Merkel Heads For Debt Showdown With Hollande At EU Summit (Bloomberg) German Chancellor Angela Merkel said she won’t shy away from disagreeing with French President Francois Hollande at the summit in Brussels over dinner at 7 p.m., the next major appointment of leaders seeking to allay concerns that Greece may quit the euro, putting Spain and Italy at risk as well. Good cooperation “doesn’t exclude differing positions,” Merkel told reporters yesterday in Chicago during a meeting of the North Atlantic Treaty Organization. “These may very well arise in the context of the European discussions.” Morgan Stanley Says It Played By Rules In Facebook’s IPO (Bloomberg) “Morgan Stanley followed the same procedures for the Facebook offering that it follows for all IPOs,” Pen Pendleton, a spokesman for the New York-based investment bank, said yesterday in an e-mailed statement. “These procedures are in compliance with all applicable regulations.” Inside Facebook's Fumbled Offering (WSJ) Interviews with more than a dozen people involved in the IPO reveal that Facebook approached its deal differently than companies typically do. Facebook CFO Ebersman kept a close grip on every important decision on the stock offering, not deferring to his bankers the way many companies do, according to the people familiar with planning...Mr. Ebersman had asked Facebook's early shareholders to fill out a form indicating how many shares they would like to sell in the IPO and at what price, and to indicate whether they would be willing to sell more if the share count was increased, the person said. When Mr. Ebersman learned from Mr. Grimes that there was outsize investor demand, he went back to those forms and reached out to early shareholders to cash out more stock, the person said. Gupta On Rajaratnam's VIP List (NYP) Jailed hedge fund manager Raj Rajaratnam deemed only a handful of people — including ex-Goldman Sachs director Rajat Gupta — important enough to disturb his trading day, Rajaratnam’s former assistant testified yesterday in Manhattan federal court. Carlyn Eisenberg, the government’s first witness in the trial of Gupta on insider-trading charges, said his name was on a “special list” of those whose calls she was to put through to her then-boss. She said it was one of those calls in September 2008 that triggered a flurry of trading activity at Rajaratnam’s Galleon Group, shortly before Goldman Sachs announced it had landed a $5 billion investment from famed investor Warren Buffett...Eisenberg recalled getting a call several years ago from a man whose voice she recognized as being on the list at the time, although she said she couldn’t identify it now as belonging to Gupta. The call, which phone records later showed came from Gupta’s McKinsey & Co. office, arrived minutes before the close of markets on Sept. 23, 2008, according to Eisenberg. The caller “said it was urgent and he needed to speak to Raj,” she told jurors. After Rajaratnam took the call, he immediately brought Galleon co-founder Gary Rosenbach into his office. When Rosenbach emerged, he began making calls, saying, “buy Goldman Sachs,” Eisenberg testified. More Finance Chiefs Willing To Pay Bribes, Global Survey Finds (Bloomberg) Fifteen percent of chief financial officers around the world are willing to make cash payments to win or retain business, according to a survey of executives interviewed by the accounting firm Ernst & Young LLP. The firm’s annual “global fraud survey” of 400 finance chiefs, interviewed from November to February, found a greater tolerance of bribery compared with the previous year, when 9 percent said they would make cash payments. Five percent of CFOs said they would misstate financial performance, while 3 percent said that the year before, according to the survey. Troubleshooter In Running To Succeed Dimon (FT) For relaxation, Matt Zames shoots things. Mostly birds. But the 41-year-old JPMorgan Chase executive does not have much free time for hunting now. He is busy mopping up his bank’s biggest mess since the financial crisis. Last week Mr Zames was appointed to replace Ina Drew as head of the bank’s chief investment office, whose London-based trading unit has wiped $30bn off its parent’s market capitalisation. “When you’re in a difficult spot you find out who you want to be in a foxhole with,” says Jamie Dimon, chief executive of JPMorgan. “Matt puts his hand up.” Barclays To Sell Entire BlackRock Stake For $5.5 Billion (Bloomberg) The lender sold about 26.2 million shares to money managers for $160 each, London-based Barclays said in a statement yesterday. Underwriters have the option to purchase an additional 2.6 million. New York-based BlackRock will buy back a further 6.38 million shares at $156.80 per share, about 8.8 percent less than the stock’s $171.91 close on May 18, the last trading day before the deal was announced. Tall Tales About Private Equity, By Steve Rattner (NYT) To be sure, some of Bain’s large leveraged buyouts — notably, Domino’s Pizza — added jobs. But Mr. Romney left Bain Capital two months after the Domino’s investment (7,900 new jobs claimed) was finalized. Aware of private equity’s reputation, Mr. Romney still trots around the country erroneously calling himself a “venture capitalist.” And in a further effort to deflect attention