Business and Finance

Three high-ranking executives at JPMorgan Chase are expected to leave their jobs this week after a trading blunder cost the bank $2 billion, The Wall Street Journal reported Sunday.

The Journal, citing people familiar with the situation, reported that one of the executives is Ina Drew, who for seven years has run the risk-management division at the bank responsible for the loss.

The other two identified by the newspaper are an executive in charge of the London desk that placed the trades and a managing director on that team. The bank did not immediately return a message from The Associated Press.

The $2 billion loss, disclosed on Thursday by CEO Jamie Dimon, has been an embarrassment for the bank and led lawmakers and critics of the banking industry to call for tougher regulation of Wall Street.

Drew, one of the highest-ranking women on Wall Street, is the bank’s chief investment officer. She was paid $15.5 million last year and almost $16 million the year before, according to a regulatory filing.

The Journal reported that Bruno Iksil, the JPMorgan trader identified as the “London whale” because of the giant bets he placed, was also likely to leave, but the paper reported that it was not clear when that would happen.

On Friday, investors shaved almost 10 percent off JPMorgan’s stock price. Dimon said in a TV interview aired Sunday that he was “dead wrong” when he dismissed concerns about the bank’s trading last month.

“We made a terrible, egregious mistake,” Dimon said in an interview that was taped Friday and aired on NBC’s “Meet the Press.” “There’s almost no excuse for it.”

Dimon said he did not know the extent of the problem when he said in April that the concerns were a “tempest in a teapot.”

The loss came in the past six weeks. Dimon has said it came from trading in so-called credit derivatives and was designed to hedge against financial risk, not to make a profit for the bank.

Dimon said the bank is open to inquiries from regulators. He has also promised, in an email to the bank’s employees and in a conference call with stock analysts, to get to the bottom of what happened and learn from the mistake.

Dimon told NBC that he supported giving the government the authority to dismantle a failing big bank and wipe out shareholder equity. But he stressed that JPMorgan, the largest bank in the United States, is “very strong.”

A piece of financial regulation known as the Volcker rule would prevent banks from certain kinds of trading for their own profit. Dimon has said the trading involved in the $2 billion loss would not have fallen under the rule.

Rep. Barney Frank, D-Mass., told ABC’s “This Week” that he hopes the final version of the Volcker rule will prevent the type of trading that led to the massive loss at JPMorgan.

Dimon conceded to NBC that the bank “hurt ourselves and our credibility” and expects to “pay the price for that.” Asked what the price should be, Sen. Carl Levin, D-Mich., said that banks will lose their fight to weaken the rule.

“This was not a risk-reducing activity that they engaged in. This increased their risk,” Levin told NBC.

“So we’ve got to be very, very careful that the regulators here are not undermined by this huge effort to weaken the rule by putting in a huge loophole” that includes the trading involved in the JPMorgan loss, he said.

Addressing public anger toward Wall Street, Dimon said he wants a more equitable society and does not mind paying higher taxes. But he said attacking all of business is “very counterproductive.”

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Lamborghini could have made a four door sedan instead of an SUV, but that wouldn’t have been cool enough, said the Italian automaker’s chief executive in a telephone interview from Beijing, where the Urus SUV concept vehicle was being unveiled.

Sedans are "less emotional" than SUV’s, Stephan Winkelmann said and, therefore not as good a fit for the maker of extreme performance vehicles. "What we want to build is a real Lamborghini in any market segment we enter," he said.

Still, Lamborghini also wants to create a vehicle that can be used for more than just occasional high-speed drives.

"Today, we are not building cars which are meant to driven on a daily basis from ‘point a’ to ‘point b,’" Winkelmann said, "and this car is exactly that."

Lamborghini’s current line-up consists of two models, the V-12 powered Aventador, available at prices starting at about $375,000, and the V-10 powered Gallardo, which starts at about $180,000 and is available in numerous hard-top and convertible variations.

Gallery: Lamborghini Urus SUV

The Italian automaker has been considering something with broader appeal for years, Winkelmann said. In 2008, Lamborghini showed off a four-door sedan concept vehicle called the Estoque. But he said the global economic crisis put a stop to any further consideration of that vehicle.

