R. Allen Stanford gave himself up to prove he hasn’t given up.

Stanford and lawyer Dick DeGuerin marched the few downtown blocks from DeGuerin’s office to the federal courthouse today to “surrender” Stanford to federal authorities even though there was no warrant for his arrest and he hasn’t been charged with any crimes.

“We want to surrender him into custody,” DeGuerin told the woman behind the glass at the U.S. Marshal’s office on the10th floor. Stanford stood nearby, his company insignia eagle pin on his lapel.

[…]

Because there was no warrant for Stanford, the marshal’s office did not take him into custody and didn’t even write down his address as DeGuerin offered.

Stanford ‘surrenders’ to feds who didn’t want him [Houston Chronicle]

Earlier: Sir Stanford: “You’re F’ing Right I’m Gonna Fight”

What would make this all worth it is if we found out that when Citi and Bank of America submitted their rebuttals to the suggestion they need to raise more capital, they purposely told the government things are so much worse than anyone knows and sharing that information with the public would be deadly. The results should be put in the lock box and never let out (if none is on hand, Geithner must eat the documents). Don’t think they have the pair or the brains for such a conniving scheme, unfortunately, but if you’re reading boys, that was a free one.

The results, originally scheduled for publication on May 4, now may not be revealed until toward the end of next week, said the people, who declined to be identified. A new release date may be announced as soon as tomorrow, they said.

Regulators and bank executives are concerned about how the disclosure is handled because weaker institutions could suffer a collapse in their stock prices.

“Everybody understands they’ve got a tiger by the tail here,” said Mark Tenhundfeld, a senior vice president at the American Bankers Association in Washington. “If they don’t let him go gently there will be a lot of mauling going on.”

Alternative theory: Bernanke, Geithner, etc were starting to get the strange feeling everyone thinks these “tests” are meaningless, and decided something had to be done to up the drama factor. To that end, tomorrow a video of T. Geith opening up the file on, I don’t know, Goldman, and shitting his pants will be “leaked” onto YouTube, by user BigSwinginFedChair. Maybe then you people will start to take this thing seriously.

U.S. Stress Test Results Delayed as Early Conclusions Debated [Bloomgberg]

$$$ Mean Street: Chrysler — Our Long Nightmare Has Begun [Deal Journal]

$$$ D Bank defends chairman over Ackermann [FT]

$$$ Portfolio drinks away the pain [Daily Intel]

With all the talk of buying American lately, and with Obama taking the opportunity with the cameras to give Chrysler a bit of free endorsement work (Chrysler, we hope you file that on your taxes)…

So these are some of the steps that we’re taking to make it easier for Americans to buy a car. If you are considering buying a car, I hope it will be an American car. I want to remind you that if you decide to buy a Chrysler, your warrantee will be safe — because it is backed by the United States government. And to further boost demand for autos, we are working to accelerate the purchase of a federal fleet, and we’re also working with Congress on fleet modernization legislation that can provide a credit to consumers who turn in old cars and purchase cleaner, more fuel-efficient cars.

…we thought we would revisit the Administration’s driving habits.

Of course, one fact missing from our old exploration on the topic was that Obama traded in his Chrysler 300C for a Ford Escape Hybrid in 2007 after putting a mere 20,000 miles on the Chrysler. Odd, Chrysler wasn’t good enough to hang on to back then. What’s changed?

Who drives what, after the jump.

Update:

Citadel Investment Group is preparing to expand into investment banking as the Chicago-based hedge fund tries to rebound from last year’s massive losses.

Citadel is expected to hire as many as five investment bankers, including Merrill Lynch & Co.’s Todd Kaplan, a leveraged finance specialist. The firm is expected to make the announcement in the next few days, according to a person familiar with matter.

The move may indicate that even a hedge fund trying to rebuild after an embarrassing year looks like a more attractive place to work than investment banks that are under scrutiny by various arms of the government.

Well, if the details interest you, Chrysler’s petition in the United States Bankruptcy Court of Southern New York is an entertaining start. Our favorite section in these cases has to be the list of creditors holding the 50 largest unsecured claims. Woops.

Chrysler_043009_Petition.pdf

For those of you on 24-hour delay (CNBC): After it was announced yesterday that hot piece of man meat Tim Geithner has been deemed one of the world’s 100 most beautiful, according to People, we asked you to nominate the thirty hottest financial services hacks. You’re off to a great start but we need more picks and we need them now! As previously stated, submissions may include both individuals who project inner beauty and, obviously, those whose contribution to the universe is raw sex appeal, such as a certain Southern Connecticut Zamboni driver (so incredibly hot our ice melts just thinking about him). For inspiration, after the jump (and at left), a sampling of nominees thus far.

Listen up, people. I know you’ve come to expect the Securities and Exchange commission to be on top of its shit and not completely worthless, but Mary Schapiro needs you to know that it’s almost a certainty that the regulator will be unable to uphold the standard it’s historically brought to the table. Why? ‘Cause financial journalists are getting laid off. And that’s a problem for the SEC because the business model it’s been following is to 1) read an article about a possible scam in, say, the Journal and then 2) go to work. Or, you know, read about a possible scam and then do nothing. Either way! The bottom line is, despite the fact that Twitter is going to go a long way in improving the SEC’s ability to crime-bust, you should recalibrate your expectations of what the agency is capable of ASAP.

Mary Schapiro, America’s new top cop for the securities industry, said the current mass culling of journalists’ jobs is a concern because it could reduce the number of leads that regulators get as they seek to crack down on nefarious behavior.

“It’s an absolute worry for me because I think financial journalists have in many cases been the sources of some really important enforcement cases and really important discovery of practices and products that regulators should be profoundly concerned about,” the chairman of the Securities and Exchange Commission told the Reuters Global Financial Regulation Summit in Washington on Tuesday.

“But for journalists having been dogged and determined and really pursuing some of these things, they might not be known to the regulators or they might not be known for a long time,” she said.

SEC’s Schapiro says journalist job cuts worrying [Reuters]

You’ll have to shell out a few mill for the opportunity but we say it’s worth it. Target Boy has put his 115 Central Park West (not to be confused with 15 CPW) apartment on the market for $10 million, after his mother-in-law, Elliman executive vice president Marilyn Herskovitz convinced him it wasn’t worth the $12 million he wanted. A detailed floor-plan of the 11-room, four-bedroom, two-terrace pad can be found here.

Interested but worried you won’t be able to get financing? Ackboy’s got you covered. “If someone can’t get financing because there’s no financing in the world right now, I’m happy to provide seller financing,” he told the Observer. “In a world where there are very few jumbo mortgages, I’m happy to make a loan.”

Meet the evil villains that won’t let Chrysler just escape its obligations to pay its creditors:

As of last night’s deadline, we were part of a group of approximately 20 relatively small organizations; we represent many of the country’s teachers unions, major pension and retirement plans and school endowments who have invested through us in senior secured loans to Chrysler. Combined, these loans total about $1 billion. None of us have taken a dime in TARP money.

As much as anyone, we want to see Chrysler emerge from its current situation as a viable American company, and we are committed to doing what we can to help. Indeed, we have made significant concessions toward this end — although we have been systematically precluded from engaging in direct discussions or negotiations with the government; instead, we have been forced to communicate through an obviously conflicted intermediary: a group of banks that have received billions of TARP funds.

Perhaps showing a seven season West Wing marathon wasn’t the best Oval Office training film after all?

Statement From Non-Tarp Lenders of Chrysler [The Wall Street Journal - Deal Journal]

12:08 pm:

Obama in ‘da house.

12:13 pm:

I can announce that I saved Chrysler, nothing is fucked, I am safeguarding taxpayer dollars, Fiat is going to save the day (oh and Canada too).

12:13 pm:

Bob Nardelli is a cool guy. No. Seriously. (But he’s fired).

The UAW cut down to the bone, and then found more muscle to cut. It was amazing.

You, America, will also be sacrificing.

12:15 pm:

Some stakeholders did NOT cooperate.

Damn hedgefunds held out waiting for a unjustified taxpayer bailout.

Some demanded twice the return of other stakeholders.

I don’t stand with them I stand with Chrysler’s (everything).

12:16 pm:

Bankruptcy is not a sign of weakness.

This process will be quick.

12:18 pm:

Oh, I almost forgot.

Hedge Funds suck.

It is unacceptable for a small group of speculators to endanger my success.

As such an effective and diligent steward of your taxpayer dollars I was not prepared to provide unlimited bailout funds or to reward greed.

This is going to be our finest hour 30 60 days. Seriously. ‘kaythanksbye.

So, it would be one thing if Steven Rattner’s firm was the only one accused of being tied up in a “pay to play” scandal for access to New York’s pension funds. It isn’t. Neither is Riverstone Holdings the only other fund stuck in the “fund my shitty movie distribution and I’ll send few hundred million your way” morass.

The New York Attorney General on Thursday charged Aldus Equity Partners managing partner Saul Meyer with violating the Martin Act. He surrendered to authorities and bail was set at $200,000.

Also on Thursday, the Securities and Exchange Commission asked a federal judge to add Aldus and Mr. Meyer as defendants in its complaint in the New York state pension fund investigation.

Paul Shechtman, Mr. Meyer’s lawyer, said: “I learned years ago that it’s far easier for a prosecutor to file a complaint than to prevail at trial. … It’s true and the evidence will show that Saul Meyer did no wrong.”

Aldus Managing Partner Charged in N.Y. Pension Probe [The Wall Street Journal]

That’s right, ladies, our favorite governor bangin’ prostie turns 24 today! Since the noted hooker fucker is most likely not sending her a gift (the brute), we’ll just have to step up to the plate for him. Suggestions as to what she might like would be greatly appreciated (money’s no object). In the shorter term, we wanted to deliver a cake but, unfortunately, don’t have an address for the working girl’s place of business at the moment. Bad for Ash D but good for you! We’ve decided to send the frosting originally intended for the birthday girl to one lucky recipient. Please nominate yourself or someone you think is deserving of the treat now, and consider those candles blown!

Maria Bartiromo is reporting that a number of Chrysler’s non-TARP senior bondholders are precluded from conducting direct talks with the government at all.

That is entertaining.

Developing.

It is entirely possible that a demographic defined by the terminally capitalist-guilt ridden figure of Geoffrey Gwin is responsible for the likes of the Chrysler tennis match we have been enjoying this morning.

One of 46 secured creditors to Chrysler LLC, Mr. Gwin was debating Wednesday whether to accept about 33 cents on the dollar for his debt. With some debtholders refusing to budge late Wednesday night, Chrysler moved closer to filing for bankruptcy protection, a step that would complicate its reorganization and put at risk the pensions of employees and retirees. In a bankruptcy scenario, a majority of lenders could still block Chrysler’s restructuring if they don’t agree to a deal.

Or perhaps the absurdly bloated egos of these managers have been tilting the entire playing field:

Geoffrey Gwin is wrestling with the knowledge that the retirement plans of some 80,000 Americans may rest in his hands.

“I am in turmoil,” says Mr. Gwin, principal of the Group G Capital Partners LLC hedge funds in New York.

Heavy rests the crown.

His confusion and crisis better find an outlet soon, as it’s game time in the stadium already.

A trip through the courts will open a new chapter of uncertainty as the company’s lenders and its thousands of affiliated dealers could mount a series of legal challenges to the administration’s efforts to pull off a swift reorganization.

And personal bias appears to play a substantial part:

Says the younger Mr. Gwin: “I have regret and bitterness about this process but may still swallow it and vote yes,”adding facetiously, “but if we want to talk about fairness here, give my dad’s pension back and I will gladly forgive Chrysler’s loan.”

In pointing out the article top us a friend of Dealbreaker and senior manager for a multi-billion-dollar hedge fund family comments:

If I were an investor, I’d yank my money from his fund faster than Geithner yanks away the comp restrictions on the bank welfare recipients.

A Chrysler Creditor Finds Himself Torn [The Wall Street Journal]

Added yesterday. Apparently the fundamentals of good hygiene weren’t a matter of concern at the Big C until pig season. Previously, cornering colleagues in the elevator, hitting the emergency stop button, and injecting them with a strain of whatever disease you happened to be carrying at the time was fully encouraged.

Related: TB At BAC

Also Related: Bear Stearns: “Do not use the urinal for disposal of solid matter”

They were robbed of a spot on Time’s 100 Most Influential list, after being teased with the prospect of such an honor, that’s what!* If you see any of these men today, stop and give them a hug— they’re gonna need it. Moving on. Among those who were inducted into the winner’s circle: T. Boone Pickens, Carlos Slim, Meredith Whitney, Suze Orman, Tim Geithner, Jamie Dimon, Sheila Bair, Paul Krugman, Nouriel Roubini, and Bernie Madoff. According to managing editor Rick Stengel, “The TIME 100 is not a list of the most powerful people in the world, it’s not a list of the smartest people in the world…they’re people…who are using their ideas, their visions, their actions to transform the world and have an effect on a multitude of people.” Indeed!

*Feel free to find more common threads among them.

If anyone harbored any illusions with respect to the crushing complexity involved in trying to restructure a firm before during or after bankruptcy, the last several hours should clear that question up nicely:

8:52 am EDT

9:16 am EDT

9:41 am EDT

9:54 am EDT

The time-line betrays a nearly blind, almost naive optimism on someone’s part. It is easy to feel sorry for the Administration in the way you pity the little kid who was sure she would be “A Fairy Princess” when she grew up.

Administration Official Says Chrysler to Enter Chapter 11; Obama to Speak at Noon [The Wall Street Journal]

Wells Fargo is apparently implementing some new cost cutting and productivity strategies today. The former is going down in the form of layoffs at Evergreen Securities in Charlotte. The latter is much more inspired. From the front lines:

Among the new rules, and what I view as the most important, is that you aren’t allowed to look down at your Blackberry during a meeting. If you do look down, you have to write a check for $100 to the charity of the meeting manager’s choice. You are allowed a 5 minute productivity break where you are either allowed to check your Blackberry, or go to the bathroom. One break per meeting. It is yet to be determined whether or not you are allowed to check your Blackberry while going to the bathroom, so long as it fits in the allotted time…we’ll let you know when HR gives us their report with our afternoon nap.

Related: Let this be a cautionary tale to all— extensive use of the ‘berry will result in your investment bank going under

State Street Under Investigation (WSJ)
The Mass Secretary of State is looking in to whether State Street misrepresented (flat out lied) to pension funds about the nature of its Bond Fund.

