Thu Sep 27, 2012 10:29pm EDT

n">(Reuters) - Transocean Ltd (RIG.N) said on Thursday it was served with a preliminary injunction by a federal court in Brazil that would require the drilling contractor's nine rigs operating in waters off the country to cease operations in 30 days.

The ban stems from an oil spill last November in an offshore field operated by Chevron Corp (CVX.N) at a well drilled with a Transocean rig. The eight other Transocean rigs in Brazil work for Petrobras (PETR4.SA), including seven contracted to the state-led oil company and another subcontracted from BP (BP.L).

If not overturned, the ban could seriously disrupt exploration and drilling in one of the world's most promising offshore oil frontiers by removing about 13 percent of Brazil's drilling fleet.

Petrobras Chairwoman Maria das Gracas Foster has said that a lack of drilling rigs, even with Transocean's rigs operating, is one of the reasons production growth at her company has stalled despite a $237 billion, five-year expansion plan, the world's largest corporate spending program.

The Transocean ban is related to civil lawsuits seeking about $20 billion in damages from Transocean and Chevron for the spill in the Frade field, which leaked 3,600 barrels of oil into the sea northeast of Rio de Janeiro.

Transocean said it was "vigorously pursuing" a reversal of the injunction, including an appeal to the Superior Court of Justice. "Absent relief from the courts, Transocean will be required to comply with the preliminary injunction," it added.

The world's largest offshore rig contractor warned two weeks ago, after the ban was upheld on appeal, that it could not be sure of overturning the decision in time to prevent its rigs going to zero revenue for some period of time.

Shares of Transocean, which earns 11 percent of its revenue in Brazil, declined by about 1 percent after the ruling, ending 1.7 percent lower at $45.37, on concerns that the average fourth-quarter earnings estimate of 90 cents per share might be at risk.

"The Brazilian issue will continue to overhang the stock until resolved," said UBS analyst Angie Sedita, estimating a drop in earnings of 5 cents per share for every week of Brazil downtime. "Rig has strong local support, but we believe the injunction is politically driven versus operationally driven."

Petrobras is working to help overturn the ruling, which would halt the exploration and development of some of its most promising deepwater fields.

Petrobras has a total of 31 offshore rigs, either self-owned or under contract, and it has struck a deal to build 28 more rigs in Brazilian shipyards by 2020.

The ANP, Brazil's oil regulator, has said there was no negligence in last November's Frade spill and that only Chevron had to pay fines and present a remedial plan before getting approval to drill again.

Chevron, the second-largest U.S. oil company, paid the ANP-levied fine on Thursday, and received a 30 percent discount on the 35.1 million-real ($17.3 million) charge because it paid promptly and did not challenge the 24 violations ANP found.

But prosecutors have won the injunction against Chevron and Transocean that will stand until the civil suit is resolved, which could take years. Chevron and Transocean say they have done nothing wrong.

When exactly that injunction takes effect is under dispute. The July 31 ruling by a Federal Court in Rio de Janeiro was supposed to go into effect 30 days after the judges' decision was published in a local legal gazette and the ruling physically served to company executives.

Separately on Thursday, Transocean announced the appointment of John Stobart as chief operating officer, effective Monday. Stobart had been worldwide drilling manager for BHP Billiton Petroleum (BHP.AX) since 1994 in Australia, the UK and Texas.

"I expect that he will be instrumental in taking the company to an even higher level of performance," said Steven Newman, Transocean's previous COO before he was promoted to chief executive more than two years ago.

The new COO comes just a few weeks after Transocean named a new chief financial officer after an eight-month search. Esa Ikäheimonen, the former CFO of rival Seadrill (SDRL.OL) who spent two decades working for Royal Dutch Shell Plc (RDSa.L), will succeed interim CFO Greg Cauthen on November 15.

(Reporting by Braden Reddall in San Francisco and Jeb Blount in Rio de Janeiro; Editing by Leslie Gevirtz and Jean Yoon)

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n" readability="113">(Reuters) - Emerging markets are, in essence, a leveraged way to play the bet that the Federal Reserve will continue its quantitative easing policy - always, everywhere and forever.

Whether that makes them a good investment is an entirely different question.

If you believe that the European Central Bank has taken euro break-up off of the table and that the Fed's pledge to continue buying bonds indefinitely until labor conditions improve will work, then expect fantastic returns from risk assets, and the riskier, as in emerging markets, the better.

