MBAs are making even more money. [Business Week]

There aren't many (any?) male personal assistants in UK investment banks. [The Devil's Personal Assistant via WallStFolly]

Why does the new KKR fund have a Luxembourg subsidiary? No withholding or capital gains taxes! [Going Private]

Jon Corzine was so beat-up by Hank Paulson during the 1998 struggle to control Goldman that he wouldn't even enter the building and conducted his business from a limo outside. [New York Post]

We suppose you can read the reporting on today's Google conference call from Reuters or CNNMoney. They are good enough as far as they go. But the most complete treatment comes from John C. Ogg on the 24/7 Wall Street blog. It's little more than a hastily written transcript but its got the goods on who asked what, which is always one of the best parts of these calls.

Google's Investor and Analyst Conference Call [24/7 Wall Street]

Update: Seeking Alpha has the complete transcript.

Today seems to be Hank Paulson day here at DealBreaker. The Observer ran a good profile on the incoming Treasury Secretary today, with details on his fly-fishing habits (catch and release). Meanwhile, over on Slate, Timothy Noah provides the details on Paulson's political contributions (heavily Republican).

In light of what we've heard about Paulson leaving a sappy voicemail for Goldman's employees yesterday, this older story from Fortune is particularly telling.

I've never used e-mail, but I'm a huge voicemail user. I do a couple hundred voicemails a day. And I return every call right away, whether it's a client or someone in the firm. There are positives and negatives to this. I don't have a lot of time for small talk.

Occasionally there are wing nuts who call, and I pass them on to Julie, my assistant. But Julie doesn't screen my voicemails. The people at Goldman Sachs have to be able to get to me. Clients have to be able to get to me.

I've always spent a lot of time on the phone. Even when cell phones were a novelty in the 1980s when I lived in Chicago, I was using one of those huge Motorola phones as I walked from the train station to the office. This past Christmas, my wife, Wendy, and my daughter, Amanda, and her husband and I spent ten days hiking in Chile, and my daughter took so many pictures of me with this big satellite phone attached to my ear.

If anyone has yesterday's voicemail and wants to send it our way, that would be like super. Actually, if you've got any Paulson voicemail you should send it to TIPS at DealBreaker.com.

Secrets of greatness: How I work [Fortune via CNN Money]

Yesterday we were trying to remember just how long we had been hearing that Treasury Secretary John Snow was on his way out. Weeks? Months? A year? It feels like it's been forever.

Actually, people have been talking about this at least since 2004! This Wall Street Journal story [subscription required] even lists Hank Paulson as a probable candidate for the job.

Eric Savitz has launched a blog over at Barron's, Tech Trader Daily. From the initial post.

Well, here it is, the first-ever post of Barron's first-ever blog. It's been a long time coming: Barron's has been online for a decade now, but our approach until this point has focused largely on writing stories for the Web that look a lot like the ones we write in the magazine: in-depth company stories with an investment angle. And the site will continue to do a lot of that. With Tech Trader Daily, however, I'll try to apply some of the same Barron's logic to daily coverage of the tech sector. Like other bloggers, I'll be linking off to interesting stuff around the Web, from both other print publications and various places in the blogosphere.

Today he's more or less live-blogging from the Wall Street Journal's"D Confernce" and provides this quote from Sony CEO Howard Stringer: "Microsoft whips out patches like hot meals."

Tech Trader Daily [Barron's Online via Random Roger's Big Picture]

Not everyone is happy with the appointment of Goldman CEO Hank Paulson to takeover from John Snow as Treasury Secretary. Here is what the free-marketeers at the Competitive Enterprise Institute* had to say.

"No conservative administration should consider appointing anyone who works for the Nature Conservancy to any position and certainly not to one carrying the high responsibilities of Treasury Secretary. The financial scandals at the Nature Conservancy uncovered by the Washington Post are only the tip of the iceberg. The Nature Conservancy has served as the agent for turning millions of acres of productive private land into federally-owned land and has made huge profits doing so," said CEI's Director of Energy & Global Warming Myron Ebell. "The question that needs to be asked is, what will Mr. Paulson be able to do as Treasury Secretary to benefit the Nature Conservancy and its big corporate partners?"

Translation: Treehugger!

Trouble at Treasury: Paulson Wrong Choice for Secretary [CEI]

* Disclosure: John Carney's brother Timothy P. Carney is the Warren T. Brookes Journalism Fellow at CEI. He did not contribute to the article discussed here.

It seems some people find this very funny. To be honest, though, we don't really get it.

Actress and blogger Helen Green (pictured left) is upset that the financial services community isn't paying enough attention to the Tom Cruise-Katie Holmes situation.

