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"Just this once, we're going to be like other airlines." -- Independence Air, in an e-mail informing frequent fliers of its bankruptcy filing

It's a Wall Street mystery: Did Bear Stearns (BSC) take a hit on the imploded Johnson & Johnson/Guidant (JNJ), (GDT) deal? The Wall Street firm has a risk arbitrage desk that makes bets on pending mergers and acquisitions. But unlike many other arb players who keep their positions quiet, Bear Stearns discloses its top five arb bets in a weekly publication to clients, to avoid potential conflicts of interest. On Oct. 17, according to someone who saw that publication, Bear's second-largest arbitrage position was Guidant.

On Oct. 18 the deal began to unravel. In a call with analysts, CFO Robert Darretta said J&J was "continuing to consider the alternatives" under the deal -- in light of Guidant's recent problems with its defibrillators.

Guidant's stock fell 11% that day, to 64.10. A week later the Oct. 24 arb report no longer showed Guidant among the top five positions. Guidant later sued to force J&J to complete the deal, and its stock is now around 56.70.

It's possible Bear bought shares earlier this year at prices below 64. Bear won't comment on the record. And if it did lose money, Bear isn't alone. The bigger mystery is: How many others on Wall Street took a hit -- and how big? Laments one arb: "Everybody lost."

If you've been a bad boy or girl at your bank job, beware. Your name could soon be posted on an industry list of bank employees fired for causing financial loss or compromising customer data. BITS, a Washington-based consortium of 100 big banks, is putting the finishing touches on a database due to launch next spring. It could contain the names of scores of ex-employees, who presumably would be banned from working in the industry. Insider-assisted crimes are running amok, say the banks: They lose an estimated $2.2 billion per year to scams ranging from tellers pilfering cash to bankers colluding with identity thieves and credit-card hustlers. "This will serve as a strong deterrent to current employees when they are approached by criminals," says Shirley Inscoe, senior vice-president for loss management at Wachovia (WB).

Workers' rights advocates worry that a blacklist could include former workers who were falsely accused or never charged. But banks appear to have legal cover. The USA Patriot Act authorizes federally insured banks to disclose information about former employees involved in nefarious doings when they apply for jobs at other banks.

U.S. students get off to a strong start in math. But by age 15, they've fallen behind those in 23 other countries. Raytheon (RTN) CEO William Swanson says that's because many middle schoolers decide math isn't cool. In fact, a survey commissioned by Raytheon found that 84% of kids 11-13 would rather clean their rooms, eat vegetables, or go to the dentist than do math homework.

Raytheon is enlisting these kids to help put more zip into math class. Starting on Nov. 10 they can enter a contest at by offering ideas on how to make math fun. Winners will get a visit to their school from soccer star Mia Hamm, BMX biker Dave Mirra, or other teen idols. MathMovesU will also offer $1 million in grants and scholarships to teachers, schools, and students with innovative ideas. Raytheon hopes to share the best ideas with math teachers.

The $20 billion defense contractor hires 4,000 engineers a year, so it wants more kids to be math capable. "The numbers are going the wrong way," says Swanson, noting that Europe, Japan, and China do better. For now, Raytheon might be happy if kids chose math over broccoli.

Should parking meters cost $17 an hour? Donald Shoup thinks that's fine -- if the rate drops when demand falls. The University of California at Los Angeles urban planning prof wants to end wasteful trolling for empty meters by charging market prices on smart meters. "It's like Goldilocks," he says. "The price is too low if there are no spaces open, and too high if there are a lot of spaces open." Drivers should pay up at peak times and get a break when demand ebbs, he argues. Chicago, where an hour in a downtown lot can cost $17, is studying the idea. And in February, Redwood City, Calif., will adjust meter rates -- every three months -- to assure 15% vacancies.

WHY READ IT: This blog offers an irreverent take on hedge funds. A one-man show that author Greg Newton considers a "self-indulgence," its commentary on scandals and insight on players are followed by industry insiders.

NOTABLE POST: On a report that ousted Refco (RFXCO) CEO Phillip Bennett couldn't get co-signers for a $50 million bond: "I must admit that my original reaction was: 'Tough. You can have John Gotti's old space at The Tombs where you can hang out while [former Refco exec] Sandy Maggio makes like Sammy the Bull."'

When Microsoft (MSFT) bought Groove Networks in April, it was happy to absorb Groove's software technology into some Office productivity products. But the real key to the deal was Groove founder and CEO Ray Ozzie. Something of a legend in software circles, Ozzie struck digital gold in 1989 when he created Lotus Notes, the widely used messaging software.

Now, Ozzie is pushing the bounds of innovation again. Chairman Bill Gates and CEO Steven Ballmer tapped Ozzie to lead Microsoft's charge into software delivered over the Internet. In a frank Oct. 28 memo to top execs, Ozzie spelled out how Microsoft is trailing rivals such as search leader Google (GOOG) and Net-phone pioneer Skype. "We must reflect upon what's going on around us, and reflect upon our strengths, weaknesses and industry leadership responsibilities, and respond," Ozzie wrote. "It's clear that if we fail to do so, our business as we know it is at risk." Sometimes, it takes an outsider to cut through the fog.

The next frontier in outsourcing may be a sort of Google Answers on steroids. Launched by ex-McKinsey consultants, fields business, financial, or marketing questions by e-mail and forwards them to its researchers in India. They quote a price and e-mail back answers in a PowerPoint presentation. The service is an offshoot of Pipal Research of New Delhi, the research arm of ICICI (IBN), India's second-biggest bank. So far, it has around 10 clients, including Bear Stearns (BSC).

Sanjeev Arora, a Chicago-based vice-president of Pipal Research, says such piecemeal research fills a niche between inexpensive services such as Google (GOOG) Answers, which rely on online searching, and high-priced consultants like McKinsey or Bain. Arora says most of Pipal's 100 Indian researchers have MBAs or master's degrees in finance or accounting. A one-day query costs $300 to $600; a weeklong project, $1,500 to $3,000.

That's 25% to 40% less than in-house or other outsourced research services, says Ravi Aron, assistant professor of operations and information management at The Wharton School. He thinks that's model may give it an edge over outsourcing outfits with Indian operations such as Pangea 3 and OfficeTiger that aren't purely transaction driven. In any case, he expects other research firms to jump in and expand into more specialized fields such as the law and biotech.

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