There is, however, a more nuanced debate to have. Even if we don't believe that QE3 will "work" by the Fed's own definition, we may well expect that it will have a real and positive impact on asset markets for at least some portion of time. By buying relatively safe mortgage debt - and very possibly more Treasuries later - the Fed will put cash into the pockets of investors, cash which will need to find a home.

Some of it, clearly, has been flowing into emerging markets stocks, bond and currencies.

"Powerful policy puts by the ECB and the Fed have, at least in the near term, broken the stress-intervention cycle which has dominated markets for some time," wrote Piero Ghezzi, head of economics and emerging markets research at Barclays Capital, in a note to clients.

"While the timing of a global growth rebound remains uncertain, the tail risks for investors, in particular those related to the euro area, have been reduced. This improves the outlook for risky assets and should support flows into EM assets," he added.

Emerging markets shares have outperformed the S&P 500 in the past month, rising by more than 4 percent against 2 percent, during which time the ECB has taken action and the Federal Reserve instituted its new policy of open-ended quantitative easing. Over the past year, however, emerging markets have returned less than half the 23 percent gain of the S&P, and over two years the figures are deeply ugly, with emerging markets down by 5 percent against a 25 percent gain in the S&P.

THREE BIG RISKS

There are at least three large risks to a strategy of plunging into emerging markets to play the QE3 momentum trade. First, we don't know how long the positive effects will last. As in recent bouts of QE, the clear pattern has been for an initial quite positive reaction in markets, but an ebbing over months, especially if economic data does not improve. Returns from past easings have been diminishing over time.

It may well be that you get a nice ride upwards, but an equally magnified or greater fall if markets don't keep faith with central banks.

Also, you have risks that are particular to emerging markets if QE does work. It may well drive up commodity prices, as it has in the past. This is especially inflationary in emerging markets where poorer consumers spend a higher percentage of their money on food and energy. That's not just bad news from a human perspective; it may force central banks in emerging markets to keep conditions tight to fight inflation, hurting growth there in comparison to developed markets.

One of the points of QE, though not one officials emphasize, is to help growth in the countries where it is being done by driving down their exchange rates. Between the ECB, Fed, Bank of Japan and other central banks, we have a clear game of competitive currency devaluation going on, and it will only become more intense if economic conditions get worse.

This could be quite bad for emerging markets, which are more dependent on exports and have less well developed domestic consumer economies.

Finally, the big one: the Fed and the ECB may not succeed, and even if they do, politicians here may mess things up by sending the U.S. over the fiscal cliff. The International Monetary Fund warned on Thursday that emerging markets are increasingly vulnerable to another recession in the U.S. or Europe.

"There is no guarantee that the relative calm emerging economies have enjoyed over the past two years will continue," IMF economist Abdul Abiad said at a news conference. "There is a significant risk that advanced economies could experience another downturn, and in such an event, emerging economies and developing economies will end up 'recoupling' with advanced economies."

What the IMF calls 'recoupling' would look very much like a bloodbath in financial markets, with emerging markets seriously underperforming.

None of this eliminates the value of emerging markets as a source of potential diversification, and as a means to investing in economies which should, over time, grow more quickly than developed ones. But rather than a bet on decoupling, playing emerging markets today needs to be recognized as just a QE trade with booster rockets.

(At the time of publication James Saft did not own any direct investments in securities mentioned in this article. He may be an owner indirectly as an investor in a fund. You can email him at jamessaft@jamessaft.com and find more columns atblogs.reuters.com/james-saft)

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Cast members Jonny Lee Miller (L) and Lucy Liu participate in a panel for CBS series ''Elementary'' during the CBS sessions at the Television Critics Association summer press tour in Beverly Hills, California July 29, 2012.

LOS ANGELES | Thu Sep 27, 2012 6:04am EDT

LOS ANGELES (Reuters) - How many times can Sherlock Holmes be reinvented?

At least once more, judging by the latest TV incarnation of the British detective created by Sir Arthur Conan Doyle more than 120 years ago.

"Elementary," which debuts on CBS on Thursday, puts a modern twist on the classic tale by casting British actor Jonny Lee Miller as a recovering drug addict living in New York, and Lucy Liu as his rare - but far from first - female sidekick, Dr. Joan Watson.

The part-crime, part character-driven U.S. show follows hundreds of movies, TV series and books about, or inspired by, the eccentric amateur London detective with superb logical skills and his long-suffering friend.

In just the last few years, Holmes has spawned two hit movies with Robert Downey Jr. as a cheeky 19th-century action hero, and the BBC's award-winning modern day miniseries "Sherlock," starring Benedict Cumberbatch.

