If you were thinking that the stress of the economic meltdown isn't talking a toll on financial news reporters, well, it is. This morning CNBC's Charlie Gasparino got into a little on-air tiff with colleague Dennis Kneale. Skip ahead 35 seconds or so to see Gasparino tell Kneale he isn't a real reporter and Kneale respond by telling Gasparino he's damaging the CNBC brand. Gasparino, of course, is doing no such thing. That's what Jim Cramer is there to do!

• Bernie Madoff's brokerage firm, which is now up for sale, probably won't fetch more than $10 million, according to a report drafted by Lazard. The investment bank goes on to point out that Bernard L. Madoff Investment Securities is now a "tarnished" brand. Really, you think? [Bloomberg]
• A report by the Financial Industry Regulatory Authority suggests that Madoff may not have made a single trade on behalf of his investors. [AP]
• Attorney General Andrew Cuomo has issued subpoenas to determine whether money manager Ezra Merkin may have defrauded investors by putting their money in Madoff's hands without their knowledge. [NYT]
• Meet Frank DiPascali Jr., Bernie's former right-hand who is now under investigation for his role in Madoff's scheme. [Bloomberg]

• Bank of America landed $20 billion in additional aid to help it absorb Merrill Lynch. It also posted a loss of $1.79 billion for the fourth quarter. [NYT, WSJ]
• Citigroup reported an $8.29 billion quarterly loss. The beleaguered bank also said it plans to reorganize the company into two business units. [WSJ, NYT]
• UBS is selling parts of its commodities business to Barclays. [FT]
• AIG is paying a total of $619 million to retain employees. [NYP]
• Morgan Stanley and Citi are pulling clients' money from a fund run by Union Bancaire Privée, after it was exposed to Bernie Madoff. [DB]
• Citi is hiring! And you thought it was only laying people off these days. [NYP]

• JPMorgan Chase posted a 76% drop in profits in the fourth quarter, results that chief Jamie Dimon eloquently described as "very disappointing." [WSJ]
• Washington is close to finalizing a deal to give Bank of America billions in extra cash to help it "digest" the purchase of Merrill Lynch. [Reuters]
• What's Morgan Stanley doing with its bailout cash? It's buying an oil supertanker, which is what we'd do, too, if someone gave us $10 billion. [BN]
• An exec at Blackstone has been charged with insider trading. [CNN]
• Carl Icahn is suing fellow activist investor Warren Lichtenstein. [DB]
• The Dow dropped 248 points yesterday with Citigroup taking a particular beating, shedding 23 percent. But that doesn't mean Vikram Pandit isn't doing his best to keep morale up. [NYP, WSJ]

• Citigroup announced yesterday that it would sell a majority stake in Smith Barney to Morgan Stanley, but more change is on the way: The bank is expected to dump two consumer finance units as well as its "private-label" credit card business, which means now your Save the Whales Mastercard is in jeopardy, too. [WSJ, NYT]
• Deutsche Bank reported a loss of $6.3 billion in the fourth quarter. [BN]
• HSBC may need $30 billion to stay afloat. [DB]
• Nortel Networks has filed for bankruptcy protection. [BN]
• Just in case it wasn't eminently clear by all the bad news above, today is expected to be a pretty bad day in the markets. [WSJ]
• Marcus Schrenker was caught last night, but there's a new financial exec to add to the fugitive list: Ex-UBS exec Raoul Weil is now a wanted man. [NYT]
• Bernie Madoff will be in court in person later today when a judge considers an appear from prosecutors who want to imprison Madoff pending trial. [BN]
• Robert Jaffe, the Madoff middleman who failed to show up to meet with regulators yesterday, says he missed the meeting because he's sick. [WSJ]
• More on Tim Geithner's little tax problem. [NYT]

As expected, Morgan Stanley took control of Smith Barney this afternoon, paying Citigroup $2.7 billion for a 51 percent stake in the brokerage firm. Even better: It allows John Mack, Morgan Stanley's CEO, to go home to his wife tonight and brag that he controls the largest brokerage firm in America, grabbing the coveted title out of the hands of Ken Lewis, the Bank of America chief who completed the acquisition of Merrill Lynch just two weeks ago. [Bloomberg]

