Fortune says the new status symbol for hedge funds is a massive aquarium**:

City Aquarium, which he founded in 1999, now has a client roster that includes sultans, supermodels, Russian heiresses, Broadway producers, and an increasing number of hedge funds like SAC Capital Advisors and Sandell Asset Management (both declined to comment on their expensive toys). "Aquariums are status symbols," says [City Aquarium owner] Muir, who has also designed aquariums for hedge fund managers' homes. "These guys say, 'Okay, if we are going to do [an aquarium], it has to be hot.' " So what's the hottest thing right now in hedgie tanks? Sharks, natch. The price: around $2,000 each.

**One vendor in New York = trend.

Latest Status Symbol: $600,000 Aquarium [CNNMoney/Fortune]

RECAP: The OSTK call was less eventful than what we've come to expect from Byrne, but there was the usual hint of conspiracy and gratuitous media bashing (see Roddy Boyd, swipes at; Wall Street Journal, accusations of fabricated quotes). Byrne also says that one of the "big three" bulge bracket banks has been calling up some of OSTK's partners and telling them to drop OSTK. And guidance: next quarter will look exactly like this quarter.

11:59 - final comments. Jason: we stumbled and we know we stumbled and don't let anything we say make you think we're making excuses.. but in the long run it might be a good thing for the business... when we had the debacle we had, replacing all of our systems this year, and we shrunk a lot... it's given us time to take a deep breath and harden our systems. [our core business] is getting a lot of attention. As bad as the systems got, i think the core shopping business, as far as somebody orders a product and they get it on time, i'm not sure our business has ever been better... i think investors should be pleased and in the next 6 months to a year, you'll see a big difference in our financial performance. Byrne - to me this is all a function of bad decisions i made in the first half of '05, both in that they were belated, and that... we stumbled... To jason's point... we couldn't have gotten better or more refined looks at inventory or more refined looks at marketing... travel beat budget for the quarter, auctions was just a little behind budget...we don't really have any great new businesses planned. we're just refining what we have... i'm sure you welcome having Jason back to provide adult supervision... Expect that same thing for one more quarter..

The NYSE is closing its dining club, citing rising costs, lower membership and, of course, 9-11. (When we hit the decade, we assume blaming 9-11 will seem sufficiently ridiculous that people will stop doing it. But we usually give people too much credit.) At any rate, the club was at its peak... guess when. Guess. Just guess:

The Luncheon Club hit its heyday in the early 1980s, when it served up to 500 meals a day, according to one report. The club occasionally served as a backdrop for inter-member skullduggery, with four separate NYSE disciplinary actions over the years arising from misuse of members club charge accounts.

Congress has big ideas on gas prices (Seattle Times)
Forgive us if it sounds like a broken record, but it would seem that idiocy on a daily basea needs daily debunking. Real quickly, the latest proposal, you've probably heard, is for the government to send all drivers a $100 rebate check. This isn't much different than the $300 that Bush had sent back to each taxpayer a few years ago. What's funny, is if you were to ask the average person whether it's a good idea to just print up $100 bills and send them out, they'd probably recognize that you can't just print up currency to make people wealthier. That's why counterfeit currency isn't good. Yet, if you write everyone a check, and say it's a gas rebate, people will think it's a good idea -- even though it's the exact same thing. That being said, will our status as car-less New Yorkers prevent us from getting the coin?

Exxon's $8.4 Billion Net Faces Fire on All Fronts (WSJ)
It wasn't quite the $9.9 billion they made last quarter, but it seems that $8.4 billion is enough to piss off the politicians who did their usual tango. Still it came up a little short of Wall St.'s expectation. Perhaps it was intentional, maybe some knowingly wasteful expenses, a few more massages here and there for Lee Raymond, just to keep earnings a little low. Now, here's the lesson of the day Schumer, just in case you're reading. Suppose you imposed a gas cap, and earnings dropped to $3 billion/quarter. You'd probably go around saying that the company is still plenty profitable, so it's no big deal. But the stock would drop, thus meaning major capital losses for all of its investors. In other words, it's been a major loss of money. Their profit is an illusion, as the company has actually caused a loss for its owners. Got that Chuck?

Pfizer Shareholders Back CEO's $83M Golden Parachute (Forbes)
Congratulations to Hank Mickinell for securing his $83million dollar retirement. It's not quite as much as Lee Raymond's $400 million $99 million, but it's pretty good for an executive at a company that's not exactly firing on all cylinders these days. More importantly, it's a victory for what corporate law professor Stephen Bainbridge calls rational shareholder apathy. Basically, on matters like this, it's just not worth it for the shareholders to care. In a case like this, when the pay package barely represents pennies per share, why the did people rent airplanes waving a sign that said "Give it Back, Hank!" and fly them over the shareholders meeting? For more on the kind of demagoguery over CEO pay, particularly with respect to the Pfizer case, check out some of the writing of Larry Ribstein.

