(Ed Note: Well, this is it. Another year in the can.) Times Square Ball Goes Green (AP)
Fitting, given the year we've had that this year the big ball will don energy efficient LEDs. The most energy efficient solution would be no ball at all, but obviously that was never going to happen. Of course, compares to the staggering power consumption of TImes Square, the marginal difference of a green New Year' ball is trivial, but it's the message that counts. Altogether, the ball will costs $1.1 million to assemble, which, given the amount of attention and tourism it'll bring in is well worth it.

Tracinda to Take 35% Stake in Delta (WSJ)
Big investment from Kirk Kerkorian in Delta... Delta Petroleum that is. We've never heard of it either, though the 35 percent stake will cost the firm $684 million, representing a 23 percent premium for the shares. A nice finish for the year for Delta (Petroleum) shareholders.

Existing-Home Sales Edged Up In November, but Still Weak (WSJ)
Mainly bad news on the home front, but a tiny dollop of good news, which is pretty rare these days. October sales of existing homes were actually revised up, and November came in ever so slightly above that. We were going to link to Barry Ritholtz with a note saying to check there for the inevitable tear down of these numbers, but alas even he can't totally demolish the report, so it mast be halfway moderately vaguely decent. Still, he gets in some good shots at the NAR.

'National Treasure' holds No. 1 spot (LA Times)
We haven't seen the movie, but the fact that this is dominating the box offices is great news for the future of the Republic. Also great news for the producers, since they've now got a bona fide franchise on their hands. Can't wait for National Treasure 3-6.

As the Ball Drops, Dieting Companies Take Positions Nearby (NYT)
You probably gained a few pounds over the last week or so, no thanks to us, because we weren't keeping your blood pumping as intensely as we usually do. Food also had something to do with it. Anyway, don't let the diet hucksters feed you any nonsense. The key things: Fresh veggies, unadulterated meat and intense weightlifting. Stay off the treadmill and the sugar and you'll be a-okay for the next 11.5 months.

Stocks Lower on Last Day of '07 (AP)
If you're reading this site today, the last thing you need is a link telling you what the market is doing. Hence we're putting this last.

ING to Sell Reinsurance Unit to Berkshire Hathaway (Bloomberg)
More buying activity from Buffett. Despite some of the troubles that General Re has caused its parent company, Berkshire Hathaway is upping its role in the reinsurance market, buying off a unit from ING for a modest $440 million. Among the areas ING is involved in include possible settlements for tobacco and asbestos claims. ING stil has a US-based reinsurance division that it may hold on to.

Buffett to Start A Bond Insurer For Cities, States (WSJ)
And not only is BRK buying, but it's also entering new lines of business. At least it's talking a good game. Sensing a moment, given the weakness in the major bond insurers, the company says it will enter that business, er, "seek permission" to enter it. Buffett told the WSJ that the company would commit "quite a bit of capital if we like the business." So take that what you will. You really have to hand it to him. The man has dominated the holiday news cycle. All these big announcements on the slowest week of the year, when nothing's going on. The media already loves Buffett, but in the absence of other stories, it's been 24/7 Buffettvision. Well done.

Broadcast of Golden Globes Is in Doubt (NYT)
Sparing the thousands of viewers whose husbands and wives might've made them watch it, there's talk that the Gold Globes -- Hollywood's least respectable award show -- may not get broadcast. You know, there's the whole writer's strike going on, which sorts of casts a pall on any industry-related "festivities". Now if they cancel the Oscars, that might be a big deal. But the Globes? That ranks somewhere below the Cable Ace awards in terms of credibility. We'd rather watch the Tony's even if every Broadway score these days is nothing but a load of a-melodic half-talking/half-singing.

Amazon to Sell Warner Music Minus Copy Protection (NYT)
Amazon will start selling the entire Warner Music catalog as DRM-free MP3s, which is pretty cool. Whether it helps Amazon make gains against iTunes remains to be seen, but it's hard to see the news as anything but an unalloyed good for the company.

Explaining CDOs, Overcollateralization Edition (Portfolio)
There's some famous short story about a group of English majors who sit down over some wine and admit the one book that they're ashamed not to have read. Actually, we don't know whether this was a short story or a short film or a novel, or whether it never even happened in fiction. After all, we heard about it third hand from someone who'd claimed to have read it. Anyway, they all go around until one says that they hadn't read Hamlet and the rest freaked out. That was just too much. Not having read For Whom The Bell Tolls was one thing. Hamlet was quite another. Anyway, in case you feel like that Hamlet-less English major, with respect to your knowledge of CDOs, Felix Salmon gives you a chance to catch up and join the gang.

Where is the Copper Market Headed in 2008? (MetalMiner)
Wouldn't you like to know?

Moments after former Pakistani Prime Minister Benazir Bhutto's horrific assassination was announced, equities futures began to move downward. People at trading desks immediately began to guess what this would mean across a variety of markets. We started getting e-mails from traders, market watchers and even a few readers who are in Pakistan now.

Reminders that we live in an unpredictable and dangerous world tend to unsettle equities markets, so the moves in the major indexes that followed were, well, highly predictable. But some readers wanted to know why this assassination should be viewed as bad news. It sounds cold hearted and ill-mannered to mention it but isn't it possible that the death of the opposition leader in Pakistan could stabilize the country by eliminating a challenger to Pervez Musharraf? Isn't Musharraf our man over there? As one reader put it, shouldn't this be up arrow news?

