$$$ The League Tables [Deal Journal]

$$$ Keep muff brooms out of board rooms, By Jeff Skilling [NewsGroper]

$$$ Wallstrip Halloween [WallStrip]

Sponsored by the Financial Times.

Investors began the morning warily. Trading volume was low and stocks climbed slowly and steadily. Last minute jitters before the Fed announcement sent the major indexes lower. But when the Fed revealed that even an economy growing faster than expected wouldn't stop it from giving Wall Street the rate cut it was demanding, stocks soared once more. The Dow Jones Industrial Average flew up 137.54, or 1%, to 13930.01. The S&P 500 bounded 18.36, or 1.2%, to 1549.38. The Nasdaq Composite Index rocketed 42.41, or 1.5%, to 2859.12. Volume on the New York Stock Exchange was 1.6 billion shares, which is pretty much standard these days.

The Fed's statement is largely being read as drawing a line in the sand. "This far we will cut and no further." It remains to be seen whether they will be believed or whether the Punch Bowl caucus will be back demanding another swipe at the punch before the year is out.

Happy Halloween!

FT Alphaville. Boo!

He tried to get a job at an investment bank, failed and went into hiding for about a year but Aleksey Vayner is back, my bitches, and doing what, you might ask? Trying to find a job. Yes, even people who can bench press one billion pounds on sheer exaggeration alone need some sort of way to pay the rent, and take it from someone who knows, 2-bedroom realities of one’s own making do not come cheap. Mr. Vayner has been making the rounds and just last week interviewed at a fund in New York that would only speak about the life change experience if we promised not to reveal its name, because taking a meeting with this guy (or not knowing who he was in the first place) does not tend to be good for anyone’s reputation.

We’re going to get the most disappointing stuff out of the way first, starting with the fact that Vayner’s no longer sending his CV out in video form. Bull shit, I know. Equally upsetting: AV’s resume no longer makes mention of the book he previously claimed to have written, “Women’s Silent Tears: A Unique Gendered Perspective on the Holocaust.” As a woman and a fan on the Holocaust who often cries inaudibly, I have to say, this one stings, and I’m not really sure what the rationale was behind it. Additional letdowns—he's now going by "Alex" and is said to have come off as “personable,” “chatty,” and “laid back.” It’s like, who the hell is this guy? Luckily, that only lasted for about five minutes, at which point he took off his normal person mask and became the monstrously arrogant and, dare we say it, sociopathic liar we all know and love.

Was the video he sent to UBS an error in judgment? No, was not an error in judgment, fuck you very much. It was just, in the words of the Maestro, “taken out of context.” Oh, and he’s got another book coming out (ETA, Summer 2008). It’s called the Millionaires’ Blueprint to Success , and is based on Aleksey’s experience with the rich people he met through tennis and skiing. He wrote it because, honestly, he’s read every professional development book out there, and they’re mostly full of crap. Obviously he could do better, so he did (that’s called initiative and the ability to do simple math, just two of the many qualities he offered the firm). Aleksey’s tome—a cross between a hard finance book and a self-help guide—works because it teaches you to “train your mind to have the right attitude toward money, and then shows you how to get it.” Seriously, just buy it, you’ll love it.

You’re probably wondering why Aleksey, who graduated in May, is just now looking for employment. Well wonder no longer—it’s because he was going to go pro in tennis, with a debut playing doubles in the US Open. Unfortunately, his partner hurt his wrist two hours before their match, and though he thought about playing as a single, Aleks just decided he might as well go into finance, at which he is equally if not more so adept.

Earlier: Everything we've ever written about Aleksey Vayner.

Aleksey Vayner's Somewhat Toned-Down Resumé [Word doc]

Slate is planning to launch a new site next year "devoted exclusively to business news and opinion," according to John Koblin at the New York Observer.

"We think there’s an opening for a really smart, analytical, opinionated Web site that could be Webby and fast and agile,” Slate editor David Plotz tells Koblin.

Portfolio Market Mover Felix Salmon applauds the move. "What's more, that space, which was very empty at the beginning of this year, could fill up very rapidly, to the benefit of all concerned," he writes.

It seems that they still haven't found an editor to run the new site. Koblin reports that they asked Elizabeth Spiers to take the job but she turned them down. Spiers running an edgy business news site? It's almost shocking that no-one has thought of this before.

Slate to Launch Business Site [New York Observer]
The Market for Online Business Opinion [Portfolio]

Fed funds and discount rate cuts.

In our reader poll, 61% of respondents predicted a 25 basis point cut.

Too much? Too little? Goldilocks' porridge? Leave your response in the comments section.

After the jump, the full release from the Fed.

October 31 Press Release [Federal Reserve]

When Goldman turned in it's third-quarter earnings and revealed the the credit-crunch was its friend, several eyebrows were raised by market watchers. How could Goldman have made the kind of money it claimed to have made by shorting subprime mortgages, more than person we spoke with asked.

