Rome, Madrid among 6 cities bidding for 2020 Games (AP)

LONDON – Six cities from Europe, Asia and the Middle East are competing to host the 2020 Olympics.

Submitting bids to the International Olympic Committee by Friday's deadline were Rome; Madrid; Tokyo; Istanbul; Doha, Qatar; and Baku, Azerbaijan.

The U.S. Olympic Committee announced last week it would not submit a bid, assuring at least a 20-year gap between Olympics on American soil for the fourth time.

There were no surprises, as all six cities had previously announced their candidacies. All six contenders have made previous bids, and two — Rome and Tokyo_ have hosted the Olympics.

Madrid is bidding for a third consecutive time, while Tokyo, Doha and 1960 are making their second successive attempts. It is Istanbul's fifth overall bid.

"Clearly the bids that begin with the most strength are Madrid, Rome and Tokyo, cities that are consolidated as three great urban centers," said Spanish IOC member Juan Antonio Samaranch Jr., son of the former IOC president.

Doha is proposing to hold the games in September and October, outside the traditional July-August dates, to avoid the blistering summer temperatures in the Gulf country.

The IOC will select the host city by secret ballot in Buenos Aires on Sept. 7, 2013.

The six candidates must first submit detailed application files and letters of guarantee to the IOC by Feb. 15. The IOC executive board will meet in May to decide whether to cut any of the cities and approve a list of finalists.

Final bid dossiers will be submitted in January 2013, followed by visits to the cities by an IOC evaluation commission from February to April.

The IOC panel will issue a report assessing the technical merits of the bids at least one month before the vote. The cities also will make technical presentations to the IOC ahead of the meeting in Buenos Aires.

Rome, which hosted the 1960 Olympics, was the first of the cities to announce its bid months ago. The Italian capital lost to Athens in the race for the 2004 Olympics and hopes to stage the games on the 60th anniversary of the '60 Games.

"Rome is a great sporting capital and memories are still alive of the 1960 Games which ... from an economic point of view signaled the start of Italy's economic boom," Renata Polverini, the president of Rome's Lazio region, said in a statement.

Madrid, which has never held the Olympics, mounted unsuccessful attempts for the 2012 and 2016 Games. The capital finished third in the 2012 voting and second for 2016.

"Madrid has a lot of experience from its two previous candidatures," said Spanish Olympic Committee president Alejandro Blanco. "Its project has already been tested and it's just about impossible to improve on it. Now we must develop a campaign to reveal all its assets."

Tokyo, host of the 1964 Games, finished third in the vote for the 2016 Games, which went to Rio de Janeiro. The Japanese capital wants the 2020 bid to be a symbol of the nation's recovery from the March 11 earthquake and tsunami that left almost 23,000 people dead or missing.

"I would like to thank members of the IOC for encouraging us to move forward for the reconstruction from the earthquake and tsunami damage earlier this year," Japanese Olympic Committee chief Tsunekazu Takeda said in a statement.

"We also appreciate the IOC members giving us valuable input and feedback on the previous bid for the 2016 Games. Learning from the experiences, I am committed to delivering the best possible games plan with improvements on every aspect."

Istanbul is back again after failed bids for the Olympics of 2000, 2004, 2008 and 2012.

"Every candidate city aspires to prepare in the best possible way and I can say that Istanbul and Turkey are going to prepare in the best way possible to organize the 2020 Games," Turkish IOC member Ugur Erdener said. "We have a good chance for hosting the 2020 Olympics."

Doha and Baku both failed to make the shortlist of finalists in the 2016 bidding.

The IOC executive board last week agreed to the Qatari city's request for a Sept. 20-Oct. 20 time frame to avoid the summer heat, when temperatures can exceed 104 degrees.

Qatar has already won the right to host the first soccer World Cup in the Middle East in 2022. The event will be held in June, and the desert country has proposed air-conditioned stadiums to beat the heat.

Qatar Olympic Committee general secretary Sheik Saoud Bin Abdulrahman called the IOC's decision to accept the Doha bid "wonderful news for the people of Qatar and the entire Middle East."

"To have the opportunity to host the first ever Games in the Middle East will have a profound impact not just on sports development throughout the region, but also in encouraging a greater bridge between the Middle East and the wider international community," he said in a statement Friday.

Still considered a long shot is the bid from Baku, capital of oil-rich Azerbaijan. The Azerbaijan committee said a stadium was already being built for the Olympics on the outskirts of Baku and will be completed by next year.

