$$$ Did Microsoft Overpay for Its Facebook Stake? [DealBook]

$$$ GLG Hits Investors With Exit Fee [Times Online]

$$$ The Only Election That Matters [Globe And Mail]

$$$ GOOG [WallStrip]

We spent part of the afternoon combing through our Career Center in search of the most interesting jobs. There are dozens to choose from, all categorized according to specialization. Our inspiration today was to find a job that might suit the folks from JP Morgan’s Latin American credit desk who were let go yesterday. Well, we’ve got some good news…

A bulge bracket European investment bank looking for a Vice President and a Director for Latin America Project Finance. Candidates must have experience in the Latin America markets, prior experience in project finance, and a rolodex of clientele.

Today at Citigroup, in accordance with Vikram's promise to shareholders that the company will begin taking steps toward realizing the enormous potential of the C, a member of the fixed income group was paid 3 grand to execute "the reverse bowl cut," according to sources. To claim the money, he must sport the haircut proudly on the trading floor for a full calendar week. We're told the money is being donated to charity.

Pictures after the jump.

We’re pretty much suckers for anything about American Psycho. The obsessive attention to things like lunch reservations and business cards are more frightening than any of the mass murder scenes because they happen to be strikingly true. Some people, however, don’t quite get the subtext. And for those folks, the boys at College Humor have helpfully re-imagined a crucial scene in American Psycho where all the subtext is brought to the foreground.

Which is a fancy way of saying they’ve made a penis-joke version of American Psycho. Check it out after the jump.

“I was walking around with her, and all the big shots were coming up and introducing themselves. They were gaga over her,” a “financial industry source” tells Bedard.

The New TV Money Honey [US News]

Mark Petrinovic, JPM's head of Latin American Credit, along with 4 MD's and 1 ED, are said to have been laid off yesterday. Supposedly the cuts were "quite unexpected as they were unrelated to the Bear integration." Which begs the question, would you rather be fired through no fault of your own, or for reasons that can be placed squarely on your drug use*? Personally, we're inclined to go with the latter. If** I'm going to get fired, I'm going to do it on my own terms.

*Merely a "for instance."
**"If," ha.

As part of Morgan Stanley's new cost-cutting initiative, taxi reimbursement will not be provided until after 10 pm.

There's mucho dinero to be made in this mortgage meltdown situation, but instead of jumping in your time machine, traveling back to last summer and shorting subprime, why not get creative about it? According to the Journal, anyone interested in getting rich should dive into the fish fucking business, stat. Michael Corkery reports that the Gambusia affinis, i.e. the "mosquito fish," is making a name for itself in California, Arizona, Florida and anywhere else you might find a ton of foreclosed homes con swimming pools. Apparently the abandoned estate's water-based recreational facilities are becoming infested by mosquitoes, and causing worry about the spread of diseases like West Nile. Instead of using humans to spray pesticides, the fish are increasingly being deployed to the areas of concern, where they eat up to 500 larvae a day. "They are the real heroes," said Josefa Cabadad, a technician with the Contra Costa Mosquito & Vector Control District. "I've never seen a mosquito in a pool with mosquito fish." Start breeding.

For Mortgages Underwater, Help Swims In [WSJ]

I'm not exactly sure what we're supposed to do with this but a (soon to be?) former Bear employee just bcc'd us on this message to a higher up at the bank so we'll put it out there. That's what we do at DealBreaker, give voices to those who cannot be heard. We're practically a human rights watch group, wouldn't you say? I just wish we'd been non-blind carbon copied, in which case it would be appropriate to re all with "Yeah!" or "We concur!" or something to that effect. If anyone else has a message they'd like to more widely disseminate, send it our way.

It saddens me that you have so simply, arrogantly and cruelly changed the severance classification of the equity research department personnel on the very day no-less that layoffs commenced. This change is reprehensible and you-can-bet grounds for litigation. Many of us in the research department were persuaded to stay and await final determination of our employment status because of the way the severance packages were structured; mind-you, a very deliberate structuring on JPMorgan/Bear's part for the very reason to dupe us into staying at Bear. Shame on you! You lied! And, of course, the loyal employees your glib lies hurt the most are those who earned the least, the Associates.