“A document State Street provided to clients to describe the Government/Corporate Bond Fund said it would invest in a “broad-based, investment-grade fixed-income universe.” But, as of March 31, 2007, the fund had nearly half of its weighting in mortgage-backed securities and other asset-backed securities. Such securities may be investment grade but are riskier than Treasurys and specific corporate issues. In September 2005, the same fund’s biggest weighting was in U.S. Treasurys, while mortgage- and asset-backed securities accounted for less than 6% of its top 10 holdings.”

GM Bondholders Looking For More (Bloomberg)
“General Motors Corp.’s bondholders plan to present a counteroffer to President Barack Obama’s auto task force in Washington today that would give them control of the carmaker, according to a person familiar with the committee representing creditors.

The bondholder committee plans to reject GM’s April 27 debt exchange offer that asked them to swap all their claims for a 10 percent stake in the reorganized automaker, said the person, who declined to be identified because the negotiations are private.”

Pang Confined To His Home (WSJ)
Danny Pang out on $1 million bail, currently sporting ankle monitoring bracelet, under house arrest.

Former Citi Exec To Launch Financial Services Firm (Reuters)
It shall be called Primus.

EU Hedge Funds Ask Regulators To Back Off (FT)
“Jonathan Russell, chairman of the European Venture Capital Association, called the proposed EU directive “disproportionate, inappropriate and anti-competitive”.

The Commission’s proposals, drawn up amid public and political anger over the risks taken by some financial institutions that led to the current crisis, would require alternative fund managers, rather than funds themselves, to register and seek government authorisation for the first time. Fund managers would also have to meet reporting, governance and risk management standards, including minimum capital requirements.”

One of the disadvantages of taking strong positions on economic events before the fact is the credibility sink one is subjected to on the flip side. Ouch. Failing one’s predictive tasks as an asset manager is a potentially career limiting mistake. Missing a call as a gambler is expensive, even dangerous- at least to limb if not also to life. But missing a call while occupying the Executive Branch of government of the United States is a different matter all together. Now add the detail that your office was actively leveraging the rather substantial resources of the Executive Branch in pursuit of the effort and you have a bit of a problem. You either have been making a show of it, or your office is far more impotent than it appears. Neither outcome is desirable.

The solution, of course, is not to publicly intertwine yourself in industrial policy with such visible and unbridled enthusiasm unless you have matters well in hand. With J.P. Morgan Chase leading the creditors, 90 minutes of discussion before voting wasn’t enough time to tip the hands in favor of the latest deal. It wasn’t even close. It should surprise no one that once an outsider (Fiat) was introduced into the mix the subsidized and coddled “avoid Chapter” process was split wide open.

Can we please… please move on?

Chrysler Chapter 11 Is Imminent [The Wall Street Journal]

$$$ Dr. Doom’s tips for entertaining: “Fun people and beautiful girls,” Roubini said, grinning. “I look for ten girls to one guy.” His friend Bill Clinton, he added, is a fan of this ratio.

$$$ Fortress to Take Over Zwirn Hedge Fund Liquidation [WSJ]

$$$ Bernard Madoff Celebrates Birthday In Jail and Disgrace [ABC]

CHARLOTTE April 29 /PRNewswire/ — Bank of America Corporation today announced the results of management and shareholder proposals at the company’s 2009 annual meeting.

All 18 directors were elected to the board by comfortable margins. In addition, management proposals regarding executive compensation and the retention of PricewaterhouseCoopers LLC as the company’s independent accounting firm were approved.

Seven shareholder proposals were not approved. An eighth shareholder proposal to change the company’s by-laws to require an independent chairman was narrowly approved. (For results see the table below).

At a meeting of the Board of Directors today, after a recommendation from the Governance Committee, Dr. Walter E. Massey was elected chairman. Kenneth D. Lewis will be president and chief executive officer. The board unanimously expressed its support for Lewis to continue in that role.

Having discussed his looks at length on several occasions, we’ve been aware of the fact that a decent amount of the Dealbreaker audience regards Tim Geithner as a hot piece of man meat for quite some time. And it turns out you’re in good company. The Treasury Secretary, seen here bending over for the camera, has been named one of the world’s 100 most beautiful, according to People. Which, at a time when he could use all the ego stroking he can get, has got to feel pretty nice. And you know who else could use some stroking right about now? Every single financial services hack, even the ones doing pretty okay for themselves. Which brings us to this— who are the thirty most beautiful people up in this wasteland of an industry? (For continuity sake we were going to go with a 100 but…you know.) Nominate your picks now, and we’ll announce the coveted few next week. The known porn stars among us are a given, but who else? Thain? Ackman? Mark Haines? Feel free, nay encouraged, to make selections based on both inner beauty and raw sex appeal (I know I don’t even have to say who I mean. Like a cat in heat this Stamfordian makes us).

Paul Volcker sees the bottom. Right in front of his nose. And let us tell you something: As head of the Economic Recovery Advisory Board and a fact finding body on the United States Tax Code, Das Volk knows wherefrom he speaks- when the man says “stop the presses,” he means “stop the bloody presses”

The Federal Reserve is going beyond the traditional role of central banks here or abroad,” Volcker said. “At some point it’s reasonable to ask should this particular institution, with its independence very well protected, be allocating so much of what is essentially government money.

This would seem to suggest that rumor to the effect that Volcker had been “mushroomed” are false (or that he escaped his minders and is presently on a dangerous public speaking rampage, just one step ahead of the law.

Volcker Says the U.S. Economy Is ‘Leveling Off’ [Bloomberg]

The key issue: Splitting the Chairman and CEO role (effectively stripping Lewis of the Chairman title) has moved from “still being tabulated” to “deadlocked” as the proxy vote is carefully counted behind closed doors.

The situation is, of course, fluid.

Apparently, victory in the Chrysler battle will be announced presently:

President Barack Obama plans to announce tomorrow morning that Chrysler LLC will be placed into Chapter 11 bankruptcy leading to an alliance with Italian automaker Fiat SpA, people involved in the matter said.

Administration officials are still trying to resolve outstanding issues, and the plan is not finished yet, said one of the people, who declined to be named. If there’s a bankruptcy filing, it could come as soon as tomorrow, the people said.

We will keep you up to date as we are.

Obama Said to Ready Plan For Chrysler Bankruptcy, Fiat Alliance [Bloomberg]

So much so that he began practicing yoga regularly, cut out red meat and made up with his sworn enemies who he previously vowed to skull fuck, after ripping said enemy’s eyeballs out do battle with? If the filmmakers are intent on referencing Dan Loeb’s character arc with any sort of accuracy, the answer is maybe! Apparently back when the Wall Street sequel was first being discussed (circa 2007), Michael Douglas and then-writer Stephen Schiff took some lunch meetings with the Third Point founder who, it has been suggested, once exhibited similar qualities to the Gekko. Granted, the consultation took place a while ago at this point, but that doesn’t mean Mikey wasn’t sufficiently inspired. We’ll be looking out for references to the Jewish Rambo when this thing finally comes out.

Earlier: Casting The Wall Street Sequel

Apparently all 18 of Bank of America’s directors were elected “comfortably.” While results of the votes on eight shareholder proposals are still being tampered with tabulated, including the one on splitting the chairman and CEO posts, it appears we’ve got an answer to this morning’s question, re: whether or not there’d be any flirtatious exchanges between Lewis and shareholder Evelyn Davis, like there were between E-Dav and Dick Parsons’ at Citi’s meeting last week.

You know, we were fairly certain that the first time we wrote about octogenarian Ace Greenberg’s sex life (by way of Barbara Walters’ who was also banging Alan Greenspan at the time) was going to be the last. Thanks to Charlie Gasparino, not so! Perhaps taking his Italian deli meats beat a bit too literally, Gasparino’s latest report involves the former Bear Stearns chairman attempting, unsuccessfully, to slip a BSC employee the salami. Sadly, Ace Not In The Hole was unsuccessful, and Jimmy Cayne was forced to pay off the girl to the tune of $2 million.

The allegations, which centered around “inappropriate touching,” according to people with direct knowledge of the matter, didn’t result in a lawsuit. Instead, reeling from the bad press of the firm’s role in the burgeoning financial crisis, Cayne settled the matter with the woman, a much younger employee who worked in sales capacity, and who had initially demanded a much higher payment. The employee also claimed to have had a witness to this behavior. In an interview, the 81-year-old Greenberg said, “I can’t comment on something as ridiculous as this.” When given another opportunity to comment on either the unproven allegations or whether the payment was actually made, Greenberg said, “I’m not going to dignify” the matter with a response. He referred to the entire issue as “bullshit,” and said my sources were “pathological liars.”

Shockingly, JPMorgan, which every day must get down on its knees and thank god it paid the privilege to be saddled with “these people,” declined to comment when Gasparino came a’ calling. Regardless, and not to minimize sexual harassment, can’t we all just come to the conclusion that of course this happened? In his last years at Bear, Greenberg was doing magic tricks and getting broken up over the fact that his puppy wasn’t placing well in dog shows. Which is to say, he was dipping his toe in senility, if not jumping right in, and more than likely thought that stuff like, I don’t know, pinching girls’ asses on the floor still fell under the umbrella of “appropriate” touching, which it was when he first started at the firm, back in 1821.

Earlier: Barbara Walters Has Done 80 Percent Of Wall Street’s Living Dinosaurs

At last week’s Citi annual investor meeting, one shareholder suggested that the bank “hire the best public relations firm in all the land,” in order to put itself back on the path to success. We don’t necessarily disagree (though we would add that there are other things the Big C might considering doing as well)! Apparently, though, they’ve yet to hire anyone for the job, given this morning’s latest whoops. As you’re aware, Citigroup has asked Daddy Geithner permission to pay special bonuses to many “key employees,” namely those at its trading unit, Phibro, who are threatening to leave unless Vikram coughs up the dough. Employess like Andrew Hall. He runs Phibro. And, as reported last year by the Journal, he also owns this German castle.

Hall, by all accounts, seems like a cool guy who, more to the point, earned Citi a decent amount of pocket change last year. Obviously, though, that won’t much matter when the masses get a hold of the castle business, which reads so much worse than, like “mansion” or “big ass house” or even “chateau.” I guess the one argument Citi could make is that people who own castles are exactly the sort of prima donnas who would throw a hissy fit and say stuff like “if I walk out that door I’m never coming back!” But yeah, somehow we see this one not working out.

Citigroups Andrew Hall Has Castle, Demands Bonus [Daily Intel]

Supposedly Bank of America “cannot report results of shareholder votes [and whether or not Ken Lewis goes] today because of [unexpectedly high?] volume.” Right.

Count on a failing business backed into a corner to rely on “changing the rules of the game” to sustain itself, to carry it above water (barely) for another few periods. Just buy some time until something miraculous can be arranged (or more time can be purchased from the time vendor).

In this case, the “rule change” developed by some “genius” is the regulatory raising of the cost of operation of an entire industry’s flagship products so as to make one firm’s “novel alternatives” profitable. The “novel alternatives” are small cars and fuel-efficient models. The company is Ford. The “genius” is Bill Ford.

Higher taxes to push the price of petrol up by more than 70 per cent are needed to change Americans’ car-buying habits and usher in a new generation of fuel-efficient vehicles, according to Bill Ford, chairman of Ford Motor.

[…]

His comments mark a clear break with the rest of the US auto industry in the depths of a financial crisis that has sapped Detroit’s ability to fund a new generation of electric vehicles, hybrids and other more fuel-efficient models.

And what about the billions upon billions in extra costs heaved onto the back of everyone who drives so that Ford can sell some electric cars no one wants to buy otherwise?

Strong price incentives were needed for a lasting change in consumer demand, Mr Ford said: “It’s got to be a pocket book issue for the customer to change their behaviour.

That’s just fantastic, Bill.

Ford chairman calls for petrol tax to drive change [The Financial Times]

Friday is Neel Kashkari’s last day at the Treasury. This is, of course, deeply disappointing for those of you who feel strongly about having follically-challenged men at the helm of things, as we’re now down to a single Bald. But cheer up, pups. TARP-boy’s retirement means one very important thing— anecdotes about $Kari’s time on the job! Like this:

…they are different from you and me.”

The personage of Sir Fred Goodwin- who resigned as head of Royal Bank of Scotland about a month before that institution reported the largest yearly loss in United Kingdom history (£24.1 billion) and whose house in Edinburgh was vandalized by anti-capitalist terrorists- commands a yearly pension of some £703,000, a sum which, jumping on the executive pay bandwagon, Lord Myners has been pressuring the Royal Bank of Scotland to trim.

It turns out that the position of Grand Master at RBS had some other perks as well, such as getting your name on the five pound note. This, it seems, may have the tendency to drive men mad. Lord Myners, in classic Angloharangue, sums up the results for us:

I have been advised that in the Royal Bank of Scotland’s headquarters in Gogarburn, Sir Fred Goodwin employed somebody whose sole job was to ensure that bank notes dispensed from automatic telling machines in that headquarters building bore his signature and his signature alone.

Goodwin insists cash machines hold ‘his’ notes [The Times Online]

Fred J. Martin of San Francisco said his trip to the meeting cost more than he’ll receive in dividends this year. “I question whether the board has effectively represented the stockholders who elected them,” he said, adding later, “Your acquisitions are much akin to the blitzing of Baghdad.”

Earlier: Ken Lewis: “Merrill Decision Made Independent From Government Influence”

At a decidedly more sober* annual shareholder meeting, John Mack told the audience that he’s seen an ‘exodus’ of ‘key people’ as a result of no longer being able to ply them with money in the manner they’ve become accustomed to.

*That or John Mack can just hold his liquor better than Ken Lewis.

Is the SEC drowning in a wading pool of ignorance? Have no fear. The Commission is getting “…more smarter, more swifter, more successfuler….” at least if you believe Robert Khuzami, sometime federal prosecutor made SEC enforcement chief. It seems that the new focus over at the SEC will be to hire smart guys. Really smart guys. How smart? Have you ever heard of Plato, Aristotle, Socrates? Morons.

Khuzami took over Enforcement from Linda Thomsen, passer of the Ponzi buck, back in February, leaving precious few targets for ridicule at the Commission. Be this as it may, Khuzami is working hard to fill Thomsen’s shoes.

When asked if it was true that specialists and attorneys with high fees are easily bored, Khuzami revealed that “lawyers in a specialized group could be permitted to work on unrelated cases to maintain variety,” and that “It’s not about what’s broken.”

