GM went trick-or-treating early but it looks no one answered the door. Either that, or its trick wasn’t very good. Either way, it appears to have come up empty-handed in its bid for government goodies.

The much-talked about General Motors-Chrysler merger is off the table for now. Reuters is reporting that talks hit an impasse after the Bush administration said “no” to funding for the deal, citing three people with direct knowledge of the talks.

GM had approached the Treasury in recent days about support for the merger through some $10 billion in new funding that would have included taking an ownership stake in the merged company, people familiar with the talks have said.

A Bush administration official told Reuters the administration was not negotiating direct aid for the deal.

Maybe GM will have better luck after Nov. 4. Halloween will be over but Christmas isn’t too far away.

More deals of the day:

** Britain’s second biggest bank Barclays Plc is to raise 7.3 billion pounds ($12.1 billion) from investors from Qatar and Abu Dhabi and others to allow it to avoid taking government rescue cash, it said. The bank said it is raising up to 3.5 billion pounds from Sheikh Mansour Bin Zayed Al Nahyan, a member of Abu Dhabi’s royal family. That could give him a 16.3 percent stake in the bank.

** UK life insurer Friends Provident said it is abandoning the sale of wealth management unit Lombard, nine months after putting the business on the market, and reported a worse than expected drop in nine-month sales.

** Blacks Leisure Group, the British outdoor clothing retailer will consider selling its underperforming Boardwear business, made up of 57 Freespirit, Mambo, Animal and O’Neill stores, its CEO said.

A week and a half has passed since Exelon Corp made its unsolicited bid for NRG Energy Inc. But NRG still kept mum on the offer in both its third-quarter earnings pres release and its conference call with investers on Thursday morning.

“Our board is continuing to review the proposal,” Nahla Azmy, NRG’s director of investor relations said on the conference call. ”With that said, please keep in mind the purpose of today’s call is to discuss our third quarter performance and thus we will will not be making any formal remarks nor commenting on any aspects of Exelon’s proposal until an official board response has been issued.” 

So what does the lack of action mean?

“We think this might indicate that NRG is looking at a variety of alternatives beyond simply accepting the offer or remaining a stand-alone company,” Wachovia analyst Samuel Brothwell said in a research note.

Or perhaps NRG is waiting to see whether Exelon – which has suggested it would make a hostile bid if it is rebuffed by NRG – plans to back up its words with action. Your move, Exelon?

Any regrets about the now-infamous birthday party, Steve?

That was the question asked by Fortune Magazine’s Andy Serwer at an intimate breakfast gathering at posh New York restaurant Per Se.

For those that have forgotten, Schwarzman’s 60th birthday party on Valentine’s Day in 2007, to which hundreds of guests were invited, featured British rocker Rod Stewart, comedian Martin Short, singer Patti LaBelle, two Harlem choirs and a marching band. It came to symbolize an era of excess — memories that some would now rather forget.  Months later, the financial crisis hit and Blackstone’s stock plummeted. It is currently about a quarter of its June 2007 IPO price.

“Obviously, I wouldn’t have wanted to do that and become some kind of symbol of that period of time — who would ever wish that on themselves? No one,” said Schwarzman, when asked if he’d do it again.

Lazard’s Bruce Wasserstein, being interviewed by Fortune alongside Schwarzman, chimed in:  “It was a great party”.

Schwarzman noted that his 61st birthday this year was muted. “61 is just fine. You notice it was quiet,” he said.

If Frankenstein isn’t scary enough for you, the enterprising folks at benandhank.com have Hank Paulson and Ben Bernanke masks ready just in time for Halloween!

That’s right — for the low, low price of $79.90 and you can get a latex mask of “Evil Hank” and “Evil Ben“. If you’re looking for a Halloween costume, though, move fast — Bernanke masks are sold out and only a handful of Paulson masks remain.

For the more thrifty consumer, Forbes has posted printable masks for its list of the scariest people of 2008. The magazine has included the Presidential candidates on this year’s list, as well as Paulson, Bernanke, Dick Fuld and Jimmy Cayne.

And if you’re still at a loss for a costume for Friday — how about going as the U.S. economy? Not much seems much scarier these days.