Holmes also inspired the character of brilliant but cantankerous diagnostician Dr. Gregory House (Hugh Laurie) in the TV medical series "House."

According to Guinness World Records, Sherlock Holmes is the most portrayed character in movie history, with his first screen appearance dating back to 1900.

"This guy has got about as identifiable a brand as you could ever ask for. Everyone knows immediately what he means, and what he stands for. It's like Superman, you could keep on remaking this for every new age," said Robert Thompson, professor of popular culture at Syracuse University.

"Many of the Sherlocks we have seen are far separated from the one Conan Doyle created. But you can still use that general skeletal framework, and then every five years or so you dress him up in a new set of clothes," Thompson told Reuters.

ADDICTED TO DRUGS AND PUZZLES

Rob Doherty, the creator of "Elementary" and a longtime fan of Conan Doyle, says he sees the fingerprints of Sherlock Holmes on almost every modern TV crime show.

Doherty's version focuses on Holmes as an addict - not just to the cocaine mentioned in the original books, but also to puzzle solving in general.

"I think in many senses, he has an addictive personality ... . The original Sherlock dabbled with cocaine, dabbled with opiates," Doherty told television journalists last month.

"Our Sherlock had those same problems but I think one of the big differences is that our Sherlock hit a serious wall," he said. "He has emerged with just a tiny kernel of self-doubt where one previously never existed."

Liu, who previously starred in the two movie versions of "Charlie's Angels," is hired to be the "sober companion" of Holmes and plays Watson as a disgraced former surgeon with her own flaws and mystery.

"She's just as unstable (as Holmes) but just not as obvious because she is trying to distract her own problems with his problems," Liu told reporters in August.

The actress is not the first woman to inhabit Watson. Margaret Colin, Debrah Farentino and Jenny O'Hara have played the Watson role in three separate TV movies since the 1970s.

"Elementary" is getting strong early reviews and popping up on lists of the best shows debuting on U.S. television in the next few weeks.

Tim Goodman with The Hollywood Reporter called it "one of the most promising dramas this fall season," while Washington Post TV critic Hank Stuever said it "exhibits enough stylish wit in its mood and look to quickly distinguish itself from the latest British 'Sherlock' series."

While strong brand identity can be an advantage, it can also work the other way.

"You already have more than a century of promotion of this name. Everyone knows you are talking about a great detective," said Thompson.

"But, as a 50-something male, when I hear Sherlock Holmes, I think of black-and-white movies and a guy in this British, crazy outfit, and it doesn't immediately make me want to go and see the new movie or the new TV show. It seems kind of fusty."

(Editing by Xavier Briand)

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1 of 5. A woman poses with a copy of author J K Rowling's first adult fiction book The Casual Vacancy after it went on sale at a bookshop in central London, September 27, 2012.

LONDON | Thu Sep 27, 2012 12:55pm EDT

LONDON (Reuters) - J.K. Rowling's first foray into adult fiction was bound to be compared to her wildly successful Harry Potter series, and, while "The Casual Vacancy" has earned mixed reviews, for some critics the magic has worn off.

The Casual Vacancy, which hits the shelves on Thursday, looks destined for the top of the bestseller lists whatever the reaction, with Rowling's celebrity status guaranteeing public anticipation and media attention in equal measure.

In the New York Times, Michiko Kakutani likened some of Rowling's small-minded, snobby characters to the odious Dursley family from the Harry Potter tales.

"One can only admire her gumption in facing up to the overwhelming expectations created by the global phenomenon that was Harry Potter," Kakutani wrote.

"Unfortunately, the real-life world she has limned in these pages is so willfully banal, so depressingly cliched that 'The Casual Vacancy' is not only disappointing — it's dull."

Other critics were less damning, however, and several reviews in British and U.S. newspapers argued that, while not great, Rowling's eagerly anticipated break from the world of child wizards and witches was good.

"The Casual Vacancy is no masterpiece, but it's not bad at all: intelligent, workmanlike, and often funny," said Theo Tait in the Guardian newspaper.

"The worst you could say about it, really, is that it doesn't deserve the media frenzy surrounding it. And who nowadays thinks that merit and publicity have anything do with each other?"

WORTH THE HYPE?

Book stores opened early in London to deal with anticipated demand, and the print run in the United States alone is reported to be two million copies.

That build up is understandable. The series-concluding "Harry Potter and the Deathly Hallows", which appeared in 2007, became the fastest-selling book in history. More than 450 million copies of the seven Potter books have sold worldwide.