The good news is that Khuzami is due to testify before Congress next week. The sharpening of disemboweling cutlasses could be heard echoing throughout the Dirksen federal building over the last 48 hours.

SEC Plans Fraud Fight With Teams of Specialists [The Wall Street Journal]

Jigga what? Is Ken even trying to make his stories match up or just saying fuck it, let’s have some fun? We knew the Boone’s would be flowing freely today but we didn’t realize how hard and how early. This guy said it best: “Lewis is drunker than a Japanese Finance Minister right now.”

Update: Okay, this is even better than we could’ve imagined. Apparently after telling a shareholder that the bank’s decision on Merrill was “independent of any government threat,” he added, “you have your facts wrong.” You know, facts based on testimony Lewis gave to Andrew Cuomo. We will now be setting the under over on how long before someone holds up a picture of Hank Paulson and asks if Lewis recognizes him, to which Lewis will respond, “I’ve never seen that man in my life,” at two hours. And taking the under.

Earlier: Live-Blogging Bank Of America’s Annual Shareholder Meeting

Sadly we didn’t make the trip down to Charlotte but this guy is providing live updates, and of course anyone present (Lewis) is free to keep us abreast of the situation (same goes for those of you at the Morgan Stanley party). So far former BAC CEO Hugh McColl has offered that if asked to become chairman, in the event someone lost the job, he’d decline, and Evelyn Davis has proclaimed her support for Ken Lewis. Will there be any awkward flirtation between Davis and Lew like there was at last week’s Citi meeting with Dick Parsons? We’ll just have to wait and see (though it’s unlikely, as Lewis strikes us as lacking the same charm as Mr. P).

Update: Five minutes into his prepared remarks, Ken Lewis admits Merrill was a mistake. No, just fucking with ya. He defends both of his bright shining stars, Merrill Lynch and Countrywide.

As briefly mentioned yesterday, Oliver Stone has signed on to direct the Wall Street sequel, after previously bailing on the project (whose original title, Money Never Sleeps, has blissfully been shelved). That’s where the good news ends and the Shia LaBeouf begins. He’s currently in negotiations to “play a young Wall Street trader under Gekko’s spell— a somewhat updated version of the character Charlie Sheen played in the original film.” While we can see LaBeouf playing a 2009 version of the sniveling Seth Davis,* this just won’t do. Hopefully the talks will fall through and when that happens, we need to be prepared to offer a more suitable alternative. Who shall that be? Don’t be afraid to think outside the box. Once you’ve answered that, determine a working list of Wall Street “personalities” we’d like to make appearances as themselves. Jimmy Cayne— given. But what about Meredith Whitney? Jamie Dimon? Jim Chanos? Mark Haines? Let’s inject some authenticity up in this piece. Lastly, since it sounds like the script isn’t exactly finalized, what do we think of a storyline involving a burning passion between Erin Callan and David Einhorny, ignited over a balance sheet brawl?

*In a Boiler Room sequel no one’s announced plans to make.

After what’s felt like months of discussing whether or not Ken Lewis should be canned from Bank of America, shareholders are finally getting their big moment today, at the firm’s annual investor meeting. Things are scheduled to get going later this morning, but ahead of the main event, SEIU is reiterating its message to, among other things, throw 2008’s Banker of The Year out on his ass.* That truck’s been circling BAC’s corporate headquarters for the last hour.

*Meaning whether or not to re-elect Lewis to the board, but no one ever said they couldn’t see him out of the building Fresh Prince-style.

Citi Asks Permission To Pay Bonuses (WSJ)
The combination of pay caps and the full-sub role Citi has started to play is going to start pushing people towards the door; now that there are stable banks (and we can tell where they are) you’re going to see the decent groups seek to relocate. From a human capital perspective, Citi will start looking like the Treas before too long. Unless it can…pay bonuses (says Citi).

“Citigroup Inc., soon to be one-third owned by the U.S. government, is asking the Treasury for permission to pay special bonuses to many key employees, according to people familiar with the matter.

The request comes as Citigroup is grappling with broad government pay restrictions that could break apart its legendary energy-trading unit. People at that unit, Phibro, are threatening to leave because of pay caps tied to the U.S. bailout of Citigroup. Phibro has been the source of hundreds of millions of dollars in profits for the bank, and has paid out hefty compensation, including a roughly $100 million windfall last year for the unit’s leader, Andrew Hall.”

BP’s Quarterly Earnings Here;Shell’s Here (BBC/WSJ)
Both BP and Shell saw net profit drop by 62% in the most recent quarter, the obvious culprit being the price of oil.

Fed Seeks Capital For Six Banks (Bloomberg)
Obviously Citi and Bank of America, and MS thinks Regions, Sun Trust, and KeyCorp are solid contenders. And lucky number 6 is?

AIG Begs Executive To Reconsider Resignation To Avoid Default (FT)
“AIG has moved to stave off the risk of default on $234bn of derivatives by persuading a senior executive at its troubled financial products division to rescind his resignation and remain with the stricken insurer to unwind the complex trades.

AIG insiders said James Shephard, the deputy chief executive of Paris-based Banque AIG, had decided to stay on as the unit’s chief less than a month after resigning in the midst of the political furor over the insurer’s bonuses.”

Societe General Chairman Steps Down (WSJ)
“After facing repeated attacks, Societe GeneraleSA Chairman Daniel Bouton said Wednesday he will step down, ending more than 10 years at the helm of the French bank that was shaken by a €4.9 billion ($6.44 billion) trading scandal in 2008.”

$$$ Fox revives ‘Wall Street’ sequel: Oliver Stone back on board [LATimes]

$$$ Frank Sees Banks TARP - Free In A Year [Reuters]

$$$ S&P’s “Weakest Links” List Rises to Record 300 Companies [Research Recap]

$$$ Clarium Capital founder Peter Thiel: “Since 1920, the vast increase in welfare beneficiaries and the extension of the franchise to women — two constituencies that are notoriously tough for libertarians — have rendered the notion of “capitalist democracy” into an oxymoron.” [Cato Unbound via Gawker]

We tend to ignore highly volatile biotech stocks that bound off the walls and ceilings like a Happy Fun Ball on acid-laced meth, but Dendreon Corporation (DNDN) is a special case because it is such an obnoxious assassins tool for the elimination of careless shorts. (And we keep getting email tips). Short interest in Dendreon was upwards of 14 million shares on about 100 million outstanding. A very hard stock to borrow, as it happened, and susceptible to recall. But that was nothing compared to the announcement that it had fantastic results with:

…its pivotal Phase 3 IMPACT study of Provenge (suspiciously close to “revenge”) in men with advanced prostate cancer data. While the data is incomplete or non-statistical, Dendreon said that the IMPACT study met its primary endpoint of improving overall survival compared to a placebo control. Dendreon intends to file an amendment to its existing Biologic License Application (BLA) in the fourth quarter of this year to gain licensure of PROVENGE.

Being caught short was deadly for your position.

The market had been expecting an announcement within the year, and a competitor had (with the short squeeze fueling the surge). Also, a potential Provenge competitor was pulled from development late last year. Good news would be sticky.

Ouch.

Dendreon Plunge Baffles CEO as Cancer Drug Said to Prolong Life [Bloomberg]

The FBI got him in somewhere in Southern California, the Journal reports.

Earlier: How To Make People Suspect Your Business (And Life In General) Is A Sham

Additionally, Thain was also unaware of the fact that someone at Bank of America had leaked receipts from his interior decorating spree, which Gasparino also told him about. How did the pass off of information go down? Where did it go down? Was it arranged by a third party, taking place at the stroke of midnight in the alley behind Goldman? Did Gaspo tell Thain to “come alone”? Did CG bring a gun? Was there talk of a guy named Snakes? Did Chaz address Thain as “Johnny”? At any point during the conversation were threats made to “bust knee caps” or gifts of deadly deli meats alluded to? We like to think (and know in our hearts) all of the above happened, but the story JT and CG are going with is that the former Merrill CEO got the lowdown on his impending firing (and the Toilet-gate leak) while watching CNBC. Sayeth Gasparino:

As part of his makeover, Thain is also doing a lot of talking, giving a fulsome interview to the Wall Street Journal where we learned, among other salient facts, that he still puts on his suit and tie every morning even though he has no place to work and, oh yeah, he doesn’t like Ken Lewis. One interesting fact left out of the story: Thain, according to a spokesman, told the Journal that he didn’t know he was being fired by Lewis until he saw the news on CNBC being broken by yours truly.

Oh, but lest you think Chazpo can be bought by some well-placed flattery, think again!

I’m not taking sides. In fact as far as I’m concerned, watching these guys got at it is kind of like watching old World War II war footage of battles between Germans and Russians; you want them both to lose.

The Bank of America Smackdown! [TDB]

We wondered if Ken Lewis bothered to read the Material Adverse Change clause for the Merrill Merger very carefully. Either he did, and managed to pull off a fantastic bluff over Paulson’s head, or he paid as little attention as anyone else. We took a look at the details yesterday in: What Was Lewis Really Up To?

We aren’t the only ones to notice, it seems. The always interesting Credit Writedowns caught the story today: BofA’s MAC clause was as porous as swiss cheese quipping:

The latest news is stunning: Bank of America’s MAC clause could probably never have been invoked because it had a specific exclusion for the deteriorating prices of legacy assets on Merrill’s books.

Indeed.

Well, now that you men have completely trashed the financial system, banking and, basically, the entire global economy, we women are going to have to (as usual) clean up the mess. First Iceland, now this. This time, however, there are going to be a few changes around here- that is, according to people familiar with the matter.

Would the world economy have got into such a mess if more women had been in charge? It’s a difficult question to answer.

The economic crisis, though, could put a spotlight on what women offer as leaders who could help repair the damage.

“We’d love to think it would make a difference,” said Ruth Sealy, deputy director of the International Center for Women Leaders at Cranfield University.

Sealy said the crisis is bringing to light academic research, which includes studies showing that mixed management teams make better decisions and are more innovative.

Can women managers reduce your business risk? [Reuters]

Clearly, Lady Ruth McMadoff was fully aware that her husband’s business was a sham. But let’s travel for a few moments to an imaginary world in which Mrs. Bernie had no idea her baubles and beach houses and butter-blonde lockes were being financed through ill-gotten gains. According to Randy “The Ethicist” Cohen, Ruth had a moral obligation to stop and ask the husb where the scratch was coming from, the implication being that it was coming from a scam.

Here’s a guideline: around the time you acquire your third house (the one in Palm Beach), you must enquire, How are we paying for this? When selecting your second yacht (Little Bull, recently seized by the courts), you must pose the question: Where is the money coming from? Having benefited from a husband’s activities — for decades, not days — a spouse may not remain willfully ignorant. Adults must have some grasp of their impact upon other people, including financially. The greater your wealth, the greater your impact on others, the greater your responsibility not to be conveniently oblivious.

Really? With all due respect to Cohen, we beg to differ. Since when does marrying someone mean that you should have to take an active interest— prying or otherwise— in their business? Jim Simons made $2.5 billion last year. Is Mrs. Simons demanding a look at Renaissance’s books? Anne Dias Griffin’s Aragon Global Management turned in a considerably better ‘08 than the husband’s fund. Is Ken packing the Mrs.’s lunch with love notes that read “Have a great day! PS I know you’re running a Ponzi scheme, you must be. I’m not gonna rat you out, just admit it and teach me your ways.” Ray Dalio took home $780 million. Do you see Barbara making periodic visits to the trading floor just to make sure “there’s no funny business going on here”? And even if she wanted to, who’s to say she’d be granted permission to “come on down”? This isn’t the Price Is Right, RandCo.

Update: After considering the offense that might be taken (you have no idea how many “wives of” read this site), it must be said— RandCo, morals or not, these women aren’t paid to think (let alone ask, “is this a scam?”).

Sotheby’s announced in a regulatory filing today that it will slash its dividend to 20 cents a year from 60 cents and cut 5 percent of its global headcount, on top of a 15 percent population restructuring last year. Surely it goes without saying but we’ll do so anyway— we know who’s behind this. Before jumping to conclusions, however, know that this wasn’t done out of maliciousness or even as a ruthless cost cutting measure. Money, in fact, had nothing to do with it. Rather, it’s part of a master plan going under the working title Operation Play Auction House. Slowly but surely everyone everyone will be cleared out and by next year you’ll be able to mosey on up to 72nd and York, press your nose against the glass and behold as you know who will be scurrying around the building playing the roles of security guard, curator, pressed sandwich Nazi, auctioneer and, using various wigs and affecting British accents, five different bidders.

And, accordingly, has voted against all 18 of Bank of Amerrilwide’s Directors and Ken “Strawberry Hill” Lewis.

Suck it Kenny.

Update: Reuters has it now: CalPERS opposes entire Bank of America board

CalPERS said it opposes the directors “for their role in allowing billions of dollars in bonuses to be paid to Merrill Lynch employees and for their role in failing to disclose to shareholders the true financial condition of Merrill Lynch prior to the consummation of the merger.”

Granted, they only own one third of one percent, but still.

Apparently the Justice Department is now hot on the trail for answers. Good for them! Not so good for Joseph Cassano, Andrew Forster (an executive vice president), and Thomas Athan (a managing director). Or possibly no big deal. Apparently the “investigation” consists of “looking at email traffic to try and see who was saying what to whom,” and if Team AIG-FP wasn’t in fact just a bunch of morons, perhaps they were careful about what they put in writing. But who knows. Obviously they could be criminals and dumb asses, and it’s unlikely they had an insane boss who cleaned the office in the buff and “decreed that e-mails would no longer be stored electronically,” though that’d add a delightful twist to this story.

CBS News has learned investigators are honing in on statements like one in a September 30, 2007, quarterly report, where potential accounting losses tied to its Cassano’s unit, known as AIGFP, were $352 million. And the company said it was “highly unlikely..{it} will be required to make payments.” To clients, it was an indication the company was saying it was healthier than it actually was.

Also under scrutiny is a November 7 press release where AIGFP upped that potential accounting loss to $550 million.

