Alright people. This is it. If the sight of Goldman Sachs employees handling garbage doesn’t quell the hate, they’re going to have to go to DEFCON 1: blow job booth.

The Salvation Army plans to serve 10,000 free dinners across the city this Thanksgiving — meals planned by a star chef, cooked by one of New York’s ritziest caterers and cleaned up by employees of one of Wall Street’s most vilified financial firms. The number of meals is 10 times as many as last year and come at a time when more and more Americans are struggling to put food on the table.

Three hundred employees of Goldman Sachs Group Inc., Wall Street’s richest firm, have volunteered for the holiday feast and will be tasked with taking out the garbage.

To: Morgan Stanley
From: John Goff
RE: Thanks a billion

OK, OK, thanks $951 million. It was really great to have you take this albatross off my hands a couple of years ago. The timing could not have been better for me. And now, after your outstanding stewardship, I’m pleased to retake the helm at Crescent Real Estate Equities Co. now. Two-and-a-half years sitting by the pool, counting your my $6.5 billion is enough.

My new partners at Barclays want to thank you as well. They’ve proven pretty savvy over the last couple of years, but even they couldn’t have imagined how well this would turn out for them. After all, they lent you $2 billion to buy a disaster. They never would have guessed they’d get to take over such a valuable real-estate portfolio just as the market begins to turn around.

So I was getting a haircut after lunch today (York Barbershop, 71st and Lex), and Oliver Stone & co. walked in to inspect the place. According to my barber, they’re shooting MNS there, presumably all day, on Tuesday and Wednesday of next week. However, I overheard murmurs that it might be too cramped, in which case the Waldorf barbershop would be a contender. No word on how this affects Shia’s helmet hair.

This have been pretty dark for Dick Bové ever since her man, the “brilliant” Ken Lewis was essentially forced out of his job. Other analysts, the colder, unfeeling ones probably wouldn’t have taken it so personally, but Lewis is Bové’s guy and she can’t help it, this hurts, bad (also, she’s just always been a sensitive and highly strung person). Sorry if that’s too much for you to handle but Ken Lewis meant a lot* to the Rochdale rising star. It felt good and empowering to lose it in a tear-stained note to clients, in which she put the words “No other banker in this country can equal Mr Lewis’s achievements and yet every banker wishes s/he could” out there but it didn’t change anyone’s mind and she’s just felt completely helpless for almost two months now. She knows she should be strong for KL but she just can’t. She’s lost weight, she’s gained weight, she’s gone on booze-fueled sex rampages wherein she’ll fuck the first thing in her line of vision, in an attempt to silence the pain but nothing’s helped.

This morning when she woke up underneath a pile of empty pints of Ben and Jerry’s after crying herself to sleep, she couldn’t even summon the strength to get out of bed. But then, something happened. In the other room, she heard Charlie Gasparino’s voice on CNBC, which she’d left on the night before. She heard Lewis’s name and, at first, figuring CG was just going to be talking shit about her man, pulled the covers over her head. Then Chaz started saying something about how the board still hasn’t found a replacement and Divé shot out of bed. She ran into the other room wearing only the oversized tee-shirt bearing Lewis’s face she’d had made a few years ago. Biting her nails in fear that her ears were playing tricks on her, Mrs. Lewis (someday?) rewound the DVR. It was true! BAC still hasn’t come up with an ideal candidate willing to take the job. Feeling like her old self for the first time in a long time, she sat down to write. And write she did.

“Mr. Lewis was a key architect in the creation and management of Bank of America. He knows this company better than anyone else and he knows how to operate it,” Bove wrote in a research note issued early Friday morning. “At this point in the company’s history, this is the type of leader needed. Convincing him to return would be the biggest morale builder that management could get.”

Charlie Gasparino reports that the Bank of America board “really, really” wants to finally pick someone to take the job of boozing it up at happy hour and then returning to the office and saying “How ‘bout we do Merrill this time? That’ll be fun.” According to Gasparino, BAC is in a rush to get it done because they’re “sick of all the controversy surrounding the selection” and also maybe perhaps because Ken Lewis is out of there in like 5 weeks, so it would be nice if they could figure this out before then. A source of Chaz claims they’re going to try and do so this Sunday, though given that the board still pretty much as no idea who they want (or who’s desperate enough to take the gig) it will likely be a long night. For reasons lost on us, they’re still yet to get in touch with John Thain, who remains ready and willing.

Somebody is finally doing something about those corrupt, self-serving companies that we all rely on to tell us just how risky this stupid bond is. Ohio is suing the ratings agencies.

With the Feds spitting the bit on regulating an industry that never saw a mortgage-backed security or collateralized debt obligation it didn’t want to give a triple-A rating and that showed the most remarkable propensity for figuring things out right after the credit markets imploded, Richard Cordray, attorney general of the Buckeye State, is following the Andy Cuomo’s lead and attacking Fitch Ratings, Moody’s Investors Service and Standard & Poor’s.

A few weeks ago I told you to mark your calendars for the social event of the year. At the time I said it was the SAC Capital Giant Balloon Inflation Party. I lied. The balloon blowing is still going on (this Saturday in fact) but it is not the extravaganza you need to drop all previously made plans for. Do you know what’s going to happen on December 8th? I don’t think you do otherwise you’d be working yourselves into a frenzy along with me. I’m not even sure you’re fully prepared for what I’m about to lay on your asses and you probably never will be so I’m just going to say it now: STEVE COHEN MAGIC NIGHT. And when I say “STEVE COHEN MAGIC NIGHT” I mean it in two ways. First, Steve Cohen, the magician. Second, Steve Cohen, the man who makes the world a more magical place by simply existing. That’s right—doubly penetrated by magical SC’s.

Hot on the heels of the first mortgage-backed securities deal in several decades, the initial public offering market has begun to stir after its period of economic crisis-induced dormancy.

First to the post is British asset manager Gartmore Group, which said it will list on the London Stock Exchange next month. The reported £500 million stock sale will be used to cut debt, but also to allow its private equity masters, Hellman & Friedman, to finally earn a damned profit three-and-a-half years after financing Gartmore’s management buyout.

Naked short-selling has been blamed for many a market evil in recent years. Not so much any good.

Well, here’s one in the controversial practice’s corner: South Korea may allow institutional investors to short-sell bonds in an effort to boost liquidity in its nascent fixed-income market. Now, it isn’t the short-selling, per se, that will boost liquidity, but the move could win Seoul a coveted place in Citigroup’s World Government Bond Index. And then, just try to keep the money from rolling in.

If you’re coming to New Canaan, CT on Sunday to hear Charlie Gasparino discuss The Sellout you might need to bring your boxing gloves.

The other day on Chicago-based radio show StocksandJocks, co-hosted by CNBC contributor Dr. J Najarian, a listener asked Gas-Bag if he was ready to handle a confrontational room of ex-Bear and Lehman traders who might want to throw down fisticuffs. Considering many of these guys are still unemployed, stuck with McMansion mortgages, and with ample time on their hands - we thought that was a valid concern. (Sam Molinaro, former Bear Stearns CFO, is a New Canaan resident.)

The show’s other host Tom ‘the Chief’ Haugh asked Chaz, “Are you ready for a scene or a verbal confrontation? How do you think Cannanists will receive you?”

Gasparino responded, “Well you know, they can do whatever they want. What, you don’t think I’ve never had a personal confrontation from peeps on Wall Street? For some reason personal confrontations don’t scare me that much…you know.. I know how to handle myself.”

“I’m not a punching bag I don’t take their [shit]. I remind them it was their company’s management that screwed up and I just reported it. I didn’t engage in your risk taking practices. If you think I have anything to do with your implosion then you’re nuts,” Gasparino. said.

Were you a member of an elite group of individuals taken before their time known as the Lehman Brothers associate class of 2008? Were you robbed of the chance to toil under the Gorilla for more than a few weeks because oops the firm went out of business? (And speaking of that: do you blame yourself? Dick Fuld certainly does.) Those $40k signing bonuses you got and probably already spent are going to need to be paid back, ASAP.

The requests are allegedly coming from PricewaterhouseCoopers, which is administering Lehman’s estate in the UK. “More than 60% of my class received this letter around two weeks ago,” says one former Lehman associate. “We’re seeking legal opinions on whether we have to pay it back.”

The Dollar Dominatrix turns the big 4-0 today. Apparently there’s going to be a big bash at the MDubs Advisory Group later today set to include—-spoiler alert— a Vikram-shaped piñata. In the meantime, let’s put our heads together and come up with a gift from DB. What do you get for the Dom who has everything? If you were going to say cat o’ nine tails, that’s out— Lloyd’s already called dibs.

Goldman Holders Miffed At Bonuses (WSJ)
Squid on Squid violence: “Some of the largest shareholders in Goldman Sachs have urged the Wall Street firm to reduce the size of its bonus pool, arguing that it should pass along more of its blockbuster earnings to investors, according to people familiar with the situation. Some major Goldman shareholders also are concerned about a little-noticed change in the company’s financial statements that increased the firm’s total head count by adding temporary employees and consultants. The change reduced per-employee compensation, making it look like Goldman employees earn less than they actually do.”

Harvard Poker Pro Says Texas Hold ‘Em Can Teach Traders to Fold (Bloomberg)
“Someone who has made a successful living as a poker player for a few years would more likely be a good trader than someone who hasn’t,” said Aaron Brown, a 53-year-old former poker pro who is now a risk manager at AQR.

Lampert’s Sears Narrows Its Loss as Gap’s Profit Increases 25% (NYT)
This calls for a pizza party, on Eddie.

SEC Told to Improve Ways It Chooses Probe Targets (AP)
A report released by the office of Inspector General David Kotz proposes new requirements that the SEC’s inspections office examine databases and documents related to investment advisers that may be inspected.

GM’s Chairman Seeks Focus on Quality (WSJ)
Edward Whitacre wants to know why people think GM cars suck.

Oregon Democrat DeFazio Calls for Geithner’s Resignation (Real Time Economics)
“I just do not feel that his orientation is other than Wall Street, and has not been other than Wall Street, and will not be other than Wall Street. And quite frankly all the gambling on Wall Street is doing nothing to put people back to work in America and rebuild our economy.”

$$$ Pequot Worker Told Therapist That Samberg Demanded Insider Tips [Bloomberg]

$$$ Dick Bove’s Top BofA CEO Candidates [The Deal]

$$$ Felix Salmon: Henry Blodget Should Be Banned From The Industry [BI]

$$$ Wells Fargo Needs TARP Money More Than It Admits [Bloomberg]

Castle Hallenstein: Home Sweet HomeCitigroup’s former $100 million man has been freed from the tyranny of life as a serf under Czar Kenneth I. But if he wants to keep the nine-figure bonus checks rolling in under his new masters at Occidental Petroleum, he’s gonna need some new patrons.

Now, Citi chose to sell Hall’s business, Phibro, to Occidental for a few nickels rather than simply spin it off as an independent hedge fund. Still, Hall knows where the money is (a lot of it is hidden in the keep of his German castle) and he’s asked the Blackstone Group to find it.

The holiday party was canceled last year but unlike certain other banks, terrified at the backlash that would result from the sight of their employees enjoying themselves over shrimp puffs, JPM is up to get down with Christ and corporate groping. A few employees are miffed at the fact that they were informed the investment bank’s party will take place in the cafeteria of 270 Park but the point is, it’s happening. JPM’ers should also give thanks that they have not been barred from holding self-funded year-end celebrations.

