JPMorgan Reports $3.6 Billion Profit For Third Quarter (BW)
Sayeth Jamie Dimon: “”Our net income of $3.6 billion in the quarter reflected the strong earnings power of the company, with broad-based growth across the Investment Bank, Asset Management, Commercial Banking and Retail Banking. However, credit costs remain high and are expected to stay elevated for the foreseeable future in the Consumer Lending and Card Services loan portfolios. Accordingly, we have added $2.0 billion to our consumer credit reserves, bringing the firmwide total to $31.5 billion, or 5.3%1 of total loans. Tier 1 Common Capital, another key element of our fortress balance sheet, was also strengthened through capital generation during the quarter, to $101 billion, or 8.2%.”

Wall Street On Track To Award Record Pay (WSJ)
An estimated $143,400 on average, up almost $2,000 from 2007 levels.

BofA Emails Show Pique at U.S. Over Dividends (WSJ)
Some emails show that apparently a few people at BofA weren’t happy with the government’s request to “screw shareholders.”

Who Wants A RBS Branch? (FT)
The bank has 300 or so to give away.

Blackstone See “More Than Green Shoots” Of Recovery (Reuters)
“We can certainly do transactions in the $3-$4 billion range at this stage in the cycle,” Stephen Schwarzman said yesterday. “And with low leverage involved, deals of that size can use in excess of $1 billion equity.”

Geithner Aides Reaped Millions Working for Banks, Hedge Funds (Bloomberg)
Gene Sperling got $887,727 from Goldman Sachs and $158,000 for speeches mostly to financial companies (including Allen Stanford’s firm) last year; Lee Sachs, reported more than $3 million in salary and partnership income from Mariner Investment Group.

Kitchen worker among AIG staff who received ‘retention bonuses’ (FT)
$7,700 in cash. And Ken Feinberg wants it back.

One-Third of Wall Street Workers Expect Bigger Bonus This Year (Bloomberg)
About 36 percent of the 1,074 people who responded to an e-mailed poll by eFinancialCareers.com said they are anticipating a bigger annual payout from their companies and 11 percent said it will jump by at least half. Oh, and FYI: “This finding may rile regulators who have concluded that compensation arrangements often created incentives for risk- taking with insufficient regard to longer-term risks,” the company said in the statement.

Pay Czar Targets Salary Cuts (WSJ)
It’s not clear what portion of an employee’s salary will be diverted to stock but a person familiar with the matter said that in some cases it could be more than 50%.

Wall Street Cedes To Bay Street As Canada Banks ‘Play Offense’ (Bloomberg)
“The profile of the Canadian banks on the global scale has been heightened exponentially over the course of the last year,” said Rose Baker, a managing partner in Toronto with executive recruitment firm Heidrick & Struggles International Inc. “They look more powerful and are able to attract talent that was historically not available to them.”

Société Générale plans €4.8bn capital-raising (FT)
The frogs: they’re just like us. They want the government out of their business. (SocGen said it would use the money to repay the government’s €3.4bn capital aid, of which half is in the form of preference shares and the rest a subordinated loan.)

Saudi Bank Governor Denies Talks to Replace Dollar (Bloomberg)
The Independent report is “absolutely incorrect” and there has been “absolutely nothing” of that nature discussed between Saudi Arabia and other countries, Saudi Central Bank Governor Muhammad al-Jasser told reporters in Istanbul.

BofA To Select Emergency CEO (WSJ)
Bank of America is expected to pick someone this week to potentially take over the event Ken Lewis “is forced to step down” before the end of the year, so if you’ve got any suggestions, do share. Also: “Government officials are expected to tell the bank if they don’t approve of specific names, essentially giving the U.S. government informal veto power.”

Goldman To Be Paid 1 Billion If CIT Fails (FT)
Others (the US taxpayer, not so much): “The payment stems from the structure of a $3bn rescue finance package that Goldman extended to CIT on June 6 2008, about five months before the Treasury bought $2.3bn in CIT preferred shares to prop it up at the height of the crisis. The potential loss for taxpayers would be the biggest to crystalise so far from the government’s capital injection plan for banks.”

Gang Of Nine Tales
Neil Barofksy: Paulson lies!!!

Roubini Says Stocks Have Risen ‘Too Soon, Too Fast’ (Bloomberg)
“Markets have gone up too much, too soon, too fast,” Roubini said in an interview in Istanbul on Oct. 3. “I see the risk of a correction, especially when the markets now realize that the recovery is not rapid and V-shaped, but more like U- shaped. That might be in the fourth quarter or the first quarter of next year.”

Lehman Creditors To Get Payout Plan (WSJ)
The administrator for Lehman’s operations in London plans to seek permission to remove the claims from U.K. courts and dole out assets directly to creditors, if enough hedge funds are willing to go along with the move.

Sheila Bair Turns Up The Heat In Istanbul (NYP)
The FDIC chair said she wants to regulate not just banks but hedge funds as well, and then turned heads in a plunging neckline later that night.

