Shorter DealBreaker

Shorter DealBreaker

airbus.jpgAirbus CEO dropped trousers for plane deal: book (Reuters)According to Boeing versus Airbus, a book by writer John Newhouse that will be published tomorrow, the colossal rivalry was born when a pair of pants were dropped; specifically, those of Jean Pierson. While at US Airways for a meeting to seal a 400-plane deal with then-chair Stephen Wolf back in ’97, Pierson, apparently unwilling to bend to Wolf’s pressure to get a 5% discount, did what any good businessman would do—he dropped trou.

“Pierson began slowly lowering his trousers and saying ‘I have nothing more to give.’ He then allowed the trousers to fall around his ankles,” says Newhouse in his book.
Wolf replied: “Pull up your pants. I don’t need any more money,” and the deal was signed, according to the book. The author says he got the story from Pierson himself, and it was confirmed by another person present.
Shortly afterward, US Airways announced the purchase of 124 single-aisle Airbus A320 family jets with options for 276 more, a stab into the heart of Boeing’s competing 737 program. It put the European company on track to overtake Boeing in global orders only two years later.

Not unlike to how the DealBreaker/DealBook rivalry was started. (Though that story involves a lot more planes, a sombrero and a scuffle at the Canadian border).
Backdating Is Revealed by 28 Companies to Avoid Taxes (Bloomberg) No fewer than 28 companies being investigated for backdating have named executives who were given “improper grants” in order to save themselves from millions in tax penalties. Fifteen chairmen and chief executive officers, according to the filings handed over to the S.E.C., in addition to other higher-ups, received options to purchase shares below market prices. Somewhere, in an undisclosed location, Steve Jobs is laughing manically and saying to his butler “I told you, Jeeves—in order to ensure our survival, I have to take down a few peons along the way. Don’t look at me like that. C’mon, you know I can’t stand it when you’re mad at me. Now, what do you say to an episode of “The Office” on my new phone?”

BIG BOARD BRASS ARE ‘SEAT CHEATS’: SUIT
(NYPost) Paul Rittmaster, Sylvia Lief and Janet Hyman—former NYSE seatholders who sold their seats in late 2005 for around $1.5 million each—will face the Big Board in court, arguing that Chief Executive John Thain did not inform them of a pending merger with Archipelago, which caused seats to jump to $2.4 million, and a $4 million sale that December. The three plaintiffs are asking for at least $2.5 million each. Not surprisingly, it was Judge Charles “I don’t take s*** from anybody, especially not Johnny-boy Thain” Ramos who shot down the NYSE’s attempt to dismiss the case last week.

‘Mad Money’ talks, students listen
(boston.com) Legions of Ritalin-addicted college students find meaning in a man who doesn’t consider it odd to threaten to “eat a vintage Sears, Roebuck catalog.” (Which it’s not, we’re just trying to give you a character sketch here).
Wall Street’s Weathermen (Forbes) Wall Streeters care about the weather, and not just because 60 Januarys mean their “adorable and fashion forward blue shirts/black pants ensembles are no longer obscured by dumpy winter coats.” (Though that’s a large part of it).
Lindsay tackles DJO, founded by former NFL player Mark Nordquist. (WallStrip)

Shorter DealBreaker

BabyNewYear_1.jpgNYSE to Close in Ford’s Honor (WSJ) We grew up believing that Gerald Ford was at best a joke and at worst an enemy. It’s still hard to not think of Chevy Chase’s pratfalls when we hear his name. And his choice of liberal Republican plutocrat Nelson Rockefeller as vice-president marked him as not only on the wrong side of history but on the wrong side, period. In the years since he exited the stage of national politics the best thing that can be said is that he stayed off stage, no small feat in the age of ex-presidents as global superheroes. But we’ll give this to him: the man knew when to die. The NYSE, the America Stock Exchange, the Chicago Board Options Exchange and the CBOE Futures Exchange have all announced they will be closed on Tuesday in observance of a national day of mourning for Ford. And now the banks are sending out memos giving everyone the day off as well. Which means we hit this New Year’s Eve weekend with four days off—and an extra day to recover from the damage we plan to do to ourselves, our loved ones, our livers and our souls on Sunday night. So here’s to Ford. In the end, not such a bad guy.

