$$$Craigslist offers its two-cents on the Top Scumbag Professions:"stock broker -- requires no knowledge of markets, just the ability to sell you a dead cat in a box, while making you think you got a great find." And our To-Do list for today is suddenly much lighter. [Craiglist]

$$$The Chocolate Phone has arrived. Buy it and try to win back the respect that was lost the day you were revealed to be the only one at the West Garden Spa without the Q. Plebe. [engadget]

We’ve been spending some time trying to clear away the murk and shine some light into the shadows of Jeffrey Epstein’s financial dealings in an effort to provide some, uhm, actual financial reporting related to the sex candal encircling the mysterious money manager. There’s not much that is publicly available but we’re still digging.

What we have discovered, however, is a brief document amending a credit agreement for RELIANT PHARMACEUTICALS, INC. The amendment replaces the administrative agent for the credit. But what caught our eye was the confluence of three DealBreaker subjects all in the same documents.

The signature pages include lines for Morgan Stanley CEO John Mack, who is scheduled to appear before the SEC in connection with allegations of insider trading at Pequot Capital, as well at Jeffrey Epstein, who signs as trustee of the Wexner Children’s Trust II, part of the financial empire of The Limited founding family. And the agent who is being replaced? Goldman Sachs, where alleged insider trading crooks Eugene Plotkin and David Pajcin worked (not to mention the alma mater of that other DealBreaker obsession, Hank Paulson).

Now this is no doubt just a coincidence, and not really a conspiracy to make our heads explode. We should probably just take a deep breath and then post a Venn Diagram illustrating the connections but our diagramist is in meetings off-site.

One additional thought: this is probably the last time you’ll see Epstein’s name coupled with the words “trust” and “children” any time in the near future.

Reliant Consent, waiver and amendment [SEC]

Does the fact that Jeffrey Epstein taught high school math and physics at Dalton for three years creep anyone else out? Unless you’ve been depending on the New York Times for your news, by now you know that Jeffrey Epstein has been charged with felony solicitation of prostitution rather than even more serious charges of molestation and sex with minors. But the facts alleged in the police affidavit released on the Smoking Gun clearly spell out a taste for getting young, high school age girls to co-operate in some pretty raunchy scenarios. This raises the question: how long has this been going on?*

Did you go to Dalton in the mid-seventies? Epstein taught there from 1973 through 1975, when he left to take a job at Bear Stearns. We’d love to hear from you if you remember Epstein from those years, whatever your impressions—good, bad, ugly or totally perverse. Unless otherwise indicated, we’ll keep your comments completely anonymous. Send your comments to tips(at)dealbreaker(dot)com.

[* Editors Note: We know, we know. It may not have gone on at all. Everyone is innocent until proven guilty. God loves all his little creatures. The allegations and charges are serious, though, and we don't think it's too early to start asking these questions.]

Our choice of Lydia Hearst-Shaw as the hottest of the hot billionaire heiress babes seems to be controversial. To resolve the matter, we’ve created a new reader poll. Here’s how it works. First click here for the Forbes list of billionaire heiresses, then vote for the most hottest money honey below.

Dick Grasso will likely lose one of the most powerful forces he has on his side —Williams & Connolly attorney Brendan Sullivan. A recent ruling moving the trial date up to September from late October, probably means that Sullivan, who famously represented Oliver North in the Iran-Contra hearings, will not be able to serve as lead attorney at trial, according to CNBC’s Charlie Gasparino. Sullivan is already set to represent another client in a trial scheduled for the same time.

Surprisingly, Grasso may ultimately benefit from the new date. Lawyers working for Attorney General Eliot Spitzer have complained that the new date doesn’t give them enough time to prepare for the case.

Oh, and the headline comes from Sullivan’s famous reply to lawmakers who complained he was objecting too much to their questions to Colonel North. “I'm not a potted plant. I'm here as a lawyer. That's my job,” Sullivan said. Reportedly, the guy now running Grasso’s defense, Gerson Zweifach, is not potted plant either.

Grasso loses Brendan Sullivan [SquawkBlog]

Regular readers are no doubt familiar with our concern for rich, beautiful women. We earlier linked to a Forbes’ list of billionaires under 35, which unfortunately included very few women. But just because a girl isn’t a billionaire yet, doesn’t mean she won’t be soon. Like when her parent units kick off for that great country club in Hell. So which hotties are destined for fortune? The latest Forbes list brings us "The Hottest Billionaire Heiresses."

We’re kind of partial to Lydia Hearst-Shaw (pictured left) but that's probably more evidence of a sickness within our souls than anything intrinsically wonderful about our Lydia.

The Hottest Billionaire Heiresses [Forbes]

Citigroup scored a major coup on Friday, taking an entire team of bankers specializing in financial services deals from Lehman brothers. The defectors are led by Henry Michaels and John Roddy, and includes director Jerry Wiant, VP Sean Burke and associates John Minor and Donald Lacey. The best part--or at least a really great part of the deal--is that whole group isn't starting for a month, after taking a thirty day break to comply with exisiting non-compete agreements.

Contractually obligatory summer vacations. So effin hot.

Citigroup Hires Six FIG Bankers From Lehman [Dow Jones Wire on CNNMoney.Com]

Why are Mark Green and Eliot Spitzer handing $60,000.00 over to alleged money manager cum massage masturbator Jeffrey Epstein? It’s pretty standard procedure these days for politicians to send back contributions from donors accused of crime or mired in scandal, and we guess allegations of soliciting prostitution, paying for naked massages from teenagers, human trafficking and all around pervy weirdness qualify. But is sending the check back really the right move here? Wouldn’t it be better to donate the money to a worthy cause, such a home for sexually abused children? Why should Epstein be enriched by these allegations?

Let's put it this way. By sending back Epstein's $10,000 donation, Attorney General candidate Green just bought Epstein 50 sessions with local highshool girls at $200 a pop.

Dirty donor to get 10G back: Green [Daily News]

We’re told that the dirty little nymph in this picture is Sarah Kellen, the personal assistant of Jeffrey Epstein who is alleged to have arranged many of her boss’s alleged naked massage sessions with teenage girls. The woman in this picture bears a striking resemblance to confirmed pictures of Kellen, including one where she is pictured palling around with Epstein’s alleged eastern European sex-slave Nadia Marcinkova. Kellen could not be reached for comment.

More pictures of Sarah Kellen (probably) on the link below.

Sarah Kellen? [Strobe Models]

We’ve said it before and we don't mind repeating ourselves. Barry Ritholtz takes down financial writers like it's his job. This time he’s taking on an article from Sunday’s New York Times in which Ed Yardeni tells us to ignore the reported numbers on jobs growth because, well, uhm, because so many economists thought the numbers would be higher. And all those economists can’t be wrong, can they?

The Cognitive Bias of Ed Yardeni [The Big Picture]

Has it been four years already? The little monster brought into the world following the financial scandals and collapsing business in the first years of the twenty-first century turns four today.

This CFO.com column describes the business world’s evolving reaction to SOX in the language of a grief counselor—“first shock and anger, then acceptance, and finally a sense of moving on.”

Not surprisingly, it’s been a lot easier for large companies to move from one stage to the other, while smaller, newer companies get hit much harder by the cost of increased overhead. The total estimated cost of complying with the regs? An astounding $17.6 billion dollars.

Happy Birthday, Sarbox!

Hollywood Agents (Oligopoly Watch)
If you caught last night's episode of Entourage, then you already know the lesson here. The world of Hollywood agencies is a tight oligopoly, with little inclination to see a new competitor. It's actually, what's dubbed an "ologonomy", since the firms are both an oligopoly (they sell talent to the studios) and oligopsonies (they control who becomes a talent, who gets in their doors). And it's only consolidating as ICM, one of the big five, has bought slightly smaller rival Broder Webb Chervin Silbermann Agency. The other big ones, including Endeavor, William Morris, Creative Artists Agency, and United Talent Agency may also look to pursue M&A. So with such a tightly controlled business, and what you can assume are some pretty fat profit margins, you can understand how disturbed they'd be at the emergence of an Ari Gold talent agency, or, as it were, a Miller/Gold agency. And, reminder, we already referenced Entourage at the top and that's a picture of actor Jeremy Piven, so we're not falling into any Joe Kernan trap here.

Official Union Set Up in China at Wal-Mart (NYT)
First it was Maryland, then Chicago, then perhaps Boston, now China is the latest place to regulate to seek labor concessions from Wal-Mart. The country demands that the All-China Federation of Trade Unions be allowed to set up branches within Wal-Mart, representing employees. And unlike Maryland, there's probably no court that Wal-Mart can turn to to get the order over ruled on the grounds of constitutionality. That being said, the All-China Federation of Trade Unions might not be very hostile to the company; it has a reputation for siding with management on issues, particularly since the state-backed union is eager to attract foreign capital. For its part, Wal-Mart hopes to have a "cordial and productive relationship" with it.

A Revitalized US Airways Is Creating a Merger Buzz (NYT)
The overall market remains on shaky ground, but some of the big winners this year are companies we might have left for dead in 2005. GM's the biggest, but US Airways is another company exhibiting a surprising reversal of fortune. The company's shares have surged since it merged with America West and it earned a substantial, genuine profit in its most recent earnings report, which came out last week. The company is now the second most profitable airline, after Southwest. This of course will only fuel the calls for consolidation in the space, though these calls have been around for a while. Still, despite the seductiveness of this idea, it's hard to pull off airline M&A. See, airlines don't mix well for a number of reasons. For one thing, at the labor level, pilot seniority means everything. Where you stand on the list determines your flights, pay, vacations, etc. When you mix two lists of pilots, things get icky. Then there's the fleets, which if they're much different can create new waves of headaches. And of course, you'd like to find an airline with complementary locations, so not every potential partner is really viable. So despite the calls and demands from Wall St., which would love to advise on some of these deals, we'll remain leery that much will happen.

Stocks headed for early pullback (CNNMoney)
It's hard to wake up on a Monday morning, but the day holds its own allure for followers of financial markets, as we eagerly scan the headlines to see what big deals were closed over the weekend. Lately, we've seen several 'Merger Mondays', but this morning seems awfully quiet on this front, which is disappointing. Most people will wonder why they didn't hit snooze one more time. In turn, there's probably not going to be a merger-driven rally today. There may be a rally, but not one fueled by an otherwise suspect deal. And if you believe the crystal ball readers, there won't be any rally today, due to tensions in the Mid-East, which despite the fact that they were escalated all of last week, somehow couldn't permeate US markets. And there's a lot of economic data on tap for this week too, which may only confirm that we're headed to, er, a soft landing.

It has been quite a week here at DealBreaker. Lawsuits, bashed-up bankers, Senate hearings, scandals, backdating, prostitution and human trafficking. We are about to take a badly needed weekend of rest, relaxation and toxic substance abuse. But before we close up shop and head out for the hinterlands, here's a reminder of some of the juicy goodness you drank down at DealBreaker this week.

Jeffrey Epstein's Assistant: Your first look at a non-boring photo of Jeffrey Epstein's alleged sex slave. And then your first look at a second one! (Also note the demur headline we gave this item. We were going to call it "Sex, Slavery, Strap-Ons, Lesbian Under Age Prostitution Perversion and Other Habits of the Modern Money Manager" but that's too long for a headline).

Eat Bacon: Andy Kessler tells us the whole cholesterol thing is a scam!

Langone Smacks Spitzer: Only on DealBreaker could you find the entire text of Ken Langone's biting memo supporting his motion to dismiss Spitzer's case against him.

Planespotting: That NYSE jet keeps going back and forth to San Francisco. We have no idea why so we just take our best guess.

Hedge Fund Hearing: The hearing was boring and long. We tell you what happened and make a couple of jokes.

Marketplace: Coke is dirt cheap in Belgium. Expensive in Scandinavia. Arbitrage anyone?

Court Room Drama: Bess Levin goes to court to watch Langone's lawyers get smacked down by Judge Ramos. Bess (hearts) Ramos.

Planespotting: MTV's plane went somewhere. So did Ted Turner. Jane Fonda is making movie with Lindsay Lohan that we will never watch.

$$$6'0 190 lbs investment banker seeks part-time job as next Dirk Diggler. But with more private-equity know-how. [craiglist]

$$$Need a little incentive to continue the self-imposed, handcuffed to the desk (and not in the good way), 80 hour work weeks? Try this on for size. Or maybe just the first floor. Or the foyer. Or the driveway. [Born Rich]

$$$LB, GS, ML slackers: keep racking up those poor performances every month and this could be you by the new year; the babysitter of a 12 year old coke-addict, living in an apartment furnished exclusively by Urban Outfitters. And with Hebe-Hair that just sits there and mocks you. [Cobrasnake]

$$$Alternatively, be a good little worker bee and you could one day be the proprietor of this.

Our earlier post on Nadia Marcinkova was written on the assumption that unlike the young girls Jeffrey Epstein is alleged to have paid to strip and massaged him while he pawed at them and masturbated into a towel, the eastern european blonde was a different kind of participant. Older, more sophisticated, at least a little lezzy and wearing stap-on dildos. That sort of thing. Just the sort of woman you’d imagine an evil villain would keep as his mistress.

As it turns out, that sort of woman probably only exists in fiction. Gawker is now reporting that according to a previously unpublished Palm Beach police document, Epstein bragged that he purchased Nadia from her family in Yugoslavia, and that she was his sex slave. So she may be another victim of Epstein’s alleged sex-and girls-for-money racket.

The weird thing is that Nadia seems to have at least once held a job at Douglas Elliman. Did Epstein set up his alleged sex slave as a real estate agent? Isn’t being a sex slave at least a full time job?

[Oh. And yeah. Alleged. Alleged. Allegedallegedallegedallegedtoinfinity. Epstein hasn't been found guilty of anything and it's up to the government to prove its case against him.]

Exclusive: Jeffrey Epstein's Sex Slave [Gawker]

Fortune’s Marcia Vickers got all tarted up in a slinky black dress and her sexiest heels to attend, uhm, a conference on start-up hedge funds. So what kind of folks go to these things?

I first noticed Claudette, six feet tall in stiletto heels and sporting fire-truck-red lipstick and a five-alarm personality. Word spread she had "$50 million to invest from clients in the Middle East."

Then there was Henry. He ran an astrology mutual fund. If, say, the moon was eclipsing Uranus, I'm guessing that might mean switching from stocks to pork bellies. He was going to use the same strategy for his hedge fund, which would- - duh! - be easier to market than a boring mutual fund.

Hanging out by the doughnuts were two guys, both in their late 20s, who had cut their teeth at the same bucket shop on Long Island years ago along with "93 guys doing ropes of cocaine" under the tutelage of a Mob guy with "a missing pointer finger." They fondly recalled phone sales scripts they used in pump-and-dump schemes, e.g., "Your mind is like a parachute - it only works when it's open!" They were both starting "black box" funds.
Then I chatted with Mark, a gung-ho kid in his early 20s who was starting a "complex derivatives fund" with "a friend from MIT." He says that after reading George Soros's book The Alchemy of Finance, "I was hooked on trading!" He then admits he hasn't traded anything. Ever.

Poor Marcia. All dressed up and no one to hand her $20 million to invest. At least it looks like we didn’t miss much by skipping the conference. Last time we met a hot chick with “money from the Middle East” we ended up nearly getting our asses kicked by Lebanese kids with lots of ecstasy to sell.

Start your own hedge fund [Fortune on CnnMoney.com]

Gary Weiss, author of Wall Street Versus America, listened to the Overstock.Com conference call so you wouldn’t have to. Not surprisingly, CEO Patrick Byrne found time to talk about things other than his company’s $0.78 per share net loss in the second quarter. Things like dastardly short-sellers and how shareholders might prevent them from pushing the value of their stock down even further.

We’ll leave the details for you to read by clicking through to Gary’s blog on the link below. But if you're as lazy as we are on Fridays, you might appreciate skipping right to the conclusion.

Byrne's gambit won't work, by the way. History has proven that the only proven method of pushing up the share prices of bad companies is that they stop being bad. And Byrne just hasn't figured out a way to do that.

Burn! (As DealBreaker cub reporter Bess Levin likes to say.)

Byrne's Latest Gambit
[Gary-Weiss.Com]

Without a doubt, the absolutely raunchiest part of the Epstein affadavit stars a mysterious young woman named "Nada Marcinkova." Lesbian strap-on raunchiness, ending in something that sounds to us a little bit like rape. We get all the details but no explanation of who Marcinkova is or what her relationship with Epstein was. She’s not one of his high school victims, and doesn’t seem to have talked to the police. But it somehow seems fitting that this mysterious money manager to the billionaires would have an unknown Czech sex puppet lying around somewhere.