HSBC chief fears a second downturn (FT)
“Is this a V recovery or a W?” Mr Geoghegan asked in an interview with the FT. “[I think] it’s the latter. [If I’m right], we have to be very careful we don’t grow the balance sheet so far before the recovery has come only to write it back into the impairment line later on. I’m cautious about growing too fast.”

Ken Lewis’ Farewell Letter: “Not For the Faint of Heart” (DJ)
A few thoughts from the (soon-to-be departing) CEO.

1. This year’s annual Labor Day weekend trip to the mountains wasn’t as relaxing as usual.

2. It feels pretty great to see that some people, whose names I can’t recall, are finally coming around to realize the genius of the Merrill Lynch acquisition.

3. I had other offers from better banks before joining BAC but choose to pass them up.

4. This has nothing to do with Andrew Cuomo.

5. And finally:

Most important to me is this: I will leave knowing that almost anywhere I go in this country, I’ll be able to walk into a Bank of America banking center and receive a warm greeting. I will be able to travel the world, and visit towers full of bright, energetic associates creating financial solutions for companies of every size and shape.

Everywhere I go, I will know and see that the company I had the privilege to serve for 40 years is in good hands…Thank you for allowing me to lead the greatest financial services company in the world.

JPMorgan Hopes To Heal New York-London Laceration (WSJ)
Apparently the New York team “second-guessed” a decision by the London team last summer leading to a very dramatic-sounding trans-Atlantic row that pitched Bill Winters and Steve Black against one another. Then they started bitching to their colleagues, they made up before Daddy Dimon could find out what happened, but the tensions between NY and the chippies across the pond are still there yadda yadda yadda, it’s now Jes Stanley’s job to stroke everyone’s hair and make things better over chamomile tea.

London Begins To Lose Appeal For Hedge Funds (FT)
London’s share of the world’s hedge fund assets fell 2 percentage points in 2008, while New York’s portion grew the same amount.

Has Michael Vick Been Resigned With Nike? (CNBC)
The company won’t comment at this time but bark twice if it’s a yes.

Debate Heats Up Over Naked Short-Selling (Dealbook)
“There is good evidence to say that Bear Stearns went down due to abusive short-selling,” Senator Ted Kaufman told DealBook. “I think all the folks that were involved and made money off that event are still around, and we have done nothing, nothing, nothing to change the system.”

HFT: Samantha Bee Would Like A Piece Of This Action (CC)

For Gorman, A Test Of His Leadership (WSJ)
Mackettes, your new Aussi overlord wants you to get up in his face and mix it up: “He is very straight with people, and you always know where you stand,” said Gregory Fleming. During a speech at Merrill, Mr. Gorman told a group of investment bankers not to be shy about approaching CEOs. “They will always have time for you if you have a good idea,” Mr. Fleming recalls him saying.

The Fall Of Mack (NYP)
Noted mean girl Dick Bové had this to say of the Knife stepping down: “[Mack] zigzagged so many times and he increased the instability in a company that was already reeling from instability.” She also doesn’t know why Phil Purcell wasn’t seriously considered as a successor.

Prosecutors Are Poised To Impanel AIG Grand Jury (WSJ)
Joe Cassano is focus of probe as authorities try and find a distinction between ‘criminal’ and ‘idiot.’

Wells Fargo exec used Malibu Colony home lost by Madoff-duped couple (LATimes)
So this happened, in an admittedly pretty sweet house: Neighbors said the family of [Cheronda Guyton, a Wells Fargo senior vice president who is responsible for foreclosed commercial properties] spent long weekends at the home and had guests over, including a large party the last weekend of August that featured a waterborne arrival. “A yacht pulled up offshore, with one of those inflatable dinghies to take people back and forth to the shore,” said Roman’s wife, Elaine Johnson. “About 20 people got taken over in the dinghy.”

SEC Vows To Reorganize Unit To Head Off Fraud (AP)
You already knew the regulator was deadly serious about getting things right this time, what with the founding of Fraud College, and now Robert Khuzami, the head of the S.E.C.’s enforcement division had this to say: “We intend to learn every lesson we can,” he said. “There are no sacred cows.”

In Europe, Blankfein Assails Pay (WSJ)
LB totally gets the anger over comp and said that multiyear guaranteed employment contracts “should be banned entirely.” He is also all for a “robust sharing of information” among regulators.

London Suicide Connects Lehman Lesson Missed by Hong Kong Woman (Bloomberg)
Uh, apparently we’re putting actual blood on Dick Fuld’s hands now? Okay: “Yu Lia Chun, a retired hospital orderly in Hong Kong, never heard of Lehman Brothers Holdings Inc. before she got a call last September from her banker. “He said, ‘Did you hear the news? Something has happened to Lehman,’” Yu, 66, recalled in an interview in June. “I didn’t get it.”

Yu, who has a sixth-grade education, said she thought her money was in a savings account. She didn’t know she had lent it to a bankrupt American securities firm. Eventually, she found out that her HK$1.2 million ($155,000) nest egg was gone. Her children lost another HK$3.8 million because Yu had persuaded them to make similar investments. “There is no way a person like me could understand any of this,” Yu said, dabbing her eyes with a tissue in a coffee shop in Hong Kong’s financial district. “Sometimes I feel like jumping off a building.” “

GM’s Board Said to Recommend Magna as Buyer of Opel (Bloomberg)
This pleases the Germans greatly.

