Morning Take-Out

TOP STORIES

Plot Twist in the A.I.G. Bailout: It Actually Worked  |  Two years ago, Neil Barofsky, then the special inspector general for the Troubled Asset Relief Program, complained that the Treasury Department was fudging its math about its investment in the American International Group, Andrew Ross Sorkin writes in the DealBook column.

Fast forward to this week. The Treasury Department announced it planned to sell $18 billion of its A.I.G. stake, putting it on a path to actually turn a profit. It was a remarkable feat and one that nobody - including Treasury Secretary Timothy F. Geithner - anticipated four years ago at the peak of the crisis during the $180 billion bailout of the company.

Critics of the A.I.G. bailout - it was the most loathed of the rescues and a centerpiece of the Occupy Wall Street movement - had insisted it was going to be a huge black hole. Mr. Barofsky, who recently wrote a scathing book about the Treasury Department called “Bailout,” refused to admit defeat, saying, “I was right then and I am right now.”
DealBook '

Bets on European Bonds Paying Off for Funds  |  When fear gripped the European markets in April, the money manager Robert Tipp decided to bu y more Portuguese government bonds. He figured that European officials wouldn't let the country turn into another Greece.

“They wanted to have some success stories, and Portugal was one they wanted to keep in,” said Mr. Tipp, who runs the Prudential Global Total Return Fund.

Such contrarian bets are looking pretty smart right now. Last week, the European Central Bank pledged to buy huge amounts of the region's sovereign debt, potentially putting a floor under the prices of Italian, Portuguese, Spanish and Irish bonds. But bond funds may have to brace for a bumpy ride. Despite the progress, uncertainty looms.
DealBook '

DEAL NOTES

Protesters in Hong Kong Forcibly Removed  |  Bailiffs and police in Hong Kong exercised a court order to evict demonstrators with the Occupy movemen t, who had been camped for nearly a year by the Asia headquarters of HSBC, The New York Times reports.
NEW YORK TIMES

The iPhone Stimulus Plan  |  Michael Feroli, the chief United States economist at JPMorgan Chase, estimated in a research note that the upcoming release of the next iPhone could add one-quarter to one-half of a percentage point to the annualized growth rate of America's gross domestic product next quarter.
NEW YORK TIMES ECONOMIX

Japan Banking Regulator Dead at 73  |  Tadahiro Matsushita, the Japanese financial services minister who had overseen a crackdown on insider trading, was found dead in his home in Tokyo, in what authorities said was a suicide, Bloomberg News reports.
BLOOMBERG NEWS

Mergers & Acquisitions '

Qatar Holding Makes Glencore Wait on Revised Xstrata Bid  |  The sovereign wealth fund Qatar Holding says it has yet to decide whether to support Glencore International's increased all-share offer for the mining giant Xstrata.
DealBook '

Tony Blair, Deal Maker  |  Reuters reports: “If Tony Blair's cameo proves to be a deciding factor in winning support from Qatar for a Swiss commodity trader's $36 billion bid for a giant mining firm, the former British prime minister could become a sought-after fixer in global finance.”
REUTERS

Lazard Acquires an Australian Advisory Firm  |  Lazard's Australian unit said it acquired O'Sullivan Partners, an independent advisory firm based in Sydney, as it looks to expand its investment banking business, Reuters reports.
REUTERS

Thai Beverage Considers Bidding for Singapore Brewery  |  After unsuccessfully vying with Heineken for a stake in Asia Pacific Breweries, Thai Beverage is now in talks with an unidentified partner to explore making an offer for Fraser and Neave, the Singapore conglomerate that is selling the Asia Pacific Breweries stake, Reuters reports.
REUTERS

A.I.A. Group Said to Lead Bidding for ING Unit  |  The Asian insurer A.I.A. is the leading bidder for the Malaysian and Thai insurance o perations of ING, Reuters reports, citing unidentified people with knowledge of the matter.
REUTERS

INVESTMENT BANKING '

Deutsche Bank Chiefs Outline Overhaul  |  At a presentation, Jürgen Fitschen and Anshu Jain described Deutsche Bank's shortcomings and promised to take remedial steps like delaying bonuses for top managers.
DealBook '

Legg Mason C.E.O. to Step Down  |  Mark R. Fetting, the chairman and chief executive of the asset management firm Legg Mason, is stepping down on Oct. 1, the company said. The lead independent director, W. Allen Reed, is becoming the nonexecutive chairman, and the head of global distribution, Joseph A. Sullivan, will be the interi m chief executive, MarketWatch reports.
MARKETWATCH

