My finance view

JPMorgan Chase is expected to accept the resignation of one of the highest-ranking women on Wall Street after the bank lost $2 billion in a trading blunder, a person familiar with the matter said Sunday.

The bank will accept the resignation of Ina Drew, its chief investment officer, the person told The Associated Press, speaking on condition of anonymity because the person was not authorized to discuss the decision publicly.

At least two other executives at the bank will be held accountable for the mistake, the person said.

The casualties come as the bank, the largest in the United States, seeks to minimize the damage caused by the $2 billion trading loss, disclosed Thursday by CEO Jamie Dimon.

Investors shaved almost 10 percent off JPMorgan’s stock price on Friday, and Dimon has said the mistake will complicate the efforts of banks to fight certain regulatory changes three years after the financial crisis.

Drew, 55, is a top lieutenant to CEO Jamie Dimon. She was paid $15.5 million last year and almost $16 million in 2010, making her one of the highest-paid officials at JPMorgan, according to a regulatory filing.

The Wall Street Journal reported earlier Sunday that Drew and two other JPMorgan executives were expected to resign soon.

The Journal also 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.

The surprise loss has been a black eye for the bank and for Dimon, who is known in the industry both as a master of risk management and as an outspoken opponent of some proposed regulation since the crisis.

JPMorgan’s disclosure has led lawmakers and critics of the banking industry to call for tougher regulation of Wall Street. Many post-crisis rules governing risk-taking by banks are still being written.

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.

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.

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.”

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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A polluted drainage ditch that once flowed with industrial waste from Lake Charles, La., petrochemical plants teems with overgrown, wild plants today.

A light-rail line zips past the spot where a now-defunct Portland, Ore., gasoline station advertised in 1972 that it had run out of gas.

A smoking Jersey City, N.J., dump piled with twisted, rusty metal has disappeared, along with the twin towers of the World Trade Center in lower Manhattan that were its backdrop.

Forty years after the Environmental Protection Agency sent an army of nearly 100 photographers across the country to capture images at the dawn of environmental regulation, The Associated Press went back for Earth Day this year to see how things have changed. It is something the agency never got to do because the Documerica program, as it was called, died in 1978, the victim of budget cuts.

AP photographers returned to more than a dozen of those locations in recent weeks, from Portland to Cleveland and Corpus Christi, Texas. Of the 20,000 photos in the archive, the AP selected those that focused on environmental issues, rather than the more general shots of everyday life in the 1970s.

Gone are the many obvious signs of pollution _ clouds of smoke billowing from industrial chimneys, raw sewage flowing into rivers, garbage strewn over beaches and roadsides _ that heightened environmental awareness in the 1970s, and led to the first Earth Day and the EPA’s creation in 1970. Such environmental consciousness caused Congress to pass almost unanimously some of the country’s bedrock environmental laws in the years that followed.

Today’s pollution problems aren’t as easy to see or to photograph. Some in industry and politics question whether environmental regulation has gone too far and whether the risks are worth addressing, given their costs.

Republican presidential contender Mitt Romney has called for the firing of EPA chief Lisa Jackson, while GOP rival Newt Gingrich has said the EPA should be replaced altogether. Jackson has faced tough questioning on Capitol Hill so often the in past two years that a top Republican quipped that she needs her own parking spot.

“To a certain extent, we are a victim of our own success,” said William Ruckelshaus, who headed the EPA when it came into existence under Republican President Richard Nixon and was in charge during the Documerica project. “Right now, EPA is under sharp criticism partially because it is not as obvious to people that pollution problems exist and that we need to deal with them.”

Environmental laws that passed Congress so easily in Ruckelshaus’ day are now at the center of a partisan dispute between Republicans and Democrats. Dozens of bills have been introduced to limit environmental protections that critics say will lead to job losses and economic harm, and there are those who question what the vast majority of scientists accept _ that the burning of fossil fuels is causing global warming.

In the 1970s, the first environmental regulations were just starting to take effect, with widespread support. Now, according to some officials in the oil and gas and electric utility industries, which are responsible for the bulk of emissions and would bear the greatest costs, the EPA has gone overboard with rules.

For instance, Documerica photographers captured a wave of coal-fired power plants under construction. Republicans and the industry now say environmental regulations are partly to blame for shuttering some of the oldest and dirtiest coal plants.

Jim DiPeso of ConservAmerica, a group that recently changed its name from Republicans for Environmental Protection, says the EPA is caught in the center of a perfect storm. “This time of greater cynicism about government, more economic anxiety and the fact that the problems are not immediately apparent, has created this political problem for EPA,” he said.