How many financial fraudsters are on the run, or at least appear to be? At least two as of this afternoon! There's Marcus Schrenker, the financial adviser accused of defrauding investors through three of his companies, who tried to fake his death over the weekend by bailing out of his plane (which crashed in a Florida swamp) before taking off on a red motorcycle. Schrenker remains missing—some suspect he may have fled the country—but if he gets caught, he'll have quite a movie to sell to Hollywood, won't he? Schrenker isn't the only crook to have mysteriously disappeared. Robert Jaffe, the Bernie Madoff middleman from Palm Beach, who, last we heard, was selling off his wardrobe to a consignment store, failed to show up at a meeting with Massachusetts regulators today. There isn't an arrest warrant for Jaffe yet. ("What happens now is yet to be determined," says an official.) Let's hope that changes. It isn't every day that you get to see a police car chase a vintage green MG through the streets of Palm Beach.

• Citigroup and Morgan Stanley may announce a joint venture combining their brokerage divisions as early as today or tomorrow. The firms have already agreed to set aside $2 billion and $3 billion to retain top brokers. [WSJ, NYP]
• The joint venture isn't giving Citigroup or its CEO, Vikram Pandit, much of a boost. Shares dropped 17 percent yesterday as investors grew concerned the deal was prompted by Citi's desperation more than anything else. [NYT]
• Close to 2,000 former Merrill Lynch employees in London have been laid off by new parent Bank of America. [Times UK]
• AIG is expected to sell its Canadian life insurance operations to Bank of Montreal to repay government loans. [BN]
• Federal Reserve chair Ben Bernanke says a fiscal stimulus won't be enough to spur an economic recovery. [BN]

• Talks between Citigroup and Morgan Stanley continue as the two banks discuss a plan to combine Citi's Smith Barney unit with Morgan Stanley's brokerage division in a joint venture worth $20 billion. [FT, Bloomberg, WSJ]
• It remains unclear if Vikram Pandit will be able to hang on as Citigroup's CEO, especially amid rumors the bank will report a $10 billion loss for the fourth quarter. In the meantime, banking regulators are pushing for the removal of Citi's chairman, Win Bischoff. [NYT, WSJ]
• The man who will likely lead the Citi-Morgan Stanley joint venture, James Gorman, is now considered the frontrunner to take over for Morgan Stanley CEO John Mack when he retires next year. [Bloomberg]
• Phil Falcone's Harbinger is the latest hedge fund to limit redemptions. [DB]
• The board of the Federal Reserve of New York met with candidates over the weekend as part of their effort to find a replacement for Tim Geithner. [NYT]

The Wall Street Journal reports that Bob Rubin is leaving Citigroup and Citi is now in active discussions to unload its Smith Barney unit. Possible bidders include Morgan Stanley and JP Morgan, but there's probably still time to get in on the action if you're interested in picking up a venerated brokerage brand for bargain basement prices. Just shoot a quick email over to vikram.pandit@citi.com. [WSJ]

• More than 2.6 million jobs were lost in 2008, the most since World War II ended in 1945. The unemployment rate now stands at 7.2 percent. [CNN]
• Steve Rattner may be Barack Obama's car czar, assuming several potential conflicts of interests are sorted out. [ABC, NYP]
• Hedge funds lost 18.3 percent on average in 2008 [DB]
• Merrill Lynch exec Gregory Fleming is headed off to teach at Yale. [DB]
• Dick Parsons says he has no plans to become Commerce Secretary. [DB]
• Sometimes there is justice in this world: Marc Rich was a victim of Bernie Madoff, too, and lost $10-15 million as part of the scheme. [BN]
• Bernie Madoff's home in the south of France is actually fairly modest. [BN]

It's not easy making billions while everyone else is losing their shirts. Just ask John Paulson, the founder of the hedge fund Paulson & Co. who collected $3.7 billion in 2007 and, unlike the vast majority of his peers, had a fantastically profitable 2008, too. Of course, making money off the collapse of the global economy isn't the sort of thing that earns you many fans, as Gary Weiss points out in the new issue of Portfolio: "It's hard to see how any financier who made a fortune from market turbulence can improve his public image when the economy is in such serious trouble... Traders like Paulson will probably never be popular. They might as well get used to it."