The Casual Vacancy is set in a small English town called Pagford, where class prejudices are played out and Rowling exploits her post-Potter freedom by tackling themes of drug addiction, teenage sex and violent domestic abuse.

The plot is set in motion by the death of Barry, which creates a "casual vacancy" on the local municipal ("parish") council and gives his opponents an opportunity to offload a nearby run-down housing estate on to a neighboring district and be done with its seedy inhabitants.

Andrew Losowsky of the Huffington Post website, said Rowling's foray into adult fiction was worth publishing, but perhaps did not match the giddy anticipation surrounding its release.

"Would this book be published if it weren't for the name on the cover? Almost certainly. Would anyone pay much attention to it, and its message? Probably not."

But he also argued that Rowling should not give up on adult fiction, even though the 47-year-old Briton has declared that her next book is most likely to be another children's story.

"Though some sequences feel a few drafts short of being ready, others are written with a fluency and beauty that suggest that there could be more and better works to come from her pen."

In The Independent newspaper, Boyd Tonkin believed Rowling was at her best when describing the younger characters.

"The teens of Winterdown belong in a bolder, richer book than some of the parental caricatures," he said. "All the social and hormonal turbulence that the later Potter volumes had to veil in the euphemisms of fantasy appear in plain sight here."

The conservative Daily Telegraph broadsheet took umbrage at Rowling's skewering of the middle class.

"While Rowling gives due respect to the poorer, damaged characters, higher up the social scale she is busy carving grotesques," wrote Allison Pearson in a three-star review.

Although Rowling is dubbed the world's first author billionaire, she started her literary life in the 1990s as an unemployed single mother living on state benefits who struggled to find a publisher. She is a long-time Labor Party supporter.

Perhaps the conclusion Rowling will least want to read came from Monica Hesse in The Washington Post.

"Throughout 'The Casual Vacancy' I could not stop from having one overarching thought, which the devoted fan in me loathes to share since I'm certain it's the one Rowling is most loath to hear: This book would be a little better if everyone were carrying wands."

(Reporting by Mike Collett-White, editing by Paul Casciato)

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NEW YORK | Thu Sep 27, 2012 4:01pm EDT

NEW YORK (Reuters) - With increased regulatory scrutiny of complex exchange-traded funds and exchange-traded notes, big brokerage firms are taking longer to make them available to financial advisers, according to speakers at SIFMA's Complex Products Forum.

In some cases, the firms have decided that the time it would take to conduct due diligence on complex ETFs, or even a mutual fund, is not worth the effort, said Paul Weisenfeld, managing director of funds at Morgan Stanley Wealth Management, in a panel discussion at the forum on Thursday.

This means that financial advisers - and many of their clients - may not be able to access more sophisticated products or, at the very least, will have to wait several months before they can buy them.

"It used to be that once a product got a ticker everyone could get it," said one conference attendee who declined to be named because he was not permitted by his employer to speak to the press. "Now the firm blocks the ticker until they approve it for sale."

The U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority in recent years have stepped up their focus on complex ETFs, such as leveraged and inverse exchange traded-funds, as well as exchange-traded notes.

Leveraged and inverse ETFs are designed to amplify short-term returns by using debt and derivatives while exchange-traded notes are debt securities issued by banks.

The number of ETFs and ETNs has jumped over the years, with 1,454 ETFs, 205 of which are exchange-traded notes, now on the market, according to Morningstar.

Given the increase in the number of these products being launched, brokerage firms have to spend more time than ever doing due diligence, brokerage firm executives on the panel said.

Some products might not get approved because the firm simply has not had time yet to review them properly, said Robert Forsyth, director, exchange traded products at UBS Financial Services.

"At UBS we block many products because they are too new and we haven't had a chance to review them," he said in the panel discussion. "With so many new products coming out, we just don't have the time or manpower to review all of the products."

The due diligence applies both to the firms' own products as well as those created by other providers, Forsyth said.

For example, the investment banking arm of UBS offers a number of volatility-based exchange-traded notes, none of which UBS allows its own financial advisers to sell, Forsyth said after the panel discussion.

For those products that do pass muster, the brokerages still set restrictions on who can buy them.

UBS and Wells Fargo & Co, for example, have built systems to help assure that more complex products are only available to suitable clients.

UBS' classification system takes into account a number of criteria, such as an investors' risk tolerance, income, total net worth, when deciding which investors can have access to complex products. The system has more than 20 criteria.

"You can have a very unsophisticated investor with a huge net worth, so you need to look at a variety of factors," Forsyth said.

