1 of 4. European Central Bank (ECB) President Mario Draghi (L) speaks during the European Parliament's Economic and Monetary Affairs Committee in Brussels October 9, 2012.

BRUSSELS | Tue Oct 9, 2012 9:55am EDT

BRUSSELS (Reuters) - Greece has made progress on reforming its economy but has more work to do, European Central Bank President Mario Draghi said on Tuesday.

"It's quite clear that the progress at the level of undertaking the necessary policy reform has been perceptible and significant and it's also clear that more needs to be done," he told the European Parliament Committee.

"We see progress, we see a need for further work," he added.

The ECB, the European Commission, and the International Monetary Fund form the so-called troika of international lenders. The troika is working on a report on Greece's progress in tackling its debts.

(Reporting by Francesco Guarascio, writing by Paul Carrel; editing by Patrick Graham)

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NEW YORK | Mon Oct 8, 2012 3:41pm EDT

NEW YORK (Reuters) - U.S. hedge funds and other clients of Wall Street investment firms raised their level of borrowed money in August, a sign they may be more confident in the markets, data published Monday showed.

Leverage rose to $286.6 billion last month, according to New York Stock Exchange margin debt data, up 5.4 percent since August last year. It is the first time in nine months that margin debt has increased on a year-over-year basis, analysts at Bank of America Merrill Lynch showed in their Hedge Fund Monitor report.

Leverage levels "can be used as a sentiment indicator" so the increase could mean investors have regained some confidence in the market, the report said.

While the level of leverage recorded in August is a 3.2 percent rise on July levels, it still lags the amount of borrowed cash that investors were using to make bets in the stock market before Lehman Brothers collapsed, according to NYSE data.

Hedge funds have gained about 5 percent this year through September, according to hedge fund tracking firms, but still trail the broader stock market. The S&P 500 index rose more than 16 percent through September.

August's rise in leverage could be an indication that hedge funds and large investors, reassured by rallying stock markets, are willing to use more borrowed money try and amplify their returns, though another month of data would be needed to confirm this, Bank of America analyst Mary Ann Bartels said in an email.

Before the financial crisis, hedge funds, particularly those focused on bets in credit markets, used leverage in different forms boost returns, such as increasing exposure to inherently levered products like derivatives, or by using margin or borrowed money from Wall Street.

In 2007, NYSE margin debt rose above $317 billion and stayed there for the remainder of the year, hitting a peak of more than $381 billion that July.

Investors reduced their leverage in 2009 and 2010 to levels as low as $173 billion and then began to borrow more money again through July of 2011. Spooked by whipsawing markets last summer, which devastated the portfolios of some of the country's savviest investors, money managers took off leverage again in the second half of the year.

Through August, NYSE margin debt is down about 4 percent from its 2012 peak of $298.5 billion, recorded in April. Beginning in May risk-averse investors reduced leverage, pulling back from global financial markets riled by fears that Greece would exit the deeply troubled euro zone.

Margin debt remains down roughly 10.6 percent from its post-2008 peak of $320.7 billion, which it reached in April last year.

NYSE member organizations are required to report monthly the total amount of money borrowed by customers to purchase securities.

While hedge funds have yet to ratchet up to pre-crisis levels, or even to the highs of 2011, Bank of America analysts said the fact that investors increased leverage last month is a positive sign.

Margin debt is one way to measure how much risk hedge funds and other large investors are taking by using borrowed cash, but it fails to address or measure the exposure those firms have to 'embedded' or 'hidden' leverage, which they can obtain by investing in structured products like collateralized loan obligations or asset-backed-securities, which are more highly levered in themselves. Some hedge funds have been eyeing those riskier, more exotic assets in their hunt for yield.

Data published Friday by BarclayHedge and TrimTabs showed that hedge fund managers "are strongly inclined to maintain current levels of leverage," and "plans to lever up fell slightly in September while plans to reduce leverage climbed by a small margin."