Meanwhile, the SUV market has continued to expand, despite higher gas prices, as more sizes and variations of the high-riding vehicles have come to market.

Today, SUVs range from the traditional large truck-based vehicles to very small, sporty models personal loan for poor credit. According to a recent analysis by Ford Motor Co. (, Fortune 500), one in three vehicles sold in the United States last year was some sort of SUV.

"Even outside the U.S., the segment is growing," Winkelmann said.

Should Lamborghini decide to make the Urus available for sale — something Winkelmann said hadn’t been decided yet — it would cost roughly the same as the Gallardo.

Cool cars from the N.Y. auto show

Producing a vehicle like the Urus is "over 95% feasible," Winkelmann said.

Much of the concept SUV is made from expensive, but very lightweight, carbon fiber, and instead of actual side mirrors, it has video cameras.

Currently, Lamborghini sells only about 2,000 cars but is prepared to produce as many of the 3,000 of the Urus SUV alone.

That would still leave the supercar maker selling just 5,000 vehicles a year, a number that wouldn’t endanger the brand’s valued exclusivity, Winkelmann said.

Lamborghini is part of Germany’s Volkswagen Group () which also owns Audi, Bentley and Bugatti. Bentley also unveiled an SUV concept vehicle at an auto show earlier this year.

The 600 horsepower Urus would primarily be intended for on-road use, said Winkelmann, where it would offer strong acceleration and cornering without, perhaps, the top speed of a Lamborghini sports car.

Off road, it would perform about as well as other high-performance luxury crossovers. In other words, it will be able to drive in the mud and on rocks but not all that well. 

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The Philippines central bank will gauge the impact of two interest rate cuts this year when it assesses monetary policy at this week

Deep in Republican oil country, President Barack Obama is fending off criticism of his energy policies, pointing to plans to fast-track an oil pipeline that emerged after he delayed the larger Keystone XL project earlier this year.

Obama was directing federal agencies Thursday to expedite a 485-mile line from Oklahoma to refineries on Texas’ Gulf Coast that would remove a critical bottleneck in the country’s oil transportation system. The directive would also apply to other pipelines that alleviate choke points.

“We’re drilling all over the place,” Obama said in Maljamar, N.M., on Wednesday, standing alongside oil rigs on federal land. The president was announcing his plans for the expedited pipeline, a southern portion of the original Keystone XL, in Cushing, Okla., where construction is expected to begin this spring.

In oil fields and amid acres of solar panels, Obama is trying to rebut charges that he has stifled domestic energy production and been too eager to spend government money on renewable energy projects as gas prices have climbed to $3.86 a gallon. His emphasis on oil drilling is aimed at countering criticism of his rejection of the 1,700-mile Keystone XL pipeline, which would carry tar sands oil from western Canada to refineries along the Texas Gulf Coast.

For Obama’s advisers, rising gas prices pose a threat to his re-election bid because they could undermine the benefits of a payroll tax cut that he made the centerpiece of his jobs agenda last fall _ Congress approved the tax cut extension in February _ and throttle the economic recovery.

Republicans view rising gas prices as emblematic of Obama’s energy record and hope to tag him with the blame even though no president has much control over prices at the pump. Gas prices have risen more than 50 cents a gallon since January in response to a standoff over Iran’s nuclear program that has threatened to disrupt Middle East oil supplies.

GOP presidential hopeful Rick Santorum, campaigning at a Harvey, La., company that services oil rigs, said Obama’s administration should open more federal lands for leases to boost U.S. oil production and revenue for the federal government.

“Here’s an opportunity for us in this country to do something about it: increasing jobs, lowering energy prices, decreasing the deficit, all of the things you would think the president of the United States would be for,” Santorum said.

Mitt Romney, Santorum’s chief rival for the Republican nomination, has labeled Obama’s top energy advisers as the “gas hike trio,” urging the president to fire three Cabinet secretaries because of the high prices.

The status of the Keystone XL pipeline has been a focal point in the heated political fight over energy development.

Calgary-based TransCanada said it hopes to complete the $2.3 billion Oklahoma-to-Texas section next year after receiving the last approvals it needs to start construction. Many of the permits and environmental reviews already have been completed as part of the larger Keystone project, company officials said.