The reason it's terrible news is that Bhutto was actually a source of stability for the country. She was a reasonable and relatively US-friendly alternative to Musharraf. With her out of the picture, it's unclear what direction the opposition to Musharraf will take. But what is clear is that the opposition will most likely strengthen and act with a greater sense of urgency. The world is slightly more dangerous this afternoon than it was when we went to bed last night.

The $50 Ticket: A Lottery Boon Raises Concern (NYT)
It's pretty ludicrous for the government to crack down on all sorts of gambling, but then promote lottery tickets, which offer a terrible payout ratio.But that's really obvious. An interesting trend is the growth of $10, $20 and $50 scratch off tickets. Naturally, it's got the public-health types freaking out. If these more expensive tickets were causing players to play more scratch off, it would be an interesting study. But it's also possible that the net amount spent is staying the same, and that people are opting to buy one $50 ticket, as opposed to ten $5 tickets. If the latter is the case, that's just efficiency. Plus it's a more concentrated rush. Anyway, in a few years, some academic will do a paper on this, and we'll let you know what they conclude by linking to the abstract in an obscure journal.

Citigroup May Cut Dividend by 40%, Goldman Sachs Says (Bloomberg)
Citi shareholders counting on that fat dividend shouldn't be, at least according to Goldman Sachs. The firm predicted the dividend would be slashed up to 40 percent, in an attempt to shore up capital. Then again, this is sort of old news. Citi's dividend looks big because nobody thinks it will last. For most, it looks like a matter of when, not if.

Why isn't E.W. Scripps a Raging Short? (Infectious Greed)
When the Home Depot opened in Manhattan a few years back, and the city flew into an orgiastic state, we realized that homemaking as pop culture had reached ridiculous proportions. Yes, faucets and lumber are nice, but come on. It's a Home Depot. Not only was the housing boom to blame, but it also had to do with the endless stream of TV shows relating to building homes, remodeling, etc., that tried to make home ownership sexy. So now that the underlying force, the housing boom, has come to an end, what to make of home ownership as pop culture, and how is that an investment play? Paul Kedrosky likes shorting Scripps, the parent company of Home & Garden Television (HGTV), Food Network, DIY Network (DIY), each of which is filled with home-related content that could very well be at its peak. Just something to chew over.

Nokia Delays N-Gage Game Service for a Second Time (Bloomberg)
Shocking, really shocking.

Durable Goods Flat, Business CapEx Spending Falls (Big Picture)
Barry Ritholtz's take on today's punk economic data. Right up his alley.

'Long-Short' Funds Labor to Thrive (WSJ)
Several "long-short" mutual funds that promise hedged, market neutral returns have faired badly this year. Basically, they sound like the poor man's hedge fund. And it sounds like you get what you pay for. Then again, by actually attempting to, you know, hedge, they're probably more hedge fund than a lot of actual hedge funds.

Berkshire to Pay $4.5 Billion for Pritzkers' Marmon (Bloomberg)
WaBu's Berkshire Hathaway will spend $4.5 billion for a 60 percent stake in privately-held Marmon, a Pritzker-family held diversified services firm, whose businesses include hotels and rail services. Buffett describes Marmon as, "our kind of company." Sounds true. Nothing too splashy or flashy. Just some good old Graham & Dodd style operations. Now wait for the spate of stories about how Buffett is back, along with big lists of companies in play.

Retailers hope post-Christmas sales can save the season (USA Today)
And there you have it. More analysis here from Barry.

Amazon.com Wraps Up Its 13th Holiday With Best Season Ever
On the other hand, if you're Amazon.com, and you're the biggest e-tailer in the world, then you had a good season. If there's one statistic to keep in mind, this is it: "If you lined up all of the GPS units Amazon.com sold this holiday, they would make a trail from New York to Philadelphia; however, a new trail wouldn’t be necessary with the use of a GPS."

Home prices post record drop (CNNMoney)
Well, it looks like were were premature in calling a bottom. Several months ago, we said home prices were due to rise, since the Realtors had dropped their bullish spin. That's what you get for relying too much on contrarian indictors. Never again! Anyway, yeah, October. Record fall in house prices.

Luxury Air Travel: Still Not Proven (Felix Salmon)
On the decline of MaxJet.

Our economic education was somewhat unorthodox. Much of it took place in the basement of a library with moveable stacks, located not far the center of campus but very far, intellectually speaking, from the lecture halls where famous economists taught throngs of undergraduates to ignore what they know in favor of what could be depicted in graphs and equations.

We were helped along by a newsletter published by the Ludwig Von Mises institute, the foremost center for Austrian economics in these United States. Each year around this time our favorite edition of the newsletter was printed, the Christmas issue. It usually presented some contrarian take on a famous Christmas story. One year it might be the economics of Santa's workshop. Another year the feature story was about the entrepreneurialism of shiny red noses. Another year about Scrooge's generosity.

The folks who put together the newsletter now run both the Mises.org website and LewRockwell.com. We decided today to take a look at those sites. Sure enough, there was plenty of contrarian Christmas stories that we thought we would pass along.

