$$$ A "nice, normal girl" needs a date, would like to mention that "if you're an investment banker, that's hot, but please don't be one who spends ALL his money on coke," some, okay. [Craigslist]

$$$ Long Licenses to Kill [Long Or Short Capital]

$$$Peter Rojas, 'Stripped by Lindsay Campbell [WallStrip]

Everything we’ve heard until now about the departure of Ross Levinsohn, from News Corp implied that the man who put together the deal to scoop up MySpace left voluntarily, to pursue other interests—perhaps to go work at a start-up of some sort. Sure his resignation was sudden and unexpected. But there was no indication of anything but good will on everyone’s part. In fact, Business Week's story, "Why Ross Levinsohn left" reported "The company bid Ross Levinsohn a warm farewell and even suggested that a partnership with his new venture may be possible."

This interview at D7TV with Red Herring'sTony Perkins, however, has us looking to Levinsohn’s departure in a new light. According to Perkins, Levinsohn was forced out when News Corp discovered that Levinsohn was raising money to start his own venture fund.

Here’s what Perkins tells the D7TV interviewer: “He got raising money for another deal. So the chief operating officer Peter Chernin, who works for Rupert as his right hand man—when his kids aren’t running the place, called Ross into his office and said, ‘Is this true, that you’re raising this half a billion dollar roll-up fund?...And he [Chernin] goes, ‘Are you either in or your out?’ And he [Levinsohn] said, ‘Well, I guess I’m out.”

Now the interview takes place at a party, and is very informal, so maybe we shouldn’t take it too seriously. But Perkins seems very confident with his statement.

Perkins Interview [D7TV.com via Paul Kedrosky]

Barry Diller: Princess Juliana Int'l to Francis S Gabreski on his Raytheon Hawker 800

Donald Trump: La Guardia to Los Angeles Int'l on his Boeing 727-100

Warren Buffett: Naples Municipal to Point Salines Int'l on his Cessna 560 Citation 5

The liberation of CNBC's web presence from the shackles of Microsoft is almost upon us. The new site is scheduled to launch on Monday, December 4. The site has a very, very dull preview running right now, and invites you to register for, well, it's not exactly clear what you're supposed to register for.

Okay. We know you're excited about this. But you really will have to wait until Monday to see it.

Clairvoyance can be all fun and games but lest we run wild with our powers (“I knew you were going to say that!”), it’s important to remember that it often comes at a cost. During last week’s fireside chat per Episode 4, I wondered aloud, “How the producers are going to keep you and I hooked for the rest of the season after shooting their wad on this one, I have no idea but we’ll cross that bridge when we get to it.” Friends—that bridge is upon us. Episode five—what can I say? It was okay; but it doesn’t hold a candle to episode four. Godfather I versus III, if you catch my drift. (Or Douglas as Gordon Gekko versus Douglas as Steve Tobias, if you’re more comfortable with that analogy and I have a hunch many of you are). Watched E4 on Sunday, as usual, and have been sitting on this run-down ever since. Do it? Don’t do it? Five little words—one ghastly dilemma. I put off dealing with it for a while—as people who embrace the ‘ignore the problem and it’ll go away’ tactic are wont to do—but something from deep inside has been saying “Do episode 5, Bess. Do it now,” since I woke up this morning (but conceivably that could be last night’s bad Chinese talking). Despite its suspicious provenance, despite—nay, because of—the questionable spring rolls, I've decided, "I WILL do this, and now." Also, because Tim Sykes says, “I feel it’s my duty to be the Godfather of throwing parties.”

13D Tracker has the (maybe, probably) scoop:

Reports circulating that Kirk Kerkorian has sold his remaining 4.95% interest in General Motors (NYSE: GM). A large block of shares traded recently which is believed to be from Kerkorian. However, owning less than 5%, he doesn't have to file any public information on his trading activity in the stock.

In an earlier 13D filing, Kerkorian disclosed they agreed to sell 14,000,000 shares which brought his stake to 28 million shares. It just so happens that a 28 million share block trade crossed the tape at 2:41PM at $29.25 per share.

Reports Circulating Kirk Kerkorian Sold his Remaining 4.95% Interest in General Motors

We're still searching for the identity of the "wealthy businessman" who reportedly crashed this Carrera GT after the owner let his friend take it for a test spin during a party in Port Chester, NY last Saurday. Because of the reported location--very near Greenwich, Connecticut--and the amount of disposable wealth involved--the driver bought his friend a new Carrera GT the very next day--we suspect that the driver or its owner might be a DealBreaker sort of guy.

So we're on the hunt for the identities of the people involved. But we need your help! Send your thoughts to tips(at) dealbreaker (dot) com, with the subject line "Car Wreck." Here's a hint: the driver broke his foot. So look around the office and let us know which bigshots are limping today! Thanks.

Update: Autoblog, our source for this story, takes it all back! So maybe the reason we can't find anything about the parties involved is that, uhm, it may not have happened.

The Carrera GT crash in NY: What you didn't know [Autoblog]

Near the end of the New York Post's big business section article discussing the advice of some analysts that Citigroup break-off its investment banking business and concentrate on lending and retail, CreditSights analyst David Hendler advocates the revival of the storied name: Salomon Brothers.

"It's too big and management needs to realize that they have the skills and disposition to manage a lending and retail operation, not an investment bank," said Hendler. "If they did a spin-off and IPO, calling it Salomon Brothers, they'd get a huge multiple from the market. Plus, people might think they were really light on their feet for the first time."

You can almost see Sandy Weill spinning in his grave. Except for the part about not being dead yet.

The Lost Citi [New York Post]

At some point you start to wonder, "Hey, Pepsi dude, are you sure keeping your $6 million job wasn't worth paying that little hustler $125,000?"

A top Pepsi honcho's job fizzed out yesterday, just days after his soda bosses learned that his penchant for surfing the 'Net for women made him an extortion target.

"As of today, Gary Wandschneider no longer works for Pepsi Bottling Group," said spokeswoman Kelly McAndrew, who refused to say whether he was canned or quit his $6 million post as executive vice president for worldwide operations.

Ex-Exec [New York Post]

The report from the Paulson committee on capital markets regulation hit the streets today. It'll take some time to get through all 135 page sof the report, but fortunately Columbia Business School dean Glenn Hubbard and former Goldman Sachs president John Thornton have issued an executive summary of sorts on the editorial page of the Wall Street Journal.

The gist of the thing can be found in the second to last paragraph:

Effective regulation requires economic analysis. While there are existing mechanisms at the SEC for applying cost-benefit analysis to proposed rules and regulations, we believe more can be done in this regard to assure that regulations are achieving the intended effects of investor protection at a cost that is sensible in the context of individual firms, the markets at large, and the economy as a whole. The SEC and self-regulatory organizations need to engage in a more risk-based process, focused explicitly on the economic costs and benefits of regulation (as is the case for the FSA in the United Kingdom) for companies and investors, while strengthening shareholder protections. In weighing the costs and benefits of new rules, regulators should assess and rely on empirical evidence to the extent possible.

Action Plan for Capital Markets [Wall Street Journal]

Some rather non-thrilling video from the Goldman Sachs cleaners protest that went down the other day. Are they seriously chanting "What do we want? JUSTICE. When do we want it? NOW"? That's the same thing the protesters at the whole strip-club bachelor party shooting were chanting. Isn't it about time for protesters to come up with some new material?

Bonus season is here, and the truth is you don't have many friends right now. What you have, actually, are people wondering if you're getting more or less than them. It's an effin' state of nature, a war of all against all.

But we're still here for you. Always. Send us any rumors, unconfirmed reports or, you know, actual news you have about 2006 bonuses. At least one tipster will receive...hmmm...we haven't actually worked out what the prize will be. So feel free to nominate your own prizes in our comments section below. As always, the identity of all tipsters will be our closely guarded secret.

Okay, we're kidding with the title. To be honest, we actually could use a few new business magazines. Most of those we've got now have been around for a long, long time. The few newer ones seem obsessed with tech issues. The American promises to revive the tradition of long-form business journalism, something we can't help but look forward to. Plus, they're first issue has a nicely contrarian article complaining the CEOs aren't paid enough. Take that, Gret-Gret!

The American [The American]

Brock Fantasia is the only remaining person in the JPMorgan analyst class of 2002 to still work at JPMorgan, which is in no way testament to the work environment at JPMorgan. In fact, Brock likes to think of himself as the Highlander of his analyst class, wielding an indestructible claymore of corporate finance.

After “totally wrecking” (in his own words) the Analyst-to-Associate program in the M&A group, Brock was briefly moved to the Natural Resources group, due to increased deal flow in the M&A group. Brock graduated from the prestigious University of Pennsylvania Wharton with a degree in Finance and is working in investment banking until he can find a buy-side job. Brock has been interviewing for buy-side jobs throughout the past 3 years and has not been a “good fit” anywhere, despite his ever-burgeoning skill-set. [Editor's P.S.,- Some of this is true. But only some of it. Previous Ask Brocks are here. Send your questions to : brock AT dealbreaker DOT com]

(Recap: We have been chronicling the story of Bro…Crock Mantasia, loose acquaintance and clear non-friend of Brock Fantasia, who wants to leave JPMorgan for a buy side shop. The following buy side virtual interview is based on Crock’s experiences. Crock just conspicuously slipped out of 277 Park Avenue wearing an “interview tie” and clean, matching socks. Having tenuously inched past the screening interviews, the INTENSITY of the process is starting to reach banker pimple during a live deal levels. Something is about to burst, as Crock reaches Round 3. See my last column for the full recap.)

Round 3
The Final Round…of the initial set of Rounds. In this round, you again turn yourself into a cymbal playing monkey in order to demonstrate that are a good “fit” within a firm that is considering you.

Running out of conventional excuses to free up time for round after round of interviews, you are left to tell your deal team that there’s been an emergency at your sister’s friend’s quinceanera and that the mariachi band is a man down from an errant piñata swing, and that you must fill in because you’re the only person within a 15 block radius who knows the chords to Cielito Lindo. Fortunately, a senior VP on your deal team knows that one cannot become a Hispanic woman without first hearing Cielito Lindo.

Try to check you instincts to laugh aloud when you read this explanation for why having fewer regulators governed by a centralized authority will mean, somehow, better regulatory scutiny.

"When the new organization is in place and fully integrated, there will be one set of rules, one set of examiners and one enforcement staff," Schapiro, who would head the combined organization under the proposed merger, said in a statement: "Duplicative and inconsistent regulation and overlapping jurisdiction will become a thing of the past."

NASD, NYSE Say They Will Merge Their Regulatory Bodies [Washington Post]

Pirate Capital just got a bit wetter, liquidating it's entire stake in Mirant Corporation, according to an amended 13D filing. This follows on Pirate's recent exit from its position in James River Coal. Of course, rumors are already starting that the Pirates are pushing these investments off the plank in order to raise the cash to fund redemptions by investors who are worried that the funds managed by Pirate may be in full meltdown mode following the departure of many of it's assets. But, of course, we heard that from a competitor of Pirate's who would be all too happy for Pirate to meltdown, so you can take that with a grain of sea salt.

Pirate Capital Sells Its Entire Stake in Mirant Corporation[13D Tracker]

Throughout the Amaranth meltdown, the best source has been Platts, the subscription only energy investing newsource. This morning, Platts Gas Daily has the scoop on how much Amaranth's losses cost it's investors, including a few funds run by Morgan Stanley.

Just in case you forgot to renew your subscription, here's Platt'\s report:

Investors in defunct energy hedge fund Amaranth Advisors saw two-thirds of their money disappear following the Greenwich, Connecticut-based hedge funds spectacular September meltdown, according to filings made this week with the US Securities and Exchange Commission by institutional fund managers.

Amaranth Advisors lost billions when the spread between March 2007 and April 2007 natural gas futures prices--which the fund bet would widen--collapsed from $2.14/MMBtu to a few pennies.

While hedge funds by nature are large pools of capital with few regulatory reporting requirements, so-called "fund of funds"--publicly-held mutual funds that invest in hedge funds--do report the performance of their investments to the SEC.

A closer look at Amaranth's collapse comes from Tuesday's report of Morgan Stanley's Alternative Investment Partners Absolute Return Fund which invested $4.3 million in Amaranth at the beginning of this year only to see that investment lose 66% of its value by the end of the third quarter.

Another Morgan Stanley fund, the Institutional Fund of Hedge Funds, also reported Tuesday that it began investing an eventual $92 million in Amaranth starting in November 2004 and by the end of the third quarter saw a 55% drop in Amaranth's value. A sister Morgan Stanley fund, Institutional Fund of Hedge Funds II had the unfortunate timing to invest $2 million in Amaranth on July 1, losing 68% of that money in three months.

The holiday season is upon us. For some of you that means Christmas trees, for some of you that means dreidels, for some of you that means [insert something associated with Kwanza here]; and for others [fill in objects related to whatever other religion you practice here]. Yes, this is a divisive time of year.

But take heart, for we can obviously all agree that “the holidays” mean one thing to us all—free drinks on our bosses’ dimes (and if you’re lucky, other “things,” too. *cough* strippers *cough*). And since you’re reading DealBreaker, you’re clearly the type of person who gets invited to tantalizingly salacious parties circa December/January, or at least ones with the potential to be so. And in less of a “we’re going to publish pictures that will ruin you, professionally and socially” and in more of a “this is the kind of party that no one will be able to remember in the morning unless there’s photographic evidence of its awesomeness,” we think you should totally send invites to any and all of these events to us at tips at dealbreaker dot com. (Use the subject line: “Holiday Party.”)

What’s in it for you? Two words: Bess Levin. We’ll be sending her to as many of these parties as her liver, brain and our insurance premiums can handle. And don’t worry about possible law-related problems, as her driver’s license informs us that she’s legal to drink. But just barely.

So send us the invites, or at least the time, place and manner. As always, the identities of all tipsters will be kept in strictest confidence.

Sponsored by Bloomberg.com

Greenberg denies push to buy Times Co. stock (Boston Globe)
Who's word do you trust, Hank Greenberg's or Roddy Boyd? In our experience, the biz desk at the NY Post gets things right with uncanny accuracy when it comes to Wall St rumors, and we'll take them against any other paper in town. Yet Greenberg denies the report that he's snapping up shares of the Old Gray Lady. The initial report caused the stock to surge, which should be pretty alarming for the Sulzbergers, even if the rumors aren't true. It shows that investors have a yen to see some change there. We hope Greenberg is just being coy, since we'd love to see a real brawl break out.

Average house price rises by £15,000 (Guardian)
Yesterday there were a bunch of reports out with people arguing that the worst is over in the housing market. There didn't seem to be much to back this up, so it was probably just well-placed NAR propaganda. Since the beginning of the downturn, there have been several people who thought the situation should be compared to the UK, which went through as similar cycle, but was a few years ahead of us. They pointed out the lack of carnage induced by the fall. So if your one of those, who thinks that our cousins across the Atlantic act as a guidepost to the future, take heart that prices are rising there again, in spite of higher interest rates. So get out there and buy.

Buyout takers won't take off (Detroit Free Press)
Almost 50% of Ford's factory workers are said to have accepted buyout offers from the company, leaving many to wonder what the glut of non-workers will mean for the state of Michigan, whose economic health is already tenuous. Unfortunately, most of them probably aren't qualified to work at Google, which recently opened up offices in Ann Arbor. With any luck (for economists), the move might be a good lab to explore the positive impact of a massive freeing up of deadweight capital. In interviews, many of them said that they'll stick around, and use their buyout money to start small businesses. In a state dominated by these old industries, a little boom in entrepreneurship seems like just what the doctor ordered. Maybe the massive reorganization will be the the best thing that ever happened to the state.

Panel to Urge Rewriting S.E.C. Rules to Aid Companies (Dealbook)
President Bush's opportunity for salvaging a positive mention in the history books is rapidly closing. his tenure will absolutely be defined by the war in Iraq, where he would need a miracle to pull out any semblance of a victory in the next two years. So he should probably focus on some policy areas that are salvageable. A panel is making the claim, yet again, that regulations have badly damaged the competitiveness of US businesses and financial markets, and that big changes are warranted. It also recommended that the SEC perform cost-benefit analysis on every proposal it makes. Let's take a step back here. Why the hell does this even need to be a recommendation? Really. Why would any government bureau pass a regulation, ever, without doing a cost-benefit analysis? That being said, if it's not going on, it certainly seems like a good idea. In our view, Bush could do a lot worse than undoing some of the Sarbanes-Oxley damage that occurred early on in his administration.

$$$Wall Street Bonuses — The Ancillary News [Banker's Ball]

$$$Workaholic blond finance type still seeking borderline alcoholic [Craigslist]

$$$Lindsay "gets down and dirty in the mud." [WallStrip]

What you see here is the image of a Carrera GT wrecked when the owner let his friend take it for a test spin during a party in Port Chester, NY last Saurday. So what’s this doing on DealBreaker? Well, let’s let Autoblog (from whom we nicked this photo) describe the aftermath of the wreck.

