Morning Take-Out

TOP STORIES

Citigroup Blasts Nasdaq Over Facebook I.P.O.  |  Citigroup is not happy with Nasdaq's response to Facebook's ill-fated initial public offering.

In a 17-page letter sent to the Securities and Exchange Commission on Wednesday, the bank slammed Nasdaq for its “mishandling” of the I.P.O. and its compensation offer. Citigroup said that Nasdaq's $62 million proposal would only cover “fraction of its total losses.”

“Nasdaq was grossly negligent in its handling of the Facebook I.P.O., and as such, Citi should be entitled to recover all of its losses attributable to Nasdaq's gross negligence, not just a very small fraction as is currently the case,” the firm said in its letter.

Citigroup and other big investors have been increasingly critical of Nasdaq since Facebook went public in May. Citigroup has lost about $20 million related to the I.P.O., according to two people with knowledge of the matter. UBS reported a $356 million loss. And Knight Capital, which has suffered its own missteps in recent weeks, lost $35.4 million.
DealBook '

A Quick End to TARP Means a Smaller Payoff for Taxpayers  |  Quietly, the Treasury Department is engaged in another bailout of the banks. This time, it's America's small banks that are the lucky duckies, Jesse Eisinger writes in his column, The Trade.

The federal government still holds investments in hundreds of small banks around the country in the Troubled Asset Relief Program, otherwise known as the bailout. In an effort to wind down TARP, the government is trying to sell off its holdings of preferred stock of the remaining smaller banks.

The problem is that the Treasury Department isn't getting great bids on some of the bank paper, even on the shares of banks with strong profits and strong capital. When the government sold its holdings in MetroCorp Bancshares of Houston this month, the bank itself bought back most of it - at 98 cents on the dollar. Wilshire Bancorp of Los Angeles bought back its paper at 94 cents on the dollar. The Treasury Department sold preferred shares of Ohio-based First Defiance at 96 cents, and Peoples Bancorp of North Carolina at 93 cents. All of these are regarded as healthy.
The Trade '

DEAL NOTES

A Slight but Sure Revival for Home Sales  |  Data over the past seve ral months indicate that the housing market is experiencing a recovery, but with progress weak and slow, homeowners will not feel relief for some time, The New York Times writes.
NEW YORK TIMES

Question Mark Hangs Over Larry Ellison's New Island  |  Lanai, a Hawaiian island of just 3,135 people, has undergone a series of wrenching economic changes under its private owners. Now, after Larry Ellison, a co-founder of Oracle, bought 98 percent of Lanai, the billionaire's plans for the island remain a mystery, The New York Times reports.
NEW YORK TIMES

Hedge Fund Managers Reveal Their Hedges (the Leafy Kind)  |  A garden tour in East Hampton on Saturday will offer access to five private gardens, including those of the hedge fund managers Richard Perry and Adam Sender, The New York Times reports. Mr. Sender's estate includes “a sunken trampoline garden, a pond ringed by a gazebo and pony stables and a menagerie of swans, pigs and chickens, reminiscent of Marie-Antoinette's Petit Hameau at Versailles.”
NEW YORK TIMES

Google's Inner Circle Includes a Shrinking Number of Women  |  Google has created algorithms to try to figure out how to retain women as employees, amid a troubling trend: senior women at the company are losing ground, The New York Times reports.
NEW YORK TIMES

Mergers & Acquisitions '

Tokyo Stock Exchange Completes Tender Offer for Osaka Rival  |  The Tokyo exchange said it had received tenders totaling 80 percent of the Osaka exchange, above the 67 percent it had sought.
DealBook '

F.T.C. Ends Investigation on Facebook's Instagram Deal  |  After months of anticipation, Facebook is now in the final stage of completing its takeover of Instagram, the popular photo-sharing application.
DealBook '

Behind the Due Diligence Dispute at Best Buy  |  At the moment, the squabble between Best Buy and its founder, Richard Schulze, appears to center on one basic matter: the terms of opening the electronics retailer's books for due diligence, though the two sides are still in discussions.
DealBook '

Best Buy O ffers Generous Pay Package to New Chief  |  Hubert Joly, the new chief executive of Best Buy, is set to make as much as $32 million over three years, an amount that is 2.5 times what the company earned in its most recent quarter, The Wall Street Journal reports.
WALL STREET JOURNAL

Marubeni's Acquisition of Gavilon Said to Be Delayed  |  The Japanese trading firm Marubeni will have to wait at least an additional two months to complete its $5.6 billion purchase of Gavilon, an American grain merchant, due to regulatory reviews and discussions over a key export terminal, Reuters reports, citing unidentified people familiar with the matter.

