$$$23 year old female hedgie seeks hot, promiscuous male roommate. "Dana Vachon, Tim Sykes need not apply."

$$$Polonius is (Posthumously) Avenged [Going Private]

$$$Toyota [WallStrip]

Should the New York Stock Exchange put Paul Krugman on retainer? That’s the conclusion of Paul Greenberg writing in today’s Washington Times.

Surely another dip in the market is bound to come -- so long as there's a business cycle -- but Paul Krugman's magic touch keeps delaying it, turning every down into still another unstoppable up. It's positively unnatural. The man is a kind of walking, talking, and, best of all, writing version of Al Capp's poor little jinx of a character, Joe Btfsplk -- only in reverse, leaving not disaster but good fortune wherever he goes. The New York Stock Exchange ought to put him on retainer. If only Paul Krugman would just keep writing about the coming End of It All, prosperity might be assured.

But it isn’t just Krugman as a contrary indicator of the direction of the financial markets that has caught Greenberg’s attention.

Then there's the language in which Mr. Krugman sends out his jeremiads. It is, in a word, hilarious -- if unintentionally so. He has to be the country's leading practitioner of purple-as-a-bad-bruise prose. Mrs. Malaprop might have spoken like that if only she'd had a Ph.D. in the dismal science.

I've saved my favorite Krugmanism of all time for those occasions when I may need a bit of cheering up: "And when the chickens that didn't hatch come home to roost, we will rue the days when, misled by sloppy accounting and rosy scenarios, we gave away the national nest egg."

As prose, that's a lot of poultry. Try to visualize those chickens that didn't hatch coming home to roost, if you can stop laughing. Why, that's almost Zen, like the sound of one hand clapping. His reference to the national nest egg is just lagniappe.

One note to Greenberg: if you are going to criticize the writings of others, avoid the word “lagniappe.” We have no idea what that word means and no intention of looking it up. In fact, we couldn’t read any further after we saw that word because it made us feel nauseated. It sounds like something we drank at Mardi Gras once and we’re afraid to find out what they put in it.

Sound of one man weeping [Washington Times]

Take the fairly simple premise that you aren't allowed to put pictures of canines in your workplace because Bill Gates had nights terrors after watching Cujo, add Valleywag, and you get CONTROVERSY. Valleywag heard from a friend who heard from another friend that you aren't allowed to put pictures of dogs in your workstation at Microsoft. The justification from Microsoft, according to the source, was that "some people just hate dogs, yo" without any explicit allusion to the Muslim belief that dogs are inherently unclean. Does anyone have any more dirt on this (tips at dealbreaker dot com)? Is this a first in the American workplace - in terms of banning something so innocuous and fundamental to the general aesthetic of your assistant's cubicle? Is Microsoft instead controlled by ancient Egyptians (i.e. - aliens) and is anti-dog out of reverence to cats, or an aversion to the death cult of Anubis? Is this just Valleywag pulling a "Calcanis wants Imus to start a new media network" on us?

Dogs at work - [Valleywag]

You know how there are some people in the DealBreaker audience who like to leave comments about how media people know nothing about finance and we should go back to where we came from and, “Hey, at what address can I send my underwear to for Keith Hahn?” A lot of those readers will probably be somewhat ticked off to hear that a bevy of financial journalists will now not only make your blood pressure raise with “how frighteningly little [they] know about how things work on Wall Street” but actually affect things that happen on Wall Street. Still with us? Reuters introduced a new “sentiment analysis” feature today in which computers will read their articles, decided whether they are positive or negative and then trigger trades based on those results. FINalternatives reports that the new service “allows the machines to interpret the sentiment of news stories as they are published,” i.e. faster than your average trader.

Numerical “sentiment scores” are assigned to the words and phrases in the article and then totaled to give a positive, negative or neutral report card to the company in question. Does anyone else find it a bit disconcerting that Bess Levin or her counterpart at Reuters could be triggering hedge fund trades, based on the fact that she chose to write a scathing article about Apple, after her brand new Mac Book crashed for the third time in six weeks?

Reuters Gets Sentimental [FINalternatives]

The video above comes from Texas Energy Future Holdings, the joint-venture partnership set up by Kohlberg Kravis Roberts and the Texas Pacific Group to fund their acquisition of the Texas energy company TXU. They also have a snappy, graphics laden website called TexasEnergyFuture.com.
We’ve run a lot of stories about the online public relations campaigns of Pirate Capital but until now haven’t touch on the phenomenon of political campaign style advertisements in the TXU deal.

We were wondering who was behind the turn to the public airwaves in order to win sympathy for the buyout. Unfortunately, we didn’t get very far in our inquiries with Texas Energy Future Holdings.

“The investors felt the need to let the public know about the transaction,” Jeff Eller told us twice when we asked about who planned the advertising campaign and how the idea was first hatched.

This morning’s Financial Times reports that Bonderman didn’t fare too well when confronted by Dallas mayor Laura Miller during a panel discussion at Milken Institute's annual conference in Los Angeles.

In matters of substance, I would say that Mr Bonderman won on points. But Ms Miller and a member of the audience managed to rile him enough to concede a hostage to fortune. I concluded that the senior partners of private equity firms, who are under the spotlight around the world, still have much to learn about how to behave adroitly in public.

The turning moment of the discussion came, the FT reports, when Bonderman faced a question from an environmentally concerned audience member.

So why did he lose his cool when a self-righteous man from the audience demanded to know whether he felt an ethical responsibility to cease contributing to global warming? "You and others who are absolutists tend to be wrong almost always, in every event, at any time," Mr Bonderman snapped back, promptly losing the audience's sympathy.

