$$$ The Top 10 Wall Street Halloween Costumes [The Deal]

$$$ Duff’s $100 Million Hedge Fund Spree Fails to Lure Investors [Bloomberg]

$$$ Madoff Auditor To Plead Guilty Next Week [GC]

$$$ Job of the Week: Bentley Associates Needs A Managing Director. You. [DB Career Center]

$$$ Sorkin Book Reveals Generational Rift at the New York Times [Gawker]

CNBC reports the first bits of news from Bernie Madoff’s latest prison interview. First off, he cannot express how crazy it is that he got away with all this but if he had to identify one reason it was probably so easy was the fact that “everything the SEC did before 2006” was a “waste of time.” Also? That broad running the new and improved Securities and Exchange Commission? Mary Schapiro? She’s “a dear friend” of the Master o’ Ponz. So basically this is how it’s going to work. Every few months, for remainder of his sentence, Bernie’s going ruin someone’s reputation by claiming they are one of his close personal friends, trusted advisor or fuck buddy. Who’s next? You tell us.

Update: Oh god it keeps getting better. Whistleblower “Harry Markopolos” was “a joke inside the industry” and “jealous” of Madoff’s returns.

Unlike Merrill Lynch, Goldman Sachs is yet to give official word whether or not their annual Hannukah Hoedown will be happening this year. Obviously they’ve got the cash on hand to throw the thing, but wouldn’t want to give certain Rolling Stone scribes the satisfaction of crashing and writing that “the punch tasted suspiciously like that of human blood— obviously not a coincidence and one that gives some serious credence to my thesis.” As for partying themselves, outside the office, that’s been nixed, though apparently it will not stop some brave young souls.

To: DealBreaker

From: [redacted at GS]

Subject: Holiday Parties At Goldman

Apparently self-funded ones are not cool. We started talking about planning one this week and the word came down from the management team that it was a no go. It doesn’t help that one of our MDs was in Hank’s cabinet and is a major guardian of the brand, so I’m not surprised it was squashed early.

After days of speculation, the White House produced the magic number for jobs created or saved courtesy of the stimulus. The exact total so far is 640,329 jobs. You can debate whether or not that number indicates the stimulus is doing enough to alleviate the unemployment problem, but you can’t debate how many jobs the administration is taking credit for. There should be no confusion along those lines.

So Mike Mayo said earlier that Citi “may have to write down about $10 billion in deferred tax assets in the fourth-quarter” and Steve Liesman reports that the House of Vikula had this to say in response: “We have no idea how analysts came to this conclusion.”

Here were some earlier drafts of the statement which would’ve been released had a media representative not intercepted :

* WTF?

* Is he insane?

* No seriously, Mayo, what are you smoking?

* We got nothing.

* What a whackjob this guy is

[MSNBC]

You’d think most people out there wish last year’s crisis never happened. Given the loss of jobs and money, the last thing people would do is be thankful for 2008’s bounty. Countless books and even one fact-heavy cinematic masterpiece went out of their way to document just how much pain and suffering people have been through. But, when put to a vote, more people than you would think were pleased with the collective work of the institutions that inflicted pain on the global economy.

Did the last Frederick’s of Hollywood catalogue fail to make it to your doorstep? Does your employer frown upon your surfing for porn on the job? CNBC is here to lend a helping hand, having uploaded some of their favorite little numbers to the site. If you’re wondering why they didn’t just have the on-air talent model these things, perhaps you’ve failed that remember that CNBC is a serious business network for serious investors, who wouldn’t take MCC or Dennis Kneale seriously if they showed up on Power Lunch in something like this:

Logical but no less soul-crushing news from the House of Raj:

The boys and girls at Galleon no longer enjoy real time quotes unless they get it from the web, service was cancelled given that they no longer need to make trades. They’re pretty upset about it.

The hideous rumor that the opportunity for some legacy Merrill Lynchers to drunkenly grope each other in commemoration of JC and the Bank of America merger this year is apparently true, though it remains unclear as to why (and why the ruling was made so soon). Bank of America is presumably moving forward with its Ken Lewis Good-Bye Kegger.

Tim Geithner is, unquestionably, a hard working guy. He inherited an extreme set of circumstances and didn’t have a supporting cast around him until recently. There is no shortage of issues keeping TG up at night. But could Timmy actually be working too hard? Pilots and medical residents have strict guidelines on required rest since they deal with peoples’ lives. While you may never go under the knife of Dr. Geithner, he does have some degree of control over the economic lives of over 300 million Americans. The last thing you want is some sleep deprived guy falling asleep at the wheel of the economy. So maybe it’s time to make sure TG isn’t showing any of the physiological effects of sleep deprivation such as hallucinations and memory loss.

Part of the understanding a neutral country expects from everybody else is ‘you don’t mess in our affairs and we won’t mess in yours’. And, for the most part, foreign governments have kept themselves out of what goes on inside Switzerland’s borders. But with Italian police conducting raids on Swiss banks operating in Italy and other major European governments turning up the heat on their citizens hiding assets in Switzerland, this is as close the Swiss have come to a declaration of war in several hundred years. The stakes in this game are high.

According to KPMG, as much as 80% of the Europeans’ money in Switzerland is undeclared. In all, KPMG reckons that tax evasion could represent up to 25% of Switzerland’s total private-banking market.

Still, just because there is a lot on the line doesn’t necessarily mean it’s time to hit the panic button. Typically some event happens which clearly signals a changing of the guard and that is the moment when people need to worry.

For those of you worrying the Money Never Sleeps actor would just be spouting lines about the market without the faintest clue as to what he was talking about, fear not. According to director Oliver Stone, ShiLa really gets this stuff. Sayeth Stone:

“[I’m in the market]…but I don’t play it like the [pros]. Or like Shia. As a result of this movie, Shia’s really learned. He’s into it. He trades daily. He and Josh discuss the market between takes.”

Galleon Fears Raised In 2001 (FT)
An analyst in JPMorgan’s alternative asset management arm said the unit “should reduce our allocation” in Galleon’s flagship technology fund, citing what he described as “more negative news about Raj and his cohorts.”

Bankers Expect Rising Bonus Pay To Break Records (Bloomberg)
And some people don’t seem to be very happy about that: “If we were looking for a sense of Wall Street to be, ‘we’re hit hard, I’m going to make less money,’ these results don’t show it,” said J. Ann Selzer, president of Selzer & Co., the Des Moines, Iowa-based public-opinion research firm that conducted the survey.

FBI Lets Barred Tycoon Oleg Deripaska Visit US (WSJ)
He needed to take some meetings with Goldman and Morgan Stanley.

Rajaratnam Started Side Venture With Ex-McKinsey Chief in 2006 (Bloomberg)
The investment firm would like to downplay the whole matter of the accused criminal’s involvement: Rajaratnam “has no management role in New Silk Route nor any ownership in the firm,” Rupa Ranganathan, a spokeswoman for the firm, said in an e-mail. “Neither New Silk Route nor any of its owners have any investment in Galleon.” Rajaratnam has a stake of “well under” 5 percent in the firm’s fund, she said.

Receiver Sets $1.5 Billion Target For Stanford Investors (AP)
John Little, a lawyer appointed to represent investors, said the recovery goal is ”something of a fantasy” and that investors should prepare to get back as little as 2 cents on the dollar.

$$$ Hedge Funder Buyers World’s Largest Yacht [WSJ]

$$$ Ilya the Manatee Is Currently on a Plane to Florida [NYM]

$$$ Judge, Possibly Fearing a TP’d House, Denies Bail for Madoff CFO [GC]

$$$ Is Bernanke Just A Big Hypocrite? [The Deal]

Given the promises made on the campaign trail, there are few issues the administration is more on the line for than jobs. So when the Associated Press claims the administration is, in some cases, vastly overestimating the number of jobs created (or saved) by the stimulus, the White House takes notice. They have contingency plans for minor crises like this one in which it clearly states for a given problem, X, the corrective action is Y. Ed DeSeve, a senior adviser to the president for Recovery Act implementation, probably knows this drill pretty well and shed some light on the situation by defining what the administration sees as X.

Hedge Fund Healthcare Analyst, New York, NY:

Top global multi-billion dollar healthcare investment firm seeks hedge fund analyst. 1+ years investment banking/equity research experience preferred.

Soooooo. Here’s what Jimmy Cayne had to say about about a bunch of some notable CEOs, as noted by noted by Charlie Gasparino’s new book, When Mooks Fail:

Cayne usually had nothing but disdain for most of his fellow CEOs on Wall Street. He had once referred to former NYSE chairman Dick Grasso as a “pig” for his attept to cash out his $140 million retirement package even after Cayne, then a NYSE board member, approved the move. Morgan Stanley CEO John Mack was a “bullshit artist”’ Hank Paulson, when he was the CEO of Goldman, was simply a “snake.” Cayne had even less tolerance for Sandy Weill, and even as he considered selling Bear to JPMorgan Chase chief Jamie Dimon, he told friends that he wasn’t crazy about Dimon because he was a “screamer.”

So Jamie Dimon is a “screamer.” Okay. Here’s what JC had to say about Stan O’Neal, the greatest CEO on Wall Street, present company not included, of course.

Now that more than a year has passed since Lehman was proven to be not too big to fail, lawmakers have had ample opportunity to inspect the wreckage and devise a detailed, reasonable strategy to prevent the same type of carnage from happening again. It’s tough enough for analysts to dig through the complex web of businesses at large financial institutions to place earnings estimates on them. A surgical dismantling requires a carefully orchestrated series of steps on-par with launching the Space Shuttle. Barney Frank has some ideas about which commands should be coming from Mission Control and shared them today with Timmy G.

Two critical questions about the economic recovery can now be put to rest: (1) is the consumer back and (2) are government policies having an impact. The answer to both questions can be found in 290 feet of opulence otherwise known as the world’s largest sailing yacht, the Maltese Falcon. After months of rumor and speculation, we now have confirmation that, after parting with $120 million, one lucky individual can now sail the seven seas in style. So who has a cool $100 mil to throw down on a yacht like this in the current economic climate?

German police have arrested the founder of K1 Group, Helmut Kiener, in connection with an investigation into allegations of fraud at his hedge fund, a local prosecutor said.

European and U.S. authorities are investigating allegations that K1 embezzled millions of dollars from several global banks, including J.P. Morgan Chase & Co., Barclays PLC, BNP Paribas SA and Societe Generale SA.