Apparently, the same question is being asked over at the Securities and Exchange Commission. Writing in today's New York Post, John Crudele reports that the SEC is "curious" about whether Goldman's traders were tipped off by the firm's investment bankers, giving them an edge on the market. Interestingly, there seems to be some debate within the SEC about whether or not such tipping would constitute insider trading. We assume the crux of the matter is the technical legal question of whether the notoriously conflict-ridden Goldman could ever commit insider trading. If your clients already know you are on both sides of every trade, can you really be convicted of misappropriating from them?

We'd like to know a question Crudele doesn't ask: what kind of non-public information could have led Goldman to take on those winning positions?

SEC Eyes Goldman Sachs' Good Fortune [New York Post]

Tomorrow is the first day of Movember, a charity event started in Australia that gets men to grow mustaches (and ‘stache supporters to sponsor their efforts) in order to raise money for prostate cancer research. In years past, Mo Bro participation from the Aussie branches of Citigroup, Goldman Sachs, Deloitte and PricewaterhouseCoopers has been huge, and nearly 25% of funds generated since the organization was started four years ago have come from finance professionals. With Thursday marking the first time the contest is being held in the U.S., you would think that top banks would be gung-ho about their employees growing hair, just to prove themselves better than one another in a category other than record losses, but, apparently, not so much. We placed some calls today to find out which firms will officially be sporting wool and let’s just say that you should all be performing regular self-exams for early detection, because a cure is not around the corner. When asked if their CEOs would be setting good examples for their minions by growing moustaches this month (and, obviously, contractually obligating the plebes to do so, as well), Bear Stearns, Lehman Brothers and Citigroup all said no, and Goldman Sachs said it’d get back to us but hasn’t (which is probably a no and besides the point: Blankfein promised himself he’d never go back to his hobo days a long time ago). A spokeswoman for Merrill Lynch told us that, like all the other pro-cancer banks in New York, hers would not be asking employees to take part in the event, and reminded us that, at the present time, MER has no CEO on which to grow a ‘stache. When we casually wondered aloud whether or not the last guy to run the company would’ve seen the same fate had he worn some fur, she responded, “maybe not.” And honestly? Girl didn’t sound like she was kidding.

Do you have the ability to grow facial hair and the balls to say corporate culture be damned, I am not down with this life-threatening disease? Send photographic updates on your progress here.

Growing Facial Hair for Charity [WSJ]

In all the talk about losses at individual banks and brokerages, sometimes it's easy to lose sight of the bigger picture. A report issued by the New York City comptroller yesterday nicely pointed to the forest made up by those trees. The collective profit loss at Goldman Sachs, Morgan Stanley, Merrill Lynch, Citigroup, Lehman Brothers, J.P. Morgan Chase and Bear Stearns was 65%, according to the report. And the damage would have been even worse if not for Goldman's miraculous/evil genius performance.

New York City, State Budget Outlooks Dim as Wall Street Falters [Bloomberg]

Hey guys,

We realize this is kind of last minute, not very well thought out, and a lot to ask of the 20% of you who are still employed and have more important things to do today, but you've always said that if we ever found ourselves in trouble and had nowhere else to turn, we could come to you. Well, we're coming to you—we want to rehire this kid Heath Khan (no relation to Genghis) who used to work here but don't have the money (maybe if more of you had clicked on the Mike's ads, we wouldn't be in this situation). Can someone float us the funds? If we get enough page views with Heath back on the team, there's a chance we'll even be able to pay you back in cash at some point in the future, or you could take some equity in the company now. What do you say? Know what we say? Kidding! No one named Heath ever worked here. Little ‘trick’ for you, in honor of the day. Okay, but let's talk seriously for a second-- we really do have a friend who needs your help/charity. His name is Tim and he's in a major jam. Kid has no clue what to be for Halloween. We know you've got ideas for him. The only stipulation is that it doesn't cost too much, because he doesn't currently have a source if income, per se. It won't be hard to top last year's costume, which was apparently a lumberjack (this was just before Wall Street Warriors became a hit, you see, so the pressure wasn't really on him to think up something great), but that doesn't mean you shouldn't reach for the stars. We've come up with a few jumping off points, from which you can either pick one and say "Hey, great, and this is how you execute it, Tim" or come up with your own.

A hedge fund manager (he’s always wanted to be one, and Halloween is a holiday of aspiration)

Brian Hunter

Neil Cavuto (they’ve got the same hair)

Lolcat Ben Bernanke: I'z up in yer marketz, cutting yer inflation. (That was John’s idea)

A person who’s going to buy his book (so this might just require his regular street clothes, I don’t know)

Max Cordero

It's almost too good to be true. But it is true. Goldman Sachs chief executive Lloyd Blankfein lives in the same building at Merrill Lynch's ousted chief, Stan O'Neal, according to some at New York magazine who reads DealBook. The address: 941 Park Avenue, on 81st street.