Republicans questioned whether the executive actions by Obama would speed up the pipeline’s construction and said it reiterated the need for the larger Keystone XL pipeline.

“The American people can’t afford more half-measures on energy from the president. No matter what he says, the reality is he killed the Keystone pipeline and the energy production and 20,000 jobs that went with it,” said Kirsten Kukowski, a Republican National Committee spokeswoman.

Obama’s energy tour was also aimed at defending his administration’s support of renewable energy projects, an agenda tarnished by his administration’s decision to pump millions into California solar company Solyndra before it collapsed.

In an interview with American Public Media’s “Marketplace” on Wednesday, Obama noted that the funding came from a loan guarantee program approved by Congress to help renewable energy companies, some of which would not succeed.

“Do I wish that Solyndra had gone bankrupt? Absolutely not. And obviously it’s heartbreaking what happened to the workers who were there,” Obama said. “When you look at the overall portfolio, is it right for us to make sure that we’re not just cashing in our chips and letting the Chinese or the Germans develop the technologies that we know are going to be critical in the future? I’m proud to say that we’re going to continue to support it.”

Electoral politics remain close to the surface. Nevada and New Mexico remain top targets on Obama’s 2012 election map, and while Republican stronghold Oklahoma will get scant attention from his political team, taking his message to the site of a future oil pipeline allows him to strike back at his chief critics on energy.

Obama was ending the day with a stop in battleground Ohio, talking about automobile research and development at Ohio State University in Columbus. The president has cited his decision to raise fuel efficiency standards to 55 miles per gallon for new vehicles by 2025 as an important step in conserving oil and saving consumers at the gas pump.

Obama has repeatedly invoked his decision to rescue General Motors and Chrysler from collapse with billions in federal aid, a move that saved hundreds of thousands of auto assembly and supplier jobs in Ohio, Michigan and elsewhere. Romney opposed the bailout, and Obama’s team intends to make it a stark contrast between the two candidates if the former Massachusetts governor wins the GOP nomination.

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The Federal Reserve paid $75.4 billion to the U.S. Treasury as an expanded bond portfolio generated $83.6 billion in interest income from its open-market operations last year.

The Fed

After a week dominated by hopes and fears about Greece, investors will continue to follow the plight of the nation at the center of Europe’s debt crisis as it enters another crucial week.

Investors will also have a full slate of data on the U.S. economy to sift through next week, which could vie with jitters about a default by debt-stricken Greece.

Stocks sank Friday after eurozone finance ministers postponed a decision on additional bailout funds for Greece, saying the government’s latest austerity program does not go far enough.

The Greek Parliament voted in favor of the politically unpopular reform package late Sunday, paving the way for the ministers to sign off on a second bailout worth €130 billion when they meet Wednesday.

Meanwhile, violent protests against the austerity measures continued over the weekend in Athens.

In addition to parliamentary approval, Greece needs to identify an additional €325 million in spending cuts. And political leaders must provide binding assurances that they will follow through on the reforms even after elections are held later this year.

The concern is that Greece will default on a €14.5 billion bond redemption in March if the government cannot secure additional bailout funds.

Friday’s retreat pushed the major indexes lower for the week. The Dow Jones industrial average () and the S&P 500 () both lost 0.5% last week, while the Nasdaq () eased 0.8%.

Despite the down week, stocks have been sailing higher this year. The Dow is up nearly 5% so far in 2012. The S&P 500 has gained nearly 7% and the Nasdaq has rallied over 11% year to date.

In the United States, investors will take in a series of key economic indicators next week, including January retail sales, a regional manufacturing index, a report on new home construction, as well as producer and consumer inflation data.

Bernanke: Housing problems hold back recovery

On Wednesday, the Federal Reserve will release minutes from its January policy meeting, when the central bank broke new ground by releasing interest rate forecasts and an explicit target for the rate of inflation.

The Fed has been cautious about the outlook for the economy, pledging to hold interest rates at historic lows through late 2014. But investors have been more optimistic, focusing on a better-than-expected reports on the job market and fourth quarter gross domestic product. 