We'll start with Butler Shaffer's "The Case for Ebeneezer." He makes the case that Mr. Scrooge, who seems to have been a money lender of some sort, may not be quite the villain he is made out to be for much of Charles Dickens' carol. In the first place, if Mr. Scrooge were not in the business he was in--lender money on the expectation of being repaid with interest--the lives of the people of London might have been far poorer. They needed money when they borrowed it, and Mr. Scrooge was willing to part with it for a time. If he was not willing to trust them with his money and if he was not accumulating wealth while practicing this generous art, they would have never had been able to avail themselves of the opportunities that allowed them to start and continue their own businesses and buy and live in their homes.

Lew Rockwell himself explains the economic lessons at the heart of the story of Bethlehem. Remember those wise men and their gifts of gold, frankincense, and myrrh? To hear the preachers of the gospel of poverty, who remind us always about the eyes of needles and camels, you might think that the holy family would have rejected these gifts as too extravagant. But that's not the way it happened. "Far from rejecting them as extravagant, the Holy Family accepted them as gifts worthy of the Divine Messiah," Rockwell writes. "Neither is there a record that suggests that the Holy Family paid any capital gains tax on them, though such gifts vastly increased their net wealth. Hence, another lesson: there is nothing immoral about wealth; wealth is something to be valued, owned privately, given and exchanged."

And if Rockwell's take strikes you as a bit too anti-Roman, we suggest you read Tom Fleming's very different appreciation of Rome's accomplishments. It reminds us of an oath we once took when joining a society of like-minded people while we were undergraduates, which included a plea that if we could not be saints (which was beyond the hopes of most of us in that room that night), then at least we could be like the Romans who made the world in which the first Christmas occurred.

You'll hear a lot about how Christmas is ruined by rampant consumerism. Very few people bother to defend the common practice of buying and giving gifts but the practice continues on. Gary North explains why. "There is great value in satisfying the desires of consumers, a value that goes beyond the prices that consumers pay," he writes. "Producers understand this. Consumers may not." And you won't want to miss North's take on "It's A Wonderful Life."

So why are we back again on Christmas night, writing for the few of you who may still be reading? Well, we're recovering from our Christmas feast and thinking about some of the most important people in our own lives: our readers, our commenters, our sponsors and our investors. You make it possible for us to do this wonderful work each day, and we're grateful for that gift you give to us each day. It's been a happy holiday season for us, and we hope it's been merry for you. We'll raise a glass to you tonight.

As Bess Levin noted on Friday, posting will be light this week. We didn't post yesterday despite the half-day for most US exchanges. Frankly we don't get paid enough to work on Christmas eve and our bosses are not Scrooge-y enough to expect us to. Tomorrow we will pick up publishing with a few updates throughout the day from the staff, and we'll continue at that pace until the New Year. If you find yourself working through the holidays just remember that somebody has to work the desk and just resent that that somebody had to be you. We suggest you walk around the hallways, treat the trading floor like a putting green and otherwise act out your I Am Legend fantasies while no one else is around. You, our friends, are legends. At least today. And at least in your minds and ours.

For Thanksgiving, we wrote a guide to working through that national holiday that pretty much applies to all these kind of days. Read it here and remember that we're thinking of you. Please feel free to carry on the discussion in the comments section. Check out the "recent comments" link to the left. Leave news updates, rumors, links and such in comments below.

Merry Christmas, gang. We'll be back soon.

$$$ Bro, You're A God Among Bros [TO]

$$$ Wall Street's dirty little secret-- EXPOSED. [DealBook]

$$$ Tim Sykes judges you. [Tim Sykes]

Albert Hsu, the former hedge fund manager, Cub Scout leader, and Aleksey Vayner mentor, who got into some trouble with the authorities when they found out he'd posted an ad on Collarme.com looking for someone to "rape and abduct" his former mistress, listed her home address and where she stood on the train platform for her daily commute, so as to really facilitate things for any would-be attackers, might get to spend the holidays at home with his family. Like I told devil worshiper John Carney, my letters to Santa have not been for nothing.

Disgraced Hedge Fund Manager Seeks More Family Time Before Jail [FINalternatives]

Since his little performance during Wednesday's conference call, a lot of people have been taking bets on how long it'll be before Sallie Mae Chief Executive Albert Lord is fired or involuntarily resigns. At Dealbreaker, we think this is ridiculous. This man shouldn't be fired, he should be promoted, and this might seem excessive to shareholders, but we suggest the prominent placement of a bronze statue in Mr. Lord's likeness, inscribed with whatever is Latin for "Let's get the fuck out here." We'll even consider chipping in, since poor Al lost about $200m in that little margin call from his local branch.

As a bit of housekeeping, I'd also like to take this opportunity to offer an apology. Not like the fake one I gave to Goldman last week, but a real, honest apology. Well, actually, it's not so much an apology as a clarification but whatever, let's not argue semantics. After all, it's Christmas. Some of you may remember that the last time we discussed A. Lord, I mentioned that I felt especially close to him because of his "predilection for cutting people down with dismissive statements such as those excerpted above reminds me so much of my father." Apparently my dad saw this mention, and felt that I took artistic liberties in my description. This was largely true, but I figured that since he rarely reads the site, it'd be no probs. Oh, but it was! My mother claims he was hurt-- this I find hard to believe, the man has never exhibited emotion in my presence-- my brother texted, "that thing about dad was cold," though his defense of the man isn't surprising, as he's always been my father's favorite. Anyway, at this time, I would like to say that contrary to what may have been implied earlier, I have a really good dad. To prove this, I've come up with list. Dad:

- you let me have a "Reservoir Dogs" table at my Bat Mitzvah party, where the theme was movies, even though mom thought it was inappropriate.