Thanks to a reader, we were reminded this morning of a story in Nassim Taleb's Fooled by Randomness about the hard working lawyer from Brooklyn. Although he's a success by almost any measure, he is the poorest member of his Park Avenue Co-Op, and feels lousy about himself. The anecdote is used to illustrate how happiness is not just attained through material success but is also based on relative comparison. Nassim's point is that over reaching in order to "keep up with the Jones" can lead to excessive risk taking for a trader.

Suddenly, Stan's obsession with Goldman's earnings is starting to make sense.

"Just imagine that psychological trauma!" our reader writes. "If only Stan had moved into Jimmy Cayne's building he would still be CEO of Merrill."

As Merrill Reels, Goldman Glitters [DealBook]
Hello, Blankfein [New York Magazine]

Alcatel-Lucent deepens job cuts as it posts loss (MarketWatch)
More evidence that ALA-LU has become an ugly competition. Lesses again in the quarter and another 4000 job cuts. Among those leaving is the CFO, who is "pursuing other opportunities". We're not sure whether he's part of the 4000 cut jobs or whether he makes it 4001. Hopefully they'll clarify that at some point. Seems pretty obvious that CEO Patricia Russo is not long for this job either, though nobody ever thought she was.

Fans go loco for free tacos (Boston Herald)
The Red Sox' victory prompted quite a bit of underpricing of real assets. First there was that furniture store that was stuck $40,000 because of a promotion it had run earlier in the season pertaining to a Red Sox World Series victory. Then yesterday there were free tacos at Taco Bells all across the country, again because of some Red Sox-related promotion. We didn't get a chance to hit one up, but we hope there wasn't any violence, like that time that school district sold underpriced Macs

Crude Oil Falls a Second Day After Goldman Recommends Selling (Bloomberg)
Has Goldman turned bearish on Crude? That's not clear, but they have told clients to "take profits" on the brown stuff, just as its nearing $100. It's possible that the drop is related to this call, although it's also possible it could relate to any number of other things... like the Kurds or Bernanke. That being said, this might be the first time we've ever read one of these stories where the movement of oil was associated with an institutional call. To be honest, we didn't really realize they made calls on this stuff, though, it makes sense... just doesn't get much attention.

Greenspan warns of further pain for US property prices (Guardian)
Alan Greenspan is warnings that the housing market will get worse before it gets better. But get this, so is Robert Shiller, the creator of the S&P/Case Shiller index to track housing prices. Then again, saying Robert Shiller is negative on housing doesn't mean a whole lot, since he's just pretty much a negative guy on housing period. Meanwhile, you have to agree that for the moment, things do like mighty ugly.

$$$ Has Every Wall Streeter Gone Insane? A Graphical Guide. [NYM]

$$$ Comparing the Street's worst CEO's. [Market Beat Blog]

$$$ DCF Valuation of an Investment Banker’s Life [Banker's Ball]

$$$ Banker Halloween Party [Leveraged Sell-Out]

Sponsored by the Financial Times.

Stocks closed lower today on Fed uncertainty, even though the odds are pretty much stacked in favor of Ben Bernanke doing whatever the traders tell him to do. The DJIA was down 77.79 to 13792.47, the S&P 500 lost 9.97 to close at 1531.01, and the Nasdaq fell 0.73 to 2816.71. The firing of some guy at Merrill Lynch sent shares down 2.76% to $65.56.

Sadly, Carney got bumped on "Happy Hour," but can probably be found at the bar where they tape the greatest show on cable TV for at least the next few hours, if anyone's interested (Bull and Bear, in the Waldorf).

Want more? FT Alphaville.

The bottom feeders of private equity (we’re talking, like, analysts) are now making $215,000 a year, 29% more than in 2006. If you must know, the bump in pay apparently has more to do with some sort of pissing contest between buyout firms and hedge funds, re: who can retain the best talent, and less to do with Steve Schwarzman, 5’6”, warming up to his plebes, but take it from us and consider that a good thing. Those pokers will scratch your eye out.

Why Private Equity Is the MBA’s Mecca (Hint: $) [Deal Journal]

A. Why do the big 4 (accounting firms) feel the need to have a gay anthem?

B. If you had to pick a winner, would it be PWC's (courtesy of ESPN's TMQ) or Ernst and Young's?

(On a related note, Carney makes his debut on 'Happy Hour' tonight.)

If you’d told me yesterday that there were consequences for losing tons of money, I would’ve said, “Fuck you! Is this your idea of a sick joke?” But apparently? There are. According to DealBook, in one of its many efforts to cut costs following a not so good third quarter, that Swiss bank on Park will paying more of its bonuses in the form of UBS stock. Stock which, while it may be declining today, could possibly be worth something tomorrow, but could just as easily be worth even less, if employees fail to keep their eyes on the ball during the fourth quarter, which, historically, they’ve been known to do (not necessarily their faults: there are a lot of good Christmas specials on TV at this time. You'd lose focus, too).

