$$$ Deals: Sprinting into the Future?
In our M&A Roundup for the week ended May 11, as "near deals" percolate, the two top transactions may foreshadow a bigger move involving Nextel. [CFO.com]

$$$ 2 Indicted in UBS Tax Fraud Case [NYT]

$$$ Walk of Shame [1-2]

Fortress CEO to analysts: We don’t call them “losses” [Reuters]

Supposedly Campbell’s decision to become one of the protesters rather than just report on them is raising a big discussion about rules of journalism and the proper roles of journalists. As most of you know, we’re terribly bored by such rules and roles. But we never get bored by watching Campbell.

After the jump, watch what happens when you leave the Street to join the mob. You get arrested.

“Goldman ranked first with $14 billion of announced deals to its credit this year, and Morgan Stanley ranked second with $11 billion according to investment-banking research provider Dealogic,” Moore writes. “But now, Goldman is in third place, displaced by Lehman Brothers and J.P. Morgan. Lehman has jumped from fifth to first place with $17 billion of deals to its credit, while J.P. Morgan — which, just yesterday, languished in seventh place with only about $2.2 billion of tech deals to its credit — has vaulted to second place in the rankings from seventh place. Morgan Stanley has fallen to No. 5.”

Citigroup and Evercore Partners advised Electronic Data on the deal. J.P. Morgan Chase and Lehman Brothers advised Hewlett-Packard.

Hewlett-Packard: The Advisers [Deal Journal]

It plans to do so with the launch of Blackstone Altius Advisors, an event-driven strategy based in Hong Kong, with staff in Tokyo, Mumbai, and New York, and focused on money making schemes on the left-hand side of the Pacific. Good to see no one over there’s holding a grudge. Though, to be fair, it’s been a while since the atrocities that Schwarzman made light of in Florida went down. That real test would be to have Schwarzman make some cyclone cracks in his next public appearance, and see if they have an effect on Blackstone’s (non-existent) business efforts in Myanmar (which you know he would probably call Burma, after making "Formosa" and "Peking" jokes).

Blackstone to Launch Blackstone Altius Advisors, an Asia-Focused, Event-Driven Investment Business [BusinessWire]

What certainly seems to be passing is our very brief age of anxiety. Those who have been predicting national disaster are a bit quieter. Even the worst fears of inflation resulting from the extraordinary rate cuts from the Federal Reserve seem to be receding with the expectation that interest rates will soon enough—perhaps by year’s end—begin climbing once again. Oppenheimer’s Meredith Whitney says there are more losses to be booked by brokerages but, by the logic of contrarian investing, the attention her every pronouncement gets is an indicator that there is little investment value left in shorting these institutions. This morning on Squawk Box even Jim Chanos, the notorious short seller, indicated that he might be backing off short positions in the financials.

There’s something unsettling about how orderly this has all been. How have we passed through what many have described as the worst crisis in American finance in recent memory with so little blood spilled on Wall Street? That question may seem crass to investors in Bear Stearns, to the holders of still frozen auction rate securities, to the legions of laid-off investment bankers. But the layoffs from this crisis have not come close to those we saw when the tech bubble popped. The holders of auction rates and even Bear Stearns shares have not experienced the pain of investors in the dot coms. To paraphrase a former Kansas senator, “Where's the panic?”

Guess who wasn’t at the lunch? If you answered “anyone from Bear Stearns” you’d be absolutely right. Now some are speculating that Bear Stearns may have been purposefully excluded because its fate was one of the topics of discussion.

“It doesn't seem credible that just about every major financial institution in the United States, except Bear Stearns, had a meeting about the most pressing issue of the day, bank liquidity, and the subject wasn't about Bear Stearns, who had rumors swirling about them since Monday,” Eric Salzman at the Monkey Business blog says.

What was discussed at the luncheon has not been revealed. Bloomberg News obtained Bernanke’s schedule and the list of attendees in response to a request under the Freedom of Information Act. But the timing seems is jarring. Rumors of liquidity troubles at Bear had prompted the bank to issue a denial the day before for the lunch. On the preceding Friday, one bank (which has not been identified) refused to make a short term loan of $2 billion to Bear. The meeting came hours after Bernanke announced plans to lend $200 billion of Treasuries in exchange for debt including mortgage-backed securities. Hours after the meeting every bank on Wall Street reportedly began refusing to issue credit protection on the debt of Bear. Two days later Bear Stearns chief executive Alan Schwarz would be forced to call Dimon to seek $30 billion in emergency funding.

Update: Was Bear left out because its top two men were out of town? If we recall correctly, Schwarz was down at the Bear Stearns Media Conference in Palm Beach around this time, and chairman Jimmy Cayne was flying out for a bridge tournament in the midwest.

Bernanke Lunched With Dimon, Rubin Before Bear Rescue [Bloomberg]

“We wish [Citi’s] management team all the best in their ambitious endeavors, but we fear [it] is past the point of fixing,” Whitney wrote. Does that not sound like a “Thank you and good night”? “You’ve been a great audience, but there’s really nothing left to say”? Where is she supposed to go from there? (She can't very well start recycling the dividend slashing routine at this point.) Obviously Whitney's grown weary of the 'group, and set her sights on a bigger challenge. We're thinking Merrill, but if you've got a better idea (JPMorgan), feel free to get it off your chest at this time.