Wells Fargo has a system created to restrict sales of certain products to only clients that have a relevant investment objective, said Dan Moorman, senior vice president, of mutual funds, ETFs and unit investment trusts at Wells Fargo Advisors, the brokerage arm of Wells Fargo, in the panel discussion.

Similarly, the firm has enhanced its systems so that when certain types of orders come in, the client receives disclosures about the potential risks of those complex products, he said.

For smaller brokerage firms, the increased due diligence on complex products can be a particular challenge, said one wirehouse executive who spoke anonymously because he is not allowed to speak to the press.

"FINRA holds every broker dealer accountable," he said.

In opening remarks at the conference, FINRA Chief Executive Richard Ketchum said the agency is looking closely at how firms sell complex products, with a particular focus on potential conflict of interest and training.

(Reporting By Jessica Toonkel; Editing by M.D. Golan)

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NEW YORK | Thu Sep 27, 2012 6:15pm EDT

NEW YORK (Reuters) - Wildly popular erotica trilogy "Fifty Shades of Grey" has inspired publishers, record labels, sex shops, and even crafty parents to submit - to the desire to cash in, that is.

The trio of novels by British writer E.L. James that has so far sold 32 million copies in the United States has spawned a legion of fans clamoring for anything and everything Grey-related. And businesses are aiming to meet that demand.

Manhattan sex shop Babeland co-founder Claire Cavanah said after the final book in the trilogy was released in the United States in January, customers "were asking for specific toys that they had read about," but when the trilogy was re-released in April, "the product sales started to really spike."

Since then Cavanah noticed a sevenfold increase in demand for a particular sex toy featured in a sex scene between the book's two main characters, the dominant Christian Grey and ingénue Anastasia Steele. Riding crops, restraints, blindfolds, and spanking powder have also been popular.

The store also sells special "Fifty Shades" kits and hosts "Fifty Shades"-themed workshops that teach the mostly female attendees how to use the sex toys, but Cavanah said that wasn't the only curiosity - "They also just want to get together and see each other."

Fans have also been offered "Fifty Shades"-themed fashions, accommodations, and more recently, an official music album.

"Fifty Shades of Grey: The Classical Album," featuring Bach and Chopin, is the only spin-off item James has so far endorsed.

Released by EMI with tracks James personally selected, it debuted at No. 1 on the U.S. classical charts in September. The album resulted after another "Fifty Shades" compilation series hit No. 1 in July on iTunes, said EMI Classics Vice President Wendy Ong, "and she (James) noticed, and we started talking."

Asked about the other spin-off products at the New York album launch, James told reporters, "All of this has been a huge shock to my system. If people want this stuff, why not? If we can get it out there to people, then ... that's a good thing."

"WUTHERING HEIGHTS" BONDAGE

Yet some eyebrows have been raised at other efforts by entrepreneurs, including one British hotel that replaced its nightstand Bibles with copies of "Fifty Shades," with the Damson Dene Hotel owner Jonathan Denby telling Reuters that the hotel wanted to provide "something that people actually want to read."

Even baby clothes have been subjected to the marketing blitz. One Toronto couple emblazoned baby onesies with sayings like "9 months ago my mommy read 50 Shades of Grey" and "All Mommy wanted was a night with Mr. Grey."

The feedback has been mixed, but seller Kyle Lawley said that he and his wife had been surprised by strong sales. "Some people say 'it's taboo, I'd never put my kid in that,' and others say it's clever, it's funny, it's humorous," he said.

Publishers are also looking to cash in on the trend. Penguin's "Diary of a Submissive: A Modern True Tale of Sexual Awakening," has been marketed by directly comparing it to "Fifty Shades", which was initially self-published on the Internet.

Other publishers, such as those of racier versions of literary classics such as "Jane Eyre", and "Sherlock Holmes", say the link is less transparent.

A new version of "Wuthering Heights" will be released in October featuring Catherine and Heathcliff engaging in bondage.

The books publisher, Total-E-Bound founder Claire Siemaszkiewicz, said James' series made it easier for sexed-up books to gain a market foothold, but dismissed criticism that the classics have been sullied, saying they have been brought "to a new generation of reader."

A "Fifty Shades" movie is also in the works, but James has vowed she will not write any more books for the series. Still, her next book should whet fiction fans' appetites.

"It's an erotic tale, yeah. That's all I'm going to say about it," she said coyly.

(Additional reporting by Alicia Powell, Editing by Christine Kearney and Richard Chang)

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