Big Pay Packages Return To Wall Street (WSJ)
Viva La 2007! "Goldman Sachs Group Inc. is on track to pay out as much as $20 billion this year, or about $700,000 per employee. That would be nearly double the firm's $363,000 average last year, and slightly higher than the $661,000 for the average Goldman employee in fiscal 2007, according to analyst estimates reviewed by The Wall Street Journal."

Merrill exec sounds bullish on future of BofA merger (Charlotte Observer)
Dan Sontag looks on the bright side re: Bank of Amerillwide. The future couldn't be possibly worse than the last several months, which were not unlike having hot coffee thrown on one's face during a parking lot brawl, an experience so traumatizing that no one wants to talk about it anymore. "People are really starting to move forward here," Sontag said in an interview with the Observer this week. "I see my group not wanting to talk about the rearview mirror as much."

Treasury To Name 9 Toxic Managers (WSJ)
The fate of the economy rests in your Power Point skills: "Potential managers made presentations to the government that were designed to measure whether they could handle the job. Firms considered include BlackRock Inc., Allianz SE's Pacific Investment Management Co., or Pimco; TCW Group; and Wellington Management, although it isn't clear who made the final cut."

Singh Hangs Up Stanford Logo (NYP)
Apparently he's not the man we thought he was. Two confidential things to Vijay: 1) you were paid to wear that thing, so god damn, you should have to wear it and 2) even after the 150 year sentence, the canasta player sponsored by Madoff Securities continues to sport his MadSec. Personally, we're typing this from a Bills Jersey which we'll continue to wear until the Big Guy is free. That's called loyalty, something you know nothing about.

Risk Cuts at Morgan May Lead to a Loss (NYT)
Sounds like it's time to give this guy a second shot.

Staffer At SEC Had Warned On Madoff (Washington Post)
"Genevievette Walker-Lightfoot, a lawyer in the SEC's Office of Compliance Inspections and Examinations, sent e-mails to a supervisor, saying information provided by Madoff during her review didn't add up and suggesting a set of questions to ask his firm, documents show. But with the agency under pressure to look for wrongdoing in the mutual fund industry, she wasn't able to continue pursuing Madoff, according to documents and two people familiar with the investigation, and her team soon concluded its work on the probe. Walker-Lightfoot's supervisors on the case were Mark Donohue, then a branch chief in her department, and his boss, Eric Swanson, an assistant director of the department and Bernie's nephew-in-law."

"Bon" or "Non" Appétit? (PIMCO)
Bill Gross's buzz kill of the morning: "Greed will come again. But for now, the trend is the other way and it promises to persist for a generation at a minimum."

No Criminal Exposure For Ruth Madoff (NYP)
Ruth will not be prosecuted due to the Feds' lack of evidence she was "either aware or in on" the scam. They reserve the right to change their minds if new, incriminating dirt against the 68-year-old Upper East Side (though soon to be Rego Park) matron is discovered. One source tells the Post it's unclear why the authorities would continue to pursue Lady MacMadoff, since she's already lost so much, like friends and houses (though not $2.3 mill).

California misses budget deadline, readies "IOUs" (Reuters)
"The general obligation bonds will be paid," State Controller John Chiang told Reuters on Tuesday. "California has never defaulted on its debt obligation and we don't plan to do so."

The Goldman v Rolling Stone Cat Fight (NYP)
Apparently the Masters of the Universe thought the line about the firm being "a great vampire squid wrapped around the face of humanity" was way off the mark though one official conceded that the piece was "vaguely entertaining."

FDIC Proposing New Rules on Private-Equity Investors Acquiring Failed Lenders (WSJ)
Tricky sitch for SheBair: "On the one hand, there's pressure that the government not be seen as giving extremely favorable deals to financial actors, especially since many of the problems it's cleaning up have their origins in poor decisions made by the financial sector...On the other hand, both the magnitude of the capital required and the need for hands-on management suggest that private equity can and should play a role in addressing these problems."

Freddie Picks Charles Haldeman for CEO Spot (WSJ)
Now, who wants the Citi/Bank of America/AIG gigs?

Ex-Citi chief set to lead Lloyds integration (FT)
Sir Win Bischoff tapped as next chairman of Lloyds Banking Group.

5:15 Capital Starts Hedge Fund With Nod to Who Song (Bloomberg)
5:15 Capital Management LLC, the track "5:15" on "Quadrophenia," will begin trading today with about $60 million, according to Morris Sachs, one of the founders, who said the fund will grow to $100 million. Joining him at the Greenwich, Connecticut-based fund are E.G. Fisher, 40, and Rob Wahl, 42. "We're all Who fans and love that tune," Sachs, the fund's chief risk officer, said in a telephone interview. "What are we going to do, try to find another name for the Greek god of money?"