South Africa and Dubai considered bidding for 2020, but decided not to enter the race.

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Harold Heckle in Madrid contributed to this report.

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Fed asks BofA to list contingency plan: report (Reuters)

(Reuters) – The Federal Reserve has asked Bank of America Corp to show what measures it could take if business conditions worsen, the Wall Street Journal said, citing people familiar with the situation.

BofA executives recently responded to the unusual request from the Federal Reserve with a list of options that includes the issuance of a separate class of shares tied to the performance of its Merrill Lynch securities unit, the people told the paper.

Bank of America and the Fed declined to comment to the Journal. Both could not immediately be reached for comment by Reuters outside regular U.S. business hours.

(Reporting by Sakthi Prasad in Bangalore; Editing by Muralikumar Anantharaman)

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Job growth grinds to halt (Reuters)

WASHINGTON (Reuters) – U.S. employment growth ground to a halt in August as sagging confidence discouraged already skittish businesses from hiring, piling pressure on the Federal Reserve to provide more stimulus to aid the economy.

Nonfarm payrolls were unchanged last month, the Labor Department said on Friday, and employers created a combined 58,000 fewer jobs than had been thought in June and July.

The bleak report fueled recession fears, sending prices for U.S. stocks and oil tumbling. Money fled into safe haven investments and U.S. government debt prices and gold soared. Bond traders bet the dismal data will compel the Fed to try to lower long-term interest rates to boost the economy.

Economists, however, said the data fell short of providing a recession signal, in part because employment was weighed down by 45,000 striking workers at Verizon Communications.

"The economy is struggling against stiff headwinds, which appear to have intensified in recent months," said Millan Mulraine, senior macro strategist at TD Securities in New York. "While it has clearly not fallen off the cliff, there is little to suggest it is anywhere close to regaining its momentum."

It was the weakest reading on jobs in nearly a year and far below the 75,000 gain Wall Street had expected. The unemployment rate, however, held at 9.1 percent as a survey of households found both job growth and an expanding labor force.

With the jobless rate stuck above 9 percent and confidence collapsing, President Barack Obama faces pressure to come up with ways to spur job creation. The health of the labor market could determine whether he wins re-election next year.

Obama will lay out a new jobs plan in a speech to the nation on Thursday, and White House advisers said the jobs data underscored a need for action.

"He will be very specific about what we can do that can have a meaningful impact on job growth in the economy right away," Gene Sperling, a top economic adviser to Obama, told Reuters Insider.

EYES ON THE FED

The data could strengthen the hand of officials at the U.S. central bank who wanted to do more to help the sputtering economy in August. The Fed next meets on September 20-21.

The Fed cut overnight interest rates to near zero in December 2008 and it has bought $2.3 trillion in securities. Many analysts say its arsenal is now largely depleted.

Despite simmering underlying inflation pressures, most economists expect the U.S. central bank to launch a third round of government bond buying to put downward pressure on longer-term interest rates, partly because the federal government appears intent on belt-tightening.

"Even the inflation hawks have to be concerned by this report," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. "With fiscal policy at all levels of government restraining growth, the Fed is the only game in town."

While employment was held back by the Verizon strike, the impact was offset somewhat as 23,000 public employees in Minnesota returned to work after a partial government shutdown.

Without the strike, private payrolls would have increased by 62,000 in August, instead of a paltry 17,000.

Still, the overall tenor of the report was decidedly weak.

DODGING RECESSION?

The average workweek dropped to 34.2 hours, the fewest hours since January, and average hourly earnings fell three cents.

The economy needs to generate about 150,000 jobs each month just to keep the unemployment rate steady over time.

A worsening debt crisis in Europe and an acrimonious political fight over U.S. debt, which culminated in the downgrade of the country's AAA credit rating by Standard & Poor's, ignited a massive stock market sell-off last month and sent business and consumer confidence tumbling.

"The extreme uncertainty over the outcome of the debt-ceiling debate probably did extra damage to the August (job) figures," said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts.

Although hiring cooled, fairly steady readings on claims for jobless benefits, relatively strong consumer spending, continued demand for manufactured goods and increases in industrial production offer hope the economy will avoid recession.

Still, analysts warn the recovery is so weak that any fresh shock could send it tumbling. In the first half of the year, the economy expanded at less than a 1 percent annual rate.

Government employment fell 17,000 in August, the tenth straight monthly drop, despite the return of the workers in Minnesota.