- you always came to all my field hockey games and cheered the loudest.

- you wouldn't let me go to prom with [redacted] junior year, because he'd just been caught with two pounds of marijuana in his locker. (I didn't speak to you for two weeks because of it, but I realize now that you had my best interest at heart).

- you paid my fine when I ran into trouble with the RIAA.

-you only yelled at me for a few hours that time I caused thousands of dollars in damage to your car, and lied and said I had no idea what happened. To this day I feign ignorance to how the bottom got ripped out, or what the mechanic was talking about when he told you, "I'm surprised the person driving didn't go through the windshield." To show you that I really do appreciate what a good dad you are, at this time I'm going to admit the truth. To the readers, before you jump at the chance take this annecdote as a reflection on the vehicular capabilities of women, don't. It's not a reflection on the vehicular capabilities of women, it's barely even a reflection on me. I drive really good usually. Anyway, dad: even though it wasn't a lie to say that technically, car parts-wise, I couldn't tell you what happened when I pulled into the parking spot, and when I meant to slam my foot on the brake, hit the accelerator instead, causing the car to jump over the cement divider thing at the end, put the car into reverse and dragged it back down to the ground...that's what happened.

Felt ripped off by this tribute? Here, have this, on me:

Last night after an important meeting, a source made me and Carney go to an ML fixed income holiday situation, which sucked...then he made us go to a no-words-for-it-bad-but-worse-than-the-holocaust-is-a-start club in the meat packing district that I ended up ditching them at (forgetting, rather idiotically, to ask JC for some cash, meaning I got to walk from 29th and 10th to 33rd and Park when it was -10 degrees out, which, if you haven't tried it, is delightful). Prior to that, though, someone gave the driver the wrong address and we ended up outside of Scores...thinking to myself that I'd rather go there than nightlife equivalent of a catheter with spikes, I asked 3 of the bouncers, "What's the crowd like tonight?"...two of them were like "great crowd, great crowd, come in," but one just sort of mumbled "great crowd" with an attitude and didn't make eye contact, which I took issue with. You probably don't know this, on account of my never having shared it before, but people who don't make eye contact seriously piss me off. So I said, as we walked away, "Next time make eye contact, maybe you would've made the sale." I think I made a real impact on him. In retrospect, I should've added, "fat boy," but what can you do. If you found this post to be a phenomenal waste of your time, please send a self-addressed stamped envelope to the DB headquarters, and I'll mail you back 5 dollars. Quick, though, before I change my mind, or take a nap under my desk.

Rush & Molloy send an update from Tigerland. It seems that the tiger striped-tattooed porn star has started to remember Seth Tobias. Christopher Dauenhauer, who goes by Tiger professionally, tells the Daily News columnists that "I often went with Seth to great destinations. He may have talked about me with Filomena during his drug binges. I may have been the only guy he'd ever been with. He may have thought I was his boyfriend. She may have gotten jealous."

There's nothing at all we can add to this story.

A wild Tiger tale in Tobias death [Daily News]

Merrill May Get Capital Infusion (WSJ)
It's become so hard to keep up with these writedowns and capital infusions. If you'd asked us yesterday whether Merill had already taken a big, multi-billion capital infusion we might've said yes. But apparently they're in talks to take one and apparently this is news, because it's the top story at the Journal this morning -- hence the top billing here. Nothing officialy, but probably somewhere on the order of $5 billion from the Singapore government-owned fund Temasek.

Philips to Buy Respironics of U.S. for 5.1 Billion (Bloomberg)
How many more of the EU takes over US company deals are we going to see? Probably lots until the currencies regain some semblence of parity. The latest: Philips acquiring med equipment maker Respironics for $5.1 billion, aka chump change -- the price of a latte in Moscow. Anyway, with all this cash coming into the US, time to build out our own sovereign wealth fund.

China unveils first locally developed regional jet (Reuters)
Interesting, the first China-made regional jet has been unveiled. At some point, China will be competitive in aerospace, but if we had to guess it'll take awhile longer. No need, just yet, for Airbus and Boeing to get too scared. But they can't rely on their laurels too much. Between wiring problems and bolt issues, there's obviously room for improvement. Anyway, the Chinese plane is named "Xiang Feng" or "Flying Phoenix". Btw, before we get the plane, how about the $5000 Chinese car we were promised (hello, Chery QQ).

Sweet Debut For NetSuite (Forbes)
A small step for NetSuite, a giant step for Dutch Auctions or something like that. After routinely dissapointing investors and participating companies, the theoretically sound Dutch Auction turned in a good performance, with the successful IPO of on-demand ERP maker NetSuite. Not only did the deal price high, there was even a good pop in first day trading. Still seems a bit odd though that there was such a pop, given that the market set the IPO price. perhaps there's a participation barrier. People still aren't comfortable buying via auction, so they wait until its on the market before placing their orders.

$$$ Goldman, Lehman, Morgan Lift Bonuses; Bear Cuts Them [Bloomberg]

$$$ Credit Default Swaps: Tick, Tick, Tick, Tick . . . [Overhedged]

$$$ How communication explains Morgan Stanley's losses and Goldman Sachs's profits [Blogging Stocks]

$$$ Where was Jimmy Cayne today? Not on that Bear Stearns earnings call. [Market Beat]

$$$ 101 Dumbest moments in business. [Fortune]

$$$ Wall Strip: We didn’t kill the market.