Dimon Still Polishing JPMorgan Pay Packages (NYP)
1. Nothing to write home about here-- same raising of base pay everyone else is doing. 2. Bless the headline writers at the Post. Someone came to work today.

10 more could be charged in Madoff scam (AP)
No names specified but surely you can come up with some.

UBS Selling Park Avenue Stake (NYP)
"This could be the one that pries open the market again. After the peanuts paid for 1540 Broadway and the fact that Deutsche Bank doesn't seem able or willing to unload Worldwide Plaza, a decent number for a big piece of 299 Park would help restore a sense of value."

AIG Discloses New Risk on Derivatives Sold to European Banks (Bloomberg)
An FYI out of the insurer yesterday "that valuation declines on credit-default swaps sold to European banks could have a "material adverse effect" on the company's results."

Putin Urges Russian Banks To Boost Lending (Globe And Mail)
And suggested no vacations for Russkie CEOs 'til it gets done.

Swiss Bank Shuns Americans As US Compels Disclosure (Bloomberg)
UBS, Credit Suisse, etc have told American clients to move their money into "specially created units registered in the U.S., or lose their accounts," hopefully just 'til this whole IRS situation blows over.

Ivy League Endowments Finally 'Dumb' (WSJ)
"A lesson from this crisis is that following what the larger guys have done is not necessarily road map to success," says Daniel Jick, head of HighVista Strategies, a Boston-based firm that manages endowment money for small schools. Harvard, Yale, Stanford, Princeton, and MIT all getting ready for declines of 25% to 30% for the fiscal year.

A Little Recognition For The Buse's Big Day (MelissaCNBC)
If Kudlow were on Twitter he'd do the same.

Madoff can expect de facto life term at sentencing (Reuters)
Sentencing at 10AM today, where prosecutors are hoping for 150 years, while Ponzi Boy and his lawyer are still holding out for what they have deemed an extremely reasonable 12. In kind of a crock move, Judge Denny Chin is allowing Bernie to wear his own clothes, when you know a jumpsuit would be so much more dramatic. In related news, Lady MacMadoff has been forced to live off a lump sum of $2.3 million.

UBS could pay up to $4.6 billion to settle U.S. tax case (MarketWatch)
The Swiss just want to put this behind us and get back to what they do best as quickly as possible.

A Unified Bank Regulator Is A Good Start, By Jamie Dimon (WSJ)
"We should avoid the temptation to have multiple regulators just for the sake of having them. Three or four different regulators all looking at (and fighting over) the same issue is not a wise use of taxpayer money. Companies can't operate that way. Neither should the government."

Madoff Victims Turn On Each Other (NYT)
"It's been your typical reality-show kind of fighting," said Jen Meerow Berniker, 32, a second-generation Madoff customer whose retiree parents lost their life savings through a feeder fund. "It's every man for himself right now."

Warren Buffett lunch sells for $1.68 million on eBay (Reuters)
Down 20% from last year's winning bid of $2.11 million.

Decision on bond for Stanford to be reviewed (Houston Chronicle)
Supposedly we'll find out this morning if Sir Stan will stay locked up until his trial or freed on $500,000 bond (his attorney says he's not a flight risk, natch). Either way we can all agree that Sticky Wicket was robbed on account of someone stealing today's limelight.

Bank of New York Mellon Faces More Write-Downs (Dealbook)
"Yes, we will book further write-downs, but we will be able to handle them. The securitized mortgages on our books amount to $3 to $4 billion, which corresponds to only 2 percent of our balance sheet," said CEO Robert Kelly.

Madoff Victims Tell Their Story (BBC)

Pang Took $83 Million From Firm, Filing Says (WSJ)
The court-appointed temporary receiver over Mr. Pang's former company, Private Equity Management Group Inc., also revised his estimate of potential losses by investors, saying they could range from $287 million to $654 million. The latter figure would represent a loss of nearly 80% of the $823 million still owed to investors. And here's a new pic of DP, leaving federal court:

Administrative Actions against Citibank Japan Ltd. (FSA)
All sales operations in retail banking suspended for one month starting July 15, due to lax oversight of money laundering controls. The Big C is sorry and swears it won't happen again.

UBS Expects Second Quarter Loss (WSJ)
Don't shed tears for the Swiss just yet, though, because they're entirely okay with this, as the figure, while not good, is better than previous quarters, and represents "a sequential improvement."

Death spurs Michael Jackson album sales (Reuters)
Jacko occupied the top 15 slots on Amazon's best-selling albums within hours. "Thriller" at number one, "Off the Wall" at two, "Bad" at three.

Judge Says Stanford May Be Freed On Bond (AP)
And why not? He totally does not seem like the type that would make a run for it. Oh wait, that's exactly what he seems like. (Re: GPS monitoring system, Big Al would find away around it.)