Earlier: Retirement Agreeing With Joe Cassano

So, I don’t mean to sound old or not down with technology, but the SEC is going to prove its not completely worthless by joining Twitter? No thank you, Mary Schapiro. Apparently the decision to “get online” is an effort to remake the agency’s “image” and be “where investors most need it,” which, according to Schapiro, is at SEC Investor Ed, SEC News and SEC Jobs. Bitches, please. How about first you figure out how to read reports entitled “So and So Is A Massive Ponzi Scheme” before offering up links to press releases and sharing that Mar-Schap is “out for drinks with Ruthie!” Having Power Lunch on Twitter is one thing— an annoying thing, since we have to hear about it 389 times per episode, but harmless. This actually worries us. Obviously these people have proven to bring a steep learning curve to the table. Having been duped more than one (million) time(s) before, they’re probably going to be over eager to respond to any and all messages that come their way. How long before they’re getting diversionary, throw-them-off-the-trail Tweets from, I don’t know, this guy like, “Massive Ponzi scheme @72 Cummings Point Road, better get out here and stop us” and buying it hook line and sinker, all the while missing the real scam going down in Chi-town? I say soon, if it hasn’t happened already.

Though he claims to be unmoved by share price, it is hard to imagine that Buffett is totally ignoring the crazy ride that is Berkshire’s share price, or the constant drubbing the firm (and WB himself) keeps taking over the variety of “Financial Weapons of Mass Destruction” it has collected over the last several years. Bloomberg, gleeful as a grandfather telling war stories to the grandkids and pawning off that scar he got falling off the ladder changing the kitchen lightbulb while drunk as a war wound, isn’t missing this chance to retell the story, and is, therefore, on the case again:

Chief Executive Officer Warren Buffett’s increasing use of derivatives — contracts whose value is based on the performance of stocks or bonds or the outcome of a specific event. That Buffett once called derivatives “time bombs” doesn’t calm investors.

Berkshire held contracts with a combined notional value of $67.3 billion at year-end. While this figure is used mostly for reporting purposes and isn’t indicative of potential losses, it dwarfs the company’s $25.5 billion in cash.

Though not quite as bad as the sinkhole it fell into back in February, Berkshire is getting tagged again and, at least to the extent you can believe any reason financial journalism comes up with to describe stock movements, the Berkshire Puts seem as good a reason as any. Sort of.

We’ve managed to harp on the poor reporting surrounding the Berkshire Puts more than once before, so it should come as no surprise that these are no ordinary puts and that Berkshire’s exposure isn’t typical of options writers. In this connection, we think we can be forgiven for thinking the issue of Berkshire’s ratings is a bigger one than the options themselves.

Berkshire’s 31% Decline Spurred by Derivatives Buffett Derided [Bloomberg]

Instead of banning short-selling outright, why not squeeze settlement times so tightly as to make it de facto impossible? Eddy Wymeersch, chairman of the Committee of European Securities Regulators pointed out that moving settlement from the rough European (and just about everywhere else) standard of T+3 to T+0 “would largely enable us to eliminate short selling.”

Of course, Wymeersch probably meant naked short selling, which delivery gaps tend to facilitate (stricter delivery requirements were among the recent efforts to curb the practice, in fact). But we think this a fantastic idea beyond just short selling restrictions. In fact, this approach could be the cure for financial crisis at large. It is true that the technology exists today to move to T+0 settlement. But why stop there? Why not move to T-1 settlement? Or, now that we think of it, T-3 settlement? The system we envision would work like this:

Trade Day Minus 5 (T-5):

After conversion of the Treasury’s NYSE Euronext, FINRA and owner/member preferred shares to common, the Treasury has become the DTCC’s majority shareholder and simply provides the bid and ask data for the day based on guidance from the Economic Recovery Advisory Board and recordings made during Paul Volcker’s late afternoon nap time. Prices are subject to the “uptick only” rule, meaning that no bid made at the same price as the last bid made may be made until there is first a bid uptick. This prevents stagnated pricing and undue “sideways” volatility.

Allotments and purchase assignments for the upcoming trading day are generated by rotation/capital balancing algorithm at DTCC’s headquarters. The resulting trade matches are netted and crosses harmonized to reduce the number of environmentally wasteful sheets of paper used in the printout.

T-4:

The final trade matches and prices are vetted by the Economic Recovery and Political Retribution Advisory Board. This body is currently run by Andrew Mark Cuomo, but he reportedly failed to press the “Door Open” button quickly enough when Rahm Emanuel was running for the elevator last week and Larry Summers apparently overheard Cuomo mutter “run you fucker, run” under his breath so the big AMC might be OUT.

T-3:

Funds are automatically deducted from checking and savings accounts (or added to the purchaser’s debt account at LIBOR + 11 plus “no cash” penalty. Overdrafts and related fees are a prime source of new “DTCC revenue” for those banking institutions currently favored by Tim Geithner). Trade confirmations are sent via USPS and should arrive by T+19.

T+0:

Shares are delivered to the lucky buyer. (Optional).

It will be seen that this system will pretty much assure the realization of the American Dream of Equity Ownership and prevent any of the pesky crashes or “corrections” we’ve been forced to live with until now.

Watchdog mulls new curb on short selling [Reuters]

It is difficult not to be entertained by the coverage on the meteoric plunge towards bankruptcy that is Chrysler. The Journal article is pretty circumspect about some rather important details, failing even to mention bondholders until the 18th paragraph in a 19 paragraph article. The deep and heartfelt sacrifices the UAW is making are front and center:

The United Auto Workers union would eventually own 55% of the stock in a restructured Chrysler LLC under the deal reached by the union and the auto maker, according to a summary of the agreement that was reviewed by the Wall Street Journal.

Fiat SpA “eventually” will own 35%, and the U.S. government and Chrysler’s secured lenders together will end up owning 10% of the company once it is reorganized, that summary said.

Hmmm, employee owned and operated. Where have we heard that before?

The Washington Post, however, claims to have the scoop on bondholders with:

The Treasury Department reached an agreement with Chrysler’s creditors late last night that may prevent the troubled automaker from going into bankruptcy, a source familiar with the matter said this morning.

The carmaker had owed a fractious group of 45 banks, hedge funds and other firms about $6.9 billion. These creditors have agreed to write down the debt to $2 billion, the source said.

As long as one can watch from a distance, this charade is quite entertaining.

UAW to Get 55% Stake in Chrysler for Concessions [The Wall Street Journal]

Chrysler Creditors Agree to Deal With Treasury [The Washington Post]

Fortis shareholders throw a shoe!

Fortis’s extraordinary meeting had to be adjourned on Tuesday after angry shareholders raided the stage and threw shoes at the management.

Mischael Modrikamen, an activist lawyer representing 2,300 small shareholders in the once-dominant banking group, is hoping to scupper the planned sale of Fortis Bank to BNP Paribas, the French bank, in favour of recreating a Belgian financial champion.

Management including Jozef de Mey, chairman, faced several calls to resign from angry shareholders.

Despite, among other things:

- In a moment of weakness, feeling the need to get something off his chest, inviting a partner into his office and going, “Nasar, I want you to know we are in a Ponzi scheme.”

David Schindler, an attorney for Mr. Pang, said his client expects to be fully vindicated.

A CNBC commentator asks a question we’re probably not supposed to be asking (silly goose, you’re just supposed to roll over and take this stuff). Since he’s likely been hauled off in a body bag in the last ten minutes, we’ll repeat it now— “What if the banks refuse to raise more capital?” Bank of America is apparently submitting its rebuttal today, and in the event they get the same answer, we don’t see Lewis having the pair to say “thanks, but we’re good.” However do not underestimate the liquid courage one can grow after mainlining five bottles of Boone’s on the drive to Tim Geithner’s office, and so we ask, what if? This is a serious question that certain high-up bank officials really, really want an answer to. Is worst case scenario, like, they take the CEO’s out office, or the more disturbing and to be avoided enforced bird-watching time with Hank Paulson?

As previously mentioned, regulators have told Bank of America and Citi they need to raise more capital, “insinuations” (Lewis’s drunken words, not ours) with which the firms take issue and plan to appeal. Not to give the banks any credit, but on some level, you have to feel for them, in light of what they’re dealing with:

During that process, executives have griped that examiners were demanding detailed information from every corner of the sprawling organization, consuming thousands of man-hours without briefing anyone on what the government was looking for, according to people familiar with the matter.

The regulators are asking “a million questions” and it’s “very unclear what they’re aiming at,” one senior executive said earlier this month. “We can’t discern a pattern.”

Some bank executives have said that even after meeting with Fed examiners on Friday, they still don’t understand details of the government’s methodology for conducting the tests.

On the one hand, perhaps the government is being purposely vague about what they’re looking for (“top secret mission” and somesuch). On the other, more likely hand, regulators have no idea what they’re trying to “ascertain”— which they refuse to admit, as any good corrupt cop would— and are just breaking into the place and shoving random employees into broom closets and asking questions that have nothing to do with anything like “Who’s your urinal cake distributor”** and then telling the interrogatee (the first second year analyst they happened to cross paths with upon entering the joint) to “Shut up, no, answer the question, I SAID SHUT UP.”

Also included in the “process” are unannounced building break-ins (unnecessary as they could’ve just used the front door), and sealings off of Ken Lewis’s office, which he’s forced to stand outside of, just beyond the yellow tape, while a bunch of guys rifle through his drawers, every so often going “Found it!” (an ah-ha! moment that has nothing to do with the stress test but just unbridled glee at having stumbled upon one of the many (half empty) bottles of Boone’s K to the L has stashed around the place).

*And it’s not like they can mouth off, since it’s the government.

**This actually isn’t a good example, as the various answers are way more telling than you’d think. That’s all I can say about that at this time.

London Bankers Look For Exits After Tax Raise (Bloomberg)
Apparently the recent push to 50-something-percent was just too much to take; it looks like our London brethren are looking for exits to decidedly less tax-involved areas.

Swine Flu Hits Ernst & Young In Times Square (WCBS)
We always knew the trouble would start* in accounting.

*Manhattan edition.
Deutsche Bank To Keep Ackermann (FT)
“The decision to prolong Mr Ackermann’s tenure at the bank until 2013 is a sharp reversal of the bank’s repeated indication that the Swiss-born banker was ready to step down when his current contract ends in May next year.

Clemens Börsig, chairman of Deutsche’s supervisory board, said the decision “secures leadership continuity” for Germany’s largest bank. The bank said the offer to Mr Ackermann was made at the unanimous request of the supervisory board, which met on Monday. Mr Ackermann had agreed to the request, the bank said.”

In related news, Deutsche turned in its numbers:

“Deutsche Bank posted a better-than-expected net profit of €1.19 billion ($1.55 billion) for the three months ended March 31, compared with a net loss of €131 million a year earlier. Analysts polled by Dow Jones Newswires had forecast, on average, a €764 million profit.

The latest results included charges of €1.5 billion, including €1 billion in mark-downs, bringing total crisis-related charges to €10.7 billion. Year-earlier results, the bank’s first quarterly net loss in five years, were hit by additional asset write-downs, lower revenue and a trading loss in a deteriorating market.

Revenue in the first quarter rose 57% to €7.2 billion from €4.6 billion.”

Italy Seizes Millions In Assets From Banks (NYT)
“With municipal bond investigations spreading to Europe from the United States, Italian authorities have seized about $300 million in assets of four global banks — JPMorgan Chase, Deutsche Bank, UBS and Depfa — whose officials have been accused of fraud.”

Wilbur Ross To Join PIPP Effort (WSJ)
Bill Gross just makes it look too magical to pass up, doesn’t he?

Gulfstream, Cessna Sales to Slide for 2 Years as CEOs Shun Jets (Bloomberg)
Damn you, Congress. Damn you to hell.

Regulators have told Bank of America Corp. and Citigroup Inc. that the banks may need to raise more capital based on early results of the government’s so-called stress tests of lenders, according to people familiar with the situation.

The capital shortfall amounts to billions of dollars at Bank of America, based in Charlotte, N.C., people familiar with the bank said.

Executives at both banks are objecting to the preliminary findings, which emerged from the government’s scrutiny of 19 large financial institutions. The two banks are planning to respond with detailed rebuttals, these people said, with Bank of America’s appeal expected by Tuesday.

We are given to understand that BAC will be objecting on the grounds of “shrinkage” (Lewis was in the pool), which gave us an inaccurate representation of things, and Citi’s yet to come up with something. Do Vikram Pandit a solid and offer a good excuse now. He’ll pick the best one from comments in the morning.

Fed Pushes Citi, BofA to Increase Capital [WSJ]

$$$ SEC Freezes Assets Of Danny “This Is A Ponzi Scheme” Pang [Street Insider]

$$$ GM tells creditors to swap for equity or face bankruptcy [MarketWatch]

$$$ Louis E. Caldera is sorry about the plane thing. [City Room]

Face it. There is no escape and you banks are so unpopular now that any hope you had at generating sympathy is gone gone gone. We want to know your customers. We want to know when you knew them. We want to know how you met them. We want to know who they know that you know. Brace yourself. This might be a bit uncomfortable.

The U.S. Internal Revenue Service (IRS) is preparing to pursue other foreign banks for allegedly facilitating tax evasion by wealthy Americans following its high-profile case against Switzerland’s UBS, an IRS official said on Monday.

UBS, Switzerland’s largest bank, in February acknowledged that it helped U.S. clients conceal assets from the U.S. government. It agreed to pay a $780 million fine and identify some of its American clients.

Meanwhile, don’t think we don’t see you, UBS, over there in the corner trying to get the United States to just drop the whole thing and let you gently set your clients adrift before Switzerland signs a new tax treaty with the United States to address the problem going forward (i.e. after you’ve moved the biggest clients to offshore subsidiary asset managers).

IRS says set to pursue “other banks” on tax evasion [Reuters]

During a panel at the Milken Institute’s Global Conference in Beverly Hills this afternoon, our favorite midwestern hedge fund manager let down his guard and finally let us in. Apparently considering the event a safe place to let it all out, Griffin shared his hopes (turning in a 750% return for ‘09)* and fears with the audience, which include but are in no way limited to a li’l fella named T. Geith and spiders.

“The role of government in the United States, one of the great free markets in the world, has become frightening,” Griffin said today during a panel discussion at the Milken Institute Global Conference in Beverly Hills, California.

“We cannot fuel constructive policy by pandering to anger,” Griffin said at today’s conference. “This is a disaster that everyone in our economy participated in creating. I’m not trying to take Wall Street and the banking system off the hook, but we need to find a way to move past this crisis.”

Citadel’s Griffin Calls Role of U.S. Government ‘Frightening’ [Bloomberg]

*He didn’t actually verbalize this desire but I’m feeling very close to him right now and am confident it’s on the list.

