On Monday, the New York Times’ DealBook cited a report by Investment Dealers’ Digest about Wall Street firms cutting back or canceling their holiday parties. According to the Investment Dealers’ report, a few of the firms whose holidays could be a little less happy include investment banks such as Bank of America, which is cutting back on holiday expenses, and Deutsche Bank, where efforts were made to ban holiday parties in 2006.

The less hearty holiday partying is understandable given the massive write downs by investment banks due to the subprime meltdown. A report by Citgroup Inc’s global market unit says that the total write down of collateralized debt obligations (CDO) could total as much as $64 billion. Morgan Stanley, Merrill Lynch, Citigroup, Deutsche Bank, UBS, Credit Suisse and Barclays all reported massive write downs in the third quarter.

So which Wall Street firms aren’t letting a little subprime mess put a crimp in their holiday style? According to DealBook and Investment Dealers’ Digest, Goldman Sachs, PricewaterhouseCoopers, BNP Paribas, Lehman Brothers and Citgroup have all booked their holiday parties for this year in New York City.

submitted by Christine Birkner

As 2007 draws to a close, every publication/news outlet on the planet is releasing their standard lists of most notable people, places and things for the year. (From top to bottom, the so-called “father of Russia,” Vladimir Putin, was named Time magazine’s Person of the Year, while Britney Spears topped MSNBC’s (and everyone else’s) list for Biggest Celebrity Breakdown.) The New York Times’ DealBook covered the most talked-about business items of the year, including Jim Cramer’s freak out on CNBC this summer urging people to pay attention to the subprime mortgage crisis, which, the Times pointed out, seemed a little crazy at the time but turned out to be rather prescient. Futures magazine will weigh in with its “best and worst” list for 2007, Tops and Bottoms, in the February 2008 issue. We’ll be offering our own tongue-in-cheek look at this year’s dealmakers and breakers in the futures industry, including a no-holds-barred account of the subprime meltdown, and our take on the crazy antics of certain investment bank CEOs. With more intriguing events on the horizon, like last week’s announcement of the 2008 launch of a new electronic exchange, the CFTC’s continuing reauthorization show, and lots more, the futures industry in 2008 is sure to keep us entertained as well. Have a happy new year!

Seems two officers of the CMEGroup cashed in some stock options in January, prior to a short term drop in CMEGroup prices. On Jan. 15, Bryan Durkin, managing director and chief operating officer exercised options and then sold 1,500 shares of CME Group stock at $616.75, for a cool $925,125. Phupinder Gill, CME Group president sold 1,000 shares of stock at $607.25 for a total of $607,250. Today's price closed at $629.

While it may not be quite the blockbuster story that a certain French bank fracas, or a certain government department brouhaha are, the proposed new futures exchange has been surrounded by its own (albeit lower-key) circle of rumors and intrigue over the past few weeks. The Financial Times reported that the Intercontinental Exchange (ICE) held “early and informal” talks with the consortium of 12 financial institutions backing the exchange, and according to the Chicago Tribune, Archipelago founder Jerry Putnam is being considered as the new exchange’s CEO. Whether or not ICE will contribute its muscle to the new exchange remains to be seen, and the CEO search appears to be ongoing, as today group spokesperson Bill McBride could not comment on either report. The consortium is interviewing “a range of accomplished and experienced executives” for leadership positions, according to McBride, who says that although the group hopes to have the positions filled by the end of February, as far as hiring was concerned, “getting it done right is better than getting it done fast.”

Panels on clearing have never been the most well attended panels during the annual Futures Industry Association (FIA) conference in Boca Raton FL. but clearing was the theme of much of the discussion during the recently concluded 2008 conference.

While the biggest news item may have been the announcement by the International Securities Exchange (ISE), Eurex and the Option Clearing Corporation (OCC) that they planned to create a transatlantic trading and clearing link that will allow Eurex customers to access ISE's options market using their existing Eurex connections, more interesting though was the unanimity of support for the vertical clearing model during a panel of exchange leaders. What used to be a vigorous debate regarding the pros and cons of the vertical vs. horizontal clearing model became an acknowledgement of the ascendancy of the vertical model.

Richard Sandor, chairman of Climate Exchange Plc., which owns the European Climate Exchange (ECX) and Chicago Climate Exchange (CCX), is warming to the vertical model.

There's a great line in the Superman movie with Christopher Reeve, when our hero catches Lois Lane from a disastrous fall. It goes something like this: he catches her and says "Don't worry, I've got you." She looks at him and looks around at the thin air and says, "But who's got you?"

That came to mind today when it was announced that Citigroup announced it was "on the verge" of a deal with three private equity firms: Apollo Management, TPG Capital and Blackstone, to sell some $12.5 billion of leveraged loans that were used to finance corporate buyouts, according to the Financial Times.

It says these private equity groups have "established funds" to buy the debt. But the question is, who is financing the funds? Part of me believes it's all balance sheet voodoo, another part thinks its the biggest Ponzi scheme of all, something akin to the mortgage market today. Reminds me of the notional funds model.....I give a manager a letter of credit saying trade like I've given you $100 million, but really, I'm going to give you only $10 million to use as margin. The other $90 million can be drawn from when needed, but why have it sitting in T-bills when it can be promised elsewhere (doubling down?) and make some higher returns? This is a great plan, until it all comes crashing down due to a default, or made into some financial products that are so distressed they are disguised as something else, and sold to the big firms, who perhaps ought to know better and look behind the curtain.

Makes me wonder if you really followed the leveraged loan to the private equity money to the investors to their debt, would it be Citigroup actually financing its own "safety net" in the end?

In the midst of market volatility that knows no bounds, a new "study" comes out that, in essence, states that traders with higher testosterone levels make more money. The author of the study, John Coates, formerly ran the trading desk for Deutsche Bank, but now is a research fellow at Cambridge University. In the course of the study, he noted in his Financial Times comment piece "We found that a trader's daily testosterone levels were indeed higher when he made an above average profit. We also found that the higher a trader's morning testosterone, the more money he made that day. This effect was most pronounced in experienced traders."

The April 27 Sunday New York Times had an incredible article on Robert Rubin, former Treasury Secretary under President Bill Clinton and former co-chairman of Goldman Sachs. Oh, and yes, currently is on the board and is chairman of the executive committee at Citigroup, which has lost billions of dollars in the recent mortgage mess. The question asked in the article was, Where was the wise man?

Rubin has always been brilliant, perhaps one of the smartest men on the street and in politics. But he has been noticeably absent during the Citigroup crisis, and this article describes his role at Citigroup and other aspects of his career.

It's a couple insights that deal with the futures industry that make this article especially interesting.

Sick of high gas prices? Don't worry...Diddy feels your pain. In a video diatribe, the hip hop mogul/purveyor of bling/frequent name-changer reveals that the skyrocketing price of oil has caused him to (gasp!) fly commercial. When Diddy leaves his private jet at home, you know the situation is dire. But Diddy isn't spending his time blaming speculators for the spike in oil like most of Congress, or instituting a hedging program on his fuel like most U.S. airlines. Instead, in true player fashion, he's giving a shout-out to all of his "Saudi Arabian brothers and sisters" asking "y'all to send me some oil for my jet." If his associates don't come through, perhaps Diddy could act as a celebrity witness if, as expected, Congress reopens hearings on speculation in the fall, bringing some much-needed hip-hop flavor to the proceedings. Word.