leaving the UK that this was going to happen, yet could find no way of cancelling and rescheduling without losing all our money – despite having paid £90 for comprehensive travel insurance, a Premier policy from, and having booked the flight/hotel package with an ATOL protected agent,

We had thought long and hard about spending so much. Though we are lucky to be able to afford it, it was very much a one-off treat, not something we could think of doing twice. So when we heard late Friday night that New York’s mayor had declared a state of emergency because a hurricane was due to hit, our first thought was to cancel. Reports said that closure of transport systems was anticipated for several days, and the storm was expected to be extreme. Postponing was the obvious thing to do.

We were due to fly out on Kuwait Airways late Saturday afternoon. So, equipped with all the information I could find from online reports from the US, I rang our insurer’s claims department first thing Saturday morning to clarify our position.

I was told that, hurricane or no hurricane, if we cancelled, our policy would not cover us for the £5,000 cost of our trip – we would lose the lot. This is because travel insurers only pay out for cancellation if the Foreign and Commonwealth Office has specifically warned against travelling to the relevant destination. In this case, they hadn’t. Indeed, throughout last week, at no point did the FCO advise against travel to New York.

The representative suggested I call our agent who could possibly help by rescheduling our trip or offering an alternative. No such luck. When I called, I was told there was nothing they could do because our Kuwait Airways flight was still due to leave that afternoon, and they had received no information from the airline about the hurricane threat.

With just a couple of hours left before we were due to leave for the airport, we faced a stark choice. Tell the kids the trip was off for good and lose £5,000. Or risk going, make the best of it and hope we’d get a couple of days to see Manhattan. We chose the latter, a decision that we soon sorely regretted.

We feel deeply let down by our travel insurance company. Surely there should be some way of insuring against having to choose between going on a holiday that you know in advance will be spoilt in many ways – not to mention potentially dangerous – or losing your money.

Jill and family were not alone in facing a “fly or lose your money” option at the airport, writes Miles Brignall. Sarah Kember and her partner were due to take their godson Lou to New York to celebrate his 18th birthday and they all met up at Heathrow on Saturday afternoon. But alerted to the fact that New York’s mayor had declared a state of emergency the pair, who live in Brighton, repeatedly asked Virgin Atlantic whether they could shift their booking to another date. But they were met with a blunt response: they could choose to travel on that day or cancel and lose the £2,700 flight costs for the four-day trip.

“It was a terrible decision, but you do not fly your godson into the path of a hurricane or into a city that the mayor was about to evacuate. It was particularly frustrating because British Airways was letting its customers cancel and rebook.” Sarah says.

“Telling Lou was terrible. We were in tears, while he was remarkably stoic. It was a huge amount of money to lose, but we decided it wasn’t worth the risk. What I don’t understand is why Virgin wasn’t warning us of what lay ahead, and proactively stopping passengers from flying.”

Her travel insurance, provided by NatWest through her bank account, proved similarly useless. She also lost the hotel booking costs because staff at the booking agent, Trailfinder, failed to tell her to contact the hotel to cancel.

Guardian Money took up her case with Virgin Atlantic, asking why it had refused to offer her a rebooking given that they were due to fly back on the Tuesday – the day after the “superstorm” hit. Thankfully, the airline made a swift about-turn.

It has apologised and said she can now rebook the trip, enabling Lou to see the Big Apple. It says: “Passengers due to travel to the east coast destinations of New York, Boston and Washington between Saturday 27 October and Friday 2 November, whose flights are not cancelled, can choose to delay their trips and rebook on a Virgin Atlantic flight at a later date, subject to availability. Rebooked travel must have commenced by the 28 November.”

Jill has been less fortunate. is sticking to the clause in its “Premier” travel policies that failure to board a flight that has not been cancelled, to a country about which the FCO has not issued any warnings, amounts to “disinclination” to travel, and therefore is not covered by her policy.