Volcker Gets Less Than He Wants in Curbing Excesses (Bloomberg)
"After the inauguration and Geithner's confirmation, Volcker was elbowed aside, White House insiders say. His economic recovery board took weeks to get off the ground -- a delay people close to Volcker say he blames on Larry Summers...The biggest obstacle to Volcker's reform agenda is Summers, Volcker's friends say."

Jack (And Suzy) Welch Says Bernanke Deserves A Second Term (Bloomberg)
J Dubs also added that the Fed Chair deserves some sort of teaching gig at Jack Welch's Online School Of Business, either as a full-time or adjunct professor.

Not So Green Shoots, By Maria Bartiromo (CNBC)
And it continues: From my vantage point, I have trouble buying into the whole idea of green shoots. I know the market itself has bounced, but people I talk with everywhere I go are still feeling squeezed financially.

Fed Emails Bash BofA Chief In Tussle Over Merrill Deal (WSJ)
Earlier that day, Mr. Bernanke had weighed in on the threat to pull out of the Merrill deal: "I think the threat to use the MAC is a bargaining chip, and we do not see it as a very likely scenario at all," he wrote in a Dec. 21 email to a selection of Fed governors.

He also urged preparations be made "so that we can explain to [Bank of America] with some confidence why we think it would be a foolish move and why regulators will not condone it."

New TARP Chief: Economy on Mend, But Vigilance Needed (Reuters)
"I'm confident that very soon we'll be launching [public-private] partnerships," Allison said. "Some time between now and 100 years from now."

AIG To Repay Debt Through IPOs (WSJ)
$25 billion down, $25 trillion to go.

Cuomo Recused Himself Over Money Manager in Pension Fund Probe (Bloomberg)
A paragon of virtue and ethics!

AQR hedging its bets with big mutual fund plan (Reuters)
"We don't want to be theoretical academics. We want to be the guys who demystify alternative (investments) and tell people what's under the wizard's hat," co-founder David Kabiller said.

Read e-mails between Sanford, woman (The State)
"Since our first meeting there in a wind swept somewhat open air dance spot in Punta del Este, I felt that you had that same rare attribute. Above all else I love that inner beauty about you...You have a particular grace and calm that I adore. You have a level of sophistication that is so fitting with your beauty. I could digress and say that you have the ability to give magnificently gentle kisses, or that I love your tan lines or that I love the curves of your hips, the erotic beauty of you holding yourself (or two magnificent parts of yourself) in the faded glow of night's light -- but hey, that would be going into the sexual details we spoke of at the steakhouse at dinner -- and unlike you I would never do that!"

Citigroup Has Plan To Fatten Salaries (NYT)
Pandit's people can expect a raise in base pay by as much as 50 percent this year in order to-- see if you can guess where this is going-- offset smaller bonuses. Under this scenario, according to the Times, "most Citigroup employees will make as much money as they did in 2008, although some might earn more and others less," so get excited for one of those three outcomes, though not so much the last.

Union Calls on Morgan to Reverse Raises for Top Earners (WSJ)
"We urge you to return base salaries to their previous levels and ... reward executives for long-term value creation, not just showing up for work."

Memphis Is Site Of Jobs's Liver Transplant (WSJ)
Now that we've identified The Methodist University Hospital Transplant Institute it's up to one of you to create some sort of bus tour, which would probably be pretty popular. ("This is the cafeteria where Jobs's jello was prepared and up ahead we'll show you the room in which he got hooked up to a catheter. Not one of those used ones they're always advertising on CNBC but the Rolls Royce of catheters. This is Steve Jobs we're talking about, after all.")

NYSE Loses Trades Fastest in a Year and Nasdaq Isn't the Winner (Bloomberg)
"...a record low 30.2 percent of May's trades, data compiled by Bloomberg show. That's down 2.8 points from February for the worst three months since June 2008. The beneficiary wasn't Nasdaq OMX Group Inc., the Big Board's main rival for 38 years. It was Direct Edge Holdings LLC and Bats Exchange Inc., which more than doubled their combined share since August to 22.8 percent."

New York Times Considers Paid Access To Mobile News (Bloomberg)
Since someone, let's call it the NYT, is desperate for cash anyway they can get it and Gretchen Morgenson's trick turning days are over.

Allen Stanford detention hearing set for Thursday (Reuters)
Hopefully he'll threaten to punch a reporter in the mouth outside the courthouse.

Margaret Brennan Jumps from CNBC to Bloomberg (TVNewser)
Insiders say she's being named an anchor, which is nice.

JPMorgan Is On Top Of The World, RBS Not So Much (Reuters)
Rankings by British magazine The Banker somewhat suspect, given Bank of America and Citi's spots at numbers two and three for "strongest."

Goldman Denies It Will Pay Out Huge Bonuses (NYDN)
I mean, it will, but the issue here is that we don't know if they'll be record-breakingly big just yet. We can certainly make guesses, though, which you should feel free to do at this time.