So after the New York Post reported this morning that Citadel Investment Group had taken a look at Bank of America’s prime brokerage unit, Citdadel attempted to throw cold water on the story by denying it was in negotiations to buy the unit.

But don’t take this denial at face value. The Post reported this morning that Citadel "has recently inspected the books of BofA's prime brokerage business.” And the Citadel denial consisted of the statement that it is “not negotiating to buy” to buy the business. Which doesn’t mean they didn’t look at the books, consider buying it, have talks about buying it or even begin negotiating. Essentially, all the said was that they are not currently in negotiations.

What’s more, the denial comes from an anonymous source at Citadel. The spokeswoman, Katie Spring, declined to comment on the record. If there was nothing at all to the story, why wouldn’t Miss Spring deny it on the record? Bank of America also wouldn’t comment, which means they also haven’t denied shopping the prime brokerage or giving Citadel a look at their books.

None of this means that Citadel is buying the prime brokerage. But it does make the denial a little less plausible. Instead of “throwing cold water” on the Post’s story, it throws some smoke at it.

Citadel not eyeing BoA unit: source [Reuters]

Money managers may start to move their business away from Bear Stearns, according to a low-profile manager of a large investment fund. He tells us that he is pulling away from doing business with Bear Stearns and that casual conversations with colleagues indicate that others may be making similar moves.

Bear Stearns has turned off some money managers with what sometimes appears to be a cavalier attitude towards lenders and other counter-parties. Today the Wall Street Journal reported that Barclay’s was suing Bear Stearns after two funds to which the British bank had lent money collapsed, leaving Barclays with holding the bag. Bear’s response—basically that Barclays should have known that it was risky to lend to the funds—has not endeared fund managers to Bear.

“They bragged about not having the firm’s money in the funds that had their name on it, and then told creditors to take a flying leap,” the fund manager said. “They’re a toxic counter-party. I don’t want them involved in any of my trades, in any way.”

Bear also owned a significant minority stake in ACA, the small bond insurer downgraded yesterday by Standard & Poor’s. Although Bear didn’t have a managerial role in ACA, it’s potential collapse does not sit well with some managers already wary of what the fund manager who spoke to DealBreaker called “the Bear curse.”

“To me, the report that their losses weren’t as bad as they might have been is just another stick in the eye to investors in their funds and counter-parties who lost money with these guys. I’m sure their shareholders are happy,” he said. “But let’s see how happy they are when Bear starts to lose business. People think reputational risk is hooey. Well, they’ll see.”

We didn’t contact Bear Stearns about this story because they still haven’t given us a reasonable explanation for why they blocked DealBreaker. So we’re counter-blocking them by not asking them to tell us they won’t comment on the story.

Update: More on the decline of Bear Stearn's prime brokerage business from the Financial Times. "Bear’s decline in prime brokerage began about three years ago and has been accelerated by its recent mortgage-related troubles, including the collapse of two hedge funds run by the bank’s asset management division," write Ben White and Deborah Brewster. "The troubles have raised questions about its financial stability."

Note to CNBC: That strikes about two thirds of the readers who emailed us about that little promo spot for tonight's "On The Money" as very, very funny. You should give whoever came up with that line a raise.

Citadel is often described as an investment bank masquerading as a hedge fund. And it looks like it may be moving even further in the direction of becoming a full-fledged investment bank. This morning Roddy Boyd and Zach Kouwe report for the New York Post that Citadel is in talks to buy Bank of America's prime brokerage business.

It's not surprise that Bank of America wants to get out of its investment banking business. Ken Lewis made that clear earlier this year, and BofA has been shedding senior bankers ever since. According to the Post, both the head of the prime brokerage unit and the head of its fixed-income business have recently left.

But would hedge funds be comfortable putting their trades through with CItadel on the other end of the line? There is already resentment about the way some prime brokers take positions conflicting with those of their clients. JP Morgan has been sued by Amaranth over such conflicts and there are perennial complaints about Goldman Sachs. Still, both JP Morgan and Goldman make good coin with their prime brokerage business, so the talk about conflicts hasn't hurt them.

Still, there a plenty of folks who are suspicious of anything those boys with the white boards over at Citadel do. They have proven eerily apt at turning positions that ruin competitors into money makers. One hedge fund manager we spoke with this morning laughed out loud when we asked if he would run his trades through Citadel.

"Then again, they seem to know my positions and strategy anyway. So why not? Maybe they'll accidentally tip me off," he said.

Citadel, BofA In Brokerage Sale Talks [New York Post]

Bear Stearns lost a bunch of money ($854 million, $6.90/share) in the fourth quarter, and is being sued by Barclays for allegedly starting a hedge fund in 2006 in order to offload the risky assets in another of its hedge funds that'd it lost interest in making profitable. Bear CEO James Cayne, bless his heart, is said to "not care less" about either piece of news, though a speech writer for Wall Street's Favorite junkie came up with this line, "We are obviously upset with our 2007 results," and attributed it to the guy. As an aside, I would just like to say that that I was not kidding about that thing I mentioned yesterday:

Remember the Craigslist guy from Monday? The one who made exactly $772,000 and was spending Christmas alone. The guy who sounded a bit too American Psycho-ish with his detailed description of his furniture and appliances? Mentioning "custom made oak dresser" and his "viking stove." This one?

