$$$Shorting the Government, cont. [Long or Short Capital]

$$$Can anything stop THE GOOGLE? [Business Wire Daily]

$$$More Aleksey-related news. [New York Sun via Banker's Ball]

$$$Dentsply (XRAY) [WallStrip]

Returning to DealBreaker’s coverage of the nuclear pupil explosion of insightfulness that is the Yahoo! Personal Finance website, today we review Penelope Trunk’s latest column. According to Yahoo! Personal Finance, “The Brazen Careerist” Penelope Trunk, former marketing executive and professional beach volleyball player (Impossible really is nothing!), “writes counterintuitive but effective career advice for a new generation of workers, where she explains why old advice -- like pay your dues, climb the ladder, and don't have gaps in your resume -- is outdated and irrelevant in today's workplace.”

DealBreaker’s *shocking* discovery is that almost all of the advice administered on Yahoo! Personal Finance is so bland, so generic and so impersonal, that it can be applied to almost anything, including (but not limited to) Asian Butterfly Escorts.

So, here it is, Penelope’s “Top Tips for Giving Yourself More Time,” (completely unaltered!) applied to an Asian Butterfly Escort: (after the jump)

Sources tell DealBreaker that Dell CEO Kevin Rollins is out at the company as chief exec, and founder and chair Michael Dell is in. Apparently people have been waiting for Michael to pull the plug on Rollins and "people view this as a positive catalyst...their [Dell's] performance has sucked and so we think the Street will give ole Mikey a pass on Q4." Sources expect stock price to go up by as much a $1.25.

Update: Reuters confirms the shake-up.

As of 4:50, "Dell shares up 7.1% to $25.94 in late trading," according to MarketWatch.

Returning to CNN’s list of the “Dumbest Moments in Business,” otherwise dominated by Wal-Mart, here is a clip that highlights some pretty obnoxious ways people have been laid off in the past year. It’s nice to see CNN completely stealing VH1’s “Best Week Ever”/’every other show it produces’ format. The sad thing is that the actual corporate events are way funnier than the commentary. The clip details the Northwest Airlines ‘How to be an efficient homeless person’ guide distributed to former employees and Bank of America’s mandatory (in the sense that getting your severance is “mandatory”) training of outsourced replacements.

The Video - [CNN]

March 30 will be the day Altria finally rids itself of the dead weight that is Kraft Foods Inc, Bloomberg reports. For every share of Altria, investors will get 0.7 share of Kraft. As we noted earlier this morning, this spin-off will allow the units to focus on separate interests, Oreos/Tang vs. cigarettes, while remaining committed to the mutual goal of screwing the youth of tomorrow, by whatever poison possible (trans fats versus tobacco). (Here at the DB HQs, we’re content to merely do it through poor attitudes and ineffectual discourse).

Fourth quarter profits at Altria increased 29% to $2.96 billion ($1.40/share), due to higher Marlboro prices and overseas sales. Revenue swelled 3.7% to $25.4 billion. 4Q profits at Kraft declined for the first time in four and half years. Net income dropped to $624 millino (38 cents/share); sales dropped 3% to $9.37 billion.

Altria to Spin Off Kraft Unit in March to Spur Growth [Bloomberg]

The latest string of Schumer and Bloomberg refutations are out (even since the opening bell), concerning the dynamic duo’s alarmist report about the impending decline of NYC’s financial dominance due to SarbOx and precluded by mass IPO relocation. To summarize a couple recent responses: The New Yorker’s Financial Page argues that the IPO migration is mostly a byproduct of large-scale privatization of former foreign government enterprise and SarbOx hasn’t hurt the market, evident by its growth. Adam Lashinsky of Fortune takes this stance one step further, pointing to the growth in the number of venture backed companies that went public in the U.S. in 2006 and the increase in the amount of money raised by domestic IPOs per IPO. Lashinsky also says the strength of the U.S. IPO market is self-evident in fact that some of the largest tech IPOs are still looking to trade on U.S. exchanges, not foreign ones.

IPOs still love U.S. markets – [Fortune via CNNMoney]
Over There – [New Yorker]

Bush’s “State of the Economy” speech is happening rightthissecond at Federal Hall on Wall Street. Unlike the State of the Union, the SE is not an annual party, but one delivered at the whim of the Commander in Chief, whenever he has a premonition that his numbers are bad enough that he needs to book a seat on the Acela from Union Station to Penn and tout something “good” as the work of his own nimble fingers. So far, Bushie-boy has reckoned that "America's capital markets are the deepest, the broadest and the most efficient in the world," and has called for changes to Sar-Box, specifically Section 404, stating that we “don’t need to change the law, we need to change the way the law is implemented.” Groundbreaking stuff, eh? Well it wasn’t just a waste of time and $180 for the Dubya. Incidentally, he’s also inconvenienced those of you who actually work on Wall Street, too.

[11:46] ClipperJCM: So President Fool is speaking in the building next door, and as a consequence, I can't leave the building to get coffee.
[11:48] ohbabyitsbess: that seems like an unusually restrictive security measure
[11:48] ohbabyitsbess: no coffee in the vicinity of the president?
[11:57] ClipperJCM: Starbucks is across the street.
[11:57] ClipperJCM: And of course I dislike Starbucks, but sometimes it serves the purpose
[11:57] ClipperJCM: At the moment, I can't cross the street.
[11:58] ClipperJCM: Dunkin Donuts is my preferred haunt. It's down Broad Street, and I can't walk that way without passing through the phalanx of Secret Service
[11:58] ohbabyitsbess: i suppose a trump building badge does not interest the secret service
[11:59] ClipperJCM: it'll get me back onto my own block
[11:59] ClipperJCM: and into my building
[11:59] ClipperJCM: but I won't be able to cross over to blocks with decent coffee
[11:59] ClipperJCM: my only option is the horrible little stand in our building
[11:59] ClipperJCM: or suicide
[12:00] ohbabyitsbess: 6-1, half a dozen to the other

Bush says lawsuits, regulations hurting markets [Reuters]

The first of the U.S. Commerce Department reports is out this morning; showing 2006 GDP growth in Q4 of 3.5%, up from 2% in Q3 and 3.2% in Q4 of 2005. This surpassed the consensus of economic experts by half a per cent. The other major highlight from the report is a dip in inflation (or at least a tempering of the inflation surges in Q2 and Q3), aided by a 0.8% fall in the government’s price index for personal expenditures.