Gawker identified her in a NY Social Diary photo where Nadia (far left) is palling around with Epstein’s pimp assistant Sarah Kellen (right).

Here she looks very respectable. Not at all like the “large rubber penis” wielding girl we know from the affadavit. Surely there’s a more representative photo.

Of course there is. After the jump, check out Nadia looking a little more, uhm, severe, sexy and ready to get it on. And we'll throw in the raunchy portion of the affadavit below for your, uhm, reading pleasure.

Crime/Fraud/Legal/Investigations/Inquiries:
The IRS investigating 40 companies for backdating [legal]
Feds investigating Sanofi-Aventis and Bristol-Myers Squibb for possible anti-competitive drug deal [legal]
Kazaa settlement with record and movie industry [legal]
Rambus settles with Hynix Semiconductor [legal]
Three charged with leaving fake insider tips on answering machines [legal]
Trading before big takeovers may point to leakage [legal]
Banned Brit trader Philippe Jabre drops his appeal against Brit finance authorities [legal]

M&A: [? = not yet closed, problems with the deal, lingering questions, etc.]
Man Grouptakes 70% of Eurex
Vista Capital and Carlyle Group + Grupo Emisor Iberostar
Barclays Capital and Permira bid for McCarthy & Stone

Earnings:
NYSE: LINK

For Sale:
Michael Foods: LINK
YouTube: LINK

Money Raising:
Intelleflex raises $15.5M $$
New biotechie Seredigm has investors$
Emphasys Medical pulls in $18.4M $$
Anulex Technologies scores nearly $20M$$
Homewreckers Nuprecon gets financing from Evergreen Pacific Partners. $$
Diomed Holdings looking for $10M $$

People & Moves:
Pfizer close to choosing next CEO LINK

Miscellaneous:
EMC and Symantec: hunting for acquisitions: LINK
Hedge fund proxy battle for baseball card maker Topps: LINK
News Corp’s wild weekend getaway: LINK
Annoying boomer bosses think they are rockstars: LINK
Amazon buys rights to make movie: LINK
VC money going to more established companies: LINK
Ebay vets doing interesting things: LINK
LBO shops: fast-bucksters or turnaround artists? LINK
Wachovia ditches Lebanese bank over Hezbollah ties LINK

If you spend even a few moments reading the probable cause affidavit detailing mysterious money manager Jeffrey Epstein’s alleged penchant for paying naked teenagers to massage him while he, uhm, whacked-off, everything else you read about him starts to seem creepy too.

There’s the now famous line in New York magazine’s profile. You know, the one where Donald Trump is quoted as saying about Epstein, “He's a lot of fun to be with. It is even said that he likes beautiful women as much as I do, and many of them are on the younger side. No doubt about it -- Jeffrey enjoys his social life.” Wow. That's awkward now.

But it doesn’t stop there. One thing that’s clear from the affidavit is that Epstein’s assistant Sarah Kellen is alleged to have played a central role in procuring the high school girls who rubbed him down for a couple of hundred dollars a pop. She's said to have called the girls when Epstein was in town, got them situated in his bedroom and even passed around refreshing beverages for the girls to enjoy.

As it turns out, one of the rare journalism interviews Epstein has given involved his executive assistants. The New York Times story “Working for Top Bosses on Wall St. Has Its Perks” (cough, pimping, cough) is now hidden safely from prying eyes behind the Times Select firewall but DealBreaker has boldy shelled out the Abe Lincoln to bring the story to our readers. After the jump, we bring you the excerpts with emphasis and nasty asides added.

The SEC named three Croatians to the list of defendants in the civil lawsuit it filed over the insider-trading racket alleged to have been led by former Goldman Sachs associate Eugene Plotkin and analyst David Pajcin, bringing the total number of defendants to seventeen. The new defendants are Bruno Verinac, Antun Dilber and Anto Krsic.

Seventeen is almost a mind-boggling number of defendants. What kind of secretive conspiracy involves everyone you know? Was there anyone close to Plotkin and Pajcin they weren’t tipping?

SEC Charges 3 More for Insider Trading [Associated Press in the Houston Chronicle]

Earlier this week, we pointed out that our British friends were talking about the indictment of the NatWest 3 as if it had something to do with the Iraq war. Psychologically, the two had become linked, demonstrating that America was out of control and that the UK had some how become subservient to our rampages.

That sounded a little paranoid. Even far-fetched. So we were glad to see confirmation in the Scotsman that this really is the way some Mud Islanders think about things. It’s all here—an irrational America, an acquiescent UK, the Middle East, the jailed bankers. Somehow all connected in the murky mind of writer Stephen Jardine.

The Middle East lies at the heart of the tension. Traditionally, Britain follows its own agenda in the area but as chaos continues in Iraq, in policy terms we're now increasingly tied to America's coat tails throughout the region. And even here at home, no-one is safe from harm. What Uncle Sam wants, he gets.

This week I've been in Texas interviewing the Scots businessman caught up in the collapse of America's biggest corporation. Gary Mulgrew and two colleagues allegedly took part in illegal transactions linked to Enron while they worked in Britain for the NatWest Bank.

Any crime was substantially committed here but that didn't stop America applying for extradition. Even though the United States hasn't yet ratified the treaty, the British Government happily handed the NatWest Three over on the basis of the charges made, but no evidence.

Are Deal Makers On Wall Street Leaking Secrets? (WSJ)
It took until Friday, but the Wall Street Journal finally took the crown for the most painfully naïve headline of the week. Asking whether Wall Street leaks secrets is like, well, asking any other obvious question you could think of. The article in question is prompted by some unusual action in derivatives of HCA, which bounced around a lot the week before the deal was announced. Hello, everyone had some sense that a deal was happening with HCA. In fact, most buyouts these days are preceded by days of rumors, or "chatter". Certainly, after the deal happens, there's no shortage of industry analysts ready to jump on the tube saying they'd heard rumors of this for awhile. And in a case like HCA, with so many parties involved, right down to the Senate Majority Leader (ok, he probably wasn't involved directly), it would be amazing if word hadn't been leaked. That might be cause for a story. Of course, anyone aggressively bidding up shares in the week leading up to a major buyout probably has what's coming to them -- yeah, that's not obvious at all.

Critics jump on big oil's huge profits (Chicago Tribune)
A few days ago we wondered why he hadn't hear much out of our finest Senators about price caps or a windfall profits tax. That was a thought. Duh; it's because earnings for big oil hadn't come out yet and so there wasn't any fresh news to be enraged about. Now, however, the earnings are trickling out and surprisingly, record profits happen to coincide with record prices at the pump. First off, all kudos to Exxon for cracking the $10 billion mark on their earnings. The company came just shy of this number in their last quarterly report, prompting some to wonder why they didn't cook the books just a little to hit the mark. So now we can expect another round of outrage -- Chuck Schumer should be chiming in any moment now. Fortunately, it should die down in a few weeks, at least until next earnings season.

Councilors say they'll explore a city wage bill (Boston Globe)
Apparently, Chicago had all of the other big cities over for dinner. But it served some spoiled fish, and they all went home with food poisoning. After the Windy City's move to require Wal-Mart to pay a so-called living wage to its employees, it seems like other cities may look to do the same. Two councilmen in Boston said they're interested in passing a similar ordinance so that the local $6.75 minimum wage doesn't apply to big-box retailers. Councilman Felx Arroyo said he plans to reach out to local labor leaders and see if they're interested in such a plan. Answer: yes. He said "There's no reason why we the City of Boston should accept workers being underpaid". At the moment there are no Wal-Marts in Boston, so it would only affect those bastions of yuppie retailing, Target and Home Depot. Besides, we always felt Wal-Mart was just better suited for exits on the side of the highway.

Microsoft acquires more, but R&D still the focus (Reuters)
Over the years, Microsoft management has been seen as a good steward of shareholder money, because it never went out and made wildly overpriced acquisitions just to boost the company's heft. Now, in the past couple of years, as Microsoft's competitive advantage has started to erode, the company has given into the temptation a bit more. In fact, it's acquired a Cisco-like 23 companies over the past year. Still, management insists this isn't a change of strategy. None of these buyouts have been major, averaging around $30 million a piece, and this buyout expenditure is still dwarfed by R&D and internal investment. Still, it seems the company has opted for the lazy route in filling holes in its product line.

Per bottle-smashing and fisticuffs-throwing John Washington, we thought you might also enjoy listing JW as a facebook friend and subsequently perusing his favorite movies, books and quotes. For your voyeuristic pleasure.

The other day, one of you lovely and doting Planespotting devotees—“Bad Boy” to be exact—left the following comment, in reference to Tuesday’s post, Planespotting: John Thain, Maple Syrup, Sprinkles: The Decided Lack Thereof:

“If I had my way, I'd never work. I'd just stay home all day, watch Scarface 50 times, eat a turkey sandwich, and have sex all fucking day. Then I'd dress up like a clown, and surprise kids at schools...that's funny to me. Then I'd paint, and read, and play violin. I'd climb the mountains, and sing the songs that I like to sing. But I don't got that kinda time.”

And that got us thinking; are there other people out there—you know, celebrities, like us—who live in fear of someone jumping out from behind a parked car when they leave their building and being beaten to death with a well-worn nine-iron (and knowing that afterwards, their names will be crossed off a list—in blood—and red lipstick will be smeared on the lips of the attacker, who, oddly enough, strongly resembles Steve Buscemi)? Surely there must be. Case in point: today’s Planespotees. Ted Turner, Vanessa Minnillo, Paris Hilton, William Clay “Bill” Ford, Jr. All have good reasons to watch their backs. Why they’re recklessly trotting the globe in their Cessnas and their Pipers and their fancy Piper Cherokees, we have no idea. Maybe they’ll heed our warning this time, maybe they won’t. Just don’t come crying to us when you’re staring at the business end of a snug-fitting body bag, T, V, P, F comma Dubs.

We’re starting to pull together some facts about John Washington, the man French police are searching for bashing an American investment banker over the head with a champagne bottle. And what we’re learning is that he is weird. Creepy weird.

ITEM: Washington calls himself “The President of Pop.” As in pop-music. And he claims the music on his website is the most downloaded music on the internet.
ITEM: Washington sometimes refers to himself as “No-1.”
ITEM: He seems to be really, really passionate about pop music.
ITEM: Washington once debated at the Oxford Union in favor of abolishing the English monarchy. (Okay, that’s not so weird.)
ITEM: Washington claims to be descended from one of George Washington’s brothers, and to have inherited the founding father’s place in the Society of Cincinnatus.
ITEM: Washington seems to have convinced some fellow students at Oxford that he is famous and prestigious here in America. Some have even gone so far as to wonder whether he has some sort of diplomatic immunity that will protect him from being arrested for the assault.

Developing.

[Editor's note: That top picture is Washington, we think. Below left is bottling victim Colin Hall. Below right is the girl who allegedly inspired the attack, Laura Clegg.]

Who is the President of Pop?!? [popmusic.com]

We don't know anything about this movie except what we learned from the trailer. It seems to be the usual story of a man torn between a life of high finance and wealth, on the one hand, and a slower paced life in the country, on the other. Fair enough. But the twist here is that the banker's place in the country is a vineyard in the French countryside. We guess that sort of takes the sting out of having to leave your job as head of the trading floor.

Is Lazard CEO Bruce Wasserstein seriously ill? That’s what people are telling Peter Cohan.

According to my source, a few weeks after the tragic death of his beloved sister Wendy, from lymphoma, and just after delivering his infamous report on Time Warner Inc. (NYSE: TWX), Bruce went into hiding for some eight weeks. He has lost 50 pounds and is said to look like a wobbly, 75-year-old. Bruce is 58 and has always been portly. He is apparently now back at work at Lazard and is to give a speech today.

Has anyone seen Bruce lately? Send denials or confirmations to tips(at)dealbreaker.com or leave them in the comments below.

Rumor: Is Lazard CEO Bruce Wasserstein seriously ill? [Blogging Stocks]

Marketwatch has more details on the Embassy Suites hotel in Battery Park that Goldman Sachs is reportedly buying, including new speculation on what Goldman might be planning for the site.

Robert Sammons, director of research at real estate brokerage firm Colliers ABR, said the sale would allow Goldman to control the entire block once its new headquarters opens in 2009.

"It's right next door to their new building, and they can use the hotel for their own people if need be and for bringing in people from outside for events," he said. However, he speculates that - more importantly - the acquisition will give Goldman the option to demolish and redevelop the property down the road so that it can add on to its corporate headquarters as the firm grows.

Goldman Sachs in talks to buy hotel complex in downtown New York City [Market Watch]

Crime/Fraud/Legal/Investigations/Inquiries:
Canadian company alleges hedge fund dirty tricks [legal]
Investment banks paying out to settle Global Crossing shareholder lawsuit [legal]
Ski patrol scammer’s shops must pay victims [legal]
SEC adopts executive pay disclosure rule [legal]
Battle for the board of ketchup company heats up [legal]
Testimony of two KPMG partners excluded by judge who finds they were coerced by prosecutors [legal]
Ban on BetonSports taking US bets extended [legal]
Visa, Mastercard reach$336M settlement agreement in class action suit [legal]

M&A: [? = not yet closed, problems with the deal, lingering questions, etc.]
Gaz de France+ Suez debated by French government: ?
Phelps Dodge + Falconbridge: ?
Microsoft + Azyxxi
Actavis + Pliva: ?
Serono +for ???
HSBC + Westpac’s domestic custodian biz
Gain + Refco currency trading biz
EMI + Warner
Francisco Partners + Ex Libris

For Sale:
IMAX: LINK
N.E.W. Customer Service: LINK
Jones Apparel Group: LINK
Apparently there is something called Trump Magazine: LINK
Lenin’s Russian electrical legacy LINK

Money Raising:
Digital Chocolate raised $22.5M $$
Snapvine snags $2M $
Planitax lands $5M $
Garageband.com scores $2.5M $

Miscellaneous:
How exactly Ferrovial’s acquisition BAA being financed anyway? LINK
2nd biggest pre-public investor in NYSE is buying a stake in Chicago Board of Options Exchange: LINK
Big deal, smaller club: LINK
60-year hybrid bond: LINK

We were beginning to feel lonely around here. For the past couple of weeks we felt like we were the only folks who remembered that former SEC investigator Gary Aguirre had gone before a Senate committee and alleged political corruption at the SEC. Even the banking committee, which allegedly has oversight responsibility over the SEC, didn’t seem to care.

Well, it looks like Aguirre has a friend in Senator Arlen Specter.

Specter is expected to question Cox on a number of issues involving Aguirre's investigation, but also the broader issue of how well the commission investigates hedge funds, according to people close to the matter. These people say that while Aguirre doesn't appear to have a smoking gun that points to Mack violating insider trading laws, Specter believes that the agency erred in not taking Mack's testimony earlier, and will likely point that out during the meeting.

We’re decidedly ignorant when it comes to people who have job titles like “Senator.” That may or not be a good thing. Maybe knowing something about those types would help us understand the world better. But the cost of paying attention and seeing through the spin seems enormous. So our ignorance is probably pretty rational.

So we can’t help the Big Picture. But maybe you can. Here’s today’s inquiry.

Its easy to point fingers, but let's get to the heart of the matter -- how much of the present inflation is due to ultra low rates? Huge deficits? Unfunded tax cuts?

Phrased differently, who is more responsible for the present inflationary run up -- Bernanke or Bunning's Congressional Colleagues?

The government added three more people to the defendant list in the insider trading case centered around Eugene Plotkin, David Pajcin and Stan Shpigelman. Eugene and David were both Goldman guys, and the younger Stan was an analyst at Merrill. The plot, which was allegedly hatched in a downtown Russian bathhouse, now spans two continents, at least three countries, and includes players as diverse as strippers, Eastern European relatives, a mailman serving on a potentially important business trial and guys working the shipping decks at the plant where Business Week is printed.

SEC adds three more to the insider trading defendants list [WallStFolly]

Growth Slowing Across the Country, Fed Regional Reports Say (NYT)
Well, is it here? This quarter we saw the first steady stream of disappointing earnings, at least from the major tech companies, and now the results of some regional Fed surveys are in, suggesting that growth is slowing in various parts of the country. So maybe we're on the verge of a recession soft landing. Car and home sales appear to be slowing in many parts of the country, while tourism in New York is less robust than in recent times. Meanwhile, retailers in Philadelphia and the Midwest also were indicating softness. So remember when everyone was talking about stagflation a few weeks ago, well here may be the stag part.