Microsoft's Pig in a Poke Problem (Infectious Greed)
A lot of people, including Eric Savitz at Barron's have been trumpeting the fact that Microsoft is heading into a very strong product release cycle. There's the new Vista, Office, etc., all of which should provide a tailwind for sales. But Paul Kedrosky notices a problem, after reading last night's earnings reports. All of the company's fat profits are being plowed into losers, like their endless quest to catch up to Google in search, and their costly XBOX program which isn't paying off. They're going to plow another $2 billion into search next year, few having much confidence that it will work out. So, yeah, winners subsidizing losers, that's a tough strategy.

$$$ "A sexy line of credit and a big revolver" Columbia B-school kids re-define sucking up to the teacher. [WARNING: This file contains a Vanilla Ice parody. Probably Safe for Work, But Not Recommended for the Weak.] [via LongOrShortCapital]

$$$ AOL launches bloggingstocks.com, a blog about individual stock performance. From the press release: "These blogs will focus obsessively on what average investors care about most, giving readers an interactive platform to get behind the headlines and exchange insights on some of the most widely held and talked about companies." (Average investors or the average investor? Eh, probably both.)

$$$ McKinsey predicts that investors will eventually tire of mediocre hedge fund performance and writes a report about it. It's just that sort of sophisticated observation that makes the seven-figure consulting fees entirely worth it. [Daily Dose of Optimism]

$$$ David Wittig, insider trading and now a surge in blind-pool offerings. The '80s are back. Again. [Forbes.com]

H-1B visa limits have been long stretched to the max for engineers, programmers and other people with specialty technical expertise. (Just ask the people in your newly-created Bangalore office.) But now another profession is hitting the H-1B ceiling: we're told by an agency owner that it's nearly impossible to get foreign-born supermodels into the country these days. See that on the left there? There will be no more of those. We've got enough, apparently.

(Now we better understand why Bill Gates wants to abolish H-1B caps.)

A few months ago, Overstock CEO Patrick Byrne got into an exchange with Jeff Matthews about the supposed existence of an Israeli mafia. (This discussion pre-dates his defense against more recent allegations of anti-Semitism.) In a post about the exchange, Matthews points out that Byrne is on record pointing to the "Israeli mob" (presumably among others--Sith Lords, etc.) as one of the conspirators in the alleged naked shorting movement against him. Byrne responds:

Jeff omits precisely the part of the quote that makes the connection, and that is, after I mentioned the Italian, Russian, and Israeli mobs, and the discussed the Russian mob, the interviewer said/asked, "I didn't know Israel had a mob?" To which I replied that, yes it does: for example, it is widely thought to control the US ecstasy trade.

The Israeli mob--in fact I was just reading Ha'aretz, which is an Israeli newspaper, ah, and a very good one, and you can Google this--If you Google "ectasy Israeli mafia" you'll find articles that basically the Israeli mob...is thought to control 75% of the ecstasy trade in the U.S."

In another Utah case, Holly McDonald-Korth was allegedly receiving shipments of Ecstasy from Antwerp Belgium, according to a search warrant filed by Salt Lake City police investigators... On paper, McDonald-Korth appears nothing like a drug dealer. She was enrolled in private school as a teen and then attended the University of Michigan before graduating with honors from the university of Miami with a degree in finance, according to court documents. After graduation, McDonald-Korth went to work for the Federal Reserve in Washington. The 25-year-old came to Utah 18 months later after obtaining a job as an analyst for Overstock.com

In keeping with our continuing coverage of the "New, New Economy" we have begun collecting a series of mergers and acquisitions analysis and valuation tools. Cumulatively, we expect these will give the modern investment banker a goodly number of financial arrows in her quiver. On Tuesday, we formalized the Idov Multiple. Today we bring you the Kanige Chaos Theory of M&A due diligence.

(You're welcome.)

Eventually, we expect that bankers who do not have these tools will be left behind in the fast-paced financial world, shortfalling $200 million dollar valuations of commerciablog firms and executing poorly vetted $500 million acquisitions of bricks and mortar publishing firms silly enough to sign a teenaged author.

According to this story in Philadelphia magazine, Donald Trump's new business partner in the area is Raoul Goldberg (nee Raoul Goldberger), a principal real estate bank/developer Multi-Capital Group. Goldberg has a colorful history that includes a 1999 conviction for ecstacy dealing. Upon learning of the conviction, Multi Capital and Trump have been distancing themselves from Goldberg:

"We were unaware of his past," Multi-Capital said, through the powerhouse Rubenstein PR firm, "and he is no longer associated with the marketing of the project and he is not a principal in the development."

