Credit Suisse To Cut 5300 Jobs, To See Losses of $2.5B (Reuters)
"The bank said the loss in the two months to end November, primarily in investment banking, where most of the job cuts will fall, was due to adverse market conditions and risk reduction."

The downside for the bank is actually gong to be a bit sharper for Q4 because of restructuring chargers that aren't included in the figure; total losses for Q4 could reach 4B Francs. Most of the cuts are going to happen on the Investment Banking side, though we don't yet know which specific divisions or offices are going to feel the brunt of the blow.

If you info about who/what/when/where in re: Credit Suisse, shoot us an email at tips (AT) dealbreaker (DOT) com.

French Plan 20B Euro Stimulus (BBC)
Tales from "A Year In The Merde" weigh heavy in my belief that the French are nearly incompetent when it comes to all things business, much less finance. So when France announces that it's plotting a $23B stimulus package to reinforce the automotive and housing industries: one has to wonder.

CNBC To Cut 80 Jobs (Reuters)
It's expected that we'll see the cuts "across the board" by Thursday.

D.E. Shaw, Farallon Funds Freeze Redemptions (Bloomberg)
Shaw is said to have gated redemptions in its Oculus and Composite funds, while Farallon has frozen redemptions in its "biggest fund," which you already knew, since we told you yesterday.

J.P. Morgan Freezes Funds Collateral (WSJ)
The Guggenheim Investment Fund has seen J.P. Morgan step in and seize collateral in order to meet margin calls in the last couple of days, after the Fund got its ass handed to it in leveraging.

It looks like the Fund is short ~300MM (WSJ math) in the call on the $8B managed.

Capital One Eyeing Chevy Chase Bank (NYTimes)
This deal could prove profitable for Capital One if managed effectively; it secures a large deposit base for the Bank and Credit giant, who will face $1.75 in write-downs because of the acquisition.

"Capital One will pay $445 million in cash and $75 million in stock based on Tuesday's closing price of $29.29 a share, according to several people briefed on the deal."

Mini-Me Bank Jeffries To Cut 300 People (DJNewsPlus)
The Bank is looking to cut around 13% of its staff by the year end, and that the year over year headcount would be off by 18%, "not including 85 new hires in mortgage and international equities."

Jeffries is expected to post a Q4 operating loss of somewhere in the neighborhood of $60.5MM. Jeffries, like every other firm on the street is giving credit to "the extraordinary operating environment", not the fact that they got caught with their pants around their ankles.

--William Richards

Goldman Considering Internet Banking, Free Pens and Checking (Reuters)
Take a moment to let that sink in. Everybody good? Okay. In a move to cheapen the brand name and blend into a crowd of "the average" Goldman is seeking to join the world wide web community of Banking, though they're not sure exactly how or when it's going to be done yet. While the immediate gratification of the idea is obvious, in the long I can't help but think it's going to help destroy the prestige of the firm. Glenn Schorr feels the same way:

"This move is pretty much the polar opposite of what you think about when you think about Goldman Sachs," said the UBS analyst. "But one of the keys to their future is being able to fund their balance sheet, and if they and others can't do it in traditional ways, it makes complete sense to explore other avenues."

Merrill Plans To Cut Bonuses (Reuters)
Merrill Lynch is looking at a 50% cut on average, with traders and investment bankers who are lucky enough to not get laid off bearing the brunt of the cuts.

If Merrill's thought here is that cutting bonuses won't have any affect in attrition, they're wrong. The argument that no one on the street is a just one, but firms are still picking up value hires and internationally there's been some opportunity. Moreover, the street has a good memory of such things: I can promise you that performing traders won't readily forget getting it in the ass, and will seek to relocate when the opportunity arises.

Paulson Concerned Congress Has Turned Into Little Bitches (WSJ)
Paulson is temporarily halting his request for the remaining $350B because Congress's whining and "we need this" attitude is unbearable. I would appreciate an all or nothing stand by the man here: these people haven't had a clue what's going on since day one, but they've insisted on injecting their opinion into everything, which is a testament to their ignorance. The form of our Government is primarily to protect: whereas ultimately freedom is primary goal, sanctioned intervention into the everyday only serves to subvert that. But they're not protecting us in this case, their protecting their interests - they're just so closely aligning it with protecting us that to attack one is to attack the other, parasite and host.