Pay Rules Adopted by S.E.C. (NYT)
For those who adhere to the Louis Brandeis maxim, that the sunlight is the best disinfectant, this new regulation for you. The SEC voted unanimously to require greater transparency when executives are given perks, options, lump-sum pay, etc. All told, it will likely apply to about 3,500 employees at public companies, though there's still uncertainty over whether the law will apply to highly-paid, non-executive employees, such as Kate Couric. Recently, the SEC had signalled no, but at this point the commission has decided to review the issue at a later point.

Council defies Daley, OKs 'living wage' (Chicago Sun-Times)
The so-called big-box retailers won a major victory in court last week, when a judge threw out a Maryland law requiring Wal-Mart to devote a certain amount of its labor expenses to healthcare. But, it appears they've suffered a major defeat again, as the Chicago City Council passed a requirement compelling big-box retailers to pay a 'living wage' by the year 2010. Specifically, stores like Target and Wal-Mart must pay at least $10/hour in salary and another $3/hour in benefits. The resolution passed with a veto-proof majority, over the objections of Mayor Daley. Should be interesting to see whether the stores pull out of the Chicago market. Of course, this is the same city that wants to ban not just smoking, but any unhealthy food.

How farms stymied Doha (Christian Science Monitor)
All week there's been talk about what can be done to move the WTO process further. At the moment, the developed world just doesn't have the political will to get rid of the agriculture subsidies that keep third-world farmers poor and understandably bitter about so-called free trade. After the talks collapsed, India announced it would pursue a series of bilateral accords, but these will only go so far. The fact remains that the agricultural lobby in the US and the EU remains incredibly strong. It helps that many who don't work in the agriculture industry have this idyllic notion of dwindling but proud family farms, as opposed to the reality, which is ADM. Still, if we could only let a few thousand more farms die -- or however many disappear every minute according to the commercials -- maybe they'll be weakened to the point that we can do something on trade.

From UPI:

Soul singer James Brown filed a suit in New York's Supreme Court against banker David Pullman, who initiated "Bowie Bonds," saying Pullman had blown a deal.

Brown claimed in the suit filed Monday that Pullman had not put through a loan the singer needed for bonds. But Pullman claimed he was owed money, the New York Post reported.

Pullman earned a reputation as a creative financier when he advised singer David Bowie to issue bonds using future royalties as security.

Or, as the hardest working man in showbiz once said himself:

Sold me out, for chicken change (yes you did!!)
Told me that they, they had it all arranged
You had me down, and thats a fact
Now you punk, You gotta get ready
For the big payback!! (the big payback!!)
That's where I am, the big payback (the big payback!!)

James Brown sues banker over deal [UPI]

[Editor's Note: Sometimes we like to take a break from our usual extorting- insiders and flattering-anonymous-sources style of journalism to get out of DealBreaker HQ and pound the pavement. You know, do some real shoe-leather reporting. Like crashing Donald Trump’s party.. So this morning, instead of just sending DealBreaker cub reporter Bess Levin out for coffee and cigarettes, we sent her to the Spitzer v. Langone hearing down on Center Street. Her report follows.]

My watch set off the metal detector, but that was to be expected—fine TAG Heuer (“Tag Hoy-Yer”) craftsmanship often does. I was looking for Room 238, and decided to make the city of New York work for its money: “Excuse me, I’m look for Room 238” I said in my most grownup voice. “Take aina elevator to the second floor,” the man with the uncanny resemblance to Jim Cramer (post Mystic Tan) replied. “I’m sorry, which elevator?” I tried to clarify. “A-N-Y elevator” the figure who I can only assume was acting as some sort of a translator offered.

[Bess Levin’s report continues after the jump, the jump, the lovely lady jump]

We tend to ignore some of oompah-loompah types that actually make Wall Street run, focusing more on the Willy Wonkas and all the little brattles bound to perish in his candy factory. It’s not because we hate the oompahs. It’s because they scare us.

Fortunately, we’re not the only bloggers with finance backgrounds, and the fine folks at WallStreetTechDaily.Com have more guts than us. Launching today, WSTD is focused on the most oompahism gang off all—the IT folks. Here’s their introductory note:

Welcome to Wall Street Tech Daily, a new blog in the BigWideLogic family. This blog is for the downtrodden IT folks stuck overnight writing risk analysis programs. This blog is for the kids in the fishbowl swapping out backup tapes. This blog is for anyone in the financial industry who knows how to use a keyboard and mouse for more than placing buy and sell orders – you know who you are.

Welcome to WallStreetTechDaily.com [WallStreetTechDaily]

David Anderson is a constant disappointment when it comes to insider trading. In the first place, the former LendingTree senior vice president apparently didn’t grab any money for himself. Second, he allegedly tipped off his girlfriend. (Do women still go for the whole stock-tip seduction thing anymore?) Third, she made something like less than $8,000 from his tip that IAC/InerActiveCorp was going to acquire LendingTree.

And now he doesn’t even fight the charges. Word comes today that he’s agreed to plead guilty to making false statements to the SEC. This isn’t even proper insider trading. It’s Martha Stewarting--getting caught for lying when questioned by the feds. Oh well. He’ll have up to five years in some white collar prison to consider exactly where he went wrong.

Former LendingTree exec to plead guilty [Charlotte Business Observer]

Earlier on DealBreaker: Itty Bitty Insider Trading.

The average retail price of a gram of cocaine in the US jumped 19% in 2005, rising to $103.7 from 87.3 the year before, according to a story which a source claims ran on Bloomberg yesterday.* Prices were far cheaper in most of Europe (except the Scandinavian countries), which makes us wonder whether the price jump has been caused by recent weakness of the dollar compared to the Euro. (Let’s call this the “Larry Kudlow Theory of Blast Prices.”) Another possibility is that increased US anti-terror measures are taking a toll on cross-border cocaine dealing (the “Dick Cheney Theory.”) Or maybe you folks are just powedering your noses too much and the increased consumption has sent prices skyrocketing (the "Al Gore Theory.")

The cheapest place to score? Belgium. Not coincidentally the headquarters of the European Union.

[*Note: we didn't actually see the story, so we can't link to it or even say for sure that it ever really ran.]

Update from reader "m": check out www.unodc.org for the data.
or google "UN World Drug Report". The data complied here is quite interesting, they should include it in commodities trading markets!

Investment banker Colin Hall was bashed over the head with a champagne bottle in a San Tropez nightclub, apparently for talking to an Oxford law student fifteen years his junior. Hall, 35, who we have been told by sources worked at UBS, was talking to twenty-year Laura Clegg, the social secretary at Oxford’s law society, when he was attacked. The police are looking for Oxford student John Washington, who is also an American. Colin is said to be in serious condition in a French hospital.

Millionaire banker bottled [The Sun and WallStFolly]

[Why all the fuss? Check out another picture of Laura Clegg after the jump.]

Senators Charles Schumer and Lindsey Graham are long-time China hawks, and most recently have been threatening China with tariff sanctions if it won't adopt a flexible exhange rate for its currency. Today they are meeting with Treasury Secretary Hank Paulson, who is viewed as friendly toward China. Or, to revert to more typical DealBreaker parlance, Hank's a China-Hugger.

Presumably, Paulson will ask the Senators to give him more time to negotiate with his Chinese counter-parts.

US senators to meet Paulson on China yuan concern [Reuters]

When we speak to our Brit friends, we get the impression that the extradition of the NatWest 3 is somehow mixed up in their minds with British cooperation in the Iraq War and the general chumminess between Tony Blair and George Bush. There’s the feeling that somehow their Mud Island has become subservient to US interests.

Anyway, the NatWest 3 are sad that their government shipped them back here for trial. And, not surprisingly, so are their children.

One of the so-called NatWest Three says he feels betrayed by the British government.

Gary Mulgrew told Scotland Today yesterday: "You get very jaded when you look at the politics behind this. That is incredibly disappointing.

"My disappointment is principally aimed at the British government, who we feel have abandoned us."

He added the legal proceedings had caused much stress for his ten-year-old son.

"It's tough on all the people around me. I don't think you can explain it to a ten-year-old. I've had a couple of difficult conversations with him when he's been trying to figure out when I'm coming home."

At least according to an increasing amount of English folks, especially the ones who run online betting firms. The arrests of the NatWest 3 and the head of BetonSports has them fearing the aggressive tactics of US prosecutors.

Is the US a safe place for business? [Daily Post]

Crime/Fraud/Legal/Investigations/Inquiries:
McClatchy argues against lawsuit seeking to halt its sale of three Bay area newspapers [legal]
Tech bubble bull Robertson Stephen to pay nearly $2 million in penalties [legal]
Skilling’s attempt to overturn conviction following Lay’s death rejected [legal]
SEC investigating options dating at Applied Micro Circuit [legal]
Judge gives embattled Millberg Weiss consolidated shareholder backdating case [legal]
Federal judge dismisses NSA eavesdropping case against AT&T [legal]

M&A: [? = not yet closed, problems with the deal, lingering questions, etc.]
Blackstone crashing HCA deal?
Macquarie Bank and Newbridge Capital + telecom and media assets of PCCW
Mecom Group meets with Orkla’s media assets
WatchGuard Technologies + Francisco Partners
Third Avenue Management bids for 18% of Catalyst Paper

For Sale:
The Jones Apparel Group auction faltering LINK
Tech Mahindra IPO LINK
Myspace IPO? LINK
More WNS shares in IPO LINK
McDonald’s Chipolte stake LINK

Money Raising:
SolFocus gets $18M from New Enterprise Associates $$
Tello raises $10M $$

Going Down/ Bankruptcy/ Liquidation/ Dissolution/ Wrapping Up:
Creditors of Yukos reject its recovery plan, pushing it closer to liquidation LINK
Lazard shutting down its European private equity arm LINK

People & Moves:
BP boss, Lord Browne, to retire in 2008 LINK
NASD chair Robert R. Glauber retiring in August LINK
Shake up at Merrill LINK

Miscellaneous:
Monster and Philadelphia Media Holdings in jobs joint venture: LINK
Wiki software company launches open source apps: LINK
SEC boss seeks renewed controls over hedge funds: LINK
Simon Doonan explains why Wall Street dresses so square: LINK
Deal volume already the highest ever: LINK
Goldman rakes it in by investing for itself LINK

This whole Western Civilization thing was fun while it lasted but now that it’s coming to an end, we should probably start looking for the next new thing. And for Jim Rogers that means China.

Jim Rogers, the hedge fund manager and author of "Investment Biker," said he's put his New York townhouse on Riverside Drive up for sale for $15 million so he can move to Asia, where he predicts a boom in Chinese stocks.

Facing charges far from home, family (Houston Chronicle)
If the NatWest Three are to ever see England again, they're going to have to convince the residents of Houston not to do to them what they've done to most other people involved with Enron. So, the surest way to do that is by launching a charm offensive in the local media, well before their trial starts. One of them, David Bermingham, sits down with the Houston Chronicle in an interview about the ordeal, in which makes a point to say that all three of them are family men with young children at home, and have done no crime. He also makes pains to be nice towards the US, explaining how the US Marshals, aboard their flight to Houston, were extremely polite, and that he doesn't blame US prosecutors for obeying the law. All the blame, Bermingham says, it at the feet of England, which has been disgraceful. No doubt we'll be parsing his words for awhile in Dealbreakerland, to figure out what an Englishman in Houston is supposed to be doing while waiting out the long months before his trial.

Blackstone May Enter Bid for HCA (WSJ)
Will Blackstone be the Barbarians at the Gate? Looking, perhaps, to emulate the immortalized bidding war for RJR Nabisco, there's rumors that the deal to buy HCA may yet run into competition. Though a consortium of firms agree to buy out the hospital chain, there's a window of opportunity for HCA to solicit competing bids, provided they furnish the original bidders with a substantial breakup fee. But when you're talking levered deals around $31 billion, what's a $300 million packet of sweet and low. HCA has until mid-September to find another bidder, but we hope something gets going quick, since it's bound to be fun.

SEC's Cox Says Hedge Fund Regulation Is `Inadequate' (Bloomberg)
It's sad to see former objectivists get drunk with power. First it was Alan Greenpsan at the fed, and now Christopher Cox, talking up the need for congressional legislation to deal with the burgeoning hedge fund industry. One wonders, if we could only have them look in a magic mirror, where they could see a 20-year old version of themselves shaking their head in dejected disapproval, would that make a difference? If they had to sit down for coffee with their younger selves, would they have the heart to tell them they'd become a sell out? Or would they play a long and pretend to still be men of ideals? Chris Cox, if you're reading this...

Goldman Finds Investing for Itself Rewarding (NYT)
It seems that Goldman Sachs is to be described as an endless Nile River of cash or the (and all apologies stated in advance) next Enron. And remember, before Enron's meteoric collapse, people described it in ways suggesting that its new economy profit mechanism could simply run forever. There's nothing to suggest similar problems at Goldman, other than the way people glowingly talk about the company. Now, the traditional model has been overturned. I-banking is merely a loss leader, while the real money comes from its prodigious direct investment (private equity) activity. And while everyone knows that the real beneficiaries of Goldman's success are its employees, Paulson netted is cool $12 million last year via special private equity partnerships made available only to top executives. Yeah, that doesn't sound familiar. Of course, the company has completely convinced the observers that what looks like a black box just isn't, or that the business is too complicated to be described in ledger format. Ok, we'll take 'em at their word.

Does it make us more or less perverted if while reading this, the first thing that occurred to us was that the porn industry needed to start hedging against currency fluctuations?

“We’re paying in US dollars, so in Brazil we’re able to pay the performers about 50% of what it would cost in the United States.

“If a standard boy-girl costs $1,000 (£788) in the US, it would cost me $500 in Brazil. But to the performer in Brazil, that $500 may be worth $1,000 down there.

“Right now the strength of the American dollar against the euro is diminishing, so in Hungary or Prague the performers get about the same as you’d have to pay in the US. You used to pay a Czech girl $600, but now — because she has to change those American dollars into euros — she needs $1,000,” Steele told XBiz.

By the way, that quote comes from one Lexington Steele, who we are assuming is not at all related to Lockhart Steele.

Outsourced porn gives more bang for its buck [The Sunday Times]

Reuters’ rundown of the London financial sector's revolving door is up (and updated). It’s too long, so here’s the “itty-bitty” version of the highlights from Reuters "MOVES" column. Note the two prominent defections from Goldman, which has re-ignited speculation that the recent decisions on how to structure the firm’s leadership after the departure of Hank Paulson were more divisive than has been reported.

Jacques Cailloux (economist)=Morgan Stanley Royal Bank of Scotland.
Alan Greenough (lawyer)=White and Case Lovells
Terence Moll (quant strategist)=Metis Capital Management Investec Asset Management
Randy Sessions (i-banker)=Goldman Sachs Morgan Stanley
Adam MacDonald (asset-backed securities)=UBSBank of America
Paul Wilde (asset-backed securities)=Egg Bank Bank of America
Barry Hunter (another abs guy)=Amethyst Corporate Finance Bank of America
Ghassan Abdul Karim (investment banking, Middle East)=Goldman Sachs JP Morgan
Zahed Chowdhury (research)=HSBCDeutsche Bank

MOVES-RBS, Lovells, Investec, Grant Thornton, others
[Reuters]

$$$ How To Pick A Tailor For Those Beauteous Blue Shirts And Bewitching Black Pants. Step 1: A less-than-firm handshake is a sign to move on-- he's likely to not have a very steady grip on the clippers during the inseam portion of the process. [Bankers Ball]

$$$ The Future Gay Investment Banker on...Sex and the City. You knew this was coming. [Future I Banker]

$$$ Wealthy stock broker seeks "special girl" who's "able to act appropriately in front of very prestigious people." New wardrobe, private bedroom and bathroom will be provided. We call shotgun on this one, ladies; we've always dreamt of a white horse-riding knight/broker who would sweep us off our feet with the offer of our very own lavatory, and no one's going to ruin this for us. And we mean no one. [Craigslist]

$$$ Do you like to Do-It-Yourself? [Wired]

$$$ Go ahead, punch that Goldman Sachs analyst in the nose, our (Lehman) brother; the "portable bone healing system" will soon be on the market. (He had it coming...when did you tell him it was okay for him--or anyone else-- to look at your girlfriend?)

We’re not sure exactly how he survived the boredom (we did with the help of Adderall), but Gary Weiss, author of Wall Street Versus America, also watched the banking committee hearings. He thinks these were less stupid than the judiciary committee hearings. And he too found it surprising that not one word was voiced about Gary Aguirre.