Boeing, up almost 5% after morning trading, doubled Q4 net income and experienced 26% revenue growth in response to the robust blowing the crap out of things aviation market.

U.S. Economy Grows 3.5%; Inflation Gauge Falls Sharply – [WSJ]
Boeing's Net More Than Doubles On Surge in Jetliner Orders – [WSJ]

Jeffrey Toobin’s New Yorker article sheds some light on Google’s semi-surreptitious book scanning efforts. Google plans to scan every book in the world (minimum 32 million) to create a comprehensive Google Book Search tool that would provide references and quotations to the volumes in its database. The Company has been scanning every book currently in the public domain, plundering the libraries of major state and private universities like Michigan and Stanford. Recently, however, Google has been cut off from scanning books not in the public domain (copyrighted volumes) from private universities because they don’t want to get sued.

Publishers have a problem with Google’s scanning; namely, they aren’t getting any cash for it. The legal battle Google faces is over copyrighted books. 20% of all books are in the public domain and free to scan and reproduce, 10% are in print and under copyright, and most of the rest are under copyright but out of print or restricted in some other fashion.

Google’s argument is that Google Books is basically a glorified card catalogue, and will merely point to sources rather than produce them entirely upon search. The publisher’s argument is that Google is going to profit from such ‘pointing,’ so it better give a little slice to publishers/authors like any other such enterprise. The consensus among people in the dispute is that a settlement is likely. This will actually help Google, creating a significant cash barrier to entry in the electronic book compiling market. What is paper thin police tape to Google is an entire barricade to most other companies.

Google is not Wikipedia, and despite its desires to ‘not be evil,’ the $150bn megalith’s path toward owning all the written information on the planet, whether it’s merely a ‘portal’ or not, is a bit daunting. Where’s crippling bureaucracy when you need it, or at least something to make Google seem less like the ultra-efficient assimilation machine Borg and more like the rather bumbling Vogons?

Google’s Moon Shot – [New Yorker]

The son of Senator Joe Biden (who is quite charming, a great story-teller and has the perfect hair for a white house)*, R. Hunter Biden, a Washington lobbyist, is being sued by Anthony Lolito Jr. Lolito claims Biden (and his partner-uncle James) kept him out of the purchase of a hedge fund investment firm in 2006. The firm is Paradigm Cos., based in New York. Lolito maintains that the Bidens lied to him about an offer so that they could negotiate a better deal alone.

Earlier this month, the junior Biden resigned from “daily oversight” of Paradigm Global Advisors LLC, a division of Paradigm Cos. that manages hedge fund investments; he remains a lobbyist for the firm.

*Update(And yes, “JB + BL” is written inside a pink heart on the front of my Trapper Keeper. We all have our demons). Just read the Observer piece. So, that's interesting. I have decided, after not so careful consideration, to withdraw my endorsement of Sen. Biden in favor of the wildly succeful and not at all nebbishy (though oft erroneously pegged as such) NJ Gov. Jon S. Corzine. Thank you and good night.

Biden, Senator's Son, Is Sued Over Purchase of Hedge-Fund Firm [Bloomberg]

Not too long ago, Philip Morris changed its name to Altria in order to distance itself from those pesky little cancer sticks it did such a great job of selling—specifically, Marlboro brand cigarettes. But apparently it wasn’t the cigarettes that were the dead weight. Altria is spinning off its Krafts Foods division, which makes Oreos, Tang, and a bunch of other products cigarettes are too good to associate themselves with. The split was originally announced in October; today, Altria’s chief executive, Louis c. Camilleri will set a timetable for the spinoff’s completion (shares have risen 10% since the split was announced).

An analyst from Citigroup, which just can’t seem to catch a break, told the New York Times “The exciting part for me…is that tobacco use today will evolve. It’s unlikely that there will ever be a 100 percent safe cigarette, but we feel that a reduced-risk cigarette is on the horizon.” Sounds like dropping the Kraft Foods fatties was a shrewd move for Altria. With advent of cigarettes that don’t-cause-cancer-but-will-most-likely-still-cause-things-like- Emphysema-discolored-nails-ashtray-smelling-breath-etc, shares are sure to shoot through the roof.

Tobacco’s Stigma Aside, Wall Street Finds a Lot to Like [NYT]

Following in Hollywood hedge fund operator Benjamin Waisbren and Co.'s (possibly failed) footsteps, Citigroup will be funding at least 45 movies over the next five years, in conjunction with the privately held Relativity Media. Ryan Kavanaugh, an executive at Relativity Media, brokered the deal, and previously worked with Deutsche Bank to finance 18 movies to be made by Sony and Universal Studios over the next two years. No word on whether a $Honey movie-of-the-week will be included in the 45, but, for the most part, it can pretty much be assumed. (Gotta start making those trademark application fees earn their keep, you know?)

CITI'S FILM SEED [NYPost]

Bristol-Myers hires banks for sale advice
Everybody knows that it's a bad idea to just reach into your parents' medicine cabinet and mix their pharmaceuticals, unless you want to get high. Mixing pharmaceutical companies will probably lead to the same result, but it's pretty dangerous. Although there's nothing official yet in terms of a Bristol-Myers/Sanofi deal (wonder what they'd call the company), word is is that Bristol-Myers has hired Lehman and Morgan to help it work out a deal. So, deal or no deal, the company is definitely interested in something.

