An update to yesterday's allegations that Hank Paulson is merely a tool of The Nature Conservancy's nefarious environmentalist agenda:

DealBook reports that Paulson was nonplussed:

The resolution, from the Free Enterprise Action Fund, hoped to explore whether Mr. Paulson's position as chair of the Nature Conservancy, among other things, was somehow working against shareholders' interest. "I think we know how to make money," he retorted at the meeting.

Paulson Melts Snow Talk, and More From Goldman Meeting [NYTimes]

*****DEALBREAKER EXCLUSIVE*****

Dealbreaker is prepared to reveal that Brock, the young man whose profile from the Lehman Brothers careers website we shared with you yesterday, has switched groups.

Easy now. There, there. Settle down. We know.

In his profile Brock said he was incredibly satisfied working as a technology banker. He said that he was happy to work in an industry that was both converging and diverging.

And although we did not understand how something could converge and diverge at the same time, we believed him.

Now we hear that he has moved over to Lehman's Fund of Funds, and we have to wonder:

Was Brock lying about his love for tech banking all along?

Was it just a change of heart?

Will we ever know?

In time, good reader.

In time.

Developing...

Brock At The Lehman Brothers Careers Website

One of the greatest challenges in business journalism is actually getting the people who matter to sit down and speak frankly about their affairs. This causes many business journalists to find it difficult to land important interviews, and big stories. As a result, many of these men are lonely and unloved, with only their ethics to keep them warm at night.

Me? I play the ball where it lies.

When I find that I cannot get through to someone, I simply close my eyes and imagine what that person might have said had we actually spoken. I then report whatever I imagined as fact. My critics have called this practice bogus and dishonest, but down to a single man my detractors have changed their minds in subsequent conversations that I have imagined myself having with them.

I recently shared an afternoon with Manuel Medina-Mora, the Chairman and CEO of Citigroup Latin America. At ease and surrounded by a clutch of young women on the patio of his hillside villa overlooking Acapulco Bay, Mr. Medina was in a reflective mood, and let down his guard to this young journalist as few captains have industry have before.

Trip Paulson: Let me start off the interview by...

Manuel Medina-Mora: "No, you let me start. Cockroach! Because nobody starts nothing in Acapulco without Manuel Medina Mora!"

Awkward silence.

Manuel: "Now I change my mind. Go ahead. You start."

Trip Paulson: Alright. Last year you did more deals in Mexico than...

Manuel: "Stop. No more. I cannot think, esay. I am in love with this woman, meng..."

Trip Paulson: You are?

Manuel: "Ay, cabron. She got me good! Like a bullet to the heart. I want to give her my chorizo and I can't stop thinking about it. And last night, I call her to say I love her! Guess what?"

Trip Paulson: What?

Manuel: "She say she love me too!"

Trip Paulson: Congratulations, that's just wonderful.

Manuel: (Points to three young women sunning themselves on far end of patio) "Watch this. Watch me, Trip. Puta esay, I'm going to make them kiss. Paola! Silvana! Mary-Carmen! Kiss!"

The New York Press released their annual "Most Loathsome New Yorkers" list yesterday and unless you count a handful of real estate developers and Michael Bloomberg, they only included one Wall Street guy: Ron Perelman. And he wasn't included for anything he did professionally; he was included because he spends time and money in St. Barth's (or St. Bart's, as the Press calls it) and playing musical wives.

But a trail of broken boards wasn't the only thing this cigar-chomping Romeo wracked up. There's also the trail of broken-hearted trophy wives: Claudia Cohen, Patricia Duff and even Ellen Barkin, twice! It seems as though it was only six months ago that Barkin was taking time out of the Palindromes junket to bill and coo about her man, who apparently approaches the pre-nup with the same humanitarian business sense he applies to the corporate takeover.

Only one Wall Street guy! This is a journalistic travesty! We can only assume that the Press neglected Wall Street because they don't know who any of the people are. They're too busy worrying about gentrification and how to make money off a free newspaper in a dying classifieds market.

But we'll take over where the Press left off: Send your nominees and we'll post a Most Loathsome, Wall Street edition. Send to tips AT dealbreaker DOT com.

Most Loathsome New Yorkers [NY Press]

Muffie Benson-Perella (muffie AT dealbreaker.com) is an Associate in the Investment Banking Division of a "Bulge Bracket" bank. She holds a B.A. in French and Art from Vassar College and an M.B.A. from Harvard Business School. Her regular column "Heard in the Suite" is a probing (and, ahem, fictional) weekly look into the secret lives and behind the velvet curtains of the investment banking world.

The people at work are entirely boring. No one goes out on Thursday.

The Managing Director in my group told me that I have to start thinking about industry areas I want to work in after my rotation in the Associate Ambassador program comes to an end. (I got into the Associate Ambassador program at work and it is just amazing, but that's another story). Personally, I think it is stupid that they don't let people be Ambassadors for their whole career, but Derek, my friend in the office, suggested that I should keep my opinion on this to myself.

I looked at the practice areas in the firm to see something that interested me. "Retail" seemed an obvious choice so yesterday I spent some time yesterday doing some research.