And the car appears to be totaled, much to the chagrin of Porschephiles. But here's the part you aren't reading anywhere else: the man who wrecked the car made good. As we mentioned, he happened to be a very big businessman, and we now know that he's also a standup guy. He bought the car's owner another Carrera GT the next day. With lower mileage on the odometer to boot.

Now we’re told that these things run for between $300-500k. And the driver had it the next day—no waiting for insurance payments or anything messy like that. Put that kind of disposable income together with the right next to Greenwich, Connecticut location and we’re starting to suspect that the wealthy driver might be a prominent (or reclusive) hedge fund manager.

The driver reportedly escaped with merely a broken foot. So, the question is, who came limping into work on Monday?

The Carrera GT crash in NY: What you didn't know [Autoblog]

In the comments to our post on sextortionist Jessica Wolcott’s victim—some mustachioed dude at Pepsi you’ve never heard of and probably won’t hear of again—we’ve apparently heard from his daughter, Nikki. Now we can’t vouch that this is definitely the victim’s daughter, of course. But the comment is completely earnest, and actually a bit sweet. Seems genuine enough. And we have some reason to believe that a Niki Wandschneider does exist, and may well be the Pepsi dude's daughter. Click through this link and tell us what you think. Do we have the real Nikki?

More importantly, Nikki, if you’re out there, it’s us, DealBreaker. We’d love to hear more from you. Send us an email to tips@dealbreaker.com.

Private Equity Equity Private has joined the Robot Revolutionaries in criticizing hedge fund fees, and managed to draw plenty of angry emails for that. You see, the super smart people who design amazing models supposedly uncovering value where no man has seen value before don’t like to hear that they might not deserve their fees.

Miss EP responds:

Hedge fund clients are not, I suppose, particularly impressed with the quantitative elegance of a manager's portfolio. For the most part, and aside from wanting to preserve diversity, they are interested in returns. They are, after all, in business to make money, not to fund creative correlation discovery projects that under perform the market. We are dealing with pension funds, not with theorists that derive utility from investing in some sort of aesthetic beauty in portfolio design.

Un-American [Private Equity]

The LA Times is running a piece on economists as celebrities (hat tip Barry). Well, they're not quite celebrities yet. More like blogebrities. But we've got to stop this before it goes any further. You people realize that if we make economists into celebrities, soon we'll be watching videos of Lindsay Lohan making out Larry Kudlow on TMZ.com, right?

Fame found Tyler Cowen on the back seat of an airport bus.

Travel-weary after a long flight back from a family vacation, the economics professor was returning to his car at Baltimore/Washington International Airport. Suddenly, a man leaned across the bus aisle to shake Cowen's hand, pronouncing himself a "huge fan" — not of Cowen's economics work, but of the Internet blog the George Mason University faculty member created three years ago.

"My first question was, 'How do you know what I look like?' " Cowen said. "I thought that was a little strange."

But since he and colleague Alex Tabarrok started the blog Marginal Revolution, which has had more than 6 million visitors, Cowen has become something he didn't even know existed: an economics celebrity.

Thanks to life as an econo-blogger, "I'm invited to give a speech or something at least once a week," Cowen said.

Now online: slide-rule celebrities [LA Times]

This promotional video is oddly reminiscent of, well, the debate between Cramer and his critics we linked to earlier this afternoon. Specifically this exchange (heavily edited here because we know you don't actually want to, like, read things) on the merits of the "C" block of "Mad Money"--the infamous "Lightning Round."

Cramer: It is obvious that there are three important blocks to the show, A, B and D. It is also obvious that the lightening round does not have the same homework-derived analysis of those three blocks. The fact that you weight the lightening round equally to those more thought-out blocks to me evaluates the show unfairly...

CXO: I am puzzled why you have included the "Lightning Round" on the show if you do not regard it as well thought-out...Note that the Wikipedia entry for Mad Money refers to the "Lightning Round" segment of the show as "...by far the most popular..."

Now that we come to think of it, this is a very weird exchange. Cramer says his critics are taking the Lightning Round too seriously. And his critics are saying it needs to be taken seriously. That's something you don't see everyday: an analyst disparaging his own calls and his critics drawing attention to their importance.

The offering memorandum for the Citadel bonds bore its first journalistic fruit today when Bloomberg reported that JPMorgan had exited the energy trading positions it picked up from Amaranth, the prominent hedge fund that collapsed after making bad bets on energy futures over the summer, selling them to Citadel. Since the offering memo went public, analysts, market watchers and, of course, financial journalists have poured through it looking for clues as to how the hedge fund giant does business. No doubt there is lots more information to be mined from the 363 page document.

Bloomberg sayeth:

JPMorgan Chase & Co., the third- biggest U.S. bank, sold its half of Amaranth Advisors LLC's energy trades to Citadel Investment Group LLC for $725 million less than two weeks after taking over the positions.
Amaranth, reeling from more than $4.6 billion in losses, transferred its energy investments to JPMorgan and Citadel on Sept. 19. Citadel, a Chicago-based hedge fund manager with $12.8 billion in assets, on Sept. 29 bought JPMorgan's share of the natural-gas, power and oil trades, Citadel said in a prospectus for a bond sale distributed to investors this week.

The proceeds helped New York-based JPMorgan cushion a third- quarter decline in trading revenue. Last week, Chief Executive Officer Jamie Dimon said the Amaranth transaction was a victory for his energy-trading department, which hasn't produced consistent gains since beginning an expansion last year.

But there’s more than that in the Citadel memo. First, there is clear evidence that JP Morgan and Citadel entered the transaction as partners. Previous reports had left it unclear whether each had bought off separate pieces of the portfolio or entered under some mutual arrangement. The memo refers to a “risk-sharing agreement” between the bank and the hedge fund, implying the institutions partnered on the deal.

Perhaps more importantly, the memo reveals how quickly the energy portfolio that wrecked Amaranth was “reshaped” so as to substantially less risk to Citadel and JPMorgan. It took all of two weeks. That’s a very quick turnaround.

JPMorgan Sold Its Amaranth Energy Trades to Citadel [Bloomberg]

...is Jim Cramer's response to CXO Advisory Group's evaluation of the methodology employed in his stock recommendations. We're paraphrasing, of course, but that's essentially the gist of it. CXOAG does a pretty nice job of getting under JC's skin, but our one gripe with their end of the e-mail correspondence brouhaha is the fact that they don't site Leonard the Wonder Monkey in their argument that Cramer's "stock market calls since May 2000 have low consistency and an accuracy just south of coin-flipping (just below average)." We don't think we would be too far off base in saying that we could all benefit from a little hirsute wisdom every now and then. There, piece said. Enjoy:

Subject: You have got to be kidding me

There have been so many numerous audits of me and I also have an extended audited track record that shows you could not be more wrong. But you know what? Let the market decide. Do you think if I were as bad as your records show, I would ever have been able to

a. make $100 million in the market investing for myself,

b.have a show that has gained in audience at the time when you say I have done poorly, and

c. started one of the few FINANCIALLY successful websites out there in part because of subscribers to my newsletter and columns?

Here’s where I think your methodology goes wrong. I repeatedly recommend the same stocks from my own recommended list: NYX, SHLD, GOOG, MA, TM, CSCO, AAPL, GS, BA, JNJ, MO. I do it every week. I am sure you give me credit only once for those.

I have bothered to take the time out to write you this because you worked with a man of honor, Admiral Rickover.

I know you won’t correct anything—that’s not what people do in our business—but I still feel the need to explain to you why a sucker is NOT born every minute and my popularity rides not on showmanship but on rigor on my part and success on the part of the viewers and readers who use my work.

No need to respond.

jjc

Guru Grades: Jim Cramer Comments on Our Evaluations of His Advice (All from 11/25/06) [cxoadvisory.com]

[correspondence continues after the jump]

Wow. Did the hedge funds who handed data over to the PlusFunds group not have some sort of confidentiality agreement in place? Buying the database versus giving up your trading strategy to the database. It's like a contest between genius and genius in reverse.

Citadel Investment Group LLC, one of the U.S.'s largest hedge-fund groups, is looking to get a leg up on some of its competitors by securing access to a database that details their trading positions over a four-year period.

PlusFunds Group Inc., a bankrupt hedge-fund operator that supplied data for the now-defunct Standard & Poor's Hedge Fund Index, has asked for court permission to sell Citadel a non-exclusive license to its database of 40 hedge funds for $75,000.

If the request is granted next month, Citadel will be able to access the trading history of certain funds managed by hedge-fund groups that include Westport, Conn.-based Bridgewater Associates Inc., London-based GLG Partners LP and Madrid-based Vega Asset Management Management LLC.

Since the trading information is at least five months, and as much as four-and-a-half years, old, Citadel is unlikely to find much to trade upon, said a hedge-fund advisory executive. But it could give the Chicago-based firm valuable insight into competitors' trading methods and styles.

Citadel seeks access to hedge competitor trading data [MarketWatch]

The New York Sun reports on the ancient remains of that water utility company that nowadays goes around pretending to be a bank.

When construction workers peel back the pavement in lower Manhattan, it's like opening a skylight into the old New York — a place where water flowed through hollowed-out logs and the streets were crowded with ship builders, pottery makers, and tavern riffraff.

More than 3,000 objects have been found under Beekman Street between Pearl and Water streets, where archaeologist Alyssa Loorya has been monitoring a city construction site for the last two years.

The largest find was four pieces of the city's old wooden water mains. These mains are hollowedout yellow pine logs, which distributed water from a water reservoir just north of Chambers Street during the end of the 18th and early 19th centuries, a historian and author of "Water for Gotham," Gerard Koeppel, said.

The pieces are wider on one end and narrower on the other so that each section could fit into another, with a metal collar binding them together. Customers of the Manhattan Company, which eventually became the J.P. Morgan Chase Manhattan Bank, paid $5 a year per household with no more than five fireplaces to tap into the water mains. Another $1.25 was added onto the bill for each successive fireplace as a way to account for bigger households, Mr. Koeppel said.

Value added: We all know who JP Morgan was, right? So who was this Chase fellow? The "bank" gets its last name for Salmon Chase (pictured left). Now old Sam was the Abraham LIncoln's Treasury Secretary but he never had anything do to with the Chase National Bank. They just liked the name. Which strikes us as a bit tacky. It's as if one of these new boutique investment banks decided to name themselves The Paulson Bank.

Archaeologist Finds Pottery, Wood Water Mains Downtown [New York Sun]

As Larry Ribstein points out, New York Times editor Bill Keller has been really, really defensive about criticisms of Business Section columnist Gretchen Morgenson lately.

Of particular interest to me is that Diller singled out Gretchen Morgenson. She responded that Diller's criticism "must mean that we're doing the right thing." And Bill Keller chimed in, again, on Morgenson's behalf, again waiving Morgenson's Pulitzer Prize around like a talisman to ward off evil: "Ordinary investors and other readers look to Gretchen Morgenson as one of the market's shrewdest and most fearless guides. She won a Pulitzer prize for a body of work that the Pulitzer board called 'trenchant and incisive.' We are proud of the journalism she and other Times reporters have produced on executive compensation."

This is the second time in the last couple of weeks that Keller has come out swing-swing for Gret-Gret. It sort of makes you wonder if the Biz-Sec Babe is feeling a little vulnerable these days. Why else would daddy Keller have to keep issuing these reassuring defenses?

Barry Diller on the "loony" Gretchen Morgenson [Ideoblog]

With the medium-erm debt issuance announced yesterday, Citadel may be on it’s way to becoming the anti-Long Term Capital Management—a hedge fund that can increase its leverage without incurring margin call risk if it’s investments go south. LTCM ran into trouble when its investment strategy blew-up and it became clear it wouldn’t be able to make its margin-calls. With piles of unsecured debt in its coffers, Citadel should be better able to weather the sort of stormy market that toppled LTCM.

Bloomberg does a good job of describing how the bonds might help free Citadel from some of the traditional credit risks faced by hedge funds.

The plan may cut Chicago-based Citadel's reliance on financing from Wall Street investment banks, which provide leverage and trading services to hedge-fund clients through prime brokerage units. The bonds will be sold through a medium-term note program, meaning Citadel can sell the total amount of debt over time rather than in a single offering...

"This marks a historic point in the industry, a coming of age,'' said Daniel Koelsch, S&P's analyst for Citadel in Toronto. "Before, a hedge fund was always tied to a prime broker.''

The notes can be issued for any maturity. The debt is guaranteed by Citadel's two biggest hedge funds: Citadel Kensington Global Strategies Fund Ltd. and Citadel Wellington LLC. The funds would have to back the debt should either fund rating lose its investment-grade rating.

"Their design is to reduce their reliance on Wall Street firms for funding, which would eventually provide them with a competitive advantage because they won't be forced into liquidation during periods of stress,'' Fahey said.

In other words, "No Margin Calls. No Problems."

Citadel Hedge Fund May Issue $2 Billion in Bonds

Carolyn Kepcher, who helped Donald Trump fire corporate wannabes on “The Apprentice” television show, took a new role Tuesday — helping Microsoft Corp. find the best small-business idea in America.

The winner of the Redmond, Wash.-based company’s "Ultimate Challenge” contest will get $100,000 in seed money, a storefront or other space in Manhattan for a year rent-free, and software to help get their business started.

Fired by Trump, she's hired by Microsoft [MSNBC]

Just in case you were wondering how McDonald's was planning on keeping up its swelling profits and rocketing stock price--up 22% year-to-date--in the future, now you know. They are going to own all the sandwiches in the world.

As we learned from the Wall Street Journal's LawBlog, McDonald's has filed an application to patent sandwiches.

The 55-page patent, which has been filed in the US and Europe, covers the 'simultaneous toasting of a bread component'.

Garnishes of lettuce, onions and tomatoes, as well as salt, pepper and ketchup, are inserted into a cavity in a 'sandwich delivery tool'.

The 'bread component' is placed over the cavity and the assembly tool is inverted to tip out the contents. Finally, the filling is placed in the 'bread component'.

It explains: 'Often the sandwich filling is the source of the name of the sandwich; for example, ham sandwich.'

Okay. So maybe androids aren't about to storm Greenwich quite yet. But as more and more money pours into alternative investments, you can bet that there will be more and more alternative alternatives. The outsized profits made by hedge fund managers are bound to decrease since the barriers to entry are relatively low. The party's not over yet but the prettiest girls may have already left the building. [Sorry. Forgot we banned that particular metaphor.] The androids are dreaming of assets under management.

Hedge-fund investors could earn greater returns at a fraction of the cost, according to research by Cass Business School Professor Harry Kat, who designed software to automatically mimic funds' trading profits.

Synthetic funds would have outperformed 82 percent of the 2,000 hedge funds and 500 funds of hedge funds studied by Kat, a former head of equity derivatives at Bank of America Corp. Most of the gains generated by hedge funds were eaten up by fees, typically 2 percent of a portfolio and 20 percent of profits, he found after studying 15 years of monthly fund results...

Kat and colleague Helder Palaro set up their ``FundCreator'' system to replicate the performance of any fund by identifying heavily traded futures that show the same volatility and risk characteristics over time, he said. Investors will pay 0.03 percent of the value of their portfolio for the information that they could then use to trade through a broker.

The system produces returns of about 10 percent a year, Kat said, compared with 6 percent to 7 percent after fees for the average hedge fund he studied.

Jessica Wolcott is not just an extortionist. She's also a model/market/entrepreneur—at least according several loan requests she made on the website Prosper, which brings together small lenders with borrowers. From March through April of this year, Wolcott placed six ads on the website seeking between $10,0000 and $20,0000—requests totaling $90,000—giving a variety of reasons why she needed the money and what she planned to do with it.

The young woman who pleaded guilty to extorting a Pepsi executive after meeting him over craiglist wasn't exactly shy about including lots of pictures with her loan requests, including the one you see to you left. Some of the pictures seem designed to show her as as a sweet young thing who volunteers as a Big Sister, while others are clearly attempts to look sexy and provocative.

Gawker last night reported on the Prosper profile and noted that there were even more pictures on Craiglist but, of course, these are long gone. The New York Post this morning reports that Jessica apparently lied about a lot of things in her loan requests.