There are about 10 IBs about 5 feet away from me and one of them is explaining the "Tom Cruise is gay and Katie Holmes is contracted to play his wife" theory. They are all acting SHOCKED. Just shocked!

FOR REAL!?

"Where did you hear THAT?!"
"Oh this stuff is underground, it's not even IN US Weekly."
"What? NO!"
"Maybe that would make sense."
"Well I guess 'Pieces of April' doesn't pay the bills."

This just isn't acceptable. A year ago- MAYBE. Not 2006 though. No way

Actually Helen, you might want to reconsider the idea that you want to marry any man who knows too much about Tom Cruise.

Why I Can't Marry An Investment Banker [And I'm Helen Green]

Boston blogger Kinjo complains that lunching bankers are destroying the peace of his park.

It's like every investment banker in the Financial District has shown up and is sprawled out on the lawn waiting for Michael Buble to show up to torture their eardrums with some pop-crooner revivalist Sinatra-esque mediocrity while they loudly eat their overpriced sandwich-wraps from Così2 and talk on cellphones in front of the friend they invited to come out to lunch. Asshole Woodstock.

We've seen what happens when bankers swarm at our own lunch spot. It's black pants and open-necked dress shirts everywhere. Salad lines wrapping around the back of Bazzini. The sad look of greed combined with resignation that, yes, this is all life has to offer.

Asshole Woodstock [Kinjo Vents His Spleen]

For all we know, Slate's Dan Gross is a totally a nice guy. So we're going to stop picking on him. But not yet.

Just now, while reviewing those Treasury Secretary articles on Slate's Moneybox, we noticed that each article has a "Related in Slate" section. The Related section for Gross's original "No Wall Street A-Lister to Treasury" article had a snarky little aside pointing out that Gross's record predicting things wasn't exactly sterling.

Last week, John Dickerson wondered whether Josh Bolten would change anything at the Bush White House; in November 2004, Daniel Gross dissected John Snow's strong-dollar statements. Last fall, Gross inaccurately predicted that Bush would name Glenn Hubbard to succeed Alan Greenspan as chairman of the Federal Reserve. In March, Gross pointed out that Morgan Stanley's John Mack is one of the CEOs who receives income tax gross-ups.

The "Related in Slate" section for Gross's latest article is a kinder, gentler version.

In April, Daniel Gross wrote about John Snow's potential successors, and John Dickerson wondered whether Goldman Sachs alumnus Josh Bolten would change anything at the White House. In November 2004, Gross critiqued Snow's strong-dollar statements. In January 2002, Tim Noah took Robert Rubin to task for discussing Enron's travails with a treasury department official.

Maybe the interns (who presumably write those things) just felt bad for Gross.

As it turns out, being married to an investment banker has its advantages. The Universal Critic blogger watches as his sterner half convinces a reluctant British National Health Service doctor to cough up the desired prescription:

At that point, a stare down ensued. Now Universal Wifey is not your average Notting Hill yummy mummy. For starters, she's not a mummy. She is a hardcore investment banker, and you don't get there without being able to stare someone down. She sat across from the doctor, wearing her smart work suit, and stared. Slowly the rustling from the waiting room became louder and louder. She stared. The clock ticked towards hometime. She stared. His phone rang with and enquiry from the desk to see if everything was OK. She stared. He picked up his men and doodled on her card. She stared. She clicked his pen a few times. She stared. He may even have perspired a little. She stared.

We were wondering how everyone was getting adderall prescriptions to fuel those all nighters.

London Life [Universal Critic]

Yesterday we poked fun at Daniel Gross, the Slate "Moneybox" writer who offered to eat the first chapter of Dow 36,000 if John Snow's replacement was an "A-list Wall Street CEO." You don't get much more A-list than Hank Paulson, so we expect Gross to be digesting those pages soon.

Gross himself has now admitted his error, albeit while taking a weird swipe at the book he promised to devour.

In April, I said I'd eat the first chapter of Dow 36,000 if President Bush could convince a Wall Street big shot to succeed the flailing John Snow as treasury secretary. This morning, Bush nominated arguably the biggest of the big shots on Wall Street-Goldman Sachs CEO Henry Paulson. (At least it'll be a cheap meal. Dow 36,000 is going used on Amazon.com for as little as four cents a copy.)

Well, sure you can buy a used copy for four cents. But would you really want to eat a used book? We imagine that books aren't exactly the cleanest thing you can shove down your gullet. Wouldn't it at least be a good idea to start with a new copy? Look, Daniel, if it's a money issue you can relax. Our offer to buy you a copy, a new copy, still stands.