In an interview, Jackson said she believes that people in the United States still want to protect the environment. “There’s a large gulf between the rhetoric inside the Beltway to do everything from cut back on EPA to get rid of the whole place, and what the American people would actually stand for,” she said. “It’s very easy to make rash statements without thinking about what that means to the health of everyday Americans.”

A 2010 Pew Research Center survey showed that 57 percent of those questioned held a favorable view of the EPA, compared with a 1997 poll that showed 69 percent with a positive view of the agency. A CNN/Opinion Research Corp. poll taken last year found that 71 percent of people surveyed said that the government should continue provide money to the EPA to enforce regulations to address global warming and other environmental issues.

“We are not done. We still have challenges we have to face,” Jackson said.

The agency last year began a volunteer photography project called State of the Environment. More than 620 people have participated and submitted 1,800 photographs, but only a few are at the same sites at the 1970s project.

Images always have spurred environmental consciousness. A 1980s satellite picture of the ozone hole helped lead to a ban on the chemicals in aerosol cans and refrigerants that were responsible. Underwater video of oil spewing into the Gulf of Mexico in 2010 opened the public’s eyes to the gravity of the largest offshore oil spill in U.S. history.

But a second Documerica project, with professional photographers, would be impossible today, given budget cuts facing the agency and the wariness of industry barring access by photographers.

Lyntha Scott Eiler, 65, shot photographs for Documerica around her then-home in northern Arizona, as well as one of the early emissions testing sites for automobile exhaust in Hamilton County, Ohio. At the Navajo Generating Station in Arizona, Eiler got right down in a strip mine “where the shovels were.”

“They weren’t afraid of the EPA, so it was, `What else you do you want to get a photograph of?,’” Eiler said. “You probably would have a hard time doing that today.”

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You’ve heard it a thousand times: Health reform will stifle small business and kill jobs.

But some business owners are telling another story — it just might make health insurance more affordable.

"This is all about leveling the playing field so small businesses get a fair shake, so we can effectively compete against larger companies," said Mike Roach, co-owner of Paloma Clothing in Portland, Ore.

Roach is a member of the National Federation of Independent Business, a powerful trade group that helped propel the case before the Supreme Court. He has also joined the American Small Business Majority, which is on a crusade against the idea that health reform is a job killer.

Health care reform isn’t a job killer - yet

He and others pin their optimism about the 2010 Affordable Care Act on the promise of new statewide insurance exchanges.

The exchanges, set to start in 2014, could allow individuals and companies access to less expensive health insurance by pooling together and spreading out risk.

Roach doesn’t worry about one of the main criticisms of the law — a rule forcing companies of 50 or more employees to provide insurance or face fines. That’s because he’s nowhere near that threshold. He is among the 5.2 million firms with fewer than 20 workers, a group that makes up 90% of small employers.

What does worry him is the cost of covering his employees.

Paloma Clothing has been offering insurance since 2008; today six of its nine workers are opting in. Roach is paying close to $17,000 annually — not a trivial expense.

Every February, just before Roach and his wife, Kim Osgood, sit down with their insurance broker, they toss the same ideas back and forth.

"Can we continue to be as generous?" she asks.

"We could lose these people," he reminds her. "The 15% they pay is already a substantial burden for them."

They’ve always renewed, even when costs jumped 20% in 2010. Roach admits it wasn’t entirely from the kindness of his heart. He is afraid of losing workers to Nordstrom, a large chain with a few stores a short drive away.

Roach also supports another aspect of health reform, a tax credit for small companies that provide workers health insurance. The $5,500 credit he received for 2010 is far above the $1,407 average.

For others, the insurance exchanges would be a place their workers could go themselves.

"If my employees have health coverage, they’ll take care of themselves, be around a lot longer and be very productive for the company," said Anthony Serianni, president of Omicron Biochemicals in South Bend, Ind. "Ailing employees leave, and you have to hire new people. It doesn’t make sense to have that kind of turnover."

What if the health reform mandate dies?

Serianni offers his employees extra salary to help them cover as much as 65% of their own insurance costs. So if they can find cheaper coverage in the exchange, his tab will fall too.

Roberta Tichenor, owner of Annie Bloom’s Books in Portland, picks up 80% of the insurance costs for her three full-time employees. That amounts to $30,000 a year.

Her 14 part-time employees are left to fend for themselves, and she hopes the exchanges would give them an affordable option, diminishing their incentive to quit for a company that offers insurance.

"I think [health reform] actually saves jobs because it’s not easy to attract quality employees to a job that pays $10 an hour," Tichenor said. 