The logic behind Delta’s purchase of Northwest was based on the price of oil staying above $100 a barrel. This is what the parties sold to unions, shareholders, creditors and politicians when making the case for the deal; the airline industry was going to have to overhaul everything about its business to manage costs.

New high-efficiency jets were going to be rolling off Boeing’s assembly lines, and airlines would have to find billions of dollars to buy them. Yes, prices for carry-on luggage would keep rising, and free in-flight peanuts could become a thing of the past. Worries about an economic malaise derailing vacation plans and choking corporate travel budgets would grow to full-blown fear of the worst recession in generations by the time the Delta-Northwest deal was struck.

The new, larger Delta will be an international powerhouse with unparalleled scheduling and pricing strength with service to 375 cities worldwide, experts said. The company estimates $2 billion in cost savings and revenue enhancements annually from the merger.

With savings like that, it’s a whole lot easier to forget the high-oil-price argument. The deal is expected to reignite merger plans throughout the industry, as the logic shifts to competitiveness rather than cost. Oh sure, there may still be a recession to deal with, but cutbacks in capacity are already offsetting some of that. Airline investors are so beaten down that they’ll probably be willing partners — and heck, perhaps airlines can use their costly fuel hedging strategies to convince the Fed to lend a hand. There’s a place in the handout line right behind GM.

Deals of the day:

* Top miner BHP Billiton’s chief executive ruled out adding a cash sweetener to its all-share $69 billion offer for rival Rio Tinto, saying financial turmoil hitting commodity markets was no reason to change.

* Newcrest Mining, Australia’s largest gold producer, sees ample acquisition opportunities ahead and its low debt levels mean it has the firepower to take advantage of them, it said.

* The head of Mazda Motor > said he did not expect any change in the Japanese automaker’s relationship with Ford Motor, amid reports that the struggling U.S. automaker would sell part of its controlling stake.

* British billing and support systems company Intec Telecom Systems said it ended talks about a potential offer for the company, given current market volatility and the fact that it had not received a suitable offer.

* An Italian investor group planning to buy Alitalia was in a stand-off with unions, after failing to agree on new work contracts at late-night talks, unions said.

In yet another sign of tough times on Wall Street, dejected financial professionals were among those lined up yesterday for a shot to work for none other than the IRS, the New York Times reports. It's a curious career move until you look at the circumstances: the battered banking sector has been cutthroat in its downsizing, leaving virtually no job safe. But can anyone remember the last time the IRS downsized?

“You could get a lucrative job in the financial market right now, but how long can you keep it?" says ex-Lehman Brothers staffer Jean Delice. "Everywhere I look, I see layoffs. If I take a $10,000 or $20,000 pay cut, in the long run, I’m ahead. The government is not in the trading business. It will be around.”

Now may be as good a time as any to cut and run, especially given NY Attorney General Andrew Cuomo's recent warning that it may be illegal for banks to pay bonuses with government money. In yet another blow to anyone dreaming of a fat bonus, a new study shows that nearly two-thirds of big U.S. companies have banned their chief executives from keeping hefty bonuses when there are questions over executive conduct.

Are you thinking of leaving Wall Street behind? If so, what career suits someone with a financial background? Share your thoughts below.

It’s not all bad news on Wall Street, at least not for those at the top of the heap.

Goldman Sachs, who pays out the most in bonuses each year, on Wednesday named 94 new members to its elite club of partner managing directors. This group of 443 men and women typically share a fifth of the firm’s bonus pool, which is nothing to sneeze at, even if compensation is down this year.

Below is the memo and the list:

—

October 29, 2008

Goldman Sachs Announces the Partner Class of 2008
We are pleased to announce that the following individuals have been invited to become partners as of November 29, 2008, the start of our next fiscal year. These appointments recognize the contributions and potential of some of the firm’s most valued senior professionals.

Paul R. Aaron

Sean J. Gallagher

David M. Marcinek

Heather K. Shemilt

Sanggyun Ahn

Gonzalo R. Garcia

Blake W. Mather

Magid N. Shenouda

Philip S. Armstrong

Paul E. Germain

John J. McCabe

Suhail A. Sikhtian

Charles Baillie

Paul Graves

John J. McGuire Jr.