Barbara Walters' book came out this week and it's not just for those of you interested in a behind the scenes look at the catty infighting over at The View, though rest assured, Julian Robertson, there is plenty of that (as Babs tells it, "Star Jones was so obese she could barely walk onto the...set"). Apparently while Walters was dating Alan Greenspan, she was also seeing former Bear chairman Alan "Ace" Greenberg. (Ironic enough for you? Well try this one for size-- though it's not included in the autobiography, we hear the lady of the night additionally had a standing appointment with Jimmy Cayne ever week, which ultimately resulted in the birth of Ben Bernanke.) Before you go writing BW off as a harlot, keep in mind that the men served two distinct purposes-- Greenberg bought her a show dog, and Greenspan doled out terrible investment advice.* It wasn't all fun and games, however. Babs notes that lots o' confusion would ensue when her maid would take messages and report that "Alan called." Since she refused to refer Greenberg by his nickname-- like Cayne, she thought the handle "Ace [in the hole]" was stupid and, in her words, "hypocritical, considering the number of times I had to shout, 'No, Alan, no! You're not even close!'")-- Walters and the cleaning woman came to differentiate the two as "loud Alan" (Greenberg) and "soft Alan" (Greenspan). Though he rarely identified himself, Walters says it was readily apparent when Cayne was calling, because "you could hear the the announcer's voice over the loudspeaker at the tracks in the background."

Barbara Walters On Greenspan [National Economist]

*Such as telling her not to buy a 4-bedroom co-op on Fifth for $250,000 in 1977.

Questions of Rent Tactics by Private Equity (NYT)
Sort of a classic NYT business section article here... Apparently, private equity firms that have bought into NYT housing developments have a business model that depends on a high degree of renter turnover -- i.e. folks in rent-controlled units leaving at a higher rate than in other buildings. And so tenants are claiming that renters of rent-controlled units are subject to various harrassment and whatnot. You can judge for yourself the situation, however this has to be one of the best/worst paragraphs we've seen in the paper: "Private investment funds have boomed in recent years, buying companies they considered undervalued in industries as diverse as communications, hotels and energy, streamlining operations and then selling them at a profit. For example, private equity firms have bought nursing homes, often slashing expenses and reducing staff to increase their profit." Really good example there.

Would making insider trading restrictions optional for corporations suffice? (Knowledge Problem)
This is a debate we've always enjoyed: why can't companies just say: "We allow our employees to trade on inside information, caveat emptor." Given the arbitrariness of current insider trading laws (you rarely, for example, see anyone hauled in for not selling shares based on inside info), this always seemed like it would work. The above post offers some interesting points to think on.

The 18-Cent Solution (NYT)
McCain and Hillary have been looking for an economist to support them on their plan to eliminate the federal gas tax. We've been figuring that one would eventually, you know, just to get some exposure, but for a long time, nobody did. Finally, Bryan Caplan (most known for his recent work "The Myth Of The Rational Voter") has done it, penning an op-ed in the NYT in support of the measure. It's tepid as hell, and it basically comes down to this: it's not the worst thing you could do. In other words, politicians have that urge just to do something, and usually that something is fairly awful. It wouldn't be hard for you to come up with a list of ten awful ways politicians might try to solve the gas problem. But, as Caplan explains: cutting gas taxes isn't really so awful, and if it precluded other measures, it wouldn't be so bad. Now let's see Hillary run to trot this guy out -- of course, making no mention of his recent book.

$$$ How Inefficient Are Seals? [LoSC]

$$$ Insider trading is a great idea [1-2]

$$$ Rupert, Make Me 'WSJ' Chief [WSJ]

Steve Schwarzman, the head of private equity giant Blackstone, has found himself in hot water after he made some remarks at his firm’s boondoggle at Florida’s Boca Raton Resort & Club. In an early morning session, Schwarzman was noodling over Blackstone’s failed attempt to buy the mortgage company PHH, a deal that collapsed when Blackstone discovered no one was willing to lend it money for the acquisition, Peter Lattman explains on DealJournal. To illustrate just how radioactive the mortgage industry has become to financial players, Schwarzman decided to exercise his well known penchant for world history.

“Trying to buy a mortgage bank in the midst of the subprime crisis was the equivalent of being a noodle salesman in Nagasaki when the atomic bomb went off. Not a lot of noodles left, or even a person, and that’s what happened to us on this deal,” Schwarzman said.