Yesterday we asked you guys to tweak the list compiled by BroBible, of the hottest business bitches. And they took many of your suggestions to heart! Namely the lack of Bloomberg representation. Before we get into that, however, some notice should be paid to a little something called the Amanda Drury Phenomenon. It was pointed out recently that it seemed as though Margaret Brennan was perhaps taking a page from her former colleague’s playabook, namely in the wardrobe department, based on the evidence found here. We agreed, though it seemed as if MB was doing so slowly, just dipping her toe in at first. Apparently, however, this assumption was dead wrong. MargBren is not just following in the Druries footsteps but endeavoring to beat them at their own game.

Is AD going to let this happen? We’re assuming no, as she invented the damn thing (not aggressive displays of cleave in general, but certainly the cable business edition) but obviously stay tuned. Additions to The List after the jump.

The DC braintrust may be onto something this time when it comes to the home buyer tax credit. Faced with an outbreak of fraudulent claims from home buyers using their 4-year olds as means to an $8000 reduction in their tax bill, the time had clearly come to throw in some safeguards for the next phase of the program. So lawmakers got together and did some serious thinking about how to stay one step ahead of the diabolically clever mind of the average four year old.

Or just Christmas for legacy Merrill employees? We just received the following tip:

No Christmas parties this year for ML offices.

Yesterday we mentioned the harrowing, life-shattering news that Bloomberg had removed the function that allowed you to see how many people were clicking your profile, and checking your shit out, as confirmed by a Help Desk representative. Today, it’s back. Not that we’re not thrilled for those you who enjoy the idea of people watching you, but we’re just wondering why the sudden about face?

With the economic panic currently gone, you’d like to believe bailout loans now require a demonstrated need for the additional cash, not just a checking account. The administration needs some assurance that the applicant in question is operating as a unified organization with a sound business model that simply needs a few billion (more) to get them free and clear of their troubled past. Words come cheap so you better be able to point to something specific that shows your organization is operating as one in this fight. Luckily for GMAC, now they’ve got one.

But don’t fret my pets, this is a good thing. I told you last week after examining him in the flesh that Kenny-boy had visibly slimmed down and today Bloomberg corroborates the story (in a massive profile on the Citadel founder, and how, among other things, he’s hoping to turn RBC* into a firm that goes “head to head” with Goldman Sachs, though obviously this is the most important aspect). Last year was tough, okay? Kensington and Wellington were down, really bad, the wife’s fund was outperforming his, and, of course there was that damn poster, just sitting there, mocking him. Who wouldn’t stress eat through the pain? You’ve got the S&P making idle threats on your ass, you’ve got investors pussying out on you and the only thing that can provide comfort is that plate of nachos. And brownies next to it. But now? All good! The Big C is up, and you could bounce a quarter of KG’s ass.

“We knew we were going to survive,” Griffin says of his decision to start an investment bank, sitting in the firm’s New York office on the 48th floor of the Citigroup Center a year after Lehman’s collapse. Two rows of empty desks nearby await eight new employees set to start work on the sales and trading floor of Citadel Securities.

Griffin, who says he gained 20 pounds as his funds lost $9 billion in 2008 — he shed some of the weight as they rebounded 56 percent through September — was doing what he’s done throughout Citadel’s 19-year history: stepping in when others were fleeing.

Pay Czar Wants No Wider Authority (WSJ)
Great news! Kenneth Feinberg does not want to oversea the pay of any firms beyond the 7 special ones he’s already policing, despite some Congressmen urging the Compensation Cop to go crazy one everyone’s asses. (Vikula et al still loose.)

Buffett Beats Gross in Global Poll as Investor With Most Wisdom (Bloomberg)
When your need advice on insurance companies or sex, the Oracle is apparently where most people go to get it. If he’s got his hands tied with some buxom prosties: “The closest runner-up, Bill Gross, the founder and co- chief investment officer of Pacific Investment Management Co., is chosen by 16 percent. Billionaire investor George Soros gets 10 percent, followed by Nouriel Roubini, the New York University professor who in 2006 predicted the financial crisis, and Marc Faber, publisher of the Gloom, Boom & Doom Report. Fewer than 1 in 10 cited Federal Reserve Chairman Ben Bernanke, despite high marks for his performance as a central banker. Only 3 percent pick Alan Greenspan, the former Fed chairman.”

Galleon Paid Banks Millions For ‘Edge’ (FT)
One executive who dealt with Galleon said: “They wanted anything the public did not have. They got various pieces and put them together and that was their edge.” A former Goldman executive who provided services to funds including Galleon said: “They were tough and aggressive. They cared about short-term returns and cared a lot about the impact of their trading and the costs. They expected a lot of market information.” Serious question: since when is this a crime?

Accountant Sentenced To House Arrest In UBS Tax Case (NYT)
The real kicker here is that apparently the authorities aren’t going to tolerate this kind of thing anymore, because they know you know it’s illegal: “Thousands, if not millions, of taxpayers now know what the legal landscape is,” Judge Cooke said. “Now, we will not tolerate offshore tax evasion.”

K1 Hedge Fund Said to Be Linked to FBI Money-Laundering Sting (Bloomberg)
Homes and offices raided.

$$$ Matt Goldstein: Galleon Shows Need For Hedge Fund Disclosure [Reuters]

$$$ InBev buy of Anheuser-Busch exposes boys club? [The Deal]

$$$ Paul Tudor Jones Goes For Gold [DB]

$$$ Madoff losses totaled so far at $21.2 billion; $530 million paid back [WaPo]

Photos from Jamie Dimon’s yearbook at the Browning School have surfaced. While I sit here at my desk not knowing what to do with myself, you do your parts and fill in the standard: “The tie says [this], but the jean shirt/turtleneck/tie combo says [that].”

There are more.

As anybody who works in government will tell you, politics is an exercise in choosing your words very carefully. And at this critical point in time the Fed, Treasury, regulators and lawmakers all need to be crystal clear about how to achieve a sustainable economic recovery. No more vague, ambiguous statements. Rep. Alan Grayson certainly understands this and demonstrated his mastery of the concept by summarizing where he stands on one of the Beard’s advisers, Linda Robertson, by declaring her a “K Street whore”. There aren’t too many ways to spin that one to claim that you were somehow misunderstood or your words were taken out of context. And, being the guy he is, AG offered up an apology.

“I offer my sincere apology to Linda Robertson, an adviser to Fed Chairman Ben Bernanke. I did not intend to use a term that is often, and correctly, seen as disrespectful of women,” Grayson said in a statement. “This characterization of Ms. Robertson, made during a radio interview last month in the context of the debate over whether the Federal Reserve should be independently audited, was inappropriate, and I apologize.”

What a huge breath of fresh air. We finally have a politician who can admit he was wrong and refuses to hide behind some completely ridiculous explanation to get him off the hook.

Here’s some really awful news sure to shake you to the core. You know that function on your Bloomberg that let’s you see how many times your profile has been accessed? Of course you do, you check daily. Everyone does, even the big guys. It might not seem like that big a deal, and of course there are easier venues through which to stalk people, but be honest: you get off on knowing people are looking at you. Watching you. Seeing if you’ve been referenced in any business articles lately. But those days are over. Some of you probably noticed something awry a few days ago but didn’t want to jump to such a horrible conclusion. Fortunately, some banker chickadee, also reeling from the revelation, set out to get proof, and then passed it around to her comrades at work. On the bright side it appears that while the function has indeed been removed, Bloomberg has made its staff available to help you masturbate to your own existence while on the desk, in the event you need a helping hand.

It’s a good thing Jamie Dimon believes “corporations are flush with cash” because his is still $1.5 million short thanks to Antoine Walker. In support of his candidacy for NBA representative to the Professional Athlete Financial Disaster Union, Walker can claim owing $1.5 million apiece to JPM and Wachovia, $53,000 to American Express, and $450,000 to his former agent. But you don’t become a 3-time All-Star just by putting up gaudy numbers. You need to demonstrate the intangibles. Such as facing felony check fraud charges to the tune of $1 million courtesy of several Vegas casinos. While the list of unpaid debts is impressive, the speed with which Walker was able to legitimize his candidacy is what sets him apart from the competition. So how exactly do you make being paid close to $10 million/year for 12 years vanish?

It’s an age-old question that deserves revisiting every now and then. BroBible has complied a list of its 12 favorite business bitches and while we think it’s definitely a decent start, with your collective expertise we can really nail this thing.

Personally, the bones we have to pick are a) that this isn’t a ranking but just general love-fest. Those things have their place but not here. This is a serious cutthroat competition. Line ‘em up, top to bottom. b) Some entries on the list seem to be the result of the authors have created the thing from the inside of a time machine and c) The lack of Bloomberg representation, especially from someone who is working overtime on the job and had the business sense to take a page from the Amanda Drury playabook. And speaking of the Druries, they’re present and accounted for after the jump. Let’s show a little teamwork and make this thing something to be proud of. Add, subtract and annotate at this time.

For some of Sir Allen’s victims, the playbook for getting back to even includes a chapter on a multi-billion dollar suit against the Antiguan government. You might think suing an entire government was little more than a knee-jerk reaction to the news Antigua’s chief banking supervisor, and Allen Stanford blood brother, Leroy King did his part to help the knight pull off his charade. But the victims appear to be quite serious about their own blood quest. If reason alone won’t convince the Caribbean island to pay up, maybe making them sweat about where their next development dollar is going to come from will do the trick.

Since Raj Rajaratnam was escorted out of his apartment almost two weeks ago in cuffs one thing we’ve been waiting to hear is who slept with whom in this whole thing. Who was going downtown for the hot tips? Was Raj using his bod to get ahead? Someone seems to think that Newcastle’s Danielle Chiesi might’ve been using her powers of persuasion to get an edge in the insider trading game. Not exactly sure how, given that this guy (below) runs what seems to be a small shop out in Ohio but whatevs. Regardless, at least we know she treated her men to the finer things in life, which is nice.

From: [redacted]

To: Dealbreaker

Sent: Wednesday, October 28, 2009

Subject: Danielle Chiesi

Not Obama’s favorite banker, Jamie Dimon, though you’re on the right track in assuming it’s someone who doesn’t take shit or prisoners from anyone (though he will take a bullet). Someone who, perhaps unlike our current Treasury Secretary, could stand up to Larry Summers and say “No, you’ve had enough Diet Coke for today,” and pass the big boy a Vitamin Water. Someone, like Fifty Cent. And as luck would have it, Mr. Cent has already stated publicly that should the President decide to shake up the economic dream team, he’s there.

“Any businessman who wants a piece of the future should learn for me. Obama is great. If he wants me as his financial adviser that would be cool.”

If you were thinking the CNBC contributor didn’t have the qualifications for the job, think again.