In the New York magazine profile earlier this month, Andrew Ross Sorkin said that one of the ways he’s able to land big sources is by not being “adversarial or coming to the table with an ax to grind.” The piece also claimed that many of ARS’s colleagues at the Times think it has to do with the fact that he’s too buddy-buddy with his high-profile pals, and goes way too easy on them in print. Not true, says Joe Scarborough. Not only is it a lie that Sorkin’s reporting process entails calling up CEO’s and asking for their side of the story, scheduling a meeting and suggesting he wait outside while a PR person asks some pre-approved questions, the answers of which are transcribed into a column, but these guys are horrified of ARS. So much so, Scarborough said in a radio show with Sorkin this morning, that just being told Times-boy is on the line causes them to “lose control of their bowels.”

Scarborough also claims that besides literally scaring the shit out of these guys, Sorkin is “so frightening” that they had to come to his book party and “bow down” to him. We didn’t see any head bobbing at the Too Big To Fail soiree but perhaps it went on in a backroom. Anywho, let’s do an informal poll: do Jamie Dimon, John Mack, Ken Griffin, Billy Ackman et al soil themselves at the sound of the letters “A-R-S?” And what are we to infer from the fact that Blankfein was a no show to Sorkin’s big night?

The ranks of the elect are growing: Goldman Sachs has named 272 new managing directors.

Apotheosis for God’s chosen few is scheduled for New Year’s Day. Thereafter, it’s all milk, honey and million-dollar bonuses, but they’ve earned it, so sayeth the Prophet Blankfein.

Writeth the prophet in the e-mail announcing the promotions, the newly-minted MDs have richly earned their place in Heaven, for they are among the Blessed who helped preserve God’s bank during the late difficulties, and will “be integral to our service to clients, the strength of our reputation and the long-term success of the firm.”

Yea. Let their names be recorded in the Book of Life.

Goldman Sachs Names 272 Managing Directors For Next Year [Dow Jones via CNN Money]

Update: Full list (courtesy of FINalternatives) after the jump.

The luckiest man on earthHere at Dealbreaker, our opinion of Bank of America is pretty clear. The company is a dysfunctional mess and, despite being the biggest bank in the country, can’t seem to find anyone interested in taking its top job.

Those incorrigible contrarians at Breakingviews have a different take on the Worst Job on Wall Street.

There may actually be no better job in finance than the hot-seat of BofA.

Interesting. Go on.

Regulators are hardly friendly with BofA or Ken Lewis, its outgoing chief. Its board needs an overhaul, a senior management team of big shots is already in place, and there’s huge work to be done integrating its many poorly-timed acquisitions.

Right. And, now, the upside:

If he gets asked to leave, fine, great even. It’s not even really a secret at this point that he wants to go (why do you think he stopped trying to sell his house?). But if anyone here thinks that they can bully him into leaving cause he’s some sort of push over, think again! The elven Treasury Secretary is not afraid of any of you or the dark, he is not a (total) puss and? He’s got something of a sassy side.

At a Joint Economic Committee hearing in Congress, in which House and Senate lawmakers sit on a panel, Rep. Kevin Brady opened up his questioning by telling Mr. Geithner Republicans, Democrats, and the American people had lost confidence in the Treasury Secretary and asked him to resign.

“It is a great privilege to serve this president,” Mr. Geithner responded. “I agree with almost nothing you said.”

And if you want to talk about confidence? When people, The People, think about Tim Geithner? They think confidence shooting out of every orifice.

Given their well-known incorruptibility and infallibility, is it any wonder that ratings agencies would take exception to any suggestion that they might do wrong?

Well, that’s exactly what those outback yahoos in Australia seem to be implying. So Moody’s Investors Service and Standard & Poor’s are picking up (most of) their toys and going home, withdrawing their applications to offer corporate debt ratings. The lily-white ratings agencies object to a new rule, coming into force on Jan 1., that would turn over disputes between the all-knowing and their idiot retail investor clients to a financial ombudsman.

But that “would effectively be second-guessing S&P’s analysts,” S&P cries! “This would ultimately create investor confusion and harm financial markets.” And S&P has never done anything like that.

John Mack said last night at panel discussion hosted by Bloomberg News and Vanity Fair that as an (outgoing) chief executive of a major bank, he welcomes, nay, begs for increased regulation by the Fed. He illustrated this need with a little story about how during the credit boom, he almost did a deal at 8 times leverage, and then someone else came in and did it at 10. And you know what that showed Mack? That “We cannot control ourselves. You have to step in and control the Street.” So there it is, the bottom line. We will not stop until you pry the crack pipe from our dead lifeless fingers. If you thought that time we got picked up by the cops for freebasing smack off a homeless man’s dick in a back alley was a wake-up call, you thought wrong.

Deutsche Bank moved a step closer towards buying parts of ABN Amro, while the Dutch government moved a step closer (albeit an expensive one) to ridding itself of the state-owned bank and a former Deutsche Bank CEO moved a step closer to jail on a busy Thursday for west European banking.

The Germans have agreed to pay €700 million to buy what it wants from its ill-fated western neighbor, as well as assume €950 million in financial guarantees. ABN Amro, which the Dutch government plans to merge with Fortis Bank, gets stuck with potential credit losses of €1.6 billion.

The deal—which Dutch finance minister Wouter Bos says is a foregone conclusion, despite the need for parliamentary approval—is expected to close next year. And while Deutsche Bank apparently didn’t need any help to make it happen, the same cannot be said of ABN Amro.

But he’s trying to raise new money and every single time he sits down with a potential source of cashola, or tries to convince an existing one to stick it out, last year is all they want to talk about. While it’s unclear to us as to why Griffin doesn’t just put his foot down and preempt all discussions by saying questions about 2008 are categorically off the table and that if anyone in the room so much as thinks the words “fifty-five percent loss” or “ass bleeding” or “maday!” he is gone, we respect the guy’s desire to be seen as flexible, for the time being. Still, we understand how sensitive the subject of ast-lay ear-yay is with KG and so that he doesn’t have to suffer through anymore PTSD flashbacks, we’ve decided to put together a little primer/pitch for anyone considering throwing some bills his way. The year that came before ‘09 will be touched on, so when you actually sit down with Kenny-b, there’ll be no need to bring it up. Got it? Let’s do this.

Most of you probably want to hear a little reflection on what we could have done differently. What our biggest mistake was so we don’t make it again, and lose a few billion of your money. Was it too much leverage? Too much hubris? Too much time spent away from the desk on photo-shoots? None of the above.

Citadel’s biggest mistake last year, Mr. Griffin said, was putting too much faith in regulators’ ability to deal with the global meltdown.

Now let’s talk sacrifices. Major, huge-ass sacrifices have been made in Chicago in an effort to turn things around. Whether or not they have to do with the firm’s bottom line so much as Ken’s newly taut one is not the point.

He occasionally dispatches his driver on a 200-mile round trip to fetch milkshakes from LeDuc’s Frozen Custard in Wales, Wis., near where Mr. Griffin grew up. The folks at LeDuc’s refer to the financier as “the man of a thousand shakes,” based on a birthday order in 2004 that was so big, it got shipped to Chicago in a truck. But Mr. Griffin’s driver “hasn’t been around in maybe six months or a year,” says Jim Shackton, owner of LeDuc’s, whose staff in past years came to recognize him when he’d pull up to the little pitched-roof custard shop in a silver Mercedes sedan. (“Nice car,” Mr. Shackton says.)

A Hedge Fund King Comes Under Siege (WSJ)
Ken Griffin is ready to move on from last year, and would like you to move on and invest with him. If you’re nervous about the losses, take heart: “If there were a repeat of 2008’s market turmoil, Mr. Griffin says, his funds would lose less than 20% rather than 55%. Citadel’s biggest hedge fund has rebounded 58% this year through mid-November. And recently, Mr. Griffin has resumed talking about an initial public offering for Citadel as early as next year.”

Whitney Says Goldman Has Lost ‘Talent’ (Bloomberg)
Not just a little talent but a “tremendous amount of talent,” as a result of execs leaving to start hedge funds, apparently.

New Link In Insider Trading Case (WSJ)
Gary Rosenbach, a Galleon senior partner who left the hedge fund “due to family health reasons” earlier this year.

Elizabeth Warren: Winning Means You Won’t Sell It If You Can’t Explain It (Bloomberg)
“We need a new model: If you can’t explain it, you can’t sell it,” said Warren.

Goldman Was Exposed to AIG Losses: Government Report (NYT)
Surprise! If AIG had collapsed, it would have made it difficult for Goldman to liquidate its trading positions with AIG, even at discounts, the report said. It also would have put pressure on other counterparties that “might have made it difficult for Goldman Sachs to collect on the credit protection it had purchased against an AIG default.” A Goldman spokesman called the risks discussed in the report a “moot point.”

$$$ Heineken Chief Executive Officer Jean-Francois van Boxmeer told investors this month the decade he spent in Africa was “certainly worth three times Harvard Business School.” [Bloomberg]

$$$ The SEC’s latest badge of honor [GC]

$$$ Economy 2010: How Dick Bove Sees It [The Deal]

$$$ Should you kiss your boss’s ass? (Some people would probably say yes.)

$$$ Singed in stock sale, investors chastise Chase [Chicago Business]

What a day for Ken Lewis & Co.! First, one of the savviest hedge fund managers out there gives BofA a big thumbs up (take that, Steve Cohen and Jim Simons). Next, someone we’ve actually heard of kinda sorta suggested he might take the Worst Job on Wall Street (BofA is, after all, a public company).

Now, the very ratings agency that kneecapped UBS earlier today said it is not quite as pessimistic about BofA.

Moody’s Investors Service said that Bank of America doesn’t suck quite as much as some people may have suggested, upgrading the outlook on its financial strength regulation. Sure, it upgraded it from the ominous-sounding D to the not-exactly-confidence-inspiring C-minus, but that’s better than D, right?

Charlie Gasparino called Lloyd Blankfein a “twerp with half a nut” the other night and if you thought that was just CG being affectionate, you thought wrong. Chaz is sick of “this guy.” He’s sick of his charitable contributions, he’s sick of him running his mouth, he’s sick of the look on his face. It used to be the when Wall Street execs got under his skin Charlie would simply stick them in the trunk of a Buick, case closed, no questions asked. But because he has a book to promote, CG no longer has time for that kind of thing and so he’s come up with an alternative.

I put his mea culpa and this charity thing in the same category…For all these reasons I am recommending two things: Mr. Oracle should use his considerable clout to release taxpayers from their Goldman Sachs subsidy and make the firm a hedge fund or something different than a government protected “bank.” Second, I think it’s about time for Lloyd Blankfein to step down and resign as CEO of Goldman, and really start doing God’s work by sparing the rest of us the stupidity of listening to his excuses.

John Mack, you and your cannoli are still good in Chaz’s book.

And I will strike down upon thee with great vengeance and furious anger those who attempt to poison and destroy my brothers. And you will know my name is the Lord when I lay my vengeance upon thee.So Rep. Paul Kanjorski (D-Backwoods, Pa.) has unveiled his homage to the Morgenthau Plan. His proposed amendment to the financial regulation reform package offers a simple solution to the “too big to fail” phenomenon: Stamp it out.

If Kanjorski gets his way, the government would be empowered to split up firms that are “too big to fail” even if they are in no danger of failing, as well as the power to keep firms that aspire to be “too big to fail” in their place, blocking mergers and keeping them from all of those highly-profitable enterprises that present a systemic risk.

Kanjorski, who last week announced his crusade against financial services firms with designs on “taking over the world,” offered a fun new metaphor to justify his genocidal intentions.

“Financial firms that want to play in a casino need to have their own resources to cover their bets and not assume that tax dollars are available in reserve if their bets fail,” he said.