Here at Dealbreaker we are well aware of the fact that there exists a small but passionate group of financial services hacks in the audience just dying to give acting a try, but have yet to do so because of a crippling fear of the prospect of a complete and total career change. Because we’re always working for you, we’ve done some digging and found the perfect crossover gig in which to dip your toes. While Madoff didn’t enlist the services of actors for his scheme (that we know of), lots of smaller scams, like Houston-based JaxTrece, are relying on individuals who can both act and talk shop. That could be you!

Curiously, in early October, Ramon sent an e-mail to an Austin actors group: She was seeking a male actor in his 50s or 60s with a New York accent to make an appearance at what she said was a Houston fundraising event. Another document filed in a lawsuit and said to have been found in Ramon’s computer describes Scrabanek’s back story down to his children’s names and his residence (the Time Warner building in New York City), and details his attitude: “typical Jewish New York . . . doesn’t really care about anyone but yourself, snotty and stuck up.”

Some now wonder whether the man they met was actually an actor earning $500 an hour to play a part in what the Justice Department says was an investment scam that defrauded investors of millions of dollars.

CNBC’s interviewing people on the street who think it’s a “Fairy Godmother” which is hilar, but let’s get serious and figure out who the anonymous donor is that’s gifted at least 13 women-run universities with nearly $70 million. Erin Callan doesn’t have the cash on hand, and while he considers himself a ladies man, and would love a free pass to walk into any freshman dorm and start hocking his product to nubile coeds, Jimmy Cayne smoked all his charitable donations over spring break. So, who is it? George Soros? Female and fag* aficionado Jim Simons? You tell us.

*Cigarettes, people. Cigarettes.

The Dow is toying around with 8000, and that just presents too much of a “Guess the Dow” temptation to resist.

Closest to the close without going under (reverse Price is Right rules, you know) wins. Bets are closed 10 minutes before the bell. In the event of a tie, the earlier entry wins. You know the drill.

Go!

Somewhere in the financial journalism rulebook there is a clause that forbids a disaster story to be written unless canned goods in the form of Campbell Soup Co. (CPB) and Gold are both spiking to back-up the “panic theory.” But despite the devastation of Swine Flu (you couldn’t come up with a more nefarious sounding plague except, perhaps, if you resorted to “The Black Death,” or somesuch- I mean seriously, who is going to be scared by “bird flu” or “avian flu.” Who cares if Big Bird is running a fever anyhow?) and now a 6.0 magnitude earthquake 19 miles south-southeast of Tixtla, Guerrero (strong enough to shake the capital) and the tragedy of vicious gang warfare along the border, Gold and Campbell Soup Co. aren’t doing anything at all exciting. Even Olin (OLN), fine purveyor of quality ammunition, is languishing today. It’s like “it’s different this time” or something.

Gold Futures Pull Back in New York [TheStreet.com]

Mexico hit by 6.0 magnitude earthquake: USGS [Reuters]

As Bank of America Corp. officially puts its brand on former Countrywide Financial Corp. offices today, the Charlotte bank is also unveiling new initiatives aimed at improving mortgage lending for consumers.

The changeover follows the Charlotte bank’s July 1 acquisition of Countrywide, which had become a symbol of the nation’s mortgage meltdown as it neared collapse early last year. The lender came with a damaged name, troubled loans and a phalanx of lawsuits, but Bank of America prized Countrywide for its dominant market share and well-honed technology and sales force.

Bank of America is retiring the Countrywide brand on 500 retail offices around the country and replacing it with the new Bank of America Home Loans name. Signs in California and North Carolina are changing first, with the rest switching by August.

Countrywide Brand Is Fading Away [Charlotte Observer]

As previously mentioned, last week’s annual Citi investor meeting was lacking in one very important item— snacks. Much ink has been spilled over the fact that the Big C failed to offer shareholders the standard coffee and (citi logo-frosted) cookies they’ve come to enjoy in years past, supposedly in a cost-cutting effort. But cutting the sugar and caffeine only saves so much (and even less when the sweets are being made not by a caterer but by Vikram himself), and costs much more when you factor in pissed of fractional owners, who were expecting the free goods.

In an obvious attempt to drop a hint, the Charlotte Observer today mentions the importance of laying food and drink on the table, two days before Bank of America’s shareholder meeting and with plenty of time to make arrangements. Now more than ever, if he’d like to keep his job (and it’s not entirely clear he does), Ken Lewis needs to make people happy. It goes without saying that investors like Jonathan Finger need to be stuffed with pastries but we’re thinking Lewis needs to go further than your standard coffee and cookies spread. First off, he should be dressed up as a waitress, and, instead of up on the stage, removed from the people, down in the trenches, asking questions like, “Can I get you some pie, sugar?” If he hasn’t already, he should start brewing enough moonshine to cover at least a few thousand, and he should also be coming up with special stuff to do in order to show shareholders how much he truly cares. Offering himself up for clownfacing,* yes, but what else? Let him know here.

*It’d be cathartic for a lot of people, I think.

We’re pretty sure we don’t know anyone who actually thought the Pound was going away (well, aside from a few newly minted INSEAD students we met at an Irish pub somewhere or another) but it was always good for a speculative laugh, or to tease the Germans about. Still, we thought we’d report the news anyhow: Clever investigative reporting reveals that Britain isn’t adopting the Euro.

All rejoice!

Britain’s respected Institute of Fiscal Studies, giving its traditional post-budget summing up of U.K. fiscal policy, said on Thursday that Britain faces “two parliaments of pain” living with the bitter taste of excess borrowing. It will take 20 years, the institute says, before national debt falls back to the 40% of GDP that the Labour government previously said was the maximum acceptable.

Even as a non-member of the single currency system that started in 1999, the U.K. plays a key role in European Union psychology — as a sometimes positive, but also a negative example for other countries.

The survival of the system requires countries’ continued willingness to submit to economic discipline. This applies both to current members and to candidates wishing to join from central and eastern Europe, such as Poland, Hungary and the Baltic states.

Alone because of this reason, the European Union could in no way afford to let in countries such as Britain now sitting in a dramatically exposed way in the fiscal sin bin.

Sort of scary when your country is mentioned in the same paragraph as the words “fiscal” and “Baltic states,” no?

Britain sticking with the pound [Marketwatch]

To: Colleagues in NYC

From: Citi Security & Investigative Services

Sent: Monday, April 27, 2009 11:20 AM

Subjec: U.S. Air Force Authorized Flyover in NYC

The US Air Force is conducting an authorized photo-shoot in the air space above lower Manhattan. During the shoot, a large airliner escorted by several fighter jets is flying at a low altitude over NYC, including in the vicinity of several of our downtown locations. There is no reason for concern, and the photo-shoot will conclude later this morning.

Earlier: Do Not Be Alarmed: Low Flying Jet Just A Military Drill/Vanity Project

From: Communications, Corporate

Subject: UBS names Alex Wilmot-Sitwell and Carsten Kengeter as co-CEOs of its Investment Bank

Importance: High

Please find attached and below the text of a media release issued today:

Media Release

UBS names Alex Wilmot-Sitwell and Carsten Kengeter as co-CEOs of its Investment Bank

Jerker Johansson, CEO UBS Investment Bank, has resigned from UBS with immediate effect.

Zurich/Basel, 27 April 2009 - UBS today announced the appointment of Alex Wilmot-Sitwell and Carsten Kengeter as co-CEOs of its Investment Bank effective immediately.

Alex Wilmot-Sitwell joined the firm in 1996 and is a member of the Group Executive Board. He has been joint global head of the Investment Banking Department since November 2005 and Chairman and CEO of UBS Group Europe, Middle East & Africa (EMEA) since January 2008.

Carsten Kengeter joined UBS in September 2008 and is the joint global head of Fixed Income, Currencies and Commodities (FICC) within UBS Investment Bank. In his new role he will also be a member of the Group Executive Board.

Oswald J. Grübel, Group CEO of UBS, commented on the appointments:

We’re not just asking for ourselves, we’re asking for Mrs. Thain. I’m sure the lot of you probably figured after being unceremoniously asked to leave the building back in January, John Thain would’ve gone to his locker, put on his singlet, taken five on the mat to get his aggression out, and moved on. Perhaps to an early retirement, maybe consulting every now and then, but mostly just taking it easy. Sure, in the beginning there’d be recurring night terrors that included the smell of Boone’s on Ken Lewis’s breath when he got up real close to JT’s face and whispered “You’re finished, toilet-boy.” And on more than one occasion he’d mutter to the neighborhood kids he was hanging out with, “I don’t know how these people can run this company without me.” But ultimately the shock, sadness, and anger would subside, and reality would set in. That’s what you thought would happen. But that’s not what actually happened. Rather, Master Thain has refused to accept his newfound status as a househusband, instead choosing to cling to a (professional) life that no longer exists.

When Mr. Thain left Goldman after almost 25 years to run the Big Board, he said at the time that it was his chance “to be CEO.” Now he spends his time networking and says he is optimistic that he will get another chance to run a publicly traded company. He still puts on a suit nearly every day, although he no longer has an office to go to.

What the Journal doesn’t tell us is that as part of this morning routine, after putting on the $10,000 suit, Thain takes advantage of the fact that with this daughter off at college, there are a gaggle of stuffed animals just sitting around the house with nothing to do but his bidding. So every day promptly at 8AM, he scoops them up, places them in his “office” (i.e. the extra bedroom) and begins delegating. For instance, today Sunshine Bear was told to “figure out how to avoid marking-to-market some of our more difficult structured products,” Mr. Bigglesworth was staffed with “taking care of that little pissant short seller,” and Clydefrog was saddled with the unsavory task of “redecorating this place” (“cause the boss can’t work in these conditions”), in addition to booking the executive dining room for this afternoon’s tea party.

Which is to say, he’s got to get a (real) gig, stat. You probably wouldn’t even have to start him of at CEO, but just some sort of management position and the promise of “bigger things to come.” Write it off as charity, whatever, just throw the guy something.

“Listen people, we’ve got to turn up the heat. I want enough cash to pay back the TARP, get our warrants back, retire the FDIC insured debt, fill the bonus pool, buy Bank of America and dismantle it, acquire Gulfstream from General Dynamics to vertically integrate our corporate aviation needs, and elect Hank Paulson President in the next cycle. Get to work people. Especially you folks at the trading desks.”

Goldman Sachs’s so-called value-at-risk, the amount the New York-based bank estimates it could lose from trading in a day, jumped 22 percent to $240 million in the first quarter, twice what Morgan Stanley stands to lose, company reports show. VaR climbed 2.8 percent in the same period at JPMorgan Chase & Co. and dropped 14 percent at Credit Suisse Group AG.

Goldman Sachs Boosts Risk-Taking at Fastest Pace on Wall Street [Bloomberg]

For Immediate Release

April 27, 2009

CONDÉ NAST WILL CEASE PUBLICATION OF PORTFOLIO AND PORTFOLIO.COM

Condé Nast will cease publication of Portfolio effective with its May issue and Portfolio.com will close in the second quarter of the year, it was announced today by Charles H. Townsend, President and CEO of Condé Nast.

“The pressures and realities of the continuous deep economic slump have lowered Portfolio’s revenue projections below what is needed to continue publication,” Mr. Townsend said. “Portfolio was an ambitious and innovative magazine and website, and we were proud to publish them. The challenges facing this launch however proved too great. Joanne Lipman is an extraordinarily skillful editor and William Li is a very talented publisher. We thank them and their staffs for their tremendous efforts. It is unfortunate we were unable to give Portfolio the time needed to fully mature.”

A bunch of people have emailed about employees being evacuated from Merrill Lynch and Goldman Sachs, and the WSJ was previously all “run for your lives!” but apparently, according to an update, that “commercial-size jet seen flying low over Hudson River was part of scheduled test.”

Federal Aviation Administration spokesman Jim Peters said the Defense Department is conducting a photo op that involves deploying two F-16s and escorting a Boeing 747 in the vicinity of Lower Manhattan and the Statue of Liberty. Mr. Peters says the maneuver was not an emergency and was coordinated in advance with the FAA and state and local officials. “They’ll do two or three spins … and be done by 10:30,” Mr. Peters said.

According to Fortune, it’s about a “50-50” chance that the former Bear CEO will be anointed a Master of the Universe just in time for the summer season at Ulysses. Supposedly Alan “Bear is awash with liquidity” Schwartz will enter the firm as a partner managing director, where his responsibilities will include “cooking up deals in the media, telecom and healthcare sectors and being an all-around senior banker and executive,” as well as filling a void left by Buffett banker Byron Trott and former co-president Jon Winkelreid. No word on this being a two-for-one deal, but we do have it on good authority Jimmy Cayne has been rallying hard for Schwartz to “score me a little something something” or at the very least put in a good word for him.

From the “lost in the weekend noise” file:

The President has 100% confidence in Secretary Geithner Mr. Rattner Chairman Bernanke.

Emanuel Says Obama Has ‘100% Confidence’ in Fed Chief Bernanke [Bloomberg]

The party line is that Lewis was well on his way to dumping the Merrill merger via a Material Adverse Change clause and dumping (one assumes) the now empty dancecard holding bank into bankruptcy. If you want to add nuance, you can append “unless you give us some cash” to the end of that particular party line. Sure, Lewis is making quite a lot of noise about this being forced into marriage with Merrill thing now that push comes to shove, but did Lewis really have an option? A look at the merger agreement gives us some interesting hints:

…a “Material Adverse Effect” shall not be deemed to include effects to the extent resulting from (A) changes, after the date hereof, in GAAP or regulatory accounting requirements applicable generally to companies in the industries in which such party and its Subsidiaries operate, (B) changes, after the date hereof, in laws, rules, regulations or the interpretation of laws, rules or regulations by Governmental Authorities of general applicability to companies in the industries in which such party and its Subsidiaries operate, (C) actions or omissions taken with the prior written consent of the other party or expressly required by this Agreement, (D) changes in global, national or regional political conditions (including acts of terrorism or war) or general business, economic or market conditions, including changes generally in prevailing interest rates, currency exchange rates, credit markets and price levels or trading volumes in the United States or foreign securities markets, in each case generally affecting the industries in which such party or its Subsidiaries operate and including changes to any previously correctly applied asset marks resulting therefrom… (Emphasis added).

In fact, the entire MAC clause is pretty restrictive. It becomes pretty easy to see that this was a pretty tight document.

This brings up the question: How could Paulson fallen for such a bluff? He is (was), after all, a savvy banker. Did he just not read the document? Did Lewis forget to have a staffer review it for him and give him the cliffnotes over a box of Boone’s Farm Strawberry Hill? Or did someone (or someones) pull a fast one?