New York Stock Exchange opens to trading after historic closure for Sandy

Category : Business

Wall Street looks at preparations for ‘next time’ as NYSE opens to light trading after first weather-related closure since 1888

New York mayor Michael Bloomberg rang the opening bell at the New York Stock Exchange Wednesday as Wall Street got back to work after a historic two-day closure in the wake of hurricane Sandy.

Stocks rose initially as a traders got back to work following the exchange’s first weather-related closure since 1888. But amid light trading volumes the rally had lost its momentum before lunch and ended the day flat at 13.096, down about 10 points (0.08%).

Bloomberg’s appearance, taking time away from a heavy schedule in the wake of Sandy, showed how important the opening of the exchange is to the city. But some veteran Wall Streeters remained nonplussed.

Asked by financial news channel CNBC how important it was that the exchange had opened again, Jack Bogle, chairman and founder of Vanguard Group, said: “Well, I wouldn’t put it high on my priority list. You know ,we’ve now gone four consecutive days without any trading and the sun still came up this morning.”

“If it had gone on a few more days, it wouldn’t have bothered me,” said Bogle.

New York’s exchanges have been closed during earnings season and some big news from some of the US’s largest companies. Apple jettisoned two key executives this week and it closed down $8.74 at $595.26 (down 1.45%). Ford closed at $11.16, up 8.24% as investors took in better-than-expected car sales and higher profit margins.

Shares in companies expected to benefit from rebuilding rose including Home Depot and Caterpillar. Insurance companies dipped as investors started to calculate their share of the eventual cost of the massive cleanup.

As trading resumes there looks likely to be a battle between the exchanges and their clients. The NYSE has originally planned to keep trading electronically even as it prepared to close Wall Street’s trading floors. But banks and brokerages complained that the plan was too complex and would entail sending staff into work as the storm approached.

Christopher Nagy, an exchange and trading-firm consultant who formerly sat on the board of the Philadelphia stock exchange, said: “The closure was an example of the complete and utter failure of NYSE to put a proper plan in place.”

He said Sandy was the first real test of NYSE’s emergency plans since 9/11, and that the decision to halt all trading rather than to move to all electronic trading looked more political than practical. “The NYSE only processes 11-12% of the total market share that trades,” he said.

“It’s a glorified TV studio,” he said.

Jamie Selway, managing director at ITG, a brokerage firm, who participated in many of the industry calls ahead of the storm, said it was clear that people were now looking to assign blame.

“But to me that is secondary,” he said. “Given the loss of life and that an eighth of Manhattan is underwater, a two-day closing is not a bad trade-off.”

“There is no question we absolutely have to refine the plan for next time,” he said.

US stock markets close, bracing for Hurricane Sandy

Category : Business

Stock trading has been cancelled with the closure of markets to protect employees from oncoming storm

US stock and options markets will be closed on Monday, and possibly Tuesday, as regulators, exchanges and brokers worried about the integrity of markets in the face of Hurricane Sandy.

Market participants and regulators decided to shut the market because the storm will make it difficult to ensure the safety of employees, major exchanges said.

The decision to close stock and options markets came after regulators, exchanges, and dealers discussed the unknowns that would have been tested if the markets opened on Monday, three of the sources said.

For example, NYSE Euronext’s New York Stock Exchange had planned to shut its physical trading floor, which would have meant operating as an all-electronic exchange for the first time.

Bond markets will remain open, but will close at noon, a trade group said.

Wall Street had prepared to open for business on Monday with limited staffing, booking hotel rooms for key employees and leaning on offices in other cities. The storm forced the New York mass transit system to shut down on Sunday evening, leaving tens of thousands of employees stuck at home.

Wall Street banks, including Goldman Sachs Group Inc and Citigroup Inc, activated their emergency plans, which many firms put in place after the 11 September, 2001, attacks. Banks were putting key staff, including some traders, in hotels and also are relying on others who live near the bank’s offices.

It was not immediately clear if those plans had also changed.

Some offices in lower Manhattan’s financial district are in evacuation zones and most non-critical staff and employees who don’t rely on high-speed systems, including some investment bankers, were asked to work from home.