Judge Orders UBS To Set Aside $35 Million In Hedge (WSJ)
What the judge doesn’t get is that in Switzerland calling a CDO “crap” and/or “vomit” doesn’t have the same negative connotation as over here.

The Madoff Tape: How Bernie Coached Others To Fool The SEC (ABC)
“They ask you a zillion different questions and we look at them and sometimes we laugh, and we say are you guys writing a book?” Madoff says in a phone call from 2005. “You know, because these guys they work for five years at the commission then they become a compliance manager at a hedge fund now.”

Meredith Whitney: Goldman Has “A Lot Of Gas In Its Tank” (CNBC)

Closely Watched Buffett Recalculating His Bets (NYT)
“It has been an incredibly interesting period in the last year and a half. Just the drama,” Mr. Buffett said. “Watching the movie has been fun, and occasionally participating has been fun too, though not in what it has done to people’s lives.” Basically, if you like starring in snuff films, you probably had one helluva year.

Harvard Signs On For A New Line Of Upscale Clothing (NYT)
Everyone knows Harvard needs cash but the question this morning is, was lending its name to a clothing line that seeks to “combine the power of Harvard with the power of a plaid shirt” the step just before the school starts S’ing D for money or after? (Please note how defensive those contacted for the story seem to get as though they know they have something to be ashamed of.) And would you wear the button down and blazer modeled by the fellow at left? What if you had a gun held to your head?

Swiss Deal With IRS May Hide Some Tax Cheats (NYT)
Stay strong: “They understandably trying to spook people into coming forward,” Mr. Rosenbloom said. “I doubt that strategy works for large account holders, particularly in a world where they will receive notice from UBS in advance of a disclosure. They will, of course, wait to see whether that notice arrives. And I suspect some will escape the filters.”

What It Takes To Buy Madoff’s Beach House (Fortune)
A stomach for hideous design and a heart of gold. “Whoever buys this home will help reap benefits for the victims,” insists Corcoran broker Joan Hegner.

Greenspan: US Banks Need To Have Higher Capital (Reuters)
“I think even in non-euphoria, non-crisis times, we need to have a larger buffer than we currently have,” Big Al told a Mumbai conference yesterday via satellite, meaning if you panned down you’d see that McG was in the tub.

SIPC Says Stanford Victims Are Outta Luck (NYP)
This is making some people very angry , though it’s unclear what they’re going to do about it. I think we all know what the big man would do about it, which starts with a ‘p’ and ends with a ‘unch you in the mouth.’

Bonus Fever Continues Among UK Bankers (WSJ)
Many chippies expect their bonuses to be larger in 2009 than in 2008 (without a change in pay structure), with 27% of those keeping their fingers crossed anticipating an increase of more than 51%. This is all based on a poll of wishful thinking, and may or may not actually mean anything.

Will AIG Reign In Its Brash CEO? (WSJ)
For the love of God please say no, or at least not til after the words “I’m gonna bust that guy’s knee-caps” in reference to Cuomo are uttered. (BTW, it took two people to write this article, which includes a flow chart.)

Allen Stanford Has Surgery (Houston Chronicle)
He’s recovering nicely, which is less than we can say for the orderly who got punched in the mouth.

Pot ‘Plantations’ On The Rise (WSJ)
“Authorities have discovered pot farms in 61 national forests across 16 states this year, up from 49 forests in 10 states last year. New territories include public land in Colorado, Wisconsin, Michigan, Alabama and Virginia…So far this fiscal year, which ends Sept. 30, federal agents have raided 487 pot farms on forest-service land, where they destroyed 2.6 million marijuana plants, seized 138 firearms and made 369 arrests on felony drug charges.”

Edinburgh Hedge Funds Feel Madoff Effect as Clients Get Pickier (Bloomberg)
All of a sudden people are demanding shit like disclosure.

Cerberus To Ban Withdrawals From New Funds (Reuters)
Going with the three year lock-up this time around, after the whole $4.77 billion in redemptions situation.

Ex-Lehman Trader Bedwick to Manage OGI Global Macro Hedge Fund (Bloomberg)
You’re gonna wanna get some of this.