Gavin Simms

Philip R. Berlinski

E. Glenn Hadden

Milton R. Millman III

Marshall Smith

Robert A. Berry

Jonathan J. Hall

Christopher Milner

John D. Storey

Oliver R. Bolitho

Jan Hatzius

Christina P. Minnis

Patrick M. Street

Patrick T. Boyle

Martin Hintze

Takashi Murata

Ram K. Sundaram

Stephen Branton-Speak

Todd Hohman

Todd G. Owens

Robert J. Sweeney

Anne F. Brennan

James P. Houghton

Craig W. Packer

Michael J. Swenson

Samuel S. Britton

Paul J. Huchro

Gilberto Pozzi

Jeffrey M. Tomasi

Jason G. Cahilly

Hidehiro Imatsu

Lora J. Price

David G. Torrible

Martin Cher

Alan S. Kava

Lorin P. Radtke

Frederick Towfigh

Denis P. Coleman III

Dimitrios Kavvathas

Richard M. Ramsden

Greg A. Tusar

Kevin P. Connors

Larry M. Kellerman

Michael J. Richman

Andrea A. Vittorelli

James V. Covello

Hideki Kinuhata

Michael Rimland

Paul Walker

Jeffrey R. Currie

Michael E. Koester

Luigi G. Rizzo

Alasdair J. Warren

Albert F. Dombrowski

J. Christopher

A. Kojima

Scott A. Romanoff

Dominic A. Wilson

Thomas M. Dowling

Michiel P. Lap

Julian Salisbury

Steve Windsor

L. Brooks Entwistle

Brian J. Lee

Paul D. Scialla

Martin Wiwen-Nilsson

Stephan J. Feldgoise

David A. Lehman

Peter E. Scialla

Denise A. Wyllie

Benjamin W. Ferguson

Deborah R. Leone

Peter A. Seccia

Han Song Zhu*

Wolfgang Fink

John S. Lindfors

Rebecca M. Shaghalian

Timur F. Galen

H.C. Liu

Devesh P. Shah
* Employee of Goldman Sachs Gao Hua Securities Company Limited

We congratulate all of those selected and wish them continued success in their careers. These decisions are extremely difficult and we would like to acknowledge the contributions of those who were not selected this year. We are confident that many of them will be selected in the future.
Lloyd C. Blankfein Jon Winkelried Gary D. Cohn

With commodity prices sagging in line with global growth, BHP Billiton’s mammoth, unsolicited bid for rival Rio Tinto might seem a lot less threatening. Certainly the price of the deal has a lot less wow in it, having fallen from $170 billion to under $70 billion in just a few short months. And in a few days, efforts to put the deal together will be one year old. Happy birthday.

Japan, woefully devoid of such resources, is home to two of the world’s biggest steel companies. Nippon Steel and JFE Holdings account for 6 percent of global steel output. The Nikkei business daily reports the country is stepping up pressure to block the deal.

The paper said Japan’s vice minister for international affairs at the trade and industry ministry will urge the European Commission to join it in blocking the merger, though a ministry official said there were no plans to make such a request.

It might seem petty to stir things up with global commodity prices in retreat. But unlike other industrial metals like copper, iron ore prices are not softening much. Analysts we polled said prices are likely to remain flat or rise modestly in 2009 contract talks, after the stunning hike of up to 96.5 percent in 2008.

And Japan’s outdated competition law makes it hard for the country to take any meaningful action to block the deal on its own. Its competition regulators ordered BHP to submit information on its bid for Rio last month, but BHP has refused to look at the request.

The EU commission has set a Jan. 15 deadline for making a final ruling on the deal, which has already been cleared by Australian and U.S. competition regulators. BHP’s share price is down 35 percent this year, and Rio’s is off 47 percent. By next year, the merger may be looking even less like a mighty move towards a monopoly and more like a necessity.

Deals of the day:

* Foster’s Group, the world’s second-largest wine group, said it has yet to receive any proposals on its wine business, whose future it is reviewing.

* U.S. private equity firm Ripplewood Holdings was picked as the favored bidder for the purchase of South Korea’s Daewoo Electronics from its creditors, leading creditor Woori Bank said.