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1901 • John F. Queeny sets up Monsanto Chemical Works in honor of his wife, Olga Monsanto, and begins making saccharin at a St. Louis plant.

1929 • Monsanto buys two companies to enter the rubber chemicals business. It also buys several other chemical companies.

1997 • Monsanto spins off its chemical group as Solutia Inc.

December 2003 • Solutia files for Chapter 11 bankruptcy.

May 2004 • Solutia promotes Jeffry Quinn to president and CEO after he joined the company in 2003.

May 2007 • Solutia buys the half of Brussels-based Flexsys NV, a supplier of chemicals to the rubber industry, that it didn’t own.

February 2008 • Solutia emerges from bankruptcy.

June 2009 • Solutia sells its nylon business unit.

January 2012 • Eastman Chemical announces plans to acquire Solutia.

Source: St. Louis Post-Dispatch research, Solutia

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Wall Street opened higher Wednesday following reports that the International Monetary Fund could get more cash to help countries struggling to manage their debt.

The Dow Jones industrial average is up 43 points at 12,483 after the first half-hour of trading. That’s an increase of 0.4 percent. Bank of America Corp. and JPMorgan Chase & Co. are the Dow’s leading stocks. BofA rose 2.6 percent, JPMorgan 2 percent.

Goldman Sachs Group Inc. jumped 3.5 percent after the investment bank reported earnings that trumped analysts’ expectations. Profit still sank 58 percent in the last three months of 2011, a result of sinking interest rates and volatile financial markets.

Other financial stocks were sharply lower. State Street Corp. dropped 6.5 percent.

Christine Lagarde, the IMF’s managing director, said Tuesday that the fund was looking at ways to increase the amount it can lend to countries, partly to deal with Europe’s debt crisis.

The S&P 500 index is up 5 points to 1,298. The Nasdaq is up 16 points, or 0.6 percent, to 2,744.

Yahoo Inc. rose 2 no credit check payday loans.5 percent on news that co-founder Jerry Yang is leaving the struggling Internet company. The departure clears the way for newly hired CEO Scott Thompson to take more radical action to shake up the company.

The Federal Reserve said manufacturing rose 0.9 percent in December, the biggest increase since December 2010. Output surged as companies bought more machines and materials.

Among other stocks making large moves Wednesday:

_ Amphenol Corp. soared 10 percent, the largest gain in the S&P 500. The manufacturer of fiber optic cables reported earnings that beat analysts’ expectations.

_ Linear Technology Corp. jumped 8.3 percent. The Milpitas, Calif.-based circuit maker said it expects revenue to rise between 4 and 8 percent in its third quarter following strong order increases in December and January. It also raised its dividend by a penny to 25 cents per share.

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Global stock markets were mixed Friday on 2011’s last trading day and turned in heavy losses for the year after Europe’s debt crisis and natural disasters battered a struggling global economy. Japan’s benchmark hit its lowest close in three decades.

Benchmark oil hovered below $100 per barrel and the dollar weakened against the yen but rose against the euro.

Asian traders recorded gains for the day Friday but markets in Tokyo, Shanghai and Hong Kong ended the year with double-digit losses.

Japan’s Nikkei 225 index, after three straight days of losses, rose 0.4 percent to 8,429.45, but it was the lowest closing since 1982. China’s benchmark gained 1.2 percent to close at 2,199.42 _ still, a 20 percent loss for the year.

European shares were steady or slightly down in early trading. Britain’s FTSE 100 lost 0.2 percent at 5,555.92. Germany’s DAX was marginally down at 5,846.35 and France’s CAC-40 was nearly unchanged at 3,127.34.

Wall Street appeared headed for a lower closing, with Dow Jones industrial futures down 0.2 percent at 12,194 and S&P 500 futures slipping 0.2 percent to 1,255.40.

Hong Kong’s Hang Seng Index gained 0.2 percent to close at 18,434.39.

Australia’s benchmark S&P ASX 200 ended the year at 4,140.4 _ down 0.4 percent on the day and 14.5 percent lower for 2011. A day earlier, South Korea’s benchmark Kospi closed at 1,825.74 on Thursday _ 11 percent down on its last trading session of the year Thursday.