Spitzer’s Babe Backs Run For Office, Slaps The Snobs (NYP)
Ashley Dupre (or, you know, someone else) wrote this (and more) so much awesomeness on her blog last night: “I read the front page of the NY Post this week and was happy to see that Mr. Spitzer is moving on with his life and considering getting back into politics. Everyone makes mistakes. Everyone deserves a second chance. Me too, right? Well, apparently not. Why? Because many people are liars and hypocrites. Let me give you just a few examples of what I keep encountering, despite my best efforts to move on…ladies, ladies, ladies - so many of you have been cool, supportive and loving. But there are those of you out there who just love to judge. Let me say this - most girls, to varying degrees, of course, want to be pampered and have nice shoes, designer handbags and gorgeous clothes. I know many women who target guys with money and use them to get these things. They toy with them, flirt, go on dates, have sex and then drop hints about that new dress at the store down the street or being short on rent money - and the guys deliver it. This is a dishonest relationship. I see this all over New York City. Some women aren’t as vindictive, but still dive into relationships with wealthy guys who they don’t love or even find attractive, but they stay in it because they have a nice home, a car and spending money - they would rather stay in an unfulfilling or loveless relationship than lose that security. This, too, is a dishonest relationship. I see this type all over the suburbs of New Jersey with the housewives who are strung out on mood stabilizers or the couples who put all their attention on their chil dren so they don’t have to deal with their own issues.”

Then she promoted her new single, “Inside Out.”

Lehman Claims Could Reach $100 Billion (Reuters)
The majority coming from Joe Gregory. Kidding (kind of) but seriously: PWC says it’s gonna be huge.

Cerberus to Raise New Distressed Funds (Bloomberg)
According to chief operating officer Mark Neporent, the requests to pull $4.77 billion came from other managers who needed to provide liquidity to their investors, meaning it had nothing to do with Cerberus and wasn’t one of those “lack of confidence” situations. Therefore: you should not hesitate to fork over cash for the new funds.

Barney Frank Said To Back Broader Fed Audits (WSJ)
According to Ron Paul. “Barney told me, ‘It’s going to come. You’re going to get what you want,’ ” Mr. Paul said.

Swiss Banks Expect To Avoid Witch-Hunt (FT)
They haven’t been promised anything but are hopeful, the alternative involving latex gloves. Boris Collardi, chief executive of Julius Baer, said: “I don’t want to say we’re relaxed but we’re prepared. There may be some requests for information [from tax authorities] but I don’t think we face the risk of another John Doe summons. It’s like we’ve been driving in a 60kph zone and after you’ve passed it, someone tells you it was 30. The interpretation of the rules has changed. It’s a very unpleasant position to be in, but the most important thing is that we won’t compromise on fishing expeditions or banking secrecy.”

Preaching The Gospel Of Momentum (Barron’s)
Barron’s: You employ about 200 people. But none of them do fundamental research and follow companies like General Electric or Nestlé, right?

Asness: It’s actually just me and David [Kabilllar] and one really big computer.

As Disposals Slow at AIG, ILFC Chief Makes Pitch (WSJ)
Steven Udvar-Hazy to possibly step up to the plate and buy about $2 billion of the company’s aircraft portfolio (and start a rival business).

Scavengers scan beaches seeking valuable trinkets (NYDN)
Your new revenue stream?

Woman Hires Hitman For Just $200 (CBS12 via BI)
$100 up front, $100 after the job got done.

The Flash-Trading Thorn In NYSE’s Side (WSJ)
Goes by the name William O’Brien.

Feinberg to Formally Approve AIG CEO Pay Next Week (Reuters)
Benmosche (still on vacation?) will likely get the green light for his $7 million a year salary. Meanwhile, the Compensation Cop has not yet been convinced that Andy Hall, pouting in his German castle, “really wants this.”

Hedgie Paulson Mad About Citi (NYP)
JP has allegedly acquired a two percent stake in Vikram’s funhouse.

US Court Rejects TurboTax Defense (Bloomberg)
Good enough for Tim Geithner apparently does not fly for a couple of bros in Ohio: “Petitioners were not permitted to bury their heads in the sand and ignore their obligation to ensure that their tax return accurately reflected their income,” the court said in an opinion issued yesterday. “In the end, reliance on tax return preparation software does not excuse petitioners’ failure to review their 2006 tax return.”

Treasury warns regulator off financial tax talk (Reuters)
The Treasury warned the chief financial regulator on Thursday to stay out of taxation policy after he said he would support higher taxes on the financial services industry.

A Treasury spokesman said taxation was “a matter for the Chancellor (finance minister)” after Adair Turner, chairman of the Financial Services Authority, said he would back “special taxes” on banks to rein in their activity.

Economic Crisis Strikes Irish Heartland (WSJ)
The Gaelic Athletic Association needs warm bodies.

Stanford’s Private-Equity Stakes to Be Sold (Bloomberg)
And Sir Stan is not happy about it, though really the only recourse he has is to bitch and moan like an impotent prick via his lawyer.

Blackstone Gem (NYP)
Steve Schwarzman’s unit grew 25 percent to $25 billion through the first half of the year, beating HSBC and Man Investments, whose assets dropped 52 and 46 percent, respectively. Crab Hands for everyone.

James Paulsen Sees A Sweet Spot At The 5 Minute Mark (CNBC)

Judge Rips SEC On BofA Pact (WSJ)
Rakoff: “Whatever this chain of vague expressions may mean, if it is intended to suggest that Bank of America settled this case to curry favor with the SEC or to avoid retaliation by the SEC, the Court needs to know the specifics.”

Sen. Edward Kennedy Dies After Battle With Cancer (WSJ)
Pour one out for T-Bone tonight.

