$$$ Bear bankers "becoming spa swans and gym rats." [NYMag]

$$$ Atkins departure from SEC mixed blessing for hedge funds [TheDeal]

$$$ Michael Jackson's Neverland Ranch Loan Sold by Fortress to Colony [Bloomberg]

The real problem with holidays is that they are illiquid. You can’t trade them very well, which is why roses cost so much on Valentines Day and the price of a swiftly-dying severed evergreen increases prior to Christmas Day and drops immediately afterwards. Here in New York City people do manage to trade holidays in some ways—choosing to give up Memorial Day in the summer share house for a random summer weekend while seeking excess profit on the trade by also scoring hard to get restaurant reservations in the under-populated city—but Steve Sailer thinks we’re not going far enough. Smart people, he says, should internally trade comparable holidays.

On Mother's Day, it's hard to get a brunch reservation; and on Father's Day, it's hard to get a tee time. So, just switch days and celebrate Father's Day in May and Mother's Day in June.

Interestingly, doing that violates Kant's Categorical Imperative, which is a sort of Teutonic philosopher's version of the Golden Rule ("Act only according to that maxim whereby you can at the same time will that it should become a universal law"). Yet, if everybody switched months, then we'd be right back where we started. But if you switch, then you're a lot better off and everybody else is a tiny bit better off.

One question would be how to charge others for the positive externality created by switching holidays. After all, we can't have them free-riding on our holiday trading, can we?

Remember this for next year [Steve Sailer]

You know what’s something that used to be considered gauche but is now de rigueur with the Hamptons set so you know it’s cool? Not paying your mortgage. Apparently a bunch of Hamptons residents have been neglecting to send their checks to Angelo Mozilo’s PO Box these last couple months, former UBS executives included, which sounds about right. Erstwhile UBS employee Marc Warren is among the 120 homeowners who’ve had preliminary foreclosure actions (lis pendens proceedings) taken against them for loans exceeding $1 million. And they may soon be in even better company, if no one’s in a buying mood—Concoran broker Susan Breitenbach says she’s been called by dozens of Bear Stearns employees “desperate to unload their East End homes.” Hopefully they’ll be able to do so, and not join the growing number of EE homes (ten to date) that’ve been foreclosed outright since January. Which brings us to today’s reader poll-- who’s the (former) deadbeat owner of this $15 million Westhampton home, pictured above? The Post doesn’t say, but we have faith the DealBreaker brain trust can figure it out.

Related: Trader Made Billions on Subprime

Trouble In LI Paradise [NYP]

With a slowing economy, escalating food prices and energy prices climbing ever higher, you might think that Republican presidential candidate John McCain would be hesitant to endorse a European Union-style carbon emission trading scheme that seems likely to result in less economic growth, higher energy prices and higher food prices from increased biofuel demand. But that’s because you don’t know him as well as his daughter, Meghan McCain, who says he’s totally freaking out over global warming.

“My dad was tortured in prison; he doesn’t overreact to things. So if he starts freaking out, you know it’s time to freak out,” the blonde, blogging McCain told the editors of GQ in a profile last month. “And I think he’s freaking out about the environment. He’s like, ‘I’m genuinely worried about climate change; it’s happening right now.’ ”

Today in Oregon, McCain—the former POW—announced his support for a “cap-and-trade” program for carbon emissions. Under “cap-and-trade” programs the government rations the right to emit certain pollutants and allows companies to sell unused portions of their ration or buy up excess rights from others.

The endorsement is meant to win over centrist voters who have been convinced that global warming results from man-made pollution. It is likely to be criticized by the right—which views going to Oregon to endorse environmentalist measures like Jane Fonda going to Hanoi to decry the Vietnam War (Oregon John, anyone?)—and the extreme greens, where carbon trading is seen as conceding a right to pollute. Energy traders, who largely see the credits as another commodity to trade, will likely welcome the plan.

