$$$ 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 samples podcast commentary by correspondents Edward Lucas and Anthony Gottlieb. "The style in which they write is simple and concise, how do they get their sentences so precise?" the rappers wonder.

It’s so worshipful of the magazine that we half-suspected the song was a parody of the kind of enthusiasm for the Economist that Spy magazine mocked years ago. "He reads the Economist so he can get the gist, its solid competence gives him confidence that his intelligence is correct," the rappers exclaim. But apparently lyrics are sincere.

Click here to listen to the thing yourself. (Gawker, another purveyor of unwholesomely smarty-pants English attitudes, describes it as "not entirely uncomfortable to listen to!")

(via Gawker and The Guardian.)

It’s a story that’s now all too familiar. A young Wall Street hopeful begins a promising career only to find that its been cut short by a sinking economy and Wall Street losses. Here’s how Jeffrey Martz begins telling his story to the readers of the New York Times business section.

On Monday, Nov. 5, the New York press reported that a prestigious Wall Street house -- that happened to be my employer -- intended to lay off two-thirds of its investment banking staff of about 120. Since I was one of the last people to arrive and because big corporations tend to handle their personnel by the last-in-first-out method, it occurred to me that I would be smart to stand near the elevator. This prediction turned out to be accurate and on Wednesday, Nov. 7, my successful, but truncated Wall Street career of 61 days -- including three working Sundays -- came to an end.

Martz explains how he was fired by the head of the financial strategies group, who refused to look him in the eye until they shook hands for the final farewell. And from that moment on he saw not one of his supervisors nor any the folks who had recruited him to the firm, except for one accidental encounter as he packed up his belongings.

Martz, however, was fired not on Wednesday, November 7, 2007. He was fired on Wednesday, November 7, 1990. We found the story deep in the archives of the New York Times business section. It's somewhat heartening to remember that we've been through all this before. What would be even more encouraging would be if we could find out what ever happened to the then-young Martz. But after extensive investigation, we haven't found the guy. Anyone know where Martz is?*

*We're hoping he Googles himself frequently enough to find out that his story is once again being told. Hey, Martz, get in touch. tips@dealbreaker.com.

My 61-Day Career on Wall Street [New York Times]

It’s almost summer and you know what that means—DealBreaker is looking for one or two lucky individuals to be our interns and, if you play your cards right, it might just be you. Basically, it boils down to willingness for, nay a passion to excel at, picking up Carney’s dry cleaning. Are you man enough for the job? If not, please seek alternative employment via the DB Career Center. For those of you up to the task, read on.

Speaking of blind men, Governor Patterson’s budget office doesn’t think things on Wall Street will be that bad, at least compared to Mayor Bloomberg’s budget office.* Budgeteers in Albany and City Hall are both warning of fiscal calamity but Bloomberg’s are far gloomier than Patterson’s, the New York Sun reports.
City officials are far more focused on Wall Street than state officials, in part because Wall Street accounts for far larger percentage of city revenues than state revenues.

A key difference, [city officials] said, was the city's assumption of a decline this year in Wall Street bonuses per employee, and also its anticipation of a greater number of Wall Street layoffs. The mayor's office is anticipating that Wall Street will shed 25,000 jobs over the next two years, causing wages to fall more steeply.

Our reaction to this news was: only 25,000? That number seems far too low. A recent study from the New York state Department of Labor puts the possible job cuts on Wall Street at 36,000 employees, which is around one fifth of its entire work force. That 20% figure is also what the Wall Street Journal reported Wall Street executives were predicting in March.

In short, even the pessimists sound a bit too optimistic.

City, State Gap Emerges on Pessimism [New York Sun]

* Editor note: Yesterday a cyclone joke. Today a crack about the blindness of blind men. We’re definitely going to Hell for this.

Our eyes tend to start reading when we hear a business leader start talking about “vision.” It’s a term that has been over-used to the point where it is all-but meaningless. The little wall-hanging plaque describing your corporate vision belongs in the circular file with your mission statement. So it was a bit of relief when we read in this morning’s Wall Street Journal that Citi chief executive Vikram Pandit isn’t too big on the vision thing.

Asked about his vision for the company, Mr. Pandit says first it needs to fix the little things. "Only after we get those foundations right do we earn the right to talk about vision," he says.

And yet there’s something unsettling about too much resistance to vision. We can’t help but recall how badly things worked out for President George Bush (the first one!) who famously admitted he lacked the vision thing. Pandit had to expect that Journal reporter David Enrich would ask him about his vision because the allegation that Pandit lacks a vision for Citi has been one of the loudest and most frequently heard complaints about his leadership. This version of “God is in the details” must be understood as a prepared-in-advance response.

Which makes it all the more striking how underwhelming it is. We see what he’s trying to do—flip the question on the questioner to say “that’s the wrong question, novice”—but it’s so understated that it doesn’t really work. It leaves us wondering whether Pandit too resistant to formulating a vision of what sort of financial institution Citi should be in the post-Sandy Weill, post-Chuck Prince era. Is Pandit willfully blind?