U.S. credit rating a "solid triple-A," Says Moody's (Reuters)
But it could be at risk for the d-word. "Either our assumptions in terms of debt reversibility prove to be wrong. That is, in fact the U.S. government is unable to bring public debt back to a downward trajectory," Pierre Cailleteau, team managing director of Moody's Sovereign Risk Group said.

Three Banks Suspend TARP Dividends (WSJ)
At least three cash-strapped banks have stopped paying the government the dividends they owe: JPM, GS, MS. No, just messing. Jamie Dimon would sell his liver if need be. The banks are pacific Capital Bancorp, Seacoast Banking Corp, and Midwest Banc Holdings.

Buffett Boy Raises $2 billion (FT)
Byron Trott, AKA "Buffett's banker," has raises a nice chunk of change for his new firm, BDT Capital Partners. For those interested in getting in on that, BDT will "maintain a close relationship with Goldman," Trott's former employer.

A Transplant That Is Raising Many Questions. You Know The One. (NYT)
Doctors say there is "little opportunity" to cheat the system when you need an organ, but the Times apparently remains unconvinced that Mock Turtleneck didn't do just that.

What Has the World Bank or IMF Ever Gotten Right? (Infectious Greed)
Paul Kedrosky would like to know.

No Jobs On Wall Street Mean Graduates Can Have A Social Conscience Now (Bloomberg)
Nationally, 27 percent of about 1.6 million graduating seniors plan to work for nonprofit groups or governments, an increase from 23 percent in 2008.

Settlement Anticipated In UBS Case (NYT)
"The Justice Department may drop a closely watched legal case aimed at forcing the Swiss bank UBS to divulge the names of 52,000 wealthy American clients suspected of offshore tax evasion, a United States official briefed on the matter said Monday. The move, which would halt an unusually aggressive effort to force Switzerland to lift its veil of banking secrecy, could happen by mid-July."

Goldman Sachs May Pay Record Bonuses (Guardian)
If all goes according to plan!

AIG Trading Partners Put Squeeze On Insurer Before Bailout (Bloomberg)
"Goldman is to be congratulated for seeing the problem ahead of others and protecting itself from the impending failure of AIG," said William Poole, former president of the St. Louis Fed, in an interview last week. "It's not the responsibility of any private firm to determine what the public interest is -- that's why we have a government."

Bankers' Pay Soars In Attempt To Halt Exodus (FT)
"Market salary rates for managing directors have jumped from about $250,000 (€180,000) only a few months ago, to closer to $400,000. As well as base salary hikes, banks are once more offering guaranteed bonuses to staff approached with lucrative offers by rivals. Bank of America, for example, has seen off attempts to poach top Merrill bankers by matching or bettering offers."

Morgan Stanley Topples Goldman As M&A Leader (NYP)
YTD through Friday, MS has been the lead adviser on $175 billion worth of US-based M&A deals, surpassing Goldman Sachs, which advised on $158 billion worth of deals.

Berne says U.S ready to move in UBS tax case (Reuters)
"U.S. authorities could be willing to make a deal in a legal case against Switzerland's biggest bank, UBS, after the countries agreed a double taxation treaty last week, the Swiss president said on Sunday."

Hedge Funds Boost Profile In Lobbying (WSJ)
Biggest spenders on lobbying since 2007 through Q1: Managed Funds Association, Citadel, Coalition of Private Investment Cos, OZ Management, Elliot Associates, Fortress, HBK.

RBS To Incentivize CEO (Telegraph)
He'll get $15.8 million "if shares recover to 70p withing three years." Contract includes a "no rewards for failure" clause.

Bill Gross Is On Treasury's Speed Dial (NYT)
"Paulson will call, Geithner will call, and I'll be like, 'Yabba-dabba' or 'Blah-blah-blah,' " he says with a measure of self-deprecation -- and an equal dose of pride. "I turn into a walking, talking idiot."

Stanford Is Indicted In Fraud, Surrenders (WSJ)
As expected, Allen Stanford was charged yesterday with possibly running a Ponzi scheme. He was arrested outside his girlfriend's home in Virginia, which is somewhat disappointing, compared to the scene that could've gone down had the authorities cuffed him at the gym.

Ex-Merrill Trio Discussed Buying Back Bank (FT)
Dan Tully, former Merrill chief executive; Launny Steffens, former head of Merrill's private client business; and Winthrop Smith Jr, son of one of Merrill's co-founders showed up on Ken Lewis's doorstep earlier this year asking or all or some of the bank back. Obviously they got shot down and obviously Ken Lewis is kicking himself and shout "Stupid, Lewis, stupid" circa now.

Switzerland Looks At Cutting Size Of Banks (FT)
In order to stem risks posed by the inevitable failures of UBS and Credit Suisse.