from the Bain Capital debate, Mr. Romney last week argued that President Obama was responsible for the loss of 100,000 jobs in the auto industry over the past three years. That’s both ridiculously false (auto industry and dealership jobs have increased by about 50,000 since January 2009) and a remarkable comment from a man who said that the companies should have been allowed to go bankrupt and that the industry would have been better off without President Obama’s involvement. Adding jobs was never Mitt Romney’s private sector agenda, and it’s appropriate to question his ability to do so. Stryker CEO Sought Nod For Romance (WSJ) Mr. MacMillan, 48 years old, was forced out partly because certain board members became bothered by his handling of a relationship with a former flight attendant for the company's corporate jets while his wife pursued a divorce, according to people familiar with the matter. What distinguishes his story from others in this well-worn genre is that, according to a person familiar with Mr. MacMillan's version of events, the CEO approached Mr. Parfet and Louise Francesconi, head of the board's governance and nominating committee, in late September seeking their approval to date the employee, Jennifer Koch. Facebook Analysts Who Shunned Herd Now Look Like Heroes (Bloomberg) The social networking site lost 19 percent through yesterday to $34.03 after opening at $42 on May 18. That’s consistent with warnings from Richard Greenfield of BTIG LLC and Brian Wieser of Pivotal Research Group LLC, who says the stock will slip as low as $30. It left five firms with bullish calls predicting an average rally of 36 percent and one, Tom Forte of Telsey Advisory Group, saying shares may rise 47 percent to $50.

J.P. Morgan Unit Made Risky Bets on Firms (WSJ) The JPMorgan unit whose wrong-way bets on corporate credit cost the bank more than $2 billion includes a group that has invested in financially challenged companies, including LightSquared Inc., the wireless broadband provider that this month filed for Chapter 11 bankruptcy protection...The Special Investments Group last year took a $150 million stake in closely held LightSquared, in a deal that J.P. Morgan lost money on, according to a person familiar with the bank. Both Campaigns Seize on Romney’s Years at Bain (NYT) ...the Romney campaign is actively recruiting testimonials from workers who have had positive experiences with Bain. It is getting ready to release advertising highlighting Bain’s marquee success stories, like the turnaround of Staples. It is considering seeking out middle-class surrogates — a fireman or members of a teachers union, for instance — who would be willing to talk about how Bain managed and increased the size of their pension funds, a lesser-known aspect of private equity...Mr. Romney’s advisers are betting that if they stay out of the nuances of private equity and tell a story about turning around failing companies, they can transform the Bain attacks into a narrative that underscores Mr. Romney’s image as a skilled executive who can steer a troubled economy back to prosperity. ECB Official: On Greece, ‘We Are Working on Plan A’ (CNBC) "It's our strong preference that Greece stays in the euro zone...We are working on plan A," Joerg Asmussen said in the interview yesterday. "I always work on plan A. I am not speculating, I am working to make plan A successful," he added. What Would A Greek Exit Mean For The US Economy? (Reuters) usiness investment would stall, banks would pull back on credit, and lost wealth as equity prices fall would cause consumers to slow their spending. Commodity prices would plunge, helping importers but hurting growth in export economies. Merkel May Be Persuaded On Euro Debt-Sharing Compromise (Bloomberg) Chancellor Angela Merkel left the door open to a compromise on debt sharing in the euro area as Italian Prime Minister Mario Monti said he can help bring Germany round to acting in Europe’s “common good.” Short Sellers Find Friends In Banks (WSJ) As traders at Morgan Stanley were frantically trying to shore up Facebook Inc.'s FB share price following the company's initial public offering, other managers on the deal were helping short sellers bet that the newly minted stock would fall. Trading desks at Goldman Sachs Group and J.P. Morgan Chase, two of the firms that helped Morgan Stanley underwrite the IPO, were among those lending out Facebook shares that hedge funds needed for short sales, according to people familiar with the matter. While it isn't uncommon for Wall Street firms to make shares available for shorting on IPOs they manage, Morgan Stanley, the lead underwriter, didn't lend shares, according to people familiar with the matter. Escaped monkey holds up flight at JFK for hours (NYP) Monkey business held up a Beijing-bound flight at Kennedy Airport nearly four hours yesterday. A monkey escaped its crate in the cargo hold of an Air China Boeing 747 scheduled to leave Terminal 1 at 4:50 p.m., said Port Authority police. Port Authority emergency services officers and an airport worker caught the monkey and handed it over to the airline. The animal never got out of the jet’s cargo hold. The foot-tall monkey was one of about 50 to 60 being shipped to China for medical research, said police sources. “He was