As Bonuses Look Leaner, UBS Takes Stock [DealBook]

Christopher Pesce, the global head of prime brokerage at BoA Securities, has apparently quit his job for greener pastures. We don’t know which pastures, just that they’re better. Since he’s coming from Banc of America, there are almost too many to choose from. Perhaps the minions he was instrumental in getting fired might know of his whereabouts? If one among you hasn't yet had your internet access cut off, get in touch.

BofA Prime Brokerage Chief Quits [FINalternatives]

Oscar Wilde once said that a cynic "knows the price of everything and the value of nothing."

Today, as we spoke to sources in and around Merrill Lynch, our favorite line came from a Merrill veteran who cleverly turned around Wilde's line. According to the Merrill vet, the most common objection to giving Bob McCann the top spot--that he lacks fixed-income experience--should be regarded as a strength.

"Haven't we learned that a lot of these folks with fixed-income experience had no idea what they were doing? Didn't that just cost Merrill $8 billion. That's enough of that experience," he said. "The problem is that these guys know the alleged value of everything but the prices of nothing. Value without market price is pretty in poetry but ugly on Wall Street."

Speaking of which, we're supposed to be attending the Future of Business Media conference today at the Waldorf Astoria but we've been chasing the Merrill story all morning. We're heading back to the conference. Bess Levin is holding down the fort at DealBreaker's bunker HQ. Expect more from her shortly.

Dear Colleagues,

As we approach the close of 2007, I would like to take this opportunity to bring your attention to the continued effort around cost control, balance sheet management and overall efficiency. History has shown that the fourth quarter is where we have lost ground and focus on these key initiatives. Therefore, I encourage you to take all necessary measures to make sure that you don’t take your eyes off the ball and allow end of year cost creep to occur.

Thank you for your attention to this "timely" measure. I appreciate your leadership and partnership in finishing the year on a strong note.

Best,

Michael Weisberg
Global Head Products & Services

You can check out any time you like but you can never leave.

(Warning: link plays music and contains at least one brief image which a reader has said is potentially NSFW.)

"They made money."

That's the reason that Bob McCann, the president of Merrill Lynch's massive global wealth management group, is still considered the top-running candidate to become the next chief executive by the rank-and-file of the company. He is considered a long-shot by outsiders—and perhaps by members of the board of directors—but he has strong support inside Merrill Lynch.

In a disastrous third quarter for Merill, McCann's brokerage saw a 23 percent surge in revenues, taking in $3.3 billion in the third quarter. The brokers took control of $26 billion in net new client assets, its strongest quarter in more than six years.

It's well known that McCann is immensely popular with the 16,000 brokers at Merrill. But his support is much broader than that. Across the firm, many believe that McCann may be the person who can lead Merrill out of its current morass. The greatest opposition to McCann appears to be in those areas where there is the most fear that the elevation of McCann might oversee a retrenchment. But many who work in the fixed income groups, for instance, already believe that their days may be numbered.

The brokers are already moving to put pressure on the upper-ranks of the company to name a chief executive quickly. They are spreading the word that the uncertainty at the company may be putting the brokerage business at risk, as investors wonder whether their money is safe with a company with a conspicuous void at the top.

Water-cooler odds makers are putting their money on McCann. They believe that eventually the board will come around to the view that it needs to re-invigorate the firm with a popular chief executive with support within the firm, and McCann fits that description nicely.

Larry Fink, the chief of Blackrock, is also widely admired and would be welcomed by many within Merrill. But many at the company believe that he may have already turned down the job, perhaps because he is unwilling to leave Blackrock or perhaps because he has been put-off by the apparent lack of consensus about corporate strategy at the board level.

Thank god, the money managers have weighed in and decided: A-Rod was entirely justified in opting out of the final three seasons of his contract with the Yankees. According to Daniel Alpert, a partner at Westwood Capital, a boutique investment bank in New York that specializes in mortgage and related securities, “there’s nothing cold blooded about it.” And what’s Balestra Capital founder James L. Melcher’s take on the situation? “Not only do I have no problem with it, I’m cheering him.”

Can you imagine what would happen if these guys didn’t stick together? When you’re trying to rip people off, the moral support of your peers really counts for a lot. (Investors in) Absolute Capital know what we're talking about.

Rodriguez Not Greedy by Standard of Wall St. [NYT]

The news that Merrill Lynch had not selected even an interim chief executive caught many by surprise. The official line—that Merrill is waiting to choose a chief executive while it reviews its corporate strategy—is being applauded by many as a sober, thoughtful approach. But it may indicate that even greater write-downs are coming at the company.

We've heard from a source close to the board of directors that at least one potential candidate indicated that he did not want to sign as a the new chief executive until after the losses from derivatives and credit markets had been fully reviewed and new disclosures about deeper losses, which many analysts believe will have to be made, are announced. Stepping into a job that requires as its first public act the announcement of even larger losses is not the "fresh start" that many executives would look forward to.

