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Fine dining for Dimon at the Palace raises concerns of commercialisation

It must have been a welcome spot of light relief for Jamie Dimon. Only days after he finally agreed to a $13bn settlement with US mortgage regulators, the boss of JPMorgan – and dozens of his corporate clients - were sitting back amid the splendour of Buckingham Palace, enjoying a fine dinner and performances by the Royal Philharmonic and the English National Ballet. The event, hosted by Prince Andrew, Duke of York, reflects growing enthusiasm by the Royal Family to use its premises to promote business interests. But it also risks stoking criticism over its apparent commercialisation and its intimacy with business.

One senior participant said the bank paid nothing for the evening but the Palace said the bank paid an undisclosed fee for food, drink and the venue. The bank said it also made charitable donations to the orchestra and ballet company. According to the Palace, the Duke of York is involved in efforts to support British business, and the event was an opportunity to “engage” with international chief executives about what Britain has to offer. Keith Vaz, the Labour chairman of the home affairs select committee, said the arrangement threatened to undermine the cachet of the royal palaces and even the security of the royal family. He compared it to controversial plans to open up the House of Commons to businesses, telling the Financial Times: “It could be that a company perhaps is not blue chip but may look it. We could take their money and only afterwards find out it is not an appropriate company to book a room in Buckingham Palace.” He added: “There is also the fact that this should be a special place. This is the home of the Queen. Where is it all going to end?” The JPMorgan event on October 30, had a guestlist that included up to 100 corporate and political heavyweights, ranging from Kofi Annan, the former UN secretary-general, to Indian industrialist Ratan Tata. Also present was Tony Blair, the former prime minister who chairs JPMorgan’s “international council” of senior advisers. There is also the fact that this should be a special place. This is the home of the Queen. Where is it all going to end? - Keith Vaz, Labour chairman of the home affairs select committee Key to organising the night was David Mayhew, the veteran City dealmaker who agreed a decade ago to sell to JPMorgan the Cazenove brokerage he led for many years. Mr Mayhew, still an adviser to JPMorgan, is a close personal friend of Prince Andrew. Paul Flynn, a republican Labour MP, said renting out Buckingham Palace to US investment banks should be only the start in making the royal family less dependent on the taxpayer. “I think they could raise about £100m a year by renting out rooms to tourists on a timeshare basis - they’ve got about 600 rooms,” he said. Prince Andrew has a mixed record in promoting British business. He stepped down two years ago as the UK’s trade envoy following a string of controversies over his business links, most notably his close friendship with US tycoon Jeffrey Epstein who was jailed for sex offences.

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Peugeot Seeks No. 2 Executive, Tavares May Be Candidate: Figaro 2013-11-22 23:58:50.970 GMT

By Jim Silver Nov. 23 (Bloomberg) -- Peugeot is using head-hunter firm to find an executive to support CEO Philippe Varin, Le Figaro reports, citing unidentified people. * Interviews may have already started, and Renault ex-COO Carlos Tavares, 55, is discussed as possible candidate, Figaro says * Changes in governance, including planning for CEO succession, may take place next yr; meanwhile Varin, 61, is focused on reaching agreement to sell shrs to Dongfeng Motor and French state: Figaro * NOTE: Nov. 20, Peugeot Talks Said to Hit Snag on Smaller Dongfeng Holding * NOTE: Aug. 29, Renault COO Tavares to Quit After Publicly Seeking GM Post

For Related News and Information: First Word scrolling panel: FIRST<GO> First Word newswire: NH BFW<GO>

--Editor: Louisa Fahy

To contact the reporter on this story: Jim Silver in New York at +1-212-617-7342 or jsilver@bloomberg.net

To contact the editor responsible for this story: Andrea Snyder at +1-202-624-1831 or asnyder5@bloomberg.net

Weekly Market Update: Markets Grind Higher as December Taper Looks Unlikely

- The DJIA and S&P closed out a seventh consecutive week of gains and both ended the week at all-time highs. The FOMC minutes from the October meeting suggested the taper could begin in two or three months, but very dovish comments in speeches from Yellen and Bernanke seemed to take a December taper off the table, further aiding gains among risk assets. There was some decent US data out this week: the initial jobless claims slipped back to lows last seen in September and the November Markit manufacturing PMI survey rose to 54.3, its highest level since March. In Europe, German data, including manufacturing PMI and IFO survey data, were strong. China's flash HSBC/Markit PMI stumbled, while the Japan trade deficit spiked to its highest level on record for October, with imports up 26% y/y. The Senate Banking Committee approved Janet Yellen's nomination to become the first woman to lead the Federal Reserve, sending it to the full Senate for a final vote, due in December. The DJIA rose 0.6% on the week, closing out Friday above 16000, while the S&P500 gained 0.4%, closing above 1800 for the first time. The Nasdaq added 0.1% on the week.