The elephant on the panel was the whistleblower Gary Aguirre, who was fired after trying to question Morgan Stanely's John Mack in a trading probe. Unless I missed it, as I may have dozed during the fascinating repartee, not one question about Aguirre emanated from the lips of the senators.

It's important, by the way, to distinguish between Aguirre's allegations and the effort to suppress him. As veteran financial journalist Don Bauder noted in a good wrapup on the subject, Aguirre's widely publicized allegations have been attacked as "flimsy."

Whether Aguirre is credible or not, this whole Mack business is troubling and should be investigated -- by actual investigators, not the U.S. Senate.

That was it? The Senate banking committee held its hearing on hedge funds today and the only impression we came away with was that the perennial faith of Senators and bureaucrats that they can pass laws and regulations to protect investors from fraud and loss is, like, stronger than ever. It was like stumbling across a group of druids in the woods practicing a long-dead religion.

Some highlights from our viewing of the webcast after the jump.

You know the scene in Slackers when Jeff goes to Dave and Sam, “We have been getting screwed by the system. The system that forces us guys to like girls. Alright? We’re getting pushed into this. What if we just take the girls out of it? We can have our own system, it’s a counter-system. And then, you do things together, you swim, you row, you…boat, you eat, you stink. We can just be guys! You can have sex, you can do it, you know, many guys at a time, but it’s not gay!”? We feel like the three trips the New York Stock Exchange’s Gulfstream IV has made to San Francisco in the last six days are probably setting the stage for some sort of eerily similar Dear Diary moment involving John Thain and the male members of the NYSE Group.

Aren’t vacation homes the best? Life just gets so hard sometimes that it’s important to have a place where you can go for a little R&R, where everybody knows your name and they’re always glad you came (unless you’re building some sort of monstrosity that devalues the property value of their lots), where you can sleep ‘til noon and the help serves your eggs Florentine to you in bed (and then some, if they think you’ll make good on your offer for “a little extra in the Navidad stocking”), where you can lounge by the pool and get melanoma without inhaling those toxic city fumes, and where you can bask in a relatively scandal free landscape, where no one is sleeping with no one’s husband and no one is treating himself to a nice 10-Martini lunch. It’s all just so…refreshing. But, sometimes, it’s not enough to simply get away from the home wrecking vulvas of Manhattan. Sometimes people crave more, and if you’re Mayor Mikey Bloomberg, that rumbling in your stomach isn’t indigestion from this afternoon’s three chili dogs, it’s a reverberation that’s trying to stand up and say: FOR THE LOVE OF GOD, WHO GIVES A FLYING FUCK ABOUT QUEENS, EXCUSE YOURSELF TO THE MEN’S ROOM, AND LET US OUT OF HERE! But whereas that’s the literal translation of the embarrassing racket coming from your lower abdomen, the more metaphorical, less scatological one is that if you’re anything like Mikey B., the Hamptons just doesn’t cut it. You need a place that’s a little more, shall we say…powdered sugar, as opposed to brown? Which is why Big B took a nice little flight to Burlington Int’l on his Mooney M20M Bravo, a few days back. Ah yes, the fresh mountain air, the lack of minorities, the adorable little hippies with their hemp necklaces, the lack of Spanish people, the adorable little hippies and their (unbreakable) Nalgenes, the lack of Asian people, the adorable little hippies and their marijuana-cigarettes, the lack of—HOLY SHIT THERE’S A BLACK GUY IN VERMONT! PLEASE SAY HE WORKS AT THE MAPLE SYRUP FACTORY, PLEASE SAY HE WORKS AT THE MAPLE SYRUP FACTORY, PLEASE SAY HE WORKS AT THE MAPLE SYRUP FACTORY…OH, THANK GOD. That got scary there for a second.

There's this act certain New York ladies have where they pretend to be as hard and as cruel as characters in their favorite television shows. At least the young men who encountered Cruella from the WhyHeDidnt blog on Friday night will have the satisfaction that she'll probably grow old and live in a Chinatown walk-up alone, of course, except for all her cats and sickly plants.

Investment Bankers with Matching Shoes: Three of the four I-Bankers we met had matching brown shoes from Holt Renfrew (except that one of them admitted he got a copycat pair at Wal-Mart). The fourth was clearly not an I-Banker, as he was wearing ratty jeans and black running shoes. Unfortunately, he was originally the most attractive of the four, until we found out that he was mute (by choice). Overall, I love I-Bankers, but they’re only good for their wallets. When asked whether he loved his job, one said, “Hell no!” and claimed he didn’t even get to sleep, much less go out. Lesson: I-Bankers are perfect target markets for the Cruella “Date ‘n Ditch” strategy - they won’t even have TIME to take you out again, much less fall victim to Saran Wrap Syndrome.

A Potpourri of Men [WhyHeDidnt.Com]

The Wall Street Journal today has a nice timeline of the rise of private equity. Definitely worth reading in this new (again) era of the mega-deal. Don't miss the sidebar with the dates of formation of several key private equity players.

Key private equity firms and the dates they were formed.
1966 -- Warburg Pincus
1974 -- Thomas H. Lee Partners
1976 -- Kohlberg, Kravis, Roberts & Co.
1976 -- Tracinda Corp.
1984 -- Bain Capital
1985 -- Blackstone Group
1987 -- Carlyle Group
1990 -- Apollo Advisors
1993 -- Texas Pacific Group; Madison Dearborn Partners
1999 -- Silver Lake Partners

Crime/Fraud/Legal/Investigations/Inquiries:
Senate Banking Committee to hold hedge fund regulation hearings [legal]
European Union okays Alcatel-Lucent deal [legal]
US government cracks down on online gambling [legal]
SEC investigating trades before HCA deal [legal]
Are more backdating indictments on the way? legal
Langone vs. Spitzer [legal]
Adelphia and bondholders reach deal; emerging from bankruptcy in Q4 [legal]
E&Y guy appointed chief accountant of SEC [legal]

M&A: [? = not yet closed, problems with the deal, lingering questions, etc.]
Stornoway Diamond + Ashton Mining + Contact Diamond: ?
Mama Group meets with Sanctuary Group: ?
Lots of M&A activity in Texas banks
Nacco Industries + Applica
Barrick Gold + NovaGold Resources: ?? (hostile)

For Sale:
Bank of America’s FIA Card Services division prices offering of $375 million LINK
WNS, Indian offshoring firm, going up on London Stock Exchange LINK
Heritage Underwriting raising 50 18 million in London’s Aim offering LINK

Money Raising:
Prestwick Pharmaceuticals gets $60mm $$
Zillow, online home value estimator, nabs $25mm $$
NextMedium pulls in $6mm from VC’s$

Miscellaneous:
Goldman fund of hedge fund on the London Stock Exchange LINK
Bearish and bullish on giant LBOs: LINK
Merrill pushing ahead with more private equity deals: LINK
Wilbur Ross staying the course after Amvescap deal: LINK
Juicy details from the Univision auction: LINK
Citigroup still hurting in Europe from Dr. Evil trading scheme LINK
Motorola’s $1.2 billion share buy back LINK

Eric Savitz on Tech Trader Daily (one of our favorite things at Barron’s—and not just because it’s free!) strikes back against the Barron’s critic who we linked to yesterday.

What a load of bull. I have been hearing this kind of nonsense almost from the day I joined Barron’s 18 years ago. If we’re really doing something wrong - aside from periodically giving you bad stock picks - I’d like to hear it. Shameful, indeed, Roberto. Shameful, indeed.

And while you're over there, read Eric's old boss on why YouTube is not worth a billion bucks.

Did Barron’s Trigger Monday’s Rally? Or Are We “A Compromised Rag?” [TechTraderDaily]

Our non-stop coverage of the cholesterol conspiracy continues. Today we bring you CPA Karen De Coster’s LewRockwell.Com article arguing that we should strike a blow against what she calls “the “cholesterol scare” by eating tasty things.

In the end, the cholesterol scare has become yet another health hoax foisted upon an unsuspecting public, courtesy of the heavy hands of government and its statist corporate devotees. And what makes it so appalling is that, via pharmaceutical lobbying efforts, the middleman that is used to peddle this rubbish, and the lies that go with it, is that one person whom most of us place very high on our "most trusted" list – the family doctor.

Would you like to help stamp out the establishment’s terror campaign on cholesterol? Next time you eat an egg, don’t throw the damn yolk out – eat it! Most likely, your only risk is being tagged as someone who "is not with them, and therefore against them," consequently making you a part of the seditious, anti-cholesterol insurgency. Nothing wrong with that. In my mind, the real "war on terror" is the battle that needs to be waged against the State and its terror campaign on the people, which comes to us disguised as a pretty nursemaid.

US heat stretches energy supplies (BBC)
As a heatwave engulfs the entire world, power is running low in the US. Of course parts of Queens remain without power, last we heard, while the state of California has declared a power emergency. It's been urging consumers to reduce their use of air conditioning and other power-intensive devices. Even the local tech industry has been hit by a lack of power to computers. But if the lights go out, who are they going to blame this time? There's no Enron to kick around. There's no (aptly named, to use the cliche) Gray Davis either. Will Arnold take the fall? Seems hard to imagine. It's always a tough spot for politicians when something bad happens and there's no obvious criminal.

Betonsports Ousts Carruthers After His Arrest in U.S. (Bloomberg)
As if getting arrested weren't bad enough, David Carruthers has been canned as the CEO of Betonsports. Of course, one can hardly blame the company as it hasn't had contact with Carruthers since being taken in while changing planes on the way to Costa Rica. Still, it would seem only fair to allow him some honorary position, CEO emeritus perhaps. And it turns out there's more to the arrest than just a desire to take shots at online gambling. Apparently, back in its pre-IPO days, the company held wild parties at its Costa Rica offices. We're not sure what about these wild parties were illegal, though perhaps the logic is that only law-flouting companies have wild parties, so there must be a crime somewhere.

Trade Talks Fail Over an Impasse on Farm Tariffs (NYT)
Honestly, it wasn't hard to see this one coming. Negotiations among six economic blocs primarily centered around agriculture subsidies were suspended, with WTO chief Pascal Lamy declaring little hope to resolve the impasse. Naturally, the powerful farm lobby opposed any deal that would have cut subsidies more than it opened new markets for export. While the Bush administration would like to spin this as a defeat, it's probably relieved that it didn't have to make any tough choices, or spend political capital lobbying congress to ratify a deal. If the administration wanted to, it doesn't need a WTO agreement to push for agriculture subsidies. It could just attack, and attempt to repeal the farm bill. Don't see hit happening.

Behind $21 Billion Buyout of HCA Lies a High-Stakes Bet on Growth
There are a some differences between HCA going private this time, and the last time it was taken private back in 1989. Back then, it was only worth $5 billion, so the company has grown a bit since then. And as Christine Hurt points out, we know longer call them leveraged buyouts. The leveraged is implied, and if you ever said the word leveraged at a cocktail party, or on CNBC, you'd be laughed at for being painfully quaint. And we don't call the buyers 'raiders' anymore, perhaps for good reason. The acquirers of HCA claim they're not looking to slash costs in a bid to juice cash flow. Instead they're focused on HCA's potential as a growth engine. Instead they hope to capitalize on the aging boomers, and their frequent trips to the hospitals. Of course, every healthcare company in the world has been banking on the aging boomers. Why do they think they're so special that they can pull it off?

Someone has done us all the enormous favor of resurrecting the trailer to “In Your Wildest Dreams”—a low-budget, straight-to-video film from the early nineties that tells the story of a high school senior who strikes it rich on the stock market by accidentally purchasing an under-performing tech stock. Soon he finds himself embroiled in an insider trading investigation and pursued by an unscrupulous trader dressed in full-out Gordon Gekko-fabulous fashion. It's a bit, well, lessony for our tastes--almost a financial version of reefer madness movie--but the trailer also has some very fun moments.

We've got quite a few comments from people who want us to write about the most recent issue of Barron's, which touts "10 cheap stocks" and a generally bullish tone. Unfortunately, today we're feeling all fair and not at all bubbling over with the anger and bile that makes this sort of thing fun. So we'll leave the job to the blogger at the helm of Roberto's NASDAQ Trader, who writes:

Take a look at the cover of Barron's this weekend here. Apparently it's time to buy stocks according to Barrons. Spare me Barrons you are the same people who graced us with the Dow 12,000 cover in April here. You have no credibility and some of us know exactly what you are up too. In this pathetic piece by Barrons titled "10 cheap stocks" they give us the earth shattering picks of stocks like General Electric, Home Depot, Cisco, and Lehman Brothers to name a few. Let me get this straight you have supposedly the smartest minds writing for one of the most well known rags and you come up with those dogs. How do they keep subscribers? Maybe the cover should read "Time to Cancel My Subscription" it's fitting isn't it. Barrons is a compromised rag and they continue to demonstrate that with there ill timed advice. To the bloggers who like to promote them I wonder how you sleep at night. Shameful.

The best part is his kicker: "Full Disclosure: I hold zero subscriptions to Barrons."

Propaganda at Barrons [Roberto's NASDAQ Trader]

$$$ Freddie Prinze Jr. and Chris Klein are filming "some sort of b-list ensemble cast i-bankerish movie on broad street"...Don't act like you haven't already Fandango'd your tickets. [Gawker Stalker]

$$$ "The Diary of a Future Gay Investment Banker" who enjoys "champagne with live music" and wants to "retire in [his] forties." We throw up in our mouths a little bit, you see a hole bored into the deepest, darkest crevice of your soul, Hank Paulson wonders, "How the hell did they get their hands on my gournal?!" [Future I Banker]

$$$ Advice from a criminal defense attorney. (It's like, do you honestly have the time for this kind of thing, Eddy Little? You've got a dancer to defend!) [Craigslist]

$$$ Pictures of yourselves. Congratulations to the select few who made it past "Pictures of you-". [Bankers Ball]

DealBreaker has obtained a copy of Ken Langone’s memorandum supporting his motion to dismiss the case brought against him by New York Attorney General Eliot Spitzer. Before we got this, we called Wednesday’s battle between Langone and Spitzer a “smackdown”--and we thought we were kind of joking. We were wrong. It is so on.

“Strongly worded” doesn’t quite cover it. More like biting, even sarcastic. It says that Spitzer “ignored the evidence” and that his memorandum opposing dismissal is “breathtakingly misleading.”

The Langone memo goes on to accuse Spitzer of flooding the court with irrelevant documents in an attempt to cloud the issues. “[I]t is apparent that the plaintiff’s ‘strategy’ to is to submit as many documents as possible, and then mischaracterize them, in an effort to discourage the Court even from attempting to conduct the required search for an issue of material dispute fact,” the complaint says.

“Langone has suffered through [Spitzer’s] meritless public allegations of wrong doing for more than two years. These allegations have now definitively been show to be utterly baseless,” the memo concludes.

But don’t take our word for it. Read the whole thing.

And remember, you read it on DealBreaker first.

Per today's DealBreaker Interview, below is an excerpt from Andy Kessler's new book, The End of Medicine

I was back in New York again. The American Airlines shuttle across the U.S. – another 3 mrems of radiation.

The Grand Hyatt hadn’t changed much. Same crowded sidewalk next to Grand Central Terminal. Same bustling lobby. Same set of four or five escalators up and over and up and over until you reach the ballroom level. As with every investor conference, it is filled with scurrying mice in tailored suits, all looking for the next greatest thing. And for days, every thirty minutes in six different tracks, companies endlessly pitch their golden prospects. Every damn one of them sounds like the next greatest thing, so the mice scurry some more, discuss amongst themselves and probe and prod CEOs with insightful questions until the mice are so confused, they just ask someone else what they should buy.

Ex-hedge fund guy (and DealBreaker blogrollee)Andy Kessler, author of Wall Street Meat and Running Money, recently took time to talk to DealBreaker's Carolyn Okomo about his new book, The End of Medicine, a witty, engaging examination of the heathcare industry in the not-too-distant future.

DealBreaker: Finance and technology has sort of always been your thing. In The End of Medicine, you utilize your expertise to analyze the healthcare industry. Was this an easy transition to make?

Andy Kessler: I spent 20 years looking for ever cheaper silicon that could change industries. Over the last few years, I’ve gotten bored. Wi-Fi and Wikis are cool, but a little dull. So I started looking for something else besides computing and telecom and music and stock trading and banking that technology would surround, squeeze, suffocate old business models and reshape in its image. In the meantime, a friend was diagnosed with cancer, only because he banged his head on a mogul skiing and an X-Ray showed a tumor on his neck. And a brother-in-law had a heart attack in the middle of the night. I wondered if there was some technology that could find this stuff early, before it was life threatening. Us baby boomers (I’m a late boomer at 47) are entering that fragile age.