Manufacturing payrolls fell 3,000, reflecting the slump in business confidence. Factories had added 36,000 new workers in July as disruptions to motor vehicle production caused by a shortage of parts from Japan eased.

(Editing by Neil Stempleman)

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Napolitano: no 9/11 anniversary Qaeda plot seen (Reuters)

WASHINGTON (Reuters) – Homeland Security Secretary Janet Napolitano said on Friday there was no credible intelligence that al Qaeda was plotting an attack for the September 11 anniversary, but the United States remained at a heightened state of vigilance.

Security officials are being especially watchful as the 10th anniversary of the September 11 attacks approaches. Al Qaeda was responsible for the attacks in which hijacked planes were rammed into the Twin Towers in New York, struck the Pentagon, and crashed into a Pennsylvania field.

"While there is no specific or credible intelligence that al Qaeda or its affiliates are plotting attacks in the United States to coincide with the 10 year anniversary of 9/11, we remain at a heightened state of vigilance and security measures are in place to detect and prevent plots against the United States should they emerge," Napolitano said in a statement.

The State Department issued a "Worldwide Travel Alert," saying Americans traveling and living abroad should be aware of the continued threat posed by al Qaeda and its affiliates.

No specific threats have been identified, the State Department said. "In the past, terrorist organizations have on occasion planned their attacks to coincide with significant dates on the calendar," it said.

"While threats remain, our nation is stronger than it was on 9/11, more prepared to confront evolving threats, and more resilient than ever before," Napolitano said.

(Reporting by Tabassum Zakaria; Editing by Vicki Allen and Eric Beech)

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Regulator to sue major banks over mortgages (Reuters)

By Margaret Chadbourn and Jonathan Stempel Margaret Chadbourn And Jonathan Stempel – 1?hr?59?mins?ago

WASHINGTON/NEW YORK (Reuters) – A U.S. regulator will soon file lawsuits against major banks accusing them of bundling subprime home loans into bonds that never should have been sold to investors and causing mortgage giants Fannie Mae and Freddie Mac to lose billions, according to a source familiar with the matter.

The lawsuits by the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, will deepen the mortgage litigation morass for banks. A spokeswoman for the regulator declined to comment on the pending lawsuits.

The biggest banks are negotiating with all 50 state attorneys general to address mortgage abuses. The banks are looking for a comprehensive settlement that will protect them from future litigation.

Major banks including Bank of America Corp and JPMorgan Chase & Co already face potential payouts of tens of billions of dollars to settle regulatory charges of abusive mortgage lending and foreclosure practices, and other investor lawsuits over mortgage debt losses.

These payouts would reduce earnings and weaken capital levels, perhaps harming the ability of banks to lend money and provide much-needed life to a stalled housing market and weakened economy.

The source declined to name the banks to be sued by the FHFA, but The New York Times reported that they include Bank of America, JPMorgan, Deutsche Bank, Goldman Sachs Group Inc and others. Representatives of those banks declined to comment.

The banks have been walloped by mortgage losses, but so have Fannie Mae and Freddie Mac, which are under government conservatorship after having previously been owned by public shareholders. The two entities guarantee bonds backed by mortgages and are a crucial pillar for the U.S. housing finance system.

The FHFA is charged with protecting Fannie Mae and Freddie Mac's assets. The lawsuits are part of the efforts of the acting FHFA director, Edward DeMarco, to protect taxpayer funds and would aim to recover billions of dollars which the two government-sponsored enterprises have lost from subprime mortgage bonds, according to another source familiar with the matter.

A BLIZZARD

The blizzard of litigation against banks is hurting share prices in the sector because investors feel unable to estimate with any certainty the ultimate scope of a given bank's legal liabilities.

Bank of America, for example, had intended its proposed $8.5 billion settlement in June with investors in Countrywide mortgage securities to resolve most litigation tied to its disastrous 2008 takeover of that home loan provider.

But many parties are objecting to that settlement, and the deal didn't stop the insurer American International Group Inc from suing Bank of America for $10 billion over its own alleged mortgage securities losses.

Nor did it stop Nevada's attorney general from threatening to withdraw from an $8.4 billion nationwide settlement with the bank. The AG now wants to sue the bank, accusing it of reneging on promises to modify mortgages.

Other banks also face mortgage lawsuits. In May, for example, the U.S. Justice Department sued Deutsche Bank, accusing it of misleading a U.S. housing agency into believing loans it made qualified for federal insurance.