- In FOMC minutes, members highlighted improving economic data, and "some" indicated that "if economic conditions warranted, the FOMC could reduce the pace of purchases at one of its next few meetings." How to keep short-term yields low as tapering gets underway was a major subject. Some economists think the Fed should lower the 6.5% unemployment threshold to provide more support to the job market, but there wasn't a great deal of support for such a move. Most participants thought a reduction in interest rate on excess reserves (IOER) might be worth considering, although the benefits were seen as small except as a signal of policy intentions. Establishing a lower bound on inflation got some support, but the benefits of adding it were viewed as uncertain and modest, with big communication challenges.

- Both the headline and core October retail sales data were a bit stronger than expected (+0.4% v +0.1%e) despite the government shutdown. However growth in sales remains very muted, while the ex-autos figure was even weaker. In comments at an industry conference, executives from Coach said that the consumer situation is volatile and fragile, with mall traffic seeing a sharp decline in November.

- Retail earnings reports out this week reflected this weak prognosis. Target disclosed weak third quarter results, with revenue less than expected and comps up less than 1% - with strong parallels to Walmart's report, out last week. Mall retailers Abercrombie and Limited Brands sustained decent numbers in the third quarter, but also offered weak Q4 guidance. Despite another quarter of losses and negative comps, shares of JC Penney advanced as the company promised more progress in Q4. Gap had tepid results and flat comps.

- Home Depot and Lowes continue to be notable exceptions to the gloominess in the retail sector. Both firms continue to beat expectations and rack up good y/y growth thanks to the sustained housing recovery. In their third quarters, both HD and LOW beat expectations, raised FY13 guidance and saw decent comp store sales gains.

- Coming into the week, the euro continued its gradual float higher, although EUR/USD seemed to encounter upside resistance at the 1.3550-1.3560 areas several times this week. On Wednesday morning, EUR/USD dropped sharply from 1.3545 after press reports emerged suggesting the ECB was considering a negative deposit rate. Numerous ECB officials have indicated over recent months that the council was considering negative rates, and President Draghi said at his last several press conferences that the bank was "technically prepared" for a negative deposit rate. Draghi responded to the report the next morning, warning in a speech in Berlin that markets should not assume that implementing them was a done deal. Draghi's comments and the strong November Germany IFO survey on Friday morning helped force EUR/USD back toward the highs of the week.

- USD/JPY moved back above parity mid-week after Japan pension fund GFIF's advisory panel recommended the world's largest pension fund review its domestic bond-focused portfolio and diversify investments. USD/JPY later pushed out to four-month highs above 101.30 after BoJ chief Kuroda said the bank had scope for more easing and would not hesitate ease further, if necessary. EUR/JPY closed out the week around four-year highs thanks to Kuroda's remarks

- In China, the PBoC fleshed out further the currency and financial market reforms that were disclosed following the Third Plenum. The PBoC will "basically end" normal intervention in the currency market and broaden the yuan's daily trading limit in an orderly manner, although no specific time frame was provided. Investment caps for both domestic and foreign investors will be phased out, and a ceiling on deposit rates offered by local banks will be gradually removed as well.

It wasn't the most thrilling ride on Friday, yet the stock market maintained its bullish bias and ended the week on a winning note. Both the Dow Jones Industrial Average and the S&P 500 registered new record highs. Additionally, the S&P 500 logged its seventh consecutive winning week.

There was a modicum of profit-taking interest early on after Intel (INTC 23.87, -1.36) issued a warning that its revenue in FY14 is expected to be flat, but it didn't take long at all for the broader market to regain its footing.

Participants just stayed with the trade that got them here, buying the dip and keeping sellers at bay. They also appeared to draw support from the reminder out of Atlanta Fed President Lockhart before the open that monetary policy is likely to be accommodative for many more years.

Strikingly, there wasn't a lot of conviction behind today's trading. Volume at the NYSE totaled just 607 mln shares, which was the lowest all week and well below recent averages. Even so, today's trading was notable more for the lack of selling interest than buying interest.