Court Rules Against Gabelli (NYT)
Mario Gabelli, mutual fund star, media staple, and Barron's Roundtable fixture, suffered a setback when a judge agreed that Gabelli's company illegally prevented an insider from selling his stake, paving the way for a trial to determine whether Gabelli Group Capital Partners should be legally dissolved. It's been a tough time for the man from Rye, as the DOJ recently announced civil fraud charges against him, relating to federal wireless spectrum auctions. No word on whether he'll be invited back to next year's Barron's Roundtable. We always skipped over his picks anyway.

House Members Condemn Immigration Bill (CNN)
For those who suggest that illegal immigrants do jobs that Americans don't want, the anti-immigration wing of congress has one thing to say to you, "Let the prisoners pick the fruit!" Hmm... there's a logic to that, although Rep. Steve King of Iowa said, "Anybody that votes for an amnesty bill deserves to be branded with a scarlet letter 'A'". Is everyone who voted for the bill also an adulterer? Rep. Virgil Goode tried to match his colleague in the non sequitur dept., "I say if you are here illegally and want to fly the Mexican flag, go to Mexico and wave the American flag." With brilliant statements like these, it's clear who has the facts on their side in this debate.

No IPO For Vonage? (CNN Money)
Despite the fact that they've filed their S-1, there's been no amendments in 2 months, and that's leading some to speculate (and it appears to be entirely speculation) that company is putting themselves on the block. The S-1 was received unenthusiastically as they're already facing moderate churn and high customer acquisition costs (perhaps you've seen their ads?). So who would buy them? Maybe AT&T could get them cheap, and switch their customers to its Callvantage plan. An interesting development in this space was also Comcast's recent announcement that they plan to charge over $50/month to some customers for their digital voice (VOIP) offering. Seems like quite a lot, a high enough price point to keep the Vonages of the world in the game.

J.P Morgan Wants Rivals' Branches (WSJ)
J.P. Morgan is still really interested in physical bank locations. The company is looking to pick up 300 of Bank Of New York's locations, probably via an asset swap, giving the nation's oldest public company some of their corporate-trust division. This would probably work out for both, as it allows BONY to focus on their core business, while JP Morgan can invest the money to spruce up and improve the technology at the locations.

We're not sure who at CNBC decided that Michael Eisner needed a talk show, but we suspect that it may be the same person who decided Tina Brown and Dennis Miller needed a talk show. We were passively watching it late Wednesday night when our cable provider decided to invoke the Emergency Broadcasting System siren, and the screeching buzzer was almost better TV.

We'll admit that it was fun to watch Eisner interview Sir Howard Stringer and ask him questions about Michael Ovitz while trying not to flinch, and the preview for the next show--Regis Philbin grilling Eisner about why he pulled 'Millionaire'--was entertaining if only because we don't think Philbin could even get a meeting with Eisner when Eisner was still "working," but...

Eisner is a charisma black hole. Where even the most loathesome people have a smidgen of charisma they can pull out in case of emergency/multi-million-dollar syndication deal/divorce court hearing, Eisner has a big empty void, a charisma abyss. On a scale of one to charismatic, Eisner is a negative 10 Clintons. It's painful. And we're apparently not the only ones who think so.

During the call-in portion of Jim Cramer's show just now, a caller complained that he turned on CNBC at 9PM Wednesday, expecting to find Mad Money, but it wasn't there. Cramer: "That's Cramer being a team player!" [Cramer pushes a button, gratuitous sound effect.]

Caller: "Yeah, but how's that guy gonna make me any money?"

Cramer: "That's Cramer defaulting to teeeeam player!"

Somewhere at CNBC, a call screener is getting a slap to the back of the head.

= Dead hooker

X 1 = More mundane and predictable than Mel Gibson's anti-Semitism. (C'mon. Man Without A Face? Don't even pretend you didn't know that was a metaphor for Hitler.)

X 5 = Put her in a bag and walk promptly but cautiously out of the hotel. Drive to the docks. Make the drop with a guy named Snakes. Speak to no one. You were never here. Where? Exactly.

Name: Brock
Position: Associate; Investment Banking
Education: Northwestern University; University of Chicago

What I do:

"As an Associate in our Global Technology Group, I help cover a very dynamic industry. Our clients span a broad spectrum of industries...We help our clients achieve their objectives via capital markets transactions, or by providing financial or strategic advice."

Dealbreaker translation:

"I make a lot of pitchbooks, and when they are done, I check them for spelling errors and to be sure that the page numbers are correct. Then I get to bind them! Sometimes I bind them with big plastic spirals. Sometimes I staple them together. Othertimes I fasten them with clips. I also furrow my brow a lot."

What I enjoy about my job:

"The companies in the technology sector are both converging and diverging simultaneously. I need to stay on top of the economic and strategic developments of a broad spectrum of companies. It is extremely challenging, but the pace is exciting."

Dealbreaker translation:

"I don't know if I mentioned this, but I get $25 a night for dinner. On weekends that adds up to $75 for three meals. Oh yeah, I hit up all the big delivery joints in midtown. Mangia? The know me. Haru? Sure. Every now and again, when I'm feeling a little crazy, I'll get the boys together, head over to Smith and Wollensky, and just go wild! Cabernet Sauvignon by the glass? Damn son, I told you I was loco!"