The FHFA's lawsuits would follow an initial lawsuit in July against UBS AG seeking to recover $900 million of losses incurred on $4.5 billion of debt.

The New York Times reported that the FHFA is set to file lawsuits against major banks by Tuesday, before a three-year deadline to file cases expires.

FHFA and various investors have alleged that banks packaged residential home loans into securities sold to investors, after having failed to conduct adequate due diligence, and hiding or misstating the quality of the underlying loans and underwriting, as well as borrowers' ability to make payments.

As more borrowers fell behind or went into foreclosure, the value of securities backed by their loans fell, causing losses for investors.

According to The New York Times, Fannie Mae and Freddie Mac lost more than $30 billion, in part as a result of these securities.

Banks have argued in other cases that it was the market rather than their own activity that was responsible for much of the investors' losses.

As in the AIG lawsuit, the banks have also sometimes claimed that the investors suing them were sophisticated enough to know the debt they bought had the risks that came to pass.

Losses stemming from the precipitous deterioration in subprime and other mortgages pushed the government to take over Fannie and Freddie on September 7, 2008. Since then, taxpayers have spent more than $140 billion to keep the firms afloat.

(Reporting by Margaret Chadbourn in Washington and Jonathan Stempel in New York; Editing by Dan Wilchins, Matthew Lewis and John Wallace)

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Oil companies brace for possible Gulf storm (Reuters)

HOUSTON (Reuters) – A tropical depression hovering over the central Gulf of Mexico on Friday threatened to bring heavy flooding to the energy infrastructure-heavy Gulf Coast in the coming days.

Tropical depression 13, which could become Tropical Storm Lee later on Friday, has already prompted oil and gas producers to shut down platforms and evacuate workers from the offshore oil patch that provides about a third of the nation's oil production and about 12 percent of its natural gas.

The slow-moving system that has essentially parked about 210 miles south of the mouth of the Mississippi River could bring up to 20 inches of rain over southern Louisiana, Mississippi and Alabama through Sunday, the National Hurricane Center said.

Louisiana Governor Bobby Jindal on Thursday declared a state of emergency, citing the likelihood coastal and inland areas would be drenched by up to 15 inches of torrential rain within 48 hours.

Heavy, prolonged rains could pose a severe test to low-lying New Orleans and its protective levee system.

The Gulf Coast is home to 40 percent of U.S. refining capacity and 30 percent of natural gas processing plant capacity. Much of that infrastructure is in southeast Texas and near the coasts of Louisiana and Mississippi.

"They're calling for 18 to 20 inches of rain in spots over the next several days. You've got big issues," said Aaron Studwell, a meteorologist with Wilkens Weather in Houston.

Will Hinson, spokesman for Exxon Mobil Corp's joint-venture 192,500 barrel-per-day (bpd) refinery in Chalmette, Louisiana, said the plant was prepared and was operating normally.

Other refiners also said they were prepared for bad weather and were monitoring the system.

Major Gulf producer Royal Dutch Shell spokeswoman Kelly op de Weegh said on Friday the company had "minimal" production impacts, but had evacuated 500 workers and may evacuate more. Shell operates six oil and gas platforms in the Gulf.

Other producers, including BP Plc and Anadarko Petroleum Corp, were shutting all output and evacuating all workers.

Studwell said the system was about 190 miles southwest of the center of Mississippi Canyon and 75 miles south-southwest of Green Canyon, the two areas of the Gulf with the highest concentrations of oil and gas platforms.

(Reporting by Kristen Hays and Erwin Seba; editing by Jim Marshall)

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Analysis: Damages ruling may be pivotal in BP case (Reuters)

NEW YORK (Reuters) – A key court ruling in the Gulf of Mexico oil spill litigation could change the landscape in the massive case -- encouraging more plaintiffs to sue, or spurring the parties to make a deal to resolve what could be a long string of trials over damages.

Last week, the judge overseeing a group of spill-related lawsuits against BP Plc and its business partners ruled that claims for punitive damages -- not just compensatory damages -- could be brought by fishermen and other plaintiffs alleging harm to physical property. If a jury ultimately awards these plaintiffs punitive damages, defendants could be forced to pay out big.

The ruling gives some potential plaintiffs more of an incentive to sue because of the possibility of higher damage awards, experts say. Some people have been on the fence about suing or seeking payouts from BP's $20 billion victims' compensation fund, which offers settlements as an alternative to litigation.