Following a 9.0% gain in the last three months, there simply wasn't any rush to take profits. The buying interest seen was fairly broad-based. Advancers outlegged decliners at the NYSE and Nasdaq by roughly a 3-to-2 margin and seven out of ten sectors ended the day higher.

The health care sector (+1.2%) led the way, fueled by a huge jump in Biogen-Idec (BIIB 285.58, +33.15), which surged 13% after EU regulators approved its treatment for multiple sclerosis. Buying efforts were more restrained elsewhere as the gains in other sectors ranged from 0.5-0.8%.

The only laggards today were the utilities (-0.04%), telecom services (-0.1%), and technology (-0.2%) sectors, but even their losses were fairly negligible.

Within the Dow, 23 of the 30 components finished higher. Boeing (BA 135.97, +3.04) had the biggest gain and also some outsized influence on the price-weighted average. Some of its gain was offset by IBM (IBM 181.24, 2.89), which famous money Stanley Druckenmiller said was a stock to sell short for the company's lack of innovation.

Despite the weakness in IBM and Intel, the Dow and the other major averages closed at, or very near, their best levels of the day. The same can be said for longer-dated Treasury instruments. The benchmark 10-yr note added ten ticks, lowering its yield to 2.75%, while the 30-yr bond gained nearly a point and saw its yield come down to 3.84%.

If the market is concerned about the Fed tapering its asset purchases soon, it certainly didn't show it on Friday.

SAC’s Steinberg went bad as income plunged: prosecutors

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SAC’s Steinberg went bad as income plunged: prosecutors

Getting by on just $2.1 million a year must’ve been tough for SAC Capital money manager Michael Steinberg. As Steinberg’s total pay sank to that level in 2008 from about $5 million the prior year, the 41-year-old hedgie started using illegal insider tips to score some very profitable trades, a federal court jury was told Thursday. Steinberg used illegal tips on Dell in 2008, supplied by his analyst Jon Horvath, to score huge profits, the government has charged. SAC’s CFO Dan Berkowitz told the jury in Manhattan federal court that Steinberg’s total pay took a hit in 2008 as Wall Street reeled from the financial crash. Steinberg was one of the top earners at Steve Cohen’s SAC Capital. Steinberg is on trial for conspiracy to commit securities fraud. He is the eighth SAC employee to face insider-trading charges. The highest-ranking SAC employee nabbed in US Attorney Preet Bharara’s Wall Street probe of insider-trading, Steinberg has denied the charges. The trial is expected to last up to four weeks. Prosecutors are expected to lean heavily on the testimony of Jon Horvath and his “corrupt circle of friends.” Horvath will be the star witness in the case against his boss. Another so-called friend is Jesse Tortora, a research analyst at now-defunct hedge fund Diamondback Capital. Tortora was on the stand for most of the day Thursday. Tortora explained how the circle traded inside tips on Dell through sources inside the company who gave them illegal information. Tortora told the jury he passed the illicit tips to others, including Horvath. Horvath has said that he passed the illegal information on to Steinberg, who traded on it. The government has to prove that Steinberg knew the tips were not kosher — a point the money manager’s legal team is expected to deny. On the stand, Berkowitz detailed some of the inner workings of SAC Capital Advisors, including how Steinberg, who joined SAC in 1996, was so highly regarded at the hedge fund that he was given more money to trade than most of his colleagues. Steinberg was entrusted with $300 million to trade at the beginning of 2008 and was given wider latitude than others. Steinberg was able to sink 15 percent in one trade until the financial crisis forced SAC to rein in its traders later that year, the jury was told. In testimony that started a little after 11 a.m. and lasted the rest of the day, Tortora began the government’s task of laying the foundation of the conspiracy, much of it through emails and instant messages among members of the group. After Tortora had passed on inside information on Dell that led to profitable short trades on Aug. 28, 2008, he wrote in an email to Horvath: “r u there on Dell,” Horvath replied, “Nice man” and “u nailed it.” Tortora then replied “should be lower” and “shorting more.” SAC had total assets of between $10 billion and $17 billion between 2007 and 2009, with about 100 other money managers in the same role as Steinberg, according to Berkowitz.