The Ex-Banker Living On Alcohol, Hook-Ups, And Unemployment (NYM)
“Dinner with one of my old men. I am currently dating a few to finance my Manhattan meal plan. I promised myself the liquid diet, but not when you are having a free fabulous dinner at Del Posto. Mumble an excuse after dinner about not feeling well and having to call it an early night.”

Elle Macpherson Can’t Counter London Gloom as Americans Flee (Bloomberg)
Andrew Wesbecher is one of the many Americans escaping high taxes and a shrinking financial industry across the pond even though Elle is one of his neighbors. Of course, he might’ve stayed put if Arki Busson’s ex had done the neighborly thing and invited him over for tea and whatnot but no matter. According to Mark Tilden, “Expats feel the tone has changed; it’s less welcoming. London’s ability to attract talent has gone down.”

Citadel Cuts Name From Unit (WSJ)
Citadel Solutions LLC will become Omnium in order to “boost the perception that its fund-administration arm is managed independently from its hedge-fund business, employees of the firm have told people.”

April Thank You From Obama Started Embrace of Bernanke at Fed (Bloomberg)
Apparently Obama always liked Bernanke just fine, but he really started taking a shining to the guy on Good Friday, and it was his idea to wear matching outfits to yesterday’s press conference.

Goldman’s Trading Huddles Called Off Sides (NYP)
William Galvin: “We want to know everything that occurred in the trading huddles and how it was disseminated.”

Goldman’s Trading Tips Reward Its Biggest Clients (WSJ)
Shocker (or not at all): “Every week, Goldman analysts offer stock tips [to about 50 favored clients…including Citadel Investment Group and SAC Capital] at a gathering the firm calls a ‘trading huddle.’ But few of the thousands of clients who receive Goldman’s written research reports ever hear about the recommendations.”

UBS Faces Gruebel Gloom Until 2011 as Withdrawals Curb Recovery (Bloomberg)
Why will no one trust the Swiss bank? Why is everyone acting like it did something wrong? WHY?

UBS Chairman Says Clients “Not Harmless Victims” (Reuters)
Kaspar Villiger: “Sure, now that tax evasion being viewed as ‘illegal’ they’re all ‘this is an outrage’ but at the time? They were sooo into it.”

Nouriel Roubini: The risk of a double-dip recession is rising (FT)
Doom: “There are also now two reasons why there is a rising risk of a double-dip W-shaped recession. For a start, there are risks associated with exit strategies from the massive monetary and fiscal easing: policymakers are damned if they do and damned if they don’t. If they take large fiscal deficits seriously and raise taxes, cut spending and mop up excess liquidity soon, they would undermine recovery and tip the economy back into stag-deflation (recession and deflation).”

Harvard Endowment Regroups (WSJ)
“We are looking to have a greater portion of our assets managed internally over the next few years,” Jane Mendillo, Harvard’s investment chief, says. “That will allow us to be more nimble, have better transparency into the portfolio and have more liquidity.”

Now Pitching: A Hedge Fund (NYP)
Lock you money up with TODD Stottlemyre, and if you can’t meet his minimum, Lenny Dykstra’s offer to manage whatever cash you’ve got in your wallet is still on the table.

Plain Talk From Judge Weighing Merrill Case (NYT)
Apparently we’re still talking about those bonus payouts and whoever approved them is going down.

California to get $1.5-billion loan from JPMorgan Chase (LATimes)
Jamie Dimon helps Arnold end IOU program a month early, with money repaid in late September.

Multiple Explosions In Baghdad Kill At Least 75 (WSJ)
“The officials said the deadliest blast was a car bomb near the foreign ministry, which killed at least 48 and wounded more than 240. They said the toll may climb as rescue workers continue to search through rubble and debris. The ministry is close to the fortified Green Zone. The officials all spoke on condition of anonymity because they weren’t authorized to release the information.”

The Greenback Effect (NYT)
Warren Buffett: “But it was a wise man who said, “All I want to know is where I’m going to die so I’ll never go there.” We don’t want our country to evolve into the banana-republic economy described by Keynes.”

Freddie Mac Names New Chief Operating Officer (Reuters)
Bruce Witherell, come on down!

More Banks In Europe Identified In Tax Probe (WSJ)
Credit Suisse Group AG, Julius Baer Holding AG, Zürcher Kantonalbank and Union Bancaire Privée. UBS, you are not alone!

U.S. Says Building Criminal Cases Against UBS Clients (Reuters)
At least 150 tax evaders are going down.

Amanda Drury Will “Happily Go Down Under” With Joe Terranova (CNBC)


2:25, the offer is made.

Shanghai Mayor Sees Bankers Bereft of Conscience (Bloomberg)
“Financiers have the least conscience in the world when it comes to making money,” Han, 55, said in an interview. “By saying that, I would have offended many bankers and financiers, but this is my personal experience.” Sing it, sister.

UBS tax deal may pave way for bank’s recovery (Reuters)
An interesting theory out today is that by simply handing over the names of the clients it helped avoid pay taxes, the Swiss bank’s name and “image” will no longer be tainted, and that people will stop leaving the comment “UBS sucks” on every post mentioning it.