Good as Goldman [Slate]

Bloomberg spills on the latest golf club in the Hamptons, Sebonack. Membership costs $650,000, with yearly dues running at 12 grand. What's that get you?

They will have access to a yet-to-be-built 28,000-square-foot clubhouse and a 19th hole with a green rather than barstools; it's a par-3 constructed especially to break ties and settle wagers.

So you won't really have a club house for a while. Still, that hasn't stopped the founding members from ponying up $1.5 million each. According to DealBook the founding members include:

Stanley Druckenmiller, chairman of Duquesne Capital Management; Richard Santulli, chief executive of NetJets of Woodbridge, N.J.; Paul Desmarais Jr., chairman of the Power Corporation of Canada; and Johann Rupert, chief executive of Cie. Financiere Richemont of Geneva, the world's second-largest luxury-goods company.

Rob Cox at Breaking Views argues that, okay, sure, Hank Paulson's jump from Goldman to Treasury was motivated by patriotism. But if he liquidates his stock in his old firm he also stands to make a ton of money.

Goldman recently reported mind-blowing profits. The stock, while off its highs, is up 60% in a year and has tripled since Paulson led its IPO. So leaving now with about $500m of stock under his belt seems sensible. That's especially true given the dominance of the trading businesses to Goldman's bottom line. It's only natural that a former client banker like Paulson would now pass the baton to Lloyd Blankfein and his merry traders

Hawking America [Breaking Views]

Can Paulson Be More Than a Salesman in Treasury Role? (Dealbook)
Dealbook asks what we can actually expect out of a Secretary Paulson. If Paulson is to be more than a salesman, it'd be quite impressive, since as far as we can tell, that's about the only job description. Unlike, say, the Fed chief, which actually has control over something, the Secretary only has the 3 j's at his disposal: jib-jabbing, jawboning, and jabbering. Really, what else is this position actually responsible for, other than being a whipping boy, and denying that the country is in recession when it gets to that point? One other interesting note about Paulson comes from Marginal Revolution, which notes that he's an advocate of the dividend tax cut. Perhaps that was chiefly a function of his private sector job, but so-called income investors might find this stance interesting.

M3 or not M3? (Econbrowser)
America has a proud tradition of government cover-ups: Area 51, the Kennedy assassination, the Communist plot to fluoridate the water, the moon landing hoax and more recently the decision to stop reporting M3. M3 had been seen as the broadest measure of the money supply, and conspiracy theorists have reacted strongly since its reporting was discontinued. Their central claim is that it's proof that the government is covering up rapid inflation. But few people, when pressed, can actually tell you what it is (at least that's what happened to us when we found ourselves in such a person's company, honest). So if you're curious, economist James Hamilton has a nice explanation of what M3 really is, and why it barely has any use to economists. Might come in handy the next time you're in a bar and the conversation comes up after 3 shots of whiskey.

Clarke's task: Boosting GM market share (Detroit Free Press)
This year's top-performing Dow stock, GM, continues to make moves that investors seem to like. The latest is that CEO Rick Wagoner will cede control of the company's North American operations to GM veteran Troy Clarke. While we must admit to being impressed at GM's mini-turnaround, it must be noted that it's been completely devoid of substance heretofore. There have been several interesting moves and announcements, and one profitable quarter, which was based entirely on accounting tricks. But it's hard to call anything a comeback until, you know, sales actually do come back.

Research Firm Sees Microsoft Entering Handheld Game Business (Barron's Tech Trader Daily)
Working at a third-party research firm seems like a fun racket. Basically, your job is to come up with various possible scenarios (Apple to produce their own phone, Nokia to produce standalone music player, etc.), write up a report about it, and then flog it to your clients... oh wait. The latest is buzz is that Microsoft may enter the handheld gaming market, though it's not clear how they plan to do it. Will they manufacture their own handhelds, or will they license out the Xbox operating system to a company like Samsung, for them to produce their own handheld? If you want to know, you probably have to pay $20,000 to The Diffusion Group, which did the report. Obviously, they have a pretty good track record when it comes to licensing out operating systems, though of late they've wanted to be more associated with the specific device. Either way, it probably makes sense to extend and modify the Xbox platform in some way.

Blogger Derick Punaro describes how he almost wound up on Jim Cramer's "Mad Money." Here's the email that nearly (but not quite) landed him the spot.

Jim!

A big Buffalo Booyah to ya!

Help me out! The King of Beers has me in a Castle of Pain. I bought BUD in my time B.C. (that's Before Cramer) over $50. The whole beer market is looking bad with both Budweiser and Molson Coors reporting earnings down again for Q4. What's your outlook on BUD? Should I stock up, or find another spirit to drown my sorrows?
--------------------—
Derek J. Punaro
Buffalo, NY

All it takes is email and a dream. And some regrettable investments.