Drug Safety Oversight Will Be Strengthened, U.S. Says (Bloomberg)
Yeah, because the FDA does such a good job in its current capacity, riiiight. No, in all seriousness, does anyone feel comfortable now that the FDA will expand its oversight of drugs after they've been released to the market? Yes, in a sense, this should bring some measure of comfort to those currently taking medicines, that the long-term effects are being studied, but given how much of a burden the FDA already is, and how many good treatments get taken off the market because of a few spots of bad data, this seems like it could easily cause more pain than it's worth.

Is Wall Street Really Losing Its Edge? (Dealbook)
Now that Chuck Schumer is on the anti-SarbOx bandwagon, penning articles with mayor Bloomberg about how Wall St. is deteriorating, everything is hunky dory, right? Well, it's great to have someone like Schumer unexpectedly reach his conclusion about SarbOx, but maybe he got there for reasons that aren't so appealing. Maybe it's just a form of populism -- like if he were from South Carolina, he'd be writing op-eds about the textile industry going overseas. What looks like a free-market position might not be so principled. And maybe Wall St. isn't doing that badly. Certainly the staggering earnings and record bonuses don't portend much doom, except from a contrarian point of view. And other things, like the global dispersion of IPOs may not be as damning as originally thought.

Baquet Rejoins Times as Washington Bureau Chief (NYT)
The grunt reporters at the Times are gonna love this. The Paper of Record has hired Dean Baquet to be its Washington Bureau Chief. Dean Baquet stands somewhere between Joe Hill and Casey Jones, in the eyes of many, for his one-man fight against Tribune Co. management, when, as the chief at the LA Times, he refused to institute the job cuts that were demanded of him. This radical insubordination certainly earned him a lifetime of speaking to college J-schools about the good old days of the craft -- in the short term, it got him a gig at the Times.

$$$Hedgie Milestones [WSJ]

$$$Wharton girl looking for ibanker-- preferably VPs+ and preferably bulge bracket firms. [Craigslist]

$$$Wall Streeters Make Crain’s Under-40 List [DealBook]

The official alliance between the New York Stock Exchange (NYSE) and the Tokyo Stock Exchange (TSE) may be announced tomorrow on January 31. Then again, it may not. Who knows? Certainly not the Wall Street Journal. The alliance would coincide with NYSE’s recent global expansion that included last month’s acquisition of Euronext and buying a 20% stake in India’s National Stock Exchange.

Regarding the recent splurge of acquisitions, John Thain, CEO of NYSE Group, commented, “If You Ain't Outta Control (from the regulatory ambiguity caused by the increased globalization of markets), You Ain't In Control (of many of the world’s exchanges),” then rode off in a really tweaked out Eclipse.

NYSE Group (NYSE: NYX) is up slightly in today’s trading, at $100.18.

NYSE, Tokyo Stock Exchange Are 'Very Close' to an Alliance – [WSJ]

A reader recently asked our friend over at Information Arbitrage: “Where should I start - banking or trading?"

IA, as always, gave a great answer, but in his haste, left out a few key points that we think the questioner would also appreciate, in order to make the most well-informed decision possible. If any of you DB readers out there are also trying to make this monumental decision, read on.

I’d say, in general, that it is hard if not impossible to move from banking into trading, whereas the converse is not necessarily true. While I did “this” [don’t you just love quotations? I sprinkle them everywhere I go because I like to see myself quoted and then when I see myself quoted I smile and do little air quotes to myself] (banking into trading) let me be clear: I have never actually traded. [Which is to say—gotcha! I bet I had you fooled just then, when I was all “I did ‘this’ (banking to trading)”!] I have run massive groups of traders and run large books of risk, but this is not trading. I was a trading manager. Do I wish I had actually traded at some point? Yes. [Do I wish I hadn’t taped over the series finale of 90210 with last Wednesday’s Mad Money? Yes.] But once I was a successful banker and derivatives pro was this ever going to happen? No. [Can I go back in time and not tape over what I’d regard as one of the finest 60 minutes in television history? No. I lack the capabilities—currently—to time travel.]

Former Merrill Lynch tech analyst Henry Blodget’s latest “Bad Advice” column is a lament over the current state of the financial mainstream, in which hapless day traders listen to Jim Cramer and plug away at E*Trade accounts to disappointing returns (or so he figures).

Blodget does have an impressive resume when it comes to bad advice. Blodget was ousted from his last day job for manipulating research to boost Merrill IB clients and barred from the securities industry.

That stock picks of pop-financial “experts” are not the most sound investment is hardly a new point, and is often times more effectively made with dart-throwing monkeys than someone who gets tasered if he comes near the Merrill Lynch bull (although if we could taser dart throwing monkeys, I would watch that in a heartbeat, and Fox needs to give me credit when they air this).

Cramer’s TV-picked portfolio did perform poorly against the S&P 500 last year, but so did almost everything else, and Blodget does concede that his ire springs from what is essentially a tale of two Cramers, that:

Reviewing the list of common Mad Money show segments (Stump the Cramer, Am I Nuts?, Pimpin' All Over the World) and sound effects (squealing pigs, a wrecking train, a toilet flushing, a screaming man falling out a window and then crashing on the ground), I realized that, yes, I was taking Jim Cramer waaaaaay too seriously, that his nonstop comedy routine about being a brilliant and respected investor and making everyone rich is just shtick, and that there couldn't possibly be a Mad Money viewer who actually believes that he provides intelligent advice.

The reality TV incarnation of Cramer is in stark contrast with Cramer the Harvard Law School graduate, arguably successful hedge fund manager and serious columnist, but not Cramer the total nutjob.

Pay No Attention to That Crazy Man on TV – [Slate]
Stock-Picker Showdown: Blodget vs. Cramer – [DealBook]

At least according to Bloomberg’s Michael Lewis. And why, pray tell, is it appropriate to refer to the 5-day long E-binge as such?

1. A lot of people say a lot of things at Davos but no one really has the cojones to, you know, ‘say’ anything.

Examine the public statements extruded by the World Economic Forum any year and you'll find the same warmed-over prudence, the same dreary feeling that someone is about to punctuate the nebulous tedium with a proposal to create a commission.