It was an ingenue's error. A smile lit up Ms Miller's face and she said: "That was a really interesting answer." No smart politician would have been caught losing his temper with a critic in that way, especially not on camera. As they have learned, in the age of YouTube, one reckless moment can doom them.

Like the male leads who clash with sparky women in Hollywood films, Mr Bonderman is charming but arrogant. I suspect that is true of the heads of other private equity firms. Who might not be with their stellar financial records? But it is no longer tactically wise to show it and the sooner they learn that the better it will be for them and their investors.

We hadn’t seen the video of the debate. So we asked Jeff Eller about it. Was it televised somewhere?

“It wasn’t a debate, it was a panel discussion, and to the best of our knowledge it wasn’t broadcast anywhere,” he said.

So was the "panel discussion" broadcast or not? Does anyone have the video? We haven’t been able to track it down anywhere. Send what you know to tips@dealbreaker.com.

Private equity needs more charm

Dear Mr. Buffett… [WSJ]

The resumes are already starting to pour in but it's not too late. DealBreaker is still looking for summer interns and we might just be looking for you!

Our internships fall into two categories, editorial and graphics. For editorial interns we’d like someone interested in spending their summer writing, reporting, research and performing mild administrative tasks—things like making frozen margaritas for Bess. Ideal candidates will have an interest in finance, some writing experience, a mischievous sense of humor and a history of causing trouble.

We’re also looking to improve our graphics this summer through the use of slave labor with the help of a graphics intern. The ideal candidate will have a well-developed aesthetic sense, a desire to make pretty pictures on the internet and some experience using photoshop. We’re going to be providing original video and podcatsing content in the near future, so experience in podcasting, film-making or online video is a major plus. It will probably make your summer much more pleasant if you have some interest in finance as well.

DealBreaker internships are great resume building opportunities. This is a nice way of saying they are unpaid—although you can expect to receive cocktails and food on occasion. If you are a student, we will work with you to get credit for the position. Also you should keep in mind that DealBreaker internships are not dead-end jobs. Bess Levin started as an intern, and is now a full-time contributing editor.*

And now she’s also our internship coordinator, too! Send your resumes to bess (at) dealbreaker (dot) com. Include “Editorial Intern” or “Graphics Intern” in the subject line as appropriate.

*Past performance is not necessarily indicative of future results. This "help wanted" item contains forward looking statements that rely on certain assumptions, projections and flat-out baloney that the management of DealBreaker believes to be reasonable or at least knows how to spell.

Put down that Dawkins book and stop reading that Hitchens interview, there may be hope for divine intervention yet. In other big (HUGE) pharma news today, a pill that causes women to lose weight AND their inhibitions could be on the market in the next 10 years (right at the point when age will render us in dire need of administering such a pill to our dates, sans hedge fund). Researchers from the Medical Research Council's Human Reproduction Unit in Edinburgh found the hormone-releasing pill causes female monkeys and shrews to develop the dual effects (which I guess somehow aren't correlated with each other).

Hope for sex-boost slimming pill – [BBC]

Goldman, Merrill and UBS are claiming that the Fed's recent inflation warnings, suggesting interest rate hikes, get the housing market and the general direction of the economy all wrong. Chief economists at the three banks feel that the decline in the housing market has spread to the overall economy, which would indicate a bullish view on bonds and even suggest the need for rate cuts. The Fed disagrees and sees a stabilization of the housing market and no major correlation between the recent housing slump and the overall economy.

The three banks contend that a strong labor market has prevented any cuts on the Fed's part thus far, and believe the Fed is coming around to the more bearish view that the economy is still slowing. The Fed has readjusted its time table for a housing recovery and scaled back the forecast on capital expenditures. Despite this, the latest Fed meeting gave no hint of a rate cut, and the 2.3% rise in the Commerce Dept's price index from a year earlier send off inflation warning signals. Also, the banks are often wrong when it comes to predicting the direction of rate changes. Some highlights of Goldman, UBS and Merrill's glorious track record, from Bloomberg:

Goldman projected an increase in June 2002 and the central bank ended up cutting rates the next quarter. UBS expected the Fed to double its target by the end of 2003 to 2.5 percent from 1.25 percent. Instead, the Fed reduced borrowing costs to 1 percent in June 2003.

Merrill had forecast in early 2006 that the Fed would end a series of increases when its benchmark reached 4.5 percent. Instead, the Fed boosted rates to 5.25 percent in June.

Bernanke Is Wrong on Inflation, Goldman, Merrill Say - [Bloomberg]

Jim Cramer doesn’t want you to hate the game, or the playa. And in his column in the latest issue of New York, the “game” refers to making money; the “playas,” I-bankers (and I-bank CEOs, and, more generally, I-banks). Sure, you might be saying, why shouldn’t I hate the $54 million/year Lloyd Blankfeins and the Goldman Saches of the world? Not only are they terribly unhygienic, but they make more in an hour than I do in a month (or is that just us at DB? Don’t answer that) and I’m a jealous, small and petty person (to say nothing of my unresolved issues from childhood, which probably feed into the pettiness in a vicious, never-ending circle).