How I almost got on Jim Cramer's Mad Money [Punaro.Com]

If there's anything the growing scandal over options backdating seems to demonstrate, it's that the brute force approach to dealing with corporate malfeasance is failing. In other words, you can't just ban stuff and make it go away. Boards and executives will simply delve deeper into accounting exotica in order to avoid scrutiny. Harvard economist Jeffrey Alan Miron thinks the answer is to legalize fraud:

Should corporate fraud and malfeasance be crimes? Should the SEC dictate corporate disclosure and accounting practices? What would happen if all such matters were left to private parties?

To answer these questions, consider the following.

So an alternative to the criminal / regulatory approach to corporate misconduct is private contracts. Under this scenario, shareholders would attempt to design and enforce contracts for executives that discourage fraud. This could mean organizational structures that limit the power of any one executive, checks and balances like outside audits, and deferred compensation that is conditional on good performance.

Despite clever contracts, some fraud would still occur. But under the contracting approach, this would be a civil matter between shareholders and the corporation rather than a matter of criminal law.

I did quit [my job], and it felt really good although I just put a letter of resignation on my boss's desk and slunk away. On Tuesday I'm going in to confirm my resignation, which should be the really harrowing part, except not really since I win and my boss loses forever. I AM GOING TO D.C! I MARRIED AN INVESTMENT BANKER! This is all pretty awesome.

Good to see feminism is alive and well on the internet.

Guess what I did today, homies [Felonious Couch]

The finance corridors of the interwebs are echoing with reactions to the President today naming Hank Paulson to follow John Snow as Treasury Secretary.

Larry Kudlow's pleased.

Mr. Paulson is a well-regarded, top-rated Wall Street exec at the powerful Goldman Sachs who will bring considerable credibility to the top Treasury job. He is a confirmed free trader who strongly supports deepening economic relations with China.

Mr. Paulson also supported Bush's investor tax cuts, and has worried out loud about the impact of SarBox on American competitiveness.

Goldman insiders tell me that he is something of a "greenie," having been active in the Nature Conservancy, but they say he's no Al Gore, and prefers technology advances by private enterprise to solve energy and any global warming issues.

Ah-hem. "Goldman insiders" tell him that? Somebody should be reading DealBreaker. Or maybe somebody is reading DealBreaker.

Rick Karlsgaard is bullish.

Snow has been replaced by Henry Paulson, the chairman of Goldman Sachs. Like Bill Clinton's Treasury Secretary, Paulson will have credibility with Wall Street that Snow never enjoyed. This should be good for the stock markets, even if Paulson doesn't alter any of Snow's policies. Paulson provides better optics for investors.

The Republicans face a wipeout in the 2006 and 2008 elections. Forget immigration and all the stuff you read about in the papers. The only thing what will save Republicans now is if the investor class is happy and votes to give Republicans another turn at the wheel. Given the underlying economic strength of the U.S. economy, stock markets should be doing better. With a Wall Street guy at Treasury, maybe the markets will catch up. That is the Republican hope.

DealBook wonders what happens to all those shares of Goldman Sachs currently held by Hanks.

The Treasury Secretary is typically called upon to give up control of any investments that may present a conflict of interest. In 2001, for example, pressure from public interest groups forced Treasury Secretary Paul H. O'Neill to reverse his previous stance and agree to sell about $100 million worth of Alcoa stock and options

And even though this is hardly new, we like this profile of Paulson which emphasizes his commitment to Christianity ("My wife and I try to begin every day by affirming Jesus. Sound ethics and morals have got to be the underpinning-the basis-of everything we do") and notes that he once aspired to be a forest ranger. Tree-hugger indeed.

David Phillips has taken a look at the proxy statement filed by Bed Bath & Beyond. Among the items of business are resolutions calling for the Company to be nicer to workers in other countries and not quite as nice to white people (the Board of Directors is currently all white). Phillips thinks this a distraction from some real problems with the employment agreements the company has with its two co-founders.

Under the agreements, if Messrs. Eisenberg and Feinstein decide to retire prior to election of their Senior Status Period, the Company must pay them them $700,000 (+) per annum for ten years (or, if the Company chooses, in a lump sum on a present value discounted basis of $7.0 M plus).

Bed Bath & Beyond: Bargain Bedding...Bargain Stock Price? [10Q Detective]

It was bound to happen. Anytime a scoundrel takes a sucker for everything he's got, someone will eventually blame the sucker. Afterall, he shouldn't have been a sucker in the first place.