The storm is expected to slam into the US East Coast on Monday night, bringing torrential rain, high wind, severe flooding and power outages. The rare “super storm” – created by an Arctic jet stream wrapping itself around a tropical storm – could be the biggest to hit the US mainland, forecasters said.

The scramble on Wall Street started early as New York governor Andrew Cuomo announced the subway, bus and rail system in the city would begin to close at 7pm EDT on Sunday (2300 GMT).

About 8.5 million commuters use the Metropolitan Transit Authority’s transit lines daily, meaning most Wall Street employees would be unable to get to work. New York City Mayor Michael Bloomberg also closed public schools and ordered an evacuation of 375,000 people in coastal areas, including downtown offices of banks such as Citigroup.

All of the US exchanges, as well as major broker-dealers, and regulators were involved in the decision to close the markets, according to several executives at exchanges and financial firms.

The US markets have seen three high-profile snafus this year, beginning with the failed IPO of BATS Global Markets, the No. 3 US equities exchange, on its own exchange; Facebook Inc’s botched markets debut on Nasdaq’s exchange; and a software glitch that cost trading firm Knight Capital well over $400 million, nearly forcing it into bankruptcy.

The major exchanges and most big trading firms have alternate trading facilities if downtown Manhattan is inaccessible, but the storm’s wide path may affect a number of sites in the New York metropolitan area. Authorities have warned of possible widespread power outages that could last for days.

Wall Street was spared the worst of Hurricane Irene in August last year. Officials had feared Hurricane Irene would flood lower Manhattan and cripple business in the world’s financial capital, but the flooding was minor and there were no major disruptions at the exchanges.

The Securities Industry and Financial Markets Association said earlier on Sunday it is recommending an early close of noon EDT on Monday for the trading of US dollar-denominated, fixed-income securities. It said its member firms should decide for themselves whether their fixed-income departments remain open for trading.

The foreign exchange market’s activity generally follows the fixed income markets.

The New York Federal Reserve has calls scheduled for early Monday morning with dealers to see what each dealer is doing to cope with the storm, and will modify its market activities accordingly.

In Washington, the Commerce Department said it would post its report on personal income and spending for September on its website at 8:30am as scheduled, even though the federal government was closed.

The Federal Reserve said it would postpone its regularly scheduled releases, including its weekly report on selected interest rates and daily commercial paper data. The Fed said it would release the data when federal offices in the Washington area reopened.

Hurricane Sandy also led to some events being cancelled or postponed. Citigroup Prime Brokerage postponed a hedge fund event that had been scheduled for Tuesday.

Dominique Strauss-Kahn and our paranoid-erotic fantasies of power | Michael Wolff

Category : Business

Might DSK’s embrace of his reputation for libertinism be a sly manipulation of what people like to imagine elites get up to?

Dominique Strauss-Kahn is out defending his virtue. He says he is only guilty of lust and not of turpitude, that the international sex parties that were thrown in his honor (quite apart from the accusations that he attacked a hotel maid in New York) have a long tradition among men of a certain rank.

This raises two interesting questions: can a politician, even a French politician, actually try to explain and justify sexual desire? And how different is the sex that powerful people have from what you and I have?

The first has to do with public relations and reputation management: Strauss-Kahn is trying out a form of mea culpa that’s audacious, or barmy, in its violation of all the rules about how to talk publicly about sex – especially when you are asking to be forgiven for it.

The second opens a real-life window, a first-person account even, into the kind of secret societies and working conspiracies that many people have long believed exist at the highest reaches of power. The Strauss-Kahn sex life, according to a report in the New York Times of an interview Strauss-Kahn gave to the French magazine Le Point, even involves Freemasons.

In essence, Strauss-Kahn is making an Eyes Wide Shut defense. The 1999 Stanley Kubrick film attempted to link power and sex, high-class social rituals and eroticism. This was eroticism as might exist in the minds of fashion-conscious social climbers: wealthy people going to elegant dinners and having sex with each other, in masks.

