$$$ Dillon Read exec back in the saddle [FINalternatives]

$$$ Translating Corporate Speak: Wynn [Unforeseen Upside Edition #2] [LoSC]

$$$ Wallstrip Gas and Oil [WallStrip]

This seems slightly absurd but what the hey: according to Financial News, offings at Bear could exceed 10,000 and, supposedly, those being cut will receive nine months pay and one-third of last year’s bonus, cash. If anyone knows how I could get a job with the B for about a week (got some vacay days to burn through), that would be top notch. Don't worry about the firing part of the equation, I've got plenty of 'How Tos' up my sleeve.

Earlier: Fringe Benefits To Getting Fired

Bear Stearns layoffs could exceed 10,000 [Financial News]

The bankers behind the deal for J.P. Morgan Chase to acquire Bear Stearns are quietly admitting that the deal was not reworked because lawyers mucked up the documentation, a claim that the New York Times prominently featured.

On March 24th, the second Monday following the initial announcement of the deal, a story in the New York Times reported that people involved with the takeover talks were claiming that the rushed preparation of the deal documentation had led JP Morgan to sign a guaranty agreement that went further than it ever intended. In the guaranty agreement signed in connection with the merger, J.P. Morgan agreed to "unconditionally" guarantee "the due and punctual payment" of all of Bear's "covered liabilities" for a period of time starting March 16, 2008, and seeming to last in perpetuity.

A little more than a week later, JP Morgan was floating the idea that the guaranty was never meant to last beyond the rejection of the deal by Bear Stearns shareholders. But this was nothing more than a cover-up meant to conceal the more frightening reality that Bear Stearns was once again teetering on the edge of bankruptcy, with brokerage clients fleeing for the exits, as DealBreaker’s analysis showed later that day.

The guarantee of Bear Stearns’ liabilities from JP Morgan Chase wasn’t working. Although the banking giant had put its “full faith and credit” behind Bear’s liabilities, some of Bear’s largest customers were refusing to do business with it. Counter-parties were fleeing, and Bear’s collateral was being refused up and down Wall Street. The guarantee, which was intended to keep Bear in business, had failed to provide customers with enough assurance to prevent a second round of the run-on-the-bank that nearly bankrupted Bear, people recently familiar with Bear’s operations are saying behind the scenes.

Bear Stearns' latest proxy statement, filed last week with the Securities and Exchange Commission, confirms our analysis. (Fortune magazine's Roddy Boyd has a good description of the dramatic renegotiations in the face of bankruptcy pressure here.) The proxy statement explains:

At the time of execution of the merger agreement, Bear Stearns and JPMorgan Chase hoped that execution of the merger agreement and the guaranty would stabilize Bear Stearns’ liquidity position by providing assurances to Bear Stearns’ customers, counterparties and lenders that JPMorgan Chase was standing behind Bear Stearns’ obligations. However, following the announcement of the transaction on March 16, 2008, Bear Stearns’ customers continued to withdraw funds, counterparties remained unwilling to make secured funding available to Bear Stearns on customary terms, and funding (other than from JPMorgan Chase and the New York Fed) was not available. JPMorgan Chase and Bear Stearns believed that the continued loss of customers and the continued unwillingness of counterparties to make secured funding available on customary terms was a result of, among other things, concerns that the merger would not be completed and the JPMorgan Chase guaranty would terminate, and perceived deficiencies and uncertainty on the part of Bear Stearns’ customers, counterparties and lenders regarding the scope and terms of the guaranty.

The proxy statement makes no mention of missteps in documentation. That contention has simply been dropped in favor of vaguer talk about negotiations to “clarify” the JP Morgan guarantee. It seems that the bankers who anonymously fed the “misstep” story to journalists weren’t willing to risk the legal consequences of repeating it to the SEC. This amounts to a tacit admission that the story was bunk from the get go.

Columbia Spectator Editor: How are we going to top the Times’ story about the UPENN kids who lost the jobs Bear promised they could have before, you know.

Columbia Spectator Staff Writer: Hmm…I mean, there’ve got to be some Columbia kids in the same situation, no? I could interview a bunch of them?