Some are now speculating that this remark could have some serious fallout with Blackstone’s business efforts in Japan. If it does mushroom into a major issue, it could cast a cloud over Blackstone's many important Japanese connections. Apparently, some of those Japanese types don’t find noodle salesmen appropriate material for homey, jokey anecdotes.

Steve Schwarzman’s Take on the Subprime Mess [DealJournal]

Things, making money-wise, have not been going so well at Tom Hudson's Pirate Capital for a while now, but we assumed that the addition of Michael Bolton's daughters, Isa and Holly Bolotin, to payroll as girlfriends and fund managers would straighten things out. When Isa left to join Silver Point Capital in December, we were slightly nervous but held it together, confident that Holly's masterful stewardship of assets would be enough. Then Hudson got a new lady who soon became his fiance and somewhere along the line the last remaining Bolton offspring got pushed out and now all hell has broken loose:

From: [redacted]

To: tips at dealbreaker dot com

Subject: Pirates abandon ship??


Your favorite Pirates seem to be moving out of Norwalk. Put up a sign in the lobby cafe of their building selling their chairs for $500.00 and seem to be moving other desks out of the office today..

Obviously all the homeowners who read DealBreaker bought their pads in cash, but for the one or two of you with mortgages, listen up: make those payments. And we don't say this because we care about you losing your house or because we're worried about more securitized mortgage products defaulting, but because if you don't the government's going to come poking around and when they do they're going to find the grow house you set up and you will go to prison. Period. End of sentence. (On the plus side, you'll no longer have to go into the office every day with the gripping fear you're about to get laid off, but you'll also be robbing yourself of the chance to be one of the lucky recipients of a visit from The Cheeseteak Fairy, who does not make house calls.)

Foreclosed Home Becomes Marijuana Farm [USNews]

To hear the heads of Wall Street’s largest financial institutions speak, the worst of times are behind us. But a new wave of pressure seems mounting as corporate borrowers get squeezed by tightening credit and a slowing economy. High yield bond defaults are up and going higher as companies find lenders unwilling to refinance risky loans (non-investment grade lending is down 70% this year). And now companies have begun drawing down on their revolving lines of credit, sucking even more capital away from Wall Street, the New York Times is reporting.

Those of you not involved in corporate finance might not appreciate how much banks hate when borrowers draw down on revolving lines of credit. Typically a corporate borrower will have a revolver built into its larger credit facility. But unlike bond issuances and syndicated term loans, banks cannot easily hand the credit risk and capital requirements onto other investors. In short, when borrowers draw down revolvers that money comes out of Wall Street’s coffers.

Banks are already under tremendous balance sheet pressure following the $300 billion write-downs and credit losses over the past year, and the threat of corporations drawing down their revolvers could exacerbate the situation. The New York Times, in a somewhat panicky tone, notes that in a worst case scenario of massive revolver draws, banks could be forced to sell assets or raise money to cover the loans.

The banks are downplaying the risk, of course. “Even in the most volatile markets, including last summer, we have seen very few companies draw down their revolvers,” Chad Leat, chairman of the alternative asset group at Citigroup, tells the Times. “Occasions when it did happen have been unique.”

We find this completely reassuring. Banks, especially Citigroup, have proven so effective at anticipating crises in the past year that we wouldn’t even dream of doubting Chad.

Banks Fear Increased Demand for Corporate Emergency Loans [New York Times]

We don’t usually bother with trying to win polls or prizes. It’s just not out thing. We’d rather spend our energies bringing you fake Citigroup ads or reporting on the latest ways Ace Greenberg has found to insult Jimmy Cayne.

But this morning a loyal reader directed our attention to the Globe & Mail’s poll asking “Who are your five favourite finance or investment bloggers?” (They’re Canadian, so they haven’t yet learned to spell “favorite” correctly.) A host of our own favorite blogs are listed there, as well as quite a few we’ve never heard of. But it was a bit embarrassing to discover that we’re currently ranked below Canadian Capitalist, which describes itself as a “Canadian personal finance” zzzzzzzzzz.

Sorry.

We fell asleep. Where were we? Oh, right. We’ve decided we want to win the poll. So click here and vote for DealBreaker, please. Thanks.