(Reporting By Katya Wachtel)

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1 of 2. The sun sets behind Stonehenge in Wiltshire, southern England January 7, 2010.

LONDON | Tue Oct 9, 2012 7:38am EDT

LONDON (Reuters) - A cutting-edge laser scan of Stonehenge has shown how Britain's enigmatic neolithic monument was built to enhance the dramatic passage of sunlight through the circle of stones at midsummer and midwinter.

The slabs were intended to appear at their best in the dawn light on the longest day of the year and at sunset on the shortest, the scan for English Heritage found.

The two solstices attract thousands of visitors to Stonehenge, which dates back some 5,000 years.

The 3-D scan showed the stones to the northeast were carefully "pick-dressed" - worked to be smoother and neater than the other columns - creating a more dramatic spectacle from that angle.

Those stones were set where they would be seen first by people approaching the monument from the northeast along the Avenue, a processional route that would have been particularly spectacular at the midwinter sunset.

The scan uncovered 71 new images of axe-heads carved into the surface, doubling the number of known such carvings recorded in Britain. It also showed up damage and graffiti from Georgian and Victorian visitors.

In the 19th century, visitors could hire chisels at the site to hack off their own souvenirs from the stone.

According to the new evidence, the axe-head carvings were made in the Early Bronze Age, around 1,000 years after the first builders got to work at Stonehenge.

The lofty stones were transported some 400 km (miles) to the site in around 2,100 BC. Archeologists are still puzzled as to how the stones, weighing up to 45 tonnes, were made to stand upright.

(Reporting By Isla Binnie, editing by Paul Casciato)

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A photographer take a picture of a portrait of Mona Lisa on a painting attributed to Leonardo da Vinci during a presentation in Geneva September 27, 2012. A package of diaries said to have been posted to the United States from Britain in the 1960s could provide a vital clue to the origin of a controversial portrait presented in Geneva last month as Leonardo da Vinci's original ''Mona Lisa.'' Picture taken September 27, 2012.

GENEVA | Mon Oct 8, 2012 5:47pm EDT

GENEVA (Reuters) - A package of diaries said to have been posted to the United States from Britain in the 1960s could provide a vital clue to the origin of a controversial portrait presented in Geneva last month as Leonardo da Vinci's original "Mona Lisa."

But in a twist typical of the intrigue-prone world of art, the diaries -- notes by early 20th century British connoisseur and collector Hugh Blaker -- disappeared and the Washington address they were sent to seems never to have existed.

"Those papers could well provide the key to pushing back the provenance of this version of the 'Mona Lisa' by at least 150 years," Robert Meyrick, an academic and expert on the largely forgotten Blaker, told Reuters.

And, of course, to helping establish if the so-called "Isleworth" variant of the world's most famous painting in the Paris Louvre could indeed be an earlier -- and priceless -- portrayal by Leonardo of the enigmatic, smiling lady.

Blaker, an unsuccessful painter who as a museum curator and dealer had a reputation for recognizing lost Old Masters, found and bought the "younger Mona Lisa" in 1913 -- in, he later said, a nobleman's country house in Somerset in western England.

Sure it was a real Leonardo, he kept it at his home in the London suburb of Isleworth -- giving it its informal identity tag -- until it passed to his sister Jane on his death in 1936.

But Blaker told no one the name of the country house or of the seller. Meyrick, who was invited to the Geneva presentation to talk about the bachelor connoisseur, is keen to solve that mystery for a biography he plans to write.

"I think he must have put the details in his diaries," he said in an e-mail message this month from Aberystwyth University in Wales where he is Head of the School of Art.

"But the very brief published extracts we have give no clue. If we have that knowledge, we should be able to trace how it came into the Somerset family's possession, and where."

GRAND TOUR PURCHASE?

Meyrick theorizes that it could have been picked up by an 18th century member of the family during one of the Grand Tours across Europe undertaken by young English nobles. Many great works of European art came to Britain that way.