Top finance officials from the G7 countries will meet in the remote Arctic town of Iqaluit, Canada’s northernmost territorial capital, on Feb 5-6 but may not issue a communique, Finance Minister Jim Flaherty said on Wednesday.

“The February meeting will return to the G7’s roots with a more frank and focused dialogue,” Flaherty said in a statement. “In an ever-changing global economy, the G7 will continue to evolve, with a focus not on paper but on people — not on communiques and accords, but on constructive dialogue on actions to strengthen the global economy.”

Canada to host G7 finance officials in Arctic [Reuters]

Jamie Dimon would probably make a great cop because he’s a badass who doesn’t take shit or prisoners from anyone. Ken Lewis obviously how to administer a sobriety test on a possibly drunk driver. Despite protests the contrary, Jimmy Cayne knows his way around a nightstick. Dick Fuld has spent the last year showing up to industry parties attempting to make citizen’s arrests. And I can see Vikram Pandit patrolling the streets on horseback. But riddle me this— in the event a stranger came up to you on the street and tried to slit your throat with a razor blade, would you take comfort in knowing the colleague to your left or right, the one flirting with the Bloomberg help desk guy or sucking ass at Hearts was the police officer on duty? I certainly hope so ‘cause guess what kids? The ex-Wall Streeters who aren’t getting into the transportation service business or doing the street meat thing are becoming cops.

A year and a half ago, Henry Chung was an assistant vice president at Merrill Lynch, monitoring billions of dollars the firm traded on a daily basis. Last week, he found himself, in his capacity as a patrol officer in Jackson Heights, Queens, chasing after a man who had slashed another man’s neck with a razor blade. He grabbed the man from behind, pushed him up against a wall and handcuffed him.

“It’s a little different than looking at a computer monitor trying to figure out why there’s a million bucks missing in the firm’s accounts,” Officer Chung, 34, said in a telephone interview.

UBS thinks it has its whole, unpleasant financial situation figured out. Moody’s Investors Service is somewhat less sure.

The ratings agency slashed UBS’s deposit and senior debt ratings from double-A-2 to double-A-3. Its financial strength rating and long-term debt rating took an even bigger hit, falling to C to B-minus.

The two-notch downgrade of UBS AG’s BFSR reflects Moody’s view of the considerable challenges that UBS continues to face in both its Investment Banking and Wealth Management businesses. The bank has suffered a loss of customer confidence, as demonstrated by the ongoing net new money outflows in wealth management, and a loss of key employees, as demonstrated by the loss of revenues in investment banking, especially in fixed income. While both of these areas are beginning to show early signs of a turnaround, Moody’s believes these challenges are unlikely to be short-lived.

[via BusinessInsider]
No? Then don’t skip to 9:30 of this clip, where he slips it in that in “1978 or ‘79” he and his wife took a trip down under and “came back with another child we hadn’t hadn’t expected to have made in New Zealand.”

Why does General Motors take it up the tailpipe? You could probably come up with at least handful of reasons, but at a breakfast hosted by Fortune this morning, Steve Rattner wanted to highlight one in particular. Over bagels and lox, the retired Car Czar, who last month was finally able to get it off his chest that automaker’s PowerPoint presentations were for shit, said that the higher-ups took no responsibility for their action and spent most of their time smack talking the “competition.”

On Rattner’s conversation with former GM CEO Rick Wagoner when he told him he was fired: “The most curious part of it was that after three to four minutes of chit chat he asked ‘Well are you going to fire Ron Gettelfinger too?’…And I said, ‘Look I’m not in charge of firing Ron Gettelfinger’… One of the problems with GM is that they blame everyone but themselves for their problems…But the fact is, Ford is doing OK and there is no reason why GM had to be in this position.”

Also, don’t talk to him about socialism.

As you’re aware, Lloyd Blankfein apologized yesterday for “participating in things that were clearly wrong,” because Goldman is “very concerned” about its reputation, and who doesn’t love a good “Sorry, I was wrong,” particularly done in public to up the humiliation factor? Obviously LB and Co are hoping it’s enough to silence all the peasants and Matt Taibbis out there, though the early reviews don’t think Blankfein sufficiently proved he actually meant it. Really, though, it doesn’t much matter because who cares what the plebes and the marine biology smut writers of the world think? They’ve been given $500 million to quit the bitching and honestly? Lloyd may have bigger, more important apologies to make, on the inside. Forget the populist pitchforks. Those are idle threats, and LB can take them. This is the shit he should recoiling his gold-plated scrot over.

Everyone knows that according to a simplistic calculation of average compensation, the typical person at Goldman Sachs earns a lot more than the typical person at almost any other organization you might care to think of. Now, an equally simplistic calculation, and one used by Lloyd Blankfein himself, implies that Goldman’s London bankers are more handsomely rewarded than its bankers in New York.

[…]

Last week Blankfein claimed his people were “one of the most productive workforces in the world”, earning on average $196,000 in the years 2000 to 2008, more than double the figure at other American banks. Alas, some sharp-eyed observers have noticed that this is much less than the £181,000 that Blankfein had previously said was the average among the bank’s 5,500 workers in Britain. Has Lloyd Blankfein, Goldman Sachs chief executive, overstepped the mark — again?

Blankfein banks on no one noticing salary gap [Times Online]
Do Goldman staff really earn 55% more in London than NY? [eFC]

If the European Union isn’t regulating, it isn’t happy.

Stymied by fear and common sense, the EU seems likely to drop the most odious aspects of its proposed new rules on hedge funds and private equity firms. But the Europeans have simultaneously struck upon the only thing more likely to drive hedge funds out of Europe than strict oversight: draconian pay restrictions. And now it’s turned its sights on the insurance industry.

The president of the European Central Bank today backed plans to place new encumbrances on the continent’s economy by regulating big insurers the same way it regulates banks. After all, can’t those insurers be just as “systemically relevant,” á la AIG?

The following post is by a hedge fund manager friend of DB who shall remain nameless. He runs the emerging markets desk at his firm.

The man who first hired me to work in emerging markets investing used to claim that understanding the idiosyncrasies of these markets was entirely a matter of understanding corruption. Predicting policy choices, he argued, was a matter of figuring out which domestic interest would pay the highest bribes. Capital flight? Just a question of how corrupt actors were feeling about the security of their ill-gotten gains. At the time, my youthful enthusiasm resisted accepting wholeheartedly such a cynical conclusion. It wouldn’t be unfair to say that a good deal of my many years of practical education since then has consisted of coming to a full understanding of my old boss’s dictum. It turns out that countries run by crooks tend to blow up. Go figure.

Wells Fargo has become the latest firm to offer a belated “my bad” on auction-rate securities.

The bank’s Wells Fargo Investments today agreed to repay clients who bought the unfortunate securities some $1.3 billion. It’s also paying an additional “I’m sorry” penalty of $1.9 million, for allegedly promising clients that ARS were highly liquid and that nothing could possibly go wrong.

Of course, something did go wrong: The ARS market collapsed in February 2008 and all of those billions—Wells Fargo sold some $2.95 billion in ARS—were frozen.

According to Paulson & Co internal documents John Paulson is thinking soon to be CEO-less BofA will be worth three times what he bought it for in two and a half years time. Yesterday, Bloomberg reported JP’s been telling his investors Bank of America still has considerable upside and room to double in value.

But according to documents we saw, JP started telling investors in July he got into this trade with the expectation the stock would more than triple by the end of 2011.

As first reported by Chris Gillick in the September issue of AR magazine, Paulson’s cost basis for his huge-ass BofA position was $9. Using a conservative P/E multiple of 10, and a 2011 earnings per share estimate of $3, Paulson’s analysis estimates $BAC should be worth $30 at the tail end of 2011. In other words, pay no attention to JP taking a mere 8.2 million shares off his 168 million position in the third quarter.

Given that some of you might make your own estimate off of JP $3 EPS prediction here’s how Team Paulson does the math via his marketing material:

We’ve been saying for a while that John Thain is the ideal candidate to take over Bank of America, as a) he’s unemployed and b) he could use his power to equip every men’s room with the line of urinal cakes bearing Ken Lewis’s mug he’s been working on in his spare time. Yesterday at the Reuters Global Finance Summit, JT finally got on board. He didn’t specifically name-check the bank no one wants to run but obviously the admission that he’s looking for a job in private equity “or perhaps a public company” was wink-wink for the board to get in touch, as was the “call me” gesture. (Thain further hinted that BAC is at the top of his “dream gigs” list by elaborating for any headhunters in the audience that he’s looking for a “challenge.” Read between the lines Lewis and tell JT how his ass taste.) After making sure everyone in the audience had a copy of his resume, Thain moved on to address another issue that’s been weighing on him for a while now, which is the hideous suggestion by the Times that at one point during his time at Merrill “he halted a meeting with his chief financial officer and hurled a chair against the wall, shattering a nearby glass panel.”

“That was 100 percent made up,” he said. “Do I seem like a guy who throws chairs?” asked Thain. “That conference room doesn’t even have a glass wall,” he added.

Plus, HELLO? Who here doesn’t know by now that an enraged Thain slips into a onesie and horrifies onlookers by shadow wrestling on the mat, not by throwing furniture.

Citi Boosts Base Salaries Of Some Senior Employees (Reuters)
CFO John Gerspach’s annual base salary will increase to $500,000 effective November 1 from $400,000 prior to November, while James Forese is receiving $475,000, compared with $225,000. Gerspach is also receiving $2.92 million of stock salary for 2009, while Forese will get $5.4 million. And a sad trombone for Vikram, who will make $1 for the year, with no stock salary.

Blankfein Apologizes for Goldman Sachs Role in Crisis (Bloomberg)
In case you missed it, Blankfein and Co. are kinda sorry about some stuff they got peer-pressured into going along with. Also, fuck the haters: The firm is “very concerned” about the criticism because “our reputation is very important to us,” said Blankfein. “I don’t love it, we kind of sigh,” he said of the criticism. Instead of responding directly to critics, the company instead had tried provide “the kind of constructive suggestions that people would think a Goldman Sachs would be able to come up with.”

Fearing IRS, 14,700 Disclose Disclosed Offshore Accounts (NYT)
Great news for Tim Geithner: “We are talking about billions of dollars coming into the U.S. Treasury,” Douglas H. Shulman, the I.R.S. commissioner, said Tuesday.

$$$ “We participated in things that were clearly wrong and have reason to regret,” Blankfein, 55, said at a conference in New York hosted by the Directorship magazine. “We apologize.” [Bloomberg]

$$$ Lobbying Effort Backfires For Hedge Funds [NYT]

$$$ Oops! Yale Doesn’t Actually Have $60 Billion [BI]

$$$ The Hermitage Saga Turns Tragic As Fund Lawyer Dies In Jail [ZH]

Once upon a time, before she was sleeping with married men and having people eat raw fish off her raw fish, all in the name of journalism, Melanie Berliet supposedly worked as a bond trader at “an elite investment bank.” She was one of just a handful of women and sushi girl liked it.

…my token status gave me an extra thrill. There was something doubly funny when I drilled a Nerf football into some guy’s head. Something gratifyingly titillating about my accidental flubs, like the time I announced, too loudly, “I love nuts.” I enjoyed being called a “fucking dullard” or being instructed, patronizingly, to “remove head from ass,” because my reaction—to grin rather than cry—impressed the guys. I loved their attention and the daily opportunities to prove that I fit in.