Andrew Ross Sorkin reports that the bukkake party is officially over. A year after Fortress Investment Group's HISTORIC!!!! IPO, which lifted off at the high end price of $18.50 and proceeded to rocket out of the gates with a debut on the market at $35, the hedge fund/private equity firm has fallen to $13.64 (if you're not too saddened by the notion of Fortress no longer the splooge-fest it once was, take a few seconds to try and spot DealBook's math error*). FIG's quarterly profit dropped 74 percent, with revenue declining 54 percent to $177 million (specifically, the firm's pe funds, publicly traded investment vehicles, liquid hedge funds and hybrid hedge funds plummetd 64 percent, 33 percent, 50 percent and 93.5 percent, respectively). In more uplifting news, Fortress is rumored to be considering listing on the Tokyo stock exchange, where FIG CEO Wesley Edens has heard the business community is much more likely to have large numbers line up to buy shares on one's face.

Fortress Falls on Yet Another Drop in Profits [DealBook]

*the answer [GP]

Something strange is going on. First, we find out that Goldman Sachs's Global Alpha (which, for the last year, has been playing a parlor game with its colleagues under the Goldman Sachs Asset Management umbrella that involves seeing which fund can lose the most amount of money), was up 5.4 percent in April and 9 percent year to date. Crazy, but can probably be chalked up to the good vibes the ValueStockTips guy's been sending GS's way. Now we get the against god's plan news that a Bear fund is up. Reuters reports that BSC's Emerging Markets Macro Fund posted gains of 8.9 percent for April. A Bear fund. A fund run by Bear. A fund that Bear runs. Gained and didn't lose. Almost nine percent.

Of course, EMMF lost 11 percent in March, and 15.2 for the first quarter, so it's still technically down 7.6 percent for the year but still. This is nuts.

Bear Stearns' $1.2 billion macro hedge fund sees bounce [Reuters]

The Times, of "I'm not trying to start shit" journalism, wrote about the McKibbin lofts in East Williamsburg yesterday, warehouses at 248 and 255 McKibbin Street, inhabited by around 300 people each. For $375 a month/person (if you chose to share "a four-by-six cubby") or $530 to 800 a month (for a "cubby" of your very own), "artistically"-inclined twenty somethings get to rest their heads in spaces that one resident generously described as looking "more like doghouses than rooms", and another described as one big "public bathroom," where there's zero privacy and music blaring at all hours of the night. Other amenities include bedbugs, having your shit stolen, and being judged for watching TV, which is too commercial and inhibits the creative flow. Though most people love it at first (how could they not?), some say that after a while, the being woken up by the band practicing at 3 am, and the being mugged, and the having a 40 thrown at your head start to get old. But! It could be so much worse. According to poet Eirehan Failte:

“Even when it’s really loud, it’s still better than some terrible stock-trading roommate listening to Fox in the next room.”

Are you people going to take that? The insinuation that YOU WATCH FOX?

Young Artists Find a Private Space, Only Without the Privacy [NYT]

GLG Partners, the London-based hedge fund that's seen what it would rather you not characterize as an 'exodus' of personnel over the last month, said it "hopes" to retain a modicum of assets from the emerging markets funds run by Greg Coffey, who resigned in April, and then withdrew his resignation, and then reinstated it. At the start of the year the value of Coffey's funds was at about $7.2 billion, before dropping to $6.3 due to investment losses. Noam Gottesman, the co-chief executive of GLG who has been known to say out loud that his former employees cease to exist once they abandon him, commented, surprisingly lucidly and suspiciously calmly that the firm has received $1.7 billion in redemption requests so far, and that the worst case scenario will leave them with about $2 billion. "Obviously," we're sure he wanted to say but didn't, choosing instead to give off an impression of sanity, "it's not going to come to that, once investors get wind of this."

It's been pretty well-documented that Goldman Sachs isn't so good with the hedge funds. Global Equity Partners, Global Equity Opportunities, GSIP-- none of them can get it together. Leading the way has been Global Alpha, GS's flagship fund-- i.e. the central showcase for the unbridled abnormal genius that is Goldman Sachs Asset Management-- which impressively lost more money in 2007 than almost any other hedge fund. Which is why it warms our hearts to receive word that GA is up 5.4 percent for April, and a whopping (compared to negative 40) 9 percent year to date. We're so psyched about the turnaround that we're not even going to suggest that this is an early sentinel of destruction. All we're going to do is this:

By far, our favorite part of yesterday's New York Times story on the battle of nitwits at Bear Stearns was the news that chairman Jimmy Cayne was recently required to pay a commission of $77,000 for selling his stake in the bank. The maximum fee charged to Bear Stearns employees is usually $2,500.