On October 6, Sallie Krawcheck appeared on CNBC to say that she is “very much focused” on her job running Bank of America’s wealth management unit. According to the Post, this SKraw’s way of “going public with her ambitions to run the bank.” A couple days later, the paper claimed this (fake) campaign for Lewis’s job somehow “got a big boost,” when shareholder Jonathan Finger stated that the board should pick an outsider to run the bank, despite the fact that The Kraw currently works on the inside. So you see everything was chugging along nicely and girlfriend probably would’ve gotten the gig she was so desperately and publicly begging for and them bam!

As the saying goes, you don’t know what you’ve got until it’s gone. This sentiment seems to be a leading theme in the search to fill Ken Lewis’s shoes. It’s tough to part with a guy who was Banker of the Year, became the face of BofA, and successfully timed the absolute top of the housing market. In fact, KL’s shadow still looms so large that few people outside of BAC are brave enough to throw their hat in the ring to claim the title of Ken Lewis’s Successor. As a result, the phenomenon many thought would befall Citi following a Vikula ousting has paralyzed Bank of America’s search: nobody qualified for the top job wants it.

Pay Czar Increased Base Pay At Firms (WSJ)
On average, base salaries climbed to $437,896 a year as a result of Mr. Feinberg’s review, compared with $383,409 previously, a 14% increase, according to a Journal analysis of Treasury data. Of the 136 employees under Mr. Feinberg’s review, 89 saw their base salaries increase.

Ex-AMD Chief Ruiz Tied To Galleon (WSJ)
Apparently Hector Ruiz gave Newcastle’s Danielle Chiesi her info about a 2008 reorganization of AMD. He’s not technically in any trouble himself, yet.

Ruiz’s Rise To Prominence Said To Culminate In Link To Galleon Case (Bloomberg)
Little more info about Danielle Chiesi’s buddy: he doesn’t take shit from anyone and people look (looked?) up to him. “Hector is one of the most respected figures in the industry,” said Dan Hutcheson, head of VLSI Research, a semiconductor research company in Santa Clara, California. “He’s a very quiet person and very methodical, and tends to be pretty analytical.” According to Roger Kay, an analyst with Endpoint Technologies Associates in Wayland, Massachusetts, “He fought the underdog fight for years against Intel. He was a hard-charging executive, take-no-prisoners type.”

Lazard Reports Higher Than Expected Profit (Reuters)
It’s how Bruce would’ve wanted it: The investment bank reported net income of $37.4 million, or 41 cents a share, compared with a year-earlier net loss of $77 million, or $1.17 per share.

Treasury, GMAC In Talks For 3rd Round Of Aid (AP)
Just asking for a little cash to tide us over, maybe like $2.8 billion to $5.6 billion. It’s not so much that we need the money, we just want to set the record as the U.S. company to receive three rounds of bailout aid, you know?

Irish Pubs Cut Beer Prices After Pound Slide Leaves Economy `High and Dry’ (Bloomberg)
3.50 euros for a Guinness.

$$$ Goldman Sachs: We’re The Good Guys [NYT]

$$$ Jamie Dimon promises not to go after top performers at Bank of America, Citi [AP]

$$$ Is Hank Greenberg So Bad For Starting An AIG 2? [NYM]

$$$ UBS To Align Bonuses With Business Performance Once UBS Is Profitable [Reuters]

$$$ Jefferies promotes Lorello to global head of IB [Reuters]

As you’re aware, brilliant legal mind Lenny Dykstra is representing himself in his “don’t call it bankruptcy” bankruptcy case (which has been converted from a Chapter 11 reorganization to a Chapter 7 liquidation). How are things going so far? Well, Nails has some complaints. First off, why isn’t anyone repping for Team Twizzlers?

Attorney Leonard Shulman, speaking on behalf of the estate, said, “This is a very sophisticated and complex case with quite a bit of litigation that can, and should, be pursued.” He said his office is working with Fireman’s Fund to settle for “just north of $1 million” to cover damage to both homes and to drop claims of bad faith against the insurer. Dykstra says that leaves only about $500,000 to repair the larger house, which “won’t even pay my experts to get started” on repairs. However, any settlement money will go to the estate, not to Lenny Dykstra. The former World Series champion vented in court that the estate’s lawyers weren’t looking after his interests. “I just heard everyone talk about everyone else. But what about Lenny?” Judge Mund advised Dykstra to get his own attorney. “Estate attorneys are not you.”

He’s not asking for much, you know. Just a place to rest his head, maybe tin of dip, an apology from Jim Cramer for giving him the Bear Stearns treatment, and a private jet. The basics.

Dykstra complained in court that his estranged wife has plenty of money (including his pension) while he has nothing. “I live in the street,” Dykstra said. “I don’t want anything special. My wife gets $25,000 a month, and she’s got $300,000 cash. You know what I got? Zero…I couldn’t even buy gas for my car.”

Really, will no one have a heart? The man can’t even afford to put himself up in a seedy motel for the night.

According to City Councilwoman Joann Watson, that number is $1 billion and the administration should cut a bailout check and see what the Motor City does with it. That figure should cover the city’s $300 million budget deficit plus the $700 million in petty cash needed to shock a pulse back into the city. However, before you start thinking Watson is just another local politician asking for a bailout using the ‘just because’ school of thought, be advised, she’s got her reasons.

“If the federal government can get a loan from China, if the state of Michigan can get $2 billion in federal stimulus money, why isn’t it obvious for the city of Detroit?” she said. “Why not establish us as an important precedent? They’ve bailed out Wall Street. They’ve bailed out General Motors. When are they going to bail out the workers? And Detroit’s problems are a direct result of the economic meltdown and the crisis in the auto industry”

It’s true the bailout express has been all over the place during the past year. But writing a check this size for the city at the epicenter of the auto implosion- does Detroit really deserve something like that?

The other day, the blogger over at Wall Street Cheat Sheet penned a column arguing that “according to transitive logic,” Jim Cramer would recommend selling your stock in The Street.com (TSCM), due to the fact that JC tells people to dump shares when executives leave companies suddenly or miss their filings. Both of these dealbreakers recently occurred at The Street, so the author argued that if one were a strict Cramer fundamentalist, there’d only be one thing left to do. He did not claim that JC had actually made this call himself, but rather used it as sort of WWJCD case study. You would think that Jimbo would a) realize this and b) be flattered that someone had not only bought his book but was following his teachings so closely and helping others to apply them in real time investing situations. But you’d think wrong! Uncle Jim fails to see the humor here and not only that but he wants the post removed, an apology, and honestly? A little class and civility up in this piece. Best line (especially picturing him writing it): “Think about how much better you are than that.”

From: James Cramer

To: info@wallstcheatsheet.com

Subject: Some decorum and some fairness

Date: Mon, October 26, 2009 5:30 am

It looks like there is another reason why the majority of people are better off than Warren Buffett. After decades worth of data, the clever crime fighters at the IRS think they may be on to something. As it turns out, most people who play elaborate games of hide-and-seek with some of their assets belong to the same tax bracket.

A new Internal Revenue Service enforcement unit targeting the very wealthy will help the tax agency decode partnerships, offshore trusts and other complex techniques used to hide income, IRS Commissioner Doug Shulman said Monday.

Dubbed the Global High Wealth Industry group, the unit will launch “a small number” of audits of individuals with assets or income in the tens of millions of dollars, Mr. Shulman told an accountants’ trade group. An IRS official said the group would begin work on these initial audits in the next month.

Tax cheats beware, the special unit targeting you is onto the complex web you weave. Playing games on your 1040 is not going to get the job done any more. The IRS is taking a more “holistic” approach to you guys and will not stop until they’ve achieved their objective.

J.P. Morgan Chase & Co.’s president and CEO Jamie Dimon was interviewed by Charlie Rose at the Securities Industries and Financial Markets Association’s annual meeting on Tuesday, where the Wall Street veteran shared his thoughts on the economy, compensation, markets and bailouts.

“The chance of financial Armageddon is over,” Dimon said. “Confidence is coming back. This is what a recovery feels like. Corporate credit is flowing, and corporations are flush with cash.”

Can you feel it? Can you feel down in your plums? That tingly feeling? That’s the recovery working its magic. You want some cash? You want some cash? Here’s some cash [throws it in your face]. Come back for more whenever, I’ve got plenty. This wallet doesn’t lie.

Jamie Dimon On The Financial Crisis [The Deal]

How are managing money and martial arts kind of the same thing? They both have the potential to kick the shit out of you but as long as you don’t fall over and die (or bleed enough money out of your ass that you’re forced to close up shop) it is all good. Lose nearly 70 percent? No problemo.

Benoit “La Tornade” Descourtieux, the second-oldest contender in Hong Kong’s third annual Hedge Fund Fight Night for charity, finds it easy to draw a link between managing money and martial arts.

“As long as we do well most of the time, or even if we don’t do well but survive, we’ll be OK,” said the 46-year-old, Michael Douglas-lookalike in an interview at his 27th-floor office with a view of workers unloading cargo ships at Victoria Harbour. Descourtieux manages the Calypso Asia Fund, which bets on rising and falling stock prices and their derivatives.

Anyway, most of you don’t need to be told what you already know (everyone’s a professional here) but in case you’re interested in seeing the metaphor in action, are in the neighb (Hong Kong), and would like to drop a few G’s (for a good cause!), La Tornade will be sparring Thursday night. Bonus: there’ll be a guy named John “Headcount Reduction” Crane and a male model in the ring. (For those who can’t make it, there’s an Ultimate Cage Fighting event taking place in Southern Connecticut next month, with some big name participation.)

With the agonizing process of determining what the best of the worst should be paid this year behind him, the Pay Czar offered up some thoughts on the process this time around and what the future holds for the executives lucky enough to have their names come across his desk. Even though he “wouldn’t begin to say how much money you should make on Wall Street”, KF was able to say how much money you should expect at a bailed out bank on Wall Street. In fact, he was pretty precise about it. So you’d think the master of compensation numbers would have some detailed, specific words of wisdom for the future.

Despite the current “situation” at the firm you’re not going to lose much money on account of everyone’s favorite spandex lover being an accused criminal.

Galleon Group’s liquidation of its hedge funds’ portfolios is “more than 90% complete,” a person familiar with the matter told Dow Jones Newswires on Tuesday.

The person said that the liquidation was done under “very difficult conditions,” considering Raj Rajaratnam’s hedge fund firm had about $3.7 billion under management as recently as two weeks ago. There has been “very little value leakage,” the person said, meaning the sales of stock have been done at advantageous prices.