After Jane Blaker died in 1947, the painting was eventually purchased by an international art dealer and then lay for nearly 40 years in Swiss bank vaults until last month's Geneva presentation by a Zurich-based "Mona Lisa Foundation."

At that session, Italian Leonardo specialist Alessandro Vezzosi praised its quality but held back from endorsing the foundation's claim that it is the work of Leonardo, who died in 1519. For that, much more work was needed, said Vezzosi.

Some experts who were not present like British professor Martin Kemp of Oxford University, scoffed at it as a poor copy -- although, as foundation member Stanley Feldman noted, Kemp had never actually seen the portrait.

"The controversy underlines the importance of the diaries," says Meyrick.

With other papers and an unpublished novel, they passed after the death of Blaker -- whose keen eye had brought the scorned Italian artist Amadeo Modigliani to the British art public in the 1920s -- to his painter friend Murray Urquhart.

Before he died in 1972 Urquhart, whose son Brian was a key figure in the United Nations in the 1970s and 80s, said he had sent Blaker's notes from before 1931 to a researcher named Charles Woods who had written asking to see them.

According to Urquhart's account, he posted them to Woods at 116 1/2 (Eds: correct) Maryland Drive, Washington DC -- but heard nothing more. "All I can establish is that there is no such address, and probably never was," says Meyrick.

There is also no trace of Woods.

But in 2010, in response to a standing appeal on his website (www.robertmeyrick.co.uk), Meyrick was sent Blaker's diaries for the last five years of his life by a family who found them years before in a junk shop in Gravesend, east of London.

"Did all the papers end up as junk, or did the earlier diaries really go to Washington?" asks Meyrick, who has written widely on British 20th century art.

"Perhaps we will never know, but I plan to keep looking."

(Reported by Robert Evans)

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Actor Danny DeVito and his wife Rhea Perlman kiss as they pose on his star after it was unveiled on the Walk of Fame in Hollywood, California in this August 18, 2011 file photo.

LOS ANGELES | Mon Oct 8, 2012 5:54pm EDT

LOS ANGELES (Reuters) - Actors Danny DeVito and Rhea Perlman are separating after 30 years of marriage, DeVito's spokesman said on Monday.

Stan Rosenfeld said the pair had split but gave no details.

DeVito and Perlman married in 1982 and have three adult children. The duo, both known for playing characters with sharp tongues, acted alongside each other in the 1978-82 TV comedy "Taxi," in which she had a recurring role as his character's girlfriend, and in the 1996 children's film "Matilda."

Perlman is best known for her role as sarcastic waitress Carla Tortelli in the 1980s hit comedy "Cheers," for which she won four Emmy Awards.

DeVito, who won an Emmy for his turn as the despotic dispatcher in "Taxi," currently stars in the FX comedy "It's Always Sunny in Philadelphia."

The pair also founded TV and movie production company Jersey Films, whose titles include "Pulp Fiction" and "Erin Brockovich."

(This version of the story has been corrected in the 4th paragraph to show Perlman played a waitress) (Reporting by Jill Serjeant; Editing by Gary Hill)

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The Olympic Stadium is reflected on a temporary structure sponsored by BP at the Olympic Park in Stratford, the location of the London 2012 Olympic Games, in east London July 18, 2012.

WASHINGTON | Sat Oct 6, 2012 10:16pm EDT

WASHINGTON (Reuters) - Senators from the U.S. Gulf Coast urged President Barack Obama on Friday to ensure that any legal settlement for the 2010 Gulf of Mexico oil spill does not undermine a recently passed law that would funnel billions of dollars worth of fines to their states.

The U.S. Justice Department and BP Plc have discussed a potential settlement for damages caused both to Gulf waters and the coastline, which could be worth billions of dollars to states still trying to recover from the worst offshore oil spill in U.S. history.