SEC Weighs Hedge Fund Registration (WSJ)
"It's something still being talked about," Mary Schapiro said in an interview.

Citigroup's CEO Deserves More Patience (NYT)
He's made some mistakes, but Vikram Pandit didn't get Citi in the hole it currently resides in, and more importantly, he's not as bad as Ken Lewis, who you'll note still has a job.

Goldman Regrets 'Market Euphoria' That Led to Crisis (Dealbook)
...claims Lloyd Blankfein in a letter to Barney Frank, Spencer Bachus and the rest of the House Financial Services Committee that begins, "as you know, Goldman Sachs is scheduled to repay [Wednesday] the government's $10 billion preferred investment in our firm through the TARP's Capital Purchase Program," rambles on about the lessons GS has apparently learned and closes thusly: "suck it, bitches, $100 million bonuses comin' at ya in 3...2...1..."

White House Details Financial Revamp Plan (WSJ)
Eighty-five pages of bathroom reading right here.

Morgan Stanley Offers Investors In Hedge Funds New Option (WSJ)
"The New York firm plans to announce as soon as Wednesday that hedge-fund clients will be allowed to hold part of their assets in Morgan Stanley Trust National Association, a trust company owned by Morgan Stanley. Previously, such assets were held in the firm's brokerage units."

Three Steps To Financial Reform, By George Soros (FT)
Step number one: Alan Greenspan must admit he fucked this bitch up bad. Real bad.

One Of You Should Shell Out The Cash For This (AWL)
John Delorean's Augusta National Golf Club green members jacket and golf bag tag to be auctioned at Christie's June 23.

Will Someone PLEASE Take Freddie Chief John Koskinen's Job Off His Hands? (WSJ)
"Now, approaching his 70th birthday June 30, Mr. Koskinen has what may be his most thankless assignment: chairman as well as interim chief executive and finance chief of Freddie Mac, a big mortgage company on Treasury Department life support. Near the top of his to-do list is finding a new CEO and finance chief."

Cigarette Ban Being Implemented in Va. State Prisons (Washington Post)
Something to consider before doing anything illegal-ish, if living without your fix is out of the question.

Credit Issuers Slashing Card Balances (NYT)
"Now it's the card company calling you and saying, 'Let's talk turkey,' " said David Robertson, publisher of the credit industry journal The Nilson Report.

US Likely To Lose AAA Rating (Reuters)
According to Robert Prechter.

Obama's Bank Revamp May Stall as Congress Tackles Rival Issues (Bloomberg)
"It seems like some of the fire in the discussions has gone out of it," said Alex Pollock, a fellow at the American Enterprise Institute in Washington and former president of the Chicago Federal Home Loan Bank. "Regulatory reform is always a popular topic in the wake of a bubble and bust."

FAA Chief to Draft Tougher Rules to Alleviate Commuter Pilot Fatigue (WSJ)
That seems like a good idea.

Looking for the Little Guy in the Shotgun Union of Two Wall Street Giants (NYT)
In a preview for Frontline's documentary on the Bank of America, Merrill Lynch deal, "Breaking The Bank," Ken Lewis is described as "the most competitive person in the history of the United States, including the Union Army." We also learn that he had to practice smiling and started wearing glasses to "soften" his image. According to Andrew Ross Sorkin, Lewis "wants to give the middle finger to Wall Street."

Details Set To Remake Financial Regulations (WSJ)
"At the center of the plan, which administration officials are referring to as a "white paper," is a move to remake powers of the Federal Reserve to oversee the biggest financial players, give the government the power to unwind and break up systemically important companies -- much like the Federal Deposit Insurance Corp. does with failed banks -- and create a new regulator for consumer-oriented financial products, according to people involved in the process."

Awaiting a Rebound, Back With the Folks (NYT)
Depressing read of the morning: "My mother, who is in her 60s, has been so patient and supportive. She acts like she's happy to have us, not like we're crowding her or that she minds the dogs. We have learned what's important since I've been living here."

Bank of America beefs up its image with Merrill Lynch icon via $10 million print and online advertising campaign (FT)
When you think of Bank of America, please think less BAC, more MER.

A Virtual Bank With Real Woes (NYT)
Possibly of interest to those of you who are either from Iceland and/or huge nerds.

AIG vs. Hank Greenberg: A Battle Over Who's More Deserving (Time)
In court today.

Payday For Bob Diamond (FT)
The Barclays president will personally make $26m (£16m) from the sale of Barclays Global Investors to BlackRock.

Teaser For Michael Moore's "Save Our CEO's."

"Thanks For Not Running" (Bloomberg)
Sean Swift, of JP Morgan, won the Corp Challenge this week in Central Park, and thereafter fired off this text to his pal: "Thanks for not running this year," Swift, 24, wrote to his friend Karl Dusen, an analyst at American International Group Inc. who took the title in 2006, 2007 and 2008. "Maybe now I'll get a bonus."