She claimed in those postings that she had a $60,000 marketing job, modeled for Pantene Pro-V shampoo, had a Johns Hopkins University chemistry degree and that her parents were dead.

But court records reveal Wolcott's mother is alive, and a Johns Hopkins spokeswoman said Wolcott never matriculated there.

Court records also show Wolcott was evicted from an apartment in April for not paying her rent.

Okay. Now we're going to immediately retract the metaphor of our earlier post (if not it's message). No more references to "the party" when discussing hedge funds. It's as cliched as "rockstar investment banker." We've, you know, been in hedge fund offices. They aren't exactly a party.

But Wall Street never learns from its own history, which proves that every good idea, taken too far, turns into a bad one. Yes, some hedge funds make gobs of money. But with 9,000 of them swarming over the same markets, they can't all be successes.

"Hedge funds have probably come too far too fast," admits Cliff Asness, who himself hedges more than $9 billion at AQR Capital in Greenwich, Conn.

Sure enough, so far this year, as the U.S. stock market gained more than 8.5 percent, the average hedge fund rose only 6.8 percent. (It's worth noting, too, that hedge funders use notoriously fuzzy math in calculating returns; a Yale study estimated that average performance may be overstated by up to five percentage points a year.)

So what does all this mean for Average Joe investor? That you didn't miss much by not being invited to the party.

How to beat hedge funds [Money in CNNMoney.com]

It’s totally cute. Yesterday Time Warner CEO Dick Parson’s was all over Carl Icahn, crediting the high profile investor with helping Time Warner get in touch with their shareholders and convincing the company to increase its share buyback plan.

Reuters reports on Parson's comments at the Reuters Media Summit:

"When someone accumulates even 3 or 4 percent of your stock and starts making the kind of noises Carl was making, it causes you to get in touch with your other shareholders," said Parsons. "There was a sense that you could use more of your capacity to buy back the stock."

Parsons said he's not worried about another assault by Icahn. "Someone asked me if he is happy. I'm not sure if that's a word I would use. I'm sure he is happier."

Icahn, for his part, said he is happy, now that Time Warner stock has risen over the past several months.

"I'm happy concerning Time Warner," said Icahn in a phone interview on Tuesday. "The hedge fund make over $200 million and to me, that's a lot better than having a debilitating proxy fight."

"Dick kept the promises he made to me and that makes me happy," Icahn added. "He promised to cut expenses and do a huge buyback.

"We helped facilitate some of those changes. I think some of those things would not have happened to the extent that they did if we hadn't been around," said Icahn, adding that he "got some criticism for backing off" and dropping the campaign for a full breakup.

Reuters has the whole thing up on an audio file that you can listen to here.

Time Warner CEO gives Icahn some credit [Reuters]

Compensation on Wall Street is rarely based solely on how much money one individual brings in. Wall Street types work in teams; being on a profitable team will earn you a big bonus. Unfortunately, teams in her survey rarely shared, say, compatible areas of expertise. Instead, they tended to form around shared social characteristics—like all being guys from the south who played sports and enjoyed strip clubs in their spare time. Women reported being systematically pushed toward more "female-friendly" teams and areas of their firms. These areas, like equity research and public finance, tended to feature lower compensation. Perhaps that's because they didn't generate as much fee revenue from clients, perhaps it's because they were dominated by women, or perhaps it is because these areas lack social capital, ties to the firm higher-ups. Regardless, such assignments lowered women's compensation.

Firms also systematically assigned women to work with women-owned business clients. This makes perfect sense (minority Wall Street workers also reported being assigned to minority-owned business clients; higher-ups assumed this would make the clients feel more comfortable). However, since women-owned and minority-owned businesses tend to be less capitalized than other businesses, these clients were less lucrative, which led to lower bonuses. In addition, [Author of What Are Women Worth Louise Marie] Roth reports, much of the average Wall Street bonus is determined by "360 degree" feedback from co-workers. Roth found that, systematically, people gave higher performance reviews to people who looked like them. Since men continued to dominate Wall Street through the 1990's, men received better reviews.

What Are Women Worth [The American]

We hear that news of Citadel’s debt offering has sparked the idea around some trading floors that it might not be a bad idea to short the bonds. Since this is the first time a hedge fund has issued public debt of this sort, everyone is still feeling their way through this. But the general idea would be to short the bonds as a hedge fund industry hedge—a double hedge, if you will.

“If typical hedge-fund trades come under pressure, Citadel will come under pressure, and if citadel comes under pressure, these bonds will widen for sure,” a source says. “Price talk is L+110bps area, which makes it a reasonably inexpensive hedge.”

One problem with shorting the bonds is that they may be very hard to borrow. Citadel is probably seeking reassurance from the placement agents, Lehman and Goldman, that the bonds won’t be going to investors likely to look for a quick sale or lend them out. Without an investor willing to lend out the bonds for shorting purposes, there may be no way to short the bond directly. The most obvious alternative would be to buy credit default swaps with the bonds as the referenced asset. But we’ve got a creative audience. So come on, gang. Any new ideas on how to short the Citadel bond issuance?

More tales from the top of the world. Or at least the top of the market.

Some wealthy investors are so keen to get a foot in the door they are taking sly steps to get their cash into so-called "closed" funds. Several funds have seen well-off individuals transfer money to their depository bank, triggering automatic issuance of units in the fund, even though they were not wanted.

"It is incredibly annoying," says one London fund manager who has been closed for several years. "People are quite flabbergasted, especially very wealthy people, when you send their money back."

Most of the tactics used by investors are less underhand. Big institutions know closed hedge fund managers often accept money from longstanding clients, friends, "good" investors and charity funds. Even the toughest fund manager is likely to replace redemptions, operating a wait list for these investment chances.

Rich try unusual moves to join hedge funds [Financial Times]

Sponsored by Bloomberg.com

Hank's New Lady (NY Post)
The Post claims that ex-AIG CEO Maurice "Hank" Greenberg is aggressively buying shares of the New York Times in a bid to bust the dominance of the Sulzberger family. Everyone knows that Hank is interested in a newspaper, and it's been assumed that he'd go after low-hanging fruit, like the Tribune, some company that nobody really cares about that's dying to sell itself off. But the Times is a different beast entirely, due to its family ownership, stature, and the fact that it's New York, not Chicago. There's probably not much prospect for ownership changes at the company, but there's no doubt that Greenberg would be a rather activist shareholder, trying to give voice to a bunch of others who are angry at the company management. Meanwhile, you have to assume the Sulzbergers have gone soft after all these years, and are far from battle-tested.

NASD, NYSE Say They Will Merge Their Regulatory Bodies (Washington Post)
In a historic agreement, similar to great treaties that have ended wars, the NASD and the NYSE have agreed to merge their regulatory bodies, so as to avoid duplication of efforts. Both exchanges will operate under one set of rules. At a press conference, SEC chairman Christopher Cox said, "our work here is done", and gave all SEC employees two weeks notice, and six-months worth of pay, "now that these two private companies have a good enforcement system in place, there's no need for our services". Oh wait, he didn't say that at all, rather he called the move a "definitive first step toward a historic change that will simplify and strengthen the current self-regulatory structure in the United States," whatever the hell that means. Of course, all around, there were promises that regulation and oversight would not diminish.

Oil Trades Near a Two-Week High on Signs of Colder U.S. Weather (Bloomberg)
The oil market really is a tease. Every time it seems like the bottom is going to drop out, like it's going to fall to $55 or something, it snaps right back up. You'd almost think it were being manipulated or something. Now it's above again on signs of colder weather in the US. That's really not a bad prediction, if you're going to make one. Every day we're getting closer to winter, and winter unfortunately tends to herald the so-called "cold-weather season". But then the leap from colder weather to higher oil prices sort of evades us, seeing as everyone knew this cold weather was coming. Or maybe this year, because of how nice it's been in much of the country, people just refused to believe it.

Court allows U.S. suit vs. Realtors to proceed (MarketWatch)
The most ridiculous (by far) part of Freakonomics is when the National Association of Realtors is compared to the Ku Klux Klan because both organizations have to keep a tight grip on information. Gimme a break. That's not to say the NAR isn't some slippery bastards, something that Jonathan Miller's done a good job pointing out. And realtors certainly operate as a cartel, limiting who can join their ranks, and the prices they can charge for their services. So we have no problem seeing the courts allow a suit against them the DOJ to go forward. But still, comparing them to the Klan does seem a bit extreme.

$$$"Are you jewish? 5'2 or less? brunette? Into fashion/handbags/shoes? Cute feet? If yes, this handsome, 6'1, 37 yr old jewish banker wants to meet you." [Craigslist]

$$$Caught up in the Wall Streeters-On-The-Couch party yesterday, we missed this: Wall Streeters who "use psychic powers to catch an edge." [Trader Daily via FinAlternatives]

$$$Lindsay on Toyota [WallStrip]

Barry Diller: General Leobardo C. Ruiz Int'l to El Paso Int'l on his Cessna Citation X

[Not sure if this is public or not, but IAC's Barry Diller's screen name is URalBugs2bSqushd, the founder of College Humor's, BoobsBoobs6969. Also, IAC owns College Humor. And Scene. Just kidding, you're not even halfway there.]

BoobsBoobs6969 (3:45:38 PM): hey dad
BoobsBoobs6969 (3:45:47 PM): Dad
BoobsBoobs6969 (3:45:59 PM): DAD
BoobsBoobs6969 (3:46:29 PM): DADDD!!!!
URalBugs2bSqushd (3:47:55 PM): What did I tell you about calling me that?
BoobsBoobs6969 (3:47:58 PM): I don’t know you said um
URalBugs2bSqushd (3:48:05 PM): I said NEVER call me that—EVER.
BoobsBoobs6969 (3:48:29 PM): Ok, I’m, I’m sorry, I forgot. I thought you said I just couldn’t call you that in public.
URalBugs2bSqushd (3:48:35 PM): I don’t want to hear sorry’s, I want to see actions changed.
BoobsBoobs6969 (3:48:49 PM): Ok, I promise.
URalBugs2bSqushd (3:49:10 PM): Promises mean nothing to me, Josh Abramson. Do you think I got to where I am today with “promises”? Nice thought kid, but if I was going to go with “promises” I might as well have put my life’s savings in a brown paper bag and lit it on fire. “Promises” are for people who believe in unicorns and buy catheters laced with dynamite—DUMB ASSES.
BoobsBoobs6969 (3:49:25 PM): Jeez relax
URalBugs2bSqushd (3:49:36 PM): Don’t ever tell me to “relax.” It’s completely inappropriate for you as, less so a child of mine that a one-night stand gave up for adoption some 26 years ago than as an employee to tell me what to do. I will sell your ass faster than you can say “rel.” Also, I really just can’t stand it when people tell people who are perfectly calm to “relax.” It’s totally infuriating. And then, you know, you start to act like someone who needs to “relax” but only because you’ve been brought to that point by the person who told you to “relax” in the first place. It really gets into my craw.
BoobsBoobs6969 (3:50:03 PM): OK I’m sorry I was just saying that maybe
URalBugs2bSqushd (3:50:04 PM): SILENCE SUBORDINATE!
Auto Response from BoobsBoobs6969 (3:50:04 PM): I wish Nicholas D. Kristof was my real father
URalBugs2bSqushd (3:50:10 PM): Josh
URalBugs2bSqushd (3:50:15 PM): why would you say something like that to daddy?
URalBugs2bSqushd (3:50:21 PM): I think you know that that wasn’t very nice.
URalBugs2bSqushd (3:50:25 PM): josh, come back to the computer. Now
BoobsBoobs6969 (3:50:28 PM): NO
URalBugs2bSqushd (3:50:35 PM): yes
BoobsBoobs6969 (3:50:37 PM): NO
URalBugs2bSqushd (3:50:40 PM): YES
URalBugs2bSqushd (3:50:45 PM): listen, you know I lose my temper sometimes but I really do love you like a…
BoobsBoobs6969 (3:50:48 PM): like a what
URalBugs2bSqushd (3:50:53 PM): like a…
BoobsBoobs6969 (3:51:48 PM): LIKE A WHAT?
URalBugs2bSqushd (3:51:54 PM): like a father an employer loves likes a son an employee.
BoobsBoobs6969 (3:51:59 PM): I don’t believe you
URalBugs2bSqushd (3:52:05 PM): it’s true. In fact, I’m even going to El Paso tonight to buy you a present.
BoobsBoobs6969 (3:52:10 PM): really?
URalBugs2bSqushd (3:52:17 PM): yup: http://elpaso.date.com/girls-single/texas.htm
BoobsBoobs6969 (3:52:25 PM): really??? For me??? Omg, dad I can’t believe this, this is the nicest thing you’ve ever done for me!
URalBugs2bSqushd (3:52:30 PM): See. Told you.
BoobsBoobs6969 (3:52:41 PM): wait a second. Is this a really a gift for me or are you just acquiring another site?
Auto Response from URalBugs2bSqushd (3:52:41 PM): work

The Reuters bearing that headline story goes on to report this shocking news: "While these sums are nowhere near the $1.5 billion that Alpha magazine said mathematician-turned-hedge fund manager James Simons of Renaissance Technologies Corp. took home in 2005, they are significantly richer than the median American household income of $46,300, according to the Census Bureau."

Hedge fund CEOs earn millions, new data show [Reuters]

There’s been talk for months now about Citadel raising money from the capital markets—much of it centered on rumors that Citadel might go public with an initial public offering of stock, much like Fortress Investment group did earlier this month. But Citadel bigs constantly downplayed the possibility, and lots of folks thought that Citadel might not want to subject itself under the regulatory scrutiny and reporting that come with a public stock offering. But still, there was a sense that there was a lot of money out there up for grabs if Citadel wanted it, and that had to be mighty tempting.

Now they’ve decided to split the difference—hitting up the capital markets for cash in the form of an unsecured bond offering. Citadel will be able to avoid securities disclosure requirements by restricting the offering to “qualified institutional purchasers.” If you’re unfamiliar with the way this works, just think of the requirements to invest in hedge funds—income or wealth requirements meant to guarantee you are a sophisticated investors—but on steroids. (The official term for this is a “Rule 144a Offering.”)

The Financial Times has the details:

Citadel, the hedge fund group, said on Monday it would sell up to $2bn of senior unsecured debt to investors in a deal believed to be the first of its kind.

The offering of five-year notes is the latest attempt by a hedge fund group to tap public markets and establish itself as a mature financial services company. Fortress Investment Group, which has $26bn in hedge fund and private equity assets under management, filed this month for an initial public offering that would value it at $7.5bn

Citadel marks a first with debt sale [Financial Times]

We’re going to leave the substantial issues about college argued in this post on the Volokh Conspiracy aside. It’s not really our thing. We just wanted to bring to your attention they way it equates “ works on a cure for cancer” and “wins the Nobel Prize in Chemisty” with “becomes a prominent investment banker.” So, all you investment bankers out there, email that to the do-gooders in your life because you're just as good as them. Only richer.

Liming Luo is a high school senior who is both a math prodigy and received a perfect 2,400 score on her SATs. New York Magazine asked Katherine Cohen, CEO and founder of IvyWise, a school-admissions consulting company, about her [and other students'] prospects for admission to MIT, the college of her choice. The answer:

Her perfect SAT score is truly outstanding but not a free ticket. She is applying to many technical colleges, so she will be competing against a lot of other high-achieving math/science kids (and a lot of other Asian students in particular). While she may be admitted to MIT early, I am not convinced she’s a shoo-in—I’d want to see more evidence that she’s giving back to the community.

Beyond the Asian issues, what sense does it make to require Ms. Luo to show that she's "giving back to the community?" She's a math genius, and has a perfect score on her SATs. Her name suggests that she is likely the child of immigrants, maybe an immigrant herself. She has a fair number of extracurriculars, but likely is focusing on developing her academic skills. She'll be giving back by creating wealth and knowledge when she invents the next Google, works on a cure for cancer, wins the Nobel Prize in Chemistry, or becomes a prominent investment banker. And some of those careers will allow her, if she chooses, to donate substantial sums to charity. But what's she supposed to be doing now, neglecting her intellectual pursuits and instead volunteering at a soup kitchen every Sunday? That's a very nice and praiseworthy thing to do, of course, but it would hardly be the most efficient use of her time and talents, and should have nothing to do with whether she's admitted to the school of her choice. The idea that Ms. Luo may not be worthy of admission because she hasn't proven herself sufficiently altruistic is the kind of thing that makes Objectivism look almost reasonable.