Who charged Cayne that fee? Alan "Ace" Greenberg, the fabled trader who ran Bear Stearns before Cayne took over. Greenberg told the Times that Cayne was ineligible for the $2,500 fee cap because, after being forced out of the chief executive's job in the wake of subprime losses, Cayne was no longer an employee.

"I don't understand why he comes in," Greenberg says. "He is not employed here anymore."

Papa John's surpasses $1 billion in online pizza sales (AP)
Why anyone would pay hard money for online pizza is beyond us. But you know kids these days: with their Facebook and its juvenile practice of gifting nonsensical items. Still, so much money in it. And Papa John's of all companies. Again, quite surprising, but if the model works, that's great.

Wave of Lawsuits Over Losses Could Hit a Wall (NYT)
This story probably hasn't gotten enough press: what will the lawsuit situation look like when this credit collapse is all over. We're still sorting out dotcom related law suits (or if we're not still dealing with them, that's a recent change), and those losses were sort of peanuts to some of the hits investors are taking here. Granted it's different -- there weren't many retail investors in risky SIVs, etc. But still, where there's a loss there's a suit.

Best Buy to Invest in U.K. Retailer (WSJ)
Best Buy and Europe's (quaintly named) Carphone Warehouse have announced a JV, whereby Carphone Warehouse will fold its stores in with Best Buys in exchange for a cash payment. The two chains will operate as one company on the continent, although the smaller footprint shops will still be branded Carphone Warehouse, while large, big-box Best Buys will still be Best Buys. We're always a little skeptical of these retail situations with multiple names and store footprints, but maybe they won't integrate them too deeply. And maybe it's time to change the name away from Carphone Warehouse. Just a thought.

Toyota's Net Income Falls 28% (WSJ)
They continue to get tripped up: A combination of a strong Yen and a rough market in the US pushed Toyota's net income down by 28 percent. Sales were up, however, a modest 3.8 percent, so the problems can't totally be pinned to seemingly top-line factors. For the coming year, Toyota says its profits will come in below expected. Toyota shares currently trade around $104, down from a high of around $140 last year.

$$$ Word Problems For Future Hedge Fund Managers [McSweeney's]

$$$ A White-Collar Sentence of 330 Years [USNews]

$$$ Fallen Wall Street Loudmouths In Escalating Trash Talk Feud [TimSykes, Gawker]

$$$ Is this really any more reassuring about the meaning of "Citi Never Sleeps" than our video?

Since C's new slogan is “Citi Never Sleeps,” will the firm accordingly be passing out amphetamines to the staff, in case any two-bit reporters plan on doing a little late night undercover work to make sure everyone’s taking this thing seriously? And if so, will the drugs be distributed using the same revenue boosting plan the firm's got going with its unused box seats, e.g. free for higher-ups, market price for peons? Interested parties would like to know.

We hope you’re not planning on taking a car out of Manhattan tonight. Hundreds protestors objecting to the acquittal of police officers who shot and killed Sean Bell have launched their attempt to traffic mayhem today by blocking key commuting intersection, including entrances to the Brooklyn Bridge, the Holland Tunnel, the Queensborough Bridge and the Midtown Tunnel.

Cops have been arresting dozens of demonstrators in an effort to prevent the evening commute being disrupted but NY1’s coverage indicates that at there are far more protestors than the police can handle quickly.

Manhattanites shouldn’t get too smug. Traffic throughout Manhattan will quickly become snarled if the exits off the island are blocked for very long. Your safest bet is subways and trains. Or, better yet, get yourself into the local watering-hole and drink the commuting problems away.

Writes: I really do have an amazing job…But it’s also very stressful. I feel a lot of pressure. Sometimes, more than others.”

Cody Willard is: giving Cody Willard a pep talk
Writes: “…and it just struck me once again that I have to be on my A game.”

Cody Willard is: taking it several eras back
Writes: “Mighty dog” (twice)

Cody Willard is: starting to freak the fuck out
Writes: “But…that means more work and pressure and being on an A game for SMART people. [Every day.] And again tomorrow. And the next day. [And the day after that.]”

Cody Willard is: asking the hard questions
Writes (no joke): “What the heck am I doing on TV?”