So what about the victims that suffered at the hands of the above mentioned individuals when they lost their life savings, jobs, pensions etc.? I am sorry - but if someone had their life savings in one and only one stock, I would question their sanity. In fact, retirement money, pensions and other such assets should always remain in diversified funds. Pleading ignorance to this rule of thumb is like the smoker who pleads ignorance to the warning printed on the carton. So honestly, those who lost their livelihood due to the shenanigans at Enron really can't blame anyone but themselves for not being careful with their own money. They put their eggs in one basket - their job, retirement savings and their future and now they want someone to pay for their own mistakes.

This reminds us of the con-man's justification of his trade--"You can't cheat an honest man." Or, in the words of Mike Skinner (aka "The Streets"), "Using the following, I'm going to show you: A) How to con someone using their own greed, B) That you won't feel bad 'cos they're trying to con you anyway, and C) TAKING THEIR MONEY!"

So, see, you don't have to feel bad for the Enron investors. They deserved to have their savings wiped out by crooks because they were stupid and greedy. The stupid and greed deserve what they get. The smart and greedy, well, that's another story. We guess that's how it works.

My Opinion on the Enron Folly [Stocks Advice by StocksandBlogs.com]

Just as youth is wasted on the young, wealth is certainly wasted on the wealthy. All too often, people who are earning the serious money have no idea how to spend such money. They end up doing silly things with it. Like dying with it so their idle offspring can fritter it away on expensive chemical habits or political causes. Or losing it to the ex-wife.

Fortunately, Kaiser Edamame of Long or short capital provides some advice.

Some of you may have heard that working at a hedge fund you can make "a lot of money". Well it's true. Now some of you might be saying to yourself: "Wow, how am I going to get a job at a hedge fund so I can make all that money?" which is a good question. But, there are a few of you who are more foresighted that are saying "Wow, how am I going to SPEND all that money?" And that's really the more important question, because let me tell you, it's not easy.

How To Be A Mini-Baller [LongorShortCapital.Com]

Last week, we mentioned that one of the things that Ken Lay was doing during the hours between his conviction and the time he emerged from the Houston courthouse was standing around with his family. Seemed fair enough. We'd probably say a couple of prayers if we were convicted of crimes that promised to put us in jail for the rest of our lives too.

But when Lay emerged from the courthouse, he decided to deliver a miniature sermon on God's role in our fate. Now we see professional athletes do this all the time, thanking God for their victories. But you usually don't see the losers blaiming God, which is pretty much what it sounded like Lay was doing when he went on about remembering that "God is in control."

Jeff Matthews was pretty disgusted.

The only thing missing from the whole tableau was Tammy Faye Baker dabbing those big raccoon-shadowed eyes of hers for the cameras and declaring her eternal affinity for the good Christian Ken.

As always, piety is the last comfort of the corrupt.

How to Give Christianity a Bad Name [JeffMatthewsIsNotMakingThisUp]

Eddy Elfenbein reminds us that back in April Slate's Daniell Gross was prediciting the Bush administration wouldn't be able to recruit a high level Wall Street exec to replace John Snow. Specficially, Gross wrote:

The probability of Bush being able to draft any of these guys-virtually all of whom have signaled their disinterest-is incredibly low.

Gross then went on to put his money where his mouth was to put his mouth where his predictions were.

John Snow will have a replacement, and he may very well come from the corporate world. But if it's an A-list Wall Street CEO, I'll buy a copy of Dow 36,000 and eat the first chapter.

We think it's unfair to ask Gross to follow through on this promise entirely. Gross is, afterall, an internet journalist. So we here at DealBreaker hereby promise to buy Gross a copy of Dow 36,000 and mail him the first chapter. But he's got to eat those words.

Snow's Job [Slate via Crossing Wall Street]

The buy-out of pipeline giant Kinder Morgan announced today includes a massive amount of debt. Fourteen and a half billion according to the buyer's press release. That number includes both the refinancing of existing debt and new debt being taken on by the company to pay the purchase price.

So how do the Kinder Morgan management team intend to rack up that much borrowed money? Well, first of all, they don't intend to borrow anything. In deals like this, the company itself borrows the money to support the acquisition by the management and the collateral will be the assets of the company. It's like financing your new car, except that instead of you promising to pay back the loan, the car makes the promise. It's Herbie the Lovebug financing Lindsay Lohan's purchase of the car.

The meaning of Goldman's "Highly Confident" letter after the jump.

At least according to former White House staffer Jonah Goldberg John Podhoretz on National Review's blog "The Corner."