Dear Partners,

Since late last year, we have been working to wind down the Tontine Partners funds, the Tontine Capital Partners funds and the Tontine 25 funds (collectively, the “legacy funds”). As we discussed in our July quarterly letter, not all of our investors have similar objectives with respect to their legacy fund investments, with some focused on achieving near-term liquidity and others focused on longer-term returns. After exploring various structures that would offer investors enhanced options going forward, we are pleased to announce that we will restructure the legacy funds to better position us to accelerate redemptions for investors whose goal is the return of their legacy fund investments, while offering investors who are interested in remaining invested with Tontine the opportunity to contribute their legacy fund interests in a newly-formed, ongoing Tontine fund with a focus on thematic, long term investing.

Confused? Someone was actually paid to take the time to create this pretty spectacular flow-chart, which should clear things up:

You have to give the administration credit. When they said the stimulus program was going to be comprehensive and broad based, you got the sense the goal was to make sure no program was left behind. If there was a remotely justifiable economic need and available workers, the stimulus would find a way to fund it. And now there is real proof. Included in the list of fund recipients are six companies currently under criminal investigation who were awarded 112 stimulus projects at Air Force and Army bases worth around $30 million. While Joe Biden commented “In my wildest dreams, I never thought it would work this well,” in reference to the stimulus program, Sen Tom Coburn has some slight reservations about the apparent carve out for those suspected of fraud.

According to the Financial Times, yes, and they’re the secret to Goldman’s success. Unexplored: whether or not the firm would be where it is today if the once “ostentatious and inappropriate dresser” had continued to let his freak-flag fly.

Blankfein is…not the nattiest dresser on the Street; nor is he all roll-up-your-sleeves-and-get-to-work. Instead, he has become a manifestation of sobriety, in a grey or dark two-button, single-breasted suit, medium-width lapels, no trendy touches - and a silk tie with a small geometric pattern.

Now that Bob McCann’s job situation is no longer fluid, UBS’s new US brokerage head took some time with Bloomberg’s Margaret Brennan to reflect on his journey from Merrill to the Swiss bank. Since his departure from ML in January, McCann has been able to critically evaluate UBS’s strengths and weaknesses from a distance. He’s been able to take a step back and identify exactly where the US brokerage should position itself and what it should be known for from this point forward.

This is from the prologue of Charlie Gasparino’s book, in which the Sellout author discusses having dinner at a Chinese restaurant with Jimmy Cayne on August 5, 2007.

When we sat down this was a different Jimmy Cayne than I had known for so long. I had always considered Cayne, now seventy-three, a youthful man. He loved to smoke cigars, and as he stated on more than one occasion he had also smoked pot (Cayne once attempted to hand me what looked like a joint in the Bear Stearns elevator).

From there Chaz goes on to discuss what in Cayne’s drug-addled mind was apparently supposed to be a diss (“…[Cayne] worked out regularly and hung out with clients and friends at San Pietro, where he spun tales about his Wall Street exploits— how he’d kicked the crap out of the competition, [like] the hated ‘Stanley Morgan,’ as he used to refer to the investment bank Morgan Stanley”), failing to revisit the matter. Why? I think you know why. How do you think Jimmy Cayne became such a huge source for Gaspo? This is Journalism 101. When we called Charlie up to press the subject further he told us, “My comment is simply this: I’m gonna save that for my next book.” Since CG has now more or less admitted to hotboxing that elevator like there was no tomorrow in pursuit of a story, the first in a series of many, many events just like it (enough to write an entire tome subject), we figured we’d better get to work helping him pen the definitive book on JC’s crisis to scrounge enough money to buy chips. Here’s a mock-up of the cover:

And some sample chapters:

Piss In This Cup: The guys go searching for a clean urine sample to appease the board of Bear Stearns.

That Stupid Fuckin’ Poster: Charlie goes absolutely postal over his inability to solve the Magic Eye.

Ex-A.I.G. Chief Is Back, Luring Talent From Rescued Firm (NYT)
Wanna work at the next big thing, by which we mean the next too big to fail firm? Step right up! Hank Greenberg is said to be staring AIG: The Sequel, and it’s gonna be huge. “Basically, he’s just starting ‘A.I.G. Two’ and raiding people out of ‘A.I.G. One,’ ” said Douglas A. Love, an insurance executive who has also hired A.I.G. talent for his company, Investors Guaranty Fund of Pembroke, Bermuda. “To me, it’s just going to be a matter of time before the valuation of what he’s building is greater than the valuation of A.I.G.,” said Andrew J. Barile, an insurance consultant in Rancho Santa Fe, Calif.

UBS Taps Bob McCann For US Brokerage (WSJ)
The former Merrill Lynch exec swears the unit will turn a profit on his watch.

Galleon Judge Pushes SEC (WSJ)
In his ruling Monday, Judge Rakoff said he wanted the first conference in the civil insider-trading case on Nov. 4 and that the SEC should prepare for an April 2010 trial “absent extraordinary circumstances.” The case is being heard in a New York federal court.

George Soros: Crisis To Have “Lasting” Impact (Reuters)
When asked if he was afraid that this will not happen once the crisis is over, he said: “Very much so because … one year after the crisis, now that the financial framework has been successfully held together and money markets start to recover, people would like to forget this (crisis) just as a bad dream,” Soros said.

Angry & Sor(kin) (NYP)
Apparently some biz reporters at the Times don’t think ARS is a “team player” and supposedly that the waivers Hank Paulson got to talk to Lloyd Blankfein, discussed in the book, were ripped off from Gretchen Morgenson and Don Van Natta Jr. Awkward! (Sorkin say he got the info first but nobody knew about it because he was on leave from the paper at the time but that he’s “spoken to Don” and is “happy to include a citation in the 40 pages of end notes as a courtesy in the next printing.”)

$$$ “Raj has retained John Dowd of the Washington, D.C.-based firm Akin Gump to represent him going forward, and we are pleased Raj will continue to get great legal representation from such a fine group of lawyers,” Mr. Walden said in a statement. “Rest assured, his team will not miss a beat and is already well prepared to help him fight these charges and clear his name.” [Dealbook]

$$$ J-Vanka Will Have a Second Wedding Reception for People Who Weren’t Good Enough to Be Invited to the First One [NYM]

$$$ Fink’s Hedge Fund Plans Gold Fund [FINalternatives]

$$$ John Mack on saving Morgan Stanley [Wharton]

Sadly, it wasn’t Raj, that we know of, though perhaps he took a test drive later on. I’ll have you know that at Stamford’s premiere hedge fund, the founder takes a more hands on approach to this sort of thing, modeling the goods offered by American Apparel, of which he’s an activist investor, himself, rather than passing the work off onto an underling.* I don’t know how we missed the most amazing aspect of this weekend’s Rajaratnam profile but here you go.

Employees at Galleon recall some unusual scenes. Last summer, Mr. Rajaratnam asked a junior female analyst to buy a black spandex outfit from retailer Lululemon Athletica Inc. as part of a research project into the company, a hotly traded stock.

He then asked the analyst to wear the outfit at the firm’s morning meeting, said people who were there. As employees giggled, Mr. Rajaratnam made the point that few consumers would pay so much money for the expensive outfit in a recession, these people said.

Bank of America is spending $40 million to get the message out that from here forward, “simple, clear, and direct” banking will be the order of the day. For example, the mobile alerts feature allows you to do useful things like check your account balance or receive alerts each time a new lawsuit is filed against BAC or there is another casualty in senior management. The bank has gone to great lengths to identify the subtle changes in consumer behavior and is seeking to take a leadership role in the ‘simpler is better’ era.

Jim Buchanan, BofA’s svp-consumer marketing, said the insight for the campaign came from research that showed that consumers were seeking “clarity” in today’s turbulent market. Consumers, he said, were shifting away from “the big national stories around TARP [the government’s Troubled Asset Relief bank bailout program] and [stories about bank] nationalization, and really [focusing on] how our products and services can help them get through this difficult economy and back on their feet, and in many places, stay in their homes.”

It sounds like a lot of time and effort has gone into this makeover. So let’s hear what you get for a $40 million facelift.

There are many ways to judge the severity of the recession. You can look at unemployment, GDP, corporate bankruptcies, consumer spending, housing prices, and probably a hundred more pieces of economic data. But perhaps there is no greater indicator that what happened over the past couple of years was a bit more than a minor hiccup than when part of a highly regarded economic data set is phased out of existence. It’s happening soon and measuring the strength of the recovery will be even more difficult now.

Most people don’t typically think of Warren Buffett as a guy with limited options. But before you start wishing you could trade places with the billionaire, the Oracle wants you to know some of the hardships he faces. In an interview with the BBC, WB explains 4:00 in how the average Joe with a cool million or so ready to put to good use in the market can make returns that would leave him green with envy.

[BBC]

…according to his lawyer. Just like Seth Tobias (missed every day).

Were thinking to yourself at some point over the weekend that it’d be pretty sweet to roll up to the office (or a date, whichever) in Bernie’s Benz? Well too slow to the draw, hombres. The Ponz Master’s ride, which went to auction October 23, has been spoken for.

A New Jersey man scooped up the jailed Ponzi schemer’s ride for the cut-rate price of $14,250 on Friday after it went on the block at a U.S. Marshal Service auction in East Brunswick, N.J.

“I enjoy the historical significance of the car,” said proud new owner Gregory Przybylski. “I just don’t know if it’s good or bad history.”

Given the nearly daily lawsuits filed against Bank of America, Ken Lewis must be chomping at the bit to disassociate himself from his current employer. Having already invoked the outrage of a diverse group of people- from Andrew Cuomo to a disgruntled credit card customer to the handicapped to members of the military- BofA has now managed to go too far with a little old lady (and her husband). A BAC broker may have had little regard for the value of the assets he put an 82-year old retiree and his 75-year old wife into, but he did recognize the value of one thing, their trust. While brokers at other institutions have been sued for convincing senior citizens to take the plunge into the world of illiquid investments by some sweet talking and the occasional free lunch, the BAC broker in question went way above and beyond the call to fleece the Florida couple.

So Galleon employees are still rolling up to the office, which makes sense given that Raj has shot down the “baseless” allegations that he did anything wrong, promised the firm that this thing is far from over, and sworn that Galleon will rise again. Nevertheless, things have slowed down a bit from the usual pace pre-shit hitting the fan, and with their resumes already updated, Team G apparently needs some new ways to pass the time.

Had drinks with a friend of mine at Galleon— they are getting paid to show up but the traders are all just watching movies at their desks. DB should send them copies of Boiler Room and Wall Street to pass the time.

We should! And we would, if we didn’t think you guys could come up with some more out of the box titles, since they’ve probably already watched the above, many times (possibly as required viewing for working at the fund). If we want to go topical there’s Shawshank, The Fugitive and Harold & Kumar Escape from Guantanamo Bay. But why go topical when they probably want to get their minds of the news off the day? In which case, its really just a matter of taste. How about the entire Made series to date, including the episode “I want to be a model,” in which the subject was told by her coach, “Girl, I’m going to eat you up on the runway,” a line oft quoted by Raj while on the desk? Figure it out by noon and we’ll messenger something over, with snacks.