Strauss-Kahn’s version is very close to this; says the New York Times about the DSK parties:

“The exclusive orgies called “parties fines” – lavish champagne affairs costing around $13,000 each – were organized as a roving international circuit from Paris to Washington by businessmen seeking to ingratiate themselves with Mr Strauss-Kahn.”

In the description of one source cited by the Times:

“There was a rhythm to the gatherings, with everyone dressed for a sit-down dinner … Then over time, couples separated, ‘kisses were exchanged between one woman and another and between a husband and the wife of a friend’ until the guests ‘all ended up nude.’”

Strauss-Kahn’s defense falls back on the peculiarly French, noting his country’s history of “libertinage”. But it is also something of a white paper about the culture of male desire – or, at least, that of powerful men. He admits to the proud place that lust occupies in his life and outlines its extensive rituals and activities. Rather innocently, he says that he “long thought that I could lead my life as I wanted, and that includes free behavior between consenting adults. There are numerous parties that exist like this in Paris, and you would be surprised to encounter certain people.”

This is quite a breakthrough in contemporary political discourse. Certainly, politicians in sex scandals in the US and UK and, I would have to believe, in virtually every other modern country (save, perhaps, for Italy) never, never admit to enjoying sex, or pursuing it for any reason other than helplessness. Indeed, it seems like another strange wrinkle in the many odd wrinkles in the Strauss-Kahn story that he would think this would be a point of public sympathy: extreme roguishness. It seems, too, to be another demonstration of his extraordinary arrogance – that he would think overt honesty would help him.

But perhaps truth is the point. It is not just the truth about the kinks of desire, or of the fact that the more successful you become, the more opportunity you have to indulge your kinks. But that the world of the paranoid does, in fact, exist. That insiders cavort. That, as the financial world teetered on the edge of the collapse, the former head of the IMF participated in “secret soirees with lawyers, judges, police officials, journalists and musicians that start with a fine meal and end with naked guests and public sex with multiple partners”, according to the New York Times account.

But then again, this may be as much Strauss Kahn’s erotic fantasy as it is other people’s paranoid fantasy. “Mr Strauss-Kahn and a few friends gathered in a private basement club, carpeted in purple and black tiger stripes,” says the Times of an account of the parties given by a Belgian sex club owner who helped organize them. Indeed, Strauss-Kahn “energized by Viagra”, a word for which the Times offers a hyperlink, apparently tried to hit on the sex club owner’s companion.

Strauss-Kahn sees himself, in other words, as a libertine. Others might see him merely as a cheese ball, more Vegas than Paris.

There is, of course, Strauss-Kahn’s paranoia, too. He sees himself as a victim of other secret forces, a view supported by the journalist Edward Jay Epstein’s account of how French security forces may have stalked Strauss-Kahn to a sex party in Washington and then on to his fateful encounter in the hotel room in New York.

Indeed, there is more than a small sense that Strauss-Kahn might be offering his tale of libertinage as both a way to neutralize this as a weapon in the hands of his enemies, and also as a warning to them that he yet knows more secrets than he is telling.

From the beginning of the Strauss-Kahn story, it has seemed that, through it, we might learn something more about the real personality and unvarnished desires of the powerful – even of their true evil. But just as the story seems set, it turns: the testimony of the hotel maid in New York is discredited, other accusers undermined, accusations recanted. We don’t know if it’s a tale for a pulp novelist – or one for Balzac.

Certainly, the New York Times, for one, seems to lack the language to talk about sexuality and power:

“Whether his downfall will have a lasting impact on the culture of sexual privilege and impunity for powerful men in France remains uncertain …”

There is something the Strauss Kahn story wants to tell us. But while tantalizing, the meaning is yet obscure.

Occupy and the reasons for our discontent | Mark Greif

Category : Business

Exactly one year ago the protests started in Manhattan. Occupy’s support is wider and deeper than

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