Well, guess what? You were right. It's a fake. But it was so brilliantly faked that the author got dozens of responses from women interested in spending the holidays beneath his fifteen foot tall Christmas tree and other outsized objects he mentioned. The author, who writes at a blog called Cajun Boy In the City, has experimented with fake Craigslist in the past but seldom gets responses from women. Until now. Apparently, even bitter, self-centered materialistic guys can get teh attention with women as long as they're hitting the right numbers and work for Goldman Sachs.

So now we're going to send Bess out on a date with the Cajun Boy, as long as he agrees to spend the evening in character.

my holiday gift to you: "fancy being lavished during the holidays?" [Cajun Boy In The City]

Price Increases Lift Profit at General Mills (NYT)
We still haven't seen $100 oil, and for all we know we may never, but there's been a lot of excitement over $10/bushel wheat. It's sort of the poor man''s $100 oil. Perhaps it's a spillover effect, as people look for other stuff to get excited about. A couple years ago, when we first started writing here, we might have said something to the effect of, "oh, is there such thing a 'peak wheat' now too?" But now nobody talks about peak oil anymore, despite the commodity's rise. Pretty much everyone is in agreement that it has more to do with inflation, the weak dollar and overall demand/supply, as opposed to geological factors. So no need to take a pot shot at the peak oil crowd. Meanwhile, wheat king General Mills was able to pass along price increases, though it may not be able to do so in perpetuity. Perhaps it's all just a message: people, stop eating so much damn grain.

The Bear Flu: How It Spread (BusinessWeek)
The Bear Flu is serious, but let's not let it take our eyes of the real killer: bird flu. We must have a dual preventative track to avoid problems.

G.M. Said to Be Selling a Truck Unit (NYT)
GM may sell 'a' truck unit, not its main one, to Navistar, the maker of big industrial rigs. Obviously GM wouldn't sell its core pickup truck unit, since that's still regarded as a key cash cow, but its doubtful that investors will miss its medium-duty truck business. The automaker even shut down production of the vehicles to reduce market supply, never a real positive sign.

Oracle Beats Wall Street’s Expectations for Quarter (NYT)
By all accounts, Oracle is crushing right now.

$$$ Guess who thinks JL Spears's pregnancy matters to investors? [Blogging Stocks]

$$$ Awaiting the Truth about Ralph Cioffi's Departure [Jake Zamansky]

$$$ Church & Dwight Co. Inc. (CHD) [WallStrip]

Is that not a good enough justification for me posting this clip? Well how about this: it's after 5, I've run out of caffeine, I haven't had lunch, I'm tired and I haven't showered yet today. This is my gift to myself, and I don't have to justify shit to you. I might even post the Glengarry Glen Ross speech tomorrow just because I goddamn well feel like it.

I like to imagine that the performance you're about to watch was inspired by the show put on by Alfred Lord this morning, right down to the eye-rolling circa 4:47, and the sequined tank top. Check it out and tell me you disagree. I dare you.

"Investing in a buggy whip after Henry Ford created the Model T was not going to be fruitful no mater how good a buggy whip it was."

Back to Basics (Part Three) - Potential [ThinkBlog]

Bonuses out of Morgan Stanley will increase from $8.39 billion to $9.93 billion this year. The extra spending money will serve MS employees well, when they're all fired to make up for a near-$10 billion writedown. Taking one for the team is CEO John Mack, who will reportedly be pulling a Jimmy Cayne and forgoing his pile of unmarked twenties this year, and however unlikely, we move that for this statement alone, CFO Colm Kelleher should be stripped of his bonus, too, or given his plus Mack's, I can't decide: "If you were to normalize our business and take out this $9.4 billion charge, you would see that we had a record year across the whole enterprise."

Morgan Stanley Bonus Pool Rises as CEO Forgoes Pay [Bloomberg]

John Baudanza, an associate with the Lucchese crime family, one of the "Five Families" that runs New York, was sentenced to seven years in prison, for his part in a $20 million pump-and-dump scam. The racketeering ring, which Baudanza had help running with nine other colleagues from the Bonanno and Colombo families, employed all tactics you'd expect of any good P 'n D, and as well as a few slightly more colorful ones, including "beating a broker with a bat and then stabbing him in the head," "pummeling" a phone solicitor with a golf club, and kidnapping a stock promoter and "chaining him to a parrot until he paid an alleged debt." The whole thing was based out of Staten Island, and operated from 1994 until 2005. The take away here is that whereas your average crooks can typically only keep these things going for one to two years max, these guys did it, and did it well, for over a decade, without getting caught. And also that Italian mafiosos + their Jew accountants = unstoppable combination. Stevie Cohen knows what we're talking about.

Hedge Fund Mobster Gets Seven Years [FINalternatives]
John Baudanza [Wikipedia]

CNBC's Charlie Gasparino informs me that when he reported that Bear Stearns is holding talks to decide whether they're going to get behind Wall Street's favorite junkie or not, he was "hung over, not drunk." Meaning there's a chance JC really could get fired. I'm still choosing to say, "No, I don't believe it," but now, there's a quiver in my voice. Stay tuned.