Supreme Court To Hear Case On Executive Pay (NYT)
Jones v. Harris Associates, this fall, re: doling out huge bonuses, while one’s company bites the big one. Judge Richard Posner had this to say last summer, which no doubt pleased Eliot Spitzer greatly: “Executive compensation in large publicly traded firms often is excessive because of the feeble incentives of boards of directors to police compensation.”

Jury Finds Butler Did It (NYP)
Ex-Credit Suisse broker Eric Butler, possibly going to jail for 45 years, cried after being convicted of securities fraud.

‘Terminator’ Producers File Suit Against Hedge Fund Backer (Media Decoder)
For the love of god tell us another one of these is about to come out. It’s August, and we need this.

Regulators Were Told Of Stanford Fraud, Investors Say (Reuters)
“These agencies along with Stanford have robbed me of my American dream,” Craig Nelson, a 55-year-old resident of Magnolia Springs, Ala., testified at a Senate Banking Committee field hearing. We could’ve had a Coach reunion if you worthless bastards had done your jobs! (Don’t even with the “it’s a different Craig Nelson. The SEC knows exactly what we’re talking about.)

Few Gender Differences In A Recession (WSJ)
“A new study, on women with MBAs, being published in the Harvard Business Review, found men and women were roughly equally likely to be promoted or laid off. Among men, 36% were promoted and 10% lost jobs; among women, 31% were promoted and 12% lost jobs. The authors said the differences weren’t statistically significant.”

London Bankers’ Pay Rises 6% in July (CNBC)
The average salary paid to financial sector workers in London rose to 53,223 pounds ($87,220) in July, up 6 percent from June but down 1 percent from a year ago, recruiters Morgan McKinley said. Also, managers are looking for people with “multiple skill sets.”

Madoff Man Dodges Drug, Gun Charges (NYP)
Attention to anyone intimately involved in the Madoff scam yet to confess— do it and the feds will promise not to go after you on stuff like “”use of controlled substances” and possessing illegal firearms. Frank DiPascali knows what we’re talking about.

Merrill Ramps Up Recruitment Program (FT)
Industry recruiters and people within the company say Merrill Lynch Global Wealth Management is offering signing bonuses of 140 percent of the previous 12 months’ “production” to lure top advisers, and another 200 per cent over the next five years if the advisers hit aggressive growth targets. “That’s more than they’ve ever offered,” said one recruiter. “It’s huge.”

Blackstone’s Schwarzman Tops Best-Paid Chiefs With $702 Million (Bloomberg)
The package for Schwarzman included $2.3 million of compensation and almost $699.8 million from the vesting of one- quarter of the equity granted as he took the firm public at $31 a share in 2007.

Pimco’s Bill Gross Pays $23 Million in California (WSJ)
The bayfront Newport Beach manse, which had been listed for $26 million, includes a 1979 Georgian home of 11,000 square feet with nine bedrooms and 12 baths all of which Billiam plans to tear down.

Krawcheck Buys $1 Million Bank Of America Stock (Reuters)
Another round for everyone, says Ken Lewis, still down at the bar celebrating Paulson getting on board this bitch.

Airlines to Require More Passenger Data (WSJ)
Please have your sperm samples ready before boarding.

Dollar Dominatrix Acquires Broker-Dealer (Reuters)
Meredith Whitney: “We are excited to complete the acquisition of the broker-dealer in such a timely manner. This acquisition will broaden the scope of our services and capabilities to our clients greatly and we look forward to this new addition to the platform.” Now, administer the testicle clamps!

Tax-Cheat Showdown: Fess Up or Stay Quiet? (WSJ)
Would you come clean on your own or risk being exposed by the authorities and having to sully TurboTax’s good name on CSPAN, as a for instance?

Madoff Had Affair With Ex-Hadassah Finance Chief, Her Book Says (Bloomberg)
Did Bernie Madoff run around on Ruth? The girls who dispensed In addition to the massage parlor handies aren’t talking but some lady named Sheryl Weinstein, who’s writing a book, says yes. In addition to allegedly screwing Weinstein manually, Bernie-boy also ripped off her and her husband, Ronald, who were Madoff investors left with pretty much nothing. Bonus: the tell-all will supposedly include photographs, i.e. crotch shots of Big B.

Huge Bonus Hangs Over Pay Review (NYT)
So far the only thing Citi has come up with re: convincing the Compensation Cop that it should be allowed to pay Phibro trader Andrew Hall his $100 million bonus is that the contract was signed prior to the government announcing it’d be getting involved in this shit. This would be because everyone staffed with figuring out how to get Andy his clams is an unimaginative fuck. Treasury officials have apparently noted amongst themselves that they’d sooner give Vikram the go-ahead to build his $10 million zen garden than let Hall have his money.

Lehman Sues AIG For $9 Million In CDS Payments (Reuters)
Lehman alleges that AIG is using the bank’s failure as an excuse not to make payments, and that this violates U.S. bankruptcy law.