Shia LaBeouf (and Michael Douglas) working it on set. [NYP]

Russia may wind up with the most broadly diversified banks in the world by complete accident. While banks in the US and Europe can look forward to seizing more conventional collateral assets such as houses when loan recipients run into trouble, Russian banks may truly wind up becoming banking supermarkets.

When Russian billionaire Alexander Lebedev’sOAO National Reserve Bank seized collateral offered against a loan from a cash-strapped borrower, a health quarantine was slapped on the security: 40,450 pigs.

“We had a court decision to take away the collateral, which is the pigs,” Lebedev, 49, said in an interview in Moscow.

With some estimates placing the level of loans secured by “strange assets” at state banks at close to 20%, it’s not just tens of thousands of pigs Russian banks need to make space for.

What has Neel Kashkari been up to lately? Chopping wood, mostly, in attempt to “decompress” from the stress of last year, up at a “secluded mountain cabin” in California. Getting away from it all has helped Hank Paulson’s little buddy center himself and offered some serious time for reflection. And up there, in the woods, decked out in flannel, know what he’s reflected on a whole lot? The fact that his former employer, who will not be name-checked at this time for security purposes, is full of shit. (Leaving names out of this on the off-chance Kash-K decides he wants to return to the golden ball pit.)

“Every single Wall Street firm, despite their protest today, every single one benefited from our actions,” he said. “And when they get up there and say, ‘Well, we didn’t need it,’ that’s bull.

“They did need it. And they’re all happy with the actions that we took, and they need to show restraint today.”

As for you, Representative Cummings, why don’t you come out to my cabin and we’ll settle once and for all who the chump is? Let’s see your clippers.

The Economic Bomb That Didn’t Drop [NYT via NYM]

Galleon Wiretaps Rattle Hedge Funds as Insider Trading Targeted (Bloomberg)
“The word wiretap strikes fear in the hearts of everyone, even the innocent,” said Brad Balter, who runs Balter Capital Management LLC, a Boston-based firm that allocates clients’ money to hedge funds.

Madoff colleague Picower found dead Palm Beach pool (Palm Beach Post)
“I do feel badly a man died,” said Ronnie Sue Ambrosino, a former Delray Beach resident who lost her life savings to Madoff. “But it’s another clue we’ll never have. Madoff pleaded guilty and didn’t go to trial. And now Picower dies. It’s a little ironic that we’re never going to find out the truth.” The Picowers, according to attorneys investigating Madoff’s financial empire, were part of the Ponzi scheme for more than 20 years. They and their daughter, Gabrielle, made more than $5 billion in fictitious profits, according to a complaint that was filed as part of federal efforts to recover money for the victims of Madoff’s scheme.

Fund to Focus On Role Of Women (FT)
The Women’s Leadership Fund, started by Zurich-based Naissance Capital, hopes to invest up to $2bn (£1.2bn) and take activist positions in companies with few or no women in executive or board roles. Now with the are you trying to convince us or yourselves questions: “Is there an edge to be gained in investing in these kind of companies? We think so, and we’re the first to do it,” said Daniel Tudor, the fund’s project manager.

Billionaire Hedges Bet on Auction House (NYT)
SAC Capital has sold its 6 percent stake in Sotheby’s. Did this have to do with a dispute over people getting their greasy sandwiches near a certain someone’s art? We like to think so.

Probe Widening In Galleon Case (WSJ)
The Journal reports that Richard Grodin’s Quadrum Capital has been subpoenaed for its trading records, and also that the fund was closed the week before last (without giving Dealbreaker credit for being the ones to report that fact days earlier, plus Grodin’s ties to Galleon cooperating witness Choo Beng Lee, etc).

Moffat’s Galleon Arrest Stuns IBMers Who Recall Sumo Suit, Kilt (Bloomberg)
Bob Moffat is going to be missed big time: “To boost employee morale, according to a former colleague, he once told workers in the Raleigh office that if the division turned a profit in one quarter, he would wear a kilt at a company event. When it did, he kept his promise. He once dressed up in a sumo-wrestler suit at a conference. While onstage at an another event, he tore up a speech a communications executive had written, saying he preferred to speak off-the-cuff.”

Learn To Love Insider Trading (WSJ)
A certain Sri Lankan is two steps ahead of you.

$$$ CIT CEO’s Wife Very Angry at Obama for Cutting Wall Street Salaries [NYM]

$$$ ICAP US Unit Receives “Wells” Notice From SEC [NASDAQ]

$$$ Professor Bartiromo [NYP]

$$$ CHUPI (NOT) IN CRISIS: Banker Buys 2nd Palazzo Apartment [Curbed]

$$$ Job of the Week: Bentley Associates Needs a Managing Director. You. [DB Career Center]

$$$ BofA’s Countrywide to Get Subpoena Over VIP Program [CNBC]

It’s been a while since Ken Lewis and the phrase ‘a good example’ have been used in the same sentence. After a rough couple of months, KL has been declared a model citizen of sorts once again. This time by Ken Feinberg. When pondering the question of which CEO had excelled in the areas of interest for compensation clawbacks, the Pay Czar was quick to nominate Kenny boy.

“There may be situations where, you want a good example, is the CEO for Bank of America, where we thought it important to claw back,” Feinberg told reporters after speaking at George Washington University Law School.

But KF has tried to make it clear that he would invoke the power of the claw only in rare cases. What exactly does a former Banker of the Year have to do to warrant such a severe penalty? BAC has cornered the market on neither admitting nor denying any wrongdoing. You can’t go after Ken Lewis just because. You need a good reason. So Ken Feinberg, exactly what warrants singling KL out?

Have you ever wanted to learn how to kill a person with your bare hands, as a matter of self-defense or just cause? Are you going to be in Vegas the weekend of the 14th? I am and I thought we could take this class together, which comes highly recommended by the “senior staff” at Goldman.*

Good afternoon,

Las Vegas’ Tim Larkin is teaching Investment Bankers ‘How to Kill’ as a method of self defence at a closed-venue in Las Vegas on 14th and 15th November. He has taught senior staff of Goldman Sachs, JP Morgan, Deutche Bank and Credit Suisse and also Scotland Yard.

It looks like the secret location of the hundreds of billions of supposedly well hidden assets isn’t so secret after all. The Italian tax amnesty program has been pretty successful so far in bringing the hidden fortunes of the country’s wealthy citizens back inside its borders. Business is good. So good in fact that Italian authorities are taking the opportunity to strike while the iron is hot and go for the mother lode. But authorities around the world have gone on at length about the difficulties involved in locating the piles of cash. They could be in any number of places. Including right at their doorstep.

Namely, did Ace Greenberg’s million dollar donation in 1998 to New York City hospitals, which paid for Viagra prescriptions for homeless men, reflect poorly or favorably on Bear Stearns? JC ponders this and other questions on the subject of the down on their luck getting it up via spokesman Charlie Gasparino, an expert on the sex habits of the destitute, in The Sell-Out:

Ace would always be the guy who marched to his own drumbeat. It’s what made him a media darling; the press loved his mannerisms, from the magic tricks he performed on the trading desk to the fact that he answered his own telephone calls. Cayne saw the dark side of Greenberg’s personality; it’s why he never doubted the sexual harassment story.

As crazy as Cayne seemed, Greeberg could match him in being off the wall. It was, after all, Greeberg who had once donated $1 million to a hospital so homeless men could enjoy sex by having access to free Viagra. He had made a splash of it, making the announcement in the New York Times without alerting Cayne, who first heard it when he picked up the paper in the morning and nearly hit the ceiling.

“Are you fucking kidding?” Cayne screamed at Greenberg after reading the story.

For those who are worried that the bailouts and seemingly endless government support and safety nets are pushing the US closer to a Scandinavian welfare state model where everything is shared, Norway provides some context for just how much farther we would need to go. For example, calls for increased transparency in the US typically revolve around issues such as policy clarification or greater disclosure detail. The Norwegian equivalent is getting a more granular breakdown of the your neighbors’ income streams.

To: Dealbreaker

From: [redacted]

Subject: Shia LaBeouf

Most unhappy with Mr. LaBeouf yesterday. He was filming in front of a co-op at 66th and Park. My daughter is ten and between takes the crew was nice enough to let her get close to him. He was sitting in a red Prius looking very very nervous about his next scene which was difficult- sitting in the passenger seat of a car as it drove up to the co-op. Anyway, we got about 10 feet from him, my daughter waved, smiled and he just sat there completely mortified to realize his fan base is a bunch of tweens. I actually think I saw him sweating, the little runt. How can this teenage guy (who weighs 95 pounds) represent Wall Street?! Very puzzling casting decision.

As has been pretty well established, if you want to work in this business, you’d best have your own rap to speak of. A bunch of MIT b-school students made this one, based on the boys on a motherfucking boat. CFA candidates, the gauntlet has been thrown down.

“I wouldn’t begin to say how much money you should make on Wall Street,” Mr. Feinberg said in an interview last week, as he prepared to slash pay for the top 25 earners at seven firms that received significant government aid. “I’ve never worked on Wall Street. I don’t claim to know the ethos of Wall Street.”

Pay Czar Doubts Cuts Will Make Bankers Leave [NYT]

One of the main contributing factors of the spectacular implosion of AIG’s Financial Product unit was not knowing the real value of their assets. However, based on the behavior of AIGFP’s senior management, the value of at least one thing from the unit, a promise, is becoming crystal clear. Adding credibility to Bobby Benmosche’s contention that AIG is almost immune from Ken Feinberg’s reach, the Pay Czar issued a reminder to the four senior managers in the group who had promised to return their retention bonuses that he is still waiting.

But this shouldn’t come as any surprise. Given the amount of outrage at executive compensation this past year, it’s natural for people who received generous retention bonuses to think twice about giving them back. With the changing pay landscape, what are the chances they’d be able to recoup that money and who would go to bat for them? Even AIG must know when enough is enough when it comes to unjustified compensation.

Also: the next time you people want to debate MBA v. CFA, know this— Greenlight’s new controller has both, in addition to a CPA, to say nothing of his kickball skills.

Wall Street Reacts With Skepticism, Anger on Moves to Reduce Executive Pay (Bloomberg)
The pay cuts are “sheer stupidity,” said Kenneth Langone, co-founder of Home Depot Inc. and a former New York Stock Exchange board member. “The taxpayers have an enormous financial risk in these companies, and very simply stated, I want the best person. If I needed neurosurgery, I would want the finest doctor I could get, no matter what I had to pay for it.”