Citi Is Beyond Repair [NYP]

Reuters source is “a person familiar with the situation” which we’re taking to mean someone at JP Morgan who spoke on the condition that the quote not be attributed to them.

There may still be additional hires, however, as this morning JP Morgan head honcho Jamie Dimon said only about three-fourths of the personnel decisions had been made. But it's not exactly like they're saving the best for last, so the folks who still haven't heard probably shouldn't get their hopes up.

“The remaining roughly 3,500 employees will learn their fates in the next two weeks. These staffers, mostly in technology and operations, and will likely see a lower percentage of job offers,” Reuters reports.

Not all of those offered jobs by JP Morgan are accepting them. According to our own sources familiar with the situation, many Bear employees have been offered jobs at JP Morgan at substantially lower levels—and lower pay—than they enjoyed at Bear. Some in highly regarded units of Bear have been swept up by other competitors.

JPMorgan offered jobs to 6,000 Bear staff: source [Reuters]

“California withdrew its proposal this month after many hedge fund industry officials suggested the lightly regulated investment funds could move to another state if California started regulating them,” DealBook reported this morning.

California is thought to have the largest concentration of hedge funds outside of New York, Connecticut and the Dallas area. California’s high-concentration of wealth and agreeable climate make the state very attractive to fund managers. But faced with the threat of extensive regulation, many could choose to relocate to states less prone to regulation.

“Yes, and they would take with them all those huge houses, big cars and taxes paid by hedge fund managers,” law professor Larry Ribstein explains. “California is used to having its regulatory way because many firms can’t avoid its market. But hedge funds can operate just fine without California.”

California’s surrender on hedge fund regulation nicely illustrates how federalism forces states to compete with each other, and can check excessive regulation. This is sometimes decried by critics of federalism as a “race to the bottom” but there’s little evidence to suggest that states are forced to lower regulatory levels on investment managers to below optimum levels. If investors desired more hedge fund regulation, hedge funds would have financial incentives to locate in states with greater regulations. Hedge fund investors, however, seem to doubt that they would benefit from new regulations that go beyond traditional legal strictures against things like theft and fraud.

California Drops Hedge Fund Proposal [DealBook]
Hedge funds and jurisdictional competition [Ideoblog]

BARTIROMO: You only had 48 hours to do the due diligence, correct?

DIMON: That's correct.

BARTIROMO: That had to be a huge risk.

DIMON: It's the last time I will ever do something like that.

CNBC's Maria Bartiromo Speaks Exclusively with JP Morgan Chase CEO Jamie Dimon on "Closing Bell" [CNBC]
JPMorgan CEO sees $1 bln gain from Bear deal [Reuters]

Oddly enough, the municipal bond unit, which is reportedly set to be shuttered by UBS, has been asked to "hold on" as the bank attempts to see if there are any buyers for the business, according to our source.

UBS could not immediately be reached for comment on the job cuts.

Losses at XM and Sirius as They Pursue a Merger (Reuters)
XM and Sirius really need to stop competing with each other. Approval from the FCC and a subsequent merger wouldn't eliminate competition -- after all there's regular radio, HD, radio and iPods. But they're still killing each other on the off chance that they may not be allowed to get married. Both continued the tradition of heavy losses yesterday, although Sirius is obviously the strong one, having posted much higher growth and lower costs. But again, still not even close to profitability.

Société Générale’s First-Quarter Profit Drops 23.4% (NYT)
It's been rough at Soc-Gen but it could be worse. At least analysts had been looking for something a bit worse than what the battered bank reported. At least they made a profit, for one thing, which can't be said for all of its peers. And at this point, the Kerveil thing seems to be ancient history. Good for them. Too bad for us.

Are Polar Bears Really an Endangered Species? (American)
Apparently it's not a trivial question. President Bush has to decide by Friday whether or not to put them on 'the list', and if he does then it could prompt all kinds of debate about whether global warming is leading to their extension (like if a glacier melts do they fall into the ocean?) and then that leads to some energy policy issues. Somehow we can't imagine it'll really be that big of a deal either way. No doubt there are plenty of school children whose teachers have made them write letters to Bush urging him to put polar bears on the endangered species list. But doubtful that his decision will have much of an effect on the course of history.

Retailers dropping like flies (Oligopoly Watch)
Wal-Mart might be doing okay, but here's some counterpoint. This has been a bad year for several retail chains, which have been joining the ranks of the bankrupt that might make the airlines blush. Ok, not that bad, but still. Some ones to have declared: The Sharper Image, Fortunoff, Bombay and Company, Wickes Furniture, Lilian Vernon and Linens 'n' Things. And then there are several others teetering on the brink. One issue according to Oligopoly Watch: "As has often been pointed out, there is an obscene excess of retail space in the US, and while Americans like to shop till they drop, they are now dropping." Another reason: "Do and did anyone ever buy anything from The Bombay Company? Just asking." Right on.

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

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