Apple Probe Finds Jobs Recommended Some Grants
(WSJ) Here’s an Apple commercial you won’t see—the one where Hodgeman comes on asking why the hell the Mac guy is always so effin smug, and the Mac guy replies that not only did he get backdated options but he’s totally getting away with it. Look, we’ve said again and again that, for the most part, backdating was a phony scandal. And nothing illustrates this better than what happened with Steve Jobs’ backdated options grants. You see, Jobs got two grants that were pegged to earlier dates, essentially giving him options that would be priced cheaper than if they were dated on the correct date. But these were later cancelled when the company gave Jobs a bunch of restricted stock. Now if you keep in mind that restricted stock is basically an option with an exercise price of zero, you can understand why scandalizing backdating is so silly. A cheaper option is a crime but a free grant isn’t? It’s a wonderful world.

Hedge Hogging
(New York Post) The limits of the insider trading laws are a bit fuzzy, in part because so few of those charged actually go to trial. Except for the most obviously criminal enterprises—such as this year’s Plotkin Plot—the SEC settles most insider trading cases out of court, which means that there actually isn’t much in the way of legal precedent testing the limits of the laws. So you can bet on some legal fireworks in the case of John Mangan, a co-founder of Mangan & McColl Partners, who was accused by the SEC yesterday of insider trading. Mangan is accused of gaming a PIPE of CompuDyne stock, and plans defend himself by claiming it was just a bureaucratic mix-up. The outcome of the case could provide guidance for how banks and hedge funds can be held liable for screwing up trading executions.
Bringing Back The Brick (GrooveKing) Nothing says classic Wall Street like the old brick cellular phone. Now someone has gone and figured out how to get one of these babies working again by tearing out the insides and using Bluetooth technology to bring it up to date. Bess, we finally found a Hanukah gift for you.

And That Was 2006:
The entire DealBreaker team wishes you a happy New Year. We’ll be back on a full schedule next week. See you in 2007.

Shorter DealBreaker

thehodgmeister2.jpgBernanke Recovers From Missteps to Earn Inflation Credibility (Bloomberg)

After early doubts about the Fed chief’s commitment to fighting inflation and charges that he was too candid about policy, investors are now giving the 53-year-old Bernanke a vote of confidence. The yield on the benchmark 10-year Treasury note has fallen to 4.65 percent — from 5.25 percent in June — even though he stopped raising interest rates in August with inflation above his declared comfort level.

It’s like we always say– never question the street cred of a man with a beard. It’ll always come back to bite you in the ass. Always.
SEC Charges Trader (The Street) The SEC has filed a suit against John Mangan Jr., a former hedge fund manager, for the alleged insider trading of shares in a small company involved in private placement. The lawsuit is the “latest in a long string of regulatory actions to stem from the investigation into allegations of improper trading in [a 2001 investment in PIPE], which raised $12 million for Compudyne, a Maryland security-services company.
Apple ‘falsified’ files on Jobs’ options (Financial Times) Stevie-boy Jobs was reportedly given 7.5 million stock options back in 2001 sans the pesky little “required authorization” from Apple’s board of directors.

Records that purported to show a full board meeting had taken place to approve Mr. Jobs’ remuneration, as required by Apple’s procedures, were later falsified. These are now among the pieces of evidence being weighed by the Securities and Exchange Commission as it decides whether to pursue a case against the company or any individuals over the affair, according to these people.

Still adamant in his desire to “F the S.E.C,” Jobs apparently continued today barraging reporters with threats pointed toward the government organization in regards to his purported might as bizarrely derived by a recent series of television ads produced by Apple. “Have you seen our ‘I’m a MAC/I’m a P.C. commercials?” he was heard asking a reporter in a tone that was best described as sounding “psychotic.” “If you’d seen them you’d know the S.E.C. don’t have shit on me.” “No, really, I’m not kidding you, if you can’t agree with the statement ‘That Hodgman get my goat every time,’ you haven’t seen the commercials. Most people think the one with them in the boxes is the best but I think the best one is when P.C. and MAC are at a “marriage counselor” and they’re talking about how P.C. feels inadequate compared to MAC and oh my god it’s just hilarious, they’re pretending to be like a husband and wife, I kid you not, I’m in stitches every time I see that one. STICHES! I’m not kidding. I love those ads. I love them. I love them. [whispering] I love them. I love…[trails off].”
Seagate CEO apologizes for porn remark (Fortune) We just like that headline. Sue us for living.
PAYOLA SCORES ANOTHER $4.25M (NYP) Shocker: Hurricane Spitzer strikes again.
Lindsay gets a visit from Mr. Flash (WallStrip)

