Unsurprisingly but still disappointingly to those of us who know the incalculable value of a good facial New York Attorney General Andrew Cuomo got on his high horse today and wrote in no uncertain terms that AIG's board must stop "unwarranted and outrageous expenditures and recover any past ones that were unreasonable. Obviously, outrageously, we all know what he's referring to. The company's retreat to the "exclusive" St. Regis Resort in Monarch Beach the week after the government bailout, during which executives spent a few thousand on "facials, manicures, and pedicures." But! Andy also goes on to ban a whole bunch of other stuff we didn't even know was going down at the insurer, including but not limited to "golf outings" and "overseas hunting parties." No hunting? No facials? You, Andy just blew AIG's chances of scoring a would-be very senior hire come November 5.

AIG Bonuses, Retreats Violate State Law, Cuomo Says [Bloomberg]

Related: AIG Canada still killing it.

Geoffrey Raymond is behind Goldman Sachs this afternoon, and would like you to stop by and jot some notes down on his latest masterpiece, "The Screaming Pope." Not sure where you'll find room on the already heavily annotated canvas, but we're confident you'll find a place to make your mark. Among the best so far: "I'll show you a liquidity injection," "Aaron was here," and "It really grinds my gears when people tack the word 'science' on things in an attempt to legitimize them. Like, for instance, social science. Or Christian Science."

Dick Fuld's take on the Paulson Dinner [via USN]:

From: Fuld, Dick

Sent: Saturday, April 12, 2008 2:52 AM (GMT)

To: Russo, Thomas A

Subject: Tom
____________________________________________________________

Just finished the Paulson dinner.

A few takeaways//

1-we have a huge brand with treasury

2-loved our capital raise

3-really appreciate u +Reiders work onm ideas

4-they want to kill the bad HFnds + heavily regulate the rest

5-they want all the G7 countries to embrace
Mtm stnds
Cap stnds
Lev + liquidity stnds

6-HP has a worried view of ML

All in all worthwhile.
Dick

We love the Swiss. Sure, I am biased here, particularly when we are discussing the city of the gnomes, but you just have to love a culture that shines in hard times by pointing to its alarmingly large caches of wealth. Shortages in Zurich tend to run along the "running out of vault space" lines.

Yeah, you have to endure the old pensioners who call your illegally parked Benz in to the police within moments of your parking. True, jaywalking draws jeers from drivers. Admittedly, the least off-color remark elicits emotional shock and awe from the locals. But that's the fun. Shocking the Swiss is a fantastic sport, and (most of) that gold from, you know, before, has been returned. What's not to love?

Full Disclosure: Long CHF, Short USD, Long Krugerrands, Long Confoederatio Helvetica

Zurich Bank's Vault Is `Full to the Top' With Gold [Bloomberg]

It doesn't get any better for fans of moderate to heavy S&M than the caged arena of certain conference calls in this environment. True, instead of tuxedo clad Michael Buffer's trademarked voice, you get a nasally, twentysomething operator who can't get through a sentence containing "forward looking statements" without stuttering, but I think if you just close your eyes and let yourself, "And for our next questioner we have Meredith Whitney from Oh-Pen-Hem-Er and Company" can become "...and in the left corner, weighing in at one hundred and thirty pounds, hailing from Brown University and parts unknown, the Citi Slayer, the Dollar Dominatrix, Meredith 'Markdown' Whitney!" And if you really try, I think you can picture someone pouring glistening oil all over Jamie "The Borg" Dimon just before he steps onto the canvas.

...Mr. Dimon was also quick to state that his bank is not cutting back significantly and said he sees the loan market returning to normal in the future.

Ms. Whitney, who has a "perform" rating on JPMorgan's stock, then asked: "If you really believed that, you would be gunning credit card lines, right?"

"We are not speculators," Mr. Dimon shot back. (No one on the call challenged him on this point, or at least not audibly.) "We are buying slightly more risky assets and we are growing our business, so we are not panicking."

Mr. Dimon continued: "Obviously we are trying to modify what is going on -- we are not going to say 'Yahoo, this is over,' and go extend credit -- like we did -- without fear. If you are not fearful, you are crazy."

Then from Ms. Whitney: "I'm fearful, thanks."

"We know you are," Mr. Dimon replied, his smile coming through the conference call. "We are waiting for you to reverse your position."

A quick reversal. A pin. One... Two...

'If You Are Not Fearful, You Are Crazy' [The New York Times]

Listen, I love the Beard. I do. There's something about him being this sweet little college professor dork, reading his texts from the Depression over at the National Archives, trying to use history to figure out how to fix this problem he inherited, all the while day dreaming about being back playing D&D with his academics. But what the christ is the point of him (and Bald, and Bushie) giving these speeches every other day? Do we really need to hear a millionth iteration of how we should be confident that they're going to fix things? I'm not saying I'm not confident, and sure, I'll get behind the Troika of B on this one but can we stop talking about what we're going to do and just do it already? No need for a play by play, unless of course it's marginally more interesting that the stuff they've been regurgitating. Like, "Day 2: Hank, Neel and I needed to blow off some steam so we went to one of those picture booth things, where it comes out on a long strip. Man, that was fun. We made the silliest faces. Later, at the carnival, there was a moment by the funnel cakes during which I actually thought those two were going to kiss, which shouldn't surprise anyone, them coming from Goldman and all but still. I felt a little left out. Tomorrow I'll wear something to catch HP's eye. I wonder if he knows Neel doesn't choose not to have facial hair, but lacks the ability to grow it."