a slippery little beast,” one source said. Bankia Shares Suspended Ahead of Board Meeting (WSJ) EFE news agency reported Thursday that the lender will ask the government for more than €15 billion ($18.80 billion). The bank said it requested the suspension ahead of the meeting, at which it will also approve its 2011 earnings report. The board meeting will begin at 2:30 p.m. GMT. Moody's Downgrades Major Nordic Banks (WSJ) Moody's said the funding and margin issues left the banks susceptible to unexpected losses from which it would be a challenge for them to rebuild capital. It also highlighted risks to asset quality, with the Swedish economy exposed to weakness in Europe and the banks' variable-rate mortgage books vulnerable to interest rate changes. USDA Is a Tough Collector When Mortgages Go Bad (WSJ) Unlike private firms, the USDA doesn't need permission from a court to start collecting on unpaid debts. It can in some cases seize government benefits and tax refunds before a foreclosure is completed. After foreclosure, the USDA can go after unpaid balances, even in states that limit such actions by private lenders. Nasdaq CEO went ahead with Facebook IPO despite signs new software had bugs (NYP) During a conference call on Monday evening, Nasdaq officials said that they were unaware of any problems with the system. However, sources said that there may have been signs that the system wasn’t glitch-free even at the 11th hour and that Nasdaq opted to roll the dice. “They may have thought they did not have any material issues with the systems,” said one exchange platform official. Lacrosse Party-Boy Image Worries Coaches Who See Slower Growth (Bloomberg) “It’s really important that the lacrosse world grows up a little bit,” Danowski said from his office in Durham, North Carolina. “We are getting more TV exposure; more people are able to make a living through lacrosse. If we want to be accepted in the mainstream, then it’s time for us to grow up.”

Economy Adds 171,000 Jobs (WSJ) U.S. payrolls increased by a seasonally adjusted 171,000 jobs last month, the Labor Department said Friday. The politically important unemployment rate, obtained by a separate survey of U.S. households, rose one-tenth of a percentage point to 7.9%. Economists surveyed by Dow Jones Newswires expected a gain of 125,000 in payrolls and a 7.9% jobless rate. Hedge Fund Cashes In On Greek Bonds (Reuters) London-based hedge fund Adelante Asset Management has made a 70 percent gain on a sale of Greek bonds, showing the potential for big profits from betting on a recovery in the fortunes of a country effectively off-limits to investors a few months ago...Since the restructuring, Greek government bond prices have strengthened, allowing Adelante to sell them for around 24 cents on the euro, having bought them for around 14 cents in June, the company said. A Greek government bond maturing in 2042, for example, is currently trading at around 20.8 cents on the euro, Thomson Reuters data shows. Other hedge funds have made similar bets. Third Point, a high profile New York hedge fund, for example, has been a significant buying of cut-price Greek bonds. RBS Eyes Libor Settlement Soon (WSJ) RBS wants to seal a settlement with regulators over its alleged rigging of key interest rates in the coming months, as the partstate-owned bank looks to draw a line under the scandal. Speaking to reporters at the bank's third-quarter results presentation, Chief Executive Stephen Hester said he would be "disappointed" if he couldn't provide details on a settlement by February. "We are up for settling with all and everyone as soon as they are ready. But each regulator has to satisfy itself that it has all the facts," he said. Deutsche Bank Faces Top Surcharge as FSB Shuffles Tiers (Bloomberg) Deutsche Bank would be required to hold more capital and Bank of America Corp.’s burden stands to be reduced as global regulators shuffled the competitive balance among the world’s biggest banks. Citigroup, HSBC and JPMorgan join Deutsche Bank as firms that will be targeted for a capital surcharge of 2.5 percent, according to an updated list published yesterday by the Financial Stability Board. The change means Bank of America already exceeds requirements, while Deutsche Bank would be more than 2 percentage points below the new minimum of 9.5 percent. “That limits earnings potential for Citigroup, JPMorgan and Deutsche Bank compared to Bank of America, all other things being equal, so it’s certainly a competitive advantage for them,” said David Kass, a professor at the University of Maryland’s Robert H. Smith School of Business. Short-Sellers of Europe Set to Be Unmasked (CNBC) The European Securities and Markets Authority (ESMA), the EU regulator, has issued new rules on the short-selling of securities indicating that anyone with short positions of greater than 0.2 percent in an EU company’s shares must report it to regulators. Positions of more than 0.5 percent will be publicly released, naming both the company and the short-seller. Public disclosure is triggered any time that level is hit with each 0.1 percent increase or decrease after that. NYSE Open For Business Shows Wall Street Still Vulnerable (Bloomberg) The Securities and Exchange Commission may consider whether exchanges’ emergency