Government shouldn't be parasitic.

Icahn Sues Friend/Real Estate Mogul (NYTimes)
Icahn is playing the billionaire equivalent of "slaps" with longtime friend Leon D. Black as the two head for court over Realogy Corp.'s seeking to refinance $1.1B of debt and the negative impact it may have on shareholders.

Icahn: "I'm getting bored, man; you wanna come over and play G.I. Joes?"

Black: "I would love to.. wait, No! Come on. You know what? Screw you man!"

Icahn: "Leon, man, you gotta cross over the anger bridge and come back to the friendship shore."

Black: "'Cross over the anger bridge?"

Icahn: "Yeah, that's where you're at: you're stuck on the anger bridge."

Auto Wants $34B (WSJ)
I'm positive that the auto companies are failing, and I have no doubt that it's going to put thousands of people out of work, but it's indicative of the problem that two weeks ago GM needed $12B to float and now they need $18B. The only option at this point is a structured failing of the companies, a stoppage of production, and a restructure through Chapter 11. New leadership would have to be brought in - that would be imperative - none of the old members could seek to gain from this in any manner. New operating budgets, US Government picks up the pensions for GM (bene's go out the window), Chrysler manufacturing and processing gets absorbed by Toyota or Nissan, Ford is forced to stop making POS autos.

--William Richards

JP Morgan's Highbridge Suffering (WSJ)
Investors are calling for 36% of the assets from the flagship multistrategy fund, which when coupled with the fund's losses could see the fund dropping from its watermark $15B to around $6B. All in all, Highbridge has seen its assets tumble from $38B to $20B over the course of the last year, though no mention is made of whether those numbers include looming redemptions.

Related, JP Morgan Is Cutting Back At Wamu (BBC)

Looking to scale back their operations, WaMu will be cutting about one-fifth of its work force over the coming year, with roughly 4000 people being cut in January alone. This looks more like a winding down than a clearing of payroll though, as the remaining 5200 people are going to be released gradually over the remainder of 2009.

Goldman Could See $2B Quarterly Loss (CNNMoney)
Goldman is facing write downs across most business lines. Lowlights:

"One area that is thought to have given Goldman particular problems in the just-ended quarter is its "book" of so-called distressed investments. Over the years, Goldman has invested in everything from troubled auto loans in Thailand to the debt of a liquor maker in South Korea to struggling golf courses in Japan. This business was once a big profit center.

It isn't known whether these specific investments contributed to the write-downs in this portfolio, and Goldman doesn't disclose the size of its book of distressed investments, which is housed in its fixed-income department. But the business is substantial. In 2005, a blowout year for the group, Goldman bet $24 billion of its own money on this type of investing, according to people familiar with the matter."

One-Half Of College Kids Are Crazy (Guess Which Chromosome Pair I'm Voting For) (Bloomberg)
Apparently College kids are engaging in potentially risky behavior using alcohol, have lasting psychological issues from substance abuse (smoking is listed), or are just bat-shit nuts.

Credit Suisse and HSBC Lay Offs (Reuters)
"Credit Suisse said on Tuesday the bank was cutting 650 jobs, equivalent to roughly 3 percent of its investment banking workforce of about 21,300.

HSBC, Europe's biggest bank, said it was cutting 500 jobs at its UK banking business following a review of the business. The bank employs 58,000 people in Britain."

Paulson & Co. Up Big For 2008 (Bloomberg)
Paulson did a hell of a job capitalizing on the market downside over the trailing quarters, better than the majority of his peers. The breakout winner was out of Long Island, though:

"The highest return in the Bloomberg ranking was scored by the Medallion Fund, run by Jim Simons's Renaissance Technologies LLC. The fund, which has an estimated $8 billion in assets, according to Bloomberg, racked up a gain in excess of 58 percent. That translates into firm profits of $1.43 billion for the quantitative juggernaut."

BOJ Issues Credit For Credit (Reuters)
The BOJ is going to issue an additional $32B in credit lines to companies, which they're trading for Bonds (and apparently they're accepting bonds of a lower rating this round, because ratings still matter).

"The BOJ will launch a new scheme in January under which it will lend unlimited funds to financial institutions at the overnight call rate with corporate debt as collateral.

Until now the BOJ has only accepted corporate debt rated single A or higher as collateral. From December 9 it would start lending against triple B-rated bonds."