2. Phonies wanted.

Davos is where people with no talent for risk-taking gather to imagine what actual risk-takers might do. Davos Man needs to sit in judgment; Davos Man needs to brood. So great is this need that he will brood about virtually anything, no matter how little he knows about it.

3. We haven't seen this much overthetop worrying such we attended the 1987 Jewish Mom Expo at Nassau Colisseum.

``The surging demand for derivatives is making financial markets more vulnerable to any slowdown in the global economy.''
The piece came with supporting quotes from European Central Bank President Jean-Claude Trichet, Bank of China Vice President Zhu Min and the deputy chief of India's planning commission, Montek Singh Ahluwalia -- but not a worrisome fact in sight. None of them seemed to understand that when you create a derivative you don't add to the sum total of risk in the financial world; you merely create a means for redistributing that risk. They have no evidence that financial risk is being redistributed in ways we should all worry about. They're just -- worried.

4. Most of the people who attended this thing spend their days in bubble baths while being fed bon bons and having US Weekly read aloud to them. The ones with heroin problems hold out their arms at various intervals and have someone who actually bears the title “heroin injector” inject the drug into their pliable (as a result of inactivity) veins.

Even if these global financial elites knew something useful that you and I don't -- that, say, 50 hedge funds were about to go under and drag with them half the world's biggest banks along with a third of the Third World -- they would be unlikely to do anything about it.

5. The reason people go to Davos is because it makes them feel good about themselves in ways their mothers (fathers/husband/swives/doormen/dry cleaners) never did.

…perhaps the only point of standing in the snow and expressing your doubts to a television camera to prove that you are the sort of person whose doubts matter…

Davos Is for Wimps, Ninnies, Pointless Skeptics [Bloomberg]

You know that friend of yours, who’s really a great girl with looks and personality and that special something who, inexplicably, is constantly drawn to scumbags? That sort of magnetism seems to be at work between PIPEs and hedge funds run by people who are/or are involved with criminals, as discussed in Forbes’s “Sewer Pipes,” this week. If you suspect that your neighbor was able to afford that gold-plated Statue of the David on his front lawn because his hedge fund posted some fantastic returns last year—almost too fantastic, you should check it out. We’ll just offer you some interesting facticles on the phenomenon’s poster child, Eugene Grin (and his younger brother, David):

+Originally from Ukraine, Eugene Grin became a vacuum cleaner salesman when he landed in the U.S. in 1979. Then he worked as a broker of penny stocks, among other investments, at F.N. Wolf & Co., the boiler room shut down by regulators in 1994. At Wolf one of Grin's clients was Gilbert Bornstein, a 54-year-old unemployed man who invested $32,000 with Grin after being convinced he could safely double his money through penny stocks. Bornstein was soon stuck with $27,000 in losses. Nine years later a New York State judge determined that Grin owed Bornstein $40,000. Grin has yet to pay that bill, and the judgment remains outstanding. "He was superwealthy," Grin shrugged [while talking to Forbes], by way of an excuse. "There was money in the family."

Jack Shafer is mad—fumed, you might even say. Obviously, his fury has to do with the Maria B. and Todd T. situation, but only tangentially. Jack’s a big boy—he doesn’t care if two extremely loaded, good looking individuals want to join the Mile High Club (‘what took them so long?’ is what he probably wanted to ask), but what he cannot take is the Puritans over at the Wall Street Journal and their insistence on not saying what everyone’s thinking: Todd Thomson nailed Maria Bartiromo (or vice versa, if you’re more comfortable with a less masculine-driven sort of discourse and you think Maria was on top).

Highlighting several examples of the paper’s irresponsible cockteasing style of journalism, Shafer reviews its Citi-Gate coverage with a red pen and finds the following: the slimmed-down rag makes mention of “a friendship that includes a trans-Pacific flight alone in a corporate jet, an apparently significant sighting in an expensive restaurant, and a dressing down in which a corporate executive is told to reduce his contact with his friend of the opposite sex” but fails to connect any of the dots that it itself has laid out! Shafer is so mad about this he comes up with a brilliant yet horrifying euphemism for sex and proceeds to actually make us read it: “[listing all of the above mentioned incidents] all but draws the donut and tosses the hot dog through it.” (Is he taking liberties with his knowledge of Ms. Bartiromo’s more delicate parts or does Shafer speak from prior experience? And if so, are we talking chocolate with sprinkles or jelly? When one is taking another party to task for a lack of driving something home, one should shy away from doing the exact same thing, Jackie-boy).

In cases like these, there’s usually someone or a bunch of someone’s to blame and today is no example. Though our litigious younger brother might quarrel, Shafer’s line of reasoning for the absence of the phrase “they did it” seems pretty airtight to us:

Having dumped the compost, planted the seed, and fertilized and watered the earth, the Journal leaves it to nobody's imagination what species the flowering Thomson-Bartiromo friendship, relationship, and contact is without actually coming out and writing anything that 1) they can't prove and 2) invites a libel suit. This is the sort of copy a clever lawyer directs reporters to write when they "know" something but can't prove it. Leave it to the reader to assemble the meaning of the facts in their minds, the wise libel attorney tells his clients.

Stupid lawyers; always with their ‘libel’ and their ‘let’s not get sued’ and their ‘Ally McBeal was not an accurate representation of us.’ They really just need to get laid.

Bartiromo Innuendo [Slate]

Some of you have been wondering why we are posting at the speed of Windows Vista on a 2 year old computer this week. The answer – server and power issues. This will continue to sound conventional until we think of some ridiculously awesome reason like an eagle carrying a severed deer head attacked our servers. By the time I finish typing this, there will be metal bands fighting for that logo.

Let the eagle soar — but without the deer head – [MSNBC]

Speaking of Microsoft and how it is often maligned for blatant copying slight tweaking of competitor’s products, notice how MSNBC copied CNN.com’s “Offbeat” category and called it “Peculiarity.” That is uncoachable. Or Zune-tastic.