Goldman Loses Its Fee in Energy Deal  |  As part of a $110 million settlement between Kinder Morgan and shareholders of the El Paso Corporation, Goldman Sachs is not being paid a $20 million it was supposed to earn for advising El Paso in the tie-up between the energy companies. A judge said Goldman failed to properly identify and address alleged conflicts.
REUTERS  |  WALL STREET JOURNAL

For a Goldman Executive, More Real Estate Dealings  |  According to people familiar with his plans, J. Michael Evans, a Goldman Sachs vice chairman, will list his Upper West Side condominium for $26 million. He has also put up for sale another apartment that he owns in the building and has recently purchased a $27 million Fifth Avenue apartment.
DealBook '

Goldman Analysts Say Banks Face Lasting Problems  |  In a research report that appeared to contrast with something Goldman Sachs's chief executive said last November, Goldman analysts said that new regulations posed “structural” challenges to the financial industry, Bloomberg News reports.
BLOOMBERG NEWS

Banks in the Business of Transforming Collateral  |  To help clients comply with rules requiring them to post higher-quality collateral, banks including JPMorgan Chase and Bank of America “plan to let customers swap lower-rated securities that don't meet standards in return for a lo an of Treasuries or similar holdings that do qualify,” Bloomberg News reports.
BLOOMBERG NEWS

Scandal Followed a Struggle Over Control of Libor  |  The Wall Street Journal reports: “Four years before a scandal erupted over banks' attempts to manipulate an important interest rate, the head of a private association of giant banks suggested that perhaps the group shouldn't be responsible for what had come to be known as ‘the world's most important number.'”
WALL STREET JOURNAL

Insurer Fears the Fallout of Libor Scandal  |  Richard Ward, the chief executive of Lloyd's, the British insurer, said the rate-manipulation scandal and the money laundering scandals do not “help restore the image of financial services in t he eyes of the public, the politicians and regulators,” Reuters reports.
REUTERS

Barclays to Set Goal for Profitability  |  The new chief executive of Barclays said he would announce a profitability target in the first quarter of next year, Bloomberg News reports.
BLOOMBERG NEWS

Bank of America Shakes Up Research Department  |  Bank of America is replacing its head of equities strategy in Europe, and it is promoting its former equity strategy chief to be its chief investment strategist, Bloomberg News reports, citing unidentified people with direct knowledge of the moves.
BLOOMBERG NEWS

Canadian Banks Grow as Rivals Shrink  |  The eight publicly traded Canadian banks added 8,512 full-time employees in the three months that ended July 31, while their rivals in the United States have been trimming payrolls, Bloomberg News reports.
BLOOMBERG NEWS

PRIVATE EQUITY '

How ‘Rough-and-Tumble' Was Bain Capital?  |  When Mitt Romney led Bain Capital in the 1990s, the private equity firm would sometimes use middlemen to find companies that were in relatively strong shape and could yield quick profits, reports Jesse Eisinger in ProPublica. But these finders sometimes sued over their fees, “raising questions of how rough-and-tumble the company could be,” Mr. Eisinger writes.
PROPUBLICA

Fix Car ried Interest, Not Capital Gains  |  Bruce Bartlett, writing on the Economix blog, says there are “three big problems” with taxing capital gains at the same rate as ordinary income. But when it comes to carried interest in private equity, he says, those earnings should be treated as ordinary income.
NEW YORK TIMES ECONOMIX

Ancestry.com Said to Be in Talks With Buyout Firms  |  Hellman & Friedman, Permira Advisers and TPG Capital are bidding for Ancestry.com, which is seeking an offer of at least $1.5 billion, Reuters reports, citing three unidentified people familiar with the matter.
REUTERS

GoDaddy Experiences Glitches  |  GoDaddy, the Web site registration company owned by K. K.R., Silver Lake and TCV, said it was having trouble with its site on Monday, and a hacker claimed responsibility.
NEW YORK TIMES BITS  |  WALL STREET JOURNAL

Apollo Executive on the Benefits of Size  |  James Zelter, the head of the credit markets group at Apollo Global Management, told The Wall Street Journal that in a challenging market, “size can be a decided advantage in some asset classes such as senior secured loans and non-performing loans.”
WALL STREET JOURNAL

HEDGE FUNDS '