Citi hires external help to probe management (FT)
Naturally it was Sheila Bair and Co who required the C-izzle to pay Egon Zehnder to put on the rubber gloves and check out what Vikula’s got going on under the hood.

Apartments To Rent: $2 Billion (NYP)
“The bill, which is called the TARP for Main Street Act and was sponsored by House Financial Services Committee Chairman Barney Frank (D-Mass.) and Rep. Nydia Velazquez (D-Brooklyn and Manhattan), would use TARP funds that have been returned by banks and plow it into programs that, according to the bill, would create “sustainable financing” for the complexes as well as provide funding for property rehabilitation.”

John Paulson bets on BofA with 2% stake (FT)
How do you like Ken Lewis now, Ken Lewis wonders from a water hole down the road upon hearing the joyous news, before buying rounds for everyone and putting it on his “new friend in Connecticut.”

UBS and US Strike Tax Evasion Deal (FT)
5,000 names will probably be revealed. In addition to having the scarlet ‘T’ for tax evader and also Tim Geithner stamped on their chests, the clients will likely be forced to pay “a big fine.”

SEC Charges Coming For Pequot, Samberg (NYP)
Art intends “to defend the matter vigorously.”

University of Pennsylvania Endowment Beats Harvard With Stocks (Bloomberg)
Give it up for the Quakers, who managed to suck less than their Cambridge counterparts: “The Philadelphia university’s stocks outperformed market indexes, said Kristin Gilbertson, chief investment officer of the fund. Penn’s endowment fell 16 percent in the year ended June 30 to $5.2 billion, better than Harvard’s estimated 30 percent decline and the 26 percent loss for the Standard & Poor’s 500 Index, including dividends.”

Atticus Closes Flagship Fund (FT)
Atticus Capital’s Barakett is stepping down from his role as Manager of the fund, which has roughly 3.5B in assets. FT says his decision was “purely personal” and had nothing to do with the fact that the fund was off its high water mark.

DiPascali Admits To Madoff Fraud, Judge Denies Bail (NYT)
Frank DiPascali, the Queens kid, pled guilty to 10 counts of fraud and admitted to knowing the whole thing was a sham from the beginning. He detailed for the judge how he and the big M created wire transfers from the London to the NY office to make it look like they were earning commissions, and how they created fake account statements. Judge Sullivan ended up pulling the plug on DiPascali’s bail though, claiming that the cash involved vs. the 125 years he was facing amounted to little more than an honor system.

Ackman Easing Interest In Target (NYPost)
Shortly after Ackman’s attempt to upend Target’s board it looks like the Manager may have started dumping his positions; his exposure has dropped from 7.8% to 4.4%.

JP Morgan Looking To sell 23 Office Properties (WSJ)
On the list: One Chase Manhattan Plaza, and Four New York Plaza, as well as the former WaMu headquarters in downtown Seattle. All in all it will include 7.1MM square feet of space.

HSBC Lays Off 90 in UAE (B24-7.ae)
This is dangerous for several reasons, not the least of which is the debtor’s prison the UAE still boasts. Hopefully the company got word to the employees in ample time, if not, Godspeed.

FSA Rules To Reign In Bonuses (Bloomberg)
The FSA has moved to kill banking in the U.K. as the combination of higher taxes and death to bonuses will surely send top talent off shore.

ING Profitable After Three Quarters (NYT)
Looking to show up their Swiss three letter counterpart, the Dutch bank posted a profit of $100MM. Sure, it was down a couple of billion from the year before, and still missed analyst estimates by some two hundred million, but they beat UBS, damnit. That counts for something.

China Arrests Rio Employees (FT)
“Chinese prosecutors have formally arrested four Rio Tinto employees on suspicion of obtaining trade secrets and commercial bribery, making it more likely the highly-politicised case will be brought to trial.”

Judge Questions Merrill Bonuses (NYT)
“A week after the Securities and Exchange Commission announced that it had settled the matter, Judge Jed S. Rakoff questioned whether the $33 million agreement with Bank of America was adequate. He refused to approve the deal, saying too many questions remained unanswered, including who knew what and when about the controversial payouts.”

Distressed Debt Deals On The Rise (Reuters)
At $84.4B, distressed-debt deals are on pace to double last year’s numbers.

Stanford Can’t Get Money To Mount Legal Defense (NYPost)
There stands a decent chance the government has the money tied up to the point that Stanford will effectively be getting a team of public defenders.

Despite Negative Revenue, UBS Making High Profile Hires (Bloomberg)
The marginally less client friendly Swiss bank is building out its teams in the downtime, having picked up more than 20 bankers from the competition. No mention of comp plans.

Toxic Assets May Need More Help (Reuters)
The Congressional Oversight Panel is looking for stress tests on the smaller banks/institutions to assure they’re not functionally inept, and wants capital support much in the same way it was available to the larger institutions.

Asia Showing Slow Climb Out Of Recession (NYT)
China released its economic numbers today, showing industrial output raising 10.8% and retail sales up 15%.