GM CEO to get raise in compensation (Reuters)
Last year’s comp was $1.71 million, this year will be $5.45 million.

CIT Reaches Tentative Deal with Goldman (CNBC)
The new agreement calls for Goldman to reduce the loan to just over $2 billion, people said. CIT in turn would pay Goldman about $300 million if it files for bankruptcy.

Top employees leave financial firms ahead of pay cuts (WaPo)
So suck it, Feinberg!

Fed Hits Banks With Sweeping Limits Pay (WSJ)
While the Fed didn’t propose pay caps, it said it will review compensation policies at “28 large, complex banking organizations,” which it didn’t identify. It will be a “horizontal review” that in effect compares them to one another. The Fed also proposed that pay of traders and other employees be linked to the risks taken to achieve returns. So if two people generate $1 million in revenue each, one who took more chances could be paid less.

Man pleads guilty to DWI in motorized La-Z-Boy (AP)
Let this be a lesson to you all.

$$$ The SEC’s Tough New Offensive on Insider Trading [BW]

$$$ 40 Under 40: Business’s Hottest Rising Stars (Jonathan Gray, John Arnold, Meredith Whitney, Erin Burnett, Keith Meister). [Fortune]

$$$ Georgetown student advertises for a personal assistant [WaPo]

$$$ Phil Goldstein’s First Amendment Case Heads To Massachusetts’ Highest Court [AR]

$$$ Larry Fink Enraged That Sorkin Wrote BlackRock’s Balance Sheet Was Loaded With Subprime [BI]

$$$ Erin Burnett was in a hula-hooping contest this morning. [NBC]

The administration’s commitment to transparency is coming along pretty well these days. For example, it’s becoming clearer and clearer what the standard is for considering anti-fraud measures for the home buyer tax credit program. Evidently we have breached the tolerance level for the number of individuals currently in kindergarten who were approved for the $8,000 credit on their tax returns. In addition to the one 4-year old who did his or her part to help the housing recovery efforts, 581 other individuals under the age of 18 were granted the credit as well.

Mary Thompson reports that Bank of America has taken the opportunity provided by the Comp Cop’s crackdown on pay to note that “people want to work at Bank of America.” They really do! But now, in light of the new rules, they might seek employment elsewhere. Also, this.

AIG’s bashful CEO Bobby Benmosche put the fear lurking inside each one of his employees to rest yesterday. When faced with the question ‘what is Ken Feinberg going to do to my paycheck’, BB made it crystal clear to his troops that they had nothing to fear. The rule of the Pay Czar does not extend very deep into the house the US taxpayer (re)built.

“It is important that all of you know that the Special Master’s jurisdiction is quite limited, and we expect Feinberg’s upcoming decisions on compensation to cover only the top 25 employees at AIG,” Benmosche said in an internal memo distributed around the company late on Wednesday.

If there is one thing Benmosche has been consistent and adamant about since starting it’s turning AIG around as fast as possible to repay the US taxpayer making sure his people get paid competitively. But the real question is what does the guy at the top think about how his pay package stacks up. His predecessor made good on $1/yr.

You people have really done it now. Yesterday Dick Bové went on CNBC right after Wells Fargo had announced earnings, at which time he described the bank as a “standout” and one that had its loan losses “under control.” Boves followed this up by downgrading WFC from neutral to sell. No big D, she thought, but apparently some people begged to differ! DiBo was taken to task for the sharp sell off in Wells (and the market in gen) and now, because the relentless bitching just will not quit, she’s decided she’s going to pack up her act and leave. According the Rochdale analyst, we will no longer be treated to her analysis of a company she hasn’t yet analyzed. Now, she’s going to start doing her homework before appearing on television to make recommendations and what’s more? She’s no longer going to play the game where Michelle Caruso Cabrera names a company and she blurts out the first word the comes into her head.

Prominent banking analyst Dick Bove, who caused a stir Wednesday with seemingly contradictory remarks on Wells Fargo, has decided he’ll no longer provide immediate earnings commentary on air.

“I’m not going to do it anymore. I’m going to have to see the numbers before I go on air,” Bove told Dow Jones Newswires Thursday. “It creates an untenable situation.”

There are more fun times ahead for Raj Rajaratnam. Forget about proving claims of insider trading are baseless. A New Jersey lawsuit wants RR to answer for the blood allegedly on his hands. Evidently Raj and his family’s foundation transferred millions to the Tamil Rehabilitation Organization over the years. Which is a bit of a problem considering the Treasury designated the organization as a front for the Tamil Tigers and the US, EU, and India tend to file things related to the TTs under the header ‘terrorist organizations’. There is little doubt the Tamil Tigers have done some pretty horrific things over time and somebody should pay. And now, thanks to the world learning about $20 million in illicit gains, that person may be Raj.

1. Aesthetically, it’s a piece of shit. Also, Salmon wouldn’t use the pages to line his birdcage.

2. Too much Charlie.

3. That the people publicizing it in included materials that might help sell the thing.

4. This wasn’t a Tweet (yet) but just speculation: that it wasn’t written by Sorkin?

Given the recent debate about the FHA’s overall financial condition, you’d think people would jump at the opportunity to slow down the pace of FHA-insured loans. Especially when the FHA believes they’ve identified a lender signing them up for loans they shouldn’t be touching. However, after hearing the details of one or two twelve alleged violations Ideal Mortgage Bankers made against the FHA, a federal judge decided to dismiss the request for a temporary restraining order which would have prohibited the lender from making new FHA insured loans.

As you’re aware, ten more people are expected to be charged with insider trading this week. Some of them may be connected to the Rajaratnam case. Others will be accused of dipping their wick elsewhere. The authorities refuse to give any hints as to who could potentially be perp-walking, forcing us to wildly speculate, since we can’t take the suspense! To that end, we’re just going to throw some stuff out there. Maybe it means something, maybe not! It’s all relative.

One of the cooperating witnesses in the Galleon case is Choo Beng Lee, who started Spherix Capital in March 2008, after working at Stratix Asset Management, a tech fund. Stratix was formed by SAC veterans Ian Goodman and Richard Grodin, and closed in December 2007, supposedly due to personal issues between the founders. Grodin then started Quadrum Capital, another tech-focused fund, around March 2008. We were told yesterday that Quadrum “abruptly” closed at some point last week. And apparently they really don’t want to talk about it, because the firm’s number is now out of service.

Update, 10/24: The WSJ has confirmed all of the above, and notes that Grodin had been subpoenaed for his trading records.

The ECB is worried about going old school on hedge funds. It recognizes there are some significant risks involved in reverting back to an environment overly rich in regulation and has spelled out its concerns.

“The ECB sees a potential risk of regulatory arbitrage between alternative investment fund managers, insurance companies and credit institutions, among which the proposed directive does not create a level playing field,” it said.

In the end, this going to come down to a test of wills to see who joins the EU’s initiative. They are willing to risk putting an end to the party and betting that others will follow in their footsteps. Much like another person familiar with old school ways, Frank the Tank.

No projected numbers yet but John Mack told employees today that re: compensation, “it’s going to be controversial. And it is what it is.” Which should bode well for the Mackettes! If it’s going to piss off the public, that’s gotta mean it’ll be good for you.

So! Firms are starting to hire again, which is very exciting to those of you trying to improve your situation. Perhaps it’s been a while since a lot have gone through this process, and you’re a little rusty on the Do’s and Dont’s. Which why starting today we’ll be offering little pearls of accumulated wisdom picked up in the field. Tip one: don’t lie about having received an offer from one firm while you’re interviewing with another. Tip one-A: if you’re going to lie about said fake offer, impersonate someone and forge a little evidence: easy on the typos. Spelling Bank of America without ‘c’ is going to be a red flag. Jeffrey Chiang knows what we’re talking about.

Galleon Informant Surfaces (WSJ)
Roomy Khan, who worked for Galleon in the late 90s, is said to be “Tipper A.” In 2005, she asked Rajaratnam for another job. He didn’t give her one, but he did ask if she had any inside information about any companies (turns out the answer was yes). Investigators say the informant and Mr. Rajaratnam both traded shares of Polycom multiple times, as well as shares of two other companies where the informant allegedly got inside information: Hilton Hotels and Google Inc. Also, Kahn and her husband were sued by their housekeeper a few years ago.

Meriwether Setting Up New Hedge Fund (FT)
How much investor money can John Meriwether lose in one lifetime? Step right up and find out. Fresh off the success of JWM Partners and huffing on the fumes of the LTCM days, Meriwether is starting a third hedge fund, JM Advisors Management, to launch next year. It will reportedly use the same strategy as both LTCM and JWM to “make” money. Act now to get in on this can’t-lose opportunity.

TPG Plans To Return $20 Million In Fund Fees (WSJ)
Throwing investors a bone: “The gesture is TPG’s second concession this year, as it tries to shore up its relationships with investors who have committed billions of dollars with the private-equity firm but have seen little in the way of new deals or positive investment returns.”

$$$ The good people of Bloomberg Help Desk [NYM]

$$$ Rebecca Jarvis Leaves CNBC [TVNewser]

$$$ Becky Quick Can Out-Party Carl Quintanilla [BI]

$$$ Extreme Makeover: Wall Street Edition [Cityfile]

As previously mentioned, despite all drugs have done for him, Jimmy Cayne rabidly denies smoking pot or blowing rails during his time running the good ship Bear Stearns. We get why, circa 2007, JC would want to downplay his love of weed, and understand why now he does the same now, as Jimbo attempts to preserve his legacy as the most prudent and lucid-minded CEO on Wall Street, ever. But apparently even back in the day, when for the most part this shit was accepted, Big Daddy CaCayne was going to great lengths to insist he was clean (though obviously not offering to piss in a cup since clean samples were hard to come by). I don’t think I have to tell you this comes from DEA Officer Charlie Gasparino’s new book:

…some stories about Cayne’s partying did make their way back to Greenberg, including one time when a senior executive at the firm, William Montgoris, walked by Cayne’s office, detected the scent of marijuana, and reported the incident. Greenberg asked Cayne if what Montgoris was saying was true, but Cayne attributed the marijuana smell to “a new leather couch in my office,” and later invited Montgoris in for a whiff. “Does the couch smell like pot or not?” he asked Montgoris, who nervously said it did, and the matter was dropped. Montgoris, in an interview, wouldn’t deny the account; Cayne, for his part, maintains the same position he had back then; that he didn’t smoke pot in the office.

Senior ranking member of the Senate Finance Committee Orrin Hatch has seen just about enough of the big, major players always getting their way and shutting out smaller competitors. While he wouldn’t break up the usual suspects, Hatch did call on the White House to help level the playing field. After years of potentially illegal activity, it’s about time to put the debate that always comes to a boil around election time to rest once and for all. Is there a way to get rid of the Bowl Championship Series?