CS E: It's poss…tell me more.

CS SW: Well my roommate’s friend had his offer from Bear taken back and now he doesn’t know if he’ll be able to afford to live in Murray Hill this summer…there’s a chance his parents might pay his rent, but there’s also a chance they might make him move home, which I think is sort of crazy, and would make for a good story, no?

CS E: Well, it’s worse than the Penn girl who’ll merely have to be subsidized by mom and dad for a spell, that’s for sure, but we can do better.

CS SW: Yeah.

CS E: There’s go to be more pain. More heartbreak. Ya dig?

CS SW: Yeah.

CS E: We need to give voice to those who cannot speak.

CS SW: I know. But I've got nothing.

CS E: Same…damn, this is harder than I thought it'd be.

CS SW: You’re telling me.

[They stare at each other in silence for 5 minutes]

CS E: Oh, oh wait, here it is, here comes the money shot—I just got an email about a girl who got the bad news about Bear WHILE ON SPRING BREAK. And get this—she didn’t line up another job at a hedge fund for almost a month after that.

CS SW: God, that is perfect.

CS E: More where that came from, coming at ya. Some chick from the class of ’10—are you sitting down? Are you ready for this? Do you have a paper bag to blow into, because you’re going to need oxygen in a second—got her Bear internship taken away.

CS SW: NO.

CS E: YES.

CS SW: Then what happened?

CS E: She got one with JPMorgan.

CS SW: Christ, that was touch and go for a while.

CS E: I know.

CS SW: You see? This is why they pay you the big bucks.

Bear Stearns Crash Leaves Students in Employment Crunch [Columbia Spectator]

CNBC reports that 1,500 Morgan Stanley employees will soon know the joys of free Bloomberg subscriptions. MS will apparently lay off 5 percent of its securities-firm staff in the next couple days.

GLG Partners is BACK IN THE GAME. So, okay, the firm has witnessed a mass exodus of personnel, (including “star” portfolio manager Greg Coffey, who resigned, then came back then resigned again all in one week’s time). Okay, it expects to suffer a similar mass exodus of money (investors are likely to pull half of the $7 billion in assets managed by Coffey when he leaves). Okay, it’s run by a CEO who works under the assumption that former employees are sent to live on a farm after they abandon him. That’s all immaterial—the London-based hedge fund recently made an investment that will assure it can’t lose. PaidContent reports GLG has taken its fate into its own hands, by infusing GodTube, the Christian online video sharing and social networking site, with $30 million. Though GLG declined to comment, we have it on good authority that G-dT.com got the idea to pitch GLG after receiving an anonymous tip about senior management’s grassroots initiative to rescue Mike Seaver from captivity, and offer him the position of running Coffey’s portfolio upon his departure.

As you well know, UBS is scheduled to begin laying off some 8,000 employees tomorrow, just prior to accepting the “Heart of Gold Award” for community service unrelated to its own employees.* Bloomberg, it seems, is aware of the date as well:

More evidence that there is little appetite for a free market in rice in South East Asia came in today as news spread that Thailand may be planning an OPEC-style international rice cartel—an Organization of Rice Exporting Countries. Cambodia almost immediately chimed in with its support, while the positions of Laos, Vietnam and Burma are still unclear but are expected to be favorable.

The plan isn’t going over well with Asia’s rice importing states. In the Philippines, which just suffered its second failed rice tender after Vietnam was the only country offering to sell, the proposal has been strongly denounced. Filipino politicians and editorials are describing the cartel as a "Mekong mafia."

Because many nations—including China, Vietnam and India—have imposed curbs on rice exports to secure supply for their domestic market, Thailand already exercises outsized influence on the international rice market. The OREC cartel, some fear, would institutionalize Thailand’s grip on the market. Others are skeptical, however, that rice really can be cartelized in the way oil has because rice production is vastly more decentralized than oil drilling.

Meanwhile, China has promised to develop mutant super-rice that it says will solve the problems of growing demand. Burma responded with a cyclone killing hundreds and wiping out rice crops.