Something's Terribly Wrong with University Admissions, Judging by This Story [Volokh Conspiracy]

On Sunday New York Times writer Alex Williams broke the news that trendy New York City bars, clubs and restaurants are too crowded with the hoi polloi on Saturday nights. You know the drill: Saturdays are officially the new Sundays, where everyone who hangs out until the wee hours during the week stays home to “decompress.” (Even guys like AJ know this—Thursday night is the night he balls.) Even our hallowed haunts on the Lower East Side have become unbearable on Saturdays.

But a funny thing happened on the way to the abolition of Saturday night. They forgot to include people who have those little inconvenient things called real jobs. The article quotes author Candace Bushnell and publicist Jonathan Cheban and talks about Nicole Richie’s nightlife habits. We just couldn’t help noticing (a) that taking your nightlife advice from Cheban and Richie is part of the problem and definitely not part of the solution and (b) that these aren’t people who have to be at their desks five or six mornings a week. Of course losing Saturday night doesn’t matter to them. For those of among us who report to, say, a trading desk before the dawn five days a week, it’s another matter entirely. Saturday nights still count.

And, of course, it is precisely investment bankers and traders who the Times discovers out on a Saturday night.

[After the jump we get mean and divisive about the two different finacial types the Times finds enjoying themselves on a Saturday night]

--Wall Street Journal

--Business Week

Or at least just the party in Wall Street's pants.

The shopping mall is not the only place where prices are falling. Stocks tumbled yesterday in their steepest slide since July, after a weak sales estimate by Wal-Mart spurred concerns about the holiday shopping season and fed broader worries about a slowing economy.

The sell-off on Wall Street spoiled what had largely been a steady run-up in stock prices in recent weeks. In the last month and a half, the Dow Jones industrial average broke through 12,000 for the first time, and the broader Standard & Poor’s 500-stock index rose to its highest level in six years.

Stocks Drop Steeply After a Bull Run [NYT]

We love Target as much as the next guy, and Wal-Mart’s, you know, Wal-Mart, but does anyone else feel like we’ve walked in on Jim Cramer’s own Fatal Attraction moment in this week’s issue of New York?

What’s ailing Wal-Mart? People don’t mind shopping at a down-market, politically incorrect store, if the prices are low enough. That was always Wal-Mart’s game. But now the other guys have figured it out. A number of Wal-Mart’s competitors now offer similarly low prices and a better shopping experience. Take Target. Wal-Mart’s sloppy aisles, dowdy clothing, and junky presentation have all the charm of GUM, the grim old monopolistic chain of the former Soviet Union. Target, meanwhile, is a joy. And its in-house merchandise, the key to its bountiful profit margins, rivals the stuff you can find in much more expensive stores—at price points that still make you feel like you’re getting the deal of the century.

Maybe he’s trying to show us a “softer side of J. Cra,” but it really just makes us uncomfortable. Even the diehard Cramer fans who won’t be truly happy until he lights the Mad Money set on fire are going, “Um, yeahhh, well, we’re gonna take off now, this was real.” All in favor of chair-throwing manic rages over moments like these, say “I.”

Attention, Wal-Mart Shoppers [NYM]

When we heard that "the cleaners" had trapped Goldman Sachs London employees in their offices during their lunch today, we imagined Mr. Wolf from "Pulp Fiction" or the squad that comes in to execute everyone in sight in "Le Femme Nikita." But, as it turns out, these are just regular old cleaners. Like people who clean stuff.

Workers at investment bank Goldman Sachs, some of the highest paid professionals in the City, were trapped on Tuesday lunchtime inside their Fleet Street offices by cleaners protesting over low pay.

About 20 cleaners and Transport and General Workers Union (T&G) union members stormed the office building around lunchtime carrying placards reading "Goldman Sucks".

The cleaners, who were contained in the reception area, targeted the bank because it owns, together with a private equity firm, their employer ISS -- one of the world's largest contract building services companies.

Amaranth, the hedge fund that collapsed after making bad bets on energy futures, has taken down a fund of fund listed on the London Sotck Exchange. The $61 million fund was managed by a smaller, Chicago-based unit of the Man Group.

The Wall Street Journal reports:

A fund of hedge funds listed on the London Stock Exchange five years ago by hedge-fund giant Man Group PLC wants to shut down after recent losses tied to the collapse of U.S. hedge fund Amaranth Advisors and persistently poor liquidity in the shares.

The fund lost about one-fifth of its gains this year from the collapse of Amaranth Advisors in September. In the 10 months through October, its portfolio gained 6.5%, mainly from strong performance at the start of the year and in October.

[Editors note: The picture above the left represents Amaranth's Calgary-based trader, Brian Hunter, and some other guy holding him.]

Man Group Fund Looks To Shut Down [Wall Street Journal]

In Business Week:

$$$ Firing top executives, scheduled options rewards, and other ways companies named in the options scandal can save face and boost investor confidence. [How to Clean Up a Scandal]

$$$ MySpace: The short head of a burgeoning online social-networking movement [There's Not Enough 'Me' in MySpace]

$$$ Casual conversational Fridays: Some companies are requiring reduced email usage as a way to increase productivity. [*!#@ The Email. Can We Talk?]

In Forbes:

$$$ Lead plaintiff in Halliburton class-action suit ask for a change in legal representation following recent charges against current attorney's firm, Milberg Weiss. [Battle of the Class-Action Titans]

$$$ Forbes asks us what we would change about ourselves and the world if we could start from scratch. Some thoughts on the quality of higher education, the pharmaceutical industry, and America's prison system. [Blank Slate]

In Fortune:

$$$ MOOORE on the options scandal: spring-loading, symmetric spring-loading (what?), bullet-dodging (has anyone else never heard this one?). Aside from tougher disclosure rules, the SEC has yet to prosecute companies, executives, or compensation committees that do it, and few, if any, shareholder class-action suits have been pursued. You can't really call it a "scandal" if, technically, nothing illegal has been done, right? [Sleazy CEOs have even more options tricks]

$$$ A, "$4 billion company run like a 20-person startup." The rise and fall of Sanjay Kumar and Computer Associates. [CA: America's Most Dysfunctional Company]

$$$ Companies like Goldman and Amgen are looking to Teach for America's recruits for potential talent. [Schooling Giants on Recruiting].

The Los Angeles Times this morning reports that Ford has developed a fuel cell car that can travel 350 miles between hydrogen fill-ups. Which is probably almost far enough to actually find a hydrogen filling station.

Ford's experimental hydrogen vehicle, scheduled to be shown for the first time at a media preview Wednesday of the upcoming Los Angeles Auto Show, is a modified version of the Explorer sport utility vehicle.

It packs its hydrogen gas fuel in a large storage tank at a pressure of 10,000 pounds per square inch, twice that of most other fuel cell vehicles.

A fuel cell produces power by converting hydrogen and oxygen to electricity. A Ford spokesman said the fuel cell Explorer was not a production-ready model.

And, oh yeah, Ford is putting up all it's assets as collateral to borrow $18 billion and avoid bankruptcy. Sort term outlook: new CEO Alan Mulally avoids bankruptcy! Long term outlook: government bailout!

Ford to unveil version of fuel cell Explorer SUV [LA Times]

Inside Ford's $18-billion gamble [Detroit Free Press]

Yesterday's rash of stories about traders seeking professional help from psychologists brought to mind a story from The Money Game, the classic 1967 book on Wall Street written by George Goodman (who wrote under the pen-name Adam Smith and later went on to host "Adam Smith's Money World").

After the jump, we bring you a brief excerpt from The Money Game. It's basically the story of what happens when an interest in mental health meets an interest in financial health. Guess which wins...

We sort of suspected that Barry Diller might agree with us that a lot of the sound and fury raised against executive compensation gets things exactly backwards--many of executives of public companies probably aren't paid enough. And the fact that the Corporate Library awards IAC/InterActiveCorp a grade of 'D' on corporate governance was probably a good sign that the fetish for procedural governance isn't high on the list of things that turn Barry on. But it was nonetheless a pleasant surprise to see Barry this morning throwing a couple of jabs at the corporate governance types, the New York Times and Gretchen Morgenson.

The chairman and controlling shareholder of the Internet media conglomerate singled out governance research groups as well as the business page of The New York Times, which he said had a "loony" view of executive pay.

He also said he had no use for the cottage industry of compensation consultants who advise boards of directors...

Diller said he found "the whole issue of executive compensation and particularly the policy of The New York Times business section toward executive compensation ... absolutely loony." He singled out, in particular, business writer Gretchen Morgenson, who often writes about executive pay and corporate governance.

As long as we’re on the subject of Ron Burkle, we might as well note that there’s something not-quite-right about the criticism of the guy leveled by that celebrity-and-media gossip blog called Gawker. More particularly, Gawker has been challenging the notion that Burkle “despises” Jeffrey Epstein, the wealthy money manager indicted earlier this year after police uncovered evidence that he had been getting naked and masturbating while local high school girls manipulated his flesh.

We too had thought the two men were friends. But just because they may have been friends back before Epstein was indicted doesn’t mean they’re friends after. This might be exactly the sort of thing that could make someone go from enjoying someone’s company to despising them. We certainly didn’t have anything against Epstein before the stories came out. So, like, maybe Burkle despises him now. And wouldn’t that kind of be a good thing? We mean, wouldn’t it show a bit of character, a moral compass, that sort of thing?

The notion that California’s Supermarket King Ron Burkle is not a political entrepreneur—someone who has used his connections with politicians to profit—is unsustainable. But, of course, Burkle manages to sustain exactly that notion. The Forbes article that got so much attention from Gawker yesterday (mostly on the question of whether Burkle is or is not friends with Jeffrey Epstein), provides a brilliant little glimpse inside the self-image of Burkle.

The mainstream business press beats up on him, essentially for buying access and influence among politicians and leaders of the pension funds that invest with him.

"I basically became the poster child for the ills of political donations and business. It's preposterous!" he protests.

In the mid-1990s he had contributed money to the campaigns of Governor Gray Davis, San Francisco's former mayor Willie Brown (his former lawyer) and State Treasurer Philip Angelides, and later Brown and Angelides joined the Calpers board. "How were we supposed to know in the mid-1990s that Willie Brown was going to be on the board of Calpers?" he says. You would never have guessed unless maybe you knew that Willie Brown was about as well-connected as any politician in California's history.

Yucaipa arranged for Clinton to make a speech at a Teamsters conference in 2003, and later Clinton urged Teamsters President James Hoffa Jr. to trust Burkle and present him with possible deals. Result: This spring Yucaipa paid $100 million to buy a controlling stake in Allied Holdings, a trucking outfit in bankruptcy proceedings. "Clinton got it to the point where Hoffa actually helped us with that deal, something I couldn't have gotten on my own," Burkle says.

Ron, Ron, Ron. Look. We know you want people to think you built your fortune on your own, pounded it out on the battlefield of the free-market and all that. But it’s not taking. So we’re going to give you the same advice we gave Aleksey Vayner: Go with what you got. There have been plenty of American fortunes built on political connections. And now you’ve got one of them. If those nasty free-market types want to tease you for it, well just wipe away your tears with your piles of money.

The Rise Of Ron Burkle [Forbes]

This morning the New York Post names the extorted executive as Gary Wandschneider, a divisional vice-president of Pepsi Bottling Co. According to Forbes.com, Gary pulled in nearly $3 million in cash compensation last year and was awarded stock options worth about another $3 million.

Well, that's somewhat less exciting than the idea that it was the CEO of a major company. But the good news is that thanks to help from our readers, we were on the right track! We had narrowed it down to a handful of companies based in Westchester, including the Pepsi Bottling Co. So good work team!

'Pop' Tart Scams Bigwig [New York Post]

Forbes.com Profile: Gary K Wandschneider [Forbes]

We’re getting closer and closer to identifying the Fortune 500 executive hit by a Craiglist extortist. In addition to the details we noted earlier, the complaint notes that the company is based in the Southern District of New York. Now, there are around 92 Fortune 500 companies located in New York State. But the Southern District is much smaller, covering just the Bronx, Dutchess, New York, Orange, Putnam, Rockland, Sullivan, & Westchester Counties. And we know the victim is a man so we can cross off all those New York based Fortune 500 companies run by women, narrowing down our investigation considerably a tiny bit.

After the jump, we irresponsibly speculate on the secret identity of the crime victim.

[Editors Note: There are problems this morning with loading the blogs at the New York Times this morning. We'll have our down and dirty summary of what's on their business blog later this morning. Watch this space. Still acting buggy, so we're putting this feature aside for the day.]

Sponsored by Bloomberg.com

Boeing Not Afraid to Say ‘Sold Out’ (NYT)
We've been commenting a lot lately that everything seems to be going swimmingly for Boeing, almost to the point where things might be looking too good. A run like this seems destined for a stunning reversal of fortune, or at least it would if this were a work of fiction. The Times notes that it's biggest challenge now is the tragedy of abundance; it's basically got too many sales to handle, and it risks stumbling if it can take on more than its chew. It recently told Southwest, one of its major customers, that it would not raise an order from 80 planes to 82, because it simply didn't have the capacity. The firm also knows that orders can fail to materialize, and so there's a danger in overextending itself, as it did in the mid 90s. Meanwhile, we've been noting how just about every airline is shifting orders away from Airbus to Boeing, but the US Air-Delta merger could have the opposite effect. Delta's a Boeing shop, while US Air has big orders in at Airbus. In fact, Airbus has an investment in US Air, which was made as an incentive to buy Airbus planes. So it's possible that Boeing could lose some major Delta business. Note: this is why airline mergers are so hard. Think of the added costs, just associated with dealing with multiple airline vendors now.

Hu Tells Bush He'll Seek Balance in U.S.-China Trade (Bloomberg)
Why do we find it worrying that Chinese President Hu Jintao is pledging to take measures to balance US-China trade. That's apparently what he promised Bush, during a recent telephone call. What does he mean? Will he promise to make Chinese goods more expensive? Will the Chinese buy plastic toys, cellphones, and sneakers from the US? Sorry, but we don't make those things. Maybe the newly rich Chinese elites will fly here to get massages, hair frosting, and formica countertops from our creative class. That'd be nice.

Buffett's Berkshire complies with SEC request (Reuters)
Despite Warren Buffett's supposed love of plain-folks talk and clear financial reporting, we've always found it difficult to delve into Berkshire's financials. His insistence one solely reporting using GAAP means that there's not much clarification, or indications about what items are one-time in nature. Of course, he'd scoff at the idea of a one-time expense, but come on, it can be helpful. Apparently, the SEC agrees that the firm to could do a better job opening up, and asked the company to be a bit more forthcoming. Busted.

EMI Says It May Draw Takeover Offer (Dealbook)
The major record labels could be fertile territory for private equity to conquer. For one thing, they're really not doing very well these days. In part it's due to changes at the industry, but the management is really stale at them. It's easy to imagine that with a little bit of work, they could start to right the ship, or at least chart a better course. They're also, of course, sitting on piles of assets, namely, their extensive music cataloges, much of it is under-monetized, or, perhaps, dribbling out a few sales on iTunes. So it'll be interesting to see what happens with EMI, which may be in talks with Kravis Kohlberg to go private. Wonder what they've got cooked up for the company.

$$$The Donald's thoughts on 'naked statues.' [Trump Blog]

$$$The Donald Jr.'s hair. [Gawker]

$$$The Natty Banker’s Gift Guide for Wall Streeters. [Banker's Ball]

Inexplicably, journalists everywhere covering the business beat have declared today “Wall Street Mental Health Day,” or, rather, “Wall Street: They’re F**cking Nuts! Day.” The Post has a piece on traders who’ve been “traumatized by mass layoffs as electronic trading replaces humans” and are, dun dun DUN, “beginning to seek help from psychologists.” New York’s cover story, “Can’t Get No Satisfaction,” delves into burnout and psychological trauma that can come with taking a job on the Street. Even FHM chimes in, with what appears to be a very well-researched article on a raging endemic over at Merrill wherein analysts are so “psycho”—their words—that they can’t understand the dangers of nailing their therapists, which most of them, to their own detriment, often end up doing. (I kid...maybe). But anyway, the New York piece was the most interesting to us because our old pal Alden Cass grabs the mic and really seems to get to the bottom of things:

…Ask Cass why his clients are burning out, and his answer isn’t any different for a banker than it would be for a public-school teacher; there’s a gulf between what they expected from their jobs and what they got. “I can’t tell you,” he says, “how many people come into my office and ask, ‘How come I have this money and I can’t find happiness?’

So what does he tell them? “That happiness equals reality divided by expectations.”

What else does he tell them?

[What do you tell your patients?]
I teach them “Act as if” tips, which is from the movie Boiler Room. “Always be closing” is a good one, too. A lot of my workshops have Gekko quotes, too. I also like “Don’t get emotional about stocks; it clouds your judgment.”