Do you wonder where the White House got the idea to offer Henry Paulson of Goldman Sachs the job of treasury secretary? Well, White House chief of staff Josh Bolten used to work at Goldman Sachs. Even though, as a matter of statute, the secretary of the treasury does not work for the White House chief of staff, basically as a matter of practice the chief of staff is his supervisor...Interesting psychological development for both men....

That Harley in the picture with Bolten is not, of course, a hybrid.

It's Fun to Be Your Boss's Boss [The Corner]

One of our commenters mentions that Hank Paulson left a "sappy voicemail" to GS employees this morning. Anyone got a transcript for us? Send to TIPS at dealbreaker.com.

With Hank Paulson gone to the Treasury who will be taking up the helm at the goodship Goldman? The general consensus seems to be that the next cheif executive will be Lloyd Blankfein, a veteran of Goldman's trading side and current the bank's president and chief operating officer.

According to a recent Fortune magazine profile, this will be the first time the new Goldman CEO is chosen by the Board of Directors rather than the management committee.

Rising Star: Lloyd Blankfein, Goldman Sachs

Going Private revists the KKR offering memo.

Typically, private equity funds have provisions to "claw-back" fees paid to general partners of the fund in the event the fund closes with a net-loss. Not so here. To wit:

"Distributions that are made to the general partners of a KKR private equity fund pursuant to a carried interest in the returns generated by the fund's investment generally are subject to reimbursement in the event that the fund is in a net loss position upon the termination of the fund. Distributions that are payable to KKR's affiliates in connection with our co-investments and opportunistic investments will not be subject to similar reimbursement, although such distributions will take into account prior realized and unrealized losses."

In other words, KKR PEI could be a total bust except for three big LBOs that KKR Proper was only able to complete because of the additional funds available from this public entity. Those LBOs would pay 20% carries to KKR Proper, but the rest of KKR PEI's investments could tank and drop the fund to below the initial offering price. Despite this, KKR Proper keeps the LBO gains, and keeps the management fees it has packed in over the last many years.

You can read the whole KKR Prospectus here.

They're KKRrrreat! (Part II)

8:15. Rumors everywhere that Treasury Secretary John Snow is stepping down. What to make of Snow? Kevin Hassett sure likes him. Who will replace him? Will it be former Commerce Secretary Don Evans? Goldman Sach's Hank Paulson?

8:20. Wires are saying it's Paulson! Dollar rising on the news. Apparently, the NY Times said Evans would favor a weaker dollar.

8:22. Bloomberg very certain it's Paulson.

8:29. Yep. It's going to be Paulson according to "media reports." DealBreaker says its true so it must be!

8:47. What? According to marketwatch, dollar is falling on the news of Paulson.

8:58. Still an empty podium outside the White House. I need another cup of coffee.

9:07. CNBC keeps saying we're moments away! I'm so excited! I've put altogether too much sugar in my coffee!

9:14. John Snow walks out with George Bush and...Hank Paulson. Suck it Goldman Sachs shareholders! Watch your stock sink like the President's poll ratings! You just lost your chairman and CEO.

9:16. The President is saying nice things about Snow. That's sweet.

9:17. Wow. Not a lot of nice things. That was quick.

9:17. Now the President is saying nice things about America. "The American economy is powerful, productive and prosperous," he says. He really seems to like us. I feel kind of bad the feeling are not reciprocated. So Hank shares the president's philosophy of trusting the American people to save, spend and invest their money as they see fit. Is the President a tree-hugger?

9:18. Restrain spending! Cut the deficit in half by 2009! That's "our" goal. "He'll help ensure America's trading partners play by the rules...respect intellectual property and maintain a market-based exchange rate." Suck it China!

9:20. Snow is talking now. The President and Paulson look confused! Was Hank supposed to speak next? Why do we even have to hear from the guy going out? Snow keeps aiming his eyebrows at Paulson! I think they are growing while he's talking. Does that mean he is lying or telling the truth?

9:22. Paulson speaks. Mentions "the competitive zeal of the American people." Holy crap. We're all working at Goldman now!

Oil Prices Rise As U.S. Enters Summer (AP)
Inappropriate determinations of causation are rife in AP articles on the economy, but these are our absolute favorites. Memorial Day weekend is the start of something called, get this, the 'Summer Driving Season'. Apparently people's cars, which go dormant in the winter, get taken out of mothballs, get a new coat of wax, and people finally start driving them. Most importantly, as soon as Memorial Day comes along, traders realize they should buy some oil to take advantage of all this driving. Now, you'd think that traders, having experienced several Memorial Days and seen this bizarre ritual known as 'Summer Driving Season' would know in advance that it was coming along. Some might even be so devilish to buy gas, oh, the week before, to get a jump on their fellow traders. You know, having seen the pattern so many times. But apparently they're all much to honorable to exploit ineffincies such as this. And so each year, they pretend to be surprised that Memorial Day is upon them and they then decide to buy gas. Who knew it was so easy? Lest you think we're being sarcastic, check out this cherry quote from an analyst: Many traders believe gasoline demand will increase in the United States as Americans are more likely to take domestic vacations due to a weakening U.S. dollar and rising airline ticket prices, Shum said.