Brevan Howard Said to Profit on ‘London Whale'  |  The European hedge fund Brevan Howard logged a gain of 9.46 pe rcent this year through August 31 in one of its funds after purchasing credit default swaps from JPMorgan Chase, CNBC reports, citing an unidentified investor briefed on the matter.
CNBC

Ackman Meets Resistance From Board of General Growth  |  William A. Ackman of Pershing Square Capital Management, who controls 10.5 percent of General Growth Properties, had urged the real estate firm to consider selling itself, but the board on Monday said it would continue “to execute on its well-conceived business plan,” Reuters reports.
REUTERS

Navistar Expresses Displeasure With Icahn  |  A public spat between Carl C. Icahn and the truck maker Navistar escalated when the company accused the investor of engaging in “threats, a ttacks and disruptions,” Reuters reports.
REUTERS

I.P.O./OFFERINGS '

Ben Horowitz Commiserates With Facebook  |  Speaking at the TechCrunch: Disrupt conference in San Francisco on Monday, the prominent venture capitalist Ben Horowitz said he could relate to Facebook's problematic I.P.O., AllThingsD reports. When his company LoudCloud had its debut, Mr. Horowitz said, “it wasn't the most opportune time for the company to take it public.”
ALLTHINGSD

Mark Zuckerberg to Break His Silence  |  Facebook's chief executive is scheduled to speak at the TechCrunch conference in San Francisco on Tuesday, his first public comments since his company's I.P.O.
USA TODAY

Why Facebook Is Paying the Tax Tab on Employee Compensation  |  Facebook's restricted stock program was a clever solution to the problem of keeping the company private under securities laws, but it left its employees with a tax problem, writes Victor Fleischer in the Standard Deduction column.
DealBook '

VENTURE CAPITAL '

Protege of Peter Thiel Makes Software for the Wealthy  |  Joe Lonsdale, an entrepreneur who worked with Peter Thiel at the hedge fund Clarium Capital, now works on his start-up, Addepar, which “aims to apply Silicon Valley smarts to the increasing complexities faced by the super-rich in tracking, analyzing, transferring, and reporting their fina nces,” Fortune reports.
FORTUNE

Data Storage Company Attracts $40.7 Million  |  Nimble Storage, which makes data storage systems for businesses, raised a financing round led by Sequoia Capital and Accel Partners, two existing investors, TechCrunch reports.
TECHCRUNCH

Is Y Combinator Too Big?  |  Reid Hoffman, the entrepreneur and venture capitalist, said the start-up incubator Y Combinator was “definitely seeing some stress signs from size, like them knowing all of the class in depth and being able to provide the right level of help,” TechCrunch reports.
TECHCRUNCH

LEGAL/REGULATORY '

< span class="title">BlackRock Fined $15.2 Million by British Regulator  |  The Financial Services Authority of Britain has fined BlackRock for failing to follow rules governing the protection of its clients' money.
DealBook '

With Gensler in Hospital, Agency Scraps Vote  |  Gary Gensler, who is overhauling an array of financial rules as head of the Commodity Futures Trading Commission, cracked several ribs on Sunday when he fell at his Maryland home.
DealBook '

Geithner Holds His Own on Triathlon Front  |  Timothy F. Geithner is well known as being something of a fitness nut. And on Sunday, the Treasury secretary showed off his athletic abilities with a highly respectable finish of a tri athlon held in the nation's capital.
DealBook '

Can the S.E.C. Win an Insider Case the Old-Fashioned Way?  |  A recent appeals court decision may result in a test of whether the S.E.C. can win an insider trading verdict by putting on a circumstantial case built around a well-timed trade and contacts with an insider, Peter J. Henning writes in the White Collar Watch column.
DealBook '

Low Interest Rates Squeeze Savers  |  But governments are benefiting from the cheap money. Neal Soss, chief economist at Credit Suisse, told The New York Times: “I have a syllogism for you: The government makes the rules. The government needs the money. So why should it surprise if the rules encourage you to lend the government money?”
NEW YORK TIMES

BNY Mellon Loses Bid to Dismiss Lawsuit Over Lehman Losses  |  Bank of New York Mellon still must face a lawsuit alleging that it mishandled pension funds' investments in Lehman Brothers, but it did persuade a judge to narrow the claims, Bloomberg News reports.
BLOOMBERG NEWS

Dutch Politicians See Eye-to-Eye on Bank Regulation  |  Bloomberg News reports: “Dutch politicians, clashing over the future of the euro area and austerity measures before tomorrow's parliamentary elections, agree on one thing: toughening rules on banks.”
BLOOMBERG NEWS