[The Wall Street Journal dubbed you “The Fraser Crane of Wall Street.” How do you feel about that? Would you rather be Niles?]
No. I’d rather be neither; they’re too touchy-feely. I’d rather be Dr. Phil.

[You have an advice column in Trader Daily. Would you call yourself the “Dear Abby of Trading”?]
No, “The Hitch for Traders.”

Can’t Get No Satisfaction [NYM]
LAID-OFF TRADERS ARE NOW SHRINK RAPT [NY Post]

DealBreaker Interviews: Dr. Alden Cass, Hair Stylist Therapist to the Stars Wall Street-ers

We haven’t had the chance to use the phrase “fighting like ferrets” for a while. But the news today that Scott Kapnick, co-head of investment banking at Goldman Sachs, will leave the firm at the end of the year is prompting speculation of a continuing power struggle at Goldman.

The speculation is totally out there now, and it’s kind of fun to watch news organizations which pretend they don’t speculate engage in it.

Here’s how Bloomberg does it:

Goldman, the most profitable investment bank in Wall Street history, filled its top ranks with former trading executives in June when Blankfein succeeded Henry Paulson as CEO and named Cohn and Winkelried as his deputies. A month later, Blankfein removed Kapnick, a career investment banker, as co-chief executive officer of Goldman Sachs International and replaced him with Richard Gnodde, former president of Goldman Sachs Asia.

In April, Kapnick denied speculation of a power struggle amid senior management in London, according to the Times of London. Richard Sharp, who ran Goldman's buyout business in Europe, said in July he would leave at the end of the year.”

Kapnick's move is the latest in a string of management changes since July, when Chairman and Chief Executive Henry "Hank" Paulson left to become U.S. Treasury Secretary, succeeded by Lloyd Blankfein.

DealBook then picks up the Reuters story and ruins the party by explaining the subtext:

The latest departure comes as analysts are watching for signs of any shift in the balance of power between Goldman’s trading and investment banking businesses. Mr. Blankfein came up through the ranks of Goldman’s trading business, unlike his predecessor, Henry Paulson, who was a banker. The differing career paths have led some analysts to wonder if the firm’s trading business will be given more attention or prestige under the new leadership.

Of course, engaging in that kind of rampant speculation is totally beneath us here at DealBreaker. And by "beneath" we mean that we invite you to engage in more of it in the comments section directly below this post.

Goldman Investment Banking Co-Head Kapnick to Leave [Bloomberg]
Goldman investment bank co-head Kapnick to retire [Reuters]

Goldman’s Co-Head of Investment Banking to Leave [DealBook]

It’s not often that we laugh out loud at law review article. But that's probably related to our whole "never read a law review article" policy.

But we read the abstract to this one, and it actually made us laugh because it was actually funny. We're not bothering to read the whole thing, of course. Instead we're assigning it to our little brother for an executive summary.

Professor Lucian Bebchuk argues that the notion that shareholders in public corporations can remove directors is a myth. The same argument was made by Berle and Means in 1932. Not only is shareholder power to remove directors largely a myth in U.S. public companies, it has been widely recognized as a myth for three-quarters of a century.

What should we conclude from this? Professor Bebchuk concludes the time has come make shareholder power a reality. But there are many myths - vampires, alligators in the sewers - we would not want to make real. Part I of this Response to Professor Bebchuk's article argues that we should not want to make shareholder power to oust directors more real because, while board control worsens agency costs, it offers important economic benefits to shareholders as well. In particular, board control promotes efficient and informed decisionmaking; discourages intershareholder opportunism; and encourages valuable specific investment in corporate team production.

But on re-reading it we think it’s wrong on the substantive matter at hand. Who wouldn’t want alligators in the sewers and vampires to be real?

The Mythical Benefits of Shareholder Control [SSRN via Bainbridge]

Okay. We just made up that headline. But we got the idea of creating a phony private equity headline from this Fortune article, which has a terrific title: “Private Equity, Private Lives.” If you were hoping for some really good inside dope on the private lives of folks working for private equity firms, and you know you totally were, prepare to be let down. The article is much more sober and responsible than that. It’s not really about “Private Lives” at all. It’s just a good, sensible article about some of the ways private equity shops motivate managers to turn improve their performance.

That said, it’s probably necessary reading if you still don’t understand what was wrong with Mike Kinsley’s or Ben Stein’s clown-suited arguments.

Private equity, private lives [Fortune on CnnMoney.Com]

Meet Jessica Wolcott. Or, rather, you should probably hope you haven't actually met Jessica. You see, she’s the 22-year-old who pleaded guilty last week to extorting $125,000 from a man identified in a U.S. District Court complaint as the chief executive of a Fortune 500 Company. Smoking Gun has the story.

The CEO of a Fortune 500 company was the target of a six-figure extortion plot hatched by a woman who first met the businessman online and then later threatened to go public with details of his extramarital affairs, The Smoking Gun has learned. According to an FBI agent, the New York executive acknowledged that on "multiple occasions" he trolled for women on Craigslist and a second site "devoted to bringing together attractive women and wealthy men who were seeking romantic relationships." It was during the CEO's time on Craigslist earlier this year that he met Jessica Wolcott, a 22-year-old who pleaded guilty last week to extorting $125,000 from the executive. According to a detailed U.S. District Court complaint (a copy of which you'll find below), Wolcott began sending the executive threatening e-mails in August, warning that unless he paid $125,000, she would tell his wife that "you've been looking for a fill in for her...After all these years of being married this is how you repay your vows? You are disgusting."

The complaint redacts the identity of the victim, of course. But it does offer a few tantalizing clues. Which already has us playing the old guess who game. First, we know he's the CEO of a Fortune 500 company. So that narrows it down to, well, 500 possible CEOs right? And we learn that the CEO apparently lives in Connecticut. What's more, after they introduced themselves online, Jessica and our mystery CEO met in person in a Mount Kisco bar, in Westchester County. So we're probably not talking about the far-off reaches of Connecticut. Think Greenwich or Stamford. Other details: he’s married and has children. And, well, that’s about it for clues.

Fortune 500 CEO In Sex Extortion [TheSmokingGun.com]

If you’re like us, Urban Daddy is your go-to guide for what’s hot/not in the city of New York. Which was why it was particularly upsetting to find this in our inboxes this morning:

Russian Spa Haven on Wall Street If you're in the mood for some schvitzing and blintzing, grab a group of friends and head to Spa 88 for an old-school Russian bathhouse experience, where you can drink, eat and party the way you've always wanted to...in your bathrobe.

Upon arrival, grab a locker key, don a halat (robe), and meet up in the predbannik, a dim, damp lounge with large leather couches separated by ornate screens and covered with sleeping Russians. Flag down a waitress for some vodka or kvas (Russian bread soda) to kick off the night, then venture out to the maze of rooms hiding co-ed pools and saunas. Bear the sauna as long as you can, then douse yourself with buckets of ice-cold water—it hurts, but it's worth it for the post-douse rush.

We’d never begrudge a Wall Streeter the unparalleled ecstasy that comes with a visit to the steam room, vodka or a vodka-toting waitress. But these things have their places, namely at your local JCC, liquor store or bar (and sometimes all at one but that’s not where we’re going with this post). Russian bathhouses just make us think of our grandfathers and if you only do one thing for us this year, please make it giving us your word that you won’t try to make that sexy. We’re sure this plea will come back to haunt us, and you’ll likely hear us saying, “Please, Urban Daddy, oh please make grandfathers and Eastern Europe and blintzes and borscht and all that stuff sexy” at some point in the future. Sixty years from now.

Blintzes, Beer and Bathing in the Financial District [Urban Daddy]
Wall Street Bath & Spa

[Sidebar: You know what's something I never thought I'd say but found myself remarking to my friend Margaret while writing this post? "There's a real dearth of pictures of "bathhouse Jewish men" under the Google image search."]

As you might have noticed, we kind of don’t get the appeal of Warren Buffett. Other than the whole, you know, making a lot of money thing. But beyond that, we’re kind of creeped out by the weird cult of personality he seems to attract. (And if you have your doubts about this, take a brief skim through some of the comments from cult-members in our Warren Buffett archive.)

But then today we came across a woman who watched a CNBC interview with Buffett over the weekend with her husband. It’s a bit weird, but then we thought—maybe this is it! Maybe everyone loves Warren because he reminds them of their grandmother!

Buffet's interview was the last one we had seen. It was fascinating. I never knew I liked Buffet, but I do. He has a great mind -- even outside of his financial thinking. Buffet is a genuine, sincere and happy man. He is the kind of man when something bad happens to him, he quickly puts it into perspective, copes and looks forward. He doesn't dwell on what he can't control. He doesn't stew, he doesn't get mad -- he just gets perspective.

I explained to my husband, Buffet is much like his own grandmother was. It was when I was watching Buffet that I first saw the jawline of my husband's dad. Buffet has a similar jawline to my father-in-law -- and as he was talking -- my father-in-law's face came to mind. Then as Buffet's jovial spirit continued to come across the screen, I saw my husband's grandmother -- his father's mother in Buffet, in bits and flashes. Not in looks so much as his father -- but in personality.

As the flashes came to me, I had an instant connection, much without thought -- that these two people (my husband's grandmother and Buffet) shared a similar personality trait -- the trait of jovial happiness. With that, knowing his grandmother, I could predict how Buffet would behave given certain circumstances. If Buffet told me he was crossed, and stewed for days about a deal gone bad and wanted revenge -- I wouldn't believe him. I'd know better! My husband's grandmother would get upset briefly, but then she'd let it go and move on. So would Buffet.

The Human Lie Detector [Eyes for Lies]

That Andrew Fastow was only sentenced to six years in prison on September 26—a term that may be reduced to five, if his purported anti-anxiety drug addiction is deemed worthy enough for an in-prison drug treatment program—has a lot of people’s knickers in a twist. And probably likely so, if we’re to believe the hype behind this whole “Enron scandal” situation. Everyone has a lot of questions and answers are few and far between (except the obvious one, which is “Yes, he’s still alive and has been hiding out in a bunker on the Jersey Shore). Luckily, Peter Elkind sheds some light today at Fortune and, use of the word ‘synergistic’ notwithstanding, gives a pretty convincing explanation, save for one huge oversight*:

Give credit to a very synergistic bit of lawyering by San Francisco criminal defense star John Keker. As it turns out, Keker not only represents Fastow but is also the personal criminal defense attorney in an unrelated federal investigation for Bill Lerach, the controversial plaintiffs attorney who represents Enron shareholders in their massive class-action lawsuit.

In an 11th-hour deal benefiting both of Keker's clients, Fastow agreed to aid Lerach's Enron class action, which has already collected a record $7.3 billion in settlements (mostly from the big banks that helped Enron cook its books). Fastow provided detailed debriefings to the plaintiffs' lawyers, naming Enron bankers he considered complicit, and he agreed to sit for deposition.

*Off-off Broadway plays don’t make it to 42nd street with their chief consultant cooped up for very long in the slammer, now do they, people? Honestly, let’s quit the ballyhooing and get real—those Tonys aren’t going to win themselves.

Why Enron's Fastow may only serve five years [Fortune]

This thirty-second video clip seems entirely appropriate for a day with 90% of the Dow trading down.

“Enron: The Musical.” Opening on Friday on a stage way, way off Broadway — at Lambert Hall in Houston — the revue is a send-up of the rise and fall of the infamous energy company.

In two acts, six local actors each play up to 10 roles, including those of the former chief executives Kenneth L. Lay and Jeffrey K. Skilling, and the former finance chief Andrew S. Fastow. The songs are show-tune parodies — “Thank Heaven for Off The Books Deals,” for example, instead of “Thank Heaven for Little Girls.” The writer-director-producer is Mark Fraser, whose day job is selling janitorial supplies.

First Time as Tragedy, Second as a Musical [NY Times via DealBook]

Alternate title: "Wow. These hedge fund kids keep getting younger and younger."

Get this! According to unconfirmed reports in the New York Times, sometimes people come to Wall Street to make more money.

A decade into the practice of medicine, still striving to become “a well regarded physician-scientist,” Robert H. Glassman concluded that he was not making enough money. So he answered an ad in the New England Journal of Medicine from a business consulting firm hiring doctors.

And today, after moving on to Wall Street as an adviser on medical investments, he is a multimillionaire.

Lure of Great Wealth Affects Career Choices [New York Times]

DealBook this morning mentions the publication of Hedge Funds for Dummies. It's hard to even look at the cover without thinking, "Yeah. Okay. Maybe hedge funds are already over."

Selling for $16.49 on Amazon.com, the book is pitched as a “handy, friendly guide” for people who are considering investing in hedge funds, according to press materials announcing its publication. The book, written by Ann C. Logue, is fairly sophisticated in its approach; by Chapter 6, it is discussing modern portfolio theory and the capital asset pricing model. And it gives ample warnings about the risks of hedge-fund investing.

Still, the book could be coming at an awkward time. In theory, hedge funds are restricted to the wealthy. But some lawmakers have expressed concern in recent months that the threshold is too low, allowing, for example, a couple with a fairly average home in California to meet the requirements. The calls for tighter restrictions became louder after the meltdown of Amaranth Advisors, a multibillion-dollar hedge fund that was forced to liquidate after bets on natural-gas prices went bad.

So this seems like as good a time as any for us to bring up something that's been bothering us lately. We need a moratorium on referring to hedge funds as "unregulated." It's just not true. There are some quite exteme regulations governing hedge funds, including the wealth requirement. They are also subject to SEC disclosure regulations, anti-fraud rules, tax regulations and insider trading regulations. So that's it everyone. No more calling hedge funds "unregulated."

Hedge Fund Fever [DealBook]

Time was that traders dealing with emotional stress turned to strippers and blow. We guess making an appointment with a shrink represents some kind of progress.

"Traders are now going to psychologists - of course they are," said Howard Lasher, a veteran trader on the floor of the American Stock Exchange, watching downcast traders head for the exits at neighboring NYSE. "What's the choice?"

Dr. Ari Kiev, best-selling author of several books on the psychology of trading - he taught his groundbreaking strategies to billionaire hedge fund trader Steve Cohen - admits he has seen several traders recently due to unemployment trauma.

"Some traders would talk to me about those kind of issues," he told The Post. "They could be clinically depressed or suffering from a phobic disorder." Dr. Kiev, who refined the motivational techniques for traders he pioneered as the first psychiatrist on the U.S. Olympic Sports Medicine Council, said his aim is to get pink-slipped pros back in the game.

Laid Off Traders Are Now Shrink Rapt [New York Post]

Everyone knows we're kind of obsessed with the air travel habits of corporate executives and Wall Street bigs. So of course we've been wondering why no one has invited us to take a trip on one of these "air taxis" the Post is reporting on this morning.

As bonuses on Wall Street and beyond hit record levels, executives are finding new ways to pimp their lifestyles: for example, hailing air taxis instead of flying first class.

The air taxis - which afford practically on-demand jet travel complete with gourmet meals, no airport security lines and completely flexible scheduling - are priced, thanks to advancements in jet technology, just 65 percent over first-class commercial air travel.

And while most people don't have to decide between a $1,024 full-fare first-class commercial airline ticket from New York to Miami or the $1,687 cost of hailing a Hawker 400XP eight-seater jet for a little South Beach fun in the sun, more and more successful Wall Street types are.

And traveling on one of the growing number of on-demand jets is becoming the latest lifestyle enhancer for the finance world's bonus babies.

And we notice that although the story references "Wall Street types" the closest it comes is a reference to a "prominent real estate developer from Virginia, who wished to remain anonymous." Uhm, okay. That's not exactly the first thing that comes to mind when we think Walll Street. What's worse, he didn't even use the air taxi himself. He used it to send his (spoiled) kid on a trip to the Caribbean for spring break.

So has anyone out there ever taken an air taxi? Or do so called "Wall Street types" who are said to be spending their bonsuses on the air taxis only exist in the imaginations and press releases of the taxi services?