--William Richards

Holiday Shopping Numbers Don't Completely Suck (WSJ)
In a survey of 3370 shoppers, the National Retail Federation showed a 7.2% gain in money spent over the last year, while 39.3% of shoppers got their shit handled vs. 36.4% last year - suggesting possibly sluggish numbers going forward. Online sales were flat to up 1% holding at $534MM according to comStore Inc., an online market-research firm.

Good numbers should bode well for today, but there's going to be a fight now for the rest of the Holiday Season unless the market holds its crappy pricing strategy; pricing optimism in at this point would be a sore, sore mistake.

Citi Buys Into Spanish Infrastructure (MarketWatch)
This deal is complex in nature; essentially Citi Infrastructure Partners is looking to purchase $10.2B in Itinere Infraestructuras from Sacyr Vallehermoso, which accounts for roughly 55% of the company. After completion, the Citi Fund will package and sell highway concessions back to Sacyr for some €450MM, and will package and sell highways in Chile, Spain, and Brazil to Albertis and and Atlantia for roughly $1.42B.

The move will reduce the debt load of Sacyr Vallehermoso by approximately 37%, as the Citi fund assumes €5B in debt.

Also on the board for Citi: Financial Times has it that Pandit's so-much-more-than-Treasury's-Bitch is going to sell NikkoCiti Trust and Banking Corporation, a smallish Banking/Trust corp held in Japan for Y40B ($425.5MM).

Neuberger Bid Deadline Looms (Reuters)
Bids close at 12/noon today. Right now there's $2.15B on the table, which could be a phenomenal price depending on the standing stability of the company. The article has it that there was interest from Carlyle and Blackstone both, the former refused comment and the latter wasn't asked.

MS Looks At Bank Deposits, Possible M&A (WSJ)
This thing pitches as an advertisement for MS's Banking division, but there's some interesting stuff in here about the possibilities for M&A:

"... That means Morgan Stanley is likely to buy several small or medium-sized banks over time, according to analysts. And with 20% of all U.S. households generating about 75% of deposits, "having a line into that customer segment would be very valuable," says Michael Poulos, a managing partner at consulting firm Oliver Wyman."

And later...

"Potential fits include Boston Private Financial Holdings, with $4.6 billion of deposits, and City National Corp. of Los Angeles, with $11 billion of deposits. Both banks declined to comment."

Which all begs the question: First Year Teller Numbers?

AIG Dumps Swiss Bank (FT)
AIG is selling its Swiss arm AIG Private Bank to Aabar Investments PJSC for an estimated $247MM - $412MM.

Deutsche Bank Sues Trump (WSJ)
Trump, late on his mortgage payments, sought an extension earlier this year in court under majeure but was denied; DB's looking for $40MM personal guarantee on the loan that has an outstanding balance of $334MM.

I personally would love to see this played out in the press, Rosie O'Donnell style.

OPEC Sits On Hands (DJNewsPlus)
OPEC hasn't decided what to do yet, which has left to Oil pushing lower:

"The front-month January contract on the New York Mercantile Exchange was trading $2.41 lower at $52.02 a barrel."

My take: For most Americans lower Gas prices has the same effect as an interim Tax cut or stimulus check, but more beneficial to the economy in general because the money is already in cycle and more likely to be spent. The money saved can be substantial: If you drive 400mi/week (20k year) @20mpg, you're consuming 20G a week. At $1.80 down from $3.80 you're saving $40 week/$2080 a year, or 5% of your gross income at 40k/7% net.

--William Richards

AIG's Cassano Under Investigation (Reuters)
The ex-head of AIG Financial Products is under Federal investigation for his role in the loss of Billions of dollars, which many see as the catalyst leading AIG to financial ruin.

The announcement comes on the heels of AIG's announcing that they had completed the $40B sale of preferred stock to the US Treasury under the terms of the TARP. Also newsworthy of AIG: FT is reporting that AIG's Edward Liddy has agreed to accept a $1 salary as some symbolic move.

"This gesture by AIG is appropriate and I encourage other firms to wake up to the new reality on Wall Street and follow AIG's step quickly," Mr Cuomo said in a statement."

I'm sure you meant "quickly follow AIG's step" Mr. Cuomo, but that aside, what's the rush?

Porsche backs away from buying VW majority this year (Reuters)
Something about "ridiculous prices."