You’re saying that, right? Well Big J has the answer. If you invest said “playas,” you’ll get to be part of their “game” and your resentment will disappear because when you’re rich, you can buy the antidote to resentment. Another reason you shouldn’t hate these “playas” is because Cramer used to work for Goldman Sachs and never fails to mention this (or his relationship with Spitzer, which, let’s be honest, you really can’t blame him for, because Goldman Sachs is an incredible institution and Spitzer is essentially God’s special gift to the world and politics at large). Here are some other arguments for why you should cross Lloyd, Dick and Stanley off of your To Kill lists (hint: they all have to do with their outifts making you money, and Chuck Prince having less financial acumen than Cramer’s garbage disposal):

1. These guys are basically stay-at-home moms: underpaid and, more importantly, unappreciated.

Stop envying Goldman Sachs’ Lloyd Blankfein already. Don’t begrudge Bear Stearns’ Jimmy Cayne and Lehman’s Dick Fuld their millions. Let Merrill’s Stan O’Neal and Morgan Stanley’s John Mack get paid more than Croesus. You heard it here first: They deserve it. In fact, they deserve more than they earn now. Those five men are underpaid because they are about to make you very rich if you buy their stocks.

2. They will make you Kings of Great Neck, Dukes of Roslyn with Asset Management alone. And, not to brag or anything, but if you must know, Cramer predicted Asset Management would be a major money-maker YEARS AGO, before assets were even invented. Of course, no one at 85 Broad listened to him, just like they didn’t about gravity or 9/11.

Citigroup executives are worried that managers of activist hedge funds will try to force a break-up of the company, David Wighton of the Financial Times reports this morning.

Senior Citigroup executives fear the world’s biggest financial services company could become the target of activist hedge funds that would press for it to be broken up.

The executives believe Citigroup needs to step up its investor relations and explain better to shareholders the value of keeping its businesses together.

Many have dismissed the possibility that Citigroup, valued at $260bn, could become an activist target. But one Citigroup executive said: “Even Citigroup is not too big. It’s not impossible.”

None of executive are named in the story, and at least one person inside Citigroup (who also asked to remain anonymous) tells us that he suspects the story is a plant from executives trying to get management's attention following the campaign by The Children's Investment Fund which appears to have convinced ABN AMRO, the dutch bank at the center of a bidding contest between Barclays, the Royal Bank of Scotland and Bank of America. The fact that the executives feel the need to make their argument for better investor relations through the press, and to raise the threat of activist hedge funds, is a sign of the disfunctional culture at Citi, our source says.

Citigroup chiefs fear push for break-up [Financial Times]

If you didn’t know “How to Dance with Angels,” CFO.com is here to tell you. Even though VC investing is back at 2001 levels, the level of angel investing is ramping up at nearly the same rate. Angel investing, or foregoing VC money in lieu of wealthy individual investors, is seen as a way to prevent the pressures of 20%+ above market returns and allow for more corporate flexibility. More traditional angel return expectations hover around 10%-15% above the S&P. A sense of the overall market, from the article:

Last year angels — wealthy individuals who hope to take advantage of ground-floor investment opportunities in new companies — provided $25.6 billion to burgeoning businesses, an increase of nearly 11 percent over 2005, according to the 2006 Angel Market Analysis released by the Center for Venture Research at the University of New Hampshire. Furthermore, the number of ventures to receive angel funding rose 3 percent, to 51,000, last year, and average deal size grew by 7.5 percent. "This continued rise in total investments points to a healthy angel market," concluded the report.

More after the jump...

A new layer from the Onion o’ Epstein was peeled this weekend and, unsurprisingly, it connects The Man with Strong Proclivities for Both Fourteen Year Old Girls and Spa Treatments with the British Royal family. Turns out that Jeffrey Espstein, the guy whose police report necessitated smoking at least one cigarette after reading, is best buds with Prince Andrew—and the Brits are shocked and appalled (that they didn’t get some PR flak to bury the story sooner.) The bosom buddies were reportedly introduced by mutual friend Ghislaine Maxwell (who probably has her own cornucopia of what narrow-minded individuals might call “issues”). Andrew has shacked up at Epstein’s New York pleasure palace “at least twice”; Epstein has reportedly stayed at one of the Prince’s family’s homes—Sandringham—and “holidayed” with him in Thailand.

The Royals are apparently “troubled” by Epstein’s lifestyle, and especially by the photographs that were taken of Andrew surrounded by topless ladies on a yacht while he was on vacation with The Ep. They will likely schedule a sit-down between the Queen and her Second Greatest Disappointment (no one bounces back from marrying Camilla Parker Bowles, ever), to cut the grown man off at the knees (though they’ll pronounce it ‘shedj-yool,’ just to be contrary).

Prince Andrew's billionaire friend is accused of preying on girl of 14 [Daily Mail]

Jeffrey Epstein Archives

Pfizer has just released a Viagra commercial in Canada that contains nothing but gibberish, save for the word Viagra. While not necessarily Dr. Porkenheimer’s Boner Juice, Pfizer is no stranger to controversial advertising. The FDA made the company take its 2004 “Wild Thing” ad off the air, because the ad implied that people are given nicknames for getting around (the “Festering Ho-bag” campaign was shelved in pre-production).

Pfizer claims that the spot is just a reminder ad, and that consumers already know what Viagra does. Critics argue that pharmaceutical advertising is a stone’s throw from turning into beer (the “Magic Viagra Fridge” anyone?). From the NY Times:

Maxine Thomas, an executive at Taxi, the agency in Toronto that produced the campaign, said the ads take advantage of Viagra’s name recognition. “It’s not as though we need to tell people what it does, because they already know,” she said. “Consumers can fill in the blank for themselves.”

Canada has similar drug advertising rules as the US – you’re allowed to show a translucent neon butterfly floating in an aurora that exists in your bedroom only when you’re sleeping as long as you don’t explicitly say that the drug is a sleep aid. This allows you to bypass the 3 minute roll-call of side-effects and provides the helpful service of letting the populace decide whether it wants to see a neon butterfly. Just annoy a physician today! Everybody wins. You get to try something cool you haven’t even thought of yet, maybe see a neon butterfly, experience some unknown side effects (massive anal leakage, occasional dizziness), and your doctor gets you off his back.