Why I chose Lehman Brothers:

"I have actually chosen to work here twice, first as an Analyst after college and now as an Associate post-graduate school. Both times it was for the same reasons - the culture and the creativity..."

Dealbreaker translation:

"My father sails with the head of M&A, and in this life we take what we can get."

The most exciting project I have worked on:

"I am currently working on a potential initial public offering (IPO) of a company that is simultaneously contemplating a merger with a division of a foreign company controlled by a financial sponsor...It is incredibly exciting!"

Dealbreaker translation:

"I've been working on an ongoing transaction with one client called The West Garden Spa. I know better than anyone that Asia is where the future lies, and I can't imagine a better place to bone up on my Korean while also boning up generally. I've done this transaction perhaps twenty times now, and have come away totally reinvigorated each time."

Lehman Brothers Careers Website

A couple of Goldman Sachs shareholders from something called the Free Enterprise Action Fund are seeking support for a proposal they're putting forth at tomorrow's shareholder meeting. In it, they note that Goldman CEO Hank Paulson is Chairman of the Board of the Nature Conservancy and allege that he's promoting the Conservancy's nefarious agenda via Goldman's shareholder value-destroying environmental policy.

And they have a point. Environmentalists don't belong in banking! If we ever start a bank, we're going to build it entirely out of styrofoam, line it with asbestos and park our Hummers in the front.

Does CEO Hank Paulson Run Goldman Sachs for Himself?, Asks Shareowner Group [PRWire]

James Gorman, in an effort to clean up Global Wealth Management (screw that; we're still calling it "retail") is axing 20 - 25 senior executives in the New York and Westchester offices. Who's coming and who's going? Send reckless speculation to tips AT dealbreaker DOT com...

Morgan Stanley fires 20 Plus Execs in Retail [Marketwatch]

And previously:
Blue Horseshoe Loves a New Job at Morgan Stanley

Gary Weiss and Mark Cuban are both making arguments that if you're the CEO Biovail or Overstock and your stock is death-spiraling toward small cap oblivion, you can't really blame an itty bitty research firm in Arizona for your company's overall poor performance. And we can't argue with that. No one's entertaining the notion that Patrick Byrne is was the next Jack Welch.

But if, hypothetically, you had a "shareholder activist" who ran a $7bln fund in Connecticut heavily invested in your company and that investor had the potential to bash your other shareholders over the head with a negative research report, you'd probably pay attention to that guy and you'd probably pay attention the firms positioned to issue the negative research reports.

That said, the primary difference between activist-bully and an activist-populist is perception and good press. How do we know this? Because we have a Venn diagram (see below) that says so. And as every first year analyst knows, anything is true if you put it into PowerPoint:

T. Boone Pickens on CNBC, talking about trading on fundamentals:

"I'm not a day trader, they just beat me to death when I try to do that..."

The best thing about financial news on TV is that a guy with an eTrade account in Missouri will interpret that statement in an entirely differnet way from a guy in New York in front of a Bloomberg terminal bank.

He's also still beating the drum on the notion that there should be a global price for gasoline, maybe via taxing. "We're out of step on gasoline when we're clearly in a global oil market."

Bloomberg's Mark Gilbert discovers Goldman Sach's "Day in the Life" series and provides a sampling:

The diaries are penned, allegedly, by junior staffers around the world. So, pinch of salt at the ready, let's join the young masters and mistresses of the universe. Meet Amol, a vice president in Treasury. Amol says he's at his New York desk by 7:30 a.m. He must be a genius speed-reader. While I'm wading through invitations to boost my bedroom performance or help relieve deceased African dictators of their ill-gotten millions, it takes Amol just 15 minutes to sprint through his e-mails and check on the day's news.

Frankly, we think Amol is full of shit. An accurate representation of Amol's day would have started more like this version**:

9:00 AM - Get to work, digest Page Six and Drudgereport
9:06 AM - Wonder if I will ever be on Page Six, and under what circumstances
9:12 AM - Receive call from irate landlord over noise
9:20 AM - Call sorry ass roommate, tell him to turn down stereo
9:30 AM - Ask myself repeatedly, "What'm I supposed to do? What'm I supposed to do?"
9:45 AM - Salvage faint glimmer of what I am supposed to do. Open LBO model from shared drive
10:30 AM - After working on LBO model for 45 minutes, realize this is the wrong one. Narrowly avoid taking over a perfectly innocent Muffin Company.

At Goldman Sachs, Lunch is Still Only for Wimps [Bloomberg]
** The d-nasty archives aren't quite working, so for the full version of that post, click "Continue reading..."

Muffie Benson-Perella (muffie AT dealbreaker.com) is an Associate in the Investment Banking Division of a "Bulge Bracket" bank. She holds a B.A. in French and Art from Vassar College and an M.B.A. from Harvard Business School. Her regular column "Heard in the Suite" is a probing (and, ahem, fictional) weekly look into the secret lives and behind the velvet curtains of the investment banking world.