The Cody Word [FoxBusiness]

It’s not surprising in the least that J-Cay would be the type of person to refuse to refer to an elder by the nickname he so obviously loved. Still, the extent to which JC went to deny Alan “Ace” Greenberg one of the last remaining pleasures in the twilight of his life is stunning. According to Landon Thomas, Cayne “makes a point” to “never” use the handle, and has “a standing order among some of his closer associates that anyone who uses the name Ace in his presence, owes him $100.” Due to the fact that virtually no one else at the firm shared Cayne’s inability to utter the one syllable proper noun, this is actually considered to be one of the J man’s most prudent business decisions.

Also in line with what we know but still beating his own record at prickish behavior is the story about how Cayne “convinced” Greenberg to stay at Bear last year, after he threatened to leave, citing a lack of respect, mostly from the big guy himself. The board, trying to stave off a PR crisis, told JC to get in there and make nice. Obviously any ounce of sincerity was out of the question, but they were probably under the impression Cayne could at least fake some stuff about Greenberg being “so important to the firm,” “a valuable part of the team,” “a living antique we don’t want to lose,” and so on and so forth. As it turns out, not so much!

Apparently all Cayne was capable of was citing some speech he’d given at a dinner that mentioned Greenberg’s previous work, before getting pissed off that a man of his stature had even been asked to do something so demeaning, and shouting “Alan, this is the opposite of disrespect, so don't tell me you are disrespected” and walking out of the room. In Cayne’s defense, he did have the respect not to put Greenberg in a choke hold and ask, “Why don’t you just die, old man?” which you know he wanted to, but still. Way to make the guy feel wanted. (Another thing to note, for fairness sake, is that the reason Cayne had to cut things short was because he was late to play golf, and not because he didn’t “give a baker’s fuck if He Whose Nickname I Shall Not Say stuck around or not.”)

Shockingly left out of the article is the rumor we’ve heard that when Cayne found out those early negotiations between JPMorgan and the Fed had resulted in the Fed, feeling the equity investors didn’t deserve jack, coming up with the $2/share deal, JC was so insulted that he said he’d rather see Bear go to zero than take two, and threatened to take adequate steps to ensure that end. (Cayne scrapped the idea when the Fed supposedly told him they spend the next twenty years investigating every move he ever made at the firm which, I think we can all agree, would’ve been awesome, and would clearly include proof that JC gave away 1,000 shares of BSC to make the pictures of him taping the two-dolllar bill to the door of 383 Madison go away.)

Oh, and “Ace” says that one of the reasons he wanted to leave, in addition to being disrespected, was a bout of depression stemming from his puppy not placing well in dog shows. Enjoy it while you can, Jamie Dimon.

Behind Bear Stearns' demise, a royal battle at the top [IHT]

When we learned this morning that Citi CEO Vikram Pandit had announced at 5:03 this morning that the financial giant was adopting "Citi Never Sleeps" as its new company motto, we immediately began anticipating the new advertising campaign that Citi will doubtlessly unveil.

And then we decided we couldn't wait for Citi. Pandit's got a lot on his mind, and the bank is strapped for capital. Why not devise an advertisement for the bank? You know, just to help out. Of course, we may understand the concept of eternal insomnia slightly different from Citi, which imagines that ‘Citi Never Sleeps’ conveys the image of a bank with "boundless energy to serve customers.”

Our Citi ad after the jump.

President Bush nominated Washington University Law School professor Troy Paredes to the Securities and Exchange Commission yesterday. If confirmed by the Senate, Paredes would replace DealBreaker’s favorite SEC commissioner Paul Atkins. We’d feared that the loss of Atkins, who’s been a consistent critic excessive financial regulation, would be a blow to the SEC. But Paredes looks like a strong successor to Atkins.

Paredes, who is 37 years old, teaches classes on corporations, securities regulation, corporate finance, and the theory of the firm at the St. Louis school. His published work has focused on the political and psychological causes of excessive financial market regulation, as well as the psychology of corporate decision making. The choice has been endorsed by Larry Ribstein, a professor at the University of Illinois College of Law and the author of the Ideoblog.

Paredes has written that the SEC’s decision to require hedge fund managers to register with the commission—a policy which was later struck down by the federal courts—may have been a reaction to the accounting scandals of the late nineties. The commission "did not want to get caught flat-footed and criticized again" after taking a beating from following the collapse of Enron and WorldCom. In an era when everyone seems to have their own pet plan of new regulations following the subprime disaster, this sounds like exactly the kind of approach we need on the SEC.