EU Stimulus Plan Proposal (DJNewswires)
"The European Commission proposed Wednesday a sweeping stimulus package worth EUR200 billion, European Union sources said.

The sum, the equivalent of 1.5% of the European Union's gross domestic product, was more than the EUR130 billion that commission chief Jose Manuel Barroso had said previously that he was looking for."

Russia Threatens To Step Down Oil Production, Prices Respond (BBC)
While the Price reaction was minimal, there's the off chance that this could have a lasting effect. Russia has been rogue to the policies of OPEC in recent years, acting effectively as it saw its own best interests. We're seeing a stepping in line, however, as Russia is positioning itself with OPEC in Oil production cuts.

Some issues here to pay attention to: they're not actually aligning themselves with OPEC, merely following OPEC's most recent move. Also: they're probably drunk.

108bps Drop In China Key Rate (Bloomberg)
I've always been a fan of odd-lot cuts, as they seem remarkably arbitrary. I don't, for instance, see how one comes to the 108 number: why not 109 or 110?

"The cuts are aimed "at ensuring sufficient liquidity in the banking system and to promote steady loan growth so that monetary policy can play an active role in supporting economic growth," the bank said in a statement."

Inbursa buys 26MM share block of C (CNBC)
The big question here is whether or not this signals Carlos Slim's tacit nod of approval for Citi.

Why CNN Can't Cover The Credit Crisis (Infectious Greed)
IG is covering what amounts to an organized rant on how MSM is botching the coverage of the liquidity crunch, and as a bonus there's a Suze Orman bashing.

Wachovia Execs Could See ~$100MM In Severance (DJNewswires)
Banking's bastard child from the south - the one that lost $33B in two flat quarters - is paying its top 10 people $98.1MM on leaving. I'm more curious about what happens after the merger - does Wells get greedy? They've now got enough assets to shore a massive investment arm, and here's enough talent on the street to build five banks; is anyone going to take advantage of the situation?

Goldman to Sell $2 Billion In FDIC - Backed Bonds (NYT)
" Goldman Sachs plans to sell at least $2 billion of new debt that will be guaranteed by the Federal Deposit Insurance Corp, with pricing expected Tuesday, according to a market source familiar with the sale.

The debt will mature no later than June 30, 2012, the source said. Goldman Sachs is the sole bookrunner, while Citigroup and Morgan Stanley are joint leads, the source said.

The debt is guaranteed under the FDIC's Temporary Liquidity Guarantee Program, and investors are watching the deal as a test case for demand under the new program.

Citi Has A Credibility Problem (Reuters)
And, the light comes on. It's finally starting to sink in that Banks don't tell people everything, and that their repeated calls for transparency aren't gong unheard. Well, that's not fair: people hear you screaming they just don't give a shit (promise).

"Citigroup Inc's repeated assurances that it did not need additional capital, followed by its quick about-face in accepting billions of dollars in aid from the U.S. Treasury, has many investors wondering what other banks are hiding... "The biggest question is what, as the owner of bank stocks, do you really own?""

No, the biggest question is "why are investors holding bank stocks?" If you don't have all of the information you need to hold the security, here's a tip: you shouldn't be. You don't get to own bank stocks just because you want to, risk free.

Your House Is Worth Less, Or: How To Mislead the Public With A Worthless Headline (FT)
The median home price has fallen by 11.3%, reaching $183,300 according to the National Association of Realtors. But this doesn't necessarily mean your house is worth less (though, it probably is). For those of you too far removed from statistics, the median of anything is found by counting your way to the middle. There's no trending, smoothing, or averaging; it's much like finding your way to the middle of a ruler, just put a finger at both ends and slide it to the center: when you get there, you're home.

There's ways to skew the median so as to make it smaller, that have nothing to do with the price or your home (or even homes in your neighborhood). All you have to do is build houses that cost < $183,300, en masse.

What's more likely than a sudden shift in new construction, however, is that there was a shift in prices coupled with new construction of lighter/cheaper houses - but that, too, is pure conjecture.

Dubai Having A Bad Month (BBC)
Dubai is one of the few regions in the Middle East that isn't oil rich, which is causing some issues for the poor little fella here of late. The Government has had to pull two lenders out of the gutter, and state affiliated firms are sitting on $70B in debt; not bad for an area with only ~2.6MM people.