While the details of those discussions have been kept under wraps, Democratic and Republican senators from the region said they have "grave concerns about developments of the settlement terms" that have been cited by local media outlets.

Senators pointed to recent press reports that the Justice Department and BP are discussing settlement terms that would maximize penalties to be paid under Natural Resource Damage assessments, and minimize those paid under the Clean Water Act.

The RESTORE Act, signed by President Barack Obama on July 6, directs that 80 percent of Clean Water Act penalties paid by BP be placed in a new trust fund for restoration efforts in the five coastal states damaged by the worst U.S. offshore oil spill: Louisiana, Alabama, Mississippi, Florida and Texas.

In a bipartisan letter - a rare sight ahead of the November 6 presidential elections - eight senators told Obama they are worried the Justice Department is considering allowing the bulk of fines to be assessed under the Oil Pollution Act for damages assessed to the coastline, with a minority of fines assessed for damages under the Clean Water Act.

Fines arising from Clean Water Act violations could reach $21 billion, if BP is found to be grossly negligent of causing the April 20, 2010, explosion aboard the Deepwater Horizon drilling rig that killed 11 rig workers and unleashed 4.9 million barrels of oil that soiled the shorelines of four Gulf Coast states. BP has adamantly denied any accusations of gross negligence, and declined to comment on the senators' letter.

Without the bill, federal Clean Water Act fines would have gone straight to the U.S. Treasury. Anywhere from $4 billion to $16.8 billion could flow into states' coffers under the bill's terms.

The Mobile (Alabama) Press-Register first reported the proposed deal earlier this week, citing unnamed officials who had been briefed by the Justice Department.

The potential settlement could be attractive to BP, because fines under the Oil Pollution Act are treated more favorably by the U.S. tax code than are Clean Water Act fines, congressional sources said.

"Not only would the federal government have final say as to what qualified as environmental damage but BP, who is responsible for this, would also get a tax deduction that could write off millions," Representative Jo Bonner, an Alabama Republican, told Reuters. "The audacity of giving BP a tax write-off."

A Justice Department spokesman had no comment on either negotiations nor the criticisms from elected officials.

Senators told Obama the trade-off would mean less money allocated through a formula lawmakers negotiated in the RESTORE Act, legislation which puts decisions on how the money is spent in the hands of states and local governments.

"Circumventing the will of Congress by short changing the RESTORE Act is wholly unacceptable to us. We urge you to reject such an approach," said the letter, signed late on Friday by Mary Landrieu, a Louisiana Democrat, and Richard Shelby, a Republican from Alabama, who co-authored the legislation.

Shelby is concerned that Alabama's two coastal counties could lose out on planned recovery projects if the settlement was skewed toward Oil Pollution Act damage assessments, aides told Reuters.

"We urge you to negotiate a robust settlement that does not achieve a higher amount under one of these statutes at the expense of the other," said the letter, also signed by Florida senators Marco Rubio, a Republican, and Bill Nelson, a Democrat.

Republicans Jeff Sessions of Alabama, Thad Cochran and Roger Wicker of Mississippi, and John Cornyn of Texas also signed the letter.

Louisiana, which bore the brunt of environmental damage from the spill, expects to be compensated for damages regardless of the legal means, said Garret Graves, senior environmental advisor to Louisiana Gov. Bobby Jindal.

"Every statistic that's out there in regard to the impact of the spill clearly points to a disproportionate impact on the state of Louisiana, and Louisiana's focus will be ensuring that we fulfill our legal obligation to address all of these impacts to the Gulf," Graves said.

(The story corrects paragraph 17 to read "Thad Cochran and Roger Wicker of Mississippi" instead of Missouri)

(Additional reporting by David Ingram in Washington, Verna Gates in Birmingham, Alabama, Kathy Finn in New Orleans and Emily Le Coz in Tupelo, Mississippi; Editing by Chris Baltimore and Gary Hill)

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