Cartel plan fuels rice fear [The Australian]

Philippines Cancels Rice Tender; Futures Rebound [Bloomberg]

Rice Gene May Help Farmers Double Harvest, Chinese Study Shows [Bloomberg]

The key to Yahoo! chief Jerry Yang’s apparently successful attempt to avoid being Microserfed was the threat to enter into a partnership with Google. Under the proposal, Yahoo! would outsource to Google important paid search terms, a move that struck many as all but admitting that Yahoo was incompetent at monetizing search terms and that seems to have driven away Microsoft’s Steve Ballmer.

It was a cagey move but is it legal? Can the management of a public company targeted for opposition adopt a perhaps suicidal business plan to drive away suitor? Maybe not. Although Delaware courts—which, for quirky federalist reasons, get to decide these things—give companies broad leeway to undertake defensive measures, there are supposed to be limits to this sort of thing. Stephen Bainbridge, one of our favorite law professors, explains that Yang’s takeover defense might be acceptable to Delaware courts if he could prove it was part of Yahoo’s long-term business plan. But that seems implausible—everyone knows they came up with this as an ad-hoc defense.

If Microsoft really wanted to get hostile, they might have actually been able to get a Delaware court to stop Yahoo from running into the arms of Google.

Using a strategic partnership as a poison pill [Bainbridge]

Citigroup goes to trial in New Jersey today to defend itself against a law suit claiming it helped Parmalat in the accounting fraud that eventually led to the Italian dairy company’s collapse. We’ve never managed to get our heads around exactly what Citi is alleged to have done. The plaintiffs lawyers claim Citi knew the company was in trouble but kept lending it money through complicated structured finance deals that allowed Parmalat to temporary conceal its troubles. But Citi lost millions when the company collapsed. That sounds more like incompetence than fraud.

Adding to our suspicions that incompetence was at work here is the report from Breakingviews.com this morning that Citi called the structured finance vehicle “buconero.” That apparently translates as “black hole” in Italian. Great work fellas.

At least it wasn’t Dr. Evil [Breaking Views; subscription required.]

Yahoo CEO facing possible rebellion after spurning Microsoft (AP)
So Microsoft really walked and now the big question is what will Yahoo fall to when it opens. Most people seem to think that it won't fall all the way back to its pre-bid sub-$20 price, though some do. Ultimately, Yang believed Yahoo was worth more than $47.5 billion... maybe it was the lingering post-bubble mentality, and he still had hopes that one day Yahoo would get back to its pre-glory days. Or maybe he really wants to merge with AOL. Anyway, place your guesses on Yahoo's closing stock price in the comments. Pre-market they're off about 23 percent so far.

Investors eye Yahoo's alternatives to Microsoft (Reuters)
Nobody else is going to pay $33 per share for Yahoo (in all likelihood), but the company will be under considerable pressure to start dealing fast. There's been persistent talk of an AOL deal, and now there's nothing standing in the way of that. Then there's the Google ad partnership, which could provide a revenue lift. And maybe private equity could be interested, but at higher than $33 per share? Probably unthinkable.

A Yahoo Shareholder on What Might Have Been (NYT)
You know the cooler at the casino. The guy who comes to the blackjack table and brings everyone bad luck. Hate to say it, but that's Bill Miller of Legg Mason right now. The once-prolific S&P beater has been struggling for some time and the collapse of the Yahoo deal seems to say it all. Add that to Bear, some financials and the homebuilders, and it's been a bad time to touch what he's been touching. Also, read this typically sharp post from Felix Salmon.

Bulls' Optimism May Be Premature (WSJ)
No doubt this ongoing earnings season has something of a split personality disorder. On the one hand, you've got companies promising that they see no major impact from the economy. Others say it's the worst economy they've seen: ever. So perfectly good for a glass-half-full-half-empty debate. Overall, currency effects have probably made this quarter look a lot better than it was, though how can you ever try to strip just one thing out and hold the rest steady? And to some extent, the weak companies seeing such a punk economy already had problems of their own.