But we're sure Goldberg will survive. After all, he's faced tough business problems before:

From a 1999 NY Post article: [Michel] Hemli, a resident of Belgium, sent shipments to Goldberger and Freund in a hollowed-out night table, the feds said. The trio began to panic earlier this month when a New York-bound shipment of 200,000 pills was "misdirected" to Spain, according to wiretapped talks. "I've been in this business for years," Goldberger told [partner Marc] Freund during an April 24 phone call. "There is nothing you can do when the s--t hits the fan."

China Central Bank Raises Benchmark Interest Rate (Bloomberg)
The Chinese interest rate/exchange rate puzzle always perplexes, and trying to figure out which direction things will go is a thankless task. Presumably, a higher interest rate for lending Yuan will crimp Yuan borrowers. The stock market is punishing shares of mining companies, who need to borrow a lot. At the same time, a higher interest rate on the Yuan should also boost demand for the currency -- whose exchange rate is fixed. Won't this simply require the company to print more Yuan, in order to sop up the demand, and won't this counteract the desire to make borrowing more expensive. Perhaps (surely) there's something we're leaving out in our analysis, but the more we think these things trough, the more we align with the central banks have no effect thesis. Put it this way, if central bankers really did have the power that everyone thinks they have, wouldn't we see a lot more crashes and depressions?

No sign of an end to mergers boom, says Goldman chief (Times of London)
Good news! Analysts expect that companies have no plans to stop merging, and even more importantly, companies will keep going private. Going private is truly the new IPO. Everybody wants in on it, and investors just wait around for word that private money is gonna come take them out. Also driving M&A is greater international integration (EU), and new wealth in different parts of the world (Middle East).

CBS CEO says considering sale of some radio stations (Marketwatch)
Whatever you think about the future of big media gloms, it's harder to be optimistic about their local TV & radio affiliates. New modes of distribution (satellite, internet) threaten to, eh, disintermediate them, to use a buzzword. So it's no surprise that companies continually will look for opportunities to dump the local guys. This isn't to say that they might not be good values, or offer some compelling cash flow opportunities -- but they're certainly not growing.

A Stunning Display of Pricing Power by Guess Who? (Bloomberg)
While many mergers turn out to be a colossal waste of shareholder money, some actually seem to pay off. The railroads, which have seen a good amount of consolidation over the years, are exhibiting great pricing pressure in the face of sky-high energy costs. Not only have their numbers been reduced, but it's really hard to start a railroad. It's comparatively easy to lease a few planes, hire an out-of-work pilot, rent a gate, and start an airline. That doesn't explain why there hasn't been more consolidation in the industry. One of the big culprits is pilot pay structure. It's all based on seniority, and when you merge two lists of pilots, the whole thing gets messed up. It's more evidence that labor inflexibility is a serious impediment to the economy.

We give up.

Previously:
Yahoo! Finance: 3; Google Finance: 0
Yahoo! Finance: 2; Google Finance: 0
Yahoo! Finance: 1; Google Finance: 0

We were just perusing the Vault.com IB message boards and buried under the pile of questions about internships, SAT scores and whether one can get a job at Carlyle as a managing director straight out of high school if one "knows someone" is a fairly extensive back-and-forth about what JPMorgan's next acquisition will be. The guesses revolve mostly around retail expansion, though someone throws in the Morgan Stanley canard for good measure.

Some of the names floated:
SunTrust (the usual name floated)
Wachovia (ditto)
USB (west coast expansion is attractive, but Grundhofers probably wouldn't sell)
PNC (nice east coast footprint but not a big enough deal for Dimon's ego),
Wells Fargo (deposit limit problems)
Washington Mutual (possible deposit limit problems, S&L component that complicates things)

Someone points out that Dimon's ostensible financial superstore strategy is exactly what Citi seems to be moving away from (see Legg Mason), which is ironic, unless Dimon's logic is that he can do Citi better than Citi does Citi. All we know is that Dimon doesn't have much of a story right now and he needs one. (And we need more material, so we're secretly hoping for that dark horse MS merger.)

File under "Good Use of Internal Resources": UBS analysts, using a similuation that employs sophisticated "scientific methodologies" (*cough* dart board *cough*), predict that Italy will win the World Cup:

According to the UBS simulation, further results will be as follows: Germany will lose to Argentina in the 3rd round and Italy will beat France at the same stage. They will be closely followed by the Netherlands, who will send England home. In the fourth pairing, the Brazilians will dominate the Spaniards. The semi-finals will then be down to the favorites: the Netherlands will draw the short straw against the Brazilians, the Italians will beat Argentina. In the final, the Brazilians will be forced to accept the fact that the Italians are the better team in this tournament.

UBS Analysts Predict the World Cup Champion [Yahoo! Finance]

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.