But it's more than a potential public relations disaster. There is the risk of legal peril in taking the top job. Merrill Lynch will soon be filing its quarterly report with the Securities & Exchange Commission. These will include accounting for the losses, and under Sarbanes Oxley a new CEO would have to sign a written statement certifying that the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the company. That's something a new chief executive might not feel comfortable doing.

After days of chaos inside Merrill Lynch—chaos that was felt from the board room to the water coolers—Stan O'Neal has finally been allowed to retire. Confusion still reigned this morning as people inside the Wall Street firm read media reports claiming Ahmass Fakahany, Stan O'Neal apparatchik who had a hand in overseeing risk management, was resigning and only hours later learned that he was being retained as a co-president.

Nonetheless, the widespread view within Merrill Lynch's rank-and-file is that Ahmass has been fired in every way that matters. It seems that he has been moved over to operations, and away from the more important businesses at the firm, including risk management.

The failure to name even an interim has left many at Merrill with a sense of unease. With November fast approaching, many employees at all levels of the firm are scheduled to receive quarterly performance and shortly after that should learn their bonus numbers. But talk of a "new strategy" at Merrill and a void of leadership at the top has many feeling that although the initial period of chaos as passed, there remains too much uncertainty at the firm.

UBS announced its first quarterly loss in nearly five years today, rendering frowns on those Nazi-sympathizers’ faces that even a few anti-Semitic jokes couldn’t turn upside down, which means it must be really bad. The “unquestionably disappointing” $720 million net loss, which overshadowed record earnings in the wealth management operation, was blamed on that $4.4 billion writedown due to subprime issues and the fact that no one knew what was going on at the investment bank.

Unfortunately, UBS just recently fired a CEOi—Peter Wuffli—, and can’t very well make the only 4-month old Marcel Rohner the scapegoat in this situation (unless of course they’ve been dared to do so...in which case-- watch out, Rohner). Managing expectations of what the bank is capabale of (probably so that it can later be said that they “beat analysts’ expectations” and be rewarded for what, to the naked-eye, looks like just plain failure), UBS commented that “[Although] the fourth quarter has started with good results from all businesses, including the investment bank…UBS is not assuming that the quarter will continue as positively as it has begun or that the current difficulties will be resolved in the short term.”

UBS' Swiss Miss [NYP]
UBS to launch reporting season with losses and a warning [Times Online]

Merrill Lynch has finally announced the departure of Stan O’Neal**, but is, adorably, referring to it as a retirement, effective immediately. Apparently O’Neal and the board agreed that “a change in leadership” was in the best interest of the firm, in its quest to, and this is actually what they said, “maintain the strong operating performance of it businesses which the company reported last week were performing well, apart from sub-prime mortgages and CDOs.” Alberto Cribiore, a managing parter and founder of the private equity firm Brera Capital, has been named interim non-executive chairman. Ahmass Fakahany and Gregory Fleming will remain as co-presidents and COOs.

According to a press release, Stan feels “very fortunate to spend the past 21 years at Merrill Lynch,” which we bet he really does. He’d also like to “thank all of [his] colleagues for their contributions and support…and wish them the successful future they deserve," as first-year analysts at Bear Stearns.

Stan O’Neal Retires From Merrill Lynch; Alberto Cribiore to Serve as Interim Non-Executive Chairman and Chair Search Committee [Merrill Lynch]

*Yes, we could delete the whole thing and pretend like it never existed by you know what? It did and we don't practice revisionist history at DealBreaker (backdating the time stamps on posts? Yes. We're only human).

**Just wondering-- what do you think Carney's going to do to himself when he finds out this happened while he was being otherwise detained?

Ahmass Fakahany, the Merrill Lynch co-president who, if you want to go there, might not have done the greatest job overseeing risk management at the firm over the last several months, is expected to resign shortly, following the ousting of his main man Stan. He probably won’t be getting a package even close to the one O’Neal’s leaving with, but as a reward for exiting stage left without much of a fight, will be tossed a few extra shares of MER, because, as one member of the board put it, “They’re basically worthless anyway, if you ask me. You want me to be honest? I’d swap all my Merrill stock for a few stacks of unmarked Mozilo Bucks if I had shady enough contacts to find them, and that grin didn’t scare the shit out of me.”

On a related note, Chief Financial Officer Jeffrey Edwards apparently offered to quit at some point last week, but was told "No, no, your punishment for the $8.4 billion is that you have to stay."

Merrill co-president Fakahany seen leaving [Reuters]
Merrill Lynch CFO Edwards offered to quit [Reuters]

Oil Price Up Again Ahead of Fed Meeting (NYT)
So oil crossed the $93 mark, which means it's just a skip away from $100. Anyone who predicted $100 to get hit sooner rather than later... pat yourself on the back. Seriously. Now, as for oil up ahead of the Fed, is that a predictor of interest cuts? After all... cuts=weak dollar=high crude prices. So if there's really a connection between oil and the Fed, and we're not saying it is, then is the market telling us something?