Also, the possibility of massive settlements to resolve the plaintiffs' claims involving BP and other corporate defendants may now be more likely.

That is because tossing punitive damages into the legal mix tends to scare defendants. Punitive damages are awards that are often multiples of the amounts that plaintiffs are reimbursed for their losses. They are intended to punish defendants and prevent others from engaging in similar conduct.

The prospect of punitive damages of any size is a "potent inducement to settle," said David Logan, dean of Roger Williams University School of Law in Bristol, Rhode Island.

Such claims can strengthen plaintiffs' bargaining position in settlement negotiations by presenting an added risk for defendants, said Howard Erichson, an expert in complex litigation and a professor of law at Fordham University.

Neither BP nor the plaintiffs' attorneys would comment on the possibility of a settlement before a liability trial is scheduled to begin in February 2012.

PINNING BLAME

The February trial will decide who is to blame for the largest-ever U.S. offshore oil spill. If there are claims outstanding by the time that proceeding is done, multiple smaller trials will be scheduled to determine specific dollar amounts for damages.

The punitive damages ruling was handed down by Judge Carl Barbier of U.S. District Court in New Orleans, who will preside over the February trial.

In an emailed statement on Thursday, BP representative Daren Beaudo said: "The court's decision builds on the earlier dismissal of several other types of plaintiffs' claims. The court agreed with BP on several key issues, including dismissing plaintiffs' state law claims, limiting availability of attorneys' fees, and significantly narrowing the group of plaintiffs who are eligible to try to prove punitive damages."

Co-defendants Transocean, Cameron, Anadarko and Halliburton declined to comment.

BP is sparring with its former business partners over the disaster. On Friday, Halliburton said it had moved to add fraud claims against BP in the federal multi-district litigation pending in New Orleans, and had also filed defamation and other claims against BP in Texas court. Halliburton handled cementing services on the blown-out Macondo well.

BP has been hit with unrelated legal woes in Russia, as special forces there raided its Moscow offices earlier this week in connection with legal action brought by minority shareholders in its Russian joint venture TNK-BP. BP said on Friday that the lawsuit was "absurd."

NO STRAIGHTFORWARD VICTORY

In the U.S. oil spill litigation, the punitive damages ruling had been one of the major issues pending before Judge Barbier.

While the ruling largely benefits plaintiffs, it is not a straightforward victory for them, legal experts said. Barbier dismissed all claims brought under state law in the ruling, as well as general maritime negligence claims against Anadarko and MOEX, a unit of Japan's Mitsui & Co Ltd.

Supreme Court decisions in the last decade could also serve to limit the size of punitive damages juries can award, said David Uhlmann, a professor of law at the University of Michigan. In the long-running Exxon Valdez case, the high court in 2008 ruled that punitive damages could not exceed the amount of compensatory damages awarded.

Also, it is not clear how much the ruling could translate into in dollar terms for the Gulf spill plaintiffs. Plaintiffs who say they suffered indirect losses -- as opposed to fishermen and those with property damage -- are not eligible for punitive damages. It is unknown how many of the 108,000 private claims before Barbier alleged such indirect losses, including restaurants and hotels claiming lost revenue as tourism fell.

Still, the prospect of winning punitive damages for clients could help plaintiffs' lawyers bring more claims from property owners and fishermen, said Byron Stier, a professor at Southwestern Law School in Los Angeles.

"The punitive damages green light is huge," Stier said. "That's the threat to BP, and that's what's animating the plaintiffs' lawyers."

Plaintiffs' lawyers are competing with the BP victims' compensation fund, known as the Gulf Coast Claims Facility.

Lead plaintiffs' lawyers in the litigation criticize the fund's offers to settle with BP and other defendants in exchange for giving up the right to sue. They say claimants may be better-served in court. Kenneth Feinberg, who administers the fund, has said litigation will take years and could prove less generous than the fund.

If punitive damages are not limited by the Exxon precedent, the potential upside for some plaintiffs who choose to go to court is massive.

But if that is not the case, suing might not be victims' best option, said Uhlmann, of the University of Michigan. Victims, he said, may do better turning to the settlement fund rather than "litigating for years and seeing most of the additional money paid to their attorneys under contingent fee arrangements."

The case is In re: Oil Spill, U.S. District Court, Eastern District of Louisiana, 2:10-md-02179.

(Reporting by Moira Herbst; Editing by Martha Graybow and Matthew Lewis)

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