Lewis Defends Merrill Deal (WSJ)
"Despite being pummeled by Congress, shareholders and other critics, Mr. Lewis likely isn't stepping down anytime soon. "I don't see anyone who could be doing a better job of leading this organization at this time," said Walter Massey, Bank of America's chairman."

AIG Balks At Claims From Hudson Crash (NYT)
AIG is dragging its ass in paying the claims from the downed plane, it appears. The article attributes much of their slow response to the general perception that the crew handled the incident so well, explaining it's hard to find fault in their actions when everyone considers them heroes.

BlackRock To Acquire Stake In Barclays Unit (NYT)
"BlackRock said Thursday night that it had agreed to buy Barclays Global Investors from the British banking giant Barclays for about $13.5 billion in one of the largest deals in the money management industry, creating a juggernaut with nearly $3 trillion in assets."

Paulson & Co. Goes Long Distressed Debt/Mortgage Securities (Bloomberg)
Paulson & Co. is dumping a hefty little chunk of change into jumbo prime securitizations and distressed opportunities (including banks and finance companies). While not in direct contrast to his shorting of the subprime market in general, it could mark the fund manager's belief that the market is turning (if only slowly).

Soros: Ban Credit Default Swaps (Guardian)
"Some derivatives ought not to be allowed to be traded at all. I have in mind credit default swaps. The more I've heard about them, the more I've realised they're truly toxic...CDS are instruments of destruction which ought to be outlawed," Soros told a meeting of the Institute of International Finance.

Jim Simons Delays Retirement Plans (WSJ)
Talks with officials of the China Investment Corp about a multi-billion dollar stake in Renaissance and plans to retire have been put on hold. Spokesman Jonathan Gasthalter declined discuss what factors may have changed. Also, "two veteran Renaissance insiders, speech-recognition experts Peter Brown and Robert Mercer, are considered likely successors to lead the firm," whenever Simons, who quit his two-pack a day habit this year, decides to start taking it easy. The Journal took about 30 years off his head cut, and made him look like Biff's long lost brother, which is nice.

JPMorgan to Acquire Rest of Highbridge Capital (Dealbook)
Had a majority stake since 2004.

US Pushes A Troubled Citi To Heal Itself (NYT)
"The question now is when, or perhaps even if, Citigroup will be able to free itself from Washington." Shall we take odds?

California nears financial "meltdown" as revenues tumble (Reuters)
California's government risks a financial "meltdown" within 50 days in light of its weakening May revenues unless Governor Arnold Schwarzenegger and lawmakers quickly plug a $24.3 billion budget gap, the state's controller said on Wednesday.

U.S. stock futures blasted after Asia plunge (Marketwatch)
U.S. futures are getting smashed up this morning after a nightmare trading session in the Asian markets (see next article). Dow futures are off 546 points, while Nasdaq futures are falling 82.5 points; S&P futures are down 60 points, at 855.20. There's a lot of technical analysis that says the S&P has to hit 800 before we see a decent rebound; more and more, that's looking the right analysis. That said, with the extent of this selloff, and the huge volatility, the potential for short squeezing has never looked so ominous or looming. Opec cut production by a whopping 1.5million barrels a day, not that that's likely to have a huge effect: once a commodity market enters freefall, there's little stopping it.

Tokyo, Seoul Head Asian Market Train Wreck (CNBC.com)
The overnight dealer notes from Hong Kong were all broadly disbelieving of the last-minute rally in the Dow yesterday ... and those sentiments couldn't have been proved more right. The Nikkei plummeted 9.6%, to 7649.08, more than a five-year low. The yen hit a 13-year high vs. the dollar, at around 91 yen. South Korea's Kospi was off more than 10%, while everything else in Asia pretty much went belly-up too. Although it looks like a U.S.-led thing, much of the Asian mauling is really more to do with the yen than anything else.

Greenspan Concedes Error on Regulation (NYT)
In a dramatic and humbling mea culpa yesterday, the former fed chairman admitted he was "shocked" by the mess we now find ourselves in, and that he may have got it wrong a little bit with regard to regulation. It's refreshing to see someone being honest right now, rather than blaming the market, the short speculators, the regulators, the homeowners, or whoever else is possibly in the firing line. It makes you think, actually, that he's the only guy round who stands a chance of fixing the problem ... given that half of it seems to have been in saying "we have a problem" in the first place.

German banks overexposed in Iceland (Daily Telegraph)
It turns out that the counter-parties hardest hit by Iceland's recent banking turmoil are German banks, which are owed $21 billion. That's around a third of Iceland's $75 billion debt. German banks are having a hard time; it was also a major lender to both Spain and Ireland, which have been pretty badly beaten up in the credit crunch. These announcements could not have come on a worse day, either.