774 Arrests in China Over Safety (NYT)
Nice picture at the top of this article, showing just what a product safety crackdown looks like in China. Anyway, the government there has done a big bust of 744 people, arresting them for all manners of safety infractions. Typical. There's obviously something unnerving about this news, cause you don't know what's going to happen to these people. But a victory for the New York Times, which has been totally fighting the good fight here, day in and day out cracking the whip on this issue.

How To Talk About Books You Haven't Read (Marginal Revolution)
We read something about this book the other day, but we'll go ahead and state the obvious, that we haven't read this Marginal Rev. post. Duh. So it's obvious this is just going to start a chain reaction of unread posts about the book, though if someone links here per this link, then they've really gone too far.

Nassim Taleb (Art de Vany)
One of our favorite things in the world is when someone we respect happens to be a fan of someone else we respect. You know, it's validation. Anyway, we still haven't finished the Black Swan, despite giddily picking it up the first day it hit bookstores. Not gonna lie, it's been a little hard to break into. And, we've read some good criticisms of Nassim Taleb's work, that deserve to be taken seriously. But, he's still an important thinker and some of his truths are undeniable. Anyway, Taleb is a fan of Opening Bell intellectual hero Art de Vany, who is a giant among men in all fields. Good to know Taleb feels the same way.

Can a Google Phone Connect With Carriers? (WSJ)
Here's the thing... the gPhone won't be an iPhone. Obviously, Google has some tricks up its sleeve and it knows how to do certain things scarily well. Nobody's denying that, to be sure. But nobody knows what the company's wireless strategy is going to be. It's probably going to be software related, and it probably won't blow your socks off the same way the iPhone did when you first saw (though it no longer does). Anyway, two weeks is is the new ETA for whatever Google's gonna bring.

$$$ Deals: Welcome Back, Private Equity: In our M&A Roundup for the week ended Oct. 28, it makes at least a limited return in the form of four billion-dollar deals to boost overall dealmaking to $11.28 billion. [CFO.com]

$$$ Dipping into Guacamole [LoSC]

$$$ The Man Who Helped Take Out Merrill’s Chief [DealBook]

500 laid off from structured finance and investment banking today. Severance has been paid, but no numbers on how much yet. We're going to go out on a limb and say more than Bear Stearns. Prove us right (or wrong, though that's highly unlikely).

Sponsored by the Financial Times.

Stocks nudged up a bit today. The major indexes gained as much as three-quarters of a percent each before declining a bit to close with gains nearer to one-half of a percent. The Dow Jones Industrial Average rose 63.56, or 0.5%, to 13870.26. The S&P 500 bloomed 5.70, or 0.4%, to 1540.98. The Nasdaq Composite Index, uhm, tuliped 13.25, or 0.5%, to 2817.44. The Amex Broker-Dealer Index saw even more action—both to the upside and the downside—today, and closed up 0.95%. On the New York Stock Exchange Monday, rising stocks beat decliners by 1.8:1.3. Volume declined a bit from recently elevated levels, so that just 1.2 billion shares traded hands electronic accounts.

After a brief dip downward following the opening bell, shares of Merrill mostly tracked the Broker-Dealer Index until around 1 PM, when they broke out to the upside. The stock closed with a gain of 2.01% for the day.

FT Alphaville. They liked alpha so much they made an entire village out of it.

Just how has referring to competitors as enemies whose “throats” must be “ripped out,” telling employees to act as though they are “at war,” and, on at least one occasion, making a visit to the trading floor to put his second-best earner’s tie through a shredder, in front of everyone, to make the point that “second best isn’t good enough” helped Dick Fuld to avoid the gigantic writedowns that have plagued Merrill, Citigroup and UBS, the hedge fund failures that have made a joke of Bear Stearns, and the accounting scandal that was Goldman third quarter earnings? How about because all of that is enough to scare the shit out of anyone, especially the people within arm’s length of the guy, into not fucking things up? Nobody wants to be the guy to tell “Gorilla” that things didn’t go so well this quarter, and while everyone else was having a pissing contest to see who could do the worst, Lehman’s minions were being intimidated into not having as horrible a Q3 as their “enemies,” if not necessarily an amazing one (earnings fell 3 percent, to $887 million, and there was a $700 million write-off). Even Mike Mayo, who’s intimidated by no one, gave the credit to Fuld, saying that the outcome was “helped by having one of the most consistent cultures on the Street—one C.E.O. for over a decade, a one-firm mentality and comprehensive risk management,” probably out of fear. Former colleague Stephen Schwarzman, who seems like the kind of guy who would be too petty to give someone else credit for anything, went out of his comfort zone to call Fuld “a survivor” and opine that “he’s got a sixth sense of when things are turning on you,” though, admittedly, Schwarzman’s praise-inducing intimidation could stem more from the height differential than anything else.

But a New York Times profile suggests that Fuld is losing his taste for human flesh, which could mean disaster for LEH. Examine the facts:

- When asked how he felt about “the war comment” from last year, Fuld shifted in his chair and said, “I don’t like the war comment…‘war’ connotes that we are trying to kill our enemies. That’s not the view that I want them to have.”