Dear Muffie:

Banking on Baking

The revolving door at Morgan Stanley is spinning so quickly we're having trouble keeping track of who's coming and going. So starting today, we're going to keep a running tally. Today's additions (or subtractions, as it were:

Bush takes aim at gasoline prices (Reuters)
It looks like our oilman President has gone completely to the other side and is now requesting an investigation into price fixing in the energy markets. Perhaps if he read any single news source or even Dealbreaker, he'd realize that crude oil is near record nominal highs these days, and that might have something to do with the high gas prices. While the merits of anti-trust law can be debated (anytime, anyplace buddy), shouldn't its application be something other than arbitrary? In fact it's always arbitrary. As many have pointed out, if you're looking for evidence of "uncompetitive behavior" you can find it in any market condition. Prices too low? Aggressive pricing! Prices too high? Price Gouging! Prices just right? Market collusion. Yep, anytime a politician stubs his toe, anti-trust is an easy outlet.

Sirius Signs Mark Cuban (TheStreet.com)
The man who claims that only hedgers, not speculators, should be allowed in the oil market, now has his own radio show. He also says that any stock which isn't paying a dividend is no different than a Ponzi scam -- yet mysteriously all of his holding are entirely speculative small companies. People seem to like reading him, and listening to his griping, so maybe they'll listen to him on Sirius.

Job cuts not Sun CEO's priority (Mercury News)
Yikes, looks like you can give up that big gain after the McNealy resignation. Either the new CEO is a)lying or b) Wall St. is in for a serious disappointment. The fact that Sun is supposedly on a growth track, and yet 6 years after the peak of the bubble still isn't profitable, is evidence that the company needs to do more than just explore areas of growth. If we were to be, we'd bet that, a), he's lying.

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.

It is really hard to get work done in London. Someone has got to do something about the Hotel situation in London. Why aren't 30 cash-flush private equity firms snatching up London hotels and converting them into something civilized? I mean, really. It is beyond the pale. So we get into the city and one of the deal team guys is trying to convince us to switch our hotel reservations to some place near the client. I have never stayed at a hotel in London so what do I know. Someone at the client suggests the "Millennium Hotel." Sounds good and modern to me so we go there. Disaster. Look at what passes for "modern" in London:

I mean really. Talk about boring. It's in the middle of this huge, dull square. There are a few trees but that's it. No boutiques. No where to sit and have a nice breakfast. No shopping nearby. Nothing. I am in London, I am going to want to see the city and do some tourist things, obviously.

Gary Weiss points out that Overstock's Patrick Byrne has been hanging out in the comments section of the Israpundit blog** lately defending himself against charges of anti-Semitism stemming from some commentary he made about Tom Friedman. Then he somehow laterals into a discussion of Jim Cramer and Herb Greenberg talking about him:

I do not think I have ever commented publicly on the Israel-Arab dispute. What I did in one blog was say that, regarding that dispute, Tom Friedman makes a habit of pretending to weigh the evidence, then always takes Israel's side. I have not said that he is wrong to take Israel's side, just that the "Let's see, Arabs, israel, Arabs, Israel‚... . OK, this time I gotta go with Israel!" routine gets a little old. (As a matter of fact, I think he is sometimes insufficiently pro-Israel for my taste, but that is a logically unrelated point.)

I brought this issue up in the conext of discussing Jim Cramer's and Herb Greenberg's endless discussions of me. They run more or less like this (in paraphrase):

Jim: "Byrne might be a good guy!"
Herb: "No he's a bad guy."
Jim: "Are you sure? I thought he might be a good guy."
Herb: "No he's a bad guy."
Jim: "OK, you win, he's a bad guy."

Over and over every time they discussed me. it reminded me of Friedman. That's all.

** As opposed to the Motley Fool message boards, and the Overstock auction boards, and ... hey, why isn't he commenting here?

Reuters is totally biting our rhymes** with this piece about McNealyisms, but we can still appreciate it. And we can mourn the loss of all the smartass remarks that McNealy never got to make. In that spirit, we present the Scott McNealy Memorial "Caption the Post-Truce McNealy/Ballmer Photo" Feature (not sure if this shot is before or after the hockey jersey exchange.)

Leave captions in the comments or send them to tips AT dealbreaker.com.

** Somewhere a Reuters reporter is Googling "biting my rhymes"...

"Get a Grip, Hairball" And Other McNealyisms [Reuters/MSNBC]

It wouldn't be Tuesday if there wasn't an insider trading scandal to blog. Today's candidate: Charlotte-based Lending Tree SVP of Biz Dev, David Anderson, who has been indicted on six counts of obstruction of justice, making false statements and witness tampering. Anderson tipped off his girlfriend about Lending Tree's acquisition by Barry Diller's IAC Interactive in 2003, and she made $7,895 on trading it.