McCain also promised to bring pressure on China and India to convince them to reduce their emissions.

China responded this morning by holding an earthquake. ("Pow! Take that, Earth!") India said it would gladly allow US companies to outsource their own carbon reductions in exchange for improving India’s environment. Vietnam responded by offering to sell rice to the Philippines at shockingly high prices.

McCain Woos Democrats on Environment [Wall Street Journal]

We’re not suggesting in the slightest that Citi’s new-old slogan, “Citi Never Sleeps,” doesn’t strike us a tagline that would get Meredith Whitney going, “You know, I’m starting to think that those guys know what they’re doing over there,” but we have been wondering why the firm felt the need to rebrand itself as the posterchild for insomnia. The real reason is apparently that they simply couldn’t afford a new one, but as the C puts it, when you’ve got GOLD like “Citi Never Sleeps” just lying around, you go with it.

Shortly after Vikram S. Pandit took over in December, he scratched the “Let’s Get It Done” slogan and ordered up the “Citi Never Sleeps” tagline. Though the phrase was introduced around the invention of the A.T.M. and 24-hour banking, Mr. Pandit thought it better promoted the bank’s global presence.

“This is an extraordinary asset, and guess what, we own it,” said Ms. Caputo, who is also leading the new campaign. “It made all kinds of sense to bring it forth and advertise it.”

Citi’s New Slogan Is Said to Be Second Choice [NYTimes]

Sooo. Moments after we announced our latest market moving experiment, inspired by the stomach rumblings of Charlie Gasparino, C to the G called us to “set the record straight.” Gasparino, who seemed a bit perturbed at Barron’s writer Jonathan Laing’s suggestion that he’d been fed the “Ambac or MBIA will be downgraded” story by Bill Ackman, told us: “A lot of journalists take shots at people without calling them first. This guy lacks the integrity to call me first and at least find out if something is right or wrong. He failed Journalism 101.” Prepared, network-approved comments aside, however, we’ve heard that Gasparino put it slightly less lightly to friends, saying: “This guy didn’t have the balls or the brains to call me. If he had half a brain or half a testicle, he would have at least dialed me up before I fly out to Chicago and dial him up. I hope he sleeps well tonight.” When asked to confirm that the harsher, mildly more litigious words had exited his mouth, CG only offered “no comment.” You do the math. (And: start doing something with that Bear news I mentioned. Time’s running out!)

Management buyouts have been a favorite target of corporate governance types for years but the critics may have a new line of attack—criticizing managers for scuttling deals.

The traditional criticism of management buyouts—where a company’s senior executives cooperate with financiers to buy a company from public shareholders and take it private—has been that management could exploit shareholders by buying the company on the cheap and discouraging other bidders. When the buyout market was firing on all cylinders, objecting to management buyouts on these grounds was a favorite past-time of self-styled shareholder advocates. (One particular lunatic who happens to have a column in the New York Times even proposed outlawing them.)

But now that the buyout market has ground to a crawl—if not a complete halt—the conflicted role of buying and selling a company at the same time could be working the other way. This morning our own Joe Weisenthal, who also writes over at PaidContent.org, points out that the collapse of the deal to take radio operator Cumulus Media private has collapsed, and unlike some recently failed deals, Cumulus seems to have no plans to sue the buyers to force them to close the deal.

“A question that shareholders might be wondering about: Was the agreement to amicably drop the deal made easier by the fact that CEO Lew Dickey was on both sides of the transaction?” Weisenthal writes.

Cumulus shareholders will get a break-up fee of $15 million but it hardly seems likely that the company could sue its chief executive to force the sale. Think of it as an agency cost of a bear market.