Felix Salmon thinks he’s behaving too much like a chief operating officer and not enough like the chief executive. “Pandit doesn't think he has the right to talk about vision? Pandit has the obligation to talk about vision. That's the CEO's job,” he writes. “Right now he's behaving much more like a COO than a CEO, and that needs to change.”

Vikram Pandit, COO of Citigroup [Portfolio]

Citigroup, fighting to keep its title as one of Wall Street’s most innovative investment banks when it comes to demoralizing employees, has begun charging lower-level employees to use the investment bank's box seats at sporting events, the Wall Street Journal’s David Enrich is reporting. Top executives, of course, still get to enjoy the perk gratis.

Does anyone know how much Citi charges for box seats? Are they offered at cost? Or does Citi at least offer some kind of discount to those beleaguered junior bankers who have somehow survived the 30,000 deep cuts off Citi has already made or is planning to make? Also, does buying the seats automatically move you toward the bottom 5% of the bank that chief executive Vikram Pandit has promised to fire every year? After all, if you have time to seat in the box seats, you obviously aren’t working hard enough.

Citigroup's Pandit Faces Test As Pressure on Bank Grows [Wall Street Journal]

Hillary Clinton has been upping the ante with her populist rhetoric, bashing "greed" and swatting away economic critiques of her tax plans by saying "I'm not going to throw my lot in with economists." As is often the case, that kind of anti-intellectual politics is accompanied by Wall Street bashing. Julie Satow, who covers Wall Street for the New York Sun, reports on Clinton's latest swipes.

Yesterday, Mrs. Clinton's normally responsive camp took a full 24 hours to correct widely reported accounts that she had said in a speech during the Indiana Democratic Party's Jefferson-Jackson Day dinner: "Why don't we hold these Wall Street money-grubbers responsible for their role in this recession?" In fact, she said: "Wall Street money brokers."

Either way, the sentiment is the same, according to many on Wall Street.

Clinton Attacks Wall Street [New York Sun]

Despite what your crazy uncle or Warren Buffett says about housing prices, the residential real estate market in many areas of the US is still in a lot of trouble. Doug French, an executive vice president of a Nevada bank, spent Derby day at a housing auction in Las Vegas and what he saw wasn't pretty.

Finally it was post time for the action and the first home went up for bid – just short of 2,600 square feet in southwest Las Vegas. A brand new home, a one-year builder warranty, built by a reputable builder with a nearly 99 percent customer satisfaction rating, the auctioneer emphasized. To listen to the auctioneer, the bidding quickly escalated from the $159,000 starting point. The three young men working the crowd were frantically giving signals to the auctioneer, quickly moving from one attendee to another, and the price of home kept rising. It seemed like a real auction. But it was only real like professional wrestling is real. There were no actual bids on the first house, or the second, or the third. No bidding cards were raised.

The auction company kept up the charade for over 2 hours and for all 46 homes. The auctioneer’s rapid-fire delivery never waned. The young ladies who were there to help winning bidders with their sales contracts stood in the corner and clapped in unison until the very end. And the young tuxedoed gentlemen who worked the floor carried on with their elaborate gestures and signaling, as if it was a choreographed Broadway dance routine.

Only a couple dozen people remained by auction end, and only a handful of homes were actually sold. There were few real bids even at the low starting prices that were only a third the price that similar homes fetched during the boom a couple years ago.

No Bids at the Auction [LewRockwell.com]

UBS To Sell Mortgage Assets, Cut Jobs As First-Quarter Loss Nearly $11 Billion (WSJ)
More of the same at UBS: Another $11 billion lost. Another $2600 raised. And also a big sale of $15 billion worth of subprime assets, which had a nominal value of $22 billion. Nominal being the operative word there. Though it seems that if every asset that nominally priced at $22 could be sold for $15, it's not the worst gap there is. Or maybe it is the worst.

Las Vegas used to be a recession-proof oasis. Not anymore. (Newsweek)
Well, it may finally be time to put an end to that notion. The chips are down across the board in vegas, probably for a combo of reasons. A big one: Vegas is less of a gambling town than it used to be. By putting such an emphasis on food and shows -- neither of which are as addictive as roulette -- the casinos have diversified away from their bread and butter. Beyond that, there's gambling everywhere. Online is down, but so many states have legalized it in some form. And the popularity of low-margin poker can't help, since people lose most of their money to other players, rather than the house.

Indonesia considers quitting OPEC (AP)
Interesting, though not surprising. Indonesia hasn't really been an oil exporter for a while, so its presence in OPEC seemed mainly out of tradition, rather than logic. Said President Susilo Bambang Yudhoyono in what is sure to be grist for the peak oil mill: "Our wells are drying." They haven't made a final decision yet, but the basic idea is that because they're not an exporter, it doesn't make sense to be part of an exporters' cartel. Makes sense.

Who will reap the benefits of a gas tax holiday? (Megan McArdle)
As an exercise in contrianism, we've been trying to think of a good argument against all the haters, taking shots at Hillary Clinton for her support of a summer gas tax holiday. But so far we haven't tried to hard. In the meantime, here's Megan McArdle taking shots at the summer gas tax holiday. And quite well at that.