I want to talk about yelling in a minute. First an update:

There is this transaction in London and I am supposed to go to the London office next week and work on it. I don't know why I was picked since I'm supposed to be re-training for the next rotation of the Associate Ambassador program but I've been told that I have to go so I'm going. I thought about pointing out that I wasn't really in the transaction work pool anymore but the more I thought about it the more it occurred to me that London would be a cool place to go for the spring, if a little rainy.

I am thinking that I am going to keep a photo essay of my trip. That way you can get an idea of what it is really like to be an Associate on the road doing transactions at a bulge bracket investment bank.

Marketwatch's David Weidner argues that leaky-Chinese-Wall poster boy Frank Quattrone's third trial is beside the point because the government isn't going after Quattrone for "possibility that Quattrone accepted what amounted to bribes for allotments of IPO shares":

Proponents of a third trial say a conviction on the obstruction charge will send a powerful message to Wall Street. If so, what's the message? Don't accept kickbacks for hot IPOs? Don't obstruct justice?

Wait. We thought the message was "don't use email." We're confused...

Frankly, it's about the IPOs [CBS Marketwatch]

Nothing says Silicon Alley-is-back like the proliferation of me-too products that no one uses. Case in point: StockDigg and Flogz. (And nothing says 1998-is-here-again like the proliferation of nonsensical business names that end in "z" rather than "s".)

Digg.com, for those of you who are more Web 0.5 than Web 2.0, is a website that allows users to save links and ranks them according to popularity. It has been shamelessly ripped off and repurposed for the finance sector by people who think that the sector will embrace the technology despite a historical tendency to respond to new technologies by laughing maniacally and running away. Or living in denial as if it were St. Tropez. (Floor specialists, I'm talking to you.)

So far Flogz seems to have between 8 and 10 actual users and StockDigg appears to have a couple hundred.

Nasdaq Abandons $4.2 Billion Takeover Offer For LSE (Bloomberg)
This shouldn't do anything to quell investor enthusiasm over all things stock market related. The exchange had to drop their offer, when the market pushed shares of the LSE almost 20% higher than the offered price. We can probably expect to see more mergers, as the white-hot exchanges go hunting for global expansion. In the age of electronic trading, it's all about having the largest network, with the most opportunities for participants. Furthermore, The Nasdaq would probably like a European branch to market to tech upstarts discouraged from US listing on account of Sarbanes-Oxley. Such companies use to be their bread and butter, but are now frequently listing in London.

Google's Surprising Stock Sale (BusinessWeek)
This S&P 500 inclusion has been quite the boon for Google. For one, it reversed a flagging share price. Secondly, the company is going to issue another $2 billion of stock, just to sell to index funds, as they stated in an SEC filing. Here's how Ben Elgin of BusinessWeek puts it: Why would an outfit with so much cash in hand sell stock worth another $2 billion? In part, to dampen recent price fluctuations. Hmm, that seems generous. We're guessing they're doing it for the money. Also, after the bell, S&P announced that Dean Foods would be included in the index to replace Maytag; ka-ching!

Lifetime Ban On Quattrone Reversed! (The Register)
Eat your heart out Henry Blodget! The Quattrone comeback is in full swing after the SEC decided to reverse a lifetime ban on his working in securities, just a week after a Federal Judge overturned his obstruction of justice conviction. There are still some lingering legal issues, and we're not sure who would hire him at this point, but crazier comebacks have happened in the past.

CEOs Fight Foreign Investment Restrictions (MarketWatch)
Does The Congress get the global economy? The answer seems invariably to be no, as it weighs further restrictions and delays on foreign investment into the United States. Despite our seemingly massive need for foreign capital, some would like to make it even less appealing for foreigners to invest in the country. Fortunately, the CEOs of the major financial firms are fighting back, and have written a letter in protest.

$$$ Credit where credit's due: we all have Overstock's Patrick Byrne to thank for making conference calls fun again. But let's face it: they're even better when you record them and have them read by monkeys in wigs and sunglasses. (See also here and here.)

$$$ What's the first result when you type "finance" into Google? Uh... Yahoo! Someone's getting fiiiiiired. [via Going Private]

$$$ The 80,000 volt electric briefcase. Where the hell was this when we were dropping off piles of cash on behalf of Equatoguinean dictators in Dupont Circle for Riggs Bank in '04? Now they tell us! [via BoingBoing]

$$$ The first rule of Hedge Fund Polo Club is that no one talks about Hedge Fund Polo Club.

Muffie Benson-Perella (muffie AT dealbreaker.com) is an Associate in the Investment Banking Division of a "Bulge Bracket" bank. She holds a B.A. in French and Art from Vassar College and an M.B.A. from Harvard Business School. Her regular column "Heard in the Suite" is a probing (and, ahem, fictional) weekly look into the secret lives and behind the velvet curtains of the investment banking world.

I have really enjoyed most of the reactions to my first entry here at Dealbreaker.com. I have also gotten quite a lot of email already and the editors here have given me permission to print almost half of it.