Cumulus Take-Private Deal Falls Through; Stock Off Over 20 Percent [PaidContent.org]

Barron’s has an article today about how even though no one knows anything about credit-default swaps, few people can resist speculating, the analysts in Charlie Gasparino’s lower abdomen included. Around 3 pm on January 30th the CNBC on-air editor said he “felt in his gut” that Ambac or MBIA or both would be downgraded. Nothing happened, but shares of both companies plummeted on the news. That’s right people—the gastrointestinal discomforts of Charlie Gasparino, who we’re told was seen wolfing down an Italian sub with rapidity that would distress even the steeliest of bellies, are now causing turmoil in the markets. So ridiculous we wish we could take credit for making it up. Damn you, Charlie Gasparino, for subconsciously ginning things up in response to our obsessive chronicling of your every Dago-esque utterance. It’s almost as though you want to make it impossible for us to parody you. Attributing insider information to the sources in your stomach is something WE do, not you.

Anyway. We can’t be too hard on Gasparino’s prognostication skills because, truth be told, who cares about being right or wrong when you’ve got that kind of power? Though we could never hope to match his market moving ability, we have decided to perform a small experiment of our own, just to see how we match up. Here’s the rub: we had some bad Chinese last night and are starting to feel violently ill. That’s got to mean something, no? At random points throughout the day, we’re going to pin the feelings of nausea waving over us to a little piece of news that we know isn’t true, and see what happens. Starting now: We feel in the pit in our stomach that Bear Stearns is going to pre-announce record earnings on the strength of its subprime mortgage funds. Make of that what you will.

Credit-Default Swaps: Weapons of Mass Speculation [Barron's]

JP Morgan has taken a hatchet to Bear Stearns' foreign exchange business, with 62 of 73 positions set to be “put on notice,” according to a Forex Factory story citing “a senior Bear Stearns official.”

Both the New York and London offices of Bear Stearns have been slashed. In New York, 28 out of 34 people working in foreign exchange are expected to receive this week what Forex Factory describes as “consultation letters.” In London, 33 of the 39 team members received notification last week that they had entered a consultation period. It’s unclear how many of these “consultations” will result in job cuts or offers for positions. Apparently some have been offered positions at JP Morgan but turned them down because they were a lower levels—and presumably paid less—than their positions at Bear Stearns.

“Bear Stearns' New York trading operations have almost ground to a halt, with the FX team handling only 1% of its pre-takeover commerce,” Forex Factory reports.

Bear Stearns gets the axe [Forex Factory]

Listen, we talk a lot of shit about Citi here, and I highly doubt that’s going to stop any time soon. But let’s just all agree that the C’s got a new contrarian indicator and she’s telling us to buy. Big time. And that contrarian indicator is: Meredith Whitney. Crazy? Yes. Implausible? No. Here’s why.

As she’s wont to do, Whitney recently offered what can be interpreted as largely negative statements about Citi, following the bank’s announcement that it promises to begin realizing its “enormous potential.” She even upped the ante a bit, moving from “you will suck until you do exactly what I tell you to do” to “you will suck no matter what you do so just give up and die.”

Specifically, Whitney said today that CEO Vikram Pandit faces “an impossible feat” in trying to turn the diversified whorehouse into a profitable company. Not surprisingly, Mistress Meredith recommended that investors sell their shares, noting that “they don’t have the revenue power [and] they don’t have the earnings power in so many of their businesses.” She also took issue with the lack of details in Vikram’s Friday morning presentation, entitled, “Locating The User Manual To This Bitch." All valid, if not predictable, points. Whitney lost us, however, when she started in with the jokes.

“Even Stephen Hawking could not pull this off,” she said. And that’s true—Stephen Hawking, who to our knowledge has never attempted to underwrite any subprime debt, probably couldn’t singlehandedly turn that dump into something resembling a solvent company. It’s just slightly disconcerting when your most vociferous critic, who’s supposed to be offering reasoned, sober analysis is playing to the Borscht belt. She might as well have said, “Even Chuck Norris could not pull this off.” (In fact, if yuks are her new schtick, she should have gone with Chuck Norris.) Anyway my point is that while we will continue to be unrelenting in our mockery of Shittygroup, you should take this as a sign to back up the truck and buy this bitch. And reserve your seats from Meredith’s debut at the Laugh Factory’s monthly open mic night pronto.