To that end, Mel B was up to get down when her boss, “Carl Pratt” (whose name was changed for this article, more on that later), texted her shit like, “Just woke up from a dream. I had you on your belly and took you from behind. You came multiple times.” At first she was like, silly Carl you sound like such a tool using the word ‘belly’ but as for the doing me from behind? I’ve been thinking about it too. She hadn’t actually been thinking about it, but Carl was her boss and they’d been doing the sexual banter thing for some time now. Also, Melanie felt “blessed to be able to play the sex card rather than cursed to have the game foisted upon me” and the bottom line was her “overwhelming preoccupation was procuring a fat bonus check.” There was only one thing left to do. Text back: “Wow. And I thought I was the only one still having wet dreams.” She figured, later that night, there’d be a few more drunk exchanges with CP but she didn’t think that even after telling him she had her period and that she’d “pulled her groin” that he’d persist but surprise! He did. So she told him to put on some “hard core porn” and got in a cab.

Unlike some people who shall remain nameless. NEVERTHELESS— Maria has crossed paths with many, many stock gurus, who laid their investing knowledge on her ass. And now she wants to do the same to you. You WANT a piece this. Skittish about diving in? That’s cool. Maria’s fine with playing just the tip. But dollars to donuts you’ll be begging for more. How serious is MB about this thing? So serious she took a pledge. Need we say more? Okay:

• “Maria has carefully cultivated relationships with many giants of the investing world. And she knows how to interview them to get the very best they have to offer.”

• “Maria will not leave you hanging.”

• “Exclusive insights, analysis and forecasts that Maria gleans off-the-camera.”

It’s not an outbreak. Yet. (Kidding, you know the banks had their people vaccinated before the plebes.) On another note, it’s sort of unclear how this happened, as Citi took pains earlier this year to teach its employees how to wash their hands in an effort to avoid “accidentally” wiping everyone out and closing up shop.

One of the TMT banker on the 37th floor of the Greenwich Street building has been identified as having H1N1 and was asked to leave just now.

Lehman Brothers may be dead, but its earthly representatives are challenging the well-established legal precedent of “tap tap, no takebacks” in an effort to extract $10 billion from Barclays.

It seems the Barclays may have used some fancy contractual footwork to get more than Lehman bargained for when the British bank bought the dying bank’s North American assets. Alvarez and Marsal, hired by Lehman to figure out how Barclays wound up shacking up with its wife in addition to running its U.S. businesses, say Barclays pulled a fast one, getting a judge to give the OK to amendments to the preliminary sale contract that opened billion-dollar loopholes.

Mark Lowe, the Nomos Capital founder accused by former employee Jordan Wimmer of, among other things, trying to kill her (several times), hiring hookers to work as investor relations girls, forcing Wimmer to be present while he received lap dances, having an Asian fetish, and making dumb blonde jokes took the stand today to tell his side of the story. First off, he says the prosties he took on business trips were his girlfriends. Regarding his preference for the Asian persuasion (don’t worry about how this is relevant), Lowe responded that he prefers “women to wear less and show more flesh.” And as for the jokes? Mark said that he didn’t come up with them but merely passed them on and while we’re on the subject? As an arbiter of comedy he wouldn’t necessarily give the j’s super high marks, but thought they were definitely pretty decent. Also, he’s never put one his lady-friends in the trunk of a car, though now that you’ve put the idea in his head it’s definitely under consideration.

A selection of the emails Mr Lowe sent to Miss Wimmer and other women staff were read to Central London Employment Tribunal. One email from May 7, 2008, titled ‘Who is your real friend?’ read: ‘Put your dog and your girlfriend in the boot of your car for an hour and then see who is happy to see you.’ When asked by Alisdair Simpson, for Miss Wimmer, if he thought the joke was demeaning to women, Mr Lowe disagreed and said he thought it was ‘funny, but not especially’. Mr Simpson replied: ‘You don’t think putting your girlfriend in the boot of your car is demeaning?’ Mr Lowe said he had never put a girlfriend in the boot of a car, adding the joke was ‘not especially demeaning’. Lowe [also] said: ‘I thought they were funny. They weren’t brilliantly funny, but they amused me.’

Furthmore, does he not get credit for demonstrating enormous restraint here?

So Charlie Gasparino and Ken Feinberg had a 20 martini dinner last night, which came after Chaz’s keynote address at the Directorship 100. Gaspo told a captive audience that the Compensation Cop “has Wall Street by the stugats.” Before all that, though, Gasparino had a run in with Andrew Ross Sorkin, who you may have noticed the Jabroni Pony’s had some beef with of late. There’s the fact that the two have competing financial crisis books out, but the thing that’s mostly chapped CG’s hide is the section of Too Big To Fail wherein Sorkin claims Lloyd Blankfein was fed up with Gasparino’s alleged “rumor-mongering” last fall. Presumably trying to head off an awkward confrontation in the men’s room and/or a crowbar beatin’, ARS approached Chaz and told him, “I’m going to shake your hand.” The sensitive side of Chazpo came out and he asked Sorkin, “How would you feel if I wrote that?” Times-boy told CG he was sorry, and sufficiently pleased with the contrition, we’re told Gasparino, feeling particularly close to what he’s affectionately dubbed “my own personal Hymen Roth,” shared some thoughts on Blankfein: “A twerp with half a nut.” (We called Rego Park’s first son to confirm the description this morning— he told us “I’ll neither confirm nor deny” which CG will be the first to tell you is all the proof we need.) Anyway! Here’s a clip of Charlie demonstrating how to grab someone by what GE has required he refers to as their “you know whats.”

Timothy Geithner honed his spinelessness chops long before he got to the Treasury Dept., according to a new report.

Well, not that long before. It came a year ago, when Timmy headed the New York Fed and gave AIG’s counterparties a $25 billion bailout. So says a report from the special inspector general for the Troubled Asset Relief Program, who works for none other than Tim Geithner.

It seems Tim doesn’t have the stomach for hard-nosed negotiation. According to the report, his New York Fed gave the counterparties to AIG’s credit-default swaps just about everything they wanted without much of a fight. When Goldman Sachs, Merrill Lynch and the French banking regulator—on behalf of Société Générale and Calyon—refused to even consider accepting a discount on the trades, Tim and friends raised the white flag and agreed to fund AIG’s repurchase of the CDS—at par, despite the fact that many of the mortgages underlying the securities had gone into default.

Last night we got a piece of devastating news. The Pirate that has stood in the lobby of Pirate Capital’s 800 Connecticut Avenue office in Norwalk has gone missing. That’s right— the mascot who’s been there through it all— through the cockminnow fights on the floor, the trips to PetSmart, the proxy battle tee-shirts, the (spawn of) Michael Bolton years, the (spawn of) Michael Bolton abandonment, the AUM shrinkage, and the Sugar Daddy Days— is no longer. And this got us worried. We hadn’t heard from Tom Hudson and the swashbucklers in quite some time, and despite what we figured were assets under management of about 15-large, and the news that Tommy Boy had literally dug his own grave, we just thought that things would be okay. And then this. Getting rid of a stupid Pirate mascot might not seem like a big deal to some other fund managers but for Tom Hudson and his well known eye-patch fetish, it does not bode well. And it gets worse.

A month after Bruce Wasserstein’s sudden death, Lazard has a new CEO. Kenneth Jacobs, the head of the legendary investment bank’s North American business, has been named to succeed Wasserstein.

Jacobs was the unanimous selection of Lazard’s board.

In addition to Jacob’s appointment, Lazard added another potential CEO candidate, Gary Parr, to its board of directors and named him vice chairman. Ashish Bhutani was also tapped as a vice chair, while Steven Heyer was named to the new post of lead director.

Antonio Weiss was appointed global head of investment banking.

Jacobs Named Lazard CEO [WSJ]
Lazard Names Jacobs as Its New Chief [NYT]

Will the indignities heaped upon Bank of America never end?

It can’t find anybody who is willing to step into the considerable—if dirty—shoes of the inimitable Ken Lewis. Its former CFO just got canned for helping to run GMAC Financial Services into the ground. And now, hedge funds are running as fast as they can from the pride of the Queen City.

Word of Renaissance Technologies’ defection hurts, but it can be rationalized. What do computers know anyway? And did you know that the place is run (for another few weeks) by an old drunk who reeks of stale tobacco?

UBS Outlines Path To Profit (WSJ)
“We are on track, we have stabilized UBS’s financial condition but we still have some serious topics to address,” Mr. Grübel told investors. First order of business— we’re going to have to come up with some new and inventive tax evasion strategies. The IRS seems to be on to us.

It’s the Juggernaut, Bitch! (Bloomberg)
Origins of nicknames: “People who know [new head of the Citadel investment banking unit] Patrik Edsparr describe him as outspoken, with a forceful personality. He earned the nickname “juggernaut” during his first job at Lehman Brothers Holdings Inc., where one of his tasks in the research unit was to collect daily price data from senior traders, one of the people said. Most of his predecessors failed because they were too intimidated to interrupt the traders, who would shout at them. Edsparr would stand behind them, often for up to two hours, until they gave him the data.

Soros Fund Management Holdings Increase (Reuters)
$6.2 billion, up $2 billion, after taking a stake in Ford.

America’s Newest Land Baron: FDIC (WSJ)
The current backlog of property stuck on the agency’s books, with an appraised value of $1.8 billion, ranges from an $18,700 clapboard home with stained carpets in Birmingham, Ala., to a $1.7 million mountainside lodge with a heated driveway in Steamboat Springs, Colorado.

Facebook Verb Named English Word of the Year (Reuters)
Don’t want to live in a world where ‘unfriend’ is recognized as a real verb? Then you’re gonna need to kill yourself now.

Paul Allen Diagnosed With Lymphoma (NYT)
“This is tough news for Paul and the family,” wrote Allen’s sister Jody. “Paul is feeling O.K. and remains upbeat. He continues to work and he has no plans to change his role at Vulcan. His health comes first, though, and we’ll be sure that nothing intrudes on that.”

Audit Faults New York Fed in A.I.G. Bailout (NYT)
The Fed “refused to use its considerable leverage,” Neil M. Barofsky wrote in a report to be officially released on Tuesday, examining the much-criticized decision to make A.I.G.’s trading partners whole when people and businesses were taking painful losses in the financial markets.

$$$ Ken Feinberg is sending you a coded message: “If I saw some mass exodus, which I do not anticipate, that would require me to rethink some of the basic assumptions that have entered into my determinations,” Feinberg told Reuters Insider as part of the Reuters Global Finance Summit in New York. [Reuters]

$$$ Want to donate to the Human Fund? Let JPMorgan know. [JPM]

$$$ BofA’s Moynihan Says Merrill Deal Aided U.S., Holders [Bloomberg]

$$$ Double Talk on the Dollar [The Atlantic]

The CEO of GMAC Financial Services (a joint-venture of the United States government) has been forced to resign on the eve of the company’s third recourse to taxpayer money.

Alvaro de Molina resigned at the request of GMAC Financial’s board of directors due to “mounting concerns in recent weeks about his leadership and his vision for the company,” The Wall Street Journal reports. It also notes that de Molina totally did not see it coming. The mutiny came at noon today.

Despite running the company for more than a year and a half, de Molina wasn’t exactly best friends with anyone on the board: It got an extreme makeover in May after GMAC Financial got a second round of federal money. Two of the company’s directors are Treasury appointees; he apparently had even lost the support of the guy who got him the job, Cerberus Capital Management chief Stephen Feinberg, whose private equity firm continues to own 22% of GMAC Financial. Feinberg was apparently none too pleased when de Molina moved to make the lender a bank-holding company, which resulted in a serious diminution of Cerberus’ control over GMAC Financial.

Related? Citi: We Literally Have No Idea What Mike Mayo Is Talking About

It took a year and billions in government bailout bucks, but the monster known as the mortgage-backed securities market is twitching.