Scrushy's lawyer says Lay strategy was wrong (USA Today)
After Ken Lay was convicted, he spoke on the courthouse steps and claimed to be a lucky man for having a loving and Christian family. Jeff Matthews skewered this moment brilliantly over the weekend. But more amusing is that Donald Watkins, the lawyer for HealthSouth's Richard Scrushy (who got off), claims that the Lay defense team should have gone with a different strategy. Scrushy, if you'll recall, basically positioned himself as Jesus himself. He became a born again and hosted his own Christian family radio show in Birmingham (which, you know, plays pretty well there). According to Watkins, the Lay defense team shouldn't have concerned themselves so much with the, you know, facts of the case. In other words, don't save the Jesus stuff for post-conviction -- make it central to the defense. Hmm, wonder if it would've worked for Martha.

Wal-Mart and the Buck (Big Picture)
Don't look now but gas prices may be having an effect on consumer spending. Yes, they've been warning about this for years now, and it really hasn't materialized, just as they've been warning that if real estate started to soften, people's homes could no longer be the equity ATMs they once were. But new evidence from Wal-Mart suggests that the first part of the scenario may get fulfilled. Same store sales at the behemoth from Bentonville are expected to be weak, as low-end shoppers get pinched by higher gas prices. As further evidence that the spending patterns of the lower-end shopper are changing, some have noticed a change in purchase timing. Instead of seeing purchases smoothly throughout the month, consumers are concentrating their purchases around the 1st and 15th of the month -- so they're living paycheck to paycheck, with little in between. So if this part of the prophecy comes to pass, will the one about real estate-as-ATM happen as well? Time will tell.

Google Hates The Troops (Outside The Beltway)
Uh-oh, Google may have inadvertantly alienated a large chunk of the population by forgetting to change the logo at Google.com in honor of Memorial Day. The company likes to change their logo for all sorts of things, like Arthur Conan Doyle's birthday, most recently. This is one of those things that could go away and be forgotten, or we might see conservative bloggers urging their readers to switch to Ask.com for their search queries (Michelle Malkin enter stage right), in which case they could suffer some unnecessary hits to their reputation. Already this meme is getting spread around conservative circles (apparently they're the only ones who care about Memorial Day).

(We've been dying to use that headline forever.**) CNBC and the WSJ are reporting that, as previously speculated, Hank Paulson will be John Snow's successor as Treasury Secretary. Bush is expected to announce the appointment in half an hour or so. We predict that this time next year the entire Treasury Department will be stuffing themselves into Ozocars and the Bush administration will be pointing to said Ozocars as evidence of the administration's seriousness about energy conservation and overcoming oil dependency.

** Since 5 minutes ago.

Bush Favors Paulson as Treasury Secretary [WSJ]

There will be no posting on DealBreaker on Monday, the 29th. The market is closed for Memorial Day and so are we. We'll be back on Tuesday with the usual assortment of planestalking posts, commentary on the sex lives of investment bankers, and Vonage-IPO-bashing (gratuitous and deserved).

We're sorry you are still in the office and not already plowing through your third mojito and sailing away for the first weekend on the summer on blackout island. We'd at least like to bring you the good news that the roads are still clear and you won't spend the first five hours after leaving the office stuck on the LIE inhaling exhaust.

We'd like to but we can't. According to Traffic.Com, you are totally screwed. The 0 traffic jam rating from this morning has shot up to 8. So it looks like it is eighter the LIRR or another Friday night in your usual Friday night haunts, except that they'll be weirdly abandoned. Good luck.

Leveraged Sellout tells the story of what happens when 4 bankers found themselves inside the East Village's notorious Mars Bar.

When Team Gentrification got to 2nd Ave and 1st Street and had to ask a homosexual (eek!) where the bar was because it had no sign, they knew they were markedly out of place. Blake was scared of the façade's pentagrams and wanted to go watch reruns of West Wing, and John (the hedger) did some quick stochastic analysis and concluded they'd be better off wrapping themselves in American flags and grabbing beers in Fallujah, Iraq.