I have discovered that a lot of my new fans are aspiring business school students or investment bank hopefuls interested in what they can do to improve their chances of getting in or getting a job. And quite a few are women! First, I'm really happy to see more women interested in banking careers. Especially those of you who didn't think you wanted to go into banking until just this year. I really love your enthusiasm! I thought I would offer some advice and answer some of the common questions that have been coming up. Here are some examples:

It's not official or complete. If you have links to suggest, put them in the comments or send to tips AT dealbreaker DOT com.

William B. Harrison has been Chairman of the Board of JPMorgan Chase since December 31, 2005, parcel to the merger agreement whereby Bank One took over JPMorgan without seeming to do so. Mr. Harrison will be chronicling his experiences in retirement in periodic letters to Dealbreaker's Trip Paulson. Mr. Harrison has no awareness of his involvement in these letters.

Dear Trip,

A big bucket of thanks for your email last week. Gosh it's good to hear that the swelling has gone down, and that the dripping has stopped. In my experience there ain't just about a damn thing that a good steak and some vintage port can't fix, and I really do mean that.

And don't worry about how you got it or who gave it to you. What matters is that you had a great trip to Thailand, and now you're better.

Barbara is down in Palm Beach for the week, at the big pastel convention, and frankly I'm glad to have her out of the house. I woke up just a little past noon yesterday, and had our maid Lucia bring me my breakfast in bed. She makes a mean French toast! I grow fonder and fonder of her every day, Roger.

I know what you said, that she is sixty five and the mother of a large extended family, all of whom depend upon her monthly remittances to stay above the poverty line. I do understand that. But it gets so lonely here some mornings and then she brings me pancakes made in the shape of my initials.

And I can't help but want to be held by her.

"Lucia," I say, and hold out my arms. "Why don't you curl up, and I'll tell you about the time that I got paid twenty million dollars for paying forty billion dollars for nothing at all..." Most women love that story. She just makes the sign of the cross and scurries away. You know what?

That's when I want her most badly.

Dr. Shapiro says it's a fixation, because my mother never loved me and Lucia reminds me of my wetmaid. But I keep tellin' him that I can't but hardly ever remember my wetmaid, because I was just a little one.

He just smiles and says, 'Exactly.' I say, "Exactly what?" And he says, "Who are you really fooling here Bill?" I say, "Golly, I don't know, that' s why I asked you." And then he looks at me and says "Exactly," again. It makes my back hurt.

Well, I've got a Merck board meeting tonight. Or maybe it's a Pfizer. I don't know. But the driver's outside and I've gotta get going. Oh, and don't worry about my back. I'm on this Vioxx stuff now and have never felt better. Damned if it doesn't go down like sugar with a little bit of bourbon!

Your friend,

Bill

Today, FT plants a big, wet kiss (dare we say, a French kiss?) on EIM Group's Arki Busson, ex-of-Paul Tudor Jones, ex-of-Moore Capital and most tragically of all, ex-of-Elle Macpherson..

While he is bearish about the outlook of some equity markets, he believes 2006 and beyond is full of "situations that cannot remain in equilibrium" — inflation, the price of oil, global trade imbalances and the dollar against other currencies, to name a few. For traditional fund managers, this is a minefield. For the best hedge fund managers, it is a gold mine. "The dislocation of major trends is wonderful for global macro funds, where volatility is the friend," Mr Busson says.

And from what we understand Mr. Busson is no stranger to volatility, personally or professionally. "Insanely charismatic" was how it was described to us, followed shortly thereafter by "staff turnover." We're also told he wears very cute monogrammed shirts. But then, who doesn't?

Entrepreneur.com offers a handy bullet pointed list of tips for conducting business with those who didn't fall directly off the Mayflower. A sample "tip":

Speak more slowly than you normally do, but don't raise your voice because you think the other person can't understand you. Volume doesn't usually increase comprehension. Also, don't speak down to them as if they're children.

This is clearly a lesson the author learned by trial and error after hours of yelling slowly at some unfortunate non-English speaking person who probably had an exponentially higher IQ. "WE'RE HERE TO BUUUUY YOUR COM-PA-NY. AND PAY YOU 83% LESSS THAN MAAAARKET VALUUE."

Also:

Avoid slang, buzzwords, idioms, jargon and lingo. These can all be easily misunderstood by those whose primary language isn't your own. Just use simple language until you can get an idea of what level of your language they understand.

"LIQUIDATION PREFERENCE AT TWOOOO AND A HALF TIIIIIMES THE ORIGINAL INVEEEEEEESTMENT..."

Muffie Benson-Perella (muffie AT dealbreaker.com) is an Associate in the Investment Banking Division of a "Bulge Bracket" bank. She holds a B.A. in French and Art from Vassar College and an M.B.A. from Harvard Business School. Her regular column "Heard in the Suite" is a probing (and, ahem, fictional) weekly look into the secret lives and behind the velvet curtains of the investment banking world.

My father was beside himself when he heard I had applied to business school.

Being fairly good at predicting the sorts of things that would cause an outburst from my father by that time, I had wisely gone through the process without a peep to either of my parents, even as they pestered me about what I was going to do with my life. This was unusual, as neither of them really aspired to anything like a career of substance for me.

I suppose if I had asked, my father would have grudgingly written a fat check to start an art gallery or a boutique for me and cajoled his, admittedly substantial, social circle to buy things they did not want or need in order to give me "a start." In this case, "a start" was code for "find a husband to support you so we don't have to."