Agreement and Plan of Merger [SEC.gov]

Does anyone out there have anything they’d like to say to Vikram Pandit’s face but have found it difficult to get past security at 399 Park? Perhaps you’re a shareholder, upset about the stock price, or the Treasury Secretary, just feeling the need to remind the Citi CEO that you could’ve had his job and, and this is not a threat just a fact, could still have his job? You’re in luck. Geoffrey Raymond, the greatest artist of our time, will be in front of the building today with his latest, The Annotated Citi. In the event you can’t make it, let us know here what you’d say to VP, given the opportunity to get up in his grill, and Raymond will add it to the canvas. Interested in having Pandito all to yourself? Bidding starts at 30K.

Geithner Could’ve Been Citi CEO (NYT)
“Mr. Geithner met frequently with Sanford I. Weill, one of Citi’s largest individual shareholders and its former chairman, serving on the board of a charity Mr. Weill led. As the bank was entering a financial tailspin, Mr. Weill approached Mr. Geithner about taking over as Citi’s chief executive.

But for all his ties to Citi, Mr. Geithner repeatedly missed or overlooked signs that the bank — along with the rest of the financial system — was falling apart. When he did spot trouble, analysts say, his responses were too measured, or too late.”

Sex, Lies And Videotape: The Bank Of America Experience (WSJ)
Doesn’t tell us anything we didn’t already know but it’s nice to see his name back in print. “In an effort to restore his sullied reputation, the 53-year-old Mr. Thain is striking back at Bank of America Corp. He claims the bank lied about its role in the giant bonuses and losses at Merrill Lynch & Co. that cost Mr. Thain his job in January, after Bank of America bought the troubled brokerage.

“Getting fired is one thing. But nobody has the right to say things that they know aren’t true,” said Mr. Thain, who had been Merrill’s chief executive, during one of a series of interviews with The Wall Street Journal.”

Head of UBS Investment Bank Unit Steps Down (NYT)
Jerker Johansson— out.

UAW Reaches Deal With Chrysler, Fiat And US (WSJ)
“Immediate terms of the deal were not released, but the agreement is believed to include about a 50% reduction in the amount of cash Chrysler owes a $10 billion health-care fund that was set up in 2007. The auto maker is also expected to have won at least hundred of dollars in per-car labor savings from the UAW.

The UAW will likely get cash and equity in Chrysler in exchange for its concessions. A deal with Chrysler is a stepping stone toward avoiding bankruptcy protection, according to a person familiar with the matter. Still, “a lot of work remains in order to get the good case scenario.”

Fiat SpA, which has been positioning itself as a potential equity-alliance partner with Chrysler, had demanded that the UAW make significant concessions before agreeing to a deal. The Treasury Department, which has pumped $4.5 billion into the auto maker, also demanded givebacks by the union.”

Wall Street Pay Bouncing Back (NYT)
While it’s true that there’s considerably less of us gainfully employed, those of us that have managed to hold on to jobs are going to be earning considerably similar salaries to pre-meltdown, which has to chap some asses. According to the article Goldman should turn an average income of around $570k this year, which JP Morgan weighing in at $510k.

Bea Arthur Passes Away At 86 (Reuters)
The Golden Girls seductress will be missed.

Bloomberg To Expand Despite Terminals Threat (FT)
“Bloomberg is planning a sustained investment in its technology and news operations, arguing that it can gain market share even as sweeping changes in financial markets pose the biggest threat to sales of its data terminals in its 27-year history.

Peter Grauer, chairman of the company controlled by New York mayor Michael Bloomberg, told the Financial Times that it had seen a fall of just over 2.5 per cent in terminal numbers since they peaked in November, implying about 7,500 net cancellations from a subscriber base of about 300,000.”

$$$ Does Jim Cramer still think Lenny Dykstra is “one of the great ones in this business”? Possibly not, considering he just fired him. At a time when he could really use the money.

$$$ “When your marriage is on the rocks, you don’t ask the same jamoke who introduced you to your spouse for marital advice.” [The Big Picture]

$$$ Morgan Stanley prop spinoff makes more sense than ever. [Breaking Views]

$$$ JPMorgan: #1 [Portfolio]

$$$ Job of the Week: Macquarie needs a Senior Credit Professional. That could be you. [DB Career Center]

CNBC reports that John Mack has been the only bank CEO, that they’re aware of, to pick up the results of his firm’s stress test. He apparently showed up “in a silver Audi,” met with Fed officials for about an hour and “left without comment or fanfare.” So far Blankfein, Dimon, et al are nowhere to be found,* but if someone would get off their asses and take a walk down to Ulysses, we could surely find them.

*Perhaps suggesting they’ve banded together in a concerted effort to give the impression they don’t give a fuck about these meaningless things, or maybe they do but just got too bombed at lunch on Stone Street.

Or it would seem from the looks of the CNN piece:

General Motors is preparing to announce that the Pontiac car brand — once marketed as GM’s “Excitement division” — will be killed off, according to a source familiar with the decision.

These are, of course, the death cries of the company, which had hitherto been muffled with yards of duct tape bearing Management and UAW fingerprints. This is the end. Can we please stop sending money now?

Pontiac: End of the road [CNN.com]

We knew to expect a bit of a circus during “Stress Test Release Week,” (and we loved the theater of making bank heads come in for their results- it’s parent teacher conference time again!) but it has gone from shabby (no immediate release of results?) to beyond theater of the absurd. (GDP projected to increase in 2010? Please, bitches). And, they are actually called Supervisory Capital Assessment Programs. (SCAP). That’s just too easy.

Oh, did we mention? There is an appeals process. Like arguing with your English Literature 505: The Elizabethan Era over the impact of Christopher Marlowe’s death. (I swear she had a crush on the dead man). Oh, and there is “Bespoking.” That’s when adjustments are made on the test for the specifics of each institution. We used to have a different word for it when they used to do that in the local school districts after the testing requirements descended: Cheating.

Is it just us, or has the media taken the bait hook, line and sinker. This might have been a clever bit of propaganda, permitting the media to go wild over the tests, withholding them from public view for weeks while the feeding frenzy builds. Playing CNBC for everything it is worth is actually kind of amusing. One almost wonders if all the fuss will obfuscate the basic fact that the tests are basically useless.

There is also a case that the government is legally required to take prompt action if it discovers a given institution is in trouble. Actively concealing the results of a financial health test really doesn’t sound much to us like the kind of thing governments should be engaged in. Unless you are a bank CEO, you see, you are not getting a copy until May (that is, unless someone *ah-lloyd-em* would like to leak them to us, which would be much appreciated).

Bank Officials to Hear Results of Stress Tests [The Wall Street Journal]

The Supervisory Capital Assessment Program: Design and Implementation

Yesterday we debated the relative merits of Playboy’s recent stimulus package, a featured called the “Women of Wall Street,” and whether or not it was an effective boon to your market. Today, for comparison’s sake, we’re hopping in the Delorean and gunning it to August 1989, to study the spank rag’s original WoWS spread. If anyone has any information on where these ladies are today— perhaps you know them as “boss” or “mom”— please get in touch.

Update: It’s been brought to my attention that despite noting what’s after the jump is from a little-known adult publication called Playboy, I should’ve explicitly stated it’s not safe for work. So, yeah— NSFW! (Though we have covered the most intimate parts with a familiar face, and it’s a beautiful Friday, why not live a little?).

From the mailbag: “Just saw SuperFund’s newest employee, Vito Fossella, on Madison and 40th…he did not appear drunk, but I didn’t get close enough to smell his breath.”

Yes, the Charles Manson “Teach Kids To Make Friends,” program was a miss… true, the GM “Health Care Benefits Administration,” program was poorly attended, and yes, yes, we know that Geithner School of Tax Preparation was a flop, but we really think we’ve got a winner this time:

Citigroup Inc. Friday sent out a press release proudly announcing its participation in Teach Children to Save Day.

“Citi volunteers make learning fun, incorporating hands-on scenarios and real-life experiences into lessons that explain the basics of saving, how interest makes money grow, how to create a budget and how to distinguish needs from wants,” the press release says, without so much as a hint of irony.

Citi to teach children about finance [The Deal]

We understand that the word “billion” has lost a good deal of meaning around here lately. Be that as it may, some statistics that contain the word are still useful (at least for entertainment value). To wit:

The Federal Reserve took on more than $74 billion in subprime mortgages, depreciating commercial leases and other assets after Bear Stearns Cos. and American International Group Inc. collapsed.

In its biggest disclosure of the securities accepted to stabilize capital markets, the Fed said yesterday it had unrealized losses of $9.6 billion on the assets as of Dec. 31. The bonds, swaps and notes were taken in from Bear Stearns, once the fifth-biggest Wall Street firm by capitalization, and AIG, which had been the world’s largest insurer.

Oh, and don’t worry about the 13% in losses the Fed has racked up in just over three months. Those are unrealized.

Bear, AIG Dumped $74 Billion in Subprime, CDOs on Fed [Bloomberg]

Using his notoriously overgrown cock-bush as a Swiffer. Employees rig him up in a harness and lower him into the hard to reach nooks and crannies of the trading floor.

Madoff was even more obsessed, if that’s possible, with cleanliness. Even while he was responsible for billions of dollars, it was not uncommon to see him dusting his office or the two-foot sculpture of a screw behind his desk. One staffer recalls getting off the elevator to find Madoff, clad in one of his innumerable tailored suits, on his hands and knees in the lobby, straightening the rugs so that they were aligned perfectly.

That was Madoff’s third fixation. Everything needed to be symmetrical and in straight lines. When Madoff was in the office, all window blinds had to be aligned at the same height, all computer screens had to be arrayed at the same angle and position, and on and on. So insistent was he on perfect alignment that, more than once, he dropped his trousers in the office — startling female employees — to ensure that the line of his shirt buttons was precisely vertical.

How Bernie Pulled Off His Massive Swindle [Fortune]

David Moffett, who resigned as chief executive officer of Freddie Mac in March, will temporarily return to the company as a consultant on financial management.

Mr. Moffett will help Freddie’s acting Chief Executive Officer John Koskinen oversee the government-backed mortgage company’s finances, filling a gap left by the death Wednesday of acting CFO David Kellermann.

Former Freddie CEO Moffett to Return as Consultant [WSJ]

JPMorgan has supposedly “cut back support of various museums” (thereby screwing employees who previously enjoyed free or deeply discounted admission with a flash of their JPM IDs) and “napkins throughout the building.” Apparently, as some sort of coping mechanism, mini-Dimons have been “joking that you are going to have to bring your own toilet paper soon.” Not exactly sure why they’re so cavalierly kidding around about the prospect of BYOTP, since it’s something other firms have wholeheartedly embraced, but whatever helps bear the pain!

Sure, Cuomo may have given him an alibi, but the SEC is still pissed off, and plans to remain so for some time:

Cuomo revealed in a letter yesterday to Congress and federal regulators that Lewis testified in December that then- Treasury Secretary Henry Paulson may have threatened to remove the bank’s management and directors if the lender tried to back out of buying Merrill. Lewis said he was instructed by federal officials not to disclose Merrill’s losses, his desire to back out of the merger or the intervention of regulators, according to Cuomo.

If you needed a more direct example of why it is simply a bad idea in every single instance to permit government ownership of banking firms except for the limited purposes of facilitating liquidation, this is it.

Consider what can only be a devastating long-term message to markets: You can never again believe the disclosures from any firm in distress when the government is involved.

Bank of America’s Lewis May Face SEC Probe on Merrill [Bloomberg]

Attorney General Andrew Cuomo is shocked, shocked he tells you, to find that regulatory bullying is going on here.

A slew of documents sent by New York Attorney General Andrew Cuomo to Washington officials on Thursday detail negotiations between BofA CEO Kenneth Lewis and federal officials and demonstrate the extent to which senior officials were influencing the decisions of a public company.

Being the efficiency fans that we are here at Dealbreaker, we thought we’d save everyone a bunch of time and provide the answer to this question: Senior officials were (and are) significantly influencing “the decisions of a public company” on a daily, indeed almost continual, basis. Apparently, the irony of pointing fingers at anyone and accusing the state of wielding too much power in the present environment is lost on some of our more brusque-minded state officials.

Officials… causing firms… to act… against the interest of investors? The horror. The horror.

Cuomo Urges Probe of BofA Deal Pressure [The Wall Street Journal]

Earlier: Cuomo Corroborates Lewis’s Story

Charlie Gasparino reports that DE Shaw “has the inside track” to buy Madoff Securities, which will be bid for on Monday, with three other firms in the running. The biz was once thought to be worth around a billion, though, obviously, it’ll go for considerably less than that (one bid came in at $15 million).

We don’t have to tell you people we love ourselves some Vikram Pandit, but is this perhaps laying it on a bit thick? In response to “sources” telling the Post that regulators may take Count Vikula out of the building in order to “signal Washington is taking as hard a line with the banks as it did with General Motors,” Citi CFO Ned Kelly offered: “Replacing [Pandit] would be dramatically de-stabilizing both for Citi and the system.” As for the matter of Tim Geithner paying a visit to the Big C’s offices a week and a half ago? Totally not a big deal, and nothing having to do with Pandito’s job being at risk. The drop by, according to people familiar with the meeting, was “simply to conduct a checkup on the bank.” You know, making sure the building was up to code, that the toilets were all flushing properly, etc. Standard. Paulson used to do the same thing.

Unlike Bernie-boy, who won’t be bribed to talk, longtime Madoff Securities employee and CFO since 1996 Frank DiPascali is apparently willing to “work with” federal officials, in order to get a shorter stay bunking with Bubba. Supposedly he doesn’t have any dirt on Lady Ruth McMadoff or sons Mark and Andy but perhaps over time he’ll be able to come up with something?

Fortune has learned that Frank DiPascali is trying to negotiate a plea deal with federal prosecutors in which, in exchange for a reduced sentence, he would divulge his encyclopedic knowledge of Madoff’s scheme. And unlike his boss, DiPascali is willing to name names.

According to a person familiar with the matter, DiPascali has no evidence that other Madoff family members were participants in the fraud. However, he is prepared to testify that he manipulated phony returns on behalf of some key Madoff investors, including Frank Avellino, who used to run a so-called feeder fund, Jeffry Picower, whose foundation had to close as a result of Madoff-related losses, and others. If, for example, one of these special customers had large gains on other investments, he would tell DiPascali, who would fabricate a loss to reduce the tax bill. If true, that would mean these investors knew their returns were fishy. (Lawyers for Avellino and Picower declined to comment. Marc Mukasey, DiPascali’s attorney, says, “We expect and encourage a thorough investigation.”)