Developers Diversified Realty Corp. sold its 2009-DDR1 (Frankenbond) today, $400 million worth of the very paper that helped sink the economy. The five-year bonds are backed by 28 malls in 19 states.

Will the world again be ravaged by MBS monsters stalking financial centers around the world? Not if they need federal financing. Frankenbond is the first CMBS deal eligible for TALF money, and the program expires tomorrow.

As you might’ve noticed, Snoop Dog rang the Opening Bell this morning as part of the NYSE’s second annual Mentoring Madness program. He apparently then stuck around to talk shop with Maria Bartiromo, who made it clear where her allegiances lie (East Coast rappers, particularly Brooklyn-born).

JPMorgan Chase continues to show why not being dependent on government handouts is a good thing. While the federal government got to saddle Bank of America with a sinking Merrill Lynch, JPMorgan gets to buy a bank that actually, you know, makes money.

Jamie Dimon is in talks to finish what he started five years ago, aiming to buy the rest of Cazenove Group. JPMorgan bought half of the bankers to the Queen five years ago as one of Dimon’s first moves. As part of that 2004 deal, JPMorgan got the chance to take over the bank in toto, well, five years later.

JPMorgan has offered £1 billion for the half of Cazenove it doesn’t own. An announcement could come next week.

It’s that time of year again! The Victoria’s Secret Fashion show is this Thursday which means we’re likely in for a week of hearing about Dennis Kneale talking about lingerie. Last year around this time we learned that while some men are uncomfortable with the idea of entering a Secret store, Dennis Kneale loves nothing more than picking out some special pieces of what he’s affectionately dubbed “slut wear” for his “female partners.” Today it was that Dennis wears women’s underwear, though he wouldn’t say which brand, only that it’s not VS.* What other images could we be in store for leading up to the big show? Stay tuned!

*Methinks it may be this line, which probably gave out some items on the house for the free advertising.

Paul Touradji knows his way around a courtroom. He also knows how to write a strongly-worded countersuit. So if you’re planning to tussle with him, you’d better have your ducks in a row.

Nick Maounis failed to heed this advice in September, but he’s (wisely) had a change of heart, with a little help from Touradji. The Amaranth Advisors founder had his corpse of a hedge fund sue Touradji Capital Management for breach of contract and insider-trading, pointing the finger squarely at its namesake.

Well, Paul Touradji has set Nick straight, and the latter offers up a sufficiently meek “explanation” for why he backed down in a joint statement.

…since filing the summons and notice, and consistent with their role as fiduciaries, the Amaranth parties have continued their investigation of the claims and of the transaction. Since then, Amaranth has received and evaluated additional information regarding the transaction, including trading records and other information voluntarily provided by Touradji Capital, that is consistent with Touradji Capital’s position that it did not violate the agreement with Amaranth and did not misuse Amaranth’s proprietary information.

Well, we have it on good authority that the “information” voluntarily provided by Touradji included a draft countersuit. Selections follow.

As you may have heard, the numbers have been crunched and to some people’s surprise, Andrew Sorkin’s book, Too Big To Fail, bests Charlie Gasparino’s When Mooks Fail for the number of times the word ‘fuck’ is mentioned, overall and per page. Sorkin’s got 20 (.03/page) and CG has 10 (.02/page). To some, this was shocking, given what they think they know of Chaz, though not to those of us who know that a) Gaspo runs a “classy operation” and b) that the auteur was nervous the Pulitzer committee would be skittish about awarding a prize to someone with a filthy mouth.

It’s been a pretty rough couple of years for Citigroup. But a couple of the world’s biggest hedge fund managers seem to think Vikram and Co. have something going.

Paulson & Co. bought up a $1.2 billion stake in Citi during the third quarter, while Renaissance Technologies took a more modest $90 million slice. RenTech has been somewhat schizophrenic about Citi, selling off 21.5 million shares in the second quarter, only to rebuild its stake to—you guessed it—21.5 million shares last quarter.

Renaissance, at least, is a good deal less bullish on our friends at Bank of America. The Long Island quant fund rid itself of almost all of its shares in the soon-to-be-CEO-less firm, which keeps finding ways to make The Worst Job on Wall Street even worse.

So much so, that it’s selling its headquarters and just about every piece of real-estate it owns.

First to go was its New York headquarters on Fifth Avenue, sold last month to an Israeli. Now, HSBC is parting ways (again) with its London headquarters in Canary Wharf, agreeing to sell to South Korea’s National Pension Service.

The bank is still shopping its Hong Kong and Paris buildings.

According to Marc Porter, president of Christie’s in the Americas, last year people were “distracted” by the shit that was hitting the fan and focused on “assessing their own net worth” (rapidly dwindling by the hour!), and not on buying art. Now that the “worst of the financial crisis seems to be over people are once again focusing on collecting,” which is nice. In what must please Tim Geithner and the stripper community to no end, Warhol’s “200 One Dollar Bills” just sold for $43.7 million (more than three times its $12 million high estimate).

Chicago Booth now has one too.

Earlier: “I’m At MIT Sloan, Racking Up The Mother F*cking Student Loans”

Bank of America Hits Pay Snag In CEO Hunt (WSJ)
The BAC board has identified another reason no one wants to take over for Ken Lewis (i addition to a lack of interest in running a hellhole) and it starts with a ‘K’ ends with a ‘en Feinberg.’

UBS’s Debt Trading May Be Key for Profit Revival (UBS)
“I’d like to see us put more risk on the table and actually trade a bit harder,” said CFO John Cryan, 48. Wealth management clients, who have already withdrawn a net 182.9 billion francs over the 18 months through the end of September, may not halt redemptions until UBS returns to profitability, he added. “The turnaround will have to come from the investment bank,” said Dirk Becker, a Frankfurt-based analyst at Kepler Capital Markets who rates UBS “reduce.” “However, the biggest profits will come from the private bank. The problem is money outflows and there is no serious hope yet that they will stop.”

Paulson Puts Money On Citi, Ditching Goldman (NYT)
Paulson & Co. acquired an additional 300 million shares of Citigroup during the third quarter, while selling its entire holding in rival Goldman Sachs.

Blankfein: Firm’s wealth unit ‘should be bigger’ (IN)
He declined to discuss specific hiring goals but said in the interview that the firm “has to get into the high hundreds, before we can talk about thousands, of advisers.”

Deutsche Bank Drowning in Vegas on Costliest Bank-Owned Casino (Bloomberg)
And they’re literally underwater: “Any construction project of this size runs into problems,” Fasulo said. “But to bump into an aquifer is just bad luck.”

GM Reports $1.15 Billion Loss (WSJ)
An improvement over last year!

$$$ Heidi Moore: The Hard Fall Of Hedge Funders [NYM]

$$$ Tudor Vet. To Head Hedge Funds For China Sovereign Fund [FA]

$$$ Hedge Fund Clones: Better Than The Original? [The Deal]

$$$ The Lloyd’s Prayer [TBP]

$$$ The Madoff Auction Had Everything But Underwear [Daily Intel]

$$$ Jim Cramer will not be keying David Faber’s car any time soon: Newsweek did something very naughty. [DB]

Tax cheats are fast running out of tax shelters. The latest to submit to international standards are Singapore and Liechtenstein.

The former was removed from the OECD’s “grey” list on Wednesday and the latter today, after it signed its 12th bilateral information-sharing agreement with (ugh) the French. The city-state sought to reassure the many tax-evaders who have brought their money to its spit-and-gum-free shores, but methinks they doth protest too much.

Put down the emasculators, Chris Dodd. Your plan to geld Ben Bernanke just hit a serious roadblock.

President Barack Obama sent out some of his lesser minions to make clear he wants his Federal Reserve to remain virile and whole, whether or not it’s an “abysmal failure” as a bank regulator. While Dodd says his bill would “enhance” the Fed, it very clearly does not want to swallow a pill that would strip it of its power over banks and consumer finances.

The White House doesn’t want it to, either. The amazingly-named Austan Goolsbee warned that cutting off the Fed’s cutting off the Fed “can, if you do it wrong, get into a left hand doesn’t know what the right hand is doing kind of problem in a crisis.” In other words, don’t leave the right hand without anything to do.

John Carney reports he’s hearing that Jon Corzine’s staff is “already prepping to take over at Bank of America.” This strikes us as slightly premature on the staff’s part, as, Carney goes on to say, “there haven’t been any formal talks” between JSC and the Bank of America board. (Also: why would Papa Bear’s employees, as in his employees while Governor, assume they’d be going with him to BAC?). If it’s true though, and this really does look like it’s going to happen, J.Co will have to first deal with Dick Bové.

By now you’re heard the devastating news that Bloomberg will not run Maria Bartiromo’s BusinessWeek column after the deal to acquire the magazine is complete. So the Money Honey’s pearls of business wisdom need a new home and, pretty clearly, that home is DealBreaker (consider this post a formal offer). We’ll keep the name, “Face Time With Maria Bartiromo,” because that’s too great to give up, but let’s talk subject matter. She’s well-equipped to pick up where Lenny Dykstra left off in educating the public about the benefits of flying private but really the possibilities are endless. Let’s get some ideas. Think outside the box. This is her moment.

Congratulations, Europe. Your long continental nightmare is over, and with it the late recession.

We here on the other side of the Atlantic have been recession-free for some time, and let me tell you, it’s been, uh, great. Sure, unemployment is continuing to rise, but that’s no big deal. And the bank failures, well, they’re continuing, too—120 and counting this year!—but post-recession America has a plan for that. We’re building smaller houses, too, but you guys already do that, so no worries.

Bloomberg TV has been around for years, but it has generally been considered too wonky for all but the wonkiest finance types. In the past year, however, the network has hired new on-air talent (most prominently Margaret Brennan, from CNBC), consolidated the eye-boggling number of crawls that used to clutter the bottom half of its screen, and expanded its coverage of general business news rather than focusing almost exclusively on high finance. “There’s an audience that may have been with CNBC that’s going to be attracted by the kind of presentation we’re doing,” says recently hired head of Bloomberg TV, David Rhodes.

Is Fox Business Network A Lost Cause? [Vanity Fair]

Earlier: Hottest Women In Business Television List Gets Lift

A couple weeks ago RBS announced that it would be accepting a few more billion in bailout funds from the UK government. Some employees wondered why this was necessary and today we have an answer. The Telegraph reports that the bank needs the money for booze, a karaoke machine, and dancing girls. Why? First, if you need a reason for drunk karaoke, you need to reevaluate your life and second, in all seriousness, it’s because they need to get wasted on the job. The earlier the better.

Senior executives have applied for a licence for alcohol to be served from 7am and to hold karaoke events on all eight storeys of their central London offices over Christmas. The bank’s licence application submitted last week asks permission to provide liquor until midnight “for staff and/or guests at meetings, conferences, dinners and functions” at its £182 million City of London offices. It adds: “If there is a champagne breakfast meeting scheduled, the supply of alcohol may commence at 0700 hrs.”

Of course, some people, who just don’t get RBS like we do, feel the need to rag on the good time and brilliant profitability scheme.

Eddy Weatherill, of the Independent Banking Advisory Service, said: “Why do they need a licence to drink 365 days a year? That’s more like a gentleman’s club than a bank. “They must know everybody’s waiting for them to get egg on their faces, yet they apply for a licence for champagne breakfasts and karaoke. “They never cease to amaze me and the public will be incensed. They will try to spin it but it’s clear what’s going on. It’s all going to be paid for by the taxpayer in the end.”

Which is fine, but Ed should know he’s ensured he won’t be invited to take part in the lap dances.

How’s this for a novel approach: Try dealing with the financial crisis at hand, rather than worrying about the next one.