Earlier: Please Say Charlie Gasparino Is Drunk And Making Shit Up, Please Say Charlie Gasparino Is Drunk And Making Shit Up

I like to think I live without regrets but I more or less want to kill myself for not listening to Sallie Mae's call this morning (a replay is not the same as hearing it live), for two reasons:

a. CEO Albert Lord's comment that although he sold 97 percent of his stock, "that doesn't reflect my optimism for the company. And I'll just leave it at that."

b. CEO Albert Lord's unorthodox (but awesome) way of finishing things up: "There are no more questions, let's get the fuck out of here."

Say what you want, but I know I can't be the only one who now feels a special connection to this man (because his predilection for cutting people down with dismissive statements such as those excerpted above reminds me so much of my father, and my childhood in general). Viva la A.Lord! But, you know, sell SML. That thing makes SMD look good. Which probably isn't fair, because, to me, SMD always looks good. No more stock tips for today.

Is the Fed's announcement that it's going to start to try and prevent questionable lending practice NOW kind of like Jamie Lynn Spears's boyfriend saying, "Hey, I'm going to run out to the Duane Reade for condoms, you need anything? Gatorade? Q-tips? (Oh, and by the way, do you have any money I can borrow?...I'm good for it...)" THIS MORNING?

CNBC reports that Bear Stearns's board has been holding informal meetings in the 383 Madison Ave. 14th floor men's room to discuss replacing BSC CEO Jimmy Cayne. None of us here understand why something like this would happen! and therefore choose to believe it's not true. We're not going to add another thing to this smear campaign until Englewood Cliff's produces a body. We're just going to lay down on the floor of the DB HQs, get into the fetal position and light up. And maybe cry, though that doesn't have anything to do with this post, it has to do with Britney Spears's 16 year-old sister being pregnant. So in a sense, I guess you could say, yeah, it does have to do with this post.

Bear Stearns Looking for Cayne Successor [CNBC]

[Alternative headline: Morgan Stanley: Okay, We're Thinking Of A Number Between 1 And 4 Billion. Know What It Is? Analysts: Your Credit Score. Your 900 Number. Your- MS: Stop. None Of These Are Right. None Of Them. Analysts: The Number Saltines John Mack Can Eat In A Minute Without Water. MS: Wrong...But Also Right...If You're Picking Up What We're Throwing Down. Preference?]

Morgan Stanley beat analysts' expectations for how badly this last quarter went, when it announced a net loss of $3.59 billion ($3.61/share), compared to last year's net income of $1.54 billion ($1.44/share). Analysts had previously predicted losses of 39 cents/share. The extra dollar or so probably has something to do with the $9.4 billion in write-downs, and unforseen costs related to MSIM's holiday party at the China Club last week. Speaking of China (Investment Corp.), the sovereign wealth fund was on hand to soften the negative $450 million revenue blow, by acquiring a 9.9 percent stake in the company, as China is wont to do. (Watch as it blows up in their faces, it'll be funny.) Also helpful for distracting from the facts was CEO John Mack's comment that "these [are] isolated losses by a small trading team in one part of the firm." I don't want to say we're hoping that the entire team is going to get laid off, because we're not, but should it come to that, wouldn't it be nice if they could go out in style? You know what to do.

Morgan Stanley Swings to Loss Amid Mortgage-Related Woes [WSJ]

Bear Stearns Chiefs to Skip Bonuses (WSJ)
This is going too far. Look, it's been a rough year at Bear (as elsewhere), but skipping bonuses? You gotta eat, right? Then again, you have to wonder how big the bonuses were going to be for Jimmy Cayne & Co. this year. As a totally objective statement, if they were too meaningful, they were probably too big. This is still just a report. It's possible that at the last second, they'll take the money. But all in all, probably some smart PR and a positive message to send to the mass of employees.

Fed's lending proposals too late to save homes (Mercury News)
An op-ed from the San Jose Merc is represenative of the views on the new fed mortgage efforts: too little too late. And you know what: that's awesome. The only good things that the government does are the cosmetic ones. You knew the new proposals were a total joke, because they were "discussed" in a filmed meeting, in what was obviously the most scripted conversation Ben Bernanke's ever been part of. Hilarious.

Martin's Double Vision (WSJ)
Ah, Kevin Martin. On the same day he lifted an old rule on owning newspapers and radio stations in the same market, he imposed a cap on the size of any one cable company. He maddens and infuriates everyone on each side of the aisle. No doubt if asked, he'd whip out the old chestnut, "when I've got big corporations and left-wing activist groups complaining about me, I know I'm doing something right!" (wink)

German business climate at 22-month low (MarketWatch)
See, the EU may not be that picture of economic strength you thought it was. German business statistics have slumped to a 22-month low. And there's all that stuff about shifting demographics, young to old, ethnic strife, socialized health care, enormous public debts. Sounds like us, except more consternation about immigration.

$$$ "The holidays suck. i never thought that i'd ever say that but this is the first time in my life as an adult that i don't have a girlfriend to share in the experience with and it sucks. bad. 3 weeks ago i came home from a night out for steaks and cigars with some of the guys from my office to find that she had cleaned out her drawer in my custom made oak dresser and left a note on my viking stove that simply said "i'm done." i've been texting her like 10 times a day but i haven't heard from her since.

What sucks even more about it is that i just got word from my boss at GS this morning about how much my bonus is going to be this year. wanna guess?