- After feigning offense at the accusation that he’s “mellowed,” Fuld “paused to collect his thoughts.”

- Then he said: “I think I have many of the same reactions; I just handle them differently…I’VE LEARNED, IN ALL FAIRNESS THERE IS ANOTHER VIEW.”

And the most egregious ?
- Lehman’s president, Joseph M. Gregory, says that Fuld “has improved” his attitude and “made it more comfortable for people to speak.”

This is a phenomenon the must be cut off at the knees (which the old Fuld would’ve already done, without compunction). It’s only a hop, skip and a jump from people not soiling themselves in your presence to Merrill Lynch.

The Survivor [NYT]

Speaking of Jimmy Cayne, he’s just announced layoffs of about 300 people. That’s about 1.9% of the firm.
Dow Jones newswire quotes from a memo titled "workforce reduction" that bears (heh) Cayne’s imprimatur. According to DJ, the cuts will come "in various business units at all levels of the organization." Their will also be an attempt to throw more resources into areas where growth opportunities are greatest reduce them in areas that "can no longer justify their current level of infrastructure."

These three hundred come on top the 550 layoffs from its two mortgage-origination units, as well as the asset management executives who were let go following the collapse of two Bear hedge funds.

“Does this mean Matt Cooper will call for Cayne to be fired again today?” we were asked by the words appearing on our screen as we typed this.

Also, we can't help but wonder if the number of layoffs was in anyway related to this.

Bear Stearns Lays Off 300 Employees Firmwide [DJ Newswire at CNNMoney.com]

Earlier this afternoon we asked if some of the guys at Bear Stearns might be smiling in the darker parts of their souls at the troubles—losses, snakepits, messes, ousting, disorganized succession plans—Merrill Lynch has been going through lately. Or, more likely, some of the guys who used to be at Bear Stearns, like former head of trading, equities, fixed income, energy and asset management Warren Spector.

We thought that maybe the guys who saw first their hedge funds and then their jobs go down the drain after a Merrill led rush of creditors started grabbing their assets—which, for all anyone knows now, might have turned out of have been worthless anyway—might be experiencing some joy at watching credit market losses take down some of the folks who took them down.

This afternoon Portfolio’s politics guy asks the same question but for a totally different reason. “If Stan O'Neal is out at Merrill, doesn't that offer some comfort to the likes of Warren Spector,” writes Matthew Cooper. “Merrill is a case of the guy at the top taking the fall. At Bear, it seemed like the number 3, Warren Spector, took the hit instead of James Cayne. Where's the fairness in that?”

We’re not sure that why exactly anyone would comforted by this. But whatever. Maybe that’s why we’re not writing about politics. But we’re not convinced that Cooper is right when he says that the “guy at the top ought to take the fall when things go so wrong.”

It’s not the first time he’s said it. Back in August Cooper wrote: “It's hard to see why the firm's chief executive, James Cayne, would summarily execute Spector but not take the rap himself. The Buck Stops Here, not there.” But we weren’t convinced that time either.

Cooper’s model is clearly a political one—although we can’t remember when the last time a top guy resigned after being disgraced by the activities of his underlings either. Well, we’ve heard about Nixon but that was a long, long time ago! And Nixon is not usually held up as a model of American leadership. So let’s say Cooper’s is a model an idealistic one that is rarely realized in reality.

It’s hard not to suspect that Cooper is trying for some sort of hobgoblinistic, liberal consistency. Liberals think Bush should step down or get impeached because of the activities of, say, Alberto Gonzalez. So that means everyone should step down when their underlings allegedly lead things off the rails.

But should Cayne go? The market, the business media and the rank-and-file if Bear is hardly clamoring for his ouster. There have been losses at Bear Stearns—and investors in those two ridiculously named funds lost buckets and buckets of money—but not on the scale of Merrill Lynch’s. And, perhaps more importantly, Cayne has left investors and employees with a feeling that he understands what went wrong and is acting to contain the damage. O’Neal failed this damage-control test, in part because he had made enough enemies who went for the kill when they scented blood. And that failure, more than anything else, appears to be what doomed him

That may not be ‘fair’ in some cosmic sense. But Wall Street is hardly a place to be if you want cosmic justice.

James Cayne v. Stan O'Neal [Capital blog, Portfolio]

This morning we credited Management Today, a UK publication we'd never heard of before this morning, with being the first to use the second part of Merrill Lynch's name as a pun for the ousting of Stan O'Neal. It came to our attention in the usual way such things do: they beat us over the head with it by reminding us that "O’Neal is one of the few African-Americans running big US companies" and describing Wall Street as "largely a white male preserve."

In case you missed it, we thought that with all that hand-wringing it was a little surprising a headline-writer would decide that it was totally great to make a clever pun about lynching Stan O'Neal. Or maybe it worked the other way around: they wanted to make the pun, so they decided to cover themselves with the hand-wringing. Somebody's over-compensating!