Not all traders feeding off of Galleon’s wind down are making wise moves. Today squawk-boxes on tech desk were buzzing about the movement of $AERG, Applied Energetics. A penny stock position Galleon held 7.5 million shares in at the end of the second quarter.

“The stock fell on the first news of Galleon troubles and today it was doing its reversal off the news of Galleon’s portfolio liquidation,” says CNBC contributor Paul Kedrosky.

It’s not just the top 25 highest paid executives working at the charter members of the bailout club who are going to be hurting from the pay czar’s decision to slash salaries by 90% and reduce total comp by 50%. There will be some collateral damage and for those at Citi and AIG, all you have to do is look out the window to see it. As it stands now, the State of New York will likely not have enough money to pay its bills come December. With six weeks to go, the state is about $3 billion short of being able to pay for such luxuries as “property tax rebates, aid to school districts, counties and cities.”

Most of the staff at Rajaratnam fun house have been spending the last several days updating their resumes, which makes sense if you’ve been following the news since Friday, and most especially this morning. Except for this li’l fella, who believes Raj when he says the allegations are baseless and knows, in his gut, that Galleon will get through this. He’ll be there Monday, business as usual. Will you?

Buddy of mine works at Galleon. Thinks they’re going to pull through. He has several years in deferred comp. Not sure how to break it to him…

Hopefully Citi is already working on some new ads for its push into the exploding credit card space. If you act right now, you’ll get the chance to participate in the bank’s Mission Impossible inspired oil partner co-branded MasterCard program whereby you can look forward to rewards like 3% cash back on fuel purchases, 1% cash back on other purchases, and the possibility that in spite of paying your bill on-time, the rapidly shrinking bank has decided to turn off your tap without any prior warning. The recent steps taken to cut off even more of its limbs takes the process down to the most granular level. But you’d think the decision by the former banking supermarket, which looks more and more like a banking bodega, to make going to the pump a bit more interesting for Citi customers wouldn’t be simply random. They must have solid credit-based reasons for these incidents.

Finally, it pays to be Kenneth Feinberg’s special-needs CEO. You get this insider info before everyone else. The Times reports:

Under the plan, which will be announced in the next few days by the Treasury Department, the seven companies that received the most assistance will have to cut the annual salaries of their 25 best-paid executives by an average of about 90 percent from last year. The executive’s total compensation — including bonuses and retirement contributions — will drop, on average, by about 50 percent. The companies are Citigroup, Bank of America, the American International Group, General Motors, Chrysler and the financing arms of the two automakers.

To: RBC Employees

Subject: Staff Opportunity to be an Extra in Wall Street 2 - Filmed on our 8th Floor at WFC

All~

The sequel to Oliver Stone’s Wall Street will be filming several scenes on our WFC trading floor in early November (tentative the weekend of November 1st). As part of the arrangement our staff have been invited to participate as extras in the upcoming Wall Street 2. The casting director will be here tomorrow, Thursday at 4pm in conference room 8D. Staff interested in participating will fill out a short form and have their picture taken. They are looking for 80 people, men & women, all ethnicities.

Please see attached informational flyer for more details.

Thanks

The debate about what to do with large institutions that were directly responsible for the massive loss of financial life over the past two years has been heating up again recently. From Alan Greenspan to Paul Volcker, there is a growing chorus of people calling for the elimination of certain large organizations in their current form to avoid the economy taking another tumble while also bringing back the idea that nobody is too big to fail. One UK lawmaker is vowing to take that concept to the one area previously left out of the discussion: regulators.

I don’t think we should necessarily jump to any conclusions here. Maybe they’re just revamping the site to make it more of an interactive experience?

After a solid half-century of excellence falling behind their foreign counterparts in efficiency and surviving on credit bubbles, you’d think the former head of the mighty GM empire, Rick Wagoner, might have had some sense of urgency to position the company in a direction other than a government orchestrated bankruptcy. According to Steve Rattner, the well-placed sense of self at GM under Wagoner rule can be summed up by two words: friendly arrogance. From the outside world, that may seem a bit off target for a company whose financial performance mimicked that of a crash test dummy, but Rattner got a in-depth look at GM. Maybe he saw evidence of its inner excellence.

Just like he claims to have never touched marijuana despite the fact that former colleagues describe his office at 383 Madison as a “straight-up grow house.” Wall Street Marijuana and Cough Syrup Expert Charlie Gasparino, however, is not convinced, and implies as much in The Sell-Out. CG knows an addict when he sees one, and what’s more, his sources in the world of crack-slinging are second to none.

Cohen recalls one such incident of Cayne’s free-living lifestyle: Cayne called him to his forty-eighth floor corner office with its great view of the East River in Lower Manhattan to discuss some firm business. After a couple minutes of small talk, Cohen says Cayne reached down into his desk and pulled out a blue Bromo Seltzer bottle. (Bromo Seltzer is a white powdery antacid.) “What do you think’s in here?” Cayne said, according to Cohen’s recollection. “Bromo Seltzer?” Cohen asked, slightly bewildered. “No, it’s filled with cocaine,” Cayne said with a smile. Cohen never checked to see if that was true, and Cayne in an interview says he has never done coke (he also called Cohen’s account “patent bullshit”).

The Financial Crisis Lit Cheat Sheet [NYM]

I told her that it was intended to be a compliment à la you’re the Money Honey but powerful and in leather and carrying a whip but I don’t think it helped much. MDubs did concede, however, that “it could be worse” and that her mother “loves” the moniker which really? Is all we’re after here: the mom endorsement. Unfortunately Vikram Pandit was not present at the party last night for Andrew Ross Sorkin’s new book, Too Big To Fail, as a demo on the spreader and truss bar would’ve been nice but maybe next time. John Mack was there, though not offering himself up for an impromptu primer. JM held court in the back room for most of the evening, where he told us that contrary to popular belief he is “not retiring” but merely shedding the CEO title. Being Chairman of Morgan Stanley is a full-time job, and he will be in the office everyday come January, for those of you thinking he’d be taking it easy in North Carolina. No Lloyd Blankfein, which stung, but his loss, right? We don’t need that guy and his blood sucking ways. Jamie Dimon did his part repping for the “hot piece of ass” CEO contingent and fresh off an afternoon set at the Laugh Factory was Bill Ackman, on a roll with the prison warden jokes. Also working the room:

Paying $30k per head for the privilege to attend a dinner where your employer is the only thing truly feasted upon is a bit steep even by Manhattan standards. The brave few from the big banks who attended last night’s Democratic fund-raiser probably had a good idea of what the President had on the menu beforehand ,but may not have expected a full three courses of what Wall Street did wrong.

Everytime we try and get off the Berns Beat this guy reels us back in. Not content to let Raj Rajaratnam and his little insider trading case dominate the limelight, Madoff sees your “Sri Lankan scandal” and raises you a “I eat Italian food prepared by a pervert.” The Daily News reports that inside the Butler, NC prison he calls home, the Ponz Master bunks with a 21 year-old drug dealer and eats pizza “prepared by a child molester.” That should be enough to hold our attention but in case you were considering spending your morning discussing the implications of Raj-Raj winding down his fund, Big Big goes on:

New additions to a lawsuit against the jailed Ponzi schemer charge that he presided over an office so fueled by the drug that it was known as the “North Pole.”

Raj Rajaratnam maintains allegations are baseless. In related news, who wants to buy a hedge fund?

Chiesi Search For Investor Edge Went To Far, Say Prosecutors (WSJ)
Danielle’s attorney begs to differ: Mr. Kaufman said that all Ms. Chiesi was doing was trying to get better information than most people have, which is “what thousands and thousands of people in the financial community try to do,” He added, “I did not see any allegations that Danielle was trading for her own account or that she personally profited from this.”

Bank of America Saw Merrill Losses in November, E-Mails Show (Bloomberg)
“Read and weep,” Chief Accounting Officer Neil Cotty wrote in a Nov. 5 e-mail to Chief Financial Officer Joe Price that included Merrill’s October financial report.

Galleon Moves Assets Into Cash (FT)
Most investors are redeeming ASAP though one charitably offered: “Liquidation would be the objective thing to do,” adding that he would be “looking to see what happens this week.”

Goldman Sachs Exec Defends Bonuses At Ethics Debate (Reuters)
Brian Griffiths said he was not “ashamed” of his bank’s compensation package.

King Suggests Splitting Up Largest Banks to Stem Risk (Bloomberg)
Mervyn says chop ‘em up.

Fed Chooses Staff Economist as Head of Bank Supervision (WSJ)
“As an economist with deep expertise in financial markets, Pat Parkinson will be an important asset at a time when we are focusing on a multidisciplinary approach to banking supervision and regulation,” Mr. Bernanke said. “We’re working to supervise the banking sector in a way that focuses not just on individual institutions, but on how those institutions are interconnected and are integrated into the financial system and the economy.”

$$$ Chiesi Faced Tax Lien While Allegedly Trading Akamai [Bloomberg]

$$$ BofA Emails Tell Different Story About Merrill Deal [The Deal]

$$$ Goldman Sachs’ Favorite NYC Private Schools [Cityfile]

$$$ Rakoff Gets Galleon Case [WSJ]

Many people have spoken at great length about the evils of Wall St. but the Oracle is not buying the argument that Wall St. is evil itself. Keeping up the trend this week of refusing to name names, WB said part of the problem is ability of certain individuals to do their best George Costanza impression by leaving on top at the same time their respective organizations are in mortal danger.

Forbes reports that “an unnamed hedge fund” is seeking to bring in a specialist who can come in and “make sure employees are not wearing wires,” in an effort to screw (or: finger) said fund. Who do we think it is?

How Dirty Are Hedge Funds? [Forbes via BI]

Pershing Square hedge fund manager Bill Ackman highlighted prison operator Corrections Corp. as one of the best real-estate businesses around, during a presentation at the Value Investing Congress in New York on Tuesday. The government is a major customer and there is strong demand for prison space and limited supply, Ackman explained. “It’s also a hedge against your hedge fund business, because as the SEC ramps up…” Ackman said, prompting laughter at the conference. “We shouldn’t joke about that,” he added.

Having been frequently and thoroughly demonized over the past few years, off-balance sheet entities are now set to save the Irish government’s debt levels from reaching comical magnitudes. The recently created National Asset Management Agency (NAMA) will be allowed to deal with the €77 billion in primarily mortgage loans taken off the balance sheets of Irish banks in solitude.