772k.

And you'd think i'd be happy, right? WRONG!" [BL: It goes on, and gets better, if that's possible] [craigslist]

$$$ Goldman’s One Bad Investment: Its Own Stock [Deal Journal]

$$$ Enough with the bonuses, enough with the layoffs: this is the real story of the day, and I don't care if you don't believe me because you obviously have no idea what you're talking about. [NYDN]

$$$ Deals: A Rousing Farewell to 2007?
In our M&A Roundup for the week ended Dec. 16, there's a distinct pick-up, and a harbinger of even bigger things to come. [CFO.com]

About a year ago, management decided to fire a bad trader. Unfortunately, one MD thought that another MD fired him and the other MD thought that one fired him. So, no one told him. Then, one day, he shows up for work and his key card didn't work to get into the building. He talked to security, and they let him up. Then, he couldn't log on to his computer. So, he called IT, and they told him he no longer works for us.

Earlier: Layoffs Watch ’08 Update: Citi CDO In '07

Is our beloved New York Post business section falling apart?

While the hoity-toity media mavens fretted that Rupert Murdoch would do something awful to their beloved Wall Street Journal—exactly what he was going to do or why he would buy a newspaper just to destroy it was never clear—the more enlightened among us worried about the fate of the business section of the New York Post. Would News Corp cannibalize the Post’s business section to bolster the Journal’s staff? Would they have an interest in keeping afloat two competing business news staffs?

Specifically today, and apparently “almost everyone” in New York, which we’re told means more than forty. At this time I would like to offer our condolences to the recent unemployed, but move that we use this opportunity to recall that yesterday, I said we needed to get more creative with how people are getting fired. I came up with a few out of the box ideas (“A game of Assassin,” “turn off all the lights for five minutes and let everyone slap whoever they can at will/random. When the lights come on, the people with the reddest faces should be fired,” “something having to do with a lethal strain of syphilis (the rule is it can't be treated)”), then asked you to come up with your own. No one did and today, those poor kids at Citi were probably brought into some random conference room and told how valuable they are but at this time don’t fit into the bottom line blah blah blah while a chick from HR passed out tissues. Who do they have to thank for that run of the mill, nothing special send off? You. And now you have to live with that.

But! There are so many more layoffs to come, and not just at Citi. What I’m saying is, if you don’t want next week's or next month's lame-ass, “you're a valuable asset to the team but management is restructuring the amount of retards they have working for them*” firings on your conscience, get off your asses and do something.

Earlier: Layoffs Watch '08: Citigroup

If We're Going To Do This, Why Not Have Some Fun With It?

*actually, that’s quite good, though unlikely, except at Bear, where they have no regard for the mentally disabled.

Not surprising given that John Mack used to work at a Gap, but:

"MS bonuses- a few of the high visibility/revenue guys were up as much as 20 percent but, broadly, most YE bonuses were -10 percent vs. 2006 for those in the highest tier in terms of performance appraisal. This applies to wealth management."

Yesterday the lads and lasses at Bear Stearns got their bonus numbers, which means that last night was ridiculous. It’s almost always this way around bonus time, with young bankers drinking themselves stupid either the celebrate a great year or mourn the final, appalling truth about their compensation numbers.

One young Bear-ette who last night found herself drunkenly eating a cheeseburger as she struggled to come to terms with the fact that her hourly wage probably worked out to just about what the guy serving the burger made.

“I haven’t eaten a cheeseburger in three years,” said the toned would-be femme version of a master of the universe. (Mistress of the universe has too many unintended implications.)

Look people. We know it’s tempting to self-medicate with food, but the answer is not in the extra calories. And the only thing worse than being poor is being fat and poor.

We've had word that Morgan Stanley and Bear Stearns had the bonus communications go out last night. Information on both is still sketchy and we'll update you as we get more details. (Send what you know to tips@dealbreaker.com or text it to our text tips hotline: 973-495-0177. We can be instant messaged at TheDealBreakers.)

We told that despite performance by Morgan Stanley's brokerage arm being up over 17 percent, the bonuses were much lower than last years. Bear numbers will also be lower but we're still compiling and collecting this information.

John Thain's plan to revive the fortunes of Merrill Lynch apparently involves undoing some of the slash and burn work of Stan O'Neal, who was widely criticized for forcing out some of the most popular executives at the brokerage. This morning the Wall Street Journal reports that he is bringing back former top bond guy Jeffrey Kronthal. J. Kro will be working as a consultant on subprime portfolio.

But here's where we have to get a bit personal, and for like the third time this morning depart from our usual royal we style. You see, J. Kro apparently got a standing ovation when he appeared on the Merrill trading floor yesterday, and not one of you shared this with us. Bess almost declared an all day blackout on Merrill news when she heard this. Trading floor action is one of the things we're supposed to be good at, lads and lasses, but we can only do this with your help. So, at least until Bess gets back this afternoon, we're not going to black out Merrill news. But you people had better fire up those emails because I don't know if I'll be able to talk her down from this when she gets back.

That said, the end of the Journal's piece on J. Kro's return reads like a help wanted ad: "John Thain, who became Merrill chief executive at the start of December, is seeking senior trading and risk-management executives to oversee the firm's trillion-dollar balance sheet."

Kronthal to Return As Merrill Adviser [Wall Street Journal]