Pfizer is currently teetering around the midpoint of its 52-week range in daily trading, up slightly at the moment (after being down slightly a moment ago).

Minky Viagra? Pfizer Doesn’t Want You to Understand It, Just Buy It – [NYTimes]

How times have changed. It wasn’t so long ago that the SEC stood accused of letting Morgan Stanley chief executive John Mack’s reportedly close connection to the Bush Administration block an investigation into insider trading. Now Mack has endorsed Hillary Clinton.

Business Week reports:

One of Wall Street's big-time Republican fund-raisers, Morgan Stanley (MS) CEO John Mack, has told BusinessWeek that he and his wife, Christy, are endorsing Democratic Presidential candidate Hillary Clinton, whom they supported for re-election as senator.

Mack previously reached Ranger status in Republican campaign finance circles by raising at least $200,000 for President George W. Bush's reelection in 2004. (Former Goldman Sachs (GS) CEO Hank Paulson, now U.S. Treasury Secretary, raised a Pioneer-worthy $100,000.) Mack, who says he'll stay a registered Republican, was also considered a possible candidate for various Bush Administration posts over the years.

It's too early to tell who the other major bank chiefs will back. But Mack's switch could tip the balance of power toward the Democrats. According to nonpartisan contribution tracker PoliticalMoneyLine, three of the other top six bank CEOs (Goldman's Lloyd Blankfein, Lehman's (LEH) Richard Fuld Jr., and JPMorgan Chase's (JPM) Jamie Dimon) have favored Democrats in their political giving patterns over the past few years. Bear Stearns (BSC) CEO Jimmy Cayne is strongly Republican. Citigroup's (C) Charles Prince and Merrill Lynch (MER) CEO Stan O'Neal have bipartisan donation habits.

Melamine Said Common in China Animal Feed
When it first hit that feed from China contained the semi-toxic chemical melamine, people wondered whether the whole thing was intentional. Then, the articles shifted about how it was definitely intentional, as some feed producers spike their product with it as a cheap boost to its nutritional profile. And now the latest stories are about how pretty much everyone uses it and knows about it, which, well, pretty much answers the question about whether it's intentionally placed there (it is). Meanwhile, a number of humans have definitely eaten pigs that ate it (duh), though it's still not clear whether humans in the US have eaten it directly, in the form of gluten. We're guessing that this is another obvious "duh". It also seems possible that this will be an excuse to erect some fresh trade barriers, something that' been on the wish list of many US politicians for some time. Certainly protectionist drums are starting to bang louder, on all sides. And while we're on the subject of the food supply, is anyone else concerned by the apparent collapse in bee populations that's been on the news a lot lately? Let's get a show of hands on that.

Chalco triples in Shanghai listing, rivals Alcoa (Reuters)
You've probably noticed that the Chinese IPO market is red hot. They're doing new ones every day, and they're big. Lots of banks and industrial firms raking in large amounts of cash with the promises of monster profits. The latest is aluminum firm Chalco, which, after tripling in its Shanghai debut, is already on par with Alcoa in terms of market cap. It's already the country's eighth largest stock. What's scary is that you get the impression there are plenty more where that came from.

BoA threatens ABN with $220bn lawsuit over LaSalle (Times Online)
Bank of America really doesn't want ABN Amro to go back on its agreement to sell LaSalle. Just in case there was any ambiguity on that point, the bank has threatened ABN Amro with a little $220 billion lawsuit, should it renege. It's not clear how it came up with that number, which on its face seems ridiculous -- it's ten times the worth of LaSalle itself. But still, nobody wants that kind of threat hanging over their head.

Citigroup Wants to ‘Get It Done’ (Dealbook)
Just in case there were any doubt about Citigroup's commitment to righting the ship, it will announce next weekend its new tagline "Let's Get It Done". The great thing about this slogan is that it's obviously not a message that customers will give a damn about (just a guess: customers don't care much about taglines when it comes to banks), rather it's a message aimed internally. For more effect, it should be "Let's Get It Done, Dammit!" Meanwhile, executives at the company are said to be concerned about it becoming a target for activist hedge funds, that seek its breakup.

$$$Bank of Montreal: New Amaranth? [Bloomberg]

$$$Reader Mail (Again) [Going Private]

$$$Evian Criminals [Slate]

$$$Wallstrip Chat: Tim Wolters [WallStrip]

On Wednesday, Morgan Stanley settled a civil suit with eight of its former female employees who alleged that the bank discriminates against women in terms of how they are trained, paid, and promoted. This was at least the second time since 2004 that the bank has found itself involved in a fracas with the ladies. Following the verdict, we sat down with Jan Tyler, one of the plaintiffs.

DealBreaker: So. Were you happy with your portion of the $46 million settlement?

Jan Tyler: I’m not allowed to say whether I was happy or not, according to Cyrus Mehri [one of the lawyers who represented the eight plaintiffs], who I hate.

DB: Can you blink me an answer?

JT: No. I will tell you this—I’m writing a book. Based on my experience.

DB: Interesting—a memoir?

JT: It’s going to be like a James Frey book [, A Million Little Pieces].

DB: So you’re going to make stuff up?

Because it’s a slow news day and because we know how much you love him and because next week, or the week after, we’ll be introducing the first chapter of “The Banal Existence of Timothy K. Sykes: A Day Trader is Basically The Same Thing As a Hedge Fund Guru,” here’s another picture for you to caption to your heart’s content. You’re welcome.