So I started following doctors around, cardiologists, radiologists, researchers at cancer centers and universities, looking for silicon. What I found was astounding (and quite funny; I live to tell funny stories which is most of the book). It’s really just starting.

And the answer apparently is not "they remind us of things we heard about years ago but now seems horribly dated."

Levitt: Selling Cable Is Like Dealing Crack [Multichannelnews.com]

Last week we managed to simultaneously insult Wal-Mart and its fans (and the entire borough of Queens) while linking to an article by a libertarian economist defending the shopping giant against an attack in a recent issue of Harper’s Now it only seems fair to give the original Harper’s article a link too. Then we’re going to take a long walk around DealBreaker HQ and wonder when we started caring about things like fairness.

The Case for Breaking Up Wal-Mart [Harper's on Alternet]

We never know how much of Leveraged Sell-Out is truth or fiction. So much of it has the ring of truth, the smell of truth, that at best it is truth fictionalized. The events described may or may not have happened exactly like this but somewhere inside your heart you know that, well, at some point in time or another things actually have happened exactly like this.

So we bring you Leveraged Sell Out’s recent trip to Milk & Honey.

We've said it before but we'll say it again. Somewhere--and these days that usually means a courthouse--it is always 2003, the year the NYSE compensation scandal went public. Wednesday 2003 will be brought to you by Ken Langone, who will get his day in court when his lawyers argue his motion to dismiss a civil case against him. Attorney general Eliot Spitzer has sued Langone, charging that he misled the New York Stock Exchange’s board of directors in connection with the controversial compensation package of then CEO Dick Grasso, according to an item filed by Charlie Gasparino on SquawkBlog today.

Langone’s lawyers will apparently argue that Spitzer’s case against him is very weak and that the AG hasn’t found any NYSE board members to support it.

Langone to attack Spitzer in court [SquawkBlog]

Crime/Fraud/Legal/Investigations/Inquiries:
Wilson Sonsini and other Silicon Valley law firms scrutinized for role in options dating practices [legal]
Barnes & Noble too [legal]
NatWest 3 must remain in the US [legal]
FTA approves settlment with Take-Two [legal]
Two youngest Murdoch kids cut out from control of News Corp legal
Boston Communications settles patent suit for $55.3 million [legal]

M&A: [? = not yet closed, problems with the deal, lingering questions, etc.]
Giant HCA LBO: ?
AMD + ATI Technologies
AT&T + BellSouth: ?
Fiat and Credit Agricole in financing joint venture
Hokuetsu Paper Mills + Oji Paper
Wolseley + DT Grou Addax Petroleum
News Corp + Turkish Huzur Radyo TV
New York Observer in talks with Charles Kushner
Mama Group bids on Sanctuary Group
KKR + PagesJaunes
Amvescap + W. L. Ross & Company
Exco Resources + the natural gas businesses of Progress Energy

For Sale:
BOC Edwards LINK
Kate Spade LINK
Philips Electronics’s semiconductor division LINK
Emap sale in trouble over London rents LINK
North American Energy LINK
Quimonda LINK

Money Raising:
$37Partners grabs cash and Jeff Bezos LINK
Bay Area companies take in $2.24b from venture capitalists in Q2 LINK
New Enterprise Associates closes a new $2.5 billion fund LINK
Sequans Communications takes in $24 million, tripling its funding LINK

People:
J.P. Morgan’s Andrew Brindle to UK hedge fund LINK

Miscellaneous:
Skype founders plot secret “Venice Project” LINK
Consortium of start-ups look to open source management software LINK
CompassCare shuts down LINK
Buyout boom has buyout shops bidding on unexpected deals LINK
M&A deals grow while premiums shrink LINK
Ghosn makes noises to reassure Motor City LINK
Steve Case is just like the rest of us: has doubts about Time Warner & AOL merger LINK

Advanced Micro Buys ATI, Graphics Maker, for $5.4 Billion (Bloomberg)
This had been a rumor last week, but now it's on as chipmaker AMD will buy graphics-chip maker ATI in a deal worth $5.4 billion. The price represents a 24% premium over ATI's closing price, as much of the deal will be based on cash. AMD has been rapidly gobbling up share from Intel for the last year, but of late Intel has been throwing its muscle around, drastically cutting prices. Given the company's size it can afford to inflict pain on itself for longer than AMD can take. So while the markets are sure to give the deal a thumbs down, from a long-term perspective, to diversify their holdings and gain some size, the deal may be smart. The move also should give concern to nVidia, ATI's main rival, which now finds it self up against a much larger opponent.

Fewer Treasuries but More Stocks on Foreigners’ U.S. Shopping Lists (NYT)
There's a certain individual who always stalks us at parties demanding to talk about things like gold, silver, commodities, fiat currency, and the trade deficit as soon as we walk through the door. By the time we arrive, everyone else is too inebriated for his tastes. He's convinced that we're on the verge of a dollar collapse, though he's probably felt this way since Nixon took off the gold standard. Nevertheless, the Times has an interesting piece for him about the shifting composition of the trade deficit. While recently it was central banks blindly buying treasuries to keep down their own currencies, it is increasingly made up, now, of private investors buying stocks and corporate bonds. And while central banks have ulterior motives (that don't have anything to do with profit!), private investors generally don't. So the fact that so much buying of US assets is by private investors, investing in non-government securities would seem like a positive vote for the dollar. Certainly some good stuff in here to add to the mix, next time you find yourself in the same discussion.

Rate Peak in Sight, Finally (Barron's)
It's become something of a joke. We've been hearing about rate peaks for so long, it's hard to believe it when it may be close at hand. It's been like waiting at a restaurant, with slow service, and getting up to go to the bathroom every 10 minutes, hoping that when you get back the food will have arrived. And yet it never does. But maybe that's what the waiter's holding now. The markets seemed to believe it last week, as we saw a few days of powerful gains. This was in response to new Bernanke testimony before congress, in which he warned about the cost of borrowing. It may finally be close at hand. The Fed Futures are anticipating no rate hike at the August meeting. And in fact, as many have predicted, the Fed may be forced to start a cutting cycle before too long, perhaps sometime in 2007. Awesome.

Ross, Buyer of Assets, Is Selling Own Firm (NYT)
Businessmen at the top of their game -- particularly when it's the buyout game -- tend to have names like Wilbur Ross. Ross, known as a king of buying distressed companies, gutting them, and turning them in to profitable enterprises is selling his firm. W.L. Ross & Co. has agreed to be bought out by London's Amvescap, though Ross himself will stay active at the firm. In fact, the move seems strategic for the company, as opposed to a sign that they're giving up. The high levels of distressed debt, combined with rising interest rates, creates an exciting times for the company. The buyout will infuse the company with cash at just the right time. The payout will go almost entirely to Ross, though other managers at the company will be remunerated with restricted Amvescap stock.

This week's exclusive DealBreaker content, wrapped up in a neat package for your weekend perusal.

Planespotting: From naked Russians, through Donald Trump to yachtspotting.

BreakingNews: We are the first (and so far only) to report that SEC whistleblower Gary Aguirre has not been asked to testify at next weeks Senate banking committee hearings on hedge funds. Despite the fact that the banking committee has oversight responsibility for the SEC. And despite the fact that Aguirre was investigating alleged insider trading at a hedge fund when he was fired by the SEC.

Planespotting: Brad Pitt in Africa. The CIA in Canada. Just so long as everyone's priorities are right.

Reader Poll: You voted on whether or not the post 9/11 options grantees were assclowns.

20 Banker Poll: Investment bankers tell us what they think of CFOs hanging out with hookers. The verdict? Depends on the hooker!

The NatWest 3—as the three former British bankers facing Enron-related charges are popularly known—must remain in the US while they await their trial and are barred from talking to each other outside the presence of their attorneys, a judge ruled this morning.

Even defendants David Bermingham, Giles Darby and Gary Mulgrew could not have been surprised that they would have to remain in the US. After all, allowing accused criminals possibly facing decades of jail time to roam the world is not a great way of making sure they show up for trial. But what seems to have shocked the three is that they can’t hang out with each other. It seems they were even planning on living together while they awaited trial.

[More on British bankers "living together" after the jump.]

Goldman Sachs may be buying the Embassy Suites hotel in Battery Park, according to our friends at Curbed (whose powerful investigative journalism team learned about it by reading the Downtown Express). This has sparked all sorts of speculation about what Goldman plans to do with the hotel by people who don’t know that Goldman Sachs, and investment funds managed by Goldman, is already in the hotel business. And it may just be that someone at Goldman has figured out that owning a hotel near where the Freedom Tower will be built might not be such a bad investment.

Or, you know, maybe they just want to knock it down so they have a clear view of the Hudson waterfront and their New Jersey tower.
Goldman Entering 'Ugly' Downtown Hotel Biz [Curbed]

This afternoon BetonSports.com boss David Carruthers is scheduled to have a bail hearing, although prosecutors are asking the judge to keep him in jail until his trial, according to the BBC. Carruthers was arrested during a layover in the US while returning to his home in Costa Rica from his online gambling company’s annual meeting.

We're told that this story is getting a lot of play in the UK, coming so closely after the extradition of the NatWest 3. There's a growing impression, it seems, that the US legal system is on an out-of-control anti-business terror.

Gaming boss due US bail hearing [BBC]

The "Ken Lay" who blogs over at KenLayLives.blogspot.com is none too happy with the t-shirt selling site KenLayLives.com.

Some bastards registered a domain name ripping off the clever, catchy name of my blog. What's more is they are selling t-shirts to profiteer off of my tragedy. Can you imagine somebody viciously making buckets of money at the expense of others? I cannot. Oh, the humanity! But remember, this is the world's only "official" website giving you updates of my life in exile. Those sycophants at www.kenlaylives.com will NEVER receive my endorsement or help.

Update: KenLayLives.com seems to have died. Or maybe exceeded its bandwidth limits. In any case, rumors are already circulating that KenLayLives.com hasn't actually died. It's just in hiding somewhere.

Ken Lay Lives!!! [kenlaylives.blogspot.com]

The SEC plans to take Morgan Stanley chief John Mack’s deposition in its inquiry into claims of insider trading at Pequot Capital, according to CNBC’s Charlie Gasparino. Former SEC investigator Gary Aguirre has alleged—repeatedly and under oath—that he was fired after he attempt to subpoena Mack during his investigation of Pequot’s trading. Mack was briefly chairman of Pequot Capital before he returned to Morgan Stanley last year.

Mack to testify to the SEC [SquawkBlog]

Steve Sailer discovers the secret of Google's money machine--its highly intelligent Adsense algorithm for assigning ads to websites. For instance, right now isteve.com is running the following ad:

Beirut Hotels Last minute, discounted hotels in Beirut. Rates up to 70% off! www.hotelbrowser.biz

Why Google is worth a 100 gazillion gigabux [isteve.com]

Crime/Fraud/Legal/Investigations/Inquiries:
Two charged in Brocade backdating case [legal]
Enron case against Barclays dismissed [legal]
Judge rejects motion to dismiss in ATT privacy case [legal]
Heinz expands board amidst proxy fight [legal]
Lawsuit targets may use discovery orders to tie up Millberg Weiss [legal]
Air France-KLM under investigation [legal]
Ex-CFO of HealthSouth ordered to pay $6.92 mm [fraud]
Judge rules KPMG tax shelter is legit [legal]
Merrill Lynch must pay at least $495,000 to PA couple who sued over analyst’s work [legal]

M&A: [? = not yet closed, problems with the deal, lingering questions, etc.]
Wilbur Ross + Lear auto parts assets
Kohlberg & Company + Niagara
New York Board of Trade + IntercontinentalExchange: ?
HSBC + Grupo Banistmo
Toyota + General Motors
Addax Petroleum + Pan-Ocean Energy
Inco will remove poison pill as hostile bidders close in Link
Insight Enterprise + Level 3’s Software Spectrum
Conde Nast + Nutritiondata.com
Varig Logistica + Varig
Planar Systems + Clarity Visual Systems
Bank of North Carolina + SterlingSouth

For Sale:
Two step plan to sell Verizon yellow pages unit LINK
Pension Benefit Guaranty Corporation won’t prevent sale of GMAC LINK
UK to sell stake in British EnergyLINK
NYMEX IPO may be a tough sell LINK

Money Raising:
Eliot Spitzer raised $11 mm LINK
Bârrx Medical raises $27.8 mm LINK
Hedge Funds took in $42b of new money in Q2LINK
Hertz Europe and Europcar Groupe plan to sell car back bonds LINK
Investors scramble for China IPOs LINK
Softbank plans to borrow $12 billion for acquisition of Vodaphone unit LINK

People:
New production head at BMW LINK
Voyager Capital founder resigns LINK

Miscellaneous:
Yukos blames western banks for its demise LINK
Online gaming IPO going ahead despite BetonSports arrests LINK
ATT and Metro-HiFi submit wireless bid for Riverside LINK
NewPage Holdings postpones IPO LINK
Microsoft announced a $40 billion share buyback LINK

The Chicago Tribune reports that the gays are all about internet banking.

When deciding where to conduct business, 60 percent of gays say it's very important that a financial institution provide service through the Internet, compared with only 50 percent of heterosexuals, according to a survey released Monday by Harris Interactive and Witeck-Combs Communications.

Profit Lags as Microsoft Spends to Meet Competitors (NYT)
It's been awhile since Microsoft had any good news for the street. For years the company's flat-lined as promises of growth always seemed to be one year around the corner. Well, the company still isn't growing on the profit front. Major costs related to the XBOX bit hard into the company's typically fat margins. But revenue was up a solid 16% over the previous quarter, and the company announced huge buybacks over the next several years, which investors always seem to like. For 2007, it pegged its forecast at the high end of analyst expectations. The news was taken well, as the stock rose over 5% after hours.

SEC May Scrap 'Couric' Rule On Pay Disclosure
Those in the entertainment business often align themselves against the evils of big business, though of course most of them are as money-hungry as anyone else. It finally took the SEC to expose this, when it put forth executive disclosure regulation that would have required not only CEOs to disclose their pay, but also high-paid actors and entertainers. This of course infuriated Hollywood, which no doubt resented seeing actors lumped in with CEOs. Companies also claimed that it would be bad for business, to have to expose trade secrets in this way. The rule became known as the Katie Couric rule, as it would have certainly exposed how much money she's making. It appears now that the Katie Couric law will be scrapped, much to the delight of, well, Katie Couric among others. The reason given for the change is that the law is supposed to help investors measure 'pay-for-performance'. But considering how significant the pay of actors is, and how much doubt there is about an actors ability to turn a film into a hit, it would seem this is a legitimate 'pay-for-performance' issue.

Google Piles On Profits (San Jose Mercury News)
While Microsoft showed promise in the same way someone with a broken leg shows promise when they finally go into physical therapy, Google simply continued its sprint. The company blew past expectations yesterday -- almost as expected -- as it continues to take up market share from internet rivals. This of course sent the analyst community into a lather, as they danced all over each other to talk about how great Google was, and how good this quarter was, and how good they expect the next quarter to be, and how they're kicking Yahoo's ass, and how they might kick Microsoft's ass, etc. It was actually a little embarrassing to watch.

Boeing chief shows his caring side (Airline Business)
Typically the two companies are at each other's throats, but given the trouble that Airbus is having, even Boeing is stepping in with some words of encouragement. If we were in Boeing's shoes, we'd of course be gloating. But Boeing veep Alan Mulally said at a press conference, "Don’t give up... New airplanes are hard…we have a lot of compassion with what they’re going through." That's honestly one of the nicer things we've heard in business, and during cold times such as these at Airbus, it has to make them feel a little better.

We’ve always liked Richard Russell, the author of the Dow Theory Letters, the way we like that drunk old man down at our local watering hole. They’re both always full of bad news, telling us we’re wasting our money, not saving enough and generally headed for trouble. We try to ignore them but somewhere deep down we know they’re right.

Today Peter Brimelow pens a birthday card to Russell, who turns 82 on Saturday. He quotes a particularly "wise old man at the end of the bar" bit from a recent Russell piece.

The big picture that Russell has been writing about for several years is the move back to 1970s style-stagflation. As he put it Wednesday:

"I'm afraid that we're very close to major trouble in the stock market. ... If you can't understand the basic deflationary background of the current situation, I don't think you can understand what's occurring. In my opinion, at this point, if nations don't inflate enough -- they'll find themselves giving in to the forces of deflation. The massive debt position in the US is basically deflationary. All this debt must be serviced, and as rates rise, it takes an increasing amount of money to service the debt. ... I'll be most interested to hear whether Bernanke in his session with Congress indicates that he may boost rates again. Raising rates would be a mistake in the face of the weak real estate market and the problems of the cash-strapped consumers."