Also – This is how people come out of the closet in Ohio. Oh, what peculiarity!

So I’m sitting here with some posts ready to go, but unable to get them on the (temporarily unavailable) site, after combing the morning news. My mind starts to wander. Then the loneliness...the anomic solitude of the beached blogger. One click leads to another then all of a sudden I’m watching full episodes of “What About Brian” on the internet. “WHAT ABOUT BRIAN.” FULL EPISODES! Do you realize how murky the depths of one’s soul must become for procrastination to sink this low?

Update – the servers are back, after Elizabeth decapitated the eagle…by biting its head off. Elizabeth Spiers with a severed eagle head in her mouth with a severed deer head in its mouth. By the time I finish typing this, the metal bands previously fighting for the eagle/dear head logo will be fighting for this one. You also would think "death eagle" would lead to some freaking awesome images on Google image search, but you would be wrong, so I had to settle on the posted pic.

Bolstered by the success of T.M.X. Elmo last holiday season, Mattel plans to launch T.M.X. Cookie Monster and T.M.X. Ernie by next fall. The T.M.X. line of “tickle-me” toys is slightly smaller and much more technologically advanced than its predecessors. The new dolls will be far sluttier more affirming than Elmo, able to get off after a mere two tickles, opposed to Elmo’s three. Once tickled sufficiently, Cookie Monster giggles, laughs and rolls. Ernie, however, screams out “Oh Bert!” repeatedly, bobs up and down like a rubber duckie, starts squeaking and then collapses in a heap until you pour cold water on him.

Mattel released earnings yesterday, reporting an 8% and 11% rise in domestic and international gross sales respectively, with core brands such as Barbie showing growth for the first time in several years. Mattel (NYSE: MAT) was down almost a half a percent in after hours trading on Monday.

Following T.M.X. Elmo, here come his friends – [CNNMoney]
Mattel Q4 2006 Press Release

Maria Bartiromo—Todd Thomson’s jet setting gal-pal—is in talks with CNBC about having her own branded TV show in the vein of Charlie Rose and Bill Moyers, the Post reports today. She’s also had her nickname—‘Money Honey’—trademarked for “stuffed animals, motion picture films, coin-counting machines, coloring books, jigsaw puzzles, interactive games, beer glasses, headbands and more,” which we can only assume is code for thongs and airline peanuts. Though sources caution that the moniker may have nothing to do with the show, the suggestion that it might, in conjunction with the ‘$Honey’ teddy bears you’ll soon be able to buy, has been enough to get several people quite riled up, including talent agent Michael Glantz (whose claim to fame is that he manages Wolf Blitzer which, if you think about it, is pretty awesome). “If she’s going to be out there hawking T-shirts and other things bearing this name, that is new…for somebody in a news environment,” Glantz told the Post [Ed.: what are your thoughts on the Jim Cramer bobble head doll?] “In the sports arena it’s different. People can exploit their own personality," Glantz added. "But how's she ever going to cover anything to do with marketing, assuming she's doing the same thing?" Naturally, we don’t have an answer. But we do have a question—how great would it be to see MB sign off every night by pushing her product du jour (The $Honey eau de toilette, The $Honey pregnancy test, The $Honey set of steak knives) and nailing that evening’s guest? Pretty, pretty, pretty great.

MARIA ANGLES FOR Q&A SHOW [NYP]

Now that Americans have demonstrated an ability not to giggle uncontrollably during ads discussing 4 hour long erections and have finally forged the conceptual bridge between genital herpes and extreme kayaking, prostate drug Flomax is entering the fray with a spot during Super Bowl XLI. WPP Group’s Grey produced the spot, which features a bunch of dudes in spandex (bicycle racers) talking about “guys having more fun and spending less time in the men’s room.” The ad is going to air in the 4th quarter of the game, when most people with prostate problems are trying to pass any liquid waste that can be extracted from pizza, nachos, cheese-dip and beer. If the game goes into overtime, Flomax has another ad set to launch featuring Peyton Manning's prostate. Super Bowl ads cost $2.6mm for 30 seconds this year, and the program is expected to air in approximately 90 million households.

There may be some collusion among the big drug manufacturers, according to an old Cialis press release about the drug’s Super Bowl advertisements:

Cialis is not for everyone. If you take nitrates, often used for chest pain (also known as angina), or alpha-blockers (other than Flomax(2) 0.4 mg once daily), prescribed for prostate problems or high blood pressure, do not take Cialis

Clearly the Flomax people have clamped down on Eli Lilly like an enlarged prostate. Why else would the makers of Cialis mention only Flomax as an OK thing to chomp on after securing a means to a rock hard love scepter? The press release could have said, “other than Flomax or Hormel Brand Cured Ham (also high in nitrates). When you want to pork, or just pork in general, there’s nothing better than Cialis and delicious Hormel Ham.”

Ad Notes – [WSJ, Paper Edition 1.29.07]

If you noticed anyone last week not complaining about the cold, it was probably someone who was frequenting the Australian Wine Festival New York, part of Australia Week 2007. Australia is currently the 6th largest wine producer in the world, and exports over half a billion liters annually. At its current growth, the Australian wine industry expects to produce 10% of the world’s wine in 10 years. Moving away from its once typical “extremely fruity,” “high-alcohol” wines, Australian wine exporters are staying competitive by concentrating on middle tier, affordable wine selections, even shirking conventions like corked bottles for screw-on caps. One expert contends that the explosive growth of wine consumption and export in Australia is cutting into beer consumption, which may explain why the Australians have slipped in the world rugby rankings the last couple of years, with a relatively unmotivated squad not looking forward to wine and cheese post-game drink ups.

Australia Pumps Up, Seeking 10 Percent of World Wine Market – [Bloomberg]

And the winner at British Airways is....Willy Walsh (Flight International)
After weeks of tension, the strike threat at Biritsh Airways has been defused, and the company's CEO deserves the credit. The coup de grace came when the CEO publicly pointed out that the average unionized BA worker took 22 days of sick leave per year, far more than the average British worker. This not only made them look weak and sickly, it helped them lose face in the court of public opinion. And of course it made everyone question why they were thinking about striking.