(And as a 'Thank You' for your efforts, Keith asked me to include this next treat. Don't just stare at it, eat it).

From the looks of this video, things are heating up in Texas. The Star Wars credit sequence-style video seems to be aimed at pressuring the Texas legislature to oppose the buyout of the energy company TXU by KKR and the Texas Pacific Group. And it doesn't pull its punches, comparing the deal to another famous Texas energy concern, Enron.

Add Ed Whitacre, Chairman and CEO of AT&T, to the list of CEOs enrolled in the Lee Raymond Skydiving Institute (motto: It is the size of your golden parachute that matters, not what you do with it). Whitacre has a nice $158mm parachute packed up, on top of his total compensation last year - a whopping $60.1mm. Here’s a rundown of Whitacre’s compensation (in millions):

- $2.1 Salary
- $46.9 Options
- $6.8 Non-equity incentives
- $4.5 Pension and deferred comp
- $0.5 “Other” compensation

The “other” category includes:

- $14k for financial counseling and for people to do his taxes [even his money needs to be counseled]
- $27k in auto benefits [free wash and wax... for 50 cars]
- $38k for the corporate jet [those are some hot flight attendants]
- $11k in supplemental health insurance [in case of meteor]
- $25k in club memberships [but still doesn’t have a Duane Reade club card]
- $101k in company matches to deferred comp [we’ll see your ridiculous expenses, and raise you 100%]
- $8k in communications and security [he does not take advantage of his nights and weekends cell phone plan]
- $25k in tax reimbursements [does he get to reimburse himself for the money he expensed for people to do his taxes?]
- $214k in life insurance premiums

Where are activist nuns when you need them? The WSJ’s Deal Journal reports that Whitacre’s package may be a bit over the top considering AT&T’s performance relative to the market.

AT&T argues that the pay is deserved because the company has “outperformed its peers in delivering value to stockholders” during Whitacre’s tenure. But how about a more basic measure of performance, like how an investment in the company has stacked up against the broader stock market since Whitacre, a serial acquirer, took the top job at the company, then known as SBC Communications, in 1990? By that scorecard the conglomerate that he now runs — which has morphed into the new AT&T — is valued at just under 2.5 times its worth back then, while the Standard & Poor’s 500 stock index has risen more than four fold.

Ed Whitacre’s Country Club Retirement – [WSJ Deal Journal]

“If you want to be five guys and a dog, you don’t need a lot of money,” Joseph Perella tells DealBook’s Andrew Ross Sorkin in today’s profile of his new investment bank, Perella Weinberg. “If you want to have a firm with global reach and presence and you want to fund the model that we developed, that needed significant capital.”

Sorkin’s piece tells the tale of how Perella and Tarek F. Abdel-Meguid spent the summer after they left Morgan Stanley hanging around the offices of Weil, Gotshal & Manges, having lunch with the likes of Sandy Weil and Steve Schwarzman and plotting to take over the world.

Once it became clear to Mr. Perella and Mr. Meguid that they were not going back to Morgan Stanley, they came up with a grand plan: to create a boutique bank far bigger than a merger adviser, one that would also include a large asset-management business.

And unlike many of the most successful boutiques, which started on a shoestring, like Evercore Partners or Greenhill & Company, the two men wanted to start much, much bigger.

Mr. Perella said he told Mr. Meguid: “If this is like starting Wassperella” — referring to Wasserstein Perella, a firm he started with Bruce Wasserstein — “or an M.& A. boutique, I’m not interested. Been there, done that.”

We’ve all had those kind of summers. You’ve left your job, you just pal around with your buddies, you hatch grand schemes and promise yourself that next time around things will be different. But we don’t all know the grandson of Sidney Weinberg, who Sorkin describes as “the patriarch of the modern Goldman Sachs” or ten other people who are willing to put up a total $1.1 billion to fund your dreams.

The Pressure of Great Expectations [New York Times]

a. Taller guy is teasing shorter guy about being vertically challenged: “I won’t process your trade until you hit my hand. Hit it; hit it; you can’t hit it ‘cause you’re so short!”

b. You can’t see it, but behind the camera, there’s another guy, and the three men are currently in the midst of one intense game of Monkey in the Middle.

c. “Sieg heil!”

d. “No, seriously, I switched over to Speed Stick and I’m telling you, no stains, no smells. It’s like I’m a new man.”

e. Guy just sunk the game-winning three in the first round of Trader Detritus Basketball (TDB)

f. Super Trader is about to take flight.

g. TRADE: a renowned non-traditional dance that uses the body and ordinary objects to create percussive physical theatre performance. (What’s the sound of someone stomping his foot and banging two Bloomberg terminals together? The sound of all that is good and pure in the world.)

Surely you can do better? Let us know.

Run on Wall Street Sends Dow Above 13,000 [NYT]

Ken Kutaragi, CEO of Sony Computer Entertainment and creator of the PlayStation, announced that he is retiring yesterday. He will officially step down in June. This is indicative of just how bad things are at Sony, as Kutaragi is the human face of the PlayStation. This would be like Nintendo distancing itself from Shigeru Miyamoto (designer of Mario, Donkey Kong, Zelda) - or at least not letting him give company presentations. More on the story, from CNet:

Kutaragi is one of the most celebrated figures in consumer electronics history, having shipped more than 200 million PlayStation and PlayStation 2 consoles, as well as the PlayStation Portable. Some analysts believe that had the PS3 been perceived as a hit or even a mild hit, there's a good chance he would be sticking around for the full 10-year lifecycle Sony gives its consoles.