Citi's Pandit Faces `Impossible Feat,' Whitney Says [Bloomberg]

Barry Diller, the IAC overlord who has spent years attempting to sell the world on the idea of an internet conglomerate, now admits that conglomeration was a bad idea from the start.

In a long profile by Duff McDonald (who is possibly the best business profile writer working today) in the new issue of Portfolio, Diller says: “We were kidding ourselves if we thought we could pull off an integrated conglomerate that acts like G.E. or P&G in anything less than 10, 20, or 30 years.” His plans now include “blowing up IAC and leaving the company’s disparate parts to operate on their own,” according to the Duffster.

Although the tech-oriented Web 2.0 kids are likely to herald this as a triumph for independent, niche, small-is-wonderful tech companies with important lessons for deals such as Electronic Art’s proposed acquisition of Take-Two software, we can’t help but be struck by how much of the failure of IAC is part of the much larger mortgage story. IAC bought online mortgage middleman Lending Tree, familiar to many of our readers from its once ubiquitous ads on CNBC, for $726 million in 2003. Last year, IAC wrote down the value of LendingTree by $475.7 million. With the mortgage market still face-down and floating in the seas of plummeting real estate prices and tight credit, there’s likely to be even further write downs. For a company with under $13 billion in total assets, that’s an enormous amount to lose on single asset.

Of course, we can’t help but wonder if the proposal to slip of IAC and Diller’s newfound love affair with “anti-conglomeration” isn’t a contrary indicator. If Diller is short, is that a signal to go long conglomeration? That’s one way to read the position of Liberty Media, the Malone family controlled corporation which owns 62 percent of the voting power in IAC and is locked in litigation with Diller to prevent the break-up of the company. Of course, Liberty Media’s stock performance pretty much tracks IAC’s—both have consistently underperformed almost any broad stock index you can name—so we’re not sure we’d want to follow their lead on anything.

The Confessions of Barry Diller [Portfolio]

A lot of people are wondering this morning how HSBC was able to see a rise in first quarter profits, despite rising bad-debt charges in the U.S. and a sizable writedown in its investment banking arm. The most popular theory pins the gains to higher returns in Asia, the Middle East and Latin America. DealBreaker readers who have been paying attention know that the key to HSBC's success is far more subtle: the elimination of acronyms. Who’s laughing at asinine corporate directives now?

Earlier: We Need To Make This Thing Work. What's The Key To Making This Thing Work? NO. MORE. ACRONYMS. If I See Or Hear One Person Not Spelling/Saying The Whole Word Out, I Will Go Carnival-Freak Crazy On Your Ass. I Mean It, I'll Scratch Your Eyes Out.

3rd UPDATE: HSBC 1Q Profit Ahead Of 1Q07 Despite US Impairments [CNN Money]

Time Warner Inc.'s HBO cable network is thisclose to reaching a deal to have its programming delivered through Apple’s iTunes. Portfolio broke the story this morning, noting that when the deal is announced it will be the first time Apple agreed to a different price structure for a content provider.

The details are still vague, but HBO apparently got a better deal than other content providers. "One possibility is that HBO programming will have a higher retail price than the flat $1.99 fee Apple currently charges for video content; another is that HBO will receive a larger cut of the same flat rate than other iTunes content providers receive," Portfolio’s Josh Saul writes.

Although both companies are likely to bill the agreement as a victory—Apple gets more content and HBO more distribution—the deal could inspire other content providers to seek better deals from Apple. Many of those who have struck deals with Apple are reportedly dissatisfied, arguing they should be getting better economics from Apple, which makes money both on the distribution of content through iTunes as well as the sale of iPods and iPhones.

