There’s Currency Rigging, and Then There’s This: Opening Line

What was Lloyds Banking Group’s Martin Chantree thinking? Four people with knowledge of the inquiry say he tipped off the bank’s trading position just ahead of its sale of sterling for the dollar. In the seven minutes etween his communication and the time Lloyds began executing the order on Jan. 13, 2013, the pound fell 16 basis points against the dollar, or 0.16 percentage point, its biggest move of the day, according to data compiled by Bloomberg. As the U.K. currency tumbled, costing Lloyds an estimated $750,000, Chantree told colleagues that maybe he shouldn’t have shared the information, two of the people said, according to reporting by Gavin Finch, Ambereen Choudhury and Liam Vaughan.

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Stock markets are little changed in Europe after a gain of 0.7 percent in the Nikkei overnight. U.S. equity futures are also little changed, with S&P futures down less than 0.2 percent at 5:45 a.m. in New York.

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Maybe the analysts are right about their price targets for Facebook but just don’t know it yet. After all, a P/E ratio of 122 times trailing 12-month earnings is pretty thin air and it wouldn’t take much to knock the social-networking website back to Earth. Then again, maybe Mark Zuckerberg is smarter than Wall Street and its analysts will never catch up to the Hoodie.

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As U.S. Attorney Preet Bharara digs into the business dealings of Port Authority of New York and New Jersey Chairman David Samson amid the investigation into New Jersey Governor Chris Christie’s role in the George Washington Bridge lane-closing affair, the New York Times reports the Port Authority had become a political tool for the governor long before bridge access from Fort Lee, New Jersey, was throttled. The story details how Christie allegedly turned wreckage from the World Trade Center’s twin towers into politically motivated gifts to be doled out to New Jersey mayors based on their fealty.

UPDATE: The Bergen Record of New Jersey reports this morning the U.S. Attorney’s office in New York withdrew its subpoena for Samson’s records and turned any potential investigation over to the U.S. attorney in New Jersey.

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The search continues for Malaysia Airlines Flight 370, now expanding beyond its intended flight path and even onto land. The baffling disappearance of the Boeing 777, one of the most reliable jetliners in service, has left expert investigators shaken as the days progress since the March 8 disappearance and not a shred of evidence has turned up. “It’s disturbing the aircraft hasn’t been found,” said Louis Sorrentino, Jupiter, Florida-based managing officer of ICF International’s aviation safety, security and regulatory compliance practice. “The 777 is a huge aircraft and debris should be visible.” Malaysian officials said one of the men traveling on one of two stolen passports is a 19-year-old Iranian with no links to terrorism who was attempting to meet his mother at the Frankfurt airport.

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High-frequency trading company Virtu Financial Inc. filed yesterday for a $100 million IPO to be managed by Goldman, JPMorgan and Sandler O’Neill. Insight Venture Partners is nearing a deal to acquire Institutional Shareholder Services from MSCI, the Wall Street Journal reported yesterday. Blackstone and TPG are planning to bid about $5.5 billion for Gates Global Inc., the maker of auto parts and industrial products, a person with knowledge of the bid said late yesterday, after the WSJ’s midafternoon story.

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As Keith Naughton examines the culture at General Motors that may have contributed to delays in grasping the extent of flawed ignition switches that have led to the recall of 1.6 million vehicles and are linked to at least 13 deaths, the House Energy and Commerce Committee says it will investigate whether GM or the National Highway Traffic Safety Administration missed something. Meanwhile, Anton Valukas, the former federal prosecutor who led the U.S. investigation into the collapse of Lehman Brothers, has been hired to lead an internal GM investigation into design failures of the switches.

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The potential for fire-sale liquidations of collateral in repurchase agreements could diminish pending an agreement by the biggest U.S. banks to devise a more orderly system of pricing the assets, and making any transactions through a clearing process at the Fixed Income Clearing Corp., five people with knowledge of the talks told Liz Capo McCormick. Preset pricing and guarantees that the liquidity would be available when needed would solve what the Federal Reserve sees as the last systemic risk in the $1.6 trillion daily market for short-term funding. The plan, still in deliberations, would “ensure the plumbing of the financial system continues to operate in case we have another Lehman situation,” Bob Burgess, managing editor for bonds and currencies, says. “You won’t need to offload an asset to figure out what the price is.”

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Traffic advisory: The president is in New York today to attend some events. He’s scheduled to land at JFK Airport at about 3:25 p.m. and to depart about 9:10 p.m.