REUTERS

Health Care REIT to Buy Sunrise Senior Living  |  Health Care REIT agreed to pay $14.50 a share for Sunrise Senior Living, a nursing home operator, in the latest deal aimed at taking advantage of an aging populace.
DealBook '

Diageo Reaffirms Interest in Jose Cuervo  |  Diageo, the British distiller, said it was still in talks over the acquisition of Jose Cuervo, the Mexican tequila brand, The Wall Street Journal reports.
WALL STREET JOURNAL

INVESTMENT BANKING '

Bank of China Profit Grows at Slowest Pace in 3 Years  |  Bank of China, the first of the country's top lenders to report second-quarter earnings, said its net profit rose 5.2 percent, to $5.5 billion.
DealBook '< /span>

JPMorgan's Former Chief Defends Financial Giants  |  William B. Harrison Jr., a former chairman and chief executive of JPMorgan Chase who was an architect of the 2000 merger that created the company, writes in an op-ed piece in The New York Times that the recent calls to break up big banks are “misguided.” He writes, “every part of this argument is based on a fallacy.”
NEW YORK TIMES

The New Citigroup Isn't Your Father's Citicorp  |  Vikram S. Pandit, Citigroup's chief executive, has entered the debate over splitting up big banks. But did he overstate one of his key points?
DealBook '

An Inside Look at Wall Street's Political Clout  |  Simon Johnson, writing in the Economix blog, highlights a new book by Jeff Connaughton, who was the chief of staff of Ted Kaufman, a former Democratic senator from Delaware. Mr. Connaughton's account of Wall Street's sway in Washington “will turn your stomach,” Mr. Johnson says.
NEW YORK TIMES ECONOMIX

Discover Financial Teams Up With PayPal  |  Under an agreement with Discover Financial Services announced on Wednesday, PayPal will issue cards that people can use to make purchases in physical stores, The New York Times reports.
NEW YORK TIMES

Nomura Names 2 New Executives  |  The Japanese firm appointed a new head of fixed income for Asia excluding Japan, and a new global head of foreign exchange , reflecting its renewed focus on those businesses, The Wall Street Journal reports.
WALL STREET JOURNAL

Spain Said to Focus on Troubled Banks With New Law  |  Spain plans to grant new powers to its central bank to intervene in troubled lenders while also expanding the capacity of its bank rescue fund, Spanish newspapers reported on Thursday, according to Reuters.
REUTERS

Tycoon's Arrest Triggers a Bank Run in Vietnam  |  The arrest of Nguyen Duc Kien on Monday touched off a run on deposits at the bank he founded, Asia Commercial Bank, one of Vietnam's biggest lenders, prompting the central bank to make a public assurance that the funds were safe, state media reported on Thursday, according to Reuters.
REUTERS

Citic Capital Sells Stake to Qatar Fund  |  A unit of Qatar's sovereign wealth fund is taking a 22 percent stake in the Chinese asset management firm Citic Capital Holdings, which manages more than $4.4 billion.
DealBook '

PRIVATE EQUITY '

Buyouts Stage a Cautious Comeback  |  The Wall Street Journal reports: “Now companies are making more money, meaning that they are likely to fetch more in a sale. Wall Street, meanwhile, is balancing investor demand for the high-yield debt that buyouts produce with a hesitancy to return to the multibillion-dollar gambles that marked the pre-crisis years.”
WALL STREET JOURNAL

Passing Buyout Deals Like Hot Potatoes  |  Private equity deals are increasingly being passed among different private equity firms through so-called secondary buyouts, Fortune writes, making the industry look “like a roach motel.”
FORTUNE

Ancestry.com Said to Seek Higher Bids  |  Bloomberg News reports: “Ancestry.com, the family- history research website, has asked potential buyers including Permira Advisers LLP and TPG Capital LP to increase their competing bids for a possible buyout, according to people familiar with the situation.”
BLOOMBERG NEWS

Clinton Group Pushes for New Directors at Clothing Retailer  |  The Clinton Group, which owns a 5 percent stake in Wet Seal, a women's clothing chain, proposed a slate of nominees for the board, Bloomberg News reports.
BLOOMBERG NEWS

HEDGE FUNDS '