But we were wrong. As far as we can tell, the award/badge of shamelessness for the first lynching pun should have gone to Portfolio's pseudonymous Spin Blogger who calls himself Jack Flack. Yesterday, Flack's piece was titled "Merrill Lynch-Mob: How the Media Helped Fire Stan O'Neal."

We suppose that the function of the lynching pun in Jack's piece, like that in Management Today piece, could be said to be anti-racist. You see, he's accusing O'Neal's opponents of acting like a lynch mob. Or maybe he's accusing the media of being like a lynch mob. In any case, Flack is the first one we've found who somehow overcame the discomfort most reporters would have about calling the firing of one of America's most prominent black executives a lynching.

Merrill Lynch-Mob: How the Media Helped Fire Stan O'Neal [Spin Blog]

That’s really it. Bernankes and the Federal Reserve want to say no to an interest-rate cut this week but are apparently too scared of what a bunch of (what sound like really intimidating) traders (if you’re a puss) will do if they don’t. But they’ve got a plan! In order to make it look like the Fed’s in control, Ben will, yes, give in to a cut, but will, in addition, not promise any future ones. It’s almost as though those guys wrote the book on how not to be made someone else’s bitch, isn’t it? Also, even though no one was asking for the overshare, Bernanke went there twice in the last week, noting how “challenging” it is to make policy, and saying that he’s “doing the best [he] can*.” Not as good a job as Greenspan would do, according to Greenspan, but definitely his personal best.

Bernanke, `Reluctant' to Cut Rates, May End Up Doing So Anyway [Bloomberg]

*moment of truth: I made that last one up, but 10-1 he was thinking it.

You think James Cayne and whoever he’s playing golf with today (maybe Ralph Cioffi, but who really knows) are having a good laugh over the fact that Merrill lost billions and Stan O’Neal is getting canned? A of all, because this is exactly the kind of thing that Cayne likes to laugh about (people losing their jobs, dogs being born with only three legs, feline leukemia) and B of all, because Merrill tried to get back at Bear this summer for telling Komansky to get lost during the LTCM bailout, by selling off its assets that were in the “enhanced” fund, hastening its ultimate collapse? Could be a stretch, but apparently the theory’s not too crazy for Rich Marin to blog about, which sources tell us he’s doing as we speak. And is it really that crazy to laugh, or at the very least send a few mean-spirited emails (which we’ll reprint later) out over the fact that the firm that tried to screw you for screwing it like a thousand years ago is now taking it up the tailpipe? The answer is no. Go on James Cayne. Today you have our blessing to yuk it up (but only because we’ll probably write something cruel though maybe entirely justified about you tomorrow. Starting with a possible involvement in SAC's ho'mone case, and a penchant for Kung Pao chicken, stories we're running with unless you call us before 5). Anyway, the rest of you, answer our question.

Haven’t heard much from the Bear Stearns Department of Failure lately, have we? Probably because everyone’s too busy piling on Merrill and Stan (including Bear Stearns, which may have something to do with some unresolved anger toward MER for sort of screwing BSC this summer by grabbing assets from the funds with the impractically long names, and accelerating their demise). Good to know things are apparently still chugging along, business as usual: we’ve heard from a few places (probably all Stan O’Neal, calling from different numbers to throw us off) that Bear Stearns laid off approximately 600 people today, across all lines. Did you hear that, too?

"Worst paid employees" is not exactly a desirable reputation for a Wall Street firm looking to recover from huge losses and a chaotic, messy chief executive exit. But Merrill Lynch may be stuck with that unless it dramatically increases its compensation costs in the fourth quarter.

Reuters has run through the earnings reports for Wall Street compensation numbers, and the picture isn't pretty. Three out of five firms set aside less money for compensation in the first three-quarters of this year than they had last year. Only Goldman Sachs and Morgan Stanley have set aside more.

Interestingly, there has been some jockeying for position on Wall Street compensation. Last year, Merrill also was at the bottom of the list for the first three quarters. But it was neck-and-neck with Bear Stearns. This year it is close to $18,000 short of Bear. Morgan Stanley has moved ahead of Lehman, switching second for third place.

Of course, many of these firms may simply be engaging in managing their balance sheets and investor expectations by lowering compensation costs in what was a rough third-quarter for much of Wall Street. Indeed, Merrill all but promised those costs would jump in the third quarter. But if losses from missteps in the credit and derivatives markets are even worse than expected—and most analysts who have looked at the issue have predicted even greater losses at Merrill—that may prove difficult.

The compensation numbers are closely related to per employee revenues, Reuters writes. "Goldman is the top with revenue of nearly $1.2 million per employee for the year to date, while Merrill is at the bottom of the heap, with just $311,916 of revenue per employee," the report says.

After the jump: we run through the Reuters numbers from lowest to highest, with comparisons to last year's first three-quarters compensation figures.

Merrill on track to offer lowest pay on Wall Street [Reuters]