Tipping off your girlfriend: Now that just strikes us as a failure of the imagination. Only $7K? An appalling lack of ambition. If Anderson wants to play with the big boys in the really chi-chi minimum security federal penetentiary, he's going to have to get in a lot more trouble involving a lot more money. (Also: he needs to dump the girlfriend.)

Lending Tree Executive Charged with Insider Trading [MarketWatch]

[Editor's Note: Some of you have asked for some sort of relief from the pressures of studying for the CFA. We offer you the following advice: Get out of banking while you still can. For the rest of you: it's always fun to witness other people's pain, especially if you've already jumped through the requisite hoops and barring the creation of a CFA Level IV, will never have to do that again. DealBreaker correspondent "JAK" reports:]

So for a lot of you June 3 is going to mark the end of a tortuous struggle to stay sober long enough to cram as much financial analysis goodness into your already overstocked brains. Well, you've almost made it. You can get hammered in 39 days. These last few weeks when you're getting approximately three hours of sleep a night, you lose all contact with friends and family and your girlfriend dumps you because you're too weak and dehydrated to pleasure her in any way, we'll be here for you. We'll have war stories AND study tips and we're even sending someone to sit in on the Stala CFA I Mock Exam as part of the DealBreaker Correspondent Abuse Program. (Okay, we're sending outselves.)

They sent us our Mock Admission Ticket today, which included tips on how to prepare for exam day: we have been instructed to lay our clothes out the night before. Thank you, Stala. Last time we took the CFA, we showed up without pants.

So let's kick it off with a look back at "Great Moments in CFA Studying History"

We just noticed a feature of InstitutionalInvestor.com's site redesign that incorporates an "industry gossip" section that includes finance-related blind items. And we're all for finance-related blind items. (You get to guess and we get to not get sued.) But today's is kind of a yawner:

Which European bank has delayed paying out bonuses to U.S. employees and is rumored to have brought on JPMorgan to assess its securities division, as it is considering selling off one or more units?

Then again, we spent most of yesterday talking about valuation. Pot, kettle, etc.

Industry Gossip [II]

Reynolds Agrees to Buy Conwood for $3.5 Billion (WSJ)
Sometimes there's market failure and sometimes there's market success. The fantastic performance of tobacco giant Reynolds, at a time when the whole world is against it (or they claim to be), is a testament to the market. That being said, Reynolds is now expanding their line of smokeless products (chew), with the purchase of privately held Conwood, the #2 smokeless player. We keep waiting for a wave of popularity in New York for the smokeless stuff -- or any other town for that matter where smoking is becoming increasingly illegal. When will we see dedicated chew bars, with spittoons at each table?

Tesco to raise cash from property (Reuters)
Tesco is moving forward to extract money from their land operations and pay a one-time lump sum dividend to their shareholders. This has been an increasingly popular strategy ever since Eddie Lampert showed that the real value of a retailer is the land it sits on. Some even think that the best thing McDonalds has going for it is its real estate holdings, though evidence would suggest it's their Dollar Menu. Still, it never makes much sense to us -- how do you extract value from real estate when it's got a freakin' Tesco sitting on it?

OTC BB Volume (The Big Picture)
Whoa, check out this chart of volume on the OTC BB market. This is one of those telltale signs of excess speculation that no amount of Larry Kudlow optimism can explain away. We knew that the penny stocks had been doing there thing again, but volume appears to be orders of magnitude higher than it was in 2000 -- and those were some crazy times for penny stocks. Wild!

The great Google float (RoughType)
If you're involved in financial services, you've got to love the float. For the rest of you, it's the lag time between when a bank or insurance company takes your money and gives it back to you. During this time, they can invest it, collect interest on it, or do whatever they want. Even Google loves the float. Any publisher using Google Ads must wait until they've earned $100 before they can cash out. During this time, any money raised can be invested, put in t-bills, whatever. It's not a small amount. There's tons of bloggers running adsense, making money at a snail's pace, making money for Google until the distant day when they get to $100. Gotta love the float.

God, this hurts:

Scott McNealy resigned from Sun today. He'll be replaced by Sun COO Jonathan Schwartz.

We're Dealheartbroken. No more Fun-With-McNealy quotes. (Side note: we haven't seen a stock jump like that since Carly Fiorina got pushed out, which is ironic considering McNealy's Carly-bashing.) More later...