But the PS3 is widely seen as a commercial flop, given its third-place position among next-generation video game consoles, trailing Microsoft's second-place Xbox 360 and the surprising leader, Nintendo's genre-busting Wii. The PS3 is even trailing sales of the venerable PlayStation 2 at this point.

Sony says sayonara to father of PlayStation - [CNet]

Just in case you were worried that JP Morgan was going to make good on its “threat” to ship off to Stamford (who were they threatening? Their own employees?), DealBook notes that the move is, in all likelihood, a bluff. Also: a cheap and what will (probably) turn out to be an unsuccessful attempt to get New York to raise its $100 million incentive offer to the $650 million it gave Goldman Sachs in 2005 (would you give your mistress a diamond the same size as the one you gave your wife? Actually, that analogy doesn’t quite work).

Even the mayor of Stamford, Dannel Malloy knows he and his city are just a pawn in Jamie Dimon’s (incredibly) passive aggressive attempt, telling the Stamford Advocate, “It’s a little leverage. I’m not holding my breath.”

J.P. Morgan in Stamford? Even the Mayor Has Doubts [DealBook]

Ernst & Young with another entry into the Teambuilding Unintentional Humor Hall of Fame (thanks to a reader tip). If you missed yesterday's spiritually transcendent entry, or if you just need a pick-me-up, click here. The new entry is sans-video, but makes up for it in lyrical genius. The primary verse is "E-Y, E-Y, Ernst and Young! From top to finish, we're gonna be number #1," only with about 10 other interstitial vocal tracks coming in and screaming out a few syllables in a pitch I can only describe as Mariah Carey punched right in the baby maker. Much like Jimmy Page's guitar playing in "Ten Years Gone," a veritable wall of sound is created.

Listen here.

The constant repetition of "E-Y, E-Y" also makes the song sound like a rejected track from Terry Gilliam's Time Bandits.

PS - Time Bandits, if anyone recalls, has perhaps the greatest ending of any movie ever - where the main character's parents literally blow up, in a rather casual manner as far as exploding parents go, and then Sean Connery as a modern fireman (and pre-modern King Agamemnon) drives up and winks (can anyone find a clip of this?). That "your parents just exploded" wink. Credits. George Harrison chanting. I swear a couple of my staffers at JPM were directed by Gilliam. You have a stomach ulcer? Wink. Staffed on new project. Credits.

The government cannot effectively regulate the hedge fund industry and it’s a good thing too, Robert Steel said yesterday. The setting was a Manhattan Institute conference. Steel, a former Goldman Sachs executive who is now the Treasury Department’s top domestic finance official, raised two original arguments against hedge fund registration and regulation. Since this is something we talk about a lot around here we found ourselves a bit surprised that we hadn’t heard these ideas before.

Steel, the Treasury undersecretary for domestic finance, also said it would be costly and impossible to train enough people to keep tabs on some 8,000 hedge funds.

“I don't like the moral hazard of communicating a government all-clear,” Steel said at a conference hosted by the Manhattan Institute in New York today. The risk is that regulation “communicates confidence in a product that is riskier than normal investors should get involved in,” he said.

Both points are the sort of thing that are so obvious—once they’re raised. You instantly feel like you’ve known them all along.

Steel Says Hedge-Fund Regulation Risks 'Moral Hazard' [Bloomberg]

Last night we stopped by CNBC's On The Money to discuss the stories you told us about "dirty banks." Rats on the trading floor, garbage stuffed under the floorboards and the unmistakable scent of men making money. You told us the stories, we told America, and now you can watch it here to complete the virtuous circle.

Was This a Democratic Debate? (WSJ)
The Democrats debated last night, but there was a poker tournament at the local club, so it really wasn't much of a priority. Maybe we'll watch them when it's just down to Obama, Edwards and HIllary, but at this point, we really don't care too much about what Joe Biden and Dennis Kucinich (remind us to tell the story about the time we got to ask Dennis Kucinich a question at a press conference). But apparently, the subject of hedge funds came up, and both Hillary and Edwards sung their praises. Edwards worked for one in a past life, which he admitted, so he was pretty hamstrung. Meanwhile, Hillary said they reflected the entrepreneurial spirit of America, which is pretty much true. In other words, it looks like hedge funds' extensive investments into Democratic candidates is paying off. They weren't asked about private equity, so it's not clear whether the rightward tilt of PE funds would've brought out the guns.

In Nikko Bid, Citigroup Wins the Day (Dealbook)
In the end, it was relatively painless, as Citigroup announced today that it had successfully garnered 61% of Nikko Cordial, giving it a majority stake in the bank. It had offered to buy up the entire company, but it was hoping to at least gain 50%. So, Citi is declaring it a victory. Up until the end, there were reports of holdout institutions that felt Citi's offer was unsatisfactory.

Microsoft exceeds Wall Street expectations (Seattle Post-Intelligencer)
Valleywag reported yesterday afternoon that the hold music on the Microsoft conference call was the theme song from the Titanic, which, symbolically, seems like a real mistake. That being said, the company has gone another quarter without hitting an iceberg. Despite the fact that the company is dead and irrelevant (according to people who know about these things), it turned in a record quarter, beat expectations, demonstrates strong sales of Vista and Office, and guided solidly.

$$$Leveraged Sell-Out on Andrew. [LSO]

$$$CNBC. Tonight. 7. Dirty Investment banks. Do it. [On The Money]

$$$Lindsay Campbell: Ninja? [WallStrip]

We heard a rumor yesterday that our feathered friend "Andrew" may have been let go from what was allegedly his position (on the 38th floor?) at Bear Stearns. Obviously, we have no idea if this is true (we only have moles in the top three and at SAC, Citadel, Renaissance, and Third Point). If it's not, well, good. We like it when people are able to pay their rent. If it is, we think Bear should stop focusing on its image and start focusing on hiring a new cleaning staff. Besides not realizing that if you drink two Red Bulls a day for two weeks, you'll need more than a twelve pack to get by, what is Andy really guilty of (other than being incredibly fashionable)?