Apparently, there's still a way to make money off of Enron: eBay!

Bravo.

Then again, the seller is ostensibly affiliated with one of the underwriters. We'll buy it if we can throw it at the previous owner first.

Enron Capital and Trade Resources Bank Tombstone [eBay]

Bernanke Raises Rates, Driving For Five (NYT)
Did you expect that Bernanke wouldn't be an inflation hawk? Apparently some in the market were surprised, though really what's 25 basis points now? Guess we might as well blow the lid of some the market's biggest scandals right off the bat here: First, The Fed doesn't really know the difference between 4.75% rates and 5%. It's an art at best. Second, the idea that since January, Bernanke & Co. really have a clearer picture of the economy is absurd. Even with all the real time data available, monitoring the economy in real time comes close to violating Heisenberg's uncertainty principle. Sometimes you've just got to wing it. We'll address the third scandal (probably the biggest), that monetary policy has no effect on the economy, in a later Opening Bell.

Bidders Line Up For Pfizer's Consumer Business (WSJ)
With the prescription drug business at an uncertain state, why is Pfizer is spinning off their stable consumer products line, which includes such great brands as Listerine, Bengay, Visine, and Sudafed? For one thing, consumer staples bring a rich premium right now, so the timing may be right if they're looking to "unlock value". Over time, it also makes Pfizer a more exciting, volatile company. Their pipeline is weak right now, but it won't always be. When fortune turns, and they hit upon the next Lipitor, they'll be unbridled by their slow-growing brands that Wall St. forgets about. It's similar to when Corning got out of some their old-line glass businesses during the telecom bubble, to focus on optical fiber. When the bust happened, they looked stupid, but when the LCD boom hit, it was all growth again.

China Buying Up America pt. 34324 (BusinessWeek)
BusinessWeek fulfills their "China taking over the world"-story quota, by noting that the country's foreign currency reserves hit $854 billion, surpassing Japan's legendary stash, which stands at $850 billion. In case you hadn't heard, the article points out that China makes a lot of DVD players, sneakers, and furniture that Americans can't resist gobbling up. But isn't most of the 'imbalance' due to real estate fueld borrowing? And is that so worrisome? Houses, for most people, are the equivalent of a business' one-time expense. The low interest rates have greatly expanded the percentage of the population for whom housing is available, hence the upward push on debt. To ease your mind, economist Russ Roberts offers the following mental experiment, to demonstrate that China isn't an economic threat to the US: Even with China's tremendous growth over the last 20 years, America's per capita income is many times higher than China's. What if you woke up one more morning and discovered the whole thing was a lie. The Chinese had mismeasured their national income information and it turned out that the Chinese, in fact, had a per capita income many times that of the United States. It could be true, you know. Maybe they really are really, really, really rich. How would it change your well-being? Would it make any difference whatsoever?

Test, test... Hello? Is this thing on?

Great, great. So here's one for you: Henry Kravis, Carl Icahn and Bruce Wasserstein walk into a bar. Icahn says, "so I'm a little bored and was thinking of busting up a huge media conglomerate." Wasserstein says, "Get the fuck out! So was I!" Then Kravis says...

You know, I forgot the rest of the joke. But it's funny because it's true.

Anyway. Welcome to DealBreaker.

What? You were expecting flashing lights? Big ticker symbols scrolling across the middle of the page? Serious commentary? Stevie Cohen on a stick?

We don't really do that. But here's what you will find: posts about the precise size of the guitar collection on Paul Allen's yacht spaceship, posts about the disparity between what Aswath Damodaran thinks is the dark side of valuation and what we think is the dark side of valuation (hint: high-quality cocaine), banker body counts (thank you, John Mack), interviews with people about how much money they make and whether they sometimes buy things just so they can throw them away, sightings of Eliot Spitzer, pitchbook origami, fun with league tables, and so on. And occasionally we'll break news or do something that's otherwise useful. Which will be entirely an accident. We apologize in advance.

In the meantime, send us tips ( tips AT dealbreaker DOT com ). Tell us what you want to read. Vandalize the comments section (or, as our lawyers call it, "the lawsuit waiting to happen.") But most of all, enjoy the site.

Gasoline Prices Surge (WSJ)
Start listing the usual subjects: Iraq war, Iran elections, Nigerian riots, China, Hurricane Season, the robust economy etc.; gas prices are on the up. This development certainly pleases journalists and other pundits who talk about 'The Summer Driving Season' as if that were a real phenomenon. And since 2006 is the year of ethanol, the article notes there's gonna be a shortage of that too -- thanks.

Series: Next Stop Bombay (Banking Business Review)
Keep those resumes up to date, oh and try to figure out what you actually do at your job -- supposedly that helps when Jamie Dimon comes around looking to make redundancies. Deutsche Bank is the latest to announce significant job transfers to India, up to half of their back office staff. The move is expected to save a cool 1.9 bln Euros, which will probably get split up as bonus money for those that hung around, making the whole thing like a game of survivor; the longer you hang around, the more money left over for you. Of course, cost savings aren't the only reason for the move: The bank said that apart from cost reduction, the change also reflects the changing requests of customers who are demanding more complex transactions often involving different asset classes. Got that? Update: Heh, wrote that before seeing this: JP Morgan to hire 4,000 in India CEO Jamie Dimon also is looking to expand the bank's reach in China.