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Teenagers love "The Hunger Games," a hot trilogy of books about to hit theaters. But the biggest fans may be from an older generation — investors.

Shares have soared so far this year for the companies best positioned to benefit from the opening of "The Hunger Games" movie this Friday. And analysts are saying they’re are all poised for further gains from the series.

Lions Gate Entertainment (), whose Lionsgate studio is releasing the film here and in many major overseas markets, has probably gotten the biggest lift from the post-apocalyptic story of teenagers forced into a life-and-death competition for the entertainment of others. Shares are up 75% so far this year after a gaining more than 7% Tuesday to close at a record high of $15.27, and they were up another 4% in early trading Wednesday.

Analyst David Joyce of Miller Tabak, who Tuesday raised his price target for Lionsgate to $17 from his previous $14 target, estimates this weekend’s domestic box office sales between $70 million and $90 million. Eventually he expects it to bring in at least $300 million in domestic ticket sales.

"That’s not quite Harry Potter, but I think it’s going to be impressive," said Joyce. The final Harry Potter movie last year brought in $381 million in domestic box office for Time Warner (, Fortune 500) on its way to global ticket sales of $1.3 billion.

Joyce said that much of the run-up in stock is due to the company’s recent acquisition of Summit Entertainment, the independent studio that has the Twilight movie series. The fifth and final movie in the Twilight series, which so far have averaged $270 million each in domestic box office, debuts this November.

Box office at 16-year low

"I can’t split how much of the gain is due to Hunger Games and how much is due to the Summit deal," he said. "But having Hunger Games helped Lionsgate get Summit to the table and get the deal done."

The performance of Lionsgate shares so far this year would suggest financier Carl Icahn could be the big loser of the Hunger Games stock rally.

Icahn and his son sold 44 million shares of Lionsgate last fall for $7 each, dropping a long-running battle for control of the studio.

Publisher Scholastic, theater chains gain

The buzz around the movie also helped lift sales of the books, which last week allowed publisher Scholastic () to beat forecasts and its own sales target for the most recent period. Shares of Scholastic are up 22.5% year to date after a 1.7% rise in trading Tuesday, and were up another 1.8% Wednesday.

John Carter: Disney’s epic bomb

Company officials said even if last quarter proves to be a sales peak for the books, they expect good results from the franchise going forward. Analysts agree the first film and additional planned movies should help the book sales for years to come.

"Unlike the Harry Potter series, for which the book release event drove sales, in this case, ‘The Hunger Games’ movie appears to be driving book sales," said Drew Crum, analyst with Stifel Nicolaus, in a note last week.

"The Hunger Games" was first published in hardback in September 2008. The second in the trilogy, "Catching Fire" came out the next year, with the final book in the series, hitting bookstores in 2010. Between them there are 24 million copies of the three books in print in the United States alone.

Shares of theater operators have all had strong performances this year, as hopes for "The Hunger Games" and some other widely anticipated titles later this year like "The Avengers" "Dark Knight Rises" and the final "Twilight" movie have lifted hopes of a rebound after a down year in 2011, and some early missteps this year, such as Walt Disney’s (, Fortune 500) now historic bomb "John Carter."

James Gross, analyst with Barrington Research who follows the sector, said that "The Hunger Games" is almost certain to have the best opening so far this year and might end up No. 1 for the year, given the pre-sale demand for tickets.

"It was selling out the midnight shows a month ago," he said.

Carmike Cinemas () has been the best performer in the group, rising nearly 81.7% year to date, after Tuesday’s 3.6% gain. But shares were slightly lower in early trading Wednesday.

Shares of large screen theater operator IMAX () are up 41.8% so far this year, while shares of the two other major publicly-traded theater chains — Cinemark Holdings () and Regal Entertainment Group () — have achieved more modest gains, but both are up nearly 20% so far this year. All three were slightly higher in Wednesday trading. 

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The current-account deficit in the U.S. widened more than forecast in the fourth quarter to $124.1 billion, the biggest in three years.

The gap, the broadest measure of international trade because it includes income payments and government transfers, grew 15 percent from a revised $107.6 billion shortfall in the prior quarter that was smaller than initially estimated, a Commerce Department report showed today in Washington. The median forecast of economists in a Bloomberg News survey called for a $115 billion fourth-quarter deficit.

Imports (USTBIMP) of goods may keep rising as an improving job market underpins consumer spending, and businesses replace outdated equipment. The overall balance of payments deficit is also a reminder of U.S. dependence on foreign investors for funding.