Nothing. He didn't name his firm, give any stock tips, or release a sex tape with the CEO's wife (presumably). But if Big A was shown the door, it wouldn't be the first time Bear Stearns got its knickers in a twit over one of its employees talking to the press. With that in mind, we give you Lee Munson. The man, the myth, the legend. The guy who got fired from (what people believe was) Bear Stearns for discussing a lot more than his choice of collars and shoe-shining techniques.

You cannot make this stuff up (obviously, we’ve tried and failed):

Munson on theology:

"If I ripped my skin out, you know what would flow out?" he asked. "Bloody cash, baby. Money! Rip it out, it's gold!" Mr. Munson held his arms up higher, crucifixion-style. "I want to be like Jesus," he said. "You know why? 'Cause I'm rich with blood and I want to bleed on you, because you'll be wealthy if I bleed on you. Or maybe if you're a bitch, I'll fucking squirt you with a little bit of silver."

Private equity executives make no secret that relatively plentiful credit is the fuel power the surge in giant leveraged buyout deals, allowing the buyout shops to make acquisitions on companies which might have been untouchable in earlier eras. So it comes as a bit of a surprise to hear so many of them seem to be warning us about rising debt coupled with looser lending standards. Carlyle founder William Conway has rang the alarm bells with a memo of his that was “leaked” to the press everywhere. Remarks of Leon Black and Steve Schwarzman also have been read as warnings.

The latest entrant is the chief executive of BlackRock, Larry Fink. BlackRock is not a private equity shop—it’s an asset management firm that was spun-off of the Blackstone Group way back in 1992. But Fink’s background is in debt and private equity. He was a bond-trader at Credit Suisse and worked at Blackstone before the spin-off. And now he’s telling the Financial Times that the leveraged debt fueling the buyouts may be the next subprime mortgage crisis.

“If I was the chairman of the Federal Reserve, I’d be paying more attention to that because, to me, this is going to be tomorrow’s problem,” Mr Fink said in an interview with the Financial Times. “Standards have deteriorated to levels that we never even dreamed that we would see.”

So has Larry gone over to the other side? Perhaps. His business does compete for investment dollars with private equity firms and hedge funds, and so he may have a vested interest in seeing the current golden age of private equity come to an end.

But there’s a more paranoid theory that was suggested to us by a source (who requested that we keep him anonymous) who works at a smaller private equity shop. His theory was that the big shots in private equity were beginning to worry that the loose credit standards were allowing others in the buyout market to make bids that might once have been exclusively within the reach of the Blackstone’s, Apollo’s and KKR’s of the world. The relatively easy access to credit was fostering competition in the once cozy world of private equity, and driving-up the prices of the companies they want to take private. So they want to talk investors out of getting involved in lending into the buyout market in order to make it harder for competitors to raise funds.

Of course, as even our source admitted, this theory is more than a bit paranoid. But just because you are paranoid doesn’t mean Henry Kravis isn’t thinking about how to crush you.

BlackRock chief warns on leveraged loans [Financial Times]

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The PS3, as advertised, is smart. The console, a Scorpio (released 11/11), likes long walks on the beach and processing medical research about proteins in its free time. Over 250k PS3s are currently employed in Stanford University’s Folding@home project to improve processing power. Like the SETI program, Folding@home uses networked systems of volunteers to create a larger computing grid that works as one virtual machine. We should all be out folding proteins because, from the Folding@home website:

when proteins do not fold correctly (i.e. "misfold"), there can be serious consequences, including many well known diseases, such as Alzheimer's, Mad Cow (BSE), CJD, ALS, Huntington's, Parkinson's disease, and many Cancers and cancer-related syndromes.

Unfortunately, even “the most powerful distributed-computing service on the planet” can’t drive up PS3 sales, which still significantly trail the Wii. At least it has its tech specs to fall back on. The PS3 remains the Jeff “I’m f***ing smart” Skilling of the video game industry, boasting:

Calling PS3 machines "games" is a bit like describing an F15 fighter jet as a "lighter than air machine." Sony has said that PS3s have as much as 30 times more processing power than an average PC and can’t get AIDS.

In other console news, Nintendo released earnings this morning, showing a 77% increase in net profit over the same period last year and a near doubling of revenue.

PS3 a Hit for Stanford Grid Project – [Yahoo]
Nintendo 1Q profits pumped up by Wii – [Yahoo]

He might not've known it at the time, but hurricane-loving icthyophile Brian Hunter had started a trend. Blow up fund, start new one. Rinse and repeat. And Bo Collins, formerly with the now-defunct MotherRock is following in suit. Though it allegedly will not be turned into a hedge fund, Business Week’s Matthew Goldstein reports that Bo and several former MotherRock colleagues are starting a venture called 1618 Group, with tens of millions raised already from one investor. The group will be managing the generous (foolish, unwise, crazy) man’s money by “trading energy contracts and investing in energy-related private equity deals."

Sadly, Collins does not share Hunter’s love of great food and fine wine, and choose not to name the Two Buck Chuck (though Franzia was apparently a strong contender). Bo (overconfidently?) picked 1618 in reference to the Greek “golden ratio” (1.6180339887). (De Divina Proportione claims the ratio’s application yields “pleasing, harmonious proportions” and psychologists believe that it factors in the humans’ perceptions of beauty. So if not a major money maker, Collins’s venture is sure to be sexy beast).