Goldman Buys KarstadtQuelle Property (Bloomberg)
Goldman Sachs, which appears to be going on something of a buying spree, spent $4.5 billion on German department store KarstadtQuelle. The Firm, which has been raising money for real estate and buyout funds, also is looking to buy a port operator in Britain. Other recent purchases include foreign banks. The company is becoming more and more fund-like all the time. On the one hand their risky trading operations make it much like a hedge fund, while these purchases resemble the private equity deals we've been accustomed to seeing. Who needs Christian Baha's Superfund, when you can just buy a share of Goldman?

Europe Is Back (Bloomberg)
Just as the world was getting ready to dismiss "Old Europe" for being dead, it comes roaring back to life. The Euro is up against the dollar, and business confidence in Italy and Germany has surged to multi-year highs. But what about their pension systems, immigration problems, and decaying health care infrastructure? Forget it. Say what you will, but these are still dynamic capitalist countries, with some of the sharpest business around. Exports are booming (yes, exports), and it's fueling a surge in domestic spending, not seen in a while. Two years ago their death was the prevailing wisdom; once again it pays to be contrarian.

Last week General Motors, in an effort to staunch its financial bleeding, offered buyout packages to over 100,000 of its hourly workers. Today's Times brings the revelation that, under GM's Jobs Bank, many of these men are quite often paid full salary and benefits to sit around watching television, chatting, and playing dominoes.

This is indeed good work if you can get it, and as such, most workers don't have to think very hard about declining any offers to cash-out.

"Why would I walk out the door with $2,000 less per month and have to go find a job when I can sit in the bank, get my 30 years and retire?" asked Mr. Pruitt, who at 53 has 27 years' seniority and qualifies for a buyout that would pay him roughly half his hourly wage for three years if he leaves the company now. "It's really to my advantage to ride the bank out as long as it goes."

Ride that bank!

G.M.'s Jobs Bank Looms as Major Obstacle on Road to Survival [NYT]

"Spirit, take me back! take me back to 1982, when being a millionaire actually meant something..."

New Rise in Number of Millionaire Families [NYT]

Banks Taking More Risks (Forbes)Wall St., your ruse is up. Analysts are starting to realize that you're esteemed "investment banks" are little more than black-box casinos. Granted, the casinos are doing really, really well lately, but as profits climb, so too has risk-taking. What's particularly worrisome is that investors have no way of truly judging risk. Simple statistical measures fail to express the complexity of the operations, or the probability of various unlikely (but hazardous events). If a trader can go bust, basically have one devastating day that wipes off years of gains, can a whole trading operation?

Top traders made more than $1 bln in '05: magazine (Reuters)
Congratulations are in order to last year's top traders for their excellent haul. In the number one slot is well-named oilman T. Boone Pickens who is estimated to have pulled in more than $1.5 billion based on his long oil bet. The estimates, made by Trader Monthly, are based on public information, but may be total garbage. All in all, the top 100 traders are thought to have brought in $12.5 Billion, up from last years $6.6 billion.

Japan's Nomura Still Lagging (Bloomberg)
Nomura, the Japanese Goldman Sachs, has shown record profits lately, though it still trails the world's financial elite. Though profiting from the nascent Japanese recovery (no really, we mean it this time), the company still hasn't managed to become a global player in terms of M&A and advisory. Still, it would seem the potential is there. The company's proximity to some of the fastest growing world markets, including its own, gives it an opportunity for dealmaking. Then again, there's no guarantee that Asian companies will be as fond as the merger... spinoff... repeat rollercoaster that has proven to be an endless river of profits for American banks. Seems like a good company to get to know.

Hedge Funds Under Short-Selling Scrutiny (NYT)
In the age of Patrick Byrne, David Rocker, and Sith Lords, this story feels, well, timely. The Times has a long profile of Biovail pharmaceuticals' allegation that hedge fund SAC Capital and research house Gradient Analytics conspired to manipulate and profit from their declining share price, what's more is that two Gradient analysts corroborate the story. Yes, it looks pretty nasty, and surely some will call for the SEC to further crack down on short sellers, but isn't this just a case of insider trading? It's possible that the recent furor over the practice of short selling could put a chill on the hedge fund industry, as managers feel wary about using one of their most important tools.

New Home Sales Plummet in February [AP]

Lucent And Alcatel In Merger Talks (WSJ)
Two networking has-beens are rumored to be far along in merger talks, which would create a $33 billion company. While the deal is ostensibly a merger of equals, Alcatel's greater size ($20.2 billion vs. $12.6) means that it may be structured as a buyout of Lucent. It's also likely that Lucent's workforce will see the brunt of the staff reductions, as laying off workers in France (as you might have heard) is notoriously difficult, and full of red tape. Though these companies aren't close to the stature they achieved during the dotcom bubble, they're still important telecom suppliers.