We fully expect that Paredes will come into criticism from people whose tacit assumption is that only enthusiasts for regulatory growth should be placed in positions of power at regulatory agencies. Bush is right to ignore this question begging approach by appointing an insightful critic.

Bush Nominates Law Professor Troy Paredes To SEC [Dow Jones Newswires]

As you’ve probably heard, the U.S. Department of Justice is investigating whether or not UBS helped its clients evade taxes. Yet another less than shining moment for the Swiss bank, on the heels of writing down trillions, laying off millions, and demonstrating an extreme inability to take a joke. Or is it? Obviously that’s how the naysayers (Credit Suisse) would like to see it, but from our angle, the so-called "crimes" committed between 2000 and 2007 are the first indication of UBS trying to do right by its clients. We should be applauding UBS for such efforts, not knocking it down-- they kinda sorta give a shit! About people other than themselves! Not so much shareholders or anything (let's not go crazy), but maybe if we start offering positive reinforcement for good deeds now, there’s a glimmer of hope that perhaps, many, many years down the road, they'll consider it.

UBS Faces U.S. Tax Evasion Probe; Employee Detained [Bloomberg]

A lot of you have been wondering if C’s new slogan, “Citi Never Sleeps” is for real. It is. I know it’s a stretch to ask a rational human being to accept, but stay with me, ‘cause it’s all about to make sense.

Sources tell DealBreaker (enough with the anonymity, talkin’ Jimmy Cayne here, informant #1**) that the new tagline is the first step in Vikram Pandit’s “Double Secret Plot To Golden Parachute” plan. You see, reader, Vik is smart enough to recognize that there’s no way to fix the train wreck that is Citi. The inevitable end game of this folly is “I get shitcanned and get my payout.” And, as an astute businessman, Vik knows that the sooner he gets fired, the less the board can hold him accountable for, and “the more loot Vickie keepie.” He's got a much stronger case to demand mucho dinero after 6 to 8 months of inane ideas and stock price dropping directives ("come in to work on no sleep! It'll help us to better assess risk!") than after three years.

Which is why, as fast as he and the brain trust can come up with them, he's implementing as many stupid ideas as possible, and has even set up a tips line that the public can use to proffer suggestions (we'll send over any worthy ideas from the comments section this afternoon, so start thinking). As Cayne tells us, “It’s basically Vik’s ‘accelerated path' to joining his boys—me and Stan, no Prince—in Maury Povich’s basement.” Cayne added that while he's "skeptical" that Pandit will be able to approach "Jimmy levels of fuck up," he supports VP's plan wholeheartedly, "'cause we're running low on snacks, and the two-- yes two-- assistants Bear's still got working for me act all put out when you ask them to make chip runs."

Just yesterday we were learning that Vikram Pandit was concentrated on the small things rather than vision. But in the wee hours of the morning he sent out an email showing that he’s totally changed his mind. Now he’s on to real big things—like company slogans!

At Citi, insomnia isn’t just a chronic problem for bankers worried about losing money or losing their jobs anymore. As Bess Levin reported this morning, it’s the financial giant’s new company slogan: “Citi Never Sleeps.”

Never sleeping is a sure sign of insomnia, which is itself usually a symptom of stress. It can have some seriously deleterious consequences, some of which might not be endearing to Citi’s shareholders or customers. Insomniacs suffer from poor concentration and focus, difficulty with memory, and impaired social interaction.

Which actually sounds a lot like the Citi we all know so well. At least Pandit’s being honest with the public about Citi’s desperate condition.

We’ve finally gotten around to reading the words that the Bearded One spoke at Columbia Business School on Monday night. Stitching together his various proposals, it’s clear that Ben Bernanke has become a partisan of big government. The way we read it, he pretty much calls for the federal government to bailout lenders who have provided mortgages for homes that have suffered major declines in value.

At one point in the speech, Bernanke called on Congress to expand the Federal Housing Administration, both in terms of its role in issuing mortgages and determining underwriting strategies in order to help “troubled borrowers.” How does he expect the expanded FHA to help? By bailing out lenders with mortgages where the principal is now worth more than the value of the home.

“In some cases, when the source of the problem is a decline of the value of the home well below the mortgage's principal balance, the best solution may be a write-down of principal or other permanent modification of the loan by the servicer, perhaps combined with a refinancing by the Federal Housing Administration or another lender,” Bernanke said.