Rumors Fly About Bristol, Lifting Stock (NYT)
It's not clear, exactly, where this one stands, but there's a lot of speculation about a possible merger between Bristol-Myers and Sanofi. While there are plenty of rumors flying around, the companies have offered nothing but an official denial, which they'd have to issue whether they were talking or not, so take that with a grain of salt. Given the intensity of the rumors, and yesterday's trading, a deal will probably happen soon, if indeed one is being talked about at all.

Stock Frenzy In China Stokes Official Concern (WSJ)
Several months ago, then Treasury Secretary Snow went to China and told anyone who would listen that the Chinese people had to embrace the concept of household debt. Take out a few credit cards, he exclaimed, and while you're at it, buy a few American-made goods, just to help balance out the trade deficit. Well, the Chinese seem to be getting the whole debt thing, but they're not buying American Apparel t-shirts. Instead they're snapping up stock in the Chinese market, helping to fuel a rally, but also helping to make the whole thing look like a house of cards that will come tumbling down at the first mention of wind. So they're taking out second mortgages, setting up online trading accounts and maxing out the AmEx to play their hand at what looks to be a hot deck. Thanks a lot John Snow!

JetBlue Posts $17 Million Profit on Passenger Gain (Bloomberg)
About a year or so ago, jetBlue, once the highflying wunderkind of the airline industry started having some problems, and it warned that it's rapid growth ambitions were hurting its profitability. This was exactly at the same time most other domestic airlines started pulling their noses up and returning to profitability. Now, after slowing its expansion and intake of new jets, the company is seeing good times again. Today it reported profits that were just a hair shy of analyst estimates, with sales growth at an impressive 42%.

$$$ Carnival of the Capitalists [Long or Short Capital]

$$$Yes, I am a successful investment banker with a 7=figure bonus to prove it. Now I need some help spending some of it. If interested, please reply with 2 clear photos (1 of whole body, 1 closeup of face) and tell me your age, height, weight, occupation and why I should pick you. [Craigslist]

$$$Harvard Econ Recruiting Video and Outtakes. [Banker's Ball]

As previously noted this morning, private equity will be the hot chick at the party in ’07. But we didn’t realize that she’d be so hot that Stevie-boy Cohen would dip his fingers in her womanaly charms. But we’ve been not-clairvoyant before so, uh, this is nothing new (though upsetting all the while). As The Street’s Matthew Goldstein reports:

In a somewhat surprising move, Cohen's $12 billion SAC Capital Partners behemoth is stepping up to the plate to help finance a $3.1 billion management-led buyout of Laureate Education. The Connecticut-based hedge fund is part of a group of investors taking the higher education company private in a deal led by Laureate CEO Douglas Becker, Kohlberg Kravis Roberts and Citigroup's private equity arm.

Shift for SAC's Cohen [thestreet.com]

Tonight at midnight, Microsoft will roll out the hotly anticipated version of its old-timey Windows operating system, the majestically-named Vista, which will make the PC “the place where it all comes together for multimedia applications such as photos, music and videos.” The Big V—which Microsoft poured $6 billion in to develop—is the first update of Windows since 2001, when XP was released. To coincide with big day (night, whatever), Gates and wife Melinda will jump out of an airplane naked. Joking about that last part but thanks for the indulgence. Anywho, what’s actually going to happen approximately 7 hours prior to the release will be Gates’s appearance on The Daily Show (or, 1 hour prior, wink, wink, if we’re going to play that game wherein we pretend we don’t know how previously taped shows work). Usually this would be the time for us to wax poetic on our love for the vertically challenged but oh so irresistible and Jewish-parent friendly host of the show, but tonight is not about Jon Stewart. No, tonight represents So. Much. More. We’re pretty sure you get what we’re hinting at, but for the people in the cheap seats, we’ll spell it out: tonight, PC (Gates) will come face to face with…PC. (Meaning TDS resident expert and “PC,” John Hodgman). Obviously this is HUGE, the consequences of which could be disastrous. But we’re thinking less along the lines of the destruction of the galaxy and more like—is this (the rolling out of Vista/the MONUMENTAL meeting of PC and PC) just a big diversion that Gates created to cover up his own (backdating?) scandal, a la Mr. Jobs’s “quick, everyone look at this awesome cell phone that let’s you watch The Office whenever you want and don’t pay attention to my tinkering of stock options, etc, etc”? We’ll soon find out.

On a less cataclysmic note, in an interview for CNN’s American Morning , Gates was visibly ticked off at the suggestion that the Vista has similarities to OS X, as demonstrated in his repetition of the word “No”: “No, no, no. There are whole areas where we've innovated," Gates said during the interview. Also, and this is not meant to get Billy-boy any more riled up than he already is, but there are some experts out there—obviously morons who have no idea what they’re talking about—that say consumers needn’t upgrade from XP if they’re not buying a new computer in the next several years. Shooting of the messenger not necessary.

Bill Gates touts Vista [CNN Money]
TDS schedule of guests [Comedy Central]

...every corporate executive and his mother (and her mother) taking the company jet on unauthorizedish jaunts? Todd Thomson, sure, he needed some privacy a few thousand feet above ground to seduce the $Honey, that we get. But what about everyone else? Like, for instance, Applebee's former CEO Lloyd Hill? In a letter to the chairman of Applebee’s International’s (APPB) compensation committee, CEO Douglas Conant, from Richard C. Breeden (obtained by footnoted.org), DC is informed of the error of his "free rides for everyone" ways:

On 29 occasions from April 2006 through January 2007, Applebees’s corporate aircraft flew into and out of Galveston, Texas, where former CEO Lloyd Hill happens to own a beach house. The nearest Applebees’s restaurant is more than 40 miles away. Though Mr. Hill ceased to be CEO in September 2006, company planes continue the Galveston shuttle."