Brussels to launch antitrust probe into sales of pay-TV rights

Brussels is poised to launch a formal antitrust probe into sales of pay-TV rights to screen premium sports and Hollywood blockbusters, in a groundbreaking move that builds on a test case brought by a British pub landlady. A formal European Commission investigation could smash open the country-by-country licensing that has dominated the sales of exclusive pay-TV content such as live football and newly-released movies, said people familiar with the case.

The regulatory attack on restrictions that carve the EU market into national patches follows a European Court of Justice ruling in 2011 regarding Karen Murphy, a publican from Portsmouth who had been fined for showing football to customers using a satellite card from Greece. While Ms Murphy secured only a partial victory – the judges upheld the right of consumers to buy a TV decoder card in any EU country – a decision that is forcing sports bodies and movie studios to rethink and possibly overhaul how rights packages are sold. Joaquín Almunia, the EU competition commissioner, last year sanctioned a “fact finding” effort in light of the ruling to see whether barriers to cross-border access merited antitrust scrutiny and possible enforcement action. Some investigators are now poised to step up their inquiries into whether “absolute territorial protection clauses” break competition law. These stop licensees from selling to other countries or accepting unsolicited demands from overseas customers to pay to access the content. Full details of the probe remain unclear. But it will potentially have ramifications for football competitions such as the Premier League and Hollywood studios such as Sony Pictures Entertainment and 21st Century Fox. A Commission spokesperson declined to comment. Such investigations typically stretch for several years before charges are brought against groups. If it identifies illegal practices, the commission can levy fines of up to 10 per cent of a group’s turnover. Big football competitions and Hollywood studios have long maintained a lucrative relationship with the pay-TV industry, which bought exclusive content to attract subscribers. While the investigation could potentially bring down EU barriers, it touches on highly sensitive political debates over the rights to audiovisual content and could have serious implications for the industry. “This is a major look at the TV market in Europe,” said a person familiar with the probe. Maurits Dolmans, a partner at Cleary Gottlieb, said the 2011 Premier League case concerned satellite sports broadcasting and the court left open whether it could be applied at all to other distribution channels and other forms of content. “The Commission will have to take into account different economic factors,” he said. “Forcing EU-wide licensing may be attractive for consumers in richer countries, who may pay less, but not necessarily for consumers in poorer countries, who might be forced to pay more.” Brussels mentioned its preliminary interest in the pay-TV market in a little noticed paragraph in the commission’s competition policy report in May. “Following the Premier League judgment, the commission conducted a fact-finding investigation to examine whether licensing agreements for premium pay-TV content contain absolute territorial protection clauses which may restrict competition, hinder the completion of the single market and prevent consumers from cross-border access to premium sports and film content,” the report said. The 2011 Premier League judgment found that granting a territorially exclusive license was not necessarily against competition law. But the judges said rights holders must demonstrate that the restrictions are pro-competitive.

Comcast eyes Time Warner Cable bid

Comcast, the $130bn market leader in the US cable industry, has waded into the battle to consolidate the country’s fragmented pay-television market, after being invited to examine a bid for Time Warner Cable. The group is weighing either making a solo “white knight” bid for Time Warner Cable, which has a market value of $38bn, or joining forces with Charter, its smaller rival that has been circling Time Warner Cable since the summer despite being far smaller, with a $14bn market capitalisation.

Comcast’s role in the process comes after representatives of Time Warner Cable approached the Philadelphia-based group to ask it to make an offer that would rival Charter’s overtures, said a person familiar with the matter. Comcast, which owns NBCUniversal, has been closely following the speculation around the sale of Time Warner Cable, but until Friday had not emerged as a potential suitor. Many analysts had assumed that its size could present serious regulatory obstacles to a successful acquisition of another US pay-TV and broadband provider, but a joint bid could allow it to overcome these obstacles by breaking up Time Warner Cable’s assets. People familiar with the situation cautioned that Comcast was not in active dialogue with either Time Warner Cable or Charter. Comcast and Time Warner Cable declined to comment. Charter, whose ambitions are supported by John Malone’s Liberty Media group, its largest shareholder, was not immediately available for comment. Craig Moffett, an analyst with MoffettNathanson, told clients that Tom Rutledge, Charter’s chief executive, had said last week that he saw consolidation as being about “running the companies better” rather than primarily about synergies. “There simply aren’t enough synergies [between Charter and Time Warner Cable] to support a reasonable valuation without ‘running it better’,” he added, “and even then, the resulting entity would be frightfully levered” (hence the appeal of a Comcast white knight scenario).