Analysts said global stocks tumbled in lockstep, suffering from the effects of natural disasters, a wobbly recovery in the U.S. _ and an escalating European debt crisis that has resisted repeated measures taken by the region’s governments and financial institutions.

“The big reason is Europe. Europe tried to muddle through without a real solution. They can save a small country like Greece, but they cannot save a big country like Italy. Two trillion euros in foreign debt _ nobody in the world has that kind of money,” said Francis Lun, managing director of Lyncean Holdings in Hong Kong.

“Europe will enter a lost decade, a decade of no solutions and no growth,” he said. “Maybe except in Germany, their machinery is still selling.”

Japan’s benchmark plunged after the March 11 tsunami and earthquake disaster that destroyed huge chunks of the island nation’s northeastern region, left 20,000 people dead or missing and set off the world’s worst nuclear crisis since Chernobyl.

Disaster damage extended to key suppliers for major companies like Toyota Motor Corp. and Sony Corp., which suffered production disruptions. The Thai flooding that followed caused similar problems for automakers, including Honda Motor Co., but on a smaller scale.

The Tokyo market also saw two big-name brands lose much of their value.

One was Tokyo Electric Power Co., the utility that runs Fukushima Dai-ichi nuclear power plant, where at least three reactors went into meltdown after tsunami destroyed backup generators to keep power going at the plant.

Some officials say TEPCO may have to be nationalized because of ballooning losses and the costs to bring the reactors under control and compensate victims.

Another was camera and medical equipment maker Olympus Corp., whose offices have been raided by criminal investigators after fabricated accounting to cover up massive investment losses came to light no fax payday loans.

A British executive, who has since resigned from the board, was first to draw attention to the dubious investments, and has become a celebrity figure raising questions about old-style Japanese management.

Across the board, Japanese companies have been slammed by the rising value of the yen, which erodes the value of revenue from exports.

The Nikkei lost nearly a fifth of its value over the past year. It nose-dived right after the disaster, recouped some of those losses in July, but then started a decline that has the benchmark hovering at below the March value.

China’s benchmark Shanghai Composite Index lost 21 percent in 2011 as the impact of Beijing’s multibillion-dollar stimulus faded and the government tightened curbs on lending and investment to cool blistering economic growth.

The flood of state spending and bank lending after the 2008 crisis fueled a surge in real estate and stock prices. In 2010, Beijing responded by clamping down on credit and real estate speculation to cool inflation and soaring housing prices.

Beijing is trying to steer growth to a more sustainable level after 2010’s explosive 10.3 percent expansion. Growth eased to 9.1 percent in the three months ending in September, down from 9.5 percent the previous quarter.

Chinese leaders have promised to ease credit to help exporters and smaller companies cope with falling global demand and weaker domestic growth. But they say most controls will remain in place. That has disappointed stock traders who are hoping for interest rate cuts and looser controls on bank lending. They have responded in recent weeks by dumping stocks and moving some money to U.S. and European markets.

The benchmark Hang Seng Index slipped in the second half of the year as concerns over Europe accelerated, sending it to a 2011 low in early October before bouncing slightly to end the year at a 20 percent loss.

Hong Kong is Chinese territory, but its financial markets are open to foreign companies and investors, which made it a popular destination this year for foreign companies looking to go public, drawn by the prospect of raising their brand profiles with China’s newly wealthy as growth flags in their home markets.

Italian fashion house Prada was one of the biggest names to list in Hong Kong, with an initial public offering in June that raised $2.5 billion, making it the sixth-biggest IPO globally this year, according to deal tracking service Dealogic.

Other foreign companies that took out primary or secondary listings in Hong Kong include MGM China Holdings Ltd., the Macau casino arm of MGM Resorts International, luggage maker Samsonite S.A. and U.S. luxury handbag maker Coach Inc. However, the slumping market means share prices for many companies that went public are ending the year lower than IPO price.

Benchmark crude for February delivery fell 28 cents to $99.37 a barrel in electronic trading on the New York Mercantile Exchange. The contract added 29 cents to settle at $99.65 in New York on Thursday.

In currency trading, the dollar fell to 77.58 yen from 77.65 yen late Thursday in New York. The euro fell to $1.2913 from $1.2939.

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Japan