While we haven’t yet obtained any of 1618’s “private” documents, if they’re as “confidential” as Solengo, it’ll only be a matter of time. (We kid the Solengists).

Will Bo Collins' Second Act Be Golden? [Business Week]

We’re a little late to this (via Valleywag via M&A++), but here is an Ernst & Young offering to the Teambuilding Unintentional Humor Hall of Fame. This one may be better than HSBC’s “Let’s Live It.” The video, slick “how do you pack all those classic 80’s hits on one CD!?” production quality and all, is a four and a half minute send-up of the Gospel favorite “Oh Happy Day.” The lead, less Mahalia Jackson and more a person picked to play Amy Grant in the fifth run of an off-Broadway musical about her life, takes us to a very special place with lyrics like, “When Ernst & Young… (wait for it) When Ernst & Young …(second verse same as the first)… When Ernst & Young… (ok, seriously?).“ At least “when Jesus washed” contains a verb, unless Ernst-ing is something cool I haven’t heard of yet.

Corporate Culture – [M&A++]

The resumes are already starting to pour in but it's not too late. DealBreaker is still looking for summer interns and we might just be looking for you!

Our internships fall into two categories, editorial and graphics. For editorial interns we’d like someone interested in spending their summer writing, reporting, research and performing mild administrative tasks—things like making frozen margaritas for Bess and keeping Keith Hahn away from Carney’s whiskey. Ideal candidates will have an interest in finance, some writing experience, a mischievous sense of humor and a history of causing trouble.

We’re also looking to improve our graphics this summer through the use of slave labor with the help of a graphics intern. The ideal candidate will have a well-developed aesthetic sense, a desire to make pretty pictures on the internet and some experience using photoshop. We’re going to be providing original video and podcatsing content in the near future, so experience in podcasting, film-making or online video is a major plus. It will probably make your summer much more pleasant if you have some interest in finance as well.

DealBreaker internships are great resume building opportunities. This is a nice way of saying they are unpaid—although you can expect to receive cocktails and food on occasion. If you are a student, we will work with you to get credit for the position. Also you should keep in mind that DealBreaker internships are not dead-end jobs. Bess Levin started as an intern, and is now a full-time contributing editor.*

And now she’s also our internship coordinator, too! Send your resumes to bess (at) dealbreaker (dot) com. Include “Editorial Intern” or “Graphics Intern” in the subject line as appropriate.

*Past performance is not necessarily indicative of future results. This "help wanted" item contains forward looking statements that rely on certain assumptions, projections and flat-out baloney that the management of DealBreaker believes to be reasonable or at least knows how to spell.

New York Magazine profiles “Six real New Yorkers” in a segment called "Sex Diaries" to determine who's getting some. The article literally counts the episodes.

The inevitable Wall Street entry clocks in with an end of week count that includes one act of fellatio, one act of cunnilingus and one act of intercourse with the woman on top. The only hitch is that he's married, seemingly faithful and lost all his model and bottle instincts. The magazine labels this as sexual frustration. Is it?

Do single (or at least sleazier) traders do any better on average (does someone want to make a market here)? Judging by how frantically the pinstriped sect is trying to cram into Tenjune (or Joshua Tree) most nights we'd have to say the jury's still out (and those callouses are not from working out, or a Bloomberg terminal).

Here's the breakdown of a frustrating week, from NY Mag:

THE SEXUALLY FRUSTRATED DAD
Male, 43, Wall Street trader, Bay Ridge, married, three kids.

DAY 1
7:00 A.M. Wake up feeling frisky. My wife says, “Let’s all go to early Mass.”
7:30 P.M. She tells me she really wants to make love with me. It’s too early; the kids are still up.
9:30 She says she’s tired, just snuggles, and falls asleep. Oh, well.

DAY 2
7:00 A.M. Wake up kind of excited, but it’s time to get everybody up.
7:15 Get a nice flash of tits before my wife goes into bathroom.
9:00 P.M. Been a long day and I really want her, but she won’t be home from work for three more hours.
MIDNIGHT Think I said good night to her. May have dreamed it.

DAY 3
6:30 A.M. Awake to put on coffee. She is comatose.
4:00 P.M. Go for a drink. See a bartender friend. She is really hot, but not my wife.
8:00 Home and missing her—another late night.

Read more about this guy’s riveting week after the jump…

As most of you probably know, John Thain brushed off the claims of a Goldman analyst today that Reg NMS will “erode the transatlantic stock exchange group’s market share and benefit its main US rival, the Nasdaq.” Tossed them to the wind; knocked them down; scoffed; said, “Whatchu talkin’ about, Willis?” Now, these responses make sense if you’re going to buy the party line that the New York Stock Exchange is, as they say, in compliance with the group of rules known as the Regulation National Market System, and believe the Goldman analyst, Joshua Carter, to be on the right track.

But, as John Francis Carney III has pointed out (like the crazy homeless man who shouts at you when you walk into your building every day) in the past, there’s a good chance that the NYSE isn’t in compliance with Reg NMS. Yes, JFC3 has said, these rules that allegedly help rather than hurt the NYSE—excuse us, NYSE Euronext—are not even being followed by the small elves that push buttons on the corner of Broad and Wall. Or, at the very least, we cannot get any firm confirmation from the NYSE or the SEC that NYSE is in compliance. But why would that be? Why would just John Thain allow this to happen? And why did Erin Burnett show up to the set today walking with a limp? The answers* may surprise you.