Sony Blames Profit Warning on Yen, Weak Demand (Business Week)
A lot of the Asian market selloff was down to a surprise announcement by Sony that its earnings would fall 58% on the year, to $2.04 billion, by March 2009. The article explains that Sony sees the higher yen harming sales. It's not really the harm in sales that's the issue here however, but more the margin on exports, which is just wiped away when the yen's sitting up in the 90's.

Microsoft earnings beat the Street (NYT)
Microsoft is turning out to be a bit of a contrary indicator. When times are rolling, the software giant is lagging ... but now that things are in somewhat of a death spiral, earnings are up. Still, only just, a 48 cents a share vs. 47 cents a share. That's the advantage of a monopoly: it's almost recession-proof by default. After all, everyone still needs MS Word, if only to polish their resumes while they look for a new employer.

Futures fall as recession fears weigh (Reuters)
There's no end in sight to the bottom of this week's selloff -- but this morning there is perhaps the beginning of one. S&P futures are down 7.7 points, Dow Jones futures lower by 35 points, and Nasdaq futures are off around 12 points or so. Those numbers are much lower than in futures trading in recent days, but that's no indication of how bad things can get once the opening bell chimes.

Seoul, Hong Kong extend retreat; Tokyo cuts losses (Marketwatch)
Another spike in the yen and gloomy economic data in Japan overnight brought about a slump in Asian share prices. The Nikkei fell 2.5%, while the Hang Seng dropped 3.6%, to its lowest close since May; South Korea's Kospi ended 7.5% lower, with trading halted at one point in the day.

Foreclosure Filings Rose 71% in Third Quarter as Prices Fell (Bloomberg)
The title of this piece says it all, really: 765,558 homes either foreclosed, or were auctioned off in the last quarter. As with data from yesterday: no doubt about it, deeply recessionary. In addition, lots of people predicting a rise in foreclosures throughout the rest of the year.

OPEC Faces Worsening Oil Price Drop as Growth Slips (Bloomberg)
Bloomberg is reporting that OPEC's rumored 1 million barrel a day cut in production tomorrow at Vienna's meeting will fail to stem a freefall in oil prices ... right on the money: love it or hate it, oil is headed for $45 a barrel, where prices were the last time equities were at this level. The two will move in lockstep: just because the marginal cost of extraction has risen due to drilling in ever colder/more cumbersome climates, doensn't mean everyone will pay that price.

U.S. Futures Weighed Down by Gloomy Earnings Reports (TheStreet.com)
Despite good news from the Apple camp after the bell yesterday, an overnight selloff along with the likes of AT&T, Wachovia and Boeing reporting today is having a gloomy impact on futures trading. S&P futures are off between 19 - 31 points, at 939, while Nasdaq futures are down 17 points, at 1276. Dow futures are in the red by 242 points. The Energy Information Administration is also releasing crude-oil inventory figures for last week.

Mortgage applications dropped 16.6% last week (Marketwatch)
This doesn't look promising. The weekly mortgage application volume was off 44% from the same week last year, and hasn't been so low since December, 2000. The four week moving averages for mortgage applications has dropped 9.2%. No doubt about it: that looks recessionary.

Asian markets slide on glum corporate outlook (AP)
When the U.S. sneezes, the world catches cold while Asia gets SARS. So it was overnight: the Nikkei is back through the 9,000-point band, down nearly 7%; Hong Kong fell 5.2%; South Korea's Kospi slid 5.1%, and China held up a little better, slipping 3.2%. The yen is much higher, prompting a 9% tumble in shares of Sony. This crisis is going to be much more prolonged in emerging markets than over here in the U.S. Dealer notes in Asia are all pointing out Argentina's next possible default (see next article). Samsung has decided not to buy a stake in Sandisk.

Argentina Default Looms, Pension Seizure Roils Market (Bloomberg)
Mainly because things have been so ugly everywhere right now, lots of investors have taken their eye off Latin America. But if you look closely at the wires every day, leaders in Chile, Argentina and Brazil in particular have been printing money better than Dick Fuld. Now there are genuine fears of a big default in Argentina. The stock market plunged more than 11%, as the government seized around $29 billion of private pension funds. Bond yields are above 24%.

OPEC, Alone (Forbes.com)
Oil fell through the $70 band overnight, to $69.48 a barrel, even as OPEC is mulling a 1 - 2 million barrel cut in daily output. Russia's surplus ceases to be once oil falls lower than $70 a barrel, raising concerns there about economic tightening. Despite pleas from OPEC, Norway is refusing to cut production, however.

Wal-Mart profit could be hurt by new supplier standards (Reuters)
Finally, Wal Mart is cleaning up its quality standards act, although chief exec Lee Scott says that could harm margins and make goods more expensive for customers. Wal Mart gets around $9 billion worth of products a year from China. With everyone raising the standards bar, and Chinese consumption declining, things are going to look precarious on the economic front there very soon (if they don't already).