That’s the nugget of common sense offered by Charles Evans, president of the Chicago Fed, with the suspiciously socialistic backdrop of the City of Light. Like Blackrock’s Larry Fink, he’s sick and tired of hearing about the asset bubbles rising to the surface at home and abroad. His radical suggestion is to actually implement some of the mountain of regulatory changes prompted by the credit and financial crises of the last two years instead of going on a wild-goose chase.

CNBC, like any other organization, has typically followed the rule that while you might despise your colleagues, any trash talk about them being idiots or whores is done privately. United front and all that crap.* So, for instance, we’ve yet to hear anyone from the network agree with the generally accepted belief that Jim Cramer’s bold call your money was safe with Bear Stearns back in March 2008, because “Bear Stearns is fine,” was one of his greats, and by greats we mean worst calls of all time, second only to the public declaration that Lenny Dykstra is the best money manager in town. Then this morning, we got this:

And it raises a few questions, such as:

1. Does David Faber have a death wish?

2. Is this the beginning of something beautiful, wherein everyone at CNBC just starts turning on one another?

2a. And we finally find out who leaked Maria’s high school nickname to the Post?

2b. And Sue Herrera’s true thoughts on Michelle’s Caruso Cabreras?

3. Is someone going to have his tires slashed?

4. Can we get Faber to say this to JC’s face, on air?

5. WILL JIM CRAMER ADDRESS THIS AFFRONT ON TODAY’S STOP TRADING SEGMENT? And will it go something like this, but with the word “Faber” swapped for “they”?

Cramer: Bear Stearns [Newsweek]

*Any if you absolutely must leak your feelings to the media, you do so as an anonymous source.

UPDATE: Newsweek has changed the byline to Arlyn Gajilan, one of their editors. Why? Because David Faber was asked to simply write a piece on the fall of Bear Stearns. Newsweek, we’re told, then inserted the Cramer angle and used it for the list. Faber, kind of understandably, was not happy about this, and after what was probably an awkward conversation with Cramer, the byline was changed. So Newsweek is now in the business of instigating shit which is interesting.

It seems we will have Ralph Cioffi and Matthew Tannin to kick around for a while longer. The two men may have escaped the long arm of the law, winning an acquittal on fraud and insider-trading charges earlier this week, but the SEC isn’t discouraged.

The regulator will proceed with its own case against the two former Bear Stearns hedge fund managers, SEC Enforcement Chief Robert Khuzami said. And why not? “We filed a case based on the evidence from our own investigation,” Khuzami noted, politely failing to mention the cock-up of an investigation run by the U.S. Attorney’s office. There’s also the “different standard of proof” for a civil trial, under which even the incompetent prosecutors could probably win a conviction. And finally, there are those incompetent prosecutors, lighting the way to failure.

“We will study the transcript and events at trial,” Khuzami said, then mumbling, “and do the exact opposite.”

US SEC expects to proceed with Bear Stearns case [Reuters]

Given that the bank is flush with cash and doesn’t much care what the public thinks of them (except when it comes to kittens), this obviously has nothing to do with fear of populist outcry or certain pissant Rolling Stone writers with vivid imaginations. Rather, this is coming from the top, as in The Big Man. Now that it’s out in the open re: who Lloyd Blankfein and Co. work for, there’s no need to tip-toe around why Christmas is the first to go. For anyone considering funding an event with colleagues, as previously mentioned, you can forget that, they’re also not happening (think this is a joke? Lloyd and his secret police force— the GSS— will be checking every employee’s house for trees and egg nog). For the Masters of the Universe upset about missing out on a company-funded opportunity to spend extra time with people you despise over booze, do not fear. A gala Purim party is being planned for next year.

Goldman Sachs Says No To Christmas Party [IN]

Remember when the Feds were thisclose to finally arresting Bernie Madoff’s sons and confirming all of our suspicions that the biggest Ponzi scheme ever was a family affair? Well, they still haven’t done that. But they have arrested Bernie’s IT guys.

The U.S. Attorney’s office in Manhattan has arrested two computer programmers who formerly worked for BLMIS. According to the SEC, they provided the 70-something-year-old Madoff with the technical support needed to keep a three-decade long fraud going.

Jerome O’Hara and George Perez “used their special computer skills to create sophisticated, credible and entirely phony trading records that were critical to the success of Madoff’s scheme for so many years,” the SEC’s George Canellos said. They have been charged with conspiracy and falsifying documents.

I’ve long maintained that Charlie Gasparino’s “I’m just a country reporter” image is a façade. In reality, he is a dangerous, dangerous man who, if you know anything, nearly brought Wall Street and the country to its knees. Look behind any monumental fuck-up of the past several years— nay decades— that contributed to the financial crisis and you’ll find Gasparino (convincing Bear Stearns to load up on subprime doesn’t even scratch the surface, nor does his encouraging Angelo Mozilo to “just go one shade darker”). So it’s nice to see at least one unnamed (take your best guess) Wall Street exec is agreeing with me, finally.

Charlie Gasparino’s résumé is jam-packed: on-air editor for CNBC and contributor to the Daily Beast, the New York Post and Forbes. But at least one Wall Street executive has a different description: “A monumental asshole, who added dramatically to the financial instability during ‘08 and early ‘09.”

Business Books [Time]

Jamie Dimon: Banks Should Be Allowed To Expand—And Fail (WaPo)
“Ending the era of “too big to fail” does not mean that we must somehow cap the size of financial-services firms. Scale can create value for shareholders; for consumers, who are beneficiaries of better products, delivered more quickly and at less cost; for the businesses that are our customers; and for the economy as a whole. Artificially limiting the size of an institution, regardless of the business implications, does not make sense. The goal should be a regulatory system that allows financial institutions to meet the needs of individual and institutional customers while ensuring that even the biggest bank can be allowed to fail in a way that does not put taxpayers or the broader economy at risk.”

Warren Buffett Says The Financial Panic Is Over (Reuters)
“The financial panic is behind us,” Buffett said at Columbia University’s business school. “Our economy was sputtering, still is sputtering some.”

Ex-Bankers Form ‘Blind Pools’ in Bid for Failed Lenders (WSJ)
“Wall Street firms such as Goldman Sachs Group Inc. and Deutsche Bank AG are racing to form investment pools that plan to fund acquisitions by the bankers, who hope to leap into the auction process for failing banks led by the Federal Insurance Deposit Corp. One trio of banking veterans who are considering such plans is former J.P. Morgan Chase & Co. Chief Executive William Harrison, former Wachovia Corp. CEO Robert Steele, and Herb Boydstun, former CEO of Hibernia Corp., a regional bank in New Orleans that was sold to Capital One Financial Corp., according to people familiar with the situation.”

Roomy Khan Tipped Several People In Galleon Case (NYT)
“I provided information to several co-conspirators who worked for various hedge funds, who also traded on the inside information for profit,” Khan said. Also, she destroyed incriminating emails. NBD.

At Boeing, Dreamliner Fix Reveals New Wrinkle (WSJ)
Bad news. Your order is being delayed yet again.

$$$ Forbes 67 Most Powerful: Ben Bernanke (4), Lloyd Blankfein (18), Jamie Dimon (30). [Forbes]

$$$ Fund Manager Horseman To Resign [WSJ]

$$$ Buy Madoff’s Boats [BI]

$$$ Europe Could Impose Pay Restrictions On Hedge Funds [FA]

Well, this is certainly not what the Bush administration and the companies that owned it had in mind. Who would have guessed that “American companies’ reputation here for overcharging and shoddy workmanship” would hurt our image even more than an invasion and occupation?

For most of this week, our singular mission has been to defend the most majestic hedge fund in all the land, vis-à-vis the hideous suggestion they may have been tainted by the insider trading scandal du jour. Our message has been simply this: Steve Cohen is the king, and nobody fucks with his majesty. And yet. Some people? Still don’t get it. Take this story, entitled “SAC Capital Ex-Analyst Under Probe.” The particular trading in question took place while the employee was at another firm entirely. But someone—Rupert—just had to drag the Kingdom of Cohen into the conversation, didn’t they? So, today, I’m going to show you people what you can expect if you don’t back the shit off. I mean it. Shut it with this insider trading crap, as it relates to the big guy and his li’l guys, or the following scenario is in your future. IF YOU’RE LUCKY.

The populist rabble-rousing on Capitol Hill is getting ominous.

“I see it as one of our potentially last chances to get control, particularly of financial institutions in their mega-forms, before they take over the world,” Rep. Paul Kanjorski said of the banking regulation reforms proposed by the White House and congressional leaders. But for Kanjorski and Rep. Earl Perlmutter, both Democrats, the bill doesn’t nearly go far enough.

Both men, whose districts include few, if any, Fortune 500 companies, want to undo the deregulation enacted a decade ago, which demolished the barriers between commercial and investment banking, among other rules. Perlmutter’s “light-touch” option would simply allow whatever will be regulating banks to require hybrid commercial-investment banks to keep certain capital reserves. Kajorski’s more draconian proposal would give regulators the preemptive authority to place limits on the size, complexity or risk of any financial company that presents a systemic risk to the economy.

While it’s not yet clear how investors will fare, we’re told that Raj-Raj is taking care of his employees. The Galleon team will be paid bonuses based on the fund performance at the date of shutdown, plus two months severance, plus benefits. A Galleon spokesman confirmed the plan but declined to comment further.

As you’re aware, Warren Buffett is in the city to talk to the youngsters at Columbia’s b-school, and to check out Becky Quick’s rack. He got in early yesterday though, and hand some time his hands. After spending the morning at the Museum of Sex, we’re told the Oracle paid a visit to 85 Broad, where he walked the trading floor with Lloyd Blankfein, and gave a brief speech to the team “over the hoot.” Obviously Warren B’s been pretty pleased with how his injection in the bank has panned out thus far, but he couldn’t help but noticing that his little fluffers seemed a bit down in the dumps, and figured they could benefit from some good folksy business wisdom married with abberant sex fetish. We’re waiting on a transcript of the remarks, which we’ll bring to you shortly, but in the meantime we’re told the speech went something like this:

Good afternoon, labias and gents. Oracle of O here (oh yeah, double entendre), coming at ya live from Lloyd Blankfein’s pussy palace on the 31st floor. “Long Lloyd” over here tells me that your once long, strong and down to get the friction on Johnsons have been flying at half-mast ever since Sunday. Relax your sphincters, girls, cause Uncle Warren is here to put your mind at ease.

Earlier this morning, a report came out that Goldman Sachs, after promising to pay the vet bills and find homes for five kittens discovered on the site of their new headquarters this past August, had neither paid the bills nor found houses for those cats. Now, like magic, Goldman has put out a statement* that the vet has been paid off, and the cats adopted. And that got us thinking— for a while now Goldman has been uncharacteristically trying to ingratiate itself to the public, and after this weekend’s latest attempt kind of backfired, they’re getting desperate. The old Goldman wouldn’t have thought twice about being accused of leaving those pussies out the cold but the new Goldman, sensitive to the hate, make it its first priority to squash any indication that they are anything but saintly. They want to keep us happy and they seem to be going to great lengths to make that happen. Basically we’ve got them right where we want them and I’d like to see what else we can get out of them.

There’s a new job requirement for the next Bank of America CEO, should one ever be found: dealing with a completely dysfunctional board of directors.

The U.S.’s largest bank continues to devour itself in its search for a successor to the apparently irreplaceable Ken Lewis. And so the firm will miss its second self-imposed deadline to name a winner of the Worst Job on Wall Street contest. There will be no new BofA CEO by Thanksgiving, leaving the bank little more than a month before Lewis’ resignation takes effect.