New York Fed In Hiring Spree (FT)
“The Federal Reserve Bank of New York is aggressively hiring traders as it seeks to manage its burgeoning securities holdings, making the central bank one of Wall Street’s most active recruiters of financial talent.”

The Annual Review of Wall Street Pay (NYT)
Compensation numbers of the top 25 are due in by Thursday, after which, Feinberg will be doing his annual review of who-makes-too-much-loot. Once everything is reviewed and the big F decides who to chastise and who to let be, I don’t see the media getting nearly the response they did on this topic in recent years/quarters/months; the wholehearted flogging of salaries as a subject reached its high water mark and I think it’s safe to say people are fairly sick of hearing about this shit.

JP Morgan To Buy Back Warrants In Public Auction (NYPost)
“Unlike the other major banks, which gave warrants to the federal government in exchange for billions in capital under the Troubled Asset Relief Program, JPMorgan is expected to have its warrants sold in a public auction that would be run by the US Treasury. Warrants grant their owners the right to purchase shares at a discount sometime in the future.”

U.S. Economy May Be On The Brink Of Recovery (Bloomberg)
“”We may have hit stability, we may be in the beginning of an upturn” based on the latest economic data, Tyson, a member of the White House’s Economic Recovery Advisory Board, said yesterday during an interview in Kuala Lumpur. Nobel Prize- winning economist Paul Krugman said the deepest slump since the Great Depression may be ending.”

The Business Of Pleasure (CNBC)
CNBC will be continuing its in depth porn coverage tonight at 10.

Banks Make $38B From Overdraft Fees (FT)
Banks are likely to take a PR hit for charging the average American consumer too much to withdraw money they don’t have; I can see that there’s an argument here to be had from both sides. While anything above $30 seems ludicrous, there has to be sufficient incentive for people not to overextend themselves. Lack of that incentive is what got many of those people in the positions they’re currently in.

Rio Spying Cost China $102B (Bloomberg)
“Rio Tinto Group, the third-largest mining company, spied on China’s steel mills for six years, creating 700 billion yuan ($102 billion) in excess charges for iron ore, a report on a Chinese government-run Web site said.”

A Few Notes On AIG’s New Fearless Leader (WSJ)
Aside for the MetLife IPO and the 7-10MM he’ll be getting for the AIG gig, what’s important here is he has such soft hands, and the most beautiful tramp stamp.

Krugman Thinks Bernanke Should Keep His Job (Bloomberg)
You really have to wonder what the criteria for keeping your job as chairman of the Fed are during a depression, but it would seem chief among them is public perception (not that I agree with this methodology, but we live in a media age). Just so we’re up to date, Krugman and Roubini are for him staying in the seat, and Anna Schwartz appears to be leaning against.

Oh For The Love Of Love (DealBreaker)
Yesterday on one of Greg’s posts I noticed a little calf showing, a snip here or there, perhaps even some honest flirting (one can’t be sure where hatred and horny meet with this crowd). We care about our readers; we want you to be happy.It’s just what we do, people. That said, after speaking with InvestorCluzo (who has been a remarkably good sport about this), if Tax Chick can summon the gumption to accompany that mouth we’d be happy to arrange for the two of you lovebirds to shake hands.

AIG Reports First Profit In Seven Quarters (Bloomberg)
AIG has managed to pull its head from its ass for at least a quarter, as they report second quarter income of $1.82B or $2.30 a share.

RBS Posts $7.52B Loss (Bloomberg)
“”There is every sign that our financial performance over the next two years, at a group level, will be poor due to the severe economic downturn in 2008 and 2009 and consequent impact on impairments and funding costs,” Chief Executive Officer Stephen Hester said today in a statement.”

Small Banks Picking Up Talent (WSJ)
Regionals are dipping into the talent pool of the larger firms, though the article doesn’t expressly define what positions these finance geniuses are interested in. Is this a sign of times to come (people looking for the stability of smaller/less risky operations), or of desperation?

President Obama Not Saying Shit About Replacing Bernanke (Reuters)
Bernanke’s term expires January 31st, 2010; as is we don’t have any clue as to whether or not the President will be stepping in to replace him. There’s a good point to be made in cutting him down now, though - you don’t give him the authority or respect that tenure demands.

ProShare Getting Sued Over Leveraged ETF (WSJ)
It’s a failure to disclose risk suit, which is comical on so many levels. Labaton Sucharow LLP is leading the charge.

Citigroup Considers Options With Philbro (NYT)
“After putting out feelers to sell its Phibro commodities business, including a brief talk with the billionaire investor Warren E. Buffett, Citigroup is considering a variety of options. Among them is a deal that would give control of the unit to Mr. Hall, the energy trader who runs Phibro, two people close to the negotiations said.”

NYT Hires Goldman To Explore Boston Globe Sale (Reuters via CNN)
“The New York Times Co has enlisted Goldman Sachs to explore a sale of its New England Media Group, which owns the 137-year-old Boston Globe and other media assets.”

Bankers Beat Odds In Toxic Pay Plan (WSJ)
Despite its detractors, it turns out the CS plan to pay bankers with bonds hasn’t been all that bad.