The Economist, Forbes and Fortune all gained advertising revenue last month, while Business 2.0, Business Week, Fast Company and Money all were left singing the summer time blues, according to Talking Biz News.

We'd make a joke here but our ad sales team has instructed us that declines in business media ad sales are no laughing matter. Hey, did you know you can take a helicopter to JFK now?

Declines in ad revenue for Business 2.0, BusinessWeek and Money in June [Talking Biz News via Gary Weiss]

The Onion, a satirical paper based in New York and given away free in dive bars, is denying rumors that it is in negotiations with Viacom, an entertainment company based in New York that doesn’t give away very much for free at all.

This important story broke in Madison, Wisconsin's Capital Times. Unfortunately, our subscription to the Capital Times lapsed, so we didn't hear about this until we read it in DealBook. Andrew Ross Sorkin presumably starts every day reading the news from Madison.

Doug Moe: When Spillane cased Madison [The Capital Times via DealBook]

Today’s jumping off point: Old Russian Men. And more specifically, the following question—Ruskies: do they exist only to sit scantily clad in bathhouses of the same nationality, looking all hot and bothered and good enough to eat whilst they swill vodka with their fellow Commies, or are they latest and greatest Trendspotters, here to save us from the abominable snowman that is Demetri Martin? Delicious as the old Reds appear—and very well might be—, the consensus here in the DealBreaker janitorial supply closet (where this column is penned) is that we are going to have to go with the latter. (If “C. All of the above” were available, we’d go with that but it’s not so enough with the ballyhooing and let’s get on with it). So, the Commies: whatever they touch apparently turns to gold. And who have the Borscht Boys (BB) chosen as their team-captain? Only the most awesome, rad, two-time Tiger Beat pinup that is Roman Abramovich, of course. Romy-boy, oil billionaire and owner of the Chelsea Football Club, recently piloted his private jet to the coast of Croatia and it’s all the glossy weeklies can do not to get their panties in major bunch, what with the coverage they’ve been bestowing on the previously war torn land, calling it "The new Riviera” and engaging in editorial masturbation via lines such as “From the quay we stepped back on to our yacht and with Andrija, our local skipper, at the helm we motored out of the harbor, unfurled the sails and set off into the Adriatic. A couple of hours later we had moored in a cove on the neighboring island of Vis, swum in water that was bluer and clearer than any I had seen in the Med, and were enjoying a lunch of Dalmatian cheese and smoked ham, peaches, nectarines and cherries under the shady awning on our deck.” BB-in-training John Malkovich was also recently spotted jetting down to the new hotspot, but we doubt there was much fraternizing with Rom-ski, as Malkovich took, get ready for this—a commercial flight. It’s things like that that a person never really bounces back from. (Little research was performed to ascertain whether or not JM is actually Russian but we saw his performance as the Oreo-loving poker player in Rounders and, while the Academy may have chosen to snub him, we will forever and always salute him as the tracksuit-wearing Commie that is “Teddy KGB.” Get on board or not, we really don’t care. But it’ll be on your conscience, not ours).

This afternoon on Bloomberg's financial news cable station Stephen Roach, aka Wall Street's worst economist, asked, "Will the real Ben Bernanke please stand up?" The Morgan Stanley economist then added that the Fed chairman has a "credibility issue."

Over on Crossing Wall Street, Eddy Elfenbein explores the deeper meaning of Roach's comments.

This raises two important questions.

1. What the fuck?

2. No, seriously...what the fuck?

CNBC's SquawkBlog is reporting that former Brocade CEO Greg Reyes will be indicted on criminal charges by federal prosecutors and charged with civil securities fraud by the SEC this afternoon. The SEC and US Attorney's Office will hold a joint press conference at 2 PM California time, according to a SquawkBlog item penned by Charlie Gasparino. It had earlier been reported that Reyes might be the first corporate executive face charges stemming from alleged backdating of options grants.

Greg Reyes Indictment Today
[SquawkBlog]

Crime/Fraud/Legal/Investigations/Inquiries:
Yukos boss steps down; expects company will be liquidated [legal]
Two bidders offer $1M DIP for bankrupt kiddie bookmaker [legal]
Visa and Mastercard face Congressional probe on pricefixing [legal]
Accounting boards rethinking lease accounting [legal]
WTO investigating US rules on online gambling [legal]
Defense attorneys win delay in KPMG tax shelter trial [legal]
Televisa sues Univision over internet broadcasting rights [legal]

M&A: [? = not yet closed, problems with the deal, lingering questions, etc.]
Cramer Systems + Amdocs
Robert De Niro + New York Observer

For Sale:
Bertelsmann narrows bidders for music-publishing arm LINK
GUS to spin off its Experian credit information group LINK
Footlocker LINK
Essent Kabelcom LINK
Longview Fiber assets LINK
Shoney’s LINK
Lyondell’s Houston refineryLINK

Money Raising:
EnteroMedics nabs $45.2 mm LINK
Lux Biosciences pulls in $13 mm more LINK
Daqin Railway raises $1.9b LINK
$21 mm for Summit LINK

Earnings
Macquarie Bank forecasts record LINK
Wachovia: challenging yield curve enviro LINK

Miscellaneous:
Talk of GM-Renault-Nissan deal ruffles feathers in Motor City LINK
Sumner Redstone says his stock sales do not reflect a lack of confidence in Viacom LINK
Rambus plans to restate financials for past three years to correct options timing LINK
SOX pushing IPO capital into Europe LINK
Private equity: From pillagers to darlings LINK

Okay. Maybe she’s not your grandmother. She might not be anybody’s grandmother. But she was 95 years old, and Ken Lau pleaded guilty late Tuesday night to taking Carrie Cummins to the tune of $321,648. Prosecutors say he’ll get one to four years.

Stockbroker Admits To Stealing $320,000 From 95-Year-Old Client [Associated Press on WNBC.Com]

Despite the autopsy, Ken Lay was recently spotted in a New York area airport.

Don't check the casket. I know he's back. When I saw those lights flickering out at La Guardia Airport yesterday and heard the eerie shrieks and moans in the dark, broiling subway tunnels, I just knew it: Ken Lay's alive! We can see his spirit in every flickering lightbulb from Kansas to Queens as we head into America's annual Blackout season.

So they cut up the corpse of ex-Enron CEO Ken Lay and discovered that he had serious cardiovascular problems. Two stents were propping open his arteries, three of which were 90 percent blocked anyway.

The most interesting part of the story is the little details about Lay’s last moments.

The report said that Lay had awoken at about 1 a.m. on July 5 at the rented vacation home in Old Snowmass, Colorado, and spoke to his wife, Linda, before going into the bathroom. He was found dead on the bathroom floor.

On SquawkBlog, Charlie Gasparino expands on his reporting on the possibility that former Brocade CEO Greg Reyes will find himself the defendant in the first options backdating case brought by the US government.

The big question is whether Reyes, who resigned from Brocade more than a year ago, will be charged criminally by the US Attorney's office. Lawyers and representatives for Reyes say that last week they made a last-ditch attempt to get prosecutors to back off during a lengthy power-point presentation made to the US Attorney in San Francisco. According to people with direct knowledge of the presentation, Reyes' lawyers argued that he had little accounting knowledge - he was predominantly a salesman, and even though he had control over the granting of options, Reyes wasn’t conscious of the fact that he was doing something potentially illegal. Further, his attorneys claimed that Reyes relied on the accounting expertise of the company’s CFO and audit committee to serve as a check in his options granting practices.

Talk of Automaker Alliance Makes Michigan Uneasy (NYT)
You'd think that batterred GM shareholders would have it in their best interest to look closely at the terms of any Renault hook up. But any deal involving an iconic, manufacturing belt behemoth is necessarily going to draw a lot of interest from politicians, all of whom would like to weigh in on the deal. And of course, their financial expertise isn't usually top notch. Here's Michigan Rep. John Dingell doing his due diligence: “My daddy used to say if it sounds too good to be true, it probably is. As of this time, I’m applying this useful lesson of caution.” Is that a position John? Of course, the memories of Chrysler, which many feel was robbed from Michigan by the Germans looms large in the minds of politicians. And of course, though many feel that the only way for GM to survive is to restructure their labor contracts, politicians want assurances that there will be no jobs lost... and this is where politicians and shareholder might not see eye to eye.

YUKOS CEO quits before "sham" meeting (Reuters)
The CEO of Yukos, who's understandably frustrated about what's happened with his company, has finally had enough. Yukos was to meet with creditors tomorrow about re-arranging its billions in debt (much of it still in back taxes to the Russian government), but it was clear to Steven Theede that the meeting would be a sham, and that the creditors were bent on the destruction of the company, not in seeing it actually restructure. Of course, the liquidation of Yukos couldn't come at a better time for its nemesis, Rosneft. Rosneft happens to have a few billion laying around from a successful IPO, and would love to get its hands on more Yukos refining assets, which will be sold off. At this point, it seems they might as well take everything.

Wal-Mart Healthcare Law Is Struck Down (LA Times)
Wal-Mart won a major court case yesterday, as a judge rejected a Maryland law requiring the employer to spend at least 8% of its payroll on healthcare. Well, the law wasn't directly about Wal-Mart, just any company that employed 10,000 people in the state... which was only Wal-Mart. When reading the tea leaves for the company, laws like these were seen as one of the biggest threats, as other states might have become interested in passing something similar. With any luck for them, the court's rejection of this will cause other states to think twice.

Looking to party some more
There's always that awkward moment at the party, when everyone's out to go and then someone stands on the table starts chanting "keg stand". And what's worse is when your ride home starts cheering, and you know you're gonna be stuck there for another hour or two. So we had a good day yesterday; that was nice. Then we got some earnings which were just ok. Apple was good, but they're a unique story. eBay didn't do terrible, which was a relief. Intel, not so much. So to hope that this collection of ho-hum earnings will fuel the party on feels like it's pushing it. Maybe it can happen, but we wouldn't want anything to get awkward.

We swear when we started reading this article we thought taxistutes were some kind of tax substitutes.

Picture this situation: NYC business man, stuck in an NYC cab in the middle of NYC. There is no way he will make it to that meeting downtown with Skadden Arps, where his boss is waiting for him, judging him, and mentally trimming his bonus by the second. His Thomas Pink shirt feels like a $200 noose and his $ sign cuff-links look more like hand-cuffs. Stressed, lonely, rich and surrounded by ethnic people listenting to bad music - what this man needs is a good hooker. But he’s stuck in traffic, in a cab! What can he do? Where can he go? If only someone could provide him the service he needs then he could just nut right there in the back seat and feel like a man again. Enter the Taxistute.

Taxistutes would drive around soliciting “rides” for targets who would be screened to have high conversion rates to whoring services (men with money, men without money, men with pulses, Charlie Sheen), then, mid-transit they would proposition the customer.

Disruptive Businesses: Taxistutes [Long or Short Capital]

Update: This reminds us of an event that occurred on our way home from a party in Williamsburg last night. [More on that after the jump.]

SEC Chairman Chris Cox took Senator Richard Shelby’s baby away, swearing in longtime aide Kathleen Casey as an SEC commissioner. Casey has served Shelby in one capacity or another since graduating from George Mason’s law school. In May she was nominated by President Bush to the SEC.

The recent resignation of Casey’s predecessor has left many SEC watchers unsure of where the commission will come out on some high-profile issues, such as backdating and hedge fund regulation. On backdating, however, Senator Shelby’s harsh criticisms—he recently referred to the practice as “fraud”—may reflect the views of his staffer, to whom the senator reportedly often deferred on complex financial matters.

[Note: The woman pictured above is Kathy Casey, a model with the Nevada casting group. As far as we know, she is a different person from the new SEC commissioner entirely. We couldn't find a picture of the other Casey and thought the item looked prettier dolled up with this one.]

Casey Sworn in as SEC Commissioner [fednews-online]

The Senate banking committee, which has oversees the SEC, announced yesterday that it will hold a hearing on July 25th to discuss hedge fund regulation. There are no details yet available and the witness list has not yet been published.

We’re told, however, that the hearing will be focused on regulatory oversight in light of last month’s federal appeals court ruling throwing out an SEC rule that required hedge fund managers to register as investment advisers and yield to SEC inspections. Which is to say, the hearings are expected to be less explosive than the hedge fund hearing held by the judiciary committee.

As of earlier today, the Banking committee has not called SEC whistleblower Gary Aguirre to appear as a witness, according to Aguirre’s attorneys. Aguirre made a splash at the judiciary committee hearing with allegations that he had been fired for attempting to subpoena a senior Wall Streeter during an investigation in alleged insider trading at Pequot Capital.

Senate committee sets hearing on hedge funds [Reuters on ABCNews.Com]

Well, the dog biscuit jar anyway. Word just came in that the SEC is freezing accounts of certain investors involved with last weeks sale of Petco. We're seeking confirmation.

Developing…

Update (one minute later): Developing Fast!

Here’s Reuters on the story.

The U.S. Securities and Exchange Commission said on Wednesday it obtained a court order freezing the assets of certain unknown purchasers who bought call options of Petco Animal Supplies Inc. (PETC.O: Quote, Profile, Research) stock ahead of news that the company would be acquired for $1.8 billion. The SEC said one or more purchasers engaged in illegal insider trading by buying more than 1,400 call option contracts for Petco in late June and early July 2006.

We can't say for sure when the last time we ever actually stepped inside a Wal-Mart was. There's one coming to Queens in 2008 but we can't say for sure when the last time we actually went to Queens was, either. So that's not much help.

So maybe that's why we don't get why so many pointy-headed types seem to loathe Wal-Mart. Which is too bad, because according to Thomas DiLorenzo, Wal-Mart's enemies are "running out of reasons to hate Wal-Mart."

That's one bandwagon that totally passed us by.

Should Wal-Mart Be Broken Up? [Mises.Org]

The Street.Com's Matthew Goldstein and Lauren Rae Silva report that Ira Chilowitz, the former Morgan Stanley consultant charged with stealing confidential information from Morgan Stanley's prime brokerage group is said to have passed information on to a former director of S3, a three year old hedge fund consulting firm founded by former Credit Suisse prime brokerage head Robert Sloan. The co-conspirator has not been charged.

Here's the nut graph from TheStreet.Com:

Prosecutors in Manhattan did not identify either the co-conspirator or the firm. But people familiar with the investigation confirmed that the firm is S3 and that the unidentified co-conspirator is a former director. These same people say the former S3 director, who previously worked in Morgan Stanley's prime brokerage group, was recently fired.

We should note that prosecutors have not alleged wrong doing on behalf of founder Bob Sloan, pictured above left, or S3 Partners itself. An earlier version of this item claimed that Chilowitz had also been an employee of S3. We're told by S3 that this was wrong, and Chilowitz never worked for the firm. We apologize to our readers and S3 for the error.

We still don't know the identity of the former S3 director alleged to have conspired with Chilowitz.

Adviser Eyed in Morgan Stanley Theft Probe [TheStreet.Com]

Our People [S3 Partners]

Yesterday The Big Picture’s Barry Ritholtz challenged three other business/finance bloggers to start an “9/11 Options Grantee fund."

Now we have their responses.

Larry Ribstein: “Clever ploy, Big Picture, but it doesn't work.”

Steven Bainbridge: “Ditto.”

Eddy Elfenbein: "So Barry, but I won’t bite."

Also, you can check what DealBreaker’s readers think of the post-9/11 options grant here.

Here in New York CIty, we have friends who were praying for a blackout yesterday just so they could get out of work. The Israelis are made of tougher stuff.

Workers at Iscar, the Galilee company recently purchased by American investor Warren Buffet, are angry for being locked out of work because of the war, despite promises that the factory would not be closed. Management shut down the plant after Katyusha rockets hit nearby areas last week.

Jeff Matthews imagines how Yahoo prepared for last night's earnings call.

“Now, how should we spin this delay?”

“I was thinking, ‘We are disappointed but remain upbeat’?”

“‘Upbeat’ is good, but ‘disappointed’ is bad. Very bad.”

"Right. ‘Disappointed’ is extremely bad. How about ‘We are cautiously upbeat’?"

“No—‘cautious’ is bad.’ They hate ‘cautious.’”

“Right. Hate ‘cautious.’ And ‘upbeat’ sounds trite. How about ‘Pleased’?”

“Better yet, ‘Extremely pleased….’”

“‘We are extremely pleased…’”

“And repeat it at least three times, just so they get it.”