Not content to ravage the bank with his acquisition of Merrill Lynch and acceptance of Treasury Secretary Timothy Geithner and Federal Reserve chief Ben Bernanke as his liege lords, Lewis seems to have picked the worst possible time to resign. You see, at the Federal Reserve’s request, the bank had just tossed half of its board and added six new directors, and this board has simply failed to “gel,” according to the FT. So when Lewis surprised them with his resignation in September, they didn’t know what the hell to do.

The federal government may be the next too-big-to-fail institution to accept federal bailout money.

The Obama administration, struggling to keep the federal budget deficit from spiraling out of control, could accept up to $210 billion in TARP funds in a bid to cut its debt. The government won’t take all of the remaining TARP kitty, which is growing as other recipients race to return their bailout money to get out from under the onerous thumb of the government, especially that nasty pay czar Kenneth Feinberg.

On the bright side, no one in government makes nearly enough to run afoul of pay restrictions, and the government never has to pay itself back.

Goldman Sachs has gone on record to say that contrary to popular belief, the bank does not start each morning by clubbing baby seals in the basement of 85 Broad. Today the progress God’s workers made ingratiating themselves to the animal community is flushed down the toilet, with the news that while marine mammals get a pass, kittens with no place to go? Let them die in the streets, even if they were discovered in GS-owned cathouse.

According to a report by The Villager, five kittens were born this past August in the firm’s not yet completed new headquarters downtown. At the time Goldman said it would pay for the kitties’ vet bills and encourage employees to adopt the furballs. Three months later, none of them have a home, and the cat doctor is still awaiting payment. Now. Truth be told, we personally can understand that not everyone likes cats, as they’re fairly creepy. It’s not like Goldman abandoned a bunch of puppies in which case we’d advise every GS’er to get out of town, ASAP. And, by all accounts, Lloyd’s a parakeet guy. But the fact remains that those jerks used these things to come off all warm and fluffy to the public. What kind of sick fucks would do something like that? Goldman, apparently. They acted like they cared when in fact they don’t give a rat’s ass. This makes Goldman a liar. Capital “L”, small “i”, small “a”, small “r”, period. And now, we need to review everything else they’ve ever told us, and ask ourselves, what else have they been lying about? Maybe they do club baby seals. Maybe, despite what they’ve said, egomaniacs actually are employed at 85B. MAYBE THEY REALLY DID NEED THE TARP MONEY.

Goldman Sachs Charged With Abandoning Kittens [NYM]

So, okay. Kenneth Feinberg said at a conference this morning that he is worried that the pay cuts he came up with will drive away talent from the companies on whose asses he’s placed caps.

Kenneth Feinberg, the Obama administration’s special master for executive compensation, said he is “very concerned” about the possibility his pay cuts may drive talent away from companies bailed out by U.S. taxpayers.

What’s happening here? Is this one of those situations where he’s being like I understand where you’re coming from, I’m not disagreeing with you, but it’s too late and you have only yourselves to blame. OR: is K.Fein starting to second guess himself? Is it possible in his moment of vulnerability he can be broken? OR (and this is this most likely scenario): are we witnessing a little passive aggression being thrown in the direction certain elvin colleagues at the Treasury, whose incessant sniveling has worked Feinberg’s last nerve? He likes the caps just fine but if it means undermining the world’s most famous tax-evader he’s willing to do what it takes?

Isn’t this rich? Bill Gates, the richest man in the whole country, thinks Wall Streeters are paid too much.

The compensation problem is a very interesting problem. I do think compensation is often too high, but it’s a very tough problem to solve.

Gates blamed a 1993 federal law capping executive salaries at $1 million—“a bad milestone”—which he said wound up backfiring, encouraging huge bonuses and stock option awards. He doesn’t like that, he said during a discussion on philanthropy in New York yesterday, but he’s wary of doing anything about it, worrying that, like the ‘93 law, it will just make things worse.

Balyasny Ex-Analyst Under Probe (WSJ)
A complaint was filed last week alleging that an unnamed individual, supposedly Mark Adams, provided material non-public info about EMC Corp, where he once worked, in 2008 and 2009 while he was at Balyasny Asset Management (Adams previously worked at SAC Capital from July 2005 to December 2007).

Bear Stearns Loss Echoes Long Line of U.S. Prosecution Defeats (Bloomberg)
Don’t worry, the Matthew Tannin/Ralph Cioffi case wasn’t the first time the Justice Department was made to look stupid: “The acquittals of two Bear Stearns Cos. hedge-fund managers in a test trial for prosecutions linked to the subprime crisis echo a long line of high-profile financial cases that blew up in the government’s face. The U.S. twice failed to jail ex-Credit Suisse banker Frank Quattrone for obstruction, in 2003 and 2004; HealthSouth Corp. founder Richard Scrushy eluded a fraud conviction in 2005; and many defendants walked free in the most notorious corporate fraud of the decade, the fall of Enron Corp. in 2001.”

Bill Gates Says Wall Street Pay Is Too High (Reuters)
But he also doesn’t like the government putting caps on salary, getting up in people’s business, etc: “I do worry that when the government owns an entity like AIG that you can greatly devalue that entity by having it essentially have to behave as though it part of the government,” Gates said. “It’s an unnatural situation when the government owns a lot of a private company. Unfortunately there is a view that that should exist for a long term. There’s some devaluation of what that asset would have been worth if it hadn’t had to go through that kind of management structure. It’s unavoidable,” he said.

Beijing’s Heaviest Snow in 54 Years Strands Thousands (Bloomberg)
The gov wanted a snow day and god damn it, they were going to get one: “The government induced snowfall in the capital on Nov. 10 by seeding clouds with silver iodide, the China Daily newspaper reported yesterday, citing an unidentified official at the Beijing Weather Modification Office.”

White House Aims To Cut Deficit With TARP Cash (WSJ)
They’re serious about fixing this thing: “The idea is still a matter of debate within the administration and it is unclear how much impact it would have on the nation’s mounting deficit levels. Still, the potential move illustrates how the Obama administration is trying to find any way it can to bring down the deficit, which is turning into a political as well as an economic liability.”

$$$ $1.5 Million In Blatant Insider Trading Profit Following 3Com Acquisition [ZH]

$$$ Too Big To Fail + Zombies [NYM]

$$$ optionMONSTER Group launches Traders4Kids, Charitable Events Hosted by Traders [BW]

$$$ The Journal has a few questions: Why do football players wear helmets in the first place? And more important, could the helmets be part of the head injury problem? [WSJ]

$$$ Warren Buffett Dines And Dashes [mediabistro]

Vice President - Wealth Management, New York, NY

Prestigious full service investment boutique seeks Vice President -
Wealth Management. Bachelor’s degree with strong GPA and p5 years
minimum investment banking experience required. Advanced degree
preferred.

Admit it: You’re bummed that the Bear Stearns fraud trial has ended in a flash of prosecutorial incompetence and 12 potential clients for Ralph Cioffi and Matthew Tannin. We are, too. But fear not, friends, there’s an embarrassment of hedge fund fraud riches out there to continue to follow, and we thought we’d offer a Readers’ Digest of the (alleged) scams and scandals still making news.

Madoff: Let’s start with the mother of them all. Bernie may be moldering away in Butner with the homosexual posse, but the fallout from Ponzi scheme to end all Ponzi schemes* continues. Last week, Madoff’s storefront accountant pleaded guilty to fraud, obstruction and false filings. But the court battles aren’t over: Swiss authorities have charged the former head of Banco Santander’s fund of hedge funds arm with criminal mismanagement for overseeing its $3.5 billion in Madoff losses.

Irving Picard is still busy, too. The court-appointed receiver, who said he’s promised to pay out $534 million to Madoff’s victims, has been forced to cut his claim against Madoff feeder fund magnate Ezra Merkin by one-third to $564 million. And then there’s the aftermath of the death of Madoff buddy and Picard target Jeffry Picower.

Eliot Spitzer is scheduled to deliver a lecture tomorrow at Harvard. The topic: ethics. Unfortunately, some people would rather the event not come to pass. Namely, Kristin Davis, the hedge fund employee-cum-Madam who personally scheduled a slew of Spitzer’s appointments back in the day. What has she done about it? Written a letter to Harvard protesting the whole thing, that’s what! In her missive, David apparently lists seven reasons why this shit should not go down and says, I think sarcastically, that she is “greatly intrigued as to what Mr. Spitzer could contribute to an ethical discussion.”

Leave it to the World Bank to rain on everybody’s parade. The president of the root of all evil, in ignorance or in spite of Larry Fink, sees a bubble burgeoning to the east.

Mr Zoellick said on the margins of the Asia-Pacific Economic Co-operation summit in Singapore: “Traditionally the central banks in east Asia will follow the [US] Federal Reserve because if they raise interest rates [independently], that will draw capital and appreciate their currencies.

“In the US and Europe, because things are still relatively weak, I don’t see any likely inflationary effects at this stage. In east Asia, if you start to get a strong rebound in growth and you’ve got a lot of liquidity, there is a question of whether you start to face asset bubbles,” he said.

Zoellick’s warnings come hot on the heels of his partners-in-crime at the International Monetary Fund doubling their estimates for Asian economic growth this year.

Update: Fuck the below and headline above: CNBC reports that Bob has sent a memo to employees promising he’ll never leave them.
__________________________________________________
Obviously it goes without saying that we sincerely hope Bobby B’s threat to walk out of AIG and never come back was just that. Hopefully the board will coax him down from the ledge and Ken Feinberg, understanding that no one else has the panache to get the job, will lift these silly compensation restrictions, and give ‘Mosche the room to work. We need Bobby AIG if only so that he can taunt Andrew Cuomo into a fistfight, and tell us how he really feels about the “crazies in Washington.” Yes, he could do all this from one of his finely appointed bathrooms in Croatia, but a slightly loftier perch would be nice. But: it’s possible he might actually have been serious when he said he’s “had enough of this” and so we must prepare ourselves. Deal Journal reports that the following AIG board members are possibilities:

- Douglas Steenland, the former Northwest Airlines Corp. chief executive

- Robert “Steve” Miller, the former CEO of Delphi Corp,

- Arthur Martinez, the former CEO of Sears, Roebuck & Co.

- Harvey Golub, the former CEO of American Express Co.

But they might not care for the gig. So, let’s add a few more names to the short list. Ken Lewis will need work soon but I think they stopped letting AIG employees booze on the job a few months ago. Hank Greenberg? I’m thinking he’d love that and it would spare him the effort of making AIG: The Sequel. Who else?

AIG’s Benmosche Is A Drama Queen [The Deal]

Yesterday, together as a joint effort, we and SAC cleared the most majestic hedge fund in all the land of any possible wrongdoing vis-à-vis the insider trading case du jour. First, the firm conducted its own thorough investigation of the trades in question (and found no evidence of shady dealings). Then, we came along and finished things off with a brief but clear message: nobody fucks with the king. Nothing else needed to be said but unfortunately, some people felt the need to pipe up and remind everyone that “the determination by the big hedge fund is preliminary because a number of the stocks involved in the insider-trading case remain secret as criminal and civil investigations continue.” Obviously these people, and maybe yourselves, still don’t get it. So, today, we have no choice but to continue. For those of you— and I’m talking about the SEC, I’m talking about the Feds, I’m talking about anyone looking to make trouble— even ENTERTAINING the thought of messing with our lord, go back from whence you came. The king is busy.