Pretty Fly for a Wall-Street Guy [New York Post]

Crime/Fraud/Legal/Investigations/Inquiries/Regulation:
Affiliated Computer Services' chief executive and chief financial officer resign after options inquiry [Backdating]
SEC questions Ford in re: ties to Syria and Sudan [Legal]
Monster files general counsel for role in options timing [Backdating]
German authorities seek to questions Siemen's chief executives [Fraud]
Google reaches settlement with Belgians [Settlement]
Microsoft submits requested documents in European antitrust investigators [Antitrust]
European Union panel says banks broke privacy laws by participating in the CIA's SWIFT program [Privacy]
CFO of Quest Software resigns after refusing to answers questions about stock options timing [Backdating]
Judge urges Parmalat settlement [Settlement]
Enron, the musical [Musical]
Deutsche Bank chief settles Mannesmann fraud lawsuit [Fraud]

M&A: [? = not yet closed, problems with the deal, lingering questions, etc.]
US Airways+ Delta: Antitrust problems?
Scania + MAN: second bid rejected
Eni + Technip: ?
Origin Energy + Sun Retail
Swisscom in talks to buy back stake in mobile phone unit

People & Moves:
Musical chairs in digital media [Executives]
BJ's Wholesale Club chief resigns [Resigning]

Miscellaneous:
Enron, the musical [Musical]
Restructuring Chunnel debt [Debt]
Traders seek shrinks [Traders]

Sponsored by Bloomberg.com

Eurotunnel gets two offers to subscribe loan (Reuters)
Everybody knows that infrastructure investments are hot these days. Ports? Everybody's buyin' em. Toll roads? Talk about barriers to entry. One piece of infrastructure that will never be rebuilt, and will always be a monopoly for the rest of its existence is the Chunnel, the only piece of infrastructure that doubles as a punchline, unless you count the Tacoma Narrows Bridge, and even then, that's only a punchline in civil engineering circles. So now the Chunnel is restructuring, and everyone is clamoring to finance its debt. And if the debt deal falls through, it'll have to sell out. And you can imagine there'll be a major bidding war for it. Oh, it would be great if an American bank controlled the only physical link between the UK and France. Somehow we imagine the EU would have something to say about it.

Black Friday weekend: Strong start (CNNMoney)
Alright, go team! Blame the wealth effect, from a strong stock market, but it looks as though (after some initial results), that the holiday shopping season is off to a strong start. According to the National Retail Federation, sales at retailers were up 18% over last year. Although, the retailers had to do some pretty deep discounting in order to secure the sales. And what if these sales eat into those on Cyber Monday, then all the in-store sales might not do much for total holiday revenue. Still, if things do work out, you've gotta wonder about all those "Joe six-pack buys flatscreen TVs by dipping into his home equity line, which is basically just an ATM" pronouncements we've been hearing for so long.

Bharti and Wal-Mart in retail tie-up (Reuters)
Restrictions on FDI are a clever way for a developing countries to subsidize local companies. But it's not necessary how you think. It's not that they benefit from the lack of competition, per se (though they may), but foreign firms have to grovel at their altar and sign JV deals in order to get access to the market. Bharti, a telecom firm in India, announced a JV with Wal-Mart to open up stores in India. You might wonder what a telecom is doing opening up a store. Wal-Mart is probably wondering the same thing: why are we dealing with a telco, they can't possibly offer us too much? But, when the local brands hold the keys to market access, you got a get in bed with strange bedfellows.

Very Rich Are Leaving the Merely Rich Behind (NYT)
Just last week, we were noting that the class war between the rich and the really rich was getting a lot of attention these days. We're not sure why now, though. Maybe, the class warfare crowd thinks it can enlist the merely rich over to its cause, by reminding them that there are others who are richer than them. After all, Barbara "Nickel & Dimed" Ehrenrich recently announced plans to put together a union ow white collar workers (yeah, that'll fly). The New York Times is on the story now, and notes, well, that some people are really rich, and some others. Not clear exactly what the point or the problem is, but who knows, maybe the merely rich will get into progressive politics now.

$$$"Alpha male" with a "bohemian heart" seeks "successful business/banker/lawyer/consultant-type." [Craigslist]

$$$ Things This Mini-Baller is Thankful For [Long or Short Capital]

$$$If You Trade Today You Are Addicted (fifth item) [Wall Street Fighter]

The market closes today at 1 PM, and so do we. Have a great weekend. Eat as much pie as you can. See you Monday.

Looks like that Peter Brimelow column we linked to this morning was dead on. Gold up. Dollar down.

And with that, the DealBreakers are just about DFD. Write-offs up next.

Gold prices climbed 1.4 percent on Friday on a weaker dollar, with the absence of U.S. players making the market choppy, dealers said.

Platinum also gained, but traded well below this week's record high of $1,395 an ounce on talk of an exchange traded fund (ETF). Other precious metals followed gold's upward move.

"The market is trying to get up to $640 an ounce at some point, but there are some sell orders around there," said a precious metals trader in London.

"The dollar is weak at the moment. The market is fairly thin so it didn't take a huge amount to move it up," he added.

Spot gold was quoted at $639.30/640.30 an ounce by 1453 GMT, up from $630.30/631.30 late in London on Thursday.

Gold moves higher as weaker dollar spurs buying [Reuters]

This is a bit school projectish but it makes good use of an old John Candy film to promote a fake niche marketing breakfast cereal aimed at Wall Street traders. You kind of have to love the image of Candy getting chased through the woods by a bear. Now you know how those executives getting hit by the shorts feel.

Are you still in the office? It's closing in on noon, which means that desks are going to start emptying out any minute. While you wait for your boss to head out the door, we bring you this classic segment from the Daily Show, demonstrating that crime pretty much does pay. So, you know, go ahead and steal some office supplies or something before you head out for the weekend. After all, they made you work on the Friday after Thanksgiving.

The blog Living The Dream ("The musings of someone who works on Wall Street, but not actually on Wall Street") contributes this beauty to our understanding of deal lingo.

On the tape:

Originally stemming from the act of printing a stock trade on the ticker tape, the phrase "on the tape" is also used to describe the completion or completing any kind of action, especially one involving the exchange of money.

Original usage: "30K shares of ZVZZT went on the tape- who's advertising the sale?"

Ex.

"Enough dicking around! I want to put the deal on the tape by Thursday!"

"The tickets are on the tape, we're all set for the concert tonight"

The phrase can also be used to describe a successful sexual encounter.

"You went out with Mary last night, right? Did you put her on the tape?"

"Look at that smile on her face, you know she put Jim on the tape last night."

Actually, this brings up a new aspect of the Deal Lingo Lexicon--deal talk converted into casual conversation. Phrases that jump from conference calls to barroom chatter. If you have any suggestions for this new category, please leave them in the comments section below.

On the tape [Living The Dream]

Still here? Good. We are also. For a bit longer. But let's admit that none of us are really getting much done. Thin trading. Market wiggling this way and that. No one answering the phone. We keep wondering if our email system is down but it's not. There's just not anyone on the other end of the internets hitting the send button.

Not much by the way of news, much less the soundrels and scandals we like to obsess over. Taking a cue from our little brother, we're going to open up this comment thread to complaints, whining, bitching or just explanations for what you're doing at work today. That's right. Today you get to entertain us. Get to it.

Of course you would, even though some economists think that might be a mistake.

Bob Murphy explains why.

Suppose that everyone on the Earth except you, dear reader, refused to believe that Microsoft shares would ever sell for more than $1 as of tomorrow at the opening bell. The immediate consequence of this strange alteration in expectations would be, of course, an immediate collapse in Microsoft stock. Even though its stock might currently be trading for $28.50, those owners would try to unload their shares before the market closed today. But if everyone except you, the reader, believed the price would be at most $1 by tomorrow morning, they wouldn't offer very much for the shares today. Some transactions might occur at intermediate numbers in the mad race to the bottom, but very quickly (once everyone realized everyone else thought the same thing) Microsoft stock would be trading at $1 or less.[3]

Now in this insane scenario, what would you, dear reader, do? In a famous chapter from the General Theory, John Maynard Keynes argued that the stock market (at least in its unregulated form) was a giant game of Musical Chairs (capitalization in the original). He implied that in our Microsoft example, you would be rendered a capitalist Cassandra; even though you would know that Microsoft really "should" be priced above $1, it wouldn't pay for you to purchase it, since everyone else's ludicrous beliefs would make their predictions come true. Keynes would argue that, ironically, you too shouldn't offer more than $1 for the stock, since you would never be able to find anyone to buy it back from you (at an even higher price) in the future.

As with most of the clever arguments in the General Theory, this one too is dead wrong. If (by hypothesis) nothing had changed with Microsoft's underlying business prospects, then you would certainly do well to purchase the stock and gain access to the flow of dividend payments issued periodically by Microsoft. Indeed, one standard definition of the "correct" stock price for a company is the present discounted value of its future dividend payments. Even if we changed the absurd story away from Microsoft, and to a company that historically has never paid dividends, it would still make sense to buy ownership in a profitable company at rock-bottom share prices. For one thing, the board of directors might change the dividend policy (in light of the crazy behavior of traders regarding its stock).

The Social Function of Stock Speculators [Mises.org]

Bonus season got a little better for some senior investment bankers at Lazard the other day. They're going to get to sell some of the stock they got in the firm's IPO early, in an attempt to make up for smaller bonsues that had some grumbling, especially since chief executive Bruce Wasserstein was getting ricer than ever.

After hearing his troops grouse about paltry pay deals, Lazard boss Bruce Wasserstein is letting a select group of wealthy investment bankers sell some of its stock in the firm sooner than originally planned.

Lazard is allowing some current and former managing directors, who have been with the firm since before its initial public offering, to sell about 10 percent of their total holdings in an upcoming secondary offering that was announced yesterday.

Before the offering, most Lazard bankers couldn't begin selling their shares until 2008, but sources inside the firm as well as former bankers said bonuses have gone down since the IPO, and the firm has gone through several rounds of layoffs.

Since the IPO, Lazard's overall compensation has gone up along with the firm's revenues, but that hasn't stopped some senior bankers from grumbling about getting paid less than the rest of Wall Street.

Currently, Lazard's compensation is about 57 percent of its total revenue, on par with other investment banks, but down from 70 percent before the firm's IPO last year.

Top Lazard Bankers Get To Cash Out Shares [New York Post]

There's something oddly calm and serene about this CNBC station identification break circa 1989. The music seems not designed to suggest the market is about to effin explode at every moment. The voice is calming and authoritative, and entirely without personality. The colors are muted and sedate. But there are those news and stock tickers, rushing past at panic speed, vaguely foreshadowing the CNBC we all know and love tolerate today.

Apparently, it's never happened before. CBOT's gold contract is up and running while Comex is closed. We're still trying to figure out if this will mean anything for the price of gold contracts today but we can't get that "Mr. Hot Stock Tip Giver-Out" song out of our head to think long enough clearly.

From Peter Brimelow's MarketWatch column:

Friday, in fact, will be a historic day: It will be the first occasion on which the Chicago Board of Trade gold contract is open when the Comex division of Nymex is closed. The CBOT contract became a serious competitor to New York's within the last year.

The Chicago contract outflanked New York by going electronic. In commodities courses at Stanford Business School a million years ago I was taught an entrenched futures markets could not be displaced.

They reckoned without the computer.

This means that Friday could actually be an interesting day for gold in America. If speculators wish, they can make a statement.

Friday will be historic day for gold [MarketWatch]

The rest of America is either sleeping off their Thanksgiving hangovers or pushing their way into a mall to grab those holiday shopping discounts. But you're rubbing the sleep out of your eyes while staring at a glowing screen. Well, you're not alone. We're here with you too today. And we'll do our best to keep you entertained, and maybe even informed.

But lets start with entertained part. Here's a quick audio clip of a Bud Light commercial honor "Real Men of Genius." In this case, it honors that guy with the hot stock tips.

Mr. Hot Stock Tip Giver-Outer [The Rad Reporter]

Sponsored by Bloomberg.com

Black Friday shopping set for early start (Reuters)
It's the day we've all been waiting for, the day that everyone decides to jam the malls, despite the fact that they're never more crowded than they are today. Here's our question, which we've never had a forum to ask before this year: do you make shopping decisions based on which companies you own stock in? This is the opposite of the old maxim about investing in what you know. So if you you own stock in Home Depot, would you refuse to buy a power drill at Lowe's? If you own the Gap, will you not check out the new UniQlo? In our experience, investors do tend to let their investments influence their purchasing decisions, and in the back of their minds, they might think that they're "doing their part" to help the team. Meanwhile, it's like the equivalent of election day today. By noon, we should get early exit polling to indicate what kind of season it will be.

Italy pursues triple plan to rescue Alitalia (Financial Times)
Europe, surprisingly enough, has a fairly laissez-faire civil aviation sector, as evidenced by its myriad, fly-by-night, discount airlines. Anyone ever heard of JetGreen? True story: it went out of business after one day, leaving many of its initial travelers stranded at their destination, with no way to get home. Yet the continent also hangs on to its old state-owned dinosaurs. It seems, perhaps, that EU integration has made countries more nationalistic, and eager to hold on to their old crown jewels. Alitalia was never a crown jewel. It's been a disaster for years, always losing money, and always getting bailed out. So it looks like Italy might finally be waiving the white flag, as it explores possibilities including a merger with KLM, hooking up with an Asian carrier, or just merging into the rest of the domestic aviation market. Either way, this one's been a long time coming.

Wal-Mart Will Offer Retail Banking in Mexico, an Underserved Market (NYT)
Regulators have stymied Wal-Mart's attempts to set up a bank in the US, so it looks like it's going to have to go somewhere where they get capitalism. In Mexico, the company's been given the green light to do banking from its branches, and will launch a bank called Banco Wal-Mart de México Adelante. It could do well. The retail banking industry is still a long way from maturity there, so it might be able to gather a fair slice of the pie. The Times actually admits that Wal-Mart might be the "little guy" in Mexican banking, since it's going up against Citigroup and HSBC there. Wait, isn't that who it would be competing with here?

CNBC.com’s New Push; MSN Deal Going Away (Paidcontent)
We've never understood what in the lord's name CNBC was doing having its website get lost inside the MSN.com ghetto. Really, that seems about as dumb as the splitting up Wired magazine from Wired.com. Well, it's finally coming back to the promise land. About time. On December 4th, it'll have a website all to its very own, CNBC.com, which makes a hell of a lot more sense than wherever they were before. Good thing they didn't screw it up by going all .tv on us.

Stores as Art (Ideas)
And speaking of shopping, David D. Friedman (yes, you'd be forgiven if you thought there seemed to be a lot of David Friedmans -- there are -- this one is Milton's son), notes that some retail shops are best understood as art. We agree. We've been to trendy art galleries all around the city, and they rarely sock you in the gut at the same level than amazing supermarket can, or a great electronics retailer. It's amazing how bland and sexless art can feel, compared to commercial products, or even sports, from time to time.

$$$Trump on...body image.[Trump Blog]

$$$Super Popular Gret-Gret Still Getting It From Larry Ribstein. [Ideoblog]

$$$More Habits of Highly Successful Bankers: Learning from a Lehman Top Dog [Bankers Ball]

$$$Banker seeks mistress with "wicked libido," "is beautiful inside and out." Because, you know, if you're trained to screw on demand but aren't that nice, you're not worth a damn. [Craigslist]

Citigroup’s chief financial officer, Sallie Krawcheck, is getting ready to leave the bank, according to CNBC’s Charlie Gasparino. This would be a pretty serious blow to the firm, as Sallie is well-respected and credited with cleaning-up the bank’s image after it was tarnished in financial scandals involving its stock research operations.

We're told that there's more to come on this story, which will be leading things off at 7PM on CNBC.

Page Six brings us back to the days of the last century, with a reminder that the spat between the former head of Citigroup, Sandy Weill, and business reporter Charlie Gasparino still keeps on keeping on.

CNBC's Charlie Gasparino, formerly with the Wall Street Journal, is talking to a lawyer about possibly suing Weill for defamation because the book casts doubts on the accuracy of Gasparino's reporting.

Gasparino broke some of the juicier stories of Wall Street misconduct, including the bribery scandal that ended Weill's Wall Street career last April.

"Mr. Weill can have any opinion of me that he wants," Gasparino told The Post's Suzanne Kapner last month. "But when he ascribes certain actions of mine as fact, and he is wrong, then I have a problem with it."

Gasparino's lawyer, Mark Schwartz, said, "The argument could be made that maybe Sandy Weill fixates on Charles Gasparino as the source of his problems, and maybe there is some malice there."

Need a refresher? Oh, come on. You remember. This was back before the business scandals were all backdating this and backdating that. Back then it was all about a nursery school, a phone company and a phony research call. After the jump, we party like it's 1999.

'Real' Mad at Wall St. Mogul [New York Post]

Recipe for slow news day. Step one: take notice that nothing is happening. Step two: write that nothing is happening. Step three: post an item on a blog about a story about nothing happening.

Investment bankers and corporate lawyers seemed to take a break on Wednesday — and they certainly earned it. About $3.1 trillion worth of transactions have been announced this year, including about $50 billion on Monday alone. That was when Blackstone offered $20 billion (excluding debt) for Equity Office Properties and Freeport-McMoRan agreed to pay $25 billion for Phelps-Dodge.