I won't spoil the ending. But don't try this at home kids. Mars Bar is the real deal.

Bankers on Mars [Leveraged Sellout]

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 to say I'm starting to get really irritated at the recruiting infrastructure in many of the top banks here in New York and London. The bankers they are hiring are terrified of women.

I had three dates with this young man, let's call him "Dean" from one of the "big name" banks in town some months ago. He was actually very charming and quite a Renaissance man. When we went out the first time for drinkies and then dancing later I was pretty impressed and I am sure all my fans know how hard I am to please when it comes to things like this.

Eugene Plotkin, who allegedly masterminded the Stripper-Eastern Europe-Business Week-Mail Dude-Insider-Trading scam from inside his post at Goldman Sachs, was indicted yesterday. He's now sitting in jail, waiting to make bail. Apparrently the young man has had some trouble coming up with co-signers on his $3 million bail bond.

The NY Post has details about the bail bond haggling.

At a bail hearing yesterday, Plotkin's lawyer, Martin Schmukler, said the aunt and uncle agreed to put their $1 million home on the line. But they don't want to co-sign on the bond, which could make them liable for the entire $3 million if Plotkin fled.

Plotkin's parents are willing to co-sign on the bond, but they are no longer willing to put up the $250,000 in cash they'd promised because his father, Mikhail, was concerned about not having any cushion if his health failed, Schmukler said.

DealBook reports that Goldman confirmed our young Plotkin's been fired from Goldman Sachs. Earlier he was merely under suspension.

Wall St. Scammer to Stay in Slammer [New York Post]

Ignore the puffery in the lede on the Telegraph's story on Alexey Mordashov, the boss of the Russian company Severstal, which Arcelor has agreed to buy in an effort to block Mittal Steel's hostile bid to take it over. The rest of the story has some useful information, although you have to translate it to understand exactly what it really means.

A boyish 40-year-old, Mr Mordashov emerged from Russia's era of primitive capital accumulation with a vast fortune and has gone on to build vital establishment credentials during the rule of President Vladimir Putin.

Translation: Mordashov is not an oligarch or a gangster because in Russia today those words mean someone who isn't a friend of Putin. Mordashov is a friend of Putin.

He has lobbied for Russia's bid to join the World Trade Organisation. His purchase of a stake in commercial channel REN TV last year amounted to a demonstration of loyalty towards a Kremlin which tightly controls the broadcast media.

Translation: Mordashov is Putin's boy.

Analysts said Mordashov would never have been able to pull off the Arcelor deal without first getting the nod from President Putin.

"It's about who you are and it's about what you've done," said Rob Edwards, metals analyst at Renaissance Capital. "He's always been politically well placed."

Translation: Mordashov is the guy behind Severstal. Putin is the guy behind Mordashov.

Going Private has read the KKR offering memo so you won't have to. The post is full of nifty diagrams. It describes the structure and answers some important questions, such as how KKR will be made to continue to invest in the public fund.

A bit of a warning. If you were planning on curling up with the offering memo this weekend, you might avoid clicking the link below. It's full of spoilers and we wouldn't want to ruin your beach reading.

They're KKRrrreat! (Part I) [Going Private]

Court papers filed on behalf of Martha Stewart yesterday indicate that she will fight the SEC's civil charges of insider trading related to her sale of ImClone stock in 2001. The decision to contest the charges surprised some observers who expected Martha to attempt to avoid another public trial. Someone familiar with the case, however, tells DealBreaker that Martha instructed her lawyers to turn down any settlement offer that involved an admission of wrongdoing.

Fortunately, the first hearing is not scheduled until November so Martha's summer schedule is intact.

Stewart to fight insider trading charges [Bloomberg in Chicago Tribue via
DealBook]

The roads east from New York City are in good shape this morning. But as you know, that can change fast. Traffic.Com's LIE page provides real time updates on Fire Island and Hamptons bound traffic. Right now the LIE is rated "clear" with just a bit of construction, all scheduled to be cleared up before this afternoon.

...expensive?

Let's face it. Between the house out east, the new summer wardrobe, the car rentals and the sundry costs of living well between Memorial Day and Labor Day, summer in and around New York can get a bit pricey.

This advice from the Natty Banker won't help at all.

Ford to Pay 10.6 Percent Yield in U.S. Debt Exchange (Bloomberg)
Psst... want some high-yield corporate paper? If so, Ford is offering over 10% in a new bond offering. It's a bold move for a company, and strategically probably a wise one. The company is in a high-leverage situation here (remember, people keep referring to auto stocks as options anyway) and since they have to survive now, it makes sense for them to give it everything they've got, not necessarily preserver for a