Crime/Fraud/Legal/Investigations/Inquiries:
11 charged in online gambling case [legal]
Martin Broughton not questioned in BA case [legal]
Northwest Airlines asks bankruptcy court for $1.125 B [legal]
Gregory Reyes to face criminal charges [legal]
Medtronic settles with $40 mm [legal]
Copyright suit filed against YouTube [legal]

M&A: [? = not yet closed, problems with the deal, lingering questions, etc.]
Archstone-Smith Trust + Westmont
Televisa + Univision
Ashtead Group + NationsRent
PA Real Estate Investment Trust + Strawbridge & Clothier
L Capital + Piazza Sempione
AIG Highstar Capital + Advanced Disposal
Berkshire Hathaway + American All-Risk Insurance Services and American Commercial Claim Administrators
Ochsner Health System + Tenent Healthcare
Amdocs + Cramer Systems Group
Tyco Int'l + Confluent Surgical
Xstrata + Falconbridge (still)
NYSE + MatchPoint Trading

For Sale:
Huaxia (postponed) LINK
Peter Cooper Village and Stuyvesant Town ? LINK

Personnel
US Bancorp's Jerry Grundhofer to retire LINK

Money Raising:
Industrial and Commercial Bank of China to raise $14 B in IPO LINK
WNS looks to raise $208.6 mm in IPO LINK
Ascent Solar Technologies raises $16.25 mm in IPO LINK
Newnham Technologies raises $13.25 mm LINK
$1 B for MidOcean Partners' new fund LINK
Omeros raises $44 mm LINK
$50 mm for Virgo Capital LINK
$21 mm for SkyPilot Networks LINK
$18 mm for Jobster LINK

Earnings
2nd quarter profits for JPMorgan = good LINK

Miscellaneous:
Robin Saunders makes first private equity venture LINK
Rosneft shares below offer price LINK
Cheesecake Factory reviews stock options LINK
Rochas to close after fall season LINK
New EADS heads promise repairs LINK
Pending IPO for Shutterfly LINK
Lower premiums at M. Lynch LINK
Saudi Prince Alwaleed bin Talal/shareholders annoyed with Citigroup LINK
New auction date for Viação Aérea Rio-Grandense LINK
HCA buyout deal falls apart LINK

Coke Beats Analysts’ Estimates, Helped by Growth Overseas (Reuters)
Every quarter it's pretty much the same story for Coke. The company claims that its days of growth in the Western world are long gone, and that it needs to dial into the developing world in order to grow. Of course, if they are going to show growth in developed economies, it has to be on the backs of non-carbonated beverages, like water or sports drinks. One problem is that nobody in their right mind would choose Powerade over Gatorade. Another problem is that Coke is really good, and no water can compare to it. So that's pretty much the deal once again. Though the company would like to remake itself into a conglomerate that sells bottled water as much as it sells CDs and music videos, it's not happening anytime soon. Maybe though, whatever that secret drink those guys tried selling to Pepsi was, will finally be the next breakout hit for the company.

BetonSports stops taking bets (The Register)
In accord with the arrest of its CEO, BETonSPORTS has stopped taking bets, as of late last night. The publicly traded UK company has seen its world implode this week, as its boss was arrested in Texas for running a business that is perfectly legal in the country where it's being run and operated. Though the law is rather murky, the US has decided that its legal tentacles extend well beyond its borders. Stop and imagine for a moment if an American were arrested in China for running afoul of the country's anti- free speech laws. Perhaps we've even said a few things that would be illegal in some country. The media and our government (hopefully) would have a fit.

Reed Concedes Georgia Lieutenant Governor Primary to Opponent (Bloomberg)
Normally, we'd try to stay away from the whole politics thing, but there are those that see big, national political trends as somehow being important to the market and the economy. And so occasionally, when something stands out as being significant, it seems worth covering. Last night Ralph Reed (remember him?) lost his battle for the Republican nomination for the Lt. Governor of Georgia. Why is it a big deal? Because Reed was seen as a likely winner, until his campaign got derailed over a prior association with Jack Abramoff. Because it was the primary, it's not obvious that the issue would cause voters to switch parties, but it's the first indication that voters are paying attention to the issue. So come the general, look for Democrats to bring up that name a lot, and pound away.

Kill-the-penny bill introduced (CNNMoney)
If you'll recall, a few weeks ago famed monetary historian Kevin Federline signed a petition to save the penny, saying "I feel good about the penny". It was a Virgin Mobile publicity stunt, but still sent shockwaves, particularly at a time when the government is losing money on every penny it presses out (to the tune of $0.004). Well, now K-Fed's bete noir, Arizona Rep. Jim Kolbe, has re-introduced legislation to kill the $.01 piece, and demand that all prices be rounded to the nearest $.05. Kolbe's been on this kick for years, and every session it never goes anywhere. But could it be different this time around, now that the the Fed's precious seignorage isn't a factor? We shall see, but at the moment it looks like Jim Kolbe and Mr. B Spears are going to have to rumble.

Texas strippers, a roman a clef, Leonard Cohen, financial structures that resemble the London Underground, transcontinental travel and greedy Brit bankers reaching for giant bonuses. The Observer may have just published the perfect financial scandal article.

The bankers, the big deal and the taint of scandal [The Observer]

They should get some sort of medal for finding the creepiest, lamest ever way to use the internet to appeal to kids. If this works we're never trusting anyone under 18 again.

Desperate to appeal to teens with something other than pencils and backpacks during the crucial back-to-school season, Wal-Mart is launching a highly sanitized, controlled and rather unhip site at walmart.com/schoolyourway. Teens are invited to create their own page, "show it to the world and win some fab prizes," including a chance to have their videos appear in a Wal-Mart TV commercial. Wal-Mart's agency is GSD&M, Austin, Texas.

The opening page shows video of four teens -- a bubbly fashionista, a Texas football player, a quirky skateboarder and an aspiring R&B singer from New York -- who are clearly actors reading a script, although the videos are positioned to appear authentic. Within, there are pages such as "Beth's Backyard Club," where you find a picture of her in a strapless prom dress above the approved quote: "I'll school my way by looking hot in my Wal-Mart clothes to school to catch a cute boy's eye. ..."

Paul Schapira, a long time Goldman Sachs veteran who took over the firm’s natural resources group in 2002, is going to Morgan Stanley where his responsibilities will include relations with Italian clients and the European energy sector.

Schapira gained a good bit of notoriety when he worked on the initial public offering of PetroChina, the oil-and-gas behemoth spun off of China National Petroleum Corp. The deal became controversial when a coalition of pro-tibet tree-hugging hippies, Lutherans concerned over the company’s investments in Sudan, and unions seeking to keep China out of the World Trade Organization, sought to scuttle the deal. Several U.S. institutional investors declined to participate in the IPO, although Goldman succeeded in selling the shares to overseas investors.

We’re trying to find out how recently Schapira left Goldman. The newswire stories are a bit ambiguous about this, and we neither Goldman nor Morgan Stanley have gotten back to us. The reason it matters is that we’re trying to determine if this can reasonably be called a defection and whether it is fair to infer that Schapira’s move may be related to the “fighting like ferrets” that allegedly went on among the Goldman bigs following the decision of Hank Paulson to take the position of Treasury Secretary. If you know anything send it to Tips(at)DealBreaker(dot)com or drop them below in the comments.

Morgan Stanley hires energy banker from Goldman [Reuters]

Brad Pitt’s been looking himself in the mirror a lot lately* and saying “When in Rome.” The actor, 42 and starting to get something of a gut, who was until last year known for his love of architecture, poetry, and a glass of scotch, has been adopting the “do good” habits of his home-wrecking-there’s-a-pink-elephant-in-the-room & it’s-the-fact-that-you-used-to-wear-a-vial-of-Billy-Bob- Thorton’s-blood-around-your-neck girlfriend. Bradsky, or Whipping-boy, My Whipping-boy, as Angelina likes to call him, recently flew down to New Orleans to check in with Global Green USA, a new architectural project that is hoping to help the environment by saving energy. Namibian orphans it’s not, but the old boy’s got to walk before he can run. Hoping to prove to Angela that he’s worthy enough to pick up her kids from daycare—in a “We’re not worthy! We’re not worthy!” sort of way—Brady-boy appeared on the Today Show to garner some support for the cause by discussing his findings. After making some elucidatory points—“It’s bad down there”; “It’s really wet and stuff”—Pitt went on to talk about how freaking kick-ass Shiloh Nouvel—his only tangible link to Angelina—has turned out to be. “Having kids is really the most extraordinary thing I’ve ever taken on,” the Oklahoma-native proclaimed. “Man, I got kids now. And it really changes your perspective on the world. [You got a pet, you got a responsibility. If your dog is lost you don’t look for an hour then all it quits. You get your ass out there and you find that fucking dog.]” BP, who’s thisclose to becoming a fully licensed pilot like the Jol-ster, also noted that “Man, if I can get a burp out of that [baby], that little thing, I’ll feel such a sense of accomplishment,” which is a fair enough statement if you’ve ever seen Meet Joe Black or The Mexican. We feel like it’s only logical to assume that Mr. P then said to interviewer Ann Curry, “Shoes; that’s a funny word. Shoooooes.”

The story of SEC plans to launch the first options timing case continues to bend and wind. Yesterday CNBC’s Charlie Gasparino was the first to have the story that the SEC was said to be ready to launch its first backdating case in the form of a civil suit against Brocade Communications, or possibly its former CEO Gregory Reyes, according to various lawyers familiar with the case. Later in the day, the Dow Jones wire ran with the story that SEC commissioner Chris Cox had said SEC would have an announcement "very soon" about civil charges, although Cox declined to name a company or provide a more specific date. This seemed to confirm the notion that a civil case was on its way but probably not a criminal case. (Gasparino's piece, however, left open the possibility of criminal charges coming down as well-, noting that Reyes' attorneys had met with federal prosecutors but were "cautiously optimisic" that their client wouldn't face criminal charges.)

Now the Wall Street Journal is reporting it both ways. According to some Journal source, “federal prosecutors have warned the former chief executive of Brocade Communications Systems Inc. that he could face criminal charges related to stock options timing practices at the storage-networking firm, according to a person familiar with the situation. According to others, however, the SEC “is expected to file civil charges in the Brocade matter but wouldn't say whether it was against the firm or individuals.”

So we can thank the Wall Street Journal for clearing that up for us.

Michelle Leder, of Footnoted.Org, reads the SEC filings of public companies so that you don’t have to. Today she’s read eBay’s recent 8-K, which reveals the online auctioneer is giving its CFO Bob Swan up to $700,000 of assistance if he cannot sell his Plano, Texas home for at least $3 million. Her suggestion: why not list Swan’s home on ebay, which currently has zero homes for sale in Plano. Maybe Swan doesn’t think real estate sellers get good value for their homes online?

Here’s an idea… [Footnoted.Org]

The ever delicate blogger T.A.N. explains a recent Washington Post piece on the “race savings gap”:

So, it would figure that higher-income African Americans are also newly higher-income African Americans. And perhaps they read the WSJ, but there's still a nagging in the back of the head, a lynched negro hanging from a tree telling them that anyday now an old white man is going to bust into their house and say, "HAHA! We got you ni**a!!! Suckers. Just colored suckers, all of you!! *pulls out three fruity lollipops for ironic effect* You fell for the old 'buy & hold' Melanin-Man. Sheeeit, that's the oldest caucasian-con in the book. You give us your money, and we'll hold it for ya. HAHAHA!!! Well back to poverty with you negro. Black Tuesday bitches. Dems the breaks. You read the fine print. 'Past history is no guarantee of future results.' Game over son. Yeah that's right, we're gonna continue to appropriate the cool slang from your culture too ... SON! All us caucasoids are gonna split up your money. Here's a 'Ken Lay Is Still Alive' t-shirt for your trouble."

And thus you get:
"Black investors have focused on real estate and have not incorporated the stock market to the same degree as their white counterparts," said Lisa Toppin, director of human resources and diversity programs for Schwab.

They Say There's A Stock Market, But My GrandPappy Says If You Can't Touch It, You Can't F*ck It [T.A.N.]

The Race Savings Gap [Washington Post]

The debate about 9/11 options grants just got more interesting. Over at the Big Picture, Barry Ritholtz lays down a challenge. He wants Professor Bainbridge, Larry Ribstein and Eddy Elfenbein—who have defended the grants—to put their money where the mouths are—in a 9/11 Options Grantee Fund.

Let's assemble the 9/11 Options Grantee fund (that's a catchier title than the "Apologist Fund"). Then, I propose that Bainbridge and Ribstein and Elfenbein put their actual money at risk with this collection of fine, fine human beings and outstanding corporate executives.

I say less talk, and more actual money at risk.

Its time for the chattering class to step up and prove they have the right stuff. Few things focus the mind like hard earned cash at actual risk. Under those circumstances, will the apologisms somehow become less glib than the what we have seen so far? (That's my suspicion).

Crime/Fraud/Legal/Investigations/Inquiries:
Rambus's $307 million patent infringement award nixed [legal]
'The floatation of Rosneft shares against the law,' says LSE and British regulators [legal]
C.E.O. of BetOnSports arrested for racketeering conspiracy [crime]
$193 million balance from class-action suit against PNC approved by federal judges [legal]

M&A: [? = not yet closed, problems with the deal, lingering questions, etc.]
Phelps Dodge + Inco; investors unhappy
EMI Group + Warner Music?
Inco Xstrata + Falconbridge?
3M + Security Printing and Systems
Vivendi + 56% of France Telecom's yellow-pages PagesJaunes

For Sale:
BMG
Verizon Communications‘ yellow-pages unit
AOL UK Internet access business
Audio content distributor Audible?
Lions Gate?

Money Raising:
Industrial and Commercial Bank IPOs could hit $21billion $$$$
ShopWiki makes $6.2 million for intern'l expansion $

Earnings:
V.C.'s bank $11.2 billion for future investments in second quarter LINK
Merrill Lynch's second quarter earnings top Wall Street projections at $1.6 billion LINK
BlackRock makes $53.3 million in second quarter; up 18.9% LINK

Miscellaneous:
Greylock Partners to invest in Israeli tech start ups LINK
Merrill Lynch's global staff increases LINK
Break-up fees: good or bad? LINK
Intel denies plans to make IPO of shares for its memory chip business LINK
V.C.s wary of jumping on the social networking bandwagon LINK
Hedge funds increasingly look to Europe loan market; could this "magnify risk?" LINK

Yesterday we learned that a federal grand jury in the Eastern District of Missouri had returned indicted 11 individuals and four corporations connected with the online gambling business on various charges of racketeering, conspiracy and fraud. The founder of BetonSports.com, Gary Stephen Kaplan, was dramatically arrested while changing flights on a trip from the UK to Costa Rica.

Today some in the online gambling industry are wondering whether they might have a friend or ally in the Bush Administration, namely Treasury Secretary Hank Paulson. During his time at the top of Goldman Sachs the investment bank reportedly made investments in online gambling, including Betonsports. So will Paulson back his boys now that he is in the second highest ranking cabinet level post?

Uhm, don’t bet on it.

U.S. Treasury secretary Henry Paulson a friend to online gambling? [Gambling911.Com]

In our experience the only reason someone moves from any other field in the world—government service, media, law, college teaching—into private equity is a drive to dramatically improve the world by making lots of money for themselves.

So what did Norman Pearlstine, the former editor in chief of Time Inc., say about why he is joining the Carlyle Group as an adviser of media acquisitions?

The New York Times quotes him as saying he was making the move “because there didn’t seem to be a logical next print job.”

Translation: Sixty-three year old Pearlstine wants to make a lot more money.

Alternate translation: Those media people were mean to me after I made Matt Cooper turn over his notes on the Valeria Plame case. So now I’m going to help a private equity group buy their companies.

Ex-Editor in Chief of Time Inc. Joining Carlyle Equity Group [New York Times]

YUKOS argues UK criminal law applies to Rosneft IPO (Reuters)
You have to understand Yukos' frustration. It had its cherry assets stripped by the the government only to see a lot of western businesses turn a blind eye as those assets come to market with the Rosneft IPO. So far no regulators have had the guts to stop Rosneft from raising money, despite the fact that all this is right out in the open. So Yukos, which would love its energy back one day, is turning to the London government to block the sale. Still, you have to love Rosneft which doesn't seem to deny the theft, but that it was an act of state, which doesn't fall under any the relevant British law.