HSBC Going Forward (Reuters)
While the article touches on whether HSBC would look at Citi's assets (no one cares about that anymore) it clearly states as a byproduct where HSBC is going - and that they're intent on getting there. BRIC markets are still expanding, EM markets are going to grow into flourishing stabilized commerce centers - and HSBC sees itself in the middle of all of that.

Plus, they're not bitching or defending themselves, which seems fresh for some reason.

Google's Looking At Cutbacks To Contract Labor (Reuters)
Google currently houses about 10k contract laborers, of which some are going to get cut; is this a sign of things to come for the big G?

Citi Gets Guarantees On $306B In Assets (Bloomberg)
This marks Citi as the one of the (if not the) single largest corporate recipient of federal aid in US history, with $45B ($25B first round, $20B second) in pure injections and a tiered backstop of $306B. Highlights: Pandit stays, Cuomo gets his platform for salary caps, it's the standard preferred purchase on the $20B.

The big question going forward is going to be one of sustained solvency; whether you're on the side that says Pandit inherited this mess or the side that says he caused it (or at least is responsible for the magnitude of it) you have to admit that this is a hole of incalculable proportions.

Per Infectious Greed the tiers on the $306B look like this:

Citi will carve out $300-billion in troubled assets, which will remain on its balance sheet

* The first $37-$40-billion in losses on those assets will go to Citi
* The next $5-billion in losses will hit Treasury
* The next $10-billion in losses will go to the FDIC
* Any more losses will go to the Fed

Also: the FEDs summary of terms. [FED via IG]

Blackstone Trims Asia Fund (Reuters)

The target size for the new Blackstone fund was drawn back to $200MM from $1B, because of a new trend in finance called "mass redemptions" - it turns out people want their money back when they see shit is going south. Everyone has balls on the upside, but it takes a special kind of brass to hold the downside, people.

"The "event-driven" Blackstone fund is headed by Aaron Nieman, who joined from S.A.C. Capital Management LLC earlier this year, the paper said."

Futures Are Up (Bloomberg)

We're seeing strength in the futures, as peer effect and socialism breathe optimism into overnight trading.

RBS Exec Apologizes For Losses (BBC)

"Royal Bank of Scotland (RBS) chairman, Sir Tom McKillop, has said he is "profoundly sorry" for the bank's financial difficulties."

After seeing its first yearly loss in 300 years, RBS is considering picking up Vickram Pandit - the move would apparently help cement the chances that RBS qualified for US Government assistance - and maybe even in the 100's of Billions of Dollars range.

Fed Pledges Top $7.4 Trillion to Ease Frozen Credit (Bloomberg)

As the headline intimates, Bloomberg ha the amount of money injected into the system at $7.4T - though only a portion of that is a direct infusion of capital. While the methods Bloomberg uses to calculate the $7.4T number aren't spelled out - what I'm absolutely positive of is that if the flyover kids get wind of this, and can figure out what a trillion dollars is, there's going to be a lot of complaining.

UBS Patrons Come Forward In Tax Scheme (WSJ)

Under the voluntary disclosure program the IRS let's you come forward, admit you tried to screw them, and pay our taxes and penalties - all without jail time. This, in my opinion is about as just as things can get - we try to screw them, they try to screw us - in the middle we find some kind of agreement.

What's amusing about this whole ordeal is the sheer volume of the numbers involved: one bank facilitated 20,000 US citizens in tax evasion. As far as conspiracies to defraud go: that's absolutely, phenomenally massive.

--William Richards

Citi Group Eyes Options, Including Merger (Reuters)
After the losses over the last week the Citi board is looking for options, and futures are up on expectations. I don't know what there's going to be for them on the street, though, outside of liquidation and absorption into other firms.

To the point of liquidation, MS has already weighed in with a resounding "no", while JP Morgan isn't saying much - but I doubt that after the WaMu integration and writedowns they're going to have a lot of capital reserve to work with. Barclays doesn't have much on the table, either - and BofA is at capacity. I think if we're going to see Citi unwind, it's going to have to be slow and methodical: I'm sure someone will pick up the consumer deposits, but the rest of the company is probably looking at much less pleasant times.