On Wednesday, both BusinessWeek and Fortune magazine took a look at why there is such a deal-making frenzy.

They covered some familiar territory (bulging private equity funds in search of takeover targets, easy access to the debt markets), but BusinessWeek hinted at a tantalizing, if a bit far-fetched, political angle. It cited the incoming Democratic congress as one big reason for the year-end spate of deals. In the new year, “deals may see a greater degree of scrutiny in Washington,” it concludes.

For M&A, a Much-Deserved Holiday [New York Times]

So, like, Citadel was totally not melting down on Friday. It's just that Anand wasn't answering thye phone because he was too busy quitting.

The head of global stocks at the Citadel Investment Group, a $12 billion Chicago-based hedge fund, has left the firm, according to a person briefed on the situation.

The executive, Anand Parekh, formerly head of the North American structuring group at Deutsche Bank, left Citadel on Friday. He was one of seven business heads at the giant hedge fund, and was seen by some investors as among those who could be a potential successor to Kenneth Griffin, the 38-year-old billionaire founder and chief executive of Citadel.

Bryan Locke, a spokesman for the fund, said Citadel did not comment on personnel issues. Mr. Parekh could not be reached for comment.

Anyone want to guess why Anand left?

Executive at Stock Unit Said to Leave Hedge Fund [New York Times]

Say you're a receptionist at a financial firm, and you've always dreamed of one day working in a hedge fund; maybe with Soros, maybe Stevie, who knows, whatever. So you become a dominatrix, drum up some contacts, money, etc. Life is good, you're on the right track, in no time you're going to be saying "short sell" or "long sell" or whatever it is they say around those parts. But then, for some reason unknown to your colleagues-- fellow receptionists and dominatrices alike-- you stop that racket. Business suffers. You wake up in a cold sweat every night because-- you might not get to one day work for a hedge fund. Basically, you're Gina Pane, 31. What do you do next? The answer is apparently more scatological than it would seem:

"He wanted to go to a motel in the Bronx where I would defecate on him, but I told him I was uncomfortable going to the Bronx," testified the dominatrix, Gina Pane, 31, buttoned up in an olive-gray suit with her black hair pulled back in a bun. "I suggested that we go into a woody area. He was very excited."

The officer, she testified, performed a sexual act as she finished.

'Dominatrix' alleges bizarre sexcapade with cop [The Journal News via Gawker]

Mike Kinsley's article on Slate yesterday--the one that said the stock market is irrational--is still catching flak.

I have another question: is this the dumbest thing I've ever seen about capital markets? I'm not sure. Ben Stein's similar nonsense comes close. Karl Marx said that capitalism wasn't working for labor. Kinsley can't even see how the stock market works for capitalists.

Here's Kinsley's logic in a nutshell: If public ownership works for a company at T1, then it must also work at T2. In other words, market conditions and firms don't change. Because if they do change, then the inconsistency with which he condemns markets does not exist.

Michael Kinsley: give that man a clown suit [Slate]

We're way, way too polite to ask Bill Keller to name even one of the "legions of Wall Street executives" who read Gret-Gret with "respectful dread."

As for Gretchen Morgenson, who is a particular object of Mr. Jenkins's scorn, I'm not sure which is the best evidence of her immense civic value: the legions of Wall Street executives who read her with respectful dread, because she understands them so well; the testimony of ordinary investors and other readers who look to her as one of the markets' shrewdest and most fearless guides; the Pulitzer she won for a body of work that Mr. Jenkins calls "relentless but unanalytical" and the Pulitzer Board called "trenchant and incisive"; or the efforts of just about every business editor in town to hire her away from us.

Misrepresented, Insulted and Belittled [New York Times]

Gerard T. Hayes, Robert A. Johnson, Scott G. Hunt, Frank A. Delaney IV and Thomas J. Murphy Jr., former NYSE trading specialists accused of making illegal trades, have had their cases dropped by U.S. attorney Michael J. Garcia. An appearance on LX.TV is rumored to be in the works.

Cases Dropped Against 5 Traders [NY Times]

Lindsay Campbell looks for stock tips; adoption; men.

Wallstrip

Sponsored by Bloomberg.com

Qantas Approached by Macquarie Bank, Texas Pacific (Bloomberg)
Blue Horseshoe Loves Qantas Airways. In a rare move, Australian Bank Macquarie and Texas Pacific have made an offer to take Qantas private. Qantas has a long history, dating back to 1920, and is currently on a 13 year streak of profits, as it's withstood many of the industry's slumps. The offering price $7.6 billion represents a 15% premium over its last closing price. Of course, the move worries politicians, who think that Macquarie is going to pull a Gordon Gekko, by gutting it, laying off staff, and other cost-cutting measures. To some extent, they're probably right, otherwise they'd have a hard time justifying the offer.

Dell Shares May Rise After Profit Exceeds Analysts' Estimates (Bloomberg)
Here's something for Yahoo to aspire to. The second most hated tech company of the year, Dell, put in solid numbers yesterday evening, coming in well above analyst expectations. Everything looked good, from revenue to gross margins. Of course, a lot of issues still hang over the company, like it's accounting review, and questions about its business model. But at least for a day, we'll let it relive its glory days.

White House cuts economic growth forecast (Reuters)
It's not like the White House has a crystal ball, or anything like that, but they're as entitled as anyone else to put out an economic growth forecast. Yesterday, they came out with their 2007 numbers, and had to trim the outlook below analyst expectations based on headwinds from housing and inflation. On the conference call with investors, the White House said it remained very positive on the economy, and that the underlying market looked good. They noted that management salaries were tied to performance, so investors could rest assured that they had their skin in the game.

Fighting for Middle America (Houston Chronicle)
We swear we'd love to wait until after Thanksgiving to start talking about retail sales (God, writing this is going to be so miserable for the next month), but the media won't cooperate, as it really wants to start talking about 'em now. Perhaps the most neglected segment of the buying public is the middle class, which doesn't get nearly as much attention as the rich and the lower-income folks do. But, somewhere between Wal-Mart and Neimann Marcus are the Kohlses and Penneys, which, well, sell decent items at decent prices. Nothing real fancy, nothing real chip. Just nice and middle. And the key to winning in this segment this year, is to really nail the exact middle. Best of luck to 'em.

$$$Businessman looking for mistress [Craigslist]

$$$INSEAD: the Forgotten B-School? [Banker's Ball]

$$$Last week hedge fund guys and girls got to ostentatiously care about poor kids at the 100 Women in Hedge Funds gala. And then, you know, got hammered at Cipriani and bid for a deluxe vacation to Corfu. [FinAlternatives]

Bill Gates: Trenton Mercer to Luis Munoz Marin Int'l on his Cessna Citation X

Blackstone: Bermuda Int'l to Washington Dulles Int'l on its Raytheon Hawker 800

Donald Trump: Palm Beach Int'l to La Guardia on his Boeing 727-100

Warren Buffett: Westchester Co to Boca Raton on his Gulfstream IV

Denise Rich: Westchester Co to Washington Dulles Int'l on her Learjet 60

Oprah: Bob Hope to Santa Barbara Municipal on her Gulfstream IV

Paris Hilton: San Antonio Int'l to Panama City Bay Co Int'l on her Piper Cheyenne 2

Daniel Gross at Slate writes:

This year is shaping up to be a record for both leveraged buyouts and stock buybacks. According to Thomson Financial, buyouts worth $334.5 billion have been announced or completed so far this year, up from $115 billion for all of last year. According to Standard & Poor's, members of the S&P 500 Index spent $325.15 billion on their own shares in the first three quarters of 2006 and have spent more than $674 billion since Jan. 1, 2005. Between buybacks and buyouts, that's more than $1.1 trillion of stock taken out of public hands in less than two years.

The Mystery of the Disappearing Stocks

The AllNighter describes the physical toll of a few too many all nighters.

Once you start ritualistically going to bed at 5Am and coming to work at 9 (AM and the same day mate), your body isn't very happy. Your eyes start to see double, your hair starts to fall out and turn gray, and the only part of your anatomy that seems to be having a good time is your stomach, which baloons out of your suit pants (even after you adjust them at the waist for maximum leeway). Anyway. 3AM, and you need powernap.

And this, people, is the Eighth and final secret of the Highly Successful Banker: adding value on no sleep. Or, as one of our buddies puts it, keeping Tyler Durden under wraps till the deal closes.

Living the (fucking) dream... [The All Nighter]

Pirate Capital has found a way to make news without losing money or staffers or getting investigated by the SEC. It’s getting back into the “activist investor” game again.

From 13D Tracker:

In an amended 13D filing on Brinks Co. (NYSE: BCO), 8.5% holder Pirate Capital disclosed a letter to the board of directors of the Issuer, among other things, encouraging the board to (i) take immediate steps to unlock long-term shareholder value by retaining an investment bank to explore the sale of the Company and initiate a large Dutch tender offer for the Shares, and (ii) immediately appoint Thomas R. Hudson Jr. to the board. The firm also recommended a substantial second Dutch tender offer for its stock.

Pirate Capital Wants Brinks (BCO) Sale, Seat on Board [Street Insider: 13D Tracker]

If you thought A.J. of “models and bottles” fame was an isolated incident in douchebaggery, you thought wrong. Dead wrong. Obviously “so over” the whole “young urban professional” thing, LX.TV has really hit a home run with a brand new genre of folk and--wait for it--a brand new acronym: Young Professional Douchebags (YPDs)! Can you stand it?! Featured today are Richie “Bottles,” Stevie “B.,” Ryan “Daddy,” and Dan “The Man,” all traders, all awesome. Apropos, if any of the New Class is reading this, we’d love to feature you in Better Know A Trader next week. Get in touch!

Real/Life: “Livin’ Single” [LX.TV]

So you've got a show on CNBC. You probably think you're watched by the best and the brightest of the financial community. As it turns out, however, your biggest fans are these two dudes.

You know what? Looking back on it, maybe Warren Buffett's decision to give away is fortune wasn't such a bad idea.

From today's New York Post:

Sumner Redstone's nephew is suing the media mogul for allegedly cutting him out of the family fortune.

In a lawsuit filed in Massachusetts earlier this month, Michael Redstone accused his father Edward Redstone and his uncle Sumner Redstone of "self-dealing" and "unjust enrichment" in a series of decades-old transactions involving the family holding company, National Amusements.

Specifically, Michael Redstone charged that his father and billionaire uncle cheated him and other family members out of their fair share of National Amusements in two redemption deals in 1972 and 1984.

Another Would-Be Redstone Heir Sues [New York Post]

Every now and then its good to come across a reminder that some people do not understand the way markets work. Today we came across this little beauty from Mike Kinsley, who thinks he's proved that the stock market is irrational because, well, let's let Mike explain:

So, free-market capitalism has decreed three different values for this company. One is set by the stock market: the value of all the company's outstanding shares or "market capitalization." One is what the private investors are offering—usually a bit more than the market cap. And one is what the private investors sell the company for a blink of an eye later—which is usually a lot more than the other two. Which of these numbers is the true capitalist price? Which one represents the most sublime interaction of supply and demand? Anyone? Anyone?

Okay. Here's the thing, Mike. There are actually a lot more prices than you've listed here. Every time a stock trades hands it's because two individuals or institutions have a disagreement on its price value. Each day a stock trading on an exchange may have hundreds or thousands of prices. In fact, all free market exchanges represent the trading of goods of unequal value to the parties involved in the exchange. That's why they're trading one for the other. There's no such thing as "the true capitalist price" of anything. What we've got, instead, is the prices people are willing to pay for things, and the prices people are willing to accept to give up those things.

Does that mean that one side of every transaction is wrong and the other is right? Of course not. Different people have different tolerance for risk, different time horizons and different investment goals. The search for the "true capitalist price" assumes a uniformity of market actors that just doesn't match reality.

Update: Ted Frank has a less theoretical critique of the "infuriatingly stupid Kinsley essay":

Michael Kinsley notes that publicly-traded stocks are sometimes bought out and taken private, and that private equity managers sometimes make profit on these deals. He concludes that the free market does not work.

The non sequitur is appalling. It is apparently beyond Kinsley's comprehension that private equity managers could add value to a corporation through better management.

Kinsley acknowledges that private equity managers, by taking a company private, could be increasing the value of a corporation by avoiding the regulatory burdens that accompany public trading, but then again concludes that this shows that the free market can not work, rather than the obvious conclusion that the regulatory constraints on the free market are inefficient and create opportunities for profit through avoidance.

The Free Market Free-for-All [Slate]

Paulson makes case for tougher enforcement of securities laws

Paulson says need to apply business rules lightly

Just as long as those guys in Washington are giving the market clear signals.

We're not exactly sure why we didn't get the invitation to this party Steve Clemons details at the Huffington Post:

Last night, Washington's political stars turned out to pay homage to the banker who started in 1976 lending $27 to 42 people in one village in Bangladesh.

Muhammad Yunus and many of his colleagues from the Grameen Bank were feted at an extraordinary reception and dinner gathering -- on a Sunday night -- at the Willard Hotel in Washington and hosted by the United Nations Foundation.

Among the guests were former President Bill Clinton and Senator Hillary Rodham Clinton, Congressman and Mrs. Tom Udall, Senator and Mrs. Paul Sarbanes, Pew Research executive and former Washington Post "Outlook" Editor Jodie Allen, Ted Turner and his companion Kathy Leach, Bruce and Hattie Babbitt, former Senator and UN Foundation President Timothy & Wren Wirth, former State Department Legal Adviser William Howard Taft IV, former Senator Donald Riegle, Ashoka founder William Dreyton, Kathy Bushkin, Kenneth Adelman, John Cochran, Diane Rehm, John Henry and Ann Crittendon, and many others.

A Grameen Gala and Ted Turner's Birthday [Huffington Post]

Crime/Fraud/Legal/Investigations/Inquiries/Regulation:
Redstone versus Redstone [Legal]
Cyberonics CEO resigns amidst options timing inquiry [Legal]
Bank of America wins appeal, overturning $1.5 billion judgment in case claiming bank raided accounts of elderly customers [Legal]
Former Bank One chief settles insider trading case [Legal]
KB Homes chief has $175 million "golden parachute" despite resigning in scandal [Legal]
Alcatel sues Microsoft for patent infringement [Legal]
British media regulator eyes BSkyB's purchase of ITV shares [Legal]

M&A: [? = not yet closed, problems with the deal, lingering questions, etc.]
Suez + Gaz de France: Shareholder objections
Lagardere + Sportfive
Check Point Software Technologies + Protect Data
Royal Bank of Canada + Flag Financial
Chevron + USA Petroleum
NADAQ + London Stock Exchange: Next comes the shareholder vote

For Sale/ LBOs/ Going Private/ Auctions/ Offerings:
Auction for Putnam Investment moving into final stage bidding [For sale]
BHP selling South African mine [For sale]

Miscellaneous:
Airlines prepare for more deals[Airlines]
Comcast close to deal with Disney [Entertainment]
The new shape of private banking [Private banking]
Swiss banking tax doesn't seem to be scaring off clients [Private banking]

Sponsored by Bloomberg.com

In Web World, Rich Now Envy the Superrich (NYT)
Class warfare is a really hot subject these days, and of course we apologize for anything we do to fan its flames. In Silicon Valley, those who sold their startups for million resent those who sold 'em for billions. What's even worse, are the founders of startups during the last bubble, who see new startups replicating their ideas, and actually making money off of them. Basically, unless you're the plucky YouTube kids, you're probably envious of someone -- probably the YouTube guys. And of course we have the same dynamic here on the right coast. But it's not tech entrepreneurs, it's bankers, lawyers and doctors, each occupying a distinct spot on the wealth hierarchy. Then there's academia, where the scatter plot of professor salaries is growing ever broader. And today, the Journal says that Democrats may finally be in position to do something about the wealth gap. Perhaps they could start by ensuring that all of the wealthy are at least relatively equal.

Freeport deal feeds sweeping merger talk (Globe & Mail)
Once, back in 1999, we were driving through Ontario, and on the radio came an ad for the Toronto Stock Exchange. They were having a family fun day, and everyone was invited to come learn about the exchange, and get free prizes for the kids. It was painfully clear that the exchange was trying to drum up some popular enthusiasm a la the American markets at the time. Now it's all Canada all the time. Yesterday's announcement that Phelps-Dodge would be bought out didn't have a big impact on American stocks, but the mining-heavy Canadian market bounced around, as institutional investors once again got copper fever. The deal signals that there may be more buyouts, and than there's confidence in the price of copper going forward.