Per our earlier post, private equity anonyblogger Equity Private re-values GE based on Michael Idov's assumptions about how Daily Candy gets to a $100 million valuation**:

General Electric trailing twelve months of revenue: $144.4 billion.
GE market cap (April 24, 2006): $358.8 billion.
Control premium for acquisition of GE (2005 average): 30%
Optimism factor applied to control premium: 20%
Resulting control premium: 36%
Theoretical acquisition cost of GE with control premium: $487.9 billion.
Cost of restructuring GE to an "internet focused firm": 15% of enterprise value.
Restructuring time frame: 1 year.
Dollar cost of restructuring: $53.8 billion.
Total cost of GE acquisition and restructuring: $541.72 billion.

Potential sale price via "Idov Valuation Methodology" (patent pending): $1,444 trillion.
Gains from sale: $902.3 billion.
Time period: 1 year.
IRR on transaction: 66.56%
Cash on Cash: 1.67x

**Idov asserts that "most companies" sell for 10x revenue. Incidentally, if that were the case, it would mean that New York mag was sold to Bruce Wasserstein at roughly 56%*** of market value.

***Then again, the more we think about the Lazard IPO, Wasserstein getting away with paying 56% of market for anything else would be par for the course.

Subjectively Objective [Going Private]

That's how a family friend describes the children of John Donovan, a Boston area entrepreneur and professor who is alleging that his children tried to extort him for his money and that the eldest, James Donovan, a money manager at Goldman Sachs, hired a couple of people he believes are Russian (no explanation as to why) to shoot him. According to his wife, he survived the shooting, because his belt buckle deflected a bullet. He went skiing almost two weeks later and more mischief making occured:

While Mr. Donovan and his wife were skiing, police responded to another alarm at their Hamilton home. They found white powder on two tables and a piece of paper with the word "killer" written on it.

Estate of War [WSJ]

Ken Lay took the stand today and offered the following assessment of the Enron trial, so far:

It's been very interesting,'' Mr. Lay answered. "We've seen a lot of interesting testimony. We've seen a lot of interesting people, a lot of allegations, a lot of lies, a lot of misinformation and some truth."

Mr. Lay has been in court every day since the trial began Jan. 31, seated in a swivel chair in the same spot, flanked by a legal team that includes his daughter. He takes notes while listening to testimony, appears attentive but relaxed, and smiles or even chuckles during lighter moments.

Kenneth Lay Takes the Stand at Enron Trial in Houston [WSJ]

The fresh-faced Andrew McCarthy lookalike above is David Wittig, Fortune magazine cover boy in November of 1986, former mentee of Kidder, Peabody's Marty Seigel (of insider-trading-with-Ivan-Boesky fame), who was recently sentenced to 18 years in prison for fraud and money laundering associated with his Kansas-based firm, Westar Energy. The story turns a bit shades-of-TYCO in discussing Wittig's use of company funds for personal gain:

The Wittigs' conspicuous consumption continued with acquisition of the Topeka mansion that had been home to Alf Landon, a former Kansas governor and 1936 GOP presidential nominee. Wittig pumped $6 million into the Landon residence, using company stock as collateral for loans from Capital City Bank in Topeka. Wittig added a theater, bar, game room and a basketball court. Cost was no object, since he had a clause in his employment deal that stipulated Western Resources would buy the home at no loss to himself.

The New York Times and New York mag both lead the week with return-of-the-dot-com boom stories about MySpace and DailyCandy, respectively. Conclusion: it's different this time. Sort of. Kurt Andersen, in a separate column, interviews former Flatiron Partner Fred Wilson, who explains how:

"It doesn't seem like really dumb things are getting funded," Fred says. "You're largely not seeing Webvans and Kozmos and Urban Box Offices."

New York mag also examines the much-buzzed-about (inasmuch as an 8-to-9-figure deal that doesn't involve a bulge-bracket investment bank or Carl Icahn can be "much-buzzed about") sale of Daily Candy. Reporter Michael Idov makes the completely inexplicable assertion that it's "impossible" to determine the value of Daily Candy:

It's nearly impossible to apply the usual valuation formulas to DailyCandy. According to the Wall Street Journal, the company projects revenue of "somewhere less than $20 million" this year. Most successful businesses go on sale valued at least ten times their yearly revenue, so by this standard, DailyCandy should cost $200 million or more.

**That said, we hope it's closer to $100 million, for our own selfish reasons.

Ch√°vez Plans to Take More Control Of Oil Away From Foreign Firms (WSJ)
There's a headline you probably never expected to see. Chavez is accusing the private oil companies of making large profits at the expense of the poor nation. Wait, what were those last two words "poor nation"? Isn't this one of the largest oil exporters in the world? Isn't the rest of the oil-exporting world making record profits (working with those same oil companies), building a Middle East theme park fantasy world in Dubai? And yet Venezuela, with its rigid socialist government remains poor? Yeah, nationalize... history shows it to be a proven winner.