They haven’t said anything yet but I think it’s pretty obvious it’s coming. Yesterday, when the dream team in charge of the two ridiculously named Bear Stearns funds—High Grade Structured Credit Strategies Fund and High Grade Structured Credit Strategies Enhanced Leverage Fund— emerged from a Brooklyn courthouse, Matthew Tannin had the shit-eating grin pictured at left on his face. He was happy, of course, that he and his co-conspirator, Ralph Cioffi had gotten off counts of conspiracy, securities and wire fraud, and dodged 20 years each in the big house. Because honestly, even MT didn’t see that coming (you read the e-mails). But mostly, he was psyched to learn that his career as a money manager is not over. People aren’t planning on holding this (apparently baseless) duping of investors stuff against him and his colleague and in fact? Some are pretty impressed with how the dream team conducted their business.

Aram Hong, a juror from Woodside, Queens, said the exchanges between Cioffi and Tannin shown to the jury proved to her that the two men were working “24-7” to save the funds in the months before they collapsed. She noted a defense exhibit that showed the fund managers were working at 4 a.m.

Laurence Fink kindly asks all you financial journalists, bearish money managers and talking heads to shut the hell up about a stock market bubble.

Everything’s fine, the BlackRock chief wants to assure. Totally normal. “I think things are playing out as they should,” he told a Wall Street Journal executive-breakfast session. So stop talking about things going wrong, damnit: The Finkster promises us that the old crisis is basically history and that we won’t see two crises in a row.

Jordan Wimmer, the ex-Nomos Capital IR girl taking issue with, among other things, her former boss Mark Lowe’s executive decision to hire a (highly qualified) prostitute to work at the firm, his insistence on her being present while he received lap dances, and his dumb blonde jokes, has one more thing to add. He might’ve tried to run her over, several times.

Jordan Wimmer, who earned £577,000 per year, said she believed her boss Mark Lowe 59, the firm’s founder, had hired a Russian hit man or enlisted a family member to attempt to murder her. Miss Wimmer told how she was left fearing for her life after an incident in which a car tried to run her over six times near the King’s Road in Chelsea.

So it makes sense that they should be compensated accordingly. Not sure why this needs to be reiterated but for those of you who just don’t get it:

“I often hear references to higher compensation at Goldman,” said Mr Blankfein at an industry conference on Tuesday. “What people fail to mention is that net income generated per head is a multiple of our peer average. The people of Goldman Sachs are among the most productive in the world.”

Earlier: God’s Minions Not Cooling Their Heels At 85 Broad

Well, here’s a fun twist to Sen. Chris Dodd’s proposal to castrate the Federal Reserve: Big Ben Bernanke is set to travel to the Hill at some point after Thanksgiving for a few rounds with the gentleman from Connecticut, who heads the committee considering Bernanke’s renomination as chairman of the soon-to-be-inconsequential Fed.

Now, Dodd is saying all the right things, telling Bernanke he’s “doing a terrific job” and that his bid to give most of the Fed’s power to others is “not about individuals and personalities.” But then he turns around and says Ben’s Boys have been an “abysmal failure” when it comes to regulating banks.

One of Bernanke’s minions has already spoken out against doing anything to trim the Fed’s authority, with the Kansas City branch warning that messing with the F.R. “could lead to delays or second-guessing of supervisory recommendations and greater political interference.” And it was talking about Rep. Barney Frank’s proposals for financial regulation reform, which don’t go nearly as far as Dodd’s in cutting the Fed down to size.

Yesterday in court, Jordan Wimmer, the Nomos investor relations girl suing her boss, Mark Lowe, for possibly forcing her to accompany him to a strip club, making dumb blonde jokes at the office, and hiring his girlfriend/hooker to work in the office alongside Jords (which you understand was demeaning because it gave the impression that an IR girl is kinda like a whore) added a couple more complaints. First off, that Lowe treats women like objects (“he thinks he can just buy women like handbags or designer dresses which are meant to be just thrown around and bought on occasion”) and second, that he talked about that sickening love stuff in a place of business.

‘I couldn’t believe he was acting like a teenager in love, telling me wholly inappropriate things… Like how he loved Ling, and whether Ling loved him. I do think it’s inappropriate when your boss is talking about teenage love and lust stories about his girlfriend.’

As for Wimmer’s issues with Lowe bringing working girls to business meetings, the defense doesn’t see how that’s relevant because a) those hookers are his girlfriends and b) they’re key players in the industry.

Elizabeth Melville, representing Mr Lowe, said to Miss Wimmer that one of the women Miss Wimmer was referring to, Natalia Malagina, was also highly qualified, and had worked for two investment banks, and is now studying at Lausanne University for an MBA.

For reference, the Daily Mail has helpfully included some shots of Malagina, above and after the jump.

AIG’s Benmosche Threatens To Leave (WSJ)
Man’s got a vineyard and 12 bathrooms. He doesn’t need this: “At a board meeting last week, the strong-willed industry executive told fellow AIG directors that he was “done” but agreed to think it over after other board members reacted with shock, according to the people. During the three-hour meeting, board members discussed difficulties of complying with pay policies and retaining talent at the company. Mr. Benmosche’s frustrations “hit a crescendo,” said a person familiar with the matter. “Bob feels he is in an impossible situation,” the person added. Mr. Benmosche didn’t respond to a request for comment.”

Whitacre Prods GM Executives With Message of ‘We Need to Hurry’ (Bloomberg)
Let’s put the pedal to the metal here, people: “I’ve been telling them that we need to hurry every chance we get, that we don’t have long to do all this,” Whitacre, 68, said yesterday in an interview from his office in San Antonio. “This is about a turnaround, this is not business as usual. This is about a new GM, a new way of doing business.”

Tax Fears Are Causing Client Outflows, Swiss Bank Asserts (NYT)
Julius Baer would appreciate it if we could please stop scaring its clients into thinking they’re going to get in trubs for tax evasion.

Geither Wants A Strong Dollar, Will Tackle Deficit (Reuters)
“I believe deeply that it’s very important to the United States, to the economic health of the United States, that we maintain a strong dollar,” Geithner said in a meeting with Japanese reporters at the U.S. embassy.

Swiss Bonus Rules Limited to 12 Biggest Finance Firms (Bloomberg)
So, sorry if you work at UBS.

$$$ Boston Provident Trader Ezra Levy Arrested for Theft [Bloomberg]

$$$ If We Were Friends With John Paulson [NYM]

$$$ Buy some sex toys from this accountant. [GC]

$$$ Dennis Berman: A Reason To Pay For Big Banker Bonuses [WSJ]

The City is not a happy place today: The U.K.’s two biggest banks both reported lower earnings thanks to the credit crisis, while Lloyds Banking Group announced a new round of job cuts.

First, Barclays and HSBC. The former said its third-quarter profit fell by half. Worse, its profit was actually lower than its write-downs and impairment charges, which doubled to £1.4 billion.

The latter was a little bit more coy, but the news was worse. HSBC said its third-quarter performance was lower than a year earlier, but didn’t specify. It did say it took a US$3.5 billion hit on its own debt; without it, the bank would be doing better than it did in the third quarter last year. But it isn’t.

The ad people who run this asylum would like you to please answer this quick and painful question.

The Wall Street trial of the century (and a horrendously botched prosecution) has led to the acquittal of two former Bear Stearns hedge fund managers accused of defrauding investors.

It took a jury less than two days to exonerate Ralph Cioffi and Matthew Tannin of securities and wire fraud. Cioffi was also accused of insider-trading. The two were accused of lying to investors in their two hedge funds, painting a rosy picture while the bottom fell out of the credit market. Both funds failed, costing investors $1.6 billion.

Their victory is a huge defeat for the Justice Dept., serving as something of a test case for similar battles against Wall Street executives.

Cityfile reports that you now have the opportunity to sit your ass in the Don’s cockpit. Trump put his Boeing 727 up for sale yesterday. No word on the asking price but it’ll probably cost you considering that you’re getting three bathrooms with “gold plated sinks,” “abundant storage for fine china and crystal” and a “circular shower.” Make him an offer.

Donald Trump Has An Aging Plane To Sell You [Cityfile]

Severance: it’s means you got canned but if you got somea that way back, like circa Bear going down, before the next level shit of everyone getting axed, it was safe to assume you a) got a decent amount it and b) weren’t looking for a new job in the scariest environment imaginable. So, it was only natural that you didn’t freak out or take the first new gig you were offered, whether or not involved standing on a street corner. Also? You probably didn’t change your lifestyle much, right? If you answered yes to any of the above, Paul Joegringer knows how you feel:

Paul Joegriner hasn’t worked since March 2008, when he was laid off from his $200,000-a-year job as chief executive officer of a small bank. But you wouldn’t know it by appearances. His wife, Marzena, shuttles their two young children to private school every morning. The family recently vacationed in Virginia Beach, Va., and likes to dine on Porterhouse steaks. Since losing his job, Mr. Joegriner, 44 years old, has had several offers. He’s turned each down in hopes of landing a position comparable to what he held before. By Mr. Joegriner’s own calculations, the family will be out of money in six months if he doesn’t find work. “It will be D-Day,” he says. “But on the outside, no one has any idea that we’re in trouble.”

Except for anyone reading the Journal today. Moving on, Chuck Hipsher can also empathize:

He met his wife at the ad agency, and the two had a $40,000 wedding. Kelly Hipsher, 32, was laid off in October 2007 and found out she was pregnant in February 2008. A week later, Mr. Hipsher’s pink slip followed. Two months after that, the out-of-work couple moved to Greenville, S.C., to be closer to family and get a fresh start. Together, they had received about $60,000 in severance. “Now we have $600 to our name,” says Mr. Hipsher. Although their rent was cheaper, Mr. Hipsher says the family continued to spend like before. They moved with three cars — two BMWs and a Chevy Silverado. They continued to buy cases of $36-a-bottle wine. They spent $250 a month on a cleaning lady, and Mr. Hipsher dropped $50 a week on flowers for his wife. The couple still dined out regularly.

As can an asston of other people, apparently:

I am confident history will show that our actions… in building Bank of America positioned our company for future success. As I look ahead, I see no reason that Bank of America will not be among the handful of the most important and most successful financial-services companies in the world.

I can think of 45 billion reasons.

Our business model is benefitting from the acquisitions of Countrywide and Merrill Lynch.

The events of last week, wherein the most majestic hedge fund in all the land was implicated in the insider trading scandal du jour, were deeply distressing to us all. While SAC was reviewing the trades in question, and, thankfully, clearing itself of any wrongdoing, we went in search of a more visceral sign. Something that would say, “Nothing to see here.” Or: “Back it up, SEC. You don’t want a piece of this.” Or: “Take one step closer, and I’m not kidding, I’ll take this golf club, and I’ll bust open your skull.” Or, more simply: “Nobody fucks with the king.” This weekend in Southern Connecticut, we found it.

The Europeans certainly take antitrust laws a good deal more seriously than the Americans. Oracle and Sun Microsystems are learning this the hard way, as Microsoft did before them.

Now, consider Thomson Reuters. Surely, the media and information giant has competitors, like the company named for the guy who just bought himself a third term as New York’s mayor. Still, the European Commission has opened an investigation into potentially anticompetitive practices on the part of the company.

It seems that the EC doesn’t much like that Thomson Reuters doesn’t allow its proprietary Reuters Instrument Codes—which identify securities for banking and trading software—to be mapped to other companies’ proprietary codes, which do the same thing. And, the EC says in a statement, “without the possibility of such mapping, customers may potentially be ‘locked’-in to working with Thomson Reuters because replacing RICs by reconfiguring or by rewriting their software applications can be a long and costly procedure.”

Yesterday Lloyd Blankfein finally came clean to us re: who he works for. And I bet a lot of you probably then made what you thought was the logical conclusion that LB and his people were set for life, what with the Big Guy on their side, and could sit back and