HBO In Your Pocket [Portfolio.com]

It’s Monday and you know what that means—another exciting round of Who Said It?. This week’s entry is based in part on a letter sent out on Friday by a very important person, about a very important task. After the jump, you’ll find two excerpts from said memo. One is real, one is fake, based on the original but slightly altered for our purposes. Correctly identify which is which and there’s a letter of recommendation by us for you to Nick Maounis, re: why he should let you get in on his new cash cow, minimum net worth requirements waived.

It is well known that smart people—particularly the subset of the intelligent sometimes called intellectuals—tend to overrate the role of intelligence in providing solutions to social problems. This was on display in lurid colors in Gretchen Morgenson’s Sunday column in the New York Times lamenting the lack of “an intelligent and comprehensive plan for dealing with mass foreclosures and the economic consequences associated with the [credit crash] debacle.”

Morgenson goes to great lengths to draw comparisons to New York City’s bankruptcy crisis in the midseventies—which, as she says, was avoided in part by a cabal of government officials and bankers conspiring to refinance the city’s teetering debt structure. But she goes too far in reading a greater lesson into this story. It becomes almost a fairy tale of intellectualism, in which well intentioned intellectuals swoop in from their glass and steel perches to rescue capitalism from its tendency toward anarchy. The idea that no rescue plan outside of permitting market processes to operate is available is reduced to “doing nothing.” A better way must be available because “America is full of smart and caring people!”

We’re second to no one in our appreciation of the smart and caring—we’re not supposed to call them the “best and the brightest” anymore—Inhabiting these Untied States. Unfortunately, we have stubborn memories that insist on recalling the fact that the mortgage crisis that set off the broader credit crisis has its origins in the plans of the smart and caring to expand homeownership beyond the levels established through market processes. Perhaps its time to give “doing nothing” a chance.

Big Rescues Can Work. Just Ask New York. [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.

Cablevision Offer Baffles Wall Street (Again) (NYT)
So shareholders refused to take management's cash when it was offered to them. And now, since management was snubbed, they're rubbing it in shareholders' face, going out and buying any which asset. First it was the Sundance Channel, and now it's LI paper Newsday, in a bid to turn itself into a Long Island media monopoly. Besides the geography part, it's hard to see how a cable company and a newspaper fit together, but really, who wouldn't want to own the conversation on Long Island?

WHAT A DISASTER! 'Speed Racer' $20M Weekend Half What Warner Bros Hoped (Deadline Hollywood Daily)
The uber-kitsch Speed Racer brought in a mere $20 million in its opening weekend, a big disappointment to its studio Warner Bros. Every time something like this happens -- and it pretty much happens every weekend -- that old maxim about nobody knowing anything in the film business gets more and more credible. It might've done better had Iron Man not maintained its pole position, but again, that's the tournament. Everyone agrees to the same rules, and in fact the most interesting weekends are the ones that clearly pit one film against another. Racer even came in behind What Happens In Vegas... but there the crossover seems a bit limited.

Facebook’s CTO D’Angelo to Leave (AllThingsD)
Some interesting stuff going on at Facebook... the young company is losing its very young CTO Adam D'Angelo (he's 23). No official reason for him to jump, other than that he wants to take a vacation (not real surprising... he's gotta be pretty whiped), though there have been rumors of tension at the top ranks. Lately the company has been bringing in more mature talent, many from Google, so there seems to be a out-with-the-young in-with-the-seasoned trend afoot.

China's Inflation Accelerates; Bank Reserve Requirement Rises (Bloomberg)
China is like a kid who's parents let them sit in the driver seat, wildly turning the steering wheel back and forth when only subtle pushes are needed. The latest, another bank reserve increase, done in a bid to fight inflation. Of course, the country has tried all kinds of things to stem both inflation and the once-soaring stock market, usually not doing much good. Well, the stock market curbs worked a little too well, which is why in other areas, the government has gone back to a pro-up stance when it comes to the market. Just not in banking reservers, apparently.