Italian corporate bonds account for seven of the top 10 performers this year as investors renew their holdings of securities they shunned at the peak of Europe

Rioters set fire to buildings and battled police in downtown Athens as the Greek Parliament prepared to vote on Prime Minister Lucas Papademos

Greece’s prime minister resumed talks late Thursday with top bank negotiators to try and overcome obstacles to a major debt-relief deal needed to avoid bankruptcy.

Premier Lucas Papademos met with Charles Dallara, managing director of the Institute of International Finance, a banking lobby, and Jean Lemierre, senior adviser to the chairman of French bank BNP Paribas.

Private bondholders are being asked to forgive half their Greek debt, and in return accept cash payments and new bonds with longer maturities. The deal is required for a second international bailout with a looming euro14.5 billion bond repayment on March 20 that carries a serious threat of bankruptcy for Greece.

Top eurozone officials are pressing private bondholders to accept the new bonds at a lower interest rate.

A senior Greek government official said, despite delays in concluding the negotiations, Greece was still aiming to submit its formal offer for the bond-swap deal to banks and other private creditors by Feb. 13. The official asked not to be named because the talks are ongoing.

Dallara resumed the talks in Athens for a third successive week.

Eurozone countries have taken a tough stance with the IIF because they would have to provide additional help to Greece if the bond-swap deal falls short of expectations.

“To ensure debt sustainability for Greece, it is essential that a new program be supported by a combination of private sector involvement and official sector support,” William Murray, an IMF spokesman, said late Wednesday.

Murray said the IMF has not asked the European Central Bank, which holds more than euro40 billion ($52 billion) in Greek government bonds, to play any specific role in relieving Greece’s debt pile.

The ECB, as a public sector holder of Greek debt, is protected from any writedown.

“The Fund has no view on the relative contribution of private sector involvement and official sector support in achieving” the target of cutting Greece’s debt-to-GDP ratio to 120 percent, Murray said.

Greece is currently surviving on a euro110-billion loan package from eurozone countries and the International Monetary Fund, and has been promised an additional euro130 billion in rescue aid if the bond-swap deal goes through.

EU-IMF debt inspectors are currently in Athens for talks with the Papademos government, to set conditions for the second package that are expected to produce more austerity measures in the recession-hit country.

Hardship facing many Greeks has spurred a huge drop in support for the country’s Socialist party, which won the last general election in 2009 with nearly 44 percent of the vote, and formed a coalition government with rival conservatives two months ago.

A nationwide opinion poll published Thursday found support for the Socialists has dropped to 12 percent, just behind three opposition left-wing parties.

The VPRC survey for the Epikaira news magazine gave the conservatives 30.5 percent support. Sample data was not immediately available.

General elections are expected in late April.

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The cost of living in the U.S. was little changed in December for a second month as stores cut prices to boost holiday sales and fuel expenses fell, reinforcing the Federal Reserve

Reflecting on a challenging year, President Barack Obama says he’s hoping for more economic progress following action by Congress to prevent tax increases at the start of 2012.

“It was good to see members of Congress do the right thing for millions of working Americans,” said Obama, using his weekly radio and Internet address Saturday to deliver a New Year’s message.

He said the public made itself heard on a Social Security payroll tax cut and that was one big reason that lawmakers agreed to extend it for two more months.

The American people, Obama said, “had the courage to believe your voices could make a difference.”

The president said he expects Congress to finish the job when lawmakers return to Washington in January and extend the tax cut through the end of the year.

Reflecting on 2011, Obama said it was a time of great challenge and progress, including the end of the war in Iraq, the death of Osama bin Laden and signs of an economic recovery.

“There’s no doubt that 2012 will bring even more change,” Obama said. “And as we head into the new year, I’m hopeful that we have what it takes to face that change and come out even stronger _ to grow our economy, create more jobs and strengthen the middle class.”

On the eve of an election year, Obama said the months ahead will help determine “what kind of country we want to be and what kind of world we want our children and grandchildren to grow up in.”

Sen. Johnny Isakson, delivering the GOP address, outlined his party’s commitments to the American people for 2012.

The Georgia lawmaker said his party’s No. 1 goal is to make it easier for small businesses to create jobs.

“We’ll accomplish this by focusing on three things: fundamental tax reform, regulatory reform and energy security,” he said.

Isakson said that while some people may think Congress will be too consumed with the 2012 elections to accomplish anything significant, the public deserves better.

“Americans cannot wait until after the November election,” he said. “They need us to do our job and do it right now to create an economic climate that makes it easier to put people back to work.”

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