We do not believe that shareholder interests are served by turning corporate aircraft into flying limousines for senior executives’ personal vacations. Just as importantly, this practice is inconsistent with the wholesome “neighborhood values” that Applebee’s claims to embody as a company. I am quite certain that most Applebee’s customers would be shocked to find out that a portion of the cost of their meal goes to fly the former CEO back and forth to his beach house aboard a corporate plane.

Allowing someone to fly the company plane to his beach house when he doesn’t even work for the company anymore is one thing, but bucking Applebee’s “wholesome neighborhood values”? That a portion of the $9.99 that Bob Loblaw is shelling out for his Fiesta Lime Chicken™ is paying for? That is just wrong, my friend. This is why Applebee’s is on the decline.

(NB: footnoted asks in a P.S.: “Just imagine if some other folks started digging into corporate flight logs — now that would make for some interesting proxy reading. In fact, this sounds like a great wiki-project for footnoted.org readers. Anyone interested in helping to pull this together?” Obviously we’re huge fans of FN and read it daily but here’s a question—what in god’s name do you think the point of this is? Our own personal amusement?)

A day at the beach…[footnoted.org]

To the dismay of many executives and lobbyists, you will no longer be able to freebase with Zell Miller or join the mile-high club with Nancy Pelosi in your corporate jet. According to new measures in both chambers of Congress, you will instead have to shroom with Zell using toothpicks and bang Pelosi in one of Paul Allen’s non-winged vehicles, which ironically form a Voltron-esque galactic crime fighting entity that is considered to be winged.

The Congressional meal restrictions apply to any company that employs registered lobbyists, meaning a large number of execs will be sticking to hors d’oeuvres when entertaining politicians. While some of the lubricant of traditional glad-handing may have been stripped from the calloused hands of many companies that rely more heavily on a distinct political climate for profitability, most of these new restrictions do not apply to fund-raising activity, where most glad-handing climaxes are achieved anyway.

However, one grave consequence of the new measures:

Because the rules ban gift-giving by lobbying groups, dozens of amateur softball teams on Capitol Hill will no longer be allowed to accept balls, bats and league fees from corporations and lobbying organizations. The Nuclear Energy Institute's sponsorship of the team of Rep. Joe Barton, a Texas Republican who until recently headed the Energy and Commerce Committee, could be in trouble.

Not only does this threaten Barton’s Isotopes squad (or whatever it is called), but also it means that your corporate leagues will now be flooded with earnest K Streeters. If you thought that Lehman VP was obnoxious arguing the hotly disputed kickball strike zone, you ain’t seen nothing yet.

No Free Lunch: New Ethics Rules Vex Capitol Hill – [WSJ]

The former head of global financial institutions equity research at Merrill Lynch, Judah Kraushaar, has launched Roaring Brook Capital, a fund with an “emphasis on rigorous research and value/growth at reasonable price.” Roaring Brook charges fees of 1.5% for management and 20% for performance. The minimum investment requirement is $1 million. And scene.

Former Merrill Lynch Executive Launches Hedge Fund Shop [FINalternatives]

Citigroup is in trouble, but not for the reason you might think, according to Bloomberg. Though CEO Charles Prince has been doing his very best to cut expenses in order to come up neck and neck with the profit gains of his competitors, he may be “doomed to fail.” But, according to reporter David Pauly, neither Prince’s former wood burning fireplace-loving CFO nor the $Honey are to blame. Apparently, it’s Citigroup’s fault.

Though Pauly acknowledges the company as a “behemoth of commercial banking, stockbrokerage, investment banking, sub-prime lending and hedge funds,” Citi’s huge girth may just be the problem.

Prince is confronting the law of large numbers: The bigger a company gets, the harder it is to grow as fast as it did when it was smaller.

Over the last five years, “Citi” has produced average total returns of only 6.9 percent, paltry in comparison to the 9.5 average return of the 88 stocks in the Standard and Poor’s 500 Financials Index.
Though Pauly, apparently a better person than us, refuses to even suggest it, perhaps the departure of the less than spend thrifty Thomson and his oft-fabled fish tank will help things along. Do you have any idea how much fish food will set you back these days? You must not, or you'd be just as riled up as we are. They’re thieves, those people over at PetCo, thieves!

Professor Walter Benn Michaels argues in his book, The Trouble with Diversity, that “diversity” has been linguistically hijacked as a way to describe economic inequality. He views this as a problem because it affirms the notion of poverty as primarily a choice and that reducing the number of poor people then becomes a “reduction in economic diversity,” and “disrespectful to the agency of the poor,” which, when you put it that way, sounds like a pretty lousy thing. Michaels is a batty English professor, so while it is likely that he’s deriving most of his argument from some post-structuralist analysis of Sister Carrie or something equally irrelevant, he does offer a compelling notion that diversity jargon has obfuscated real discussion regarding the increasing wealth gap and class partitions. The notion of, I don’t know, at least a few externalities affecting one’s position in an existing and entrenched class structure, is anathema to Murray’s argument in the Journal, in which poor people either have low IQs or are just really ardent ‘consumers’ of leisure.

Wit and Sharp Argument Skewer a Damaging Euphemism – [The New York Observer]

We think Ben Stein did but we’ve got water in our ears from this morning’s dip in the pool so it’s hard to say for sure. Anyway, for those who did inquire, Andrew Ross Sorkin and Co. have the answer: go private. Apparently that was the consensus in Switzerland this past week. According to the attendees of a symposium that included people who sound like bigwigs (Pagliuca of Bain Capital, Weinberg of Perella Weinberg, Rosen of Lazard) in Davos on Thursday, private equity will “account for 26 percent or more of the M&A market in five years,” on the heels of this past year’s 20% of M&A’s being represented by private equity. Why?

The ability to pay enormous pay-for-performance packages without an outcry from public shareholders.