Paulson calls for some Sarbanes-Oxley changes (MarketWatch)
Hank, we get it. You don't like Sarbanes-Oxley. We know this by now. Really, you could probably go back and find, like, ten Dealbreaker items on Hank Paulson saying something bad about Sarbanes-Oxley. Make no mistake, he's fighting the good fight. And he's doing a lot more than John Snow or Paul O'Neill ever did, but come on. Over and over and over again, it's always the same thing. Either do something about it, or move on. And to all of the news organizations covering his word as if it was news, please find a new angle.

A Whiff of Notoriety Is All It Took to Sell An Alcohol Vaporizer (WSJ)
A little negative publicity and some threats to ban a product never hurt much. Just ask the vendor of the AWOL, a device that turns alcohol into vapor that can rapidly be inhaled, for an instant, monster hit. Since a segment about it ran on TV, several states have banned the product -- for no good reason, we're sure. Meanwhile, sales have surged. And even if they're banned in all 50 states, there's gotta be a way around it. We're thinking they should relocate to the Cayman Islands. All these lobbyists that companies hire to carve out exemptions for their products are going out about things the wrong way.

$$$Seven Secret Skills of Highly Effective Bankers [Banker's Ball]

$$$Banker with "mba and doctorate" now billing himself as "cursed," which might just actually be a genius move for slaying chicks. [Craigslist]

$$$A purportedly funny business joke. [Wall Street Fighter]

If you’re like me, you were—are—pretty miffed about the fact that INHD didn’t air an episode of Wall Street Warriors last Sunday. Really got your goat/stripped your floors/frosted your cookies, am I right? Whoever over at that network thought it was okay to get us hooked on the fishscale of reality TV and then pull it out from under us is obviously some sort sick sadist who moonlights as a tobacco lobbyist and would lace an infant’s mashed peas with nicotine if it meant he could make a buck off that kid when it started walking, talking and buying cigarettes. That’s the kind of person we’re dealing with. Sorry I had to go to extremes there but I’m not sorry because this kind of malarkey happens all the time and what’s the worst they can do to me? Cancel my INHD subscription? Nice try but threats like that don’t exactly scare Bess Levin because she doesn’t have a subscription to INHD. And if you wanted to hurt me like that you’d have to cancel my friend’s subscription which would sting a little bit but in the long run would be outweighed by the fact that he’s actually really cheap and would probably be a lot more pleasant if it meant he could quit hatching schemes to convince his roommates the “extra channels really aren’t worth it, if you guys think about it.” (What would actually do some damage would be if you canceled it, say, one or two days into December and then didn’t prorate the month. But you didn’t hear that from me).

Clearly, I’m upset. But I’m going to put my fury aside for a moment because episode four of Wall Street Warriors was without exaggeration the best one ever. How the producers are going to keep you and I hooked for the rest of the season after shooting their wad on this one, I have no idea but we’ll cross that bridge when we get to it. And here’s the genius part: the first 22 minutes of the show are excruciatingly dull, while the last three are like the t-shirt an acquaintance gave me a few years ago that says 'Levin' on the back in a sort of sports jersey vein and 'not kosher for Passover’ on the front— hilarious really funny mildly amusing. Just kidding!-- the last three minutes are hilarious (thoughts on the first 22 remain as is). As an homage to the Mensa candidates behind this show, I’m going to fast forward through the aforementioned dull parts—as I assume they intended for me to do—and get down to the good stuff. Here’s a preview of the hilarity that will ensue—Tim Sykes on a date with what’s in all probability an of-age-girl: “That right there, is my frequent karaoke card. Look at that, look how many stamps I’ve gotten. This is my late night place. Most guys bring girls back to their houses, I bring them to karaoke.”

Staci Kramer over at PaidContent reports:

Richard Rosenblatt, who engineered the attention-getting sale of Intermix and its chief asset MySpace.com, has acquired assets of Intermix Network LLC from Fox Interactive Media for his Demand Media. No terms for the sale, which closed last Friday. The News Corp. unit acquired flawed Intermix 14 months ago (the deal closed in Sept. 2005) as a way of gaining the pearl in the oyster, MySpace. Some of the other assets were intriguing at the time—talking about the deal at the time Ross Levinsohn saw potential in Grab.com, for instance— but without MySpace, we wouldn’t have been hearing any $580 million noise about the company.

FIM actually has made use of Grab.com or, more literally, some of the technology behind the site. FIM retains the rights to the Grab.com social networking code base now being used for foxsports.com, americanidol.com and other FIM operations. Demand Media gets a license to the code as well. FIM also retains a perpetual royalty-free license for the casual games that came with the company.

FIM Sells Non My-Space Intermix Assets, Technology To Former CEO Rosenblatt’s Demand Media [PaidContent.Org]

We kinda love Andrew Ross Sorkin (pictured left with DealBreaker's John Carney and CNBC's Charlie Gasparino at the DealBreaker launch party, as photographed by Gawker's Nikola). We literally wake up with him every morning, frantically composing an aggregation of his aggregation of business news over at DealBook. He’s a nice guy and seems to be one of the smarter people doing business writing. I mean, we like him so much that when we last ran into him and he asked about our very own Bess Levin, we offered to introduce him to her. If you have any idea how closely we protect Bess, you know this is a very big deal.

But his essay in Sunday’s New York Times Business Section on management buyouts this weekend was a bit, uhm, innocent. Not clown-suit, Ben Stein level stupid. But just a bit too bright-eyed student essayish. After the jump, we dissect brother Sorkin’s Sunday sermon.

Rewriting the Rules for Buyouts [New York Times]

This video purports to show the tech department at International Fund Administration on strike because of a lack of air conditioning. The Bermuda based company was bought out by the Bank of New York in like 2002, and this supposedly happened before the buy-out, so its pretty old. But the magic of YouTube means every old video is new again.

Nothing particularly shocking. But just thought you might want to see what the IT oompah-loompah's are doing when they aren't picking up the phone.

Stevie-boy has said that he makes 90% of his money from 5% of his investments. We hope he's trying to make money with this art stuff because the alternative--that someone would actually like to have stuff like this painting hanging around their home--is too horrible to contemplate.

From the New York Times:

As records were being broken at contemporary art auctions this week, the hedge fund billionaire Steven A. Cohen privately scooped up a de Kooning “Woman” painting for roughly $137.5 million, adding to the prestige of a personal collection that is fast becoming one of the world’s greatest.

Landmark De Kooning Crowns Collection [New York Times]

[This weekend the Wall Street Journal published an internal document by a Yahoo senior vice-president, Brad Garlinghouse. The letter itself is a plea to Yahoo to regain its focus, and is now famous for complaining that the company was spreading itself like a thin-layer of peanut butter over too many areas.]

Look, Brad. We're like everyone else. We really want to like you. Everyone who is not now inside of Yahoo knows there is something seriously wrong with the company. So it's good to know that someone inside knows that too. So we're not going to mock you relentlessly. Instead, we're going to give you a couple of tips.

1. You talk about baseball, bleeding and peanut butter. And we get it. You're trying to make your memorandum memorable with these images. But it's a bit much. Stick to one image. The peanut butter thing worked. Run with it. (And, to get a bit meta, your inability to stick with one image is kind of like what's wrong with Yahoo. Focus, lad. Focus.)

2. It's kind of obvious that you knew this memo would get out to the world. It sounds too much like it was written for public consumption for you to get away with saying you never expected it to get out. But, you know what Brad, that's a feature, not a bug. These days executives should be writing memos with the idea that they might leak. Because, you know, they probably will. So own the publicity the memo got.

3. Google. Say it, Brad. It's amazing that your memo doesn't once mention the big Gee-double-oh-gee-el-ee even once. It's it verboten at Yahoo? That which may not name? If so, that's part of the problem. You need to get people talking in the language of the real world rather than taboo-addled corporate speak.

4. Okay. One last thing. You know the part where you write, " I love Yahoo! I'm proud to admit that I bleed purple and yellow. I'm proud to admit that I shaved a Y in the back of my head"? Well, that's just creepy. Keep your hair removal habits private next time. We totally don't need to go there.

Your friends at,

DealBreaker.com

Okay. That headline is a little hyperbolic. There will always be public markets because there will always a demand for investment opportunities from the capital markets. But it's not impossible to imagine a shift in the public markets—one where we'd see fewer and fewer operating companies trading on stock exchanges, and more and more investment banks, private equity firms, hedge funds and pseudo-investment companies like Sears and Berkshire-Hathaway dominating. The question is not so much whether we want this intermediation between the capital markets and operating corporations to happen but why it's happening?

Also, while we've got nothing but admiration for Blackstone's Jonathan Gray, we do wish he wasn't lifting his press quotes directly from our compodium of empty investment banking cliches, the Deal Lingo Lexicon.

“We believe that the skills and strengths of Equity Office will greatly enhance our existing office platform,” Jonathan D. Gray, senior managing director of Blackstone, said in a statement.

Blackstone Acquiring Trust in Richest Buyout [New York Times]

We've pretty much ignored this whole Borat thing around here. But over the weekend too many DealBreaker-ish threads came together for us not to try to throw the rope around our neck and see if anything snaps when we jump. Three quick points and then we're kicking this stool out from under ourselves.

1. We're supposed to know these things but we only just recently found out that Sascha Baron Cohen worked for Goldman Sachs after college. (Thanks to our nearly omniscient commenters!)

2. The clip of Borat on the Late Show with Martha Stewart is amazing not because of anything said the professional funny men, Leno and Cohen. It's Martha's stone cold unflappability. Ever since jail, that bitch don't blink. Watch what happens when Leno asks her if she's ever had two men.

3. We thought the brilliance of Borat was that it was teaching progressive people that it was okay to laugh at foreigners. It turns out it's all about teaching us about bigotry and indifference to bigotry. How boring! (Via Steve Sailer.)

Remember that video of two Bank of America employees singing a bastardized version of U2's "One" to celebrate the merger of BofA and MBNA? The one that kind of made you cringe and hope you never have to go to another one of these corporate homecoming rallies again?

Yeah, well, it made Universal Music Publish Group cringe too. Last week a lawyer for Universal, which is the catalog owner and administrator for the song, posted a cease and desist letter in the comments section of the music blog Stereogum. But far from ceasing and desisting, the BofA song has found new life in the comedy of David Cross. The video above shows Cross performing the song at the Comix comedy club a couple of weeks ago. And this morning Stereogum posted another video of Cross performing the song along with Modest Mouse's Johnny Marr at the Bowery Ballroom.

After the jump, we bring you the c&d from Universal's lawyer.

Lyrics Celebrating Bank Merger Impress Only Copyright Lawyer [New York Times]

Johnny Marr & David Cross Cover Bank Of America's "One" [Stereogum]

Crime/Fraud/Legal/Investigations/Inquiries/Regulation:
Former CFO of DVI charged with fraud [Legal]
Two former Enron executives who cooperated with prosecutors receive reduced sentences [Legal]
Wachovia chief executive G. Kennedy Thompson joins the Hewlett-Packard board of directors [Legal]
AIG subpoenaed in local government bid rigging investigation[Legal]
CA sues Kumar for legal fees [Legal]
Universal Music sues MySpace for copyright infringement [Legal]

M&A: [? = not yet closed, problems with the deal, lingering questions, etc.]
Johnson & Johnson + Conor Medsystems
Esmark + Wheeling-Pittsburgh
Man’s + Scania: Deal gets tentative approval from Volkswagen
John Wiley & Sons + Blackwell Publishing
Chevron + USA Petroleum
NADAQ + London Stock Exchange: ?

People & Moves:
Langone stepping down from Home Depot board [Directors]

Miscellaneous:
Andrew Mellon biography [Reading]
JP Morgan's REIT profits [Real Estate]
Red Hat wants off of Nasdaq, onto NYSE [Exchange]

Sponsored by Bloomberg.com

Freeport-McMoRan Buying Copper Giant (AP)
After attempting a number of acquisitions over the summer, all of which were unsuccessful, copper giant Phelps Dodge itself has agreed to be acquired in a deal that values the company at $25.9 billion. The acquirer, smaller rival Freeport-McMoRan agreed to pay a 30% premium over Friday's closing price, which should make shareholders quite pleased. Right now it's a rare moment, as both sides agree, and there's no third party waiting in the wings looking to ruin the good times. But if we go all the way to early 2007, when the deal is expected to close, and nobody tries to disrupt the fun, we'll be rather surprised.

Blackstone to buy Equity Office (Reuters)
In another record-breaking private equity deal, Blackstone has agreed to buy office building owner Equity Office Partners, one of the country's largest REITs. With debt, the deal comes to $36 billion, topping the HCA buyout, which clocked in at $33 billion. There have been a number of REIT buyouts over the last half year, and EOP had been considered a candidate for some time. Blackstone hopes to combine EOP's operations and assets with other office properties that it has acquired.

Trouble in Toyland (WSJ)
The Christmas shopping season sorta makes you wonder whether the market economy is all it's cracked up to be. it seems to be plagued by shortages and long lines, even as retailers pull out all the stops to slash prices. Even the emergence of internet shopping, which should ease the burden on physical stores, doesn't seem to have done a whole lot. Although the internet does at least allow the true market-clearing price of some goods to be revealed, as eBay sellers aren't constrained by some artificial MSRP. The PS3, for example, can be had for about $2700, a price that John Edwards can afford, allowing him to not go to Wal-Mart. So, the official word is, expect more of the same. Shortages, anger, upset kids, and a generally ruined Christmas.

Nasdaq bids over $5B for LSE (Reuters)
The NASDAQ made yet another volley in the battle to create a global stock exchange conglomerate, bidding over $5 billion for the London Stock Exchange. Everybody wants a piece of London. No wonder Chuck Schumer is worried that London is the new New York. But don't expect the NASDAQ to take it in a cakewalk. Already, shares of the LSE have risen above the latest offer, meaning traders strongly suspect another offer is in the works. Of course, the NASDAQ might be ok with that. It already owns 25% of the LSE, so it stands to profit if a bidding war emerges, and it loses it.

$$$"handsome inv. banker" with mba AND doctorate! still seeking soul mate, but would now like you to know that in addition to the very impressive degrees, he's "played tennis since childhood." [Craigslist]

$$$How To Be A Businessman's Wife [FT via Gawker]

$$$therealdon in SOHO [NYDN]

$$$"Ronnn, I am your father"

We were planning to do a big piece on Milton Friedman today. And really, we tried. But, as the Sage of Dagobah says, “There is no try. There is only do and do not.” Today we fell squarely on the “do not” side of the line. Really, we’re probably just too emotional to handle the obituary round-up right now.

So instead we bring you the Milton Friedman Chorus (courtesy of Eddy Elfenbein)

From the Wall Street Journal's MarketBeat column:

Citadel Investment Group LLC, the $12 billion Chicago hedge fund, says it continues to enjoy a successful year and isn’t suffering from big energy bets gone bad — despite speculation coursing through financial markets today that the firm is dealing with heavy losses.

“We are aware of the rumors. They are completely unfounded,” says Bryan Locke, a spokesman for Citadel.

Mr. Locke wouldn’t give details about the firm’s performance this year. However, an investor in Citadel said the firm remains up about 20% so far this year, despite sharp price declines in the energy markets in recent days. Citadel’s returns are better than major stock market measures this year.

Denial's not just a river in Chicago. When people deny things you have to ask: well, wouldn't they say that anyway? Cynicism is usually a safe posture whenever someone in the financial community denies something that might not reflect well on them. In this case, however, the denial is so public and concrete that it seems likely to be accurate. It's linked to a specific spokesperson and in the Journal--not the way you issue a phony denial. Too much credibility on the line.

So you can probably cross Citadel off the list. But that doesn't mean the rumors are entirely wrong. There are other hedge funds out there who may be in trouble. It wasn't long ago that, for instance, Vega Asset Management had to issue a letter to investors reassuring them that the fund was in good health. Anyone spoken to Vega about today's rumors? We tried calling earlier but haven't reached anyone yet.

Citadel: Rumors Unfounded [Wall Street Journal]

Pots, kettles, houses, stones-- you know the drill by now:

A critical audit by the Government Accountability Office (GAO) said the SEC has failed to maintain controls in three key areas - security of its computer system, handling of the cash paid in disgorgement and penalties, and keeping track of equipment and assets.

Even with [chief Chris] Cox's crackdown, the GAO said the SEC still isn't handling its cash correctly. As an example, it said $21 million paid as a disgorgement from an unidentified firm wasn't even recorded on the books, making it difficult to know if penalties are paid or ever collected.

[insert cackles from every hedge fund manager in NY, Greenwich, etc. right about now]

GAO AUDIT: SEC HAS PROBLEMS [NY Post]