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Puerto Rico is coming to market with $3 billion in general-obligation bonds, and yields are ranging from 8.625 percent to 8.875 percent, a person with knowledge of the sale told Michelle Kaske yesterday. For investors in the highest tax bracket, an 8.875 percent tax-free yield is equivalent to a taxable 14.7 percent, Bloomberg data show. Similarly rated corporate debt maturing in seven years yields about 4.79 percent, according to Bank of America Merrill Lynch data. “It’s mouthwatering in comparison,” David Tawil, co-founder of New York-based hedge fund Maglan Capital, told Kaske. “The average high-net-worth person cannot find anything like this in the corporate world.” Because the commonwealth’s bonds are exempt from local, state and federal taxes, they’re found in 70 percent of mutual funds, according to Morningstar, an advantage that has enabled the island to double its debt, now rated junk by Moody’s and S&P, in 10 years by selling bonds to close deficits and pay operating expenses. But wait, isn’t some of that what they’re doing this time, too? “We do not see evidence of economic growth sufficient to reverse the commonwealth’s negative financial trends,” Emily Raimes, a Moody’s analyst, said about a month ago. How much has changed?

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What follows the abolition of apartheid? Money. And Kardashians.

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The Ivy League is waking up to the notion that their reputations can be burnished even further by success with sports. In our feature today, John Lauerman explains how Harvard’s recent surge into basketball prowess -- four straight league titles that used to be won regularly by Penn or Princeton, and a first-round victory in the 2013 NCAA national tournament -- has been helped along by the makings of an ersatz prep school farm system. High-school students who just need that 13th year to get into academic shape are finding prep schools like Northfield Mount Hermon, in Gill, Massachusetts, offer the right seasoning and rigor to get both their basketball and academic muscles ready for Ivies. The story also asks the question of whether the Ivy League schools are sacrificing standards. Northfield Mount Hermon has sent 20 players to the Ivy League in the past seven years.

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Edward Snowden, filtered through about 10 different computer servers to keep his pursuers off the trail, addressed the South by Southwest conference yesterday and called on technology companies to fill the void in data security that’s allowing the NSA to basically expropriate whatever information it wants from anyone about anything. The former NSA contractor from Booz Allen Hamilton (BAH), now somewhere in Crim--Russia, also urged for better oversight of intelligence agencies and said Congress has failed to do the job. Congress wasn’t immediately available to offer a response.

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One thing about the Keystone Pipeline saga: both sides play hard. This tractor pull has been going on for a long time and there are still some months to go before Obama is likely to make a final decision. Left in the middle is Hillary Clinton, on whose watch much of the U.S. State Department’s review of the pipeline was conducted, and the department’s review found little reason to think the project should be denied for environmental reasons. Which is why Clinton may be a little reticent these days to lay out her position on the pipeline as if she were already a candidate and why the wealthy-environmentalist wing of the Democratic Party is withholding its love until she does. “She’s playing the political calculus of not making unnecessary enemies,” Washington political editor-at-large Mark Silva says. Positions such as these “become a question of fervor, of willingness to work (with the candidate). There’s nothing to be gained by Clinton taking a position that winds up on the other side of the argument.”

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You’ve never heard ‘Cowgirl in the Sand’ (we assume) until you’ve heard it through a PonoMusic high-quality digital music player, now in development by rock legend Neil Young with some help along the way from the late Steve Jobs. Kickstarter is taking preorders starting today.

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Take this line, “Some are born great, some achieve greatness, and some have greatness thrust upon them,” or, wait -- this one’s better -- “By heaven, methinks it were an easy leap to pluck bright honor from the pale-faced moon, or dive into the bottom of the deep, where fathom-line could never touch the ground, and pluck up drowned honor by the locks,” and imagine they’re being delivered to you by BuzzFeed with GIFs. These lines from Shakespeare -- the first from ‘Twelfth Night,’ the second from ‘Henry IV, Part 1’ (but you knew that) -- are the presumed message that could be delivered through the moving-photograph “graphics interchange format” that is rapidly becoming a language of its own. And that’s the point to two MIT researchers, Travis Rich and Kevin Hu, in this article from Quartz about their website http://gifgif.media.mit.edu/. “I want people to be able to put in a Shakesperian [sic] sonnet and get out a GIF set,” Hu said. Really? Isn’t that kind of moving backward?

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Sean Combs, the hip-hop artist formerly known as Puff Daddy, then formerly known as P. Diddy, and for the time being known as Diddy, until the appropriate hieroglyphic GIF comes along, is said to be in the bidding for the MSG’s Fuse cable-TV channel. Three people with knowledge of Fuse’s sale tell Andy Fixmer and Alex Sherman that Combs would blend Fuse, currently available to about 74 million homes in the U.S., with his Comcast-backed Revolt TV channel, now reaching about 23 million homes. Asked what he thought Did--- Combs would do with a TV network, Bloomberg Los Angeles bureau chief Tony Palazzo took the most direct line: “Build the audience and then sell it for a billion dollars?”

To contact the reporter on this story: C. Thompson in Wilmington at cthompson1@bloomberg.net

To contact the editor responsible for this story: Marty Schenker at mschenker@bloomberg.net

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