Trying to Halt A.M.D., Intel Plays to Business Market (NYT)
According to this article, in The Times, Intel's been feeling the heat from AMD, and is altering their selling strategy to bolster their presence in business. It's too bad they're not the smaller company, then they could just file an anti-trust lawsuit -- like AMD is doing now. Of course, AMD has shown excellent market gains in the last year and a half, something that should be impossible if Intel really had a monopoly. In fact, you'd think that their recent gains would undermine their case, though real-world facts rarely seem to enter into the court system.

Microsoft, EU face off over antitrust (AP)
While we're on the subject: Are we dreaming, or is there really still an anti-trust case going on against Microsoft in Europe? The answer is of course we're not dreaming, and the Europeans (insert cheap joke about them being behind) still think that Microsoft has an unassailable fortress. For some reasons, the EU really doesn't like anything that smacks of bundling. The big issue remains (are you sitting down) the fact that Windows comes pre-loaded with the Windows Media Player. This is what the EU claims harms all innovation, and why the company should face huge fines. At this point all of Microsoft's enemies who championed legal attacks against the company might be wondering whether it's all worth it. Apple saw their iTunes "monopoly" dealt a setback in France, and Google is building what some believe is a monopoly on the web. How long before an investigation is launched into the company -- "But Judge, in the Firefox searchbar, one can easily change search engines". Yeah, that'll work.

Specter Says Rising Gas Prices May Lead to Tax on Oil Profits (Bloomberg)
How is it that politicians implore the oil companies to spend more money on exploration, yet threaten to tax them extra when they have more cash on their hands. And aren't oil companies already being taxed more as their profits are going up? Besides, as Peter Drucker famously said, "Profits are an accounting illusion, just the deferred costs of staying in business".

We tend to think that most business books fall into one of three categories:
· thinly-veiled self-help books
· shorter Ayn Rand
· vanity autobiographies

We're sure there are some good ones out there, but we don't think we've read them. Andy Kessler agrees:

I read a lot of business books. I don't know why, because they mostly suck. But folks keep asking me what books they should read. I like a good story and hope to learn something - business is the new intrigue.

We are, however, taking recommendations for Worst Business Books of All Time. Send nominations to tips AT dealbreaker.com with supporting evidence (i.e., egregious examples/excerpts). Consider it our attempt to save you from precious hours of unnecessary reading that could instead be devoted to things like vandalizing the DealBreaker wiki, figuring out how to expense bottle service at Cain or the mistress's hotel room, and building a leaning tower of dealtoys on the window ledge.

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 think I might have mentioned before that international travel is really uncivilized now. Nothing provides a more solid example of this frustrating fact than London Heathrow Airport.

First of all, you are funneled into this hallway, which goes on forever and ever. Why they can't provide some golf-carts or something is beyond me. There always seems to be some old, decrepit senior riding around in the back, as if they have anyplace other than the funeral home to get to in a hurry. Why some sort of transportation isn't provided for professionals on a timetable I will never know.

Rumors are flying that Sun CEO Scott McNealy might be shown the door for refusing to make layoffs:

This week, Sanford C. Bernstein analyst Toni Sacconaghi reported that Sun is examining every nook and cranny to cut costs, including research and development. "Anything but a massive restructuring of the workforce will prove disappointing, and that it remains unclear whether such a large reduction will occur under current management,'' he said.

If this happens, we'll be very disappointed because McNealy conference calls are only slightly less entertaining than Patrick Byrne conference calls. Our summary of all conference calls, presentations, reports, ever: "McNealy seemed defensive."

(Below the jump: our list of McNealyisms from the last McNealy presentation we attended a few years ago. More McNealy quotes here.)

Might McNealy Step Down at Sun? [San Jose Merc]

Google dazzles Wall Street (Mercury News)
It was another blowout performance from Google, whose revenues jumped nearly 80%. That's, well, staggering. If you recall, in late February, investors got unnerved after entirely predictable comments from their CFO about how growth would inevitably have to slow. Actually, he said that Google might feel the effect of large numbers. Uh, about that. The "law of large numbers" has nothing to do with slowing growth rates, and it has everything to do with the fact that statistical anomalies smooth themselves out over many iterations of an event; e.g. over a million coin flips, heads are more likely to be represented 50% of the time, than if you just flip 20 times. That should have been a clue right there, not to trade on the words of George Reyes.

Ford Posts $1.2 Billion Loss, Restructuring Cited (AP)
Question time -- how does a company that is in one of the deepest, most profound slumps that a company has ever faced, just start a massive restructuring now, in q1 '06? It seems obvious that there's very little, one-timey about big charges like this, these days... that the company is bleeding a lot of money as a cost of doing business. In fact, yesterday, GM reported a relatively narrow loss, of just a few hundred million. Didn't that seem like the rare one-time event? It sure did here. They should have made a not that the lack of charges couldn't be relied upon going forward.