U.S. Stocks Seen Lower; Earnings Take the Stage (TheStreet.com)
It's a lower open, but probably an up day. S&P futures are only down marginally, by 8.7 points, while Nasdaq futures are lower by 21 points. Most of this is to do with fears over earnings of Texas Instruments, but then again, E*Trade and Yahoo! report after the bell, and may well beat dismal expectations. If that happens, there will be a surge at the close.

Overnight Dollar Libor Declines to 1.28 Percent, BBA Says (Bloomberg)
Good news! At long last ... LIBOR has fallen below the federal reserve's target for the first time since October 3rd. The rate dropped 23 basis points.

Nikkei, Sensex extend gains, Hang Seng retreats (Marketwatch)
Asian markets were mixed but mostly down overnight; the Nikkei gained 3.3%, China's Shanghai Composite Index slipped 0.8%, and the Hang Seng slid 1.8%. The drop in shares in Hong Kong was mainly down to China Mobile reporting lower than expected earnings, and conglomerate Citic Pacific facing a $1.9 billion foreign exchange loss. The reality is, the U.S. will probably emerge from the credit crunch in pristine condition when compared with how Asia's economies will suffer. Expectations for growth are so high over there that few companies this earnings season can possibly jump over the pole. India's Sensex was up 4%, but that was down to a one percentage point rate cut (to 8%) and possible restrictions on short selling. Well, we all know how that works out in the end.

Oil Declines as Dollar's Gain Dims Commodities' Appeal as Hedge (Bloomberg)
Those who claim the era of a high U.S. dollar and falling oil prices are over ought to think again: oil is down to $73.12 a barrel, while the dollar is at a one month high vs. the euro. Unicredit analyst Jochen Hirtzfeld says: "We think OPEC will cut production by about 1 million barrels, stabilizing prices.'' Yeah, right. And Goldman though oil was stable at $150 in May.

U.S. Moves Toward Stimulus as Bernanke, Bush Shift (Bloomberg)
There's another stimulus package on the way. Details are as yet unclear, but Bernanke wants to "open the idea" of a second round of cash infusions to the economy, since the credit crunch is "hitting home." Paulson claims there's enough money now set aside for the government to buy stakes in financial firms that are hit by the credit freeze.

Sun Eclipsed By Poor Results--Again (Forbes.com)
The sun never seems to shine on Sun Microsystems, despite the enormous validity of hardware today. Sun said yesterday that it expects to report revenue of around $3 billion, compared with estimates of $3.2 billion. "Sun and its customers are seeing the impact of a slowing economy," according to chief exec Jonathan Schwartz. Given that tech is beating the street broadly across the board, this doesn't resonate well. Sun is a badly run company, and has been for decades. That's all.

U.S. stock index futures rise; eyes on earnings (Reuters)
It's looking like today's going to be another big, big rebound day if things hold up. S&P futures are up 2.9%, Dow futures are rising 2.4%, and Nasdaq futures are gaining 2.8%, as of the early morning. If earnings come in broadly much better than expectations this week, this may mark the beginning of the end of the bear market. Haliburton reports this morning; AMEX and Texas Instruments after the bell. San Disk also reports; separately Toshiba is planning to buy 30% of production capacity.

Asia Stocks To Twist With U.S. Earnings (Forbes.com)
Here's my weekly Asia markets outlook column at Forbes. Looks like it's going to be a volatile week in Asia, with some hope of markets outperforming if earnings fare well (and plunging if worse than expected). Alibaba -- which has lost a big % in recent weeks -- may jump this week if majority shareholder Yahoo! comes up with positive earnings; investors in Hong Kong real estate developers will be looking to earnings of Caterpillar. Economic growth in the region is contracting as quickly as it came.

OPEC Plans Supply Cut as Crude Oil Heads Toward $50 (Bloomberg)
Emerging markets are starting to feel the pain of the credit crunch. It was just a matter of time - many derive a disproportionate share of revenue from oil sales. OPEC now looks set to cut production quotas after a surge in volume of December puts at $50. Venezuela and Iran need $80 oil to remain profitable; Saudi Arabia can get by on $65. Inadvertently, this could be the greatest (and cheapest) counter-terrorism measure in the whole eight years of the current administration.

China's Economic Growth Is Slowest in 5 Years (New York Times)
China's growth slowed to just 9% in the third quarter, according to the latest data. Economists expected growth as high as 9.7%. The upside is that inflation is down, to 4.6% last month from 4.9% previously.

ING shares surge after 10 billion euro capital deal (Marketwatch)
It was only a matter of time before stocks began surging again on bailout packages. ING got 10 billion euros from the Dutch government, and separately, sold its Taiwanese life insurance business to Taiwan-based Fubon Financial Holding for $600 million. ING's share price rebounded more than 20% on the news.