Harkin Moves Forward With CDS Exchanges (WSJ)
"Senate Agriculture Committee Chairman Tom Harkin plans to introduce a bill Thursday that would force all over-the-counter derivatives, including credit-default swaps, onto regulated futures exchanges."

Not an unusual or ill-timed move; ICE and the CME have both been pushing forward with their plans for a CDS exchange. The exchange will allow for better regulation of the instrument, which few people actually take the time to understand (though of recent, everyone seems to be talking about them).

BNP IB Unit To Face Bonus Cuts (Bloomberg)
"Europe's third- biggest bank, may cut bonuses by more than 70 percent at its corporate and investment bank after profit plunged in the first three quarters of the year."

It's only a matter of time, BNP, before Cuomo finds a way to annoy the shit out of you, too.

All US Financials To Be Nationalized (CNBC)
Eclectica Asset Management CIO Hugh Hendry is under the impression that all or at the very least the vast majority of US Financial institutions will be under the thumb of the Senate by the end of the year. While the argument isn't fully detailed, I imagine it's a variant of the tried and true "too big to fail".

Paulson Questions Wall St Pay (WSJ via DJNW)
"Mr. Paulson, who had a lucrative career on Wall Street, also questioned compensation practices of the financial-services industry, saying policymakers need to ensure those practices don't "encourage unsafe and unsound risk-taking or reward failure.""

"And he took aim at the practice of slicing and dicing loans and packaging them for sale to investors, saying there needs to be a "wholesale review" of such securitization."

Usually casting stones is a diversionary tactic, the idea being that if you attack something that everyone dislikes, you'll draw the attention off of yourself long enough that maybe no one will notice how monumentally you fu*#ed things up. I can only imagine that's what Paulson's trying to accomplish, as there's absolutely jack shit wrong with tranching. Let's review the basics: it distributes default risk across a pool, and it allows for the segmentation of risk classes among risk seekers. Tranching had absolutely nothing to do with the current credit crunch; that's a myth that needs to get dispelled quickly.

If you're going to point fingers, it would be wise to start with the mental powerhouses that are the Regional banks. The Regionals, for those of you late to the game, issued loans to speculative contractors, and then facilitated the issuing of loans to cover the original loans, increasing their bottom line. This is only a problem when you consider that they knew that the second round of loans could be packaged and sold - meaning they didn't face any of the default risk - and the first round couldn't, which in turn means it was in their interest to make risky loans to cover their in-house loans. America got screwed by the bank at the street corner, not the one on Broad Street.

--William Richards

GMAC Files Application With Federal Reserve to Become Bank Holding Company (Press Release via DB)

GMAC Financial Services ("GMAC") today announced that it has submitted an application to the U.S. Federal Reserve Board of Governors for approval to become a bank holding company under the Bank Holding Company Act of 1956, as amended (the "BHC Act"). GMAC also announced today that it has submitted an application to the U.S. Treasury to participate in the Capital Purchase Program created under the Emergency Economic Stabilization Act of 2008, conditional upon becoming a bank holding company.

As a bank holding company, GMAC would obtain increased flexibility and stability to fulfill its core mission of providing automotive and mortgage financing to consumers and businesses. GMAC also expects to have expanded opportunities for funding and for access to capital as a bank holding company. If GMAC's application to become a bank holding company under the BHC Act is accepted, GMAC Bank will become a Utah chartered Federal Reserve member bank.

GMAC also announced that it has commenced separate private exchange offers and cash tender offers to purchase and/or exchange certain of its and its subsidiaries' (the "GMAC offers") and Residential Capital, LLC's (the "ResCap offers") outstanding notes listed below held by eligible holders for cash, newly issued notes of GMAC and, in the case of the GMAC offers only, preferred stock of a wholly owned GMAC subsidiary, upon the terms and subject to the conditions set forth in the applicable confidential offering memoranda, each dated November 20, 2008 (the "offering memoranda"), and the related letters of transmittal. The purpose of the offers is to increase GMAC's capital levels while reducing the amount of GMAC's and ResCap's outstanding debt in connection with GMAC's capital plan relating to its application to become a bank holding company.

Senate To Probe Bond-Ratings Firms (Reuters)
A Senate subcommittee is going to be investigating the involvement of the ratings companies in the recent credit crunch, looking into whether there were conflicts of interests that may have led to the other big three handing out ratings as tokens of affection.