The Oracle's Replacement (WSJ)
Worth Civils (?) at The Journal passes on an interesting point about Berkshire Hathaway once The Oracle from Omaha has moved on. One of the advantages that Berkshire Hathaway has is that managers like to be acquired by the company, because often Warren Buffet lets them stay on. In fact, if you read through any of his annual shareholder letters, he really plays up the important of personnel -- how nice it is to get a good manager, and then give them a lot of cash to play with. So when he's gone, the next chief won't be able to find as many bargains, unless managers trust that they can sell out to the company, without fearing their job.

JP Morgan Settles IPO Suit (NYT)
What? In 2006, there's still a lawsuit going on about stupid investors paying out the nose for dotcom IPOs? Apparently there is, and it's going to cost JP Morgan $425 million to settle. It's hard to follow the various lawsuits and fines relating to the excesses of the 90's. If history is any guide, we'll be hearing about various cases, winding their way through the court system, for a long long time. Here's another guess -- the big winners aren't going to be the people who lost their money, but the lawyers representing them. Yeah, easy guess.

$$$ Smith Barney, Why Do You Hate Your Customers?: A Play [Long or Short Capital]

$$$ This makes us nostalgic for the early '80s, when being a millionaire actually meant something. [Reuters via WSF]

$$$ Yet another way to make money off of Enron. (Previous way here.) [TradeSports via Dealbook]

$$$ Delta asks employees to clean planes on their own time. It's just that sort of brilliant management that put the stock where it is today: crumbling in OTC oblivion. [St. Petersburg Times via Consumerist]

From the Not-So-Funny Department:

One of the aspects of the Duke lacrosse scandal (which seems to be taking up ever more real estate on the Drudge Report) that's been the subject of much gossip in our Duke alumni circles is speculating about what happens to the players long-term if everyone is found innocent and the people whose mugshots have been circulating throughout the media are still household names. Our informal polling indicates that they'll all end up on Wall Street, with little or no negative repercussions. Several are--or were, before the aforementioned events--not surprisingly, slated to start i-banking jobs after graduation. Also: the father of Collin Finnerty, one of the two players who were arrested, is Kevin Finnerty (left), a former JP Morgan MD who ran mortgage-backed securities there and was on the board of the Bond Market Association, which, if our nepotism theory holds true, seems relevant. The possible exception: the kid who sent out the apparently ironic email referencing American Psycho. Informal polling indicates that he's probably screwed.

As everyone knows, wearing clothes that are commensurate with your status and wealth takes actual effort. There are extra buttons to button, more things to take off when you pass through the metal detectors at LaGuardia and more things that need to be dry cleaned, pressed and sung to in mild, soothing tones. So the WSJ's report about washable (*gasp*) dryable (oh god) wrinkle free suits (NOOOOOOO!!!!) has raised the ire of the traditionalists:

For Marc Psarolis, sales director for upscale British clothes maker Daks, the reaction is much more visceral. "This is the Antichrist of what we believe in," he sniffs.

But for those who need more specific guidance on what not to wear, we bring you Wall Street's own Chris Quick, who, in between vacations in Nantucket and St. Moritz found the time to sit down for an exclusive interview with tie-maker, Vineyard Vines. In hardhitting exchange of "finish the sentence," Quick reveals his sporting, political and fashion preferences:

Golf is analogous to life because...you play 18 holes with somebody, it tells you a lot about the person.

Of today's world leaders, be they economic, political, or social, I most admire...Bush, George W. W.

I wear vineyard vines because...every time I look down at my tie, it reminds me of all the fun things there are to do in life outside of the work place. Work's fun, but looking down and flying or fishing or boating or sailing, playing golf, lacrosse, watching lacrosse games, seeing squash racquets-they're lifestyle ties.

We were just at a panel on buyouts moderated by Maria Bartiromo, featuring Clayton, Dubilier & Rice CEO Don Gogel, SilverLake's Glenn Hutchins and JANA Partners founder Barry Rosenstein. We'd have live blogged it, but ... oh, who are we kidding? (This is part of our very occasional effort to bring you information that's actually useful.)

Some highlights:

· Panelists were universally negative on SarbOx, which wasn't surprising. Carlyle CEO was quoted as saying that Sarbanes and Oxley should now be forced to sit on the audit committee as punishment and that companies are going public outside of the US just to avoid it. "23 of the 25 top IPOs this year occurred outside of the U.S. ... People who have a choice don't come here."

· The boom in private equity is largely attributable to increased debt available to capital markets due to low interest rates. (Seeing multiples of 6 - 7x cash flow.)

· When asked if they were interested in doing business in Russia or India, Hutchins said Russia was "not a place where I would do business" and that its "actions with respect to Yukos have been criminal." He wasn't inclined to do