“The preliminary decision of Eurostat means that the acquisition of the assets from the financial institutions by NAMA may be treated as off-balance sheet in the budgetary arithmetic under European national accounting rules,” Lenihan said. “In other words, it will not increase the general government debt ratio and neither will our budget balance be directly affected by the NAMA initiative,” he said in a statement.

But if there is one thing the financial crisis has done, it’s demonstrated the need for accuracy from agencies responsible for critical macroeconomic and accounting issues. Based on today’s revelations, Ireland may want to hedge against anything Eurostat says.

So Hank Paulson held secret meetings with Goldman in a hotel room in Russia and now we also find out, from Andrew Ross Sorkin’s new book, that matchmakers Paulson and Geither arranged a midnight meeting between Dick Fuld and Ken Lewis on Monday, July 21, 2008 to discuss the possibility of something going down between the two men’s firms. The rendez-vous took place after a dinner honoring the then Treasury Secretary, at which all of Wall Street’s CEO’s were assembled and one sort of gets the impression that maybe if Geithner had thought to talk Fuld/Lehman up to Lewis a little more (“he’s a grower, not a shower”), and told Fuld “for god’s sake, don’t look so desperate, play it cool,” the outcome might’ve been different. (It probably also would’ve required Richard to not be delusional about what he was trying to sell which, admittedly, TG couldn’t have helped.)

As the dinner was ending, Mr. Geithner, approached Mr. Lewis and, leaning close, whispered, “I believe you have a meeting with Dick.”

“Yeah, I do,” Mr. Lewis replied.

Mr. Geithner gave him directions to a side room where the two could speak in private. He had apparently already given Mr. Fuld the same instructions, because Mr. Lewis noticed him across the room looking back at them like a nervous date.

In democracies like the US, the will of the people is supposed to at least help determine the country’s direction. It’s part of the culture and manifests itself in a variety of places. Take, for example, Who Wants to Be a Millionaire. When you run into a tough question you have the option of finding out what the majority thinks by asking the audience. Congress may want to consider applying the same methodology to the tough question of how much financial regulation to introduce.

Survey says: yes. Obviously you’ve got Raj’s right here (“when the rally’s on, put your money on Galleon), and below, the track laid down by the McKinsey Knowledge Center, a division launched by none other than McK “rising star” and Rajaratnam buddy-boy Anil Kumar. If you’ve been escorted out of your company’s office in cuffs at some point in the last week, or think you might be soon, and have no theme song to speak of, we suggest you get in the recording studio ASAP.

As reported yesterday, a source close to Sanjay Santhanam, Galleon’s head of risk management, told Dealbreaker that Santhanam recently expressed fears the firm “could be closed by Friday,” due to a massive amount of redemptions. A representative of the fund, however, takes issue with the potential expiration date offered by San-San, pointing out that, technically, the death would be much more slower and painful, and take us through the New Year.

It appears lawmakers and regulators are going to make sure one of the alleged primary causes of the economic crisis, speculation, is also part of the solution and clean up efforts. As the countdown to the next 10 people to be taken away in handcuffs for insider trading continues and speculation runs rampant, the institutional version of the whodunit perp walk is over in California. One day after the state’s attorney general, Jerry Brown, announced that a ” major institutional bank” was going to receive a $200 million legal surprise due to some of their dealings with CalPERS and CalSTRS, the grand prize winner was announced today. Brown singled out State Streets efforts allegedly overcharging the two pension funds over the past 8 years in the award presentation ceremony.

If the administration is looking for one more reason to do everything they can to create jobs, they don’t have to look much farther than the housing crisis. But the rationale extends far beyond simply keeping people in their homes. Presumably if more people were employed it might distract some of them from their current full-time occupation of trying to cheat the system. Not surprisingly, when the government advertises free cash in any form, there’s a stampede to get to the front of the line and the home-buyer tax credit program is no exception.

As you’ve probably heard, at least ten more people are expected to be charged with insider trading this week. Some of them may be connected to the Rajaratnam case. Others will be accused of dipping their wick elsewhere. Annoyingly, the authorities refuse to give any hints as to who’s going down. And we can’t take the suspense!

Few areas of the country have been hit harder by unemployment than the Rust Belt. The auto industry’s implosion has created widespread economic hardship and left many anxiously waiting for a sign that the tide is turning. Almost a quarter century after watching John Elway’s signature performance in “The Drive” from the sidelines, Bernie Kosar and the Cleveland Browns have offered a ray of hope to the residents of the mistake on the lake.

So you can imagine The Black Swan author’s surprise to find out his b-school chum is an alleged insider trading specialist.

Nassim Nicholas Taleb, author of The Black Swan, got a shock when he opened the newspaper last weekend and saw a picture of an old classmate from Wharton business school at the University of Pennsylvania.

“He was an extremely likeable fellow, chubby, a warm personality. If I had to give my keys to someone in case of getting locked out of the house, he’d be the kind of guy I’d go to.”

Update: UBP takes New Castle up on offer to pull money.

The New Castle Funds, once part of Bear Stearns Asset Management, have informed investors that despite the news of president Mark Kurland and “consultant” Danielle Chiesi being arrested for their roles in the Galleon insider trading case, everything is cool. Kurland and Chiesi have been blacklisted and your money in safe. Nevertheless, if you want to take your cash and make a run for it A-sap, everyone here will understand. (All funds provide monthly liquidity with 30 days notice.)

Galleon Clients Abandon Ship (WSJ)
Redemption requests are up to $1.3 billion (out of $3.7 billion) so far and Bank of America Merrill Lynch and Barclays have told Galleon they will no longer trade securities positions with the fund.

Prosecutor In Galleon Case Makes A Splash (WSJ)
“What former Manhattan U.S. Attorney Rudy Giuliani did to the mob is what Preet Bharara will do to Wall Street.”

Wall Street On Edge As SEC Top Cop Gets Aggressive (Reuters)
Also on your list to fear: “Robert Khuzami, who convicted the “Blind Sheik” and his ring of bomb plotters in that trial, is targeting a different kind of villain — corporate executives, traders and fund managers who dare to break securities laws. About six months into his job as the U.S. Securities and Exchange Commission’s enforcement director, Khuzami, who was handpicked by SEC Chairman Mary Schapiro, has shaken the agency to its core with reforms designed to ensure it does not miss the next Bernard Madoff.”

Galleon Traders Seek Legal Advice, Update Resumes (Bloomberg)
Downplay having worked for Raj-Raj, etc.

NYC Judge Tosses $10 Million Suit Against Biden’s Son, Brother (AP)
Stephane Farouze didn’t lay out his allegations against Hunter Biden and James Biden ”with any meaningful degree of particularity,” Manhattan state Supreme Court Justice Bernard J. Fried wrote in an order filed Friday.

10 More People To Be Charge With Insider Trading This Week (Bloomberg)
Some related to the Galleon case, some not. Let’s take bets on who they are!

$$$ Asked about the Galleon Group insider trading case, in which the fund’s principal Raj Rajaratnam and others have been accused of making up to $20 million in illegal profits, Julian Robertson said he was “delighted” about the arrests. “I think the crooks should be weeded out,” he told Reuters. [Reuters]

$$$ David Einhorn’s treasure trove [FT]

$$$ Barclays promised not to be “pigs” about the Lehman deal [WSJ]

$$$ At IBM, Robert Moffat’s Identity Has Been Erased [Local Tech Wire]

Aspiring actor Nicolas Cage is looking to help settle his $6.5 million tax bill by suing his former business manager, Samuel Levin, for approximately three times that amount. According to NC, his road to financial ruin was a direct result of Levin’s rather bullish position real estate over the past couple of years. So now it’s time to pay up. But litigation takes time and the IRS is still learning that patience is a virtue which means Cage is going to have to part with some of the crown jewels of his collection.

Dick Bove has some words of wisdom for those of you considering a career following in his footsteps: don’t do it. According to the original furry woodland creature, the business of equity research just isn’t what it used to be and cautioned all would-be disciples against aspiring to be junior Bovettes.

“It’s becoming rarer and rarer to find someone who will pay for research,” says Bove. “It’s not like you go out and say, ‘This is the product, this is the price for the product, and if you want the product you can pay me.’”

You give away research for free for six months to a year in the hope that someone will pay you,” he says. “And in many cases they won’t. They take it for free and refuse to pay - there are people that we’ve dealt with in Britain who think it’s their right to get the product and that we have an obligation to send it to them.”

But Dick Bove has made a career out of recommendations, not complaints. So if he had to do it all over again, where might DB recommend going to work today?

First off, we weren’t even going to mention obscenities that appeared on the front page of the Journal today. Obviously, I’m talking about this:

Why? Because we’re an upstanding financial publication with standards, unlike the smut factory Rupert Murdoch is running. But then a few things happened. 1) You people would not stop e-mailing us about it. 2) I started to realize that this wasn’t just some accidental slip of the tongue on the headline writer’s part but a calculated course of action to send us a serious coded message about what’s been a’ poppin’ over at the Galleon Group (The scribes brought it on home by beginning the third paragraph thusly: “Parts of that network appear to have turned on the billionaire investor”). 3) I found myself with time on my hands, given that Raj is yet to call us back to talk shop (tried him at the office twice and a few times at home; his assistant seemed flustered and in chatting with the wife, I’m prettay prettay prettay sure I detected some growing irritation on her part, though she claimed she’d pass on the message we’d called). So, I did what anyone in my position might do, and uncovered some of the rejected headlines the Journal originally wanted to go with but were sadly prohibited from using. I don’t have them all so if you caught wind of any, let us know below.

* Colleagues Finger Bang Billionaire

* Colleagues Fist Billionaire

As the Beard was off singing the praises of the Asian economic recovery story, David Einhorn threw on some long-dated option positions to put Greenlight investors in a spot to cash in from a looming currency crisis and interest rate explosion emanating from the heart of the region, Japan. In addition to building a fortress of gold to protect against US leaders “too trapped in the short term and special interests to make (serious choices)”, Einhorn took a bit of a different stance on the trajectory of certain Asian economies.

“Japan may already be past the point of no return,” he said during a presentation at the Value Investing Congress in New York.

Japan’s debt is equal to 190% of the country’s gross domestic product, and its government deficit will be 10% of GDP this year, Einhorn said.

“When the market refuses to refinance at cheap rates, problems emerge,” he said, adding that this could trigger a “currency death spiral.”

This certainly sounds reasonable. Greenlight investors should rest a bit easier knowing the guy at the top has done some critical analysis, positioned accordingly, and hopes to see the fruits of his labor in the future.

The Galleon Group said Friday that it “continues to operate and is highly liquid” but one of firm’s top lieutenants is admitting he doesn’t think the shop will last long.

At this critical juncture of the recovery, politicians need to put petty