According to one pseudonymously named “Buyout King”:

"If one of my C.E.O.’s made $100 million, I’d say that’s great because it means that we probably just made $2 billion.”

What is unacceptable for a public chief executive becomes a powerful incentive in the private sphere.

So there you have it: go private, and shut Ben Stein up.

(There are naysayers, of course, John Thain chiefly among them, who claims “all these ‘going privates’ will soon be ‘going public’ again.” But his word has been, shall we say, fishy, of late).

A Growing Aversion to Ticker Symbols [NYT]

Ben Stein had a nice little article on Sunday in which he recounts hearing a Jefferson Starship song on the radio, feels compelled to “put on [his] swim trucks” (a visual we could’ve dealt without but appreciated nonetheless), goes for a dip in his “superheated pool” and “looks up at the stars.” While splashing around in the water he starts to think about his life—his “wonderful” wife, his son who’s the “handsomest son on the planet,” his “glorious” homes, his “great, super” parents, his kick-ass game show, his starring roles in the Visine Clear Eyes commercials, those recurring spots on Charles in Charge, etc, etc. All of the gleaming (egomaniacal, probably exaggerated) superlatives, he credits to capitalism. It was because of capitalism that his parents, Eastern European Jews (represent!), could make money “as individuals according to contract,” not “according to the statues of [their] birth.” The senior Steins’ accumulation of wealth then set the ball in motion for junior Stein to go to law school, get rich, marry what sounds like a pretty hot wife, and afford the cost of an equally attractive sperm donor from which the “handsomest son on the planet” sprang forth, buy the huge house with the “superheated pool” and so on and so forth.

But the more laps he swims, the more Stein starts to get angry-- really angry (and not just because the water temperature has dipped to an uncivilized 72°). So angry that he starts to talk about “yeoman farmers” and “hammers” and “granite foundations” (though we’re pretty sure that can be chalked up to the drugs). Capitalism, Stein posits to the handful of people who recognize him outside of “Bueller, Bueller,” can only thrive in the presence of trust. When there’s no trust, there’s no capitalism, and when there’s no capitalism, there’s no “superheated pools” or hot wives or handsome sons or recurring spots on Charles in Charge. All there is are lukewarm pools and mildly attractive but nothing to write home about wives and so-so looking sons and blink-and-you-miss-it bits on, we don’t know, Moesha. And you know who’s to blame for this lack of trust? Stein does:

When I see what the top dogs at all too many corporations are now doing to that trust, I feel queasy. Outrageous—yes, obscene—pay.

You know who should also be held accountable? Washington. They’re all “crooks” there, too. No, if we don’t crack down on thieves like Jobs and, you know, liberals, and fast, you know what’s going to happen? Stein’s going to lose money, he’s going to have to downsize to an aboveground pool; and in order to keep his wife in the lifestyle she’s become accustomed to, he’s going to actually have to take those walk-ons on Moesha.

Greedy backdating of stock options, which in my opinion is straight-up theft. Mangers buying assets from their trustors, the stockholders, at pennies on the dollar, then forestalling competing bids with lockups and insane break up fees.

You see? Already preparing for the worst.

(We’re not saying we agree or disagree with Stein’s anger over corporate greed, thievery, etc, etc—taking actual stances on issues always comes back to bite us in the ass. But maybe next time he should orate from a place other than his “superheated pool”—his gold plated double-wide shower, perhaps?—if he wants people to “feel [his] pain.” Otherwise, it just sounds like BS, BS. Not that there's anything wrong with that).

The Hard Rain That’s Falling on Capitalism [NYT]

Citigroup to buy Prudential's Egg for 575 mln sterling (Reuters)
Here's a blast from the past, from the days when banks felt the need to have unique and hip internet offerings that carried separate brands from the main division. Remember Wingspan? Well, Citigroup will buy out the assets of Egg, the internet banking branch of Prudential in the UK. Just in case you were wondering, it's still underperforming, and it's still unprofitable. Previous rumors of an Egg sale were denied, but you can insert your own pun about turning a rotten Egg into an omelette here ____.

Greene King toasts sales despite pub smoke ban (Scotsman.com)
Proponents of smoking bans in the US are gaining more ammunition, as UK pub chains continue to report good results despite the ban there. One chain, Greene King, claims to have seen a major boost, particularly in its locations that sell food, as well as those that have outdoor areas. Of course, as we're sure many ban advocates would agree with, profitability does not make right. Also, it's interesting to note the vertical integration of the UK alcohol industry. Greene King, in addition to owning a pub chain, also owns a line of beer. Sure, here you have your odd microbrewery with a bar attached, but nothing approaching a national brands, with its own line of pubs.

Tech Barons Take on New Project: Energy Policy (NYT)
We read somewhere that in Davos, at panel on the future of energy, it was pretty much all tech guys, like the Google guys waxing poetically about their vision. They were there along with venture capitalist Vinod Khosla, who is simultaneously investing gobs of money into ethanol while lobbying the government for ethanol subsidies. There's a few ways to think about this trend. For one thing, gas prices are expensive, so energy policy appears to be "messed up", if only by inference. Who are the big stars today that seem to know everything about everything? The Google guys, along with some Silicon Valley VCs. Then again, perhaps were entering a unification phase among technology, whereby formerly disparate disciplines like computing, energy and medicine are all merging, as people realize that they share a common substrate, that it all comes down to 1s and 0s, if you dig deep enough. Or maybe these guys just have a lot of money, and as rich people have always done throughout the history of time, they feel they have an important voice to lend to the issues.

Summers on the biology century (Information Processing)
While the tech crowd is focused on energy policy, Larry Summers apparently thinks the big work to be done is in medicine and the life sciences. Yeah, we didn't see that coming earlier. Sure, seems like we're on the cusp of some interesting stuff, but Summers' proposal that the government invest a lot more in this area seems to come out of nowhere. More importantly, it's not clear that things aren't working. Yes, plenty of layoffs at Pfizer, but, frankly, we'd be worried about any industry where a century-old behemoth weren't going through some major pains at this point.