First Bank Of Wal-Mart (NYT)
Wal-Mart has been quite upfront, in recent years, that they'd like to open a retail bank. It's not hard to imagine the strength they would have in this area. They already have nationwide retail space, could offer rebates on in-store goods, cheap loans, no-fee ATMs, etc. We'd argue that they'd do more to retail finance than online banking has! Of course, regional bank heads don't want them to be allowed to (which is another way of saying that Wal-Mart could do better for the customer). It's a pitched battle with many charity and non-profit groups lobbying the FDIC on both sides. If they are allowed to open a bank, expect bankruptcies and rapid consolidation among the regional players. Oh, and Wall St., you're not out of the woods either, they're opening up an international arbitrage operation next.

Big Pharma Thinks Small (CNN Money)
Analysts expect big pharma to take a $100 billion sales hit over the next five years, as key drugs come off patent. With pipelines that look unpromising, the pharmaceutical makes are looking to smaller companies, and licensing deals, as a way to have something to sell. The licensing deals are probably smarter than Pfizer's strategy in the 90's, which was to buy out every company with a drug they wanted. Now Pfizer is a bloated behemoth. The drugs are gone, but the employees hung around. But will licensing be any better? Unless these actually prove to be blockbusters, the companies are going to spend a fortune on controversial direct-to-consumer advertising, which will both hurt their image (and studies show it does), as well as their bottom line. Unfortunately, in this business, there's not substitute for not developing good products, and the companies are going to learn that the hard way.

Tesco shares jump on report it may set up REIT (Reuters)
You should probably get to know Tesco. The UK retailing giant is coming to a town near you, to give Wal-Mart a battle. Shares in the UK jumped on news that the company is considering splitting up their share into two separate stocks, one for its actual stores, and a REIT for all the property it owns. This concept has been picking up steam, as the same idea has been floated, in recent months for McDonalds. Call it the Eddie Lamptertization of retail investing -- trying to unlock these hidden real estate investments. But, forgive us for our skepticism, how do you really unlock a piece of real estate's potential when it has a McDonalds or a K-Mart sitting on it?

Chinese peasants were up in arms, billions of them, in fact, when earlier this month a nefarious noodle cartel hiked the price of their staple food by four cents, a material increase for these people, who live on about sixty dollars a month.

Today's New York Times reports that things are now getting worse for the peasants still: in an effort to control runaway consumption of raw materials, the government will impose a 5% tax on wooden chopsticks.

It is important to watch China's interior, rural population for a number of reasons.

First, they are nearly all masters of various martial artforms, and known to carry numchucks and bowstaffs beneath their robes for the purpose of launching into beautifully choreographed group combat, often for no clear reason.

Further, there is the fact that many of them also possess magical powers, and can run atop trees or up walls when properly incented, or directed by Ang Lee.

It is also true that they can all do calculus, quickly and accurately, inside of their heads.

But perhaps more important than any of these things, the peasants remain the great variable in China's boundless expansion, and the extent to which the Chinese Government manages to bring them along into this new prosperity will to a great extent determine how far the prosperity goes.

Had but a few million of these numchuck wielding, gravity-defying, math-wizards been on hand at Tienanmen Square, things might have gone very differently indeed...

China Raises Taxes to Curb Use of Energy and Timber [NYT]

John Mack's hiring problems just got worse, but this time not on the advisory side. James Gorman, the new head of Global Wealth Management (or as we prefer to call it, "retail") has been barred from hiring away his former underlings at Merrill. The case seems to hinge on who called who and in which direction the soliciting occurred. Did Gorman call them or did they call Gorman and beg him to take them with him? Regardless, it begs the question:

Whatever happened to old-fashioned subtle obfuscation? In the good ol' days, there would have been no formal soliciting whatsoever. The Merrill employees would just telepathically show up one day at MS ready for work and there would be no paper trail, no phone logs, no nothing. Has Wall Street lost its touch?

Over at Valleywag, tech watchers are debating the creepiness of Tom Cruise's visit to Yahoo! and the ancillary creepiness of Earthlink founder Sky Dayton's Scientology affiliation.

Scientology doesn't really work on Wall Street. It takes too much time away from the hard work of raping, pillaging and getting paid handsomely for it--and let's face it, "audit" has a negative connotation.

But Scientologists are like cockroaches. Just when you think you've gotten rid of them, one comes scurrying out of the woodwork, and if we ever have a nuclear attack, they'll be the only ones left standing, if only to shove Scientology literature into the faces of any remaining survivors. So inherent cheesiness notwithstanding, we're sure there's a good statistical probability that there are one or two high powered Scientologists on the street. We just want to know who they are. So we can avoid them. Send suggestions to tipsATdealbreakerDOTcom.

We know far too many people who have jumped to hedge funds from IB thinking it would consist of better hours, more pay and less work. But then most of those people secretly hate finance and won't be working in the industry anymore by the time they're 40.

Other people move into hedge funds because they made a $508 million investment in Refco and they're suffering from the hangover. (Best to get out while the getting's mediocre.)

Thus Thomas H. Lee's departure from his eponymous firm. Or maybe he secretly hates finance. We can't tell.

Thom