regimens need to be bolstered, according to a person familiar with the regulator’s thinking who asked not to be named because the matter is private. The industry’s decision to halt equities and bond trading shows the challenge of maintaining markets when a catastrophe threatens New York City, home to 168,700 securities industry workers. “One of the purposes of having electronic exchanges and basing them away from New York City is for the market to be more robust and stay open,” Charles Jones, a finance professor at Columbia Business School in New York, said in a phone interview. “This is what the back-up plans were designed for. But the markets didn’t open.” David Blaine Entertains New Yorkers After Hurricane Sandy (NYP) When a backup generator at Old Homestead Steakhouse sputtered, the restaurant started serving hundreds of pounds of steaks, burgers, lobster tails and shrimp on the street outside for downtown denizens. David Blaine, the modern-day Harry Houdini who spent days recently being shocked in a steel suit, pitched in to provide spontaneous street entertainment. “David was rumbling by on his motorcycle, and he stopped to see why there was a line on 14th Street,” said a spy, adding 800 chowed down. Blaine then asked restaurant co-owner Greg Sherry if there was a deck of cards in the house. Blaine used the full deck and some spare silverware to perform magic tricks outside for an hour and a half. The magic man, an Old Homestead regular, was offered a doggie bag but said he’s on a special diet in preparation for his next stunt. Romney Faces Sale With A Win (WSJ) Mr. Romney's assets, valued at between $190 million and $250 million, include investments in hedge funds, private-equity funds and partnerships at Bain Capital, which he ran for 15 years. These entities have ownership stakes in dozens of companies that could be affected by government action, such as radio firm Clear Channel Communications Inc. and a video-surveillance firm based in China. Many businessmen and wealthy individuals have entered government service and sold off holdings. But a Romney sale would be especially complicated. Investments in private-equity funds can be difficult to value and seldom change hands. Any sale would have to be handled carefully to avoid any appearance that the incoming president was getting favorable treatment from a buyer. What Do Asia Markets Fear? Romney As President (CNBC) At a time of heightened uncertainty, with the ongoing European debt crisis and the upcoming leadership transition in China, a new president in the world’s largest economy will cause additional nervousness among Asian investors, experts told CNBC. “Asian traders don’t like change in leadership. You would see weakness in the markets if Romney won, because people would question how well he would deal with the impending doom of the ‘fiscal cliff.’ Obama would be a safer bet, as investors would enjoy continuity at a time of a lot of uncertainty,” said Justin Harper, market strategist, at IG Markets...Besides, Romney’s stance on China is particularly worrying feels Harper. The presidential hopeful has said he will name China a “currency manipulator,” which could lead to more tensions with the mainland, including on the trade front. “You would expect trade between the two nations to suffer, this would have a knee-jerk reaction on trade in the region,” he added. Fed Up With Fees (NYP) The manager of a large public pension’s private-equity program said for the last 24 months he has not committed money to any new private-equity fund that doesn’t give all fees it charges its companies back to investors. He is doing this because he wants an alignment of interest where he and the private-equity firm only make money by reselling a business. PE firms, he believes, will stop charging their companies fees if there is little in it for them. So, KKR, for example — responding to pressure — has agreed to give all fees it charges its companies in its new fund back to investors, the pension manager said. KKR is not the only firm making this change. Apax Partners, Blackstone Group, Centerbridge Partners, Providence Equity and TPG Capital are among those making the same concessions, the pension manager said. Local shelter mistakenly euthanizes family pet (WRCB) After waiting 10 days to be reunited with his dog, a local college student learned the family's pet had been euthanized by mistake. The Lab mix was being held at McKamey Animal Center, where administrators say a paperwork mix up led to the dog's death. Matt Sadler adopted the three-year-old Lab mix when he was just a puppy. "That was my best friend," Sadler says. "He was there for me through my parents' divorce and a lot of really hard tough times in my life." It was hard for Matt when Zion was quarantined last week, after jumping on a pizza delivery driver. "The lady didn't want to press charges, it wasn't anything serious, but the law has a 10-day quarantine period," he says. Because Zion was a month past due on his yearly rabies vaccine, he was held for the full 10 days at McKamey Animal Center. Thursday, Matt eagerly returned to the facility to take Zion home. "She says, ‘I'm sorry, Matt, we accidentally euthanized your dog'," Sadler says...McKamey has offered to cremate Zion, and allow Matt to adopt any dog he chooses.