Shorter DealBreaker

newcramerdoll.jpgEx-Trader Tells Story as a Warning (NYT)
After you’ve lost $1.3 billion in Japanese stock futures and bonds, run your employer into the ground, provoked the ire of the Queen of England and served four years in prison, there isn’t much left to check off on the Things To Do Before I Die list, save for serving as the general manager of an Irish soccer club, is there? Nicholas W. Leeson, a 39-year-old Londoner who has the distinct pleasure of having accomplished all of the aforementioned, begs to differ. The “Rogue Trader,” who began working for Barings Bank in 1989 and had no small part in its ’95 $1 billion-in-losses-collapse, now tells his cautionary tale to the tune of £5,000 ($9,800) a speech, in addition to a book deal and the general contentment of being able to say Hey, I may have lost a 233 year old bank a pretty penny, but now I’m turning the tables on them and insisting “The British bank was culpable for failing to supervise [me] and for accepting the bluster of a young trader who was prepared to disguise his trading losses.” You can’t put a price tag on that kind of satisfaction.
Bernanke, Fukui, Trichet May Fail King’s `Boring’ Test on Rates (Bloomberg)
2006: skinny jeans, Aleksey Vayner, Jim Cramer bobble heads, predictability. 2007: mini-skirts, Valentin Mironov, Jim Cramer dashboard dolls*, volatility. Analysts are expecting a global economy with both slowed growth and inflation; Goldman predicts Bernanke will cut the Fed’s rate to 4.5 percent, Barclays thinks it’ll be kicked up to 6. John Lipsky foresees “reasons why you should worry that [things] could be dicier.”
Questions for Peter Singer (NYT Magazine)
In case you missed it, Peter Singer (the Ira W. DeCamp professor of bioethics at the Center for Human Values at Princeton University) answered Times Magazine readers’ questions about the ethics pertaining to spending and philanthropy over the weekend. Unsurprisingly, Singer is painfully principled (“Ultimately, I don’t think my [minimal] indulgences can be justified. I know that I’m very far from being a saint. I should spend less on myself and give away more of what I earn. Of course, I give much more than most. But I know that that isn’t the right standard. As for deciding how much is enough, I just do a little better each year”) and pragmatic (“I’m a pragmatist: whatever works”), but we’re pretty sure most of you will be willing to overlook such character flaws if only for the singular reason that Singer steps into the ring with Carney, Muhammad Yunis-style.
Winners and losers: Tallying a year of outsize successes and bitter disappointments (Bloomberg News via IHT)
“Where there’s a loser, there’s a winner,” is what our psychologically-damaging-to-an-11-year-old tennis coach used to tell us. But you know what? He was right. When somebody loses, somebody else wins. He was also right about the fact that there’s nothing wrong with seeking approval even if it brings one to the brink of a nervous breakdown, if it brings perceived satisfaction to those from whom we are seeking it. Maybe if Yahoo! had done a little more seeking and a little less sinking, it wouldn’t be watching YouTube get a pat on the back from Bloomberg on the other side of the court. We mean net. Internet. Why won’t you love me?!
Biz-y day at some N.Y. shops (NYDN)
Having beat the dead horse that is the old “we’re out of ice” trick a few too many times, but still desperate to get out the house, consumers took to the streets and racked up nearly $16.2 billion in sales over the weekend. Too little, too late, however, for the economy’s sake, as sales are predicted to be up less than 5% nationally this holiday, the slowest pace since 2002.
New Year in Detroit (Forbes)
Jonathan Fahey’s tips for GM, Ford and Chrysler. Hint: turn a profit.
*like the hula girls? Don’t even try and act like you’re not psyched for those bad boys.