Paris, We Have A Problem (Forbes)
Jerry Flint, at Forbes, has a nice piece explaining why Wall St. clap-trap about GM is just that. There are frequent calls among analysts and pundit to streamline GM by reducing some of its brands, but those calls are made by people who don't understand the costs in doing this. They think the remaining GM brands will just fill the gap, and that the dealers will quickly adjust. This didn't even work out well when eliminating the lowly Oldsmobile. As for partnering with Nissan, the problems are similar. how does on actually integrate two car companies? you can't just put the Nissan name on GM products, the way you could do with Compaq and HP. So at the moment, the companies are done talking, and are now in the thinking point of the negotiations. Meanwhile, GM sales are down 12% in North America.

US charges online gaming chief (The Independent)
More details are emerging about the arrest of David Carruthers, the CEO of online gambling firm BETonSPORTS. It seems like whatever reputation Americans have for being Puritan pricks is being well backed up by the Attorneys in this case who want to jail everyone involved, and are hoping to get BETonSPORTS, which is perfectly legal in its home country to forfeit $4.5 billion in assets. You'd think they'd sold drugs, or engaged in some equivalently coercive crime. As part of the sting operation, undercover agents set up anonymous accounts and placed bets. This is undoubtedly going to be a huge legal fiasco, and it could prompt intergovernmental strain.

Cartel to Competition (TCS Daily)
For the most part, in this country, the free market is seen as a pretty good system when it comes to most things. But for some reason, when it comes to really big areas, it's like the government gets cold feet, and wants to regulate to the hilt. Healthcare comes to mind. In other area, in which the government has preferred monopoly is in the area of bond rating, and so the government has kept in place the duopoly of S&P and Moody's. But these wide-moat classics, may see the enemies banging at the gates soon. The house has taken the first step to loosening the duopoly, as last week it passed the "The Credit Rating Agency Duopoly Relief Act". Unfortunately, we don't expect politicians to be using that one in their campaign commercials too much.

$$$Hamptons Blackbook: "Big Bucks Edition"...because 100% 18% of our readers are money-loving gold diggers. [The Beach]

$$$You're an animal. You're a tiger. Be a tiger, baby! You're Tony, be corn flakes, baby, be frosted. Now be a lemur, baby! You're a ring-tailed lemur! You're a little man, baby, you're a tiny, little man! You're a man-boy, okay, okay, yes, yes, be a man-boy, be a man-boy!: "Little man needed for an art photography photo shoot in the Wall Street area. Dressed in a banker suit riding a horse (or next to it)." [Craigslist]

$$$New rehab center for video game addicts in Amsterdam: Wherein used needles are welcome, and 8-balls stop getting such a bad rap. [Engadget]

In light of the varied opinions about the Post-9/11 options granting story, we thought we'd submit it to the ultimate arbiters of financial practices--our readers.

The Wall Street Journal’s Saturday edition carried a story about executive stock options granted shortly after September 11, 2001—when share prices had plummeted so that the options granted were relatively cheap compared to what they would have been before the attack—that has sparked a bit of a debate on some of our favorite financial blogs. Eddy Elfenbein at CrossingWallStreet thinks it’s a pseudo-scandal, and quotes extensively from a post by Larry E. Ribstein arguing that the Journal is getting heated up about nothing.

Barry Ritholtz has a slightly different point of view:

I'm going to take it a step further: These assclown executives are unAmerican. They are not Patriots, they are not model citizens -- they are merely a pathetic group of opportunistic whores who might as well hang outside the Holland Tunnel looking for a quick buck (although that would involve risk and work, something they have shown a distinct aversion to).

Behold the Maltese Falcon—venture capitalist Tom Perkins $100 million yacht which set sail in Italy on July 14. Its three masts tower 57-meter above the deck. The entire ship is 87.5 meters long. Although it looks a bit like an old-school clipper, technologically it’s closer to a space ship. The masts rotate to maximize speed and aerodynamics, while specialized sensors feed crew members information on the strain put on the sails and masts.

Superyacht sets sail [C-NetNews.Com via Luxist]

Ira Chilowitz allegedly tried to make off with Morgan Stanley's list of hedge fund clients and the rates they get charged but got caught. Now he’s in jail. So now it's official. There is at at least one person who worked for Morgan Stanley who won’t be starting his own hedge fund or boutique investment bank.

According to court documents, Mr. Chilowitz is accused of sending a copy of the firm's administrative client list and its client rate list for the prime brokerage business in February from Morgan Stanley's offices in New York City to his personal E-mail account at his home in Virginia.

Mr. Chilowitz also is accused of engaging in a conspiracy with an unnamed co-conspirator to steal the client list and rate list, according to court documents. The unnamed conspirator isn't a Morgan Stanley employee.

You could call it the curse of The Devil Wears Prada.

While the hit movie about a fashion editor from hell showcases dozens of high-end and mainstream brands, the sweet smell of success isn't rubbing off on Wall Street.

The share prices of brands that got placement in the movie have almost all slumped more than the wider stock market in recent weeks -- possibly reflecting a new caution about discretionary spending among American shoppers.

Somewhere Anna Wintour, the uber-fashion editor who runs Vogue and whose former staffer wrote the novel on which the movie is based, is laughing. Or not laughing, since she’s never actually been seen laughing, but gently tittering behind her oversized sunglasses.

Curse of the Devil Wears Prada [Reuters]

Crime/Fraud/Legal/Investigations/Inquiries:
Van der Moolen traders are guilty [crime]
Review of SBC Communications' merger w/ AT&T and Verizon Communications' with MCI [legal]
Grand jury subpoena for FedEx [legal]
UK Enron bankers make bail [legal]
Gary Aguirre files suit against SEC [legal]
Limelight Networks is sued [legal]
Citigroup's Parmalat appeal is rejected [legal]

M&A: [? = not yet closed, problems with the deal, lingering questions, etc.]
Standard Chartered + Union Bank
Luxembourg company + Trinity Industries' European rail-car business
Oil & Natural Gas + PanOcean Energy
Tyco Electronics + Telemics
Warburg Pincus and Cinven + Casema
Barclays Capital or Permira + McCarthy & Stone
Blackstone Group and Kohlberg Kravis Roberts + Argos and Homebase ?
Banca Intesa + Prada
FeedBurner.com + BlogBeat.net

For Sale:
WestLB's 27% share of HSH Nordbank LINK
Rosneft stock LINK

Personnel
Fannie Mae loses managers LINK
Kim Rosenkilde joins ABN Amro LINK
Ladenburg Thalmann replaces chair, moves to Miami LINK
Carlye Group to hire global lobbying chief LINK

Money Raising:
Nymex to raise $250 mm in IPO LINK
Multiply nabs $6 mm in Series A round LINK
$6 mm for UnWired Buyer in Series B round LINK
Total Bangun Persada raises $32.3 mm in IPO LINK

Earnings
Citigroup second-quarter profits rise 4% LINK

Miscellaneous:
Interest in PagesJaunes LINK
Hedge fund invests in Cobra Beer LINK
Role of hedge funds in Europe ? LINK
NYU hedge fund scandal LINK
Mellon Financial's plans in China are stalled LINK
Romanian gov't bank's IPO will disappoint LINK
L. Bros. to expand in India LINK
Investment banks increase LBO lending LINK
Airbus tries to compete w/ Boeing LINK
GM, Renault and Nissan Motors discuss deal LINK
Phelps Dodge raises Falconbridge offer LINK
Anadarko, Encore Aquisitions, oil, M&A's LINK
Aviva still bitter about Prudential LINK
Misys reviews take-over proposals LINK
MediaNews Group/Hearst discuss sharing online content w/ Yahoo LINK
G. Sachs has conflicting interests LINK
Doubts about London's AIM LINK
Being a venture capitalist: a how-to guide LINK
Tom Perkins's $100 mm yacht LINK
2nd-quarter funding for Washington companies reaches highest level since '01 LINK
Private equity has increasing role in M&A's LINK
Janus killing Olympus LINK
Ken Lay's death is popular w/ bloggers LINK
Competition down among European retail banks LINK
A lot of backdating LINK
How much money managed by hedge funds? LINK
Buyout boom bad LINK
What went on at Sun Valley? LINK

While some economists are busily trying to figure out things the invisible mechanisms in macho things like sports and crime, University of Florida economics student Alexander Villacampa deserves some sort of award for totally embracing his inner nerd.

Here he is describing the economics of the massive multiplayer online role-playing game “World of Warcraft.” And with that young Alexander has firmly established that the only way he will ever get a girl is if he builds a hedge fund algorithm and marries her in the palace of Versailles.

The Economics of 'World of Warcraft'
[LewRockwell.Com]

The first case arising from accusations of backdating stock options for executives may be filed by the SEC within a month, according to lawyers familiar with the case who have spoken to CNBC’s Charlie Gasparino. Gasparino's sources say the case will mostly likely be a civil suit against former Brocade Communications CEO Greg Reyes. Apparently the regulators have backed-off from filing criminal charges becase they aren’t confident they can prove criminal intent.

The Securities and Exchange Commission is ready to pull the trigger on its first stock-option backdating case, CNBC has learned.

People at the SEC as well as several defense attorneys representing targets of the wide-ranging probe say that the commission will file its first case within a month. Although there are around 400 cases of backdated stock options that have caught the SEC’s attention, and about 60 under more intense scrutiny, these same people say one case is at the top of the SEC’s list. That case involves Greg Reyes the former high-flying CEO of technology company Brocade Communications.

Options backdating...let the cases begin! [SquawkBlog]

Following last week's discussion regarding inexplicably employed personal financier-to-the-working-girls/Time Warner CFO Wayne Pace, we sent DealBreaker interns Carolyn Okomo and Bess Levin to midtown to poll a non-statistically-significant sample size of bankers (20) on the issues of the day. Here are the results:

According to Bloomberg, the European Union isn’t going to meet the emissions standards of the Kyoto Protocol. It seems that tradable pollution credits made a lot of people rich—including hedge funds and investment banks who traded the credits—but didn’t do much to encourage emission reduction.

When European Union officials created a market for trading pollution credits, they boasted it was a “cost-conscious way” to save the planet from global warming.

Five years later, the 25-nation EU is failing to meet the Kyoto Protocol's carbon-dioxide emission standards. Rather than help protect the environment, the trading system has led to increases in electricity prices of more than 50 percent and record profits for RWE AG and other utilities.

Fortunately, we don't have to worry too much about those European polluters because global warming stopped in 1998.

Europe Fails Kyoto Standards as Trading Scheme Helps Polluters [Bloomberg]

Now, flush with billions in cash and the ability to borrow heavily on top of that, the private equity bigwigs and hedge fund managers have become the stars. Call it Predators’ Ball 2.0 — a kind of outdoorsy reprise of Michael Milken’s famous gathering of leveraged-buyout mavens of the 1980’s.

“We used to come here every year to sniff each other,” said the chief executive of another media company, who also did not want his name used. “Now, all these finance people are sniffing us.” With media stocks down virtually across the board, some may smell opportunity.

We don’t for a minute believe that Andrew Ross Sorkin was able to juxtapose all this talking of sniffing with references to the leverage-buyout culture of the 1980s without at least a little bit of a smirk.

Hedge Funds and Private Equity Invade Sun Valley [New York Times]

There are only 11 more days until the assets of Kirk Wayne Wright are auctioned off under orders from a US bankruptcy court. Wright, you’ll recall, was the hedge fund manager arrested in Miami in May, charged with defrauding investors who include a number of professional football players.

From the description of his assets—including a six bedroom house, an Aston Martin, a Bentley and a 1967 BMW—we can’t help but wonder why there isn’t a “Cribs: Criminal Edition” show on MTV.

Hedge-fund manager's assets go on sale [Business Week]

Executive Pay: The 9/11 Factor (WSJ)
So this weekend, the options saga took a major turn (get out your notebooks). We're no longer discussing backdated options or spring-loaded options or anything that might be constituted as illegal. Now the issue is just options themselves. Turns out that in the wake of 9/11, (yes, now that's become part of it) some boards took advantage of the "low stock prices" to grant executive options cheaply. In other words, as the WSJ reads it, companies and their executives were exploiting the initial weakness after the attacks to enrich the chief. But, and this The Journal doesn't clarify, how does anyone know when markets are low or high? In fact, if the boards were really granting these options (which weren't illegal) to take advantage of market of conditions, they really mis-timed things. The markets continued to sag for another couple of years. Was anyone who bought shares when the market re-opened trying to profit from 9/11, as the implication goes? As Larry Ribstein puts it: One reason our markets were so resilient is because we had managers who were focused on money. Should they have been thinking only about how to fill the shareholders' wallets with the nasty stuff? So what we really want from our corporate executives is people who are greedy enough to be thinking about money after 9/11, but altruistic enough only to be thinking about how to make it for the shareholders? Aren't we getting a little picky?

Toyota may look to block Nissan/GM deal: report (Reuters)
Now this story gets interesting. Rumors are coming out that Toyota, enemy #1, may look to intercede in the GM/Renault talks. The company claims to have war-gamed recovery scenarios for the troubled automaker. If you're GM, which company makes for a better partner? Obviously, Toyota is the strongest, but what use do they really have for GM other than they don't want to see it fail out of political concerns. The main concern for Toyota, of course, is that the death of GM leads to protectionism. Nissan on the other hand probably wouldn't mind seeing GM actually thrive. So if anything, perhaps the threat from Toyota pushes GM and Renault closer together at the table.

Done In The Sun (NY Post)
The mood at a luxury get together for media executives was sour, as the cruel hand of business has been dragging their stocks down of late. Normally a weekend of fun, it was a weekend discussing threats to their business -- like YouTube. They probably would've had a better time just standing around, with everyone showing their favorite clips on the service. One line stood out in particular from the report: During the week, Weinstein and BET founder Bob Johnson announced a $175 million film deal, but as of Thursday night, according to a source, Johnson was still holding discussions with hedge fund and private-equity investors to firm up financing. This makes us wonder, are hedge fund guys bored out of their minds? It's a film-school cliche that when you're looking to fund your first movie, you should drop in on all of the dentists in the area. Because they have a bunch of extra money sloshing around, and are pretty bored. So they'll pay up for the slight chance that they'll get to go to a premier or get free tickets to a film festival. So now it's regular for guys to hit up the hedge funds for cash. So are hedge fund managers the new dentists? Bored old guys who will sacrifice returns for a chance to fund a BET flick. Yes, almost certainly.

G8 may be last gasp for faltering Doha trade talks (Marketwatch)
The current summit of the G8 has a lot on its plate. There's the whole Lebanon/Israel thing, which almost certainly has them all glued to Fox News, looking for information on the latest strikes. Really, it has to be sapping up a fair amount of the time of the most important people in the world. Of course, while all this is going on, the British recording industry wants the world's leaders to focus their energies on a single Russian mp3 site that sells songs really cheaply. Seriously, they really want this to be a main topic at the discussions. And if airstrikes and cheap mp3s weren't enough, there's all this pressure on the countries to resolve some knotty trade issues, which have been holding up trade talks for years now. It's just simple stuff, like ending subsidies for farmers in the developed world. Seems like they should be able to knock that stuff out over golf. But it looks like they won't, and the latest 'Doha' round of WTO talks may be dead.

$$$For the 18% of our readers who will appreciate this: Bankers Ball's Ex-Working Girl on Older Men. [Bankers Ball]

$$$Trolling for a cheap apt. while you save up to buy stock in Microsoft? Mayhaps you'd like this feline-ish bargain: "I am a cat nutritionist offering a room in an apartment with a GREAT location (7rd and 3rd) for a very cheap price. $400/month. I am not going to lie, you must be an extreme cat lover if you want to rent this place; I have a total of 17 cats in the apartment." [Craigslist]

$$$If you're sitting at a desk owned by Lehman Brothers, Merrill Lynch, JP Morgan Chase, et al: turn off your computer and get on the LIE-- your date awaits your arrival, and Nick and Toni's waits for no one. Those of you at a Goldman Sachs cubicle: take your time. There's hardly ever a line at the Denny's in Weehawken. [The Beach]

$$$More Ken Lay shirts; and the Write-Offs scribe phones it in just in time for the weekend. [Cafe Press]

Ever beat something so hard your arm starts to hurt? We’re starting to feel that way about Warren Buffett. Once you’ve already condemned somebody to Hell, what else can possibly be left? We could prominently link to Daniel Henninger’s philanthropy-bashing essay on today’s Wall Street Journal editorial page but seems like overkill.

So, instead, we’ve decided to let Warren speak for himself. His three part interview with Charlie Rose is up on Google Video now. Go ahead and watch. Even we have to admit he’s a charming little rascal.

Charlie Rose - Warren Buffett: The Man - Part One in a Three Part Series [Google Video]