In other words, the Federal government should step in to refinance loans in danger of defaulting due to the decline in housing prices.

Citi CEO Vikram Pandit just sent out the following memo re: change in tagline to all employees. I like it because it shows he’s really taking a stab at turning the diversified whorehouse into a profitable company, though, in all objective sincerity, if he really wanted to make this thing work, he would’ve gone with our motto suggestion. Which makes me think that actually, this has nothing to do with giving a rat’s ass about whether or not the company stops losing money, and everything to do with “having it up to here” (gestures towards head) running a company that cites Larry the Cable Guy as its spiritual leader.

From: VikramPandit@citi.com

Sent: Wednesday, May 07, 2008 5:03 AM

To: VikramPandit@citi.com

Subject: Citi Never Sleeps

I am pleased to announce "Citi Never Sleeps" is our new tagline.

I believe "Citi Never Sleeps" captures our organization's relentless commitment and boundless energy to serve customers in more than 100 countries, our global growth strategy, and our long-standing reputation
as a global leader in innovation.

"Citi Never Sleeps" is a newer version of the world-famous tagline that debuted 30 years ago and which continues to hold considerable brand equity.

This advertising enhancement builds on Citi's existing brand, one of the most valuable brands in the world, which was further broadened through global advertising campaigns last year, and supports the company's rich history of serving customers any time and any place through a variety of channels. The brand promise of driving success and the brand architecture rolled out last year remain intact.

Regards,

Vikram

2008 Democratic Presidential Nominee (Intrade)
You know the media expectations game. There were actually some polls that had Barack Obama winning Indiana. But, he so consistently collapsed on primary day that small poll leads for him usually translated into significant, 10-point losses. SO when that didn't happen, and instead lost by just 2 percent, in a race that went deep into the night, the media called him the victor. Russert called him the nominee and he ticked up about 8 points on Intrade to around $.88 on the dollar.

Sprint and Clearwire to Combine WiMAX Businesses, Creating a New Mobile Broadband Company
Word of this report had leaked last night, and now it's official ailing Sprint and ailing Clearwire (started by ex-AT&Ter Craig McCaw) will merge their wireless broadband businesses (that offer internet over WiMAX) in hopes that a combined company will alleve both of their collective misery? Beyond that, it's got a number of big cable company investors -- a fresh $3.2 billion -- so yeah, seems like a gigantic industry conglomerate. Perfect.

Countrywide Admits Errors at Senate Hearing (NYT)
Steve Bailey of Countrywide admitted to a Senate panel that certain loan officers at Countrywide have made errors. Yes, it would seem that way wouldn't it.

$$$ UBS quits the US muni business [FTAlphaville]

$$$ Investment banker still needs a secretary [craigslist]

$$$ Anal_yst goes shopping [1-2]

$$$ How Not to Make a Deal [NYT]

A few months ago, we beat up a couple of Portfolio writers on the subject of municipal bond insurance until it got so easy we started to feel bad for them. Their contention was that bond insurance was a scam perpetrated by a conspiracy of investment bankers, ratings agencies and insurance companies. We argued that bond insurance persisted because of genuine market demand for lower risk investments.

At the heart of the Portfolio position, however, was a genuinely important insight: municipal bond default rates were so low that insuring the bonds seems irrational. Do you really need to purchase insurance for a class of bonds that have a 0.5% historical default rate?

An article by one of favorite New York Times writers, John Tierney, points out that irrationally insuring against small risks is not confined to muni bonds. “We buy insurance not just for peace of mind or to protect ourselves financially, but because we share the ancient Greeks’ instinct for appeasing the gods,” he writes.

Fox Business suggests, completely seriously, that you job seekers send video resumes to your employer of choice. While with the exception of Barclays, which only accepts CVs in this form, it might seem like a slightly unorthodox approach, we say go for it. For those unsure as to the appropriateness of a VR, or of his/her camera readiness, try doing a practice run with a submission to UBS. If it doesn’t work out, you can always be our intern.

The Economist—the weekly magazine that unwholesomely purveys smarty-pants English attitudes that so many undergraduates, junior i-bankers and other insecure Americans find so impressive—is winning over new readers: teenage rappers. The Guardian reports:

A teenage rap duo in Chicago has recorded a track, aptly called "The Economist," that extols the British publication's breadth and brevity and sa