Awkward! (Rickles had said that it was no big deal if the banks don’t lend to one another. Steve begged to differ.)

Morgan Stanley Eyes Changing PDT Desk (WSJ)
They’re examining rolling the desk out into a hedge fund or opening it to outside investors; though there’s every possibility that they’ll leave it alone. All that’s known is “Discussions about restructuring the group have been under way for more than a year, but have accelerated during the past few months.” At the heart of the issue are the H-1B rules implemented for those institutions holding TARP funds; under the new guidelines you have to prove you made every reasonable effort to hire an American before taking on someone requiring a Visa. The desk is largely quant, and the quants are largely foreign.

Investors Seek To Block Mortgage Securities Bill (FT)
“Bond investors are lobbying hard to change federal policies aimed at reducing foreclosures in the US, saying the measures discriminate against holders of top-rated securities backed by mortgages.

The investors are set to meet senators next week. The next step could be legal action against the US government if the law is passed, on the basis that it could violate the Fifth Amendment, which prohibits the taking of private property for public use without compensation.”

US To Tell Banks How They Did, Scores Posted By Gym At Noon (NYT)
The Gov will be telling the banks what their results looked like at some point today, and this afternoon they should release the details of how the stress tests worked/what metrics were used; the public won’t get a good look at “scores” until May 4th. In the week + weekend you have to wonder how many leaks there’s going to be, and whether Code Pink can possibly survive the nine days of not knowing who they’re going to annoy next.

Pandit Could Be Forced From Citi After Tests (Reuters)
Reuters puts forth a not-so-bad argument that when the tests for Citi come back, the US Gov may have very little (if any) choice but to replace him a-la GM. We have to be fair in socialism, you know.

M.B.A’s Staying Put (WSJ)
It used to be, you could do pretty much whatever you wanted post college (numbers related), go get your MBA, and someone would pick you up. Not so much anymore, as recent MBA Grad’s are finding out - dreams of going into IB are being squashed left and right. For instance, this guy:

“But as he prepares to graduate from the University of Notre Dame in Indiana next month, Mr. Fusco, 27 years old, hasn’t had any luck landing a position in finance. The only solution he has is to go back to his accounting roots. “It’s a tough pill to swallow, but I’ve come to the conclusion that I can’t sit and wait and cross my fingers,” he says.

Madoff Net Losers Safe From Clawback (WSJ)
“Investors with Bernard Madoff who had a net loss due to his fraud won’t be asked to return funds they withdrew from his firm in recent years, said a lawyer who is charged with recovering the firm’s assets.”

$$$ Records Say U.S. Pressed BofA to Cut Dividend. Awkward! [Dealbook]

$$$ Power To The Hedge Funds! [Newsweek]

$$$ Nelson Peltz’s House of Horrors [Cityfile]

$$$ Kellerman: the Scapegoat of a Self-Fulfilling Prophecy? [Housing Wire]

$$$ A private jet “sensible enough to impress any Congressional Committee” [copyranter]

$$$ Diet Coke Fail: “As at Harvard, Summers functions on exceedingly little
sleep. (A former student told me Summers once praised his dedication after noticing he’d run a computation at 4 a.m.; the student didn’t have the heart to tell him he’d queued it up at six the night before.) To power through the day, Summers relies on a punishing Diet Coke regimen.” [TNR, previously]

The Federal Reserve didn’t advise Bank of America or CEO Ken Lewis “on any questions of disclosure,” a spokeswoman for Fed Chairman Ben Bernanke said.

Lewis has told New York’s attorney general that then-Treasury Secretary Henry Paulson and Bernanke pressured him in December not to discuss issues with its pending purchase of Merrill Lynch.

“It has long been the Federal Reserve’s view that questions of this nature are best addressed by individual institutions and their legal counsel, as they are in a position to understand clearly their obligations and responsibilities,” the spokeswoman, Michelle A. Smith, said.—WSJ

Of course, this doesn’t answer the question of whether Bernanke told Paulson to “advise” (e.g. threaten) Lewis,* or if he and Paulson came to that decision together, only that Bernanke himself didn’t directly go to Lewis and say “do it and die, pal!”

*Which is what Cuomo’s letter claims.

Update: Paulson says he was not acting at the behest of Bernanke when he threatened Lewis, as was previously stated by Cuomo.

Then-U.S. Secretary Henry Paulson was delivering his own message, and not the Federal Reserve’s, when he told Bank of America CEO Kenneth Lewis that the bank was in a binding merger contract with Merrill Lynch and Co., a spokesman for Paulson said on Thursday. “Secretary Paulson’s words were his own,” the spokesman said. “(Fed) Chairman (Ben) Bernanke did not instruct him to indicate any specific action the Fed might take,” a spokesman for Paulson said in a statement. New York Attorney General Andrew Cuomo said on Thursday that Lewis was pressured by Paulson and Bernanke to go through with Bank of America’s planned merger with Merrill Lynch.

Is Paulson backtracking or did Cuomo have it wrong all along?

Of course, it is pretty easy after the fact to point fingers and cast aspersions. But when what would appear to be a pattern of laxity, misfeasance and perhaps even malfeasance begins to emerge out of the mist, well, things become harder to dismiss.

It seems part of the culture of the crisis that the mighty would be made to bow low. Harvard is not only no exception, it is a major recurring theme, on both sides of the blame game. The light shown on the Harvard Management Company by The Harvard Crimson is, therefore, rather a critical bit of theater.

The Crimson winds a twisted path around taxation, endowment management, off-shore entities, off-setting management fees and one Lawrence H. Summers. Take out the names and the narrative sounds quite familiar, actually:

“The general disregard for the rules, procedures and compliance—it was ridiculous,” Rose said in an interview with The Crimson. “You had to be quiet and do it and put blinders on. If you were doing work in other aspects of the company, you could just do your job. But in [my] part of the job, you couldn’t ignore things.”

Harvard Management Company—which oversees Harvard’s multi-billion dollar endowment—was plagued by a culture of ethical laxity, Rose said. Special relationships with funds run by former employees and the use of offshore investment companies—both used to boost HMC’s once-legendary returns—may not be illegal, but are considered to be ethically questionable by some, particularly in light of Harvard’s non-profit status.

HMC Tax Concerns Aided Federal Inquiries [The Harvard Crimson]

As you’re aware, Mike Morgan, proprietor of Facts about Goldman Sachs, a site billed as “an open forum for facts and discussions about what part Goldman Sachs and their executives played in the current Global Economic Crisis,” vowed several weeks back not to back down from his mission to “expose” the firm’s supposed evil-doings, despite provoking the ire of 85 Broad. He chose not to comply with a cease and desist request, and has continued to post information that doesn’t cast the Masters of the Universe in the best light at goldmansachs666.com.

Which is nice and all that, but we assumed that for the right price, he could be silenced (who couldn’t be, right?). Apparently, not so much! Morgan was recently offered $2 million from an unidentified buyer (Goldman Sachs?) to sell the site, which he turned down. Kid’s got principles, we guess (that or he’s holding out for a unit, knowing full well Blankfein’s good for it).

Earlier: Confidential To Mike Morgan: We’ve Got What You Want Right Here

So! Remember last month when we learned that William Cohan’s new book on Bear Stearns has Jimmy Cayne calling Journal reporter Kate Kelly a “cunt,” Treasury Secretary Tim Geithner a back office “clerk” with a “boyfriend” and a “hard on,” and CNBC on-air editor Charlie Gasparino a “snake”? We talked to Charlie Gasparino about that last allegation this morning and, according to Chaz, his inclusion in House of Cards is a total crock, for a couple reasons.

First off, William Cohan never called Gaspo to check things out. Well, he did email Chaz, but that was all the way back last year, and all he wrote was “Hey, we should talk.” Charlie was busy, assumed Cohan “just wanted to go to lunch or something,” and ignored the note. The lack of a call, in Gaspo’s mind, was a failure on Cohan’s part to comply with “Journalism 101 standard operating procedures.”

Second, the whole “snake” comment was a misunderstanding, according to Jimmy Cayne, who last night, perhaps after getting lit, called up Gasparino to clear the air. Removing the bong from his lips long enough to speak, Cayne told Charlie that while, yeah, he did refer to CG as a snake, a) it was said out of anger b) the burn was taken out of context c) he’s sorry d) he said “a lot of great stuff” about Charlie that didn’t make it to print and e) he thinks Charlie is “the best damn reporter” he’s ever seen. “Relentless.”

Earlier: Charlie Gasparino’s Love Affair With Jimmy Cayne

Economic Analyst
Work Schedule: Full Time
Salary: $48,682 - $95,026*
Location: Washington, DC metropolitan area

The CIA’s Directorate of Intelligence (DI) seeks economists to assess foreign economic policies and foreign financial issues - licit as well as illicit - that affect US security interests. They work closely with political, leadership and military analysts throughout the Intelligence Community in producing current and longer-term intelligence products. There is a particular need for country/regional economists with strong backgrounds in China, the Middle East and South Asia, and for specialists in international banking systems, financial markets, financial transactions, financial instruments, and energy. Economic analysts will also assess illicit financial activities, including networks used by terrorist and criminal groups, financing and procurement of weapons of mass destruction, money laundering and corruption among foreign governments and companies. Agency analysts are encouraged to maintain and broaden professional ties through academic study, contacts and attendance at professional meetings. They may also choose to pursue additional studies in fields relevant to their areas of responsibility. Opportunities exist for foreign travel, language training, analytic and management training, and assignments in other offices in the Agency and throughout the US Government.

HT: 1-2

This press release (invite?) just hit our inbox:

Tens of Thousands of Taxpayers to Protest at 100s of Bank of America Branches Nationwide

SEIU, MoveOn.org and other Community Groups to Collect 20,000+ ‘Taxpayer Proxies’ to Call for Ousting of CEO Ken Lewis, Reform of Predatory Banking Practices, Voice for Bank Workers

100s of Actions Include DC, LA, San Francisco, NY, Chicago, Pittsburgh & Philadelphia

WASHINGTON, DC -Fueled by mounting frustration over an economic system that rewards corporate executives for their bad decisions while working people struggle to stay afloat, tens of thousands of taxpayers will protest at Bank of America branches across the country on April 28th in advance of Bank of America’s Annual Shareholder Meeting.

After accepting $45 billion in bailout funds, taxpayers are one of the largest shareholders of Bank of America. They will join bank employees, consumers and activists to demand that the bank fire CEO Ken Lewis and commit to financial reform that puts consumers and workers ahead of profits.

Neil Barofsky, the special government inspector general assigned to oversee the Troubled Asset Relief Program, said Thursday he will be issuing audits of various bailout transactions, including government assistance provided to Bank of America in connection with its acquisition of Merrill Lynch. He said his office is also conducting an investigation involving Bank of America.

“I would caution anyone from leaping to too many conclusions about what Secretary Paulson or Chairman Bernanke said until we’ve looked at all the facts and reported on them,” Barofsky, who said he witnessed Lewis’ testimony, told the economic panel. “The conclusion that one may draw that it’s black and white that there was an order from the United States government not to disclose this information, I don’t think it’s as crystal clear.”

BofA’s Lewis: Fed urged quiet on Merrill [AP]

Earlier: Cuomo Corroborates Lewis’s Story

We appreciate that, at the time, the concept of “stress tests” sounded clever. Of course, as a bit of political theater and slogan propaganda, it couldn’t have hurt to have the general population picturing bloated bankers bobbing up and down on a slowly inclining treadmill with between twenty and thirty highly-adhesive electrodes plastered over every inch of chest-hair covered skin available. Wires tangling like angel-hair pasta, intertwining with thick, translucent-blue respiration tubes finally terminating in a gag-like, white, hard-plastic mouthpiece plug, stuffing the greedy mouth that would otherwise be consuming twice its weight in WTI crude daily and spewing forth financial virus laden droplets of saliva and greed.

Unfortunately, the reality of the stress tests is more suggestive of a lazy ride on a parental push-bar fitted Schwinn Roadster 9-inch Trike. So what does it mean, exactly, when it looks like Wells Fargo might have trouble even with that?

Something was curiously absent from Wells Fargo’s triumphant first-quarter earnings material: Any statement that the bank would try and quickly pay back government capital.

That may be because it needs every penny of the $25 billion the government invested in the bank last year as part of the Troubled Asset Relief Program, or TARP.

[…]

In other words, the bank doesn’t have much room for maneuver. And the government may decide that Wells Fargo needs more capital if its stress tests predict elevated losses at the bank. A look at its balance sheet suggests such an outcome is not unthinkable.

Wells Fargo Buffers in Silence [The Wall Street Journal]

The Deal spoke this morning with some fractional owners of Bank of Amerillwide, on the topic of Ken Lewis never telling them about the metric asston of losses Merrill was about to report, prior to acquiring the company, because Paulson or Bernanke or Pernanke threatened him. Among the responses: “Brute!” “Pig” “Pussy!” “Lying sack of shit!” “Worthless backpack of dicks!” “Guy whose clothes are about to be thrown out the window and whose key will no longer work once I have the locks changed!” No, not really (though they haven’t spoken to everyone and surely that’s what at least a few people, Mrs. Lewis included, are thinking). Some actual thoughts on the matter:

“He violated his duty to protect shareholders in order to protect himself, and now shareholders are shouldering the burden of those consequences,” CtW Investment Group’s Michael Garland told Dealscape.

“Seems like Ken Lewis has changed his story. Previously Mr. Lewis has stated unambiguously that Bank of America was not aware of the losses at Merrill Lynch until after the Dec. 5 shareholder vote. Now he states differently. I think this will certainly strengthen our lawsuit,” Jonathan Finger of Finger Interests Number One Ltd. told Dealscape.

Portfolio says yes! According to the mag, which has ranked the Top 20 Worst CEOs, The Gorilla is (was) a worse CEO than Angelo Mozilo (2), Ken Lay (3), Jimmy Cayne (4), Martin Sullivan (15), Stan O’Neal (18), and Vikram Pandit (20). Take a gander and tell us if you think these rankings are accurate, and if anyone’s missing (Ken Lewis? Chuck Prince? Not saying, just saying).