I don't think there's any big secret here: the credit companies dropped the ball. Well, they didn't drop it: they threw it down, peed on it, and capped it with a nice bow. Really though people, it's the thought that matters.

Iceland May Not Fail, Receives $4.6B Bailout (Bloomberg)
Iceland is looking at $2.1B from the IMF, and another $2.5B from Sweden, Denmark, Norway and Finland. The money is gong to be used to stabilize the currency through recapitalization of banks, which should limit the contraction of the economy somewhat.

Just a note: Iceland reminds me a bit of the quiet kid in High School that went crazy and lit his girlfriend's car on fire in the parking lot (no, she wasn't in it). You can almost see these things coming: a slight shift in the eye, their hair just a little too frazzled. All I'm saying is maybe England should consider catching the bus for the next couple of days.

Treasury Yields In Decline During Flight To Safety (FT)
"The yield on two-year US Treasury bonds hit a record low of 1.06 per cent, responding both to the fresh flight to safety and the prospect of lower interest rates. Eurozone government bond futures hit their highest level since March 2006."

The incentive to save is approaching zero, which would normally mean a bout of inflation; I don't think we're going to see that here. Everyone producing consumer goods so over manufactured that they can't get rid of all of their shit: it's just sitting in warehouses. I don't know that food costs will rise considerably over the holiday season, and I can't see gas becoming overly volatile. What I would worry about is an inflation whip when things start to speed up again, considering the moves in Ms.

Big Three CEOs Flew Private Jets to Plead for Public Funds (ABC)
If only they were based in New York, I'd love to see Andy Cuomo blow a gasket over this one.

Top Traders Still Expect The Cash (WSJ)
Wall St. has been a culture of BSD for at least the last 20 years and if traders, managers, and bankers have anything to do with it, it will stay that way. Unfortunately, in this climate, we're being hunted: so intuition would tell you to shut the hell up. So, what's the call?

If I have a vote, I say we fight the bastards until we're all either dead or in jail - but I have that "Hunter S. Thompson" streak in me.

Notable excerpt from the article:

"The year's three hottest trading areas -- commodities, currencies and interest rates -- generally are housed within banks' fixed-income trading divisions, which also typically include the hard-hit mortgage-trading and credit-derivative products. That is dragging down potential compensation for even the best performers."

Citi Liquidating Corporate Special Opportunities Fund (FT)
I'll keep this short, because FT wraps it up nicely:

"The fund faltered even though Citi supplied it with $450m in credit lines and equity infusions of about $320m. It also bought assets with a notional value of $1bn that it placed in the fund."

If we took the old "Chuck Norris" adages and could somehow find the opposite of them, I think we'd get Vikram Pandit adages. And I would love them.

CNBC Guilty Of Fear Mongering (CNBC)
Deferred Compensation is a perfect example of an Institution offering a value added service through structure. Basically, they just take part of your pay and hold on to it (generally paying interest, which compounds) - when you separate from the company (&v retire) you get the money back. It's simple: it doesn't look anything like a bonus, it doesn't smell like a bonus, and A.G. Cuomo probably won't investigate it like a bonus (though I'm not promising he won't bitch about it like a bonus).

But to CNBC, it's a Payout. Good job, CNBC. We should call salaries "capital distributions" and stock options "shareholder investment payouts".

Japanese Banks In Need Of Capital (Reuters)
Japan's leading banks are looking for capital infusions as the slow down works its way across financial markets. We all knew that ripple effects were coming. The initial shock is always a fun shit show, but much like an earthquake you can't really tell all the damage that's done until after the tremors stop - small forces can kill buildings and empires after being so thoroughly violated.

Look for the Banks to issue preffereds (and a possible pac-man for Morgan?).

CPI And Housing Starts At 8:30 (Bloomberg)
We're going to see the CPI fall and Housing Starts are going to be down (of course) but the market should have all of this priced in.

GE Capital Cutting $2B In Costs (FT)
GE is actually looking forward, restructuring its Financial unit (are you paying attention GM?) so as to account for the rising cost of credit and to face potential liquidity issues in the future.

In the move we're likely to see layoffs and the sale of roughly $90B in "highly leveraged assets". Also mentioned was a cut in exposure to GE's bottom line:

"Jeffrey Immelt, GE's chief executive, has pledged to cut the finance arm's contribution to profits from about 50 per cent to 40 per cent."

--William Richards