Speculation lifted share prices across the sector. Time Warner Cable shares, which started the year below $100, jumped 10 per cent to $132.92 on Friday, reaching their highest level since the company’s 2009 spin-off from Time Warner, owner of CNN, HBO and Warner Bros. Charter shares rose 6 per cent to $134.66 and Comcast rose 4.4 per cent to $49.52. Glenn Britt, who is due to hand over as Time Warner Cable’s chief executive to Rob Marcus at the end of the year, said in October it was “obviously absurd” to portray him as being opposed to consolidation. “Any decision on consolidation hinges on just one question, does it maximise value for our shareholders?” he said.

Microsoft to win EU okay for $7.3 billion Nokia deal: sources

BRUSSELS (Reuters) - Microsoft is set to secure unconditional EU regulatory approval for its proposed 5.4-billion-euro ($7.30 billion) takeover of Nokia's mobile phone business, two people familiar with the matter said on Friday.

The deal, announced in September and which includes a 10-year licensing agreement of Nokia's patent portfolio, underscores Microsoft's push into the competitive consumer devices market.

It faces fierce competition from market leader Samsung Electronics and Apple.

"The (European) Commission is expected to clear the deal without conditions," one of the people said.

The EU competition watchdog has set a December 4 deadline for its decision. Commission spokesman for competition policy, Antoine Colombani, declined to comment. Microsoft also declined to comment. Nokia did not immediately reply to an email for comments.

Regulators in Russia, India, Turkey and Israel have already given the green light to the deal. Nokia shareholders earlier this week also gave a thumbs-up to the sale of what was once Finland's biggest brand and worth 4 percent of the national GDP.

European Banks Are Getting a Negative Vibe

Would you pay someone for the privilege of lending them money?

Euro-zone banks might soon face that conundrum. European Central Bank officials, grappling with low inflation and weak growth, are publicly considering taking the bank's deposit rate, now at 0%, negative. That means effectively charging banks to hold their money.

ECB President Mario Draghi this week faced questions about the possibility of negative rates, a move the central bank discussed at its latest policy meeting. But, even if the ECB takes such a radical step, it may find the euro-zone economic engine doesn't respond.

Central banks rarely set negative interest rates. Denmark's central bank adopted the tactic last year, mainly to support the krone's peg to the euro. The ECB's hope partly would be that charging banks for deposits would spur lending. European financial institutions have about €170 billion ($229 billion) at the central bank in excess of reserve requirements.

In theory, flush banks in Northern Europe would lend more to their southern European peers. That would stoke the interbank market and ease the flow of credit to businesses and households.

Negative rates might also prove an easier option for the ECB than enacting its own Federal Reserve-style bond-buying program. A policy of buying government bonds faces practical and political difficulties given the euro zone comprises 17 different countries. Negative rates, by contrast, could be seen as an extension of conventional policy, consistent with the ECB's role as the euro zone's lender of last resort.

The problem is how banks respond. Bankers themselves are skeptical about the likely effectiveness of such a move.

Regulatory issues could still prevent them lending more. Banks must now hold enough liquid assets like cash to cover their needs for at least 30 days. Cash they lend to other banks doesn't count toward that requirement, though, meaning negative deposit rates may not be able to stoke the interbank lending market.

Negative rates would also reduce banks' profitability, particularly in Germany, France and the Netherlands, whose banks collectively account for the bulk of ECB deposits. Banks would be reluctant to pass on the rate cut to their own customers; the first to do so might face the risk of customers withdrawing deposits.

To maintain margins, banks might have to raise lending rates, the opposite of the ECB's desired effect. Yet absent higher loan rates, negative deposit rates might serve only to weaken robust banks, with scant offsetting benefit.

Moreover, strong banks might still not be willing to lend to weaker ones given the lingering uncertainties over balance-sheet strength at many European firms. Banks with high deposits at the ECB might prefer the predictable hit from negative interest rates to the uncertainty associated with increased lending.

With memories of the euro-zone crisis so fresh, the ECB can't assume financial firms will quickly emerge from their bunkers.

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BN 11/22 16:24 *SOROS BOOSTS STAKE IN TEVA PHARMACEUTICAL TO MOST SINCE 2010

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*SOROS BOOSTS STAKE IN TEVA PHARMACEUTICAL TO MOST SINCE 2010 2013-11-22 16:24:24.219 GMT

--PATRICK MCHALE

-0- Nov/22/2013 16:24 GMT