Hedge Funds Gain Larger Presence in Bond Market  |  According to a survey by the consulting firm Greenwich Associates, hedge funds accounted for nearly a quarter of bond trading in the United States between April 2011 and 2012, the most in five years, Reuters reports.
REUTERS

Och-Ziff Attracts Investment From Florida Pension  |  Florida's pension board committed $150 million to an Och-Ziff Capital fund, securing a prominent investor for the hedge fund firm, Reuters reports.
REUTERS

SAC Capital Said to Shift Toward Activism  |  The giant hedge fund run by Steven A. Cohen is coming to resemble an activist investor, with a tussle between a portfolio manager, David Rosen, and the Clearwater Paper Corporation, The New York Post reports.
NEW YORK POST

Asian Hedge Fund's Debut Said to Be Biggest of 2012  |  A new Asian hedge fund started by Alp Ercil, a former executive at the New York-based Perry Capital, raised $940 million and closed its doors to additional investors, Reuters reports, citing an unidentified person with direct knowledge of the matter.
REUTERS

T. Boone Pickens Benefits From an Old Standby  | < /span> The Texas billionaire said that oil has been a source of growth in the main portfolio of his commodities fund this year, Reuters reports.
REUTERS

I.P.O./OFFERINGS '

Peter Thiel's Exit From Facebook Seen as Unusual  |  Bloomberg News reports: “Peter Thiel's decision to sell almost all of his stake in Facebook so soon after company's initial public offering has few precedents in Silicon Valley, where venture capitalists typically hold shares longer.”
BLOOMBERG NEWS

Kayak's First Public Earning Report Beats Expectations  |  Kayak Software, which runs a travel search site, said its second-quarter net income rose on higher sales.
REUTERS

Indian Hospital Firm to Take Trust Public  |  Reuters reports: “Religare Health Trust is set to launch an up to $400 million initial public offering in Singapore, a source said, in a move that will allow the backer of the trust, Indian hospitals group Fortis Healthcare, to cut its substantial debt level.”
REUTERS

VENTURE CAPITAL '

A Haven for Entrepreneurs Is Threatened With Extinction  |  Silicon Valley's techies are fighting to save Hacker Dojo, a cavernous warehouse where start-ups like Pinterest were conceived, after city officials have ordered the shared office space to comply with city regulations or move out, The New York Times reports.
NE W YORK TIMES

Silicon Valley's Nursery  |  Randall Stross, the Digital Domain columnist appearing in The New York Times, writes about Y Combinator, the start-up incubator, on the Bits blog. This week, 63 of the summer's batch of companies made their formal debut.
NEW YORK TIMES BITS

Despite Criticism, Twitter and NBC Say Partnership Was Successful  |  Viewers of the Olympics took to Twitter to complain about NBC's decision to time-delay most events, but according to the two companies, the jokes and critiques made up only a slim minority of all tweets about the games, the Bits blog writes.
NEW YORK TIMES BITS

For Sale: Followers on Twitter  |  The New York Times writes: “It may be the worst-kept secret in the Twittersphere. That friend who brags about having 1,000, even 100,000 Twitter followers may not have earned them through hard work and social networking; he may have simply bought them on the black market.”
NEW YORK TIMES

LEGAL/REGULATORY '

S.E.C. Effort to Change Money Market Funds Stalls  |  Attempts to make broad changes to a popular type of money market mutual fund that played a central role in the 2008 financial crisis have been derailed, after a Democratic member of the Securities and Exchange Commission sided with the two Republican members to delay action.
DealBook '

Investment Bank Fined for Analysts' Violations  |  The investment bank Rodman & Renshaw, which has sponsored numerous Chinese companies in the United States, was fined $315,000 on Wednesday for violations of rules about the use of analysts to seek business, The New York Times reports.
NEW YORK TIMES

Many at Fed Ready to Add Stimulus if Necessary  |  Minutes of the Federal Reserve meeting that ended Aug. 1 read: “Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery.”
NEW YORK TIMES

New York Fed Prepares Final Sale of A.I.G. Assets  |  The New York Fed pl ans to sell $3.4 billion of risky mortgage assets on Thursday that it acquired in the rescue of A.I.G., the last batch from the Maiden Lane III portfolio, Bloomberg News reports.
BLOOMBERG NEWS

The Dance Between Belize and Its Bondholders  |  The bondholders have no direct way of making Belize pay up, but the country probably has to worry more about long-term access to the financial markets than a country like Argentina or even Greece, Stephen J. Lubben writes in the In Debt column.
DealBook '