Remember a million years ago (real time: back in October), when Playboy put the call out for “Women of Wall Street” to help tackle the financial crisis by taking their clothes off? The feature was supposed to run in the February issue, but that came and went with nary a peep of financial services T&A. We assumed it was ‘cause no one in the field was willing to get naked, despite the fact that it was for the good of the economy. Apparently, not so much! The spank rag’s May issue features the promised Wall Street spread. I’d say what follows is probably NSFW,* unless you happen to work at SAC, in which case consider this a guide to career advancement. Later today we’ll post the vintage (August 1989) WoWS feature, for comparison’s sake.

*Though we did cover the most intimate areas with a familiar face.

Competition between stress tests is heating up even as we type this entry. Not content to wait for indeterminate periods on sketchy results of questionable value, some aspiring outsourced regulators have designed their own stress tests. Early results are as daunting as their methodologies are mysterious and, of course, the most dramatic predictions tend to draw the most headlines. Like those on Dealbreaker, for instance. To wit:

U.S. banks may need another $1 trillion in capital to cushion losses as unemployment rises and borrowers fall behind on payments, KBW Inc. analysts led by Frederick Cannon said today.

The estimate is based on the analysts’ own “stress test” of the strength of top U.S. lenders, Cannon wrote. The government is also evaluating the ability of banks to withstand a deepening recession. Bank of America Corp., the largest U.S. lender by assets, may be forced by the government to accept additional aid by converting preferred shares into common stock, Cannon said.

Banks May Need $1 Trillion After U.S. Tests, KBW Says [Bloomberg]

Supposedly Paulson did the dirty work, but it was at the behest of Bernanke (this morning a government official seemingly got the Beard off on a technicality, telling Steve Liesman that the Fed chairman never *directly* told Ken Lewis to keep quiet about the Merrill losses).

Sweet news for most chocolate lovers, and we count ourselves amongst these- though our tendency to turn our nose up at confections not hailing from Central Europe has been known to cause us trouble in Pennsylvania- Hershey “Bringing sweet moments of Hershey happiness to the world every day” Co. pleasantly surprised anyone watching and did so months after Valentine’s Day.

Chocolate maker Hershey Co posted a higher-than-expected rise in quarterly profit, helped by price increases and market share gains.

The maker of Hershey’s Kisses and Reese’s Peanut Butter Cups also stood by its forecast calling for earnings per share to increase this year, but for the gain to be less than the company’s long-term goal of 6 percent to 8 percent.

Hershey’s higher profit beats estimate [Reuters]

Related: Fat Gits Causing Global Warming [GlossyNews.com]

CNBC’s Steve Liesman reports a government official denies that the Federal Reserve chairman ever told Ken Lewis not to disclose the Merrill losses prior to the deal going through. Which is all well and good and nice to hear but I think we all knew the soft-spoken professor was not the one shoving Lewis in meat locker and threatening in, no uncertain terms, bodily harm to his person if he failed to zip the lip. That would be a job best left to a slightly more intimidating figure.

Not sure there’s anything left to say but surely you people can come up with something (is Arizona State really worthy of spot number 29?). As previously mentioned, the list of the Top 20 b-schools we printed last week was unofficial, having been (unintentionally?) flashed in a US News video about law schools. Now they’re out for real, and save for slots 19 and 20 (Georgetown and UNC/University of Southern California, respectively), which couldn’t be made out at the time, the two are identical.

20. University of Southern California

20. University of North Carolina, Chapel Hill

19. Georgetown

18. Texas

17. Cornell

15. UVA

15. Carnegie Mellon

14. UCLA

13. Michigan

12. Duke

11. NYU

Just kidding, he claims! Count Vikula spoke at a “fireside chat” at Harvard Business School yesterday, and courtesy of a Dealbreaker reader in attendance, we’ve got some highlights. When asked about his biggest mistakes, he first offered the crowd-pleasing, “Taking this job and then staying in it,” to much laughter. Then he remembered he wasn’t doing a set at Caroline’s and responded that he had no “moment of catharsis” when he first arrived at the Big C, and should have communicated the trouble the bank was in faster and done more in a shorter period of time. Pandito apparently blamed the crisis on “global imbalances” and poor regulation of CDS and CDOs, and said that rebalancing and getting to a “stable platform for growth” will take “a long time” (he did not offer a timetable for getting Citi back to $55/share). On the matter of renovating his office to the tune of $10 million the jolly elfin fella characterized the situation as a “shit storm.”

And speaking of human waste— for students looking to get jobs on Wall Street, Vikula proffered the advice that they’re shit outta luck. (The actual exchange was a question by HBS professor Tom DeLong, who asked if VP had “any advice for students looking to get jobs in finance” and then, realizing the absurdity of the question, considering the dearth of positions on the Street, added “…or something,” to which Vikram responded with the suggestion they “go with the ‘or something’.”)

That probably goes without saying, and apparently discussions of this nature and speculations as to why he did it are “way over the line,” but we’re going to have them anyway. The Times reports that the Freddie Mac CFO was working nonstop, losing weight, felt someone was “always angry with him,” and finding it “impossible to appease everyone — regulators, lawmakers, investors and other executives — given their competing demands.”

And no matter how many hours everyone worked, it seemed as if the economy and homeowners were still slipping farther into the abyss.

Mr. Kellermann was also working in a poisonous political atmosphere. In addition to taking criticism over the bonuses, he was recently involved in tense conversations with the company’s federal regulator over its routine financial disclosures, according to people close to those discussions who also spoke on condition of anonymity. Freddie Mac executives wanted to emphasize to investors that they believed the company was being run to benefit the government, rather than shareholders. The company’s regulator, the Federal Housing Finance Authority, had pushed to play down that language. Freddie Mac reported to the Securities and Exchange Commission that changes it had made in practices to help the government “have increased our expenses or caused us to forgo revenue opportunities.”

“The pressure right now is relentless,” said a Freddie Mac executive who spoke on condition of anonymity because he was not authorized to speak. “Everyone in the financial sector, regardless of where you work, is constantly told both that this is our fault, and that we have to work as hard as possible, otherwise the nation will fall apart.”

Apparently there will be “massive” cuts, in the range of forty percent, beginning today and lasting through the week for legacy Wachovia employees in LevFin, M&A, DCM, IB, etc.

Why didn’t Ken Lewis tell Bank of America shareholders that the company they were acquiring was set to report an imperial asston of losses for the fourth quarter, information that would’ve been more useful to them before the deal went through, rather than after? ‘Cause Paulson and Bernanke shoved him in the trunk of a Buick, took him to an undisclosed location and suggested in no uncertain terms he keep his trap shut, that’s why! According to testimony from the Bank of America CEO’s February sit down with Andrew Cuomo, Lewis was “urged to keep quiet while the two sides negotiated government funding to help BofA absorb Merrill and its huge losses,” apparently for the good of the financial system and the country, and since he *is* head of America’s Bank, K the the L felt urged to comply (plus the bit about harm to his body if he failed to do so).

Q: Were you instructed not to tell your shareholders what the transaction was going to be?

A: I was instructed that ‘We do not want a public disclosure.’

Q: Who said that to you?

A: Paulson…

Q: Had it been up to you would you [have] made the disclosure?

A: It wasn’t up to me.

Q: Had it been up to you.

A: It wasn’t.

Oh, and there was also the matter of Paulson threatening to take Lewis out (of office) if he didn’t do exactly as he was told.

Credit Suisse Tops Analysts, Up In Swiss Trading (Bloomberg)
“Credit Suisse rose as much as 8.2 percent in Swiss trading after reporting net income of 2 billion Swiss francs ($1.7 billion), twice the median estimate of analysts surveyed by Bloomberg News. The Zurich-based bank rebounded from a 2.15 billion-franc loss in the year-earlier period.”

US Reconsiders Releasing Bank’s Needs After Tests (Bloomberg)
The government is considering revamping their stress test silence rules to include disclosure about which banks are going to need further capital injections (and to what degree) and which aren’t.

Reuters Survey Suggests Sales Of Existing Homes Down Slightly (Reuters)
“Economists surveyed by Reuters expect sales of existing homes to have declined slightly to a 4.7 million annual rate in March from 4.72 million units in February.”

SunTrust Banks Shows First Quarter Loss (Reuters)
The southern regional had a $714.8MM Goodwill charge due to real estate which significantly affected it’s earnings:

“The net loss applicable to common shareholders was $875.4 million, or $2.49 per share, compared with a profit of $281.6 million, or 81 cents a share, a year earlier. Excluding the goodwill charge, Atlanta-based SunTrust said the loss was $160.6 million, or 46 cents per share. Analysts on average forecast a loss of 46 cents per share, according to Reuters Estimates. Revenue on a taxable equivalent basis rose 1 percent to $2.24 billion. Analysts expected $2.09 billion.”

Madoff’s Trading Firm Draws Offers (DealBook)
“Irving H. Picard, the trustee liquidating Mr. Madoff’s assets, said Wednesday that he had received three additional competing offers for the business. Last month, Mr. Picard struck a tentative deal to sell the business to Castor Pollux Securities of Boston for $15 million.”

$$$ Bill Ackman’s plan to fix the financial crisis [Portfolio]

$$$ Roots of $3 Billion Fraud Case Lie in DVD Players, Not CDOs [WSJ]

$$$ S.E.C. Has Failed Madoff Victims [Dealbook]

From: Kaspar-Villiger, Chairman

Sent: Monday, April 20, 2009 4:54 AM

To: ‘All UBS staff globally’

Subject: Initial thoughts on UBS and on winning back the trust of our stakeholders / Erste Gedanken zu UBS und wie wir das Vertrauen unserer Anspruchsgruppen zurückgewinnen können

Additional language versions can be accessed on the intranet: (fra, ita)

Dear colleagues

Last Wednesday at UBS’s annual general meeting I was elected Chairman of the Board of Directors by our shareholders. In assuming this post I am well aware that I have taken on a great responsibility. I also know that UBS continues to find itself in a difficult situation. No one is certain how the markets will develop. Past mistakes have shaken the trust of investors, clients and public authorities, as well as Swiss citizens. The state aid the bank has received has exposed it to the competing interests of politics. We have not yet been able to return to profitability, and many of you feel insecure. But these are problems that can be conquered.

The Obama Portfolio (Since Inception): +19.01%

Earlier: The Obama Portfolio

GM is defaulting.

GM Plans to Skip $1 Billion Debt Payment [The Wall Street Journal]

Basically, nothing.

We suspected, and told you, dear reader, that there was very little that the government could, should or would do. Not only did they do very little, other than nearly incite a riot (including here in the comments sections), but *gasp* AIG employees in all the groups are still actually getting paid- and there are few if any restrictions on those payments going forward.

Steven Davidoff sums it up for us in “We Fought AIG and AIG Won,” which amuses us to no end because it implies that AIG and “The Law” are synonymous- though we doubt Davidoff caught the overt cheer for sanctity of contract implicit in his poorly chosen title.

Just in case you might have forgotten that DealBook is a New York Times venture, Davidoff salts his piece with thinly disguised indignant rage, but the key stuff is here:

The only thing in these agreements (accessible here, here and here) that the Treasury did to pursue these retention bonuses is to deduct the $165 million in total payments from the approximately $183.5 billion made available to A.I.G. In addition, the Treasury charged A.I.G. a commitment fee of $165 million to be paid from the operating cash flow of the company. Since money is fungible, and the government has now agreed to support the company anyway, the latter requirement is meaningless.

How’d you like to be one of the AIG people who bothered to return your bonus now?

We Fought A.I.G. and A.I.G. Won [Dealbook]

Do you ever get the urge to just knock the lights out of one of your colleagues because, I don’t know, he watches Two and a Half Men and insists on telling you about it, or he’s constantly on the phone during business hours with his significant other, who he calls “shmoopie,” or because you just straight up don’t like the look on his face? We feel you. But don’t do it, otherwise your name’s gonna get put in a file and flagged as “crazy” and/or “dangerous,” with a note to keep an eye on your ass lest you lose it again. Plus, you’ll probably be forced take a course with other “dysfunctional employees” on managing your emotions and that’ll be six hours you’ll never get back. And if you think getting laid off is a free pass to take out some rage on whoever fired you, or the random colleagues whose asses you’ve just been waiting to beat down (and figured that on your way out of the building for the last time would be the perfect moment) think again! Your employer will probably have you followed to make sure you don’t flip out on anyone again (probably out of fear they could be in some way implicated). On the off chance you’ve already gone down the path of workplace violence (big and small), share your story! You know we’re always into that shit.

Recession fuels worries of workplace violence [Reuters via Cityfile]

Some discussion yesterday (You’re Not So Tough After All Safecracker) caused us to wonder who exactly had put the provision that seems to forbid Tim “The Safecracker” Geithner from imposing conditions on the repayment of TARP funds.

A series of amendments to what was then H.R. 384, the “TARP Reform and Accountability Act of 2009” were offered to the rules committee on January 14th. That bill was eventually consolidated into a large mass of amendments and voted into the final bill which was passed in the house on January 28th. The Senate bill was passed on February 10th. Obama signed the bill on February 17th.

The “No Impediment” section of the bill was in the amendment packaged offered on January 14th, amendment #43, to be specific, was offered by Frank, Barney (D-MA).

Suck it, Timmy.

Alpha’s annual list of the Hedge Fund 100, the biggest single-manager hedge funds by AUM, is out today, and though it’s not as fun without the personal touch, it’s still a good time. The Top Ten was mostly a reshuffling of 2008’s names, with Man Group, Brevan Howard and Soros cracking the list, and Barclays Global Investors sadly getting knocked out, down to slot 12.

Nice work by Alpha but our criteria are a bit different and obviously yours are too. So, we give you Dealbreaker’s Top 10 Hedge Funds for 2009.

You have by now, no doubt, seen the Daily Beast’s take on Madoff: The Movie. Frankly, we think their casing is all wrong. Madoff seems much more Seinfeld’s Jason Alexander to us (though we love Sam Waterston as Noel). But we don’t want to impose our jaded views on you when it comes to Bernie entertainment. We are certain you can cast this thing better than The Beast or Dealbreaker. Have at it!

Madoff The Movie [The Daily Beast]

If we were throwing $80,000 around here and there to buy up DVD distribution rights for award winning cinema like Chooch, we’d probably not be in a hurry to make a lot of detailed disclosures about the people, places and profits on the deal either. Quadrangle seems to be of the same mind.

New York City’s pension funds are probing whether private equity fund Quadrangle “intentionally misled” it about placement agents used to win pension fund business, a spokesman for the city’s comptroller said Tuesday.

Well of course they (allegedly) did. Have you seen the trailers?

NY City probes