* Sumitomo Mitsui Financial, Japan’s third-largest bank, is in talks to buy around a 2 percent stake in South Korea’s KB Financial for about 20 billion yen ($201.8 million), a person familiar with the matter said.

* Norwegian oilfield services group Sevan Marine said it was in talks with potential investors in its Sevan Drilling unit.

* Singapore sovereign wealth fund Temasek Holdings has agreed to a further investment of up to 12 billion rupees ($147 million) in Pakistan’s NIB Bank via a rights issue, NIB said.

* China Southern Airlines, the country’s largest carrier by fleet size, said it will invest more than 10 billion yuan ($1.46 billion) in Liaoning Airport Group to help fund its expansion.

* Germany’s BASF has tightened its grip on Ciba to nearly 70 percent of the share capital and voting rights of the specialty chemicals company.

When at first you don’t succeed to fail, just wait for the banks. After Huntsman took rival Hexion Specialty Chemicals to court to force them to make good on their $6.5 billion acquisition, it’s the banks that are now trying to shut the door.
 
Hexion and its parent Apollo Management went to court to kill the deal in June, arguing that the combined company would be insolvent. Huntsman countersued, but the insolvency argument has caught hold at Credit Suisse and Deutsche, the banks behind the deal. Insolvency, it turns out, is not a good business for banks, ranking somewhere below reckless real estate lending and buying complex credit derivatives on the advice of rating agencies. Banks, facing big losses on the deal, figured it was better to pay the lawyers. The banks had agreed to accept a solvency opinion from either party or an independent body. That’s what they got, but they are still balking.
 
This morning, Hexion said it strongly disagreed with the banks decision. Given they were ordered by the Delaware court to do everything they could to make the deal happen, they were bound to be outraged by their banks failure to commit. Secretly satisfied, perhaps, but publically unhappy nonetheless. 
 
Still out there is Huntsman’s countersuit, which alleges that Hexion scared off another bidder, and the Delaware court never specifically ruled on what the banks had to do to make the deal happen. And the two sides seem to be talking so there is reason to expect this thing to tick on yet for a while. Stepping back a bit, a $700 billion bailout package is being doled out to try to get banks back to the business of lending. Whether or not they will have to prove the solvency of the businesses to lend to is naturally a matter for… the courts?

Deals of the day:

* British gas producer BG Group launched a A$5.6 billion ($3.4 billion) friendly takeover bid for Australia’s Queensland Gas, its latest effort to boost its position in Asia’s fast-growing natural gas market.

* Victoria Oil & Gas said it paid about $400,000 for an option to buy Cypriot oil explorer Falcon Petroleum, which has substantial exploration prospects in Ethiopia and Mali.

* Intel Capital, the investment arm of Intel Corp, announced three investments in Chinese companies, including its first moves into the nation’s clean technology sector.

The market has increasing doubts on Bunge Ltd’s $4.4 billion plan to buy Corn Products International Inc for $4.4 billion to gain a leading position in corn-based starches and sweeteners.

The spread on the deal is currently 144.8 percent, with both stocks down from the merger announcement in June, according to Reuters data. Agriculture and fertilizer stocks have plummeted along with the broader market amid a global credit crisis that has investors worried that economic growth will slow and demand for raw materials will fall.

“This tells us that either: 1) investors feel uncertain at best that the proposed acquisition will go through, or 2) Bunge will increase its offer price. We think that Bunge is unlikely to raise its offer and that the most logical read-through … is that the market doesn’t believe this deal is going to happen,” Citi analyst David Driscoll said in a research report.

Citi cut its investment-risk rating on Corn Products to “hold/speculative,” from “hold/medium risk,” citing the recent volatility in the stock and the uncertainty around the pending deal with oilseed processor and fertilizer producer Bunge.

Driscoll said he believes Corn Products is worth more than its current trading price, citing its record third-quarter earnings and higher full-year guidance. The stock ”would likely rapidly appreciate from current levels upon dissolution of the acquisition agreement.”

Bunge, meanwhile, last week said its quarterly profit fell 33 percent as foreign exchange losses and tough market conditions offset a sharp rise in sales. Bunge said it believes its problems — such as weak corn and soybean prices and farmers’ limited access to loans in some regions — are temporary.