I've got more news on the free food front and if you have any sense of right and wrong, you're not going to like it. Taken on its own it's extremely upsetting; coupled with what we told you earlier, it is a 1-2 punch to the stomach. Honestly, that's actually sugar coating it; it's worse. It's like a punch to the stomach that knocks you over and then repeated kicks to the ribs and maybe (definitely) some bashing of the skull with a tire iron.* Credit Suisse has cut expensed late night dinners from $30 to $25. This, taking nothing else into account, is of course upsetting for the employees of the marginally more reputable Swiss bank in town. But what's exponentially more devastating is that Goldman Sachs is now being out-eaten not just commercial banks but (sort of) big boy banks, as well. If we hear about someone in Stamford's afternoon snack fund being reduced to $1,000 worth of Funyuns dipped in chocolate sauce, from $2,500, I'm going to lose it.

*I'm doing what I can on the imagery here, Gasparino was on the air and unable to help me out.

CityFile reports that Vikram Pandit has sold his Upper East Side pied-à-terre to Hank Paulson, who needed a place in the city. No, but he did sell the four-bedroom apartment at 300 East 85th Street to a fellow Citi exec named Pantelis Apessos, for $2.25 million. Pandit and his wife continue to reside in their 10-room Central Park West shack at the Beresford, which Pandit constantly reminds people was once owned by Odd Couple star Tony Randall.

In an effort to cut costs, Goldman Sachs has taken an axe to the amount of money employees can expense for after hours dinners at the office. Up until several days ago, it was $25; now, its $20, which is clearly downright insulting, and grounds for a walk out of all analysts 'til conditions improve.

Carlyle and former Neuberger Berman CEO Jeffrey Lane filed an objection today to the absurdly low price ($2.15 billion) Bain Capital and Hellman & Friedman agreed to acquire the Lehman Brothers family jewels for last month. According to Carlyle, the price was down right insulting, and "violates Lehman's obligation to maximize the value of its asset sales to pay off its creditors," in addition to Dick Fuld's bookies.

Carlyle, Lane to Launch Bid for Neuberger [WSJ]

The chairman of JPMorgan Chase, Jamie Dimon, was receptive [to the agreement to sell shares of his company to the government], saying he thought the deal looked pretty good once he ran the numbers through his head.

We loves us some Jamie Dimon (congratulations on beating expectations this morning, btw, we're not ashamed to admit that we were estimating a 99% drop in third quarter profits), and that's why we're actually going to take the contrarian view on this one and say its not a harbinger of terrible things come (and it's not like he can acquire Jimmy Cayne's bong water again) but the new direction of banking, for the betterment of the industry. Yeah, he had a gun pointed to his head but had obviously done his due diligence already, in the 30 seconds between reading the terms and Bald threatening in no uncertain terms to palm his skull like a basketball if he didn't sign on the dotted line. This would be the same DD that went into BAC's acquisition of asbestos-riddled Countrywide, Joe Lewis's decision to float Jimmy Cayne some money around March, the Germans transfer of a bunch o' bills to Lehman the day it filed for bankruptcy, and Steve Cohen's "What are friends for" loan to Gary Busey a few eons ago during a weekend in AC (which the Buse would really be doing the big guy a solid if he could pay back stat).

Drama Behind a $250 Billion Banking Deal [NYT]

You know capitalism is in decline when the University of Chicago quibbles over naming an institute for Milton Friedman. You know there is some journalistic pandering going on when that story is resurrected from the grave it settled into months ago.

Faculty at Chicago Battles Over Institute Named for Friedman [Bloomberg]

Ford Executive on CNBC just now:

"One of the great myths is that there is no credit available out there."

What's the other one? That F is headed to zero?

Occasionally, there is that one event, that one thing, that one moment at the party when a little voice in your head softly says, "Yeah, it's probably time to go home." Maybe it is the off-color remark of your friend who's been drinking cosmos since four in the afternoon. Perhaps its the muffled sound of vomiting emanating from the bathroom door. Or the overheard whisper "I'm not sharing with him. Who ever heard of a 'third of a gram' anyhow."

Well, for those of us drifting around in the wee hours watching futures markets, that moment was the release of U.S. retail numbers.

September's drop, the largest since August 2005, extended declines in retail sales to three consecutive months, the first time that's happened since comparable records began in 1992.

Sales are slowing just as merchants prepare for the holiday selling season, which may account for as much as 35 percent of a retailer's revenue.

Futures, which had enjoyed sloppy gains after Tokyo rallied into nicely positive territory in the last hour of trading (who the hell knows what they were thinking) slid into the pit of despair. Yeah, so that bailout probably isn't going to be enough on its own. Now that the market has opened lower, we all probably have to settle in for some sideways action for the next week or so.

U.S. Retail Sales Slump 1.2%, Most in Three Years [Bloomberg]

$$$ The Problem Is the Assets, Not the Mark [NYT]

$$$ Where have all the Lehman Brothers bankers gone? [The Deal]

$$$ Layoffs Watch '08: Smith Barney Eq. Research, an hour ago.

$$$ Bulls, Bears, Donkeys and Elephants [NYT]

$$$ GFC [WS]

Intel beat the street's estimates:

(Dow Jones) Intel Corp.'s (INTC) third-quarter net income grew 12% on higher sales and margins as the technology bellwether's results met Wall Street's expectations and its revenue view for the fourth quarter - traditionally the busiest for electronics makers - brackets analysts' estimate.

The company said, "Current uncertainty in global economic conditions makes it particularly difficult to predict product demand and other related matters and makes it more likely that Intel's actual results could differ materially from expectations."

Shares rose 5.4% to $16.78 in after-hours trading from the close of $15.93 Tuesday.

The world's largest computer-chip maker reported net income of $2.01 billion, or 35 cents a share, up from $1.79 billion, or 30 cents a share, a year earlier.

Analysts' estimates were for per-share earnings of 34 cents on revenue of $10.26 billion, according to a poll by Thomson Reuters.

Also worth reading: Why Intel's earnings matter