• "There's only so much due diligence you can do," hedge fund manager Arki Busson explained to Bloomberg News when asked how he managed to get suckered by Bernie Madoff. This is especially true when you spend most of your time chasing models and actresses. [BN]
• Bernie Madoff's lawyer says his client will agree to "tightened bail requirements" to stay out of jail. Maybe he could be confined to his bathroom instead of his entire apartment? [BN]
• Bank of America started handing out pink slips yesterday as it plans to cut 35,000 employees following the merger of BofA and Merrill Lynch. [NYP]
• Bill Ackman's Pershing Square lost 12 percent in 2008. [BN]
• The SEC has reopened its investigation into insider trading allegations at Art Samberg's Pequot Capital. [WSJ]
• Wilbur Ross would like to buy a bank if you've got one to sell him. [CNN]

• It wasn't just overly tanned Jews in Palm Beach who were ripped off by Bernie Madoff. London's Evening Standard says Italian fashion designer Valentino may have been a victim as well. [ES]
• Ten days before his arrest, Bernie Madoff convinced elderly Palm Beach entrepreneur and philanthropist Carl Shapiro into giving him an additional $250 million. [WSJ]
• Bank Medici founder Sonja Kohn, who raised $2.1 billion for Madoff from rich Europeans and Russians, is now missing. [NYT]
• Disgraced Madoff pal Ezra Merkin will step down as chair of GMAC. [FT]
• German billionaire Adolf Merckle, who committed suicide earlier this week, was in debt to the tune of $6.7 billion. [BN]
• American companies shed 693,000 jobs in December. [MW]
• Bank of America's Ken Lewis will not be getting a bonus. [BN]
• Ken Griffin's main hedge fund dropped 53 percent in 2008. [CNN]

• A judge has yet to decide whether Bernie Madoff can stay at home or if he'll have to report to prison for violating the terms of his bail by handing over $1 million jewelry to his sons on Christmas Eve. [NYT]
• The trustee liquidating Madoff's firm has found $830 million in assets. [BN]
• Merrill brokerage chief Bob McCann is leaving the firm now that the sale of Merrill to Bank of America is complete. [WSJ]
• Rumor has it Wesley Edens is exploring the possibility of taking his beleaguered hedge fund/private equity shop private. [FT]
• Who will replace Morgan Stanley chief John Mack? The bank's board is now exploring the options in preparation for Mack's retirement in 2010. [WSJ]
• Flailing billionaire Ron Perelman is hoping to squeeze more cash out of Morgan Stanley as part of a 10-year-old legal dispute. [NYP]

Nobody watches Fox Business Network, but that doesn't stop them from landing the best business journalists in the game. Like Liz Claman, who split from CNBC because they used too many fancy "business" words:

Good morning sunshine! It's January, which means the horrible media advertising apocalypse has now begun. But not to worry, media lovers; it's only affecting every famous book, magazine, and newspaper publisher:

Citigroup says it won't be paying year-end bonuses to Vikram Pandit, Bob Rubin or chairman Win Bischoff. But we imagine Pandit will still be in good spirits tonight when he celebrates the New Year, particularly since he has that string of lovely holiday lights that he didn't have to pay for. [Bloomberg]

The Dow Jones industrial average will end the year down more than 34 percent, which makes it the worst year for the index since 1931. Just how much money has evaporated? About $7 trillion, which adds up to six years' worth of gains. On a cheerier note, there weren't any murders in Central Park in 2008, although you still have about eight hours or so to change that if you have nothing better to do this evening. [NYT]

It's not just Ivy League-educated investment bankers in Manhattan who are getting shown the door as Citigroup trims its payroll. The 50,000 job cuts are taking place at the bank's offices around the world, a process that doesn't seem to be going all that smoothly judging by the email we received from a recently-terminated Citigroup employee in India by the name of Chetan Kelawala. It's a rather depressing and complicated tale, and we're not sure we follow what happened to Kelawala exactly. (The details are contained in the email that Kelawala sent to Citi CEO Vikram Pandit, which appears after below.) And while we have no doubt that the Hindi-speaking Pandit will get to the bottom of this situation just as soon as he possibly can, just in case he forgets (or decides that the goings-on at Citigroup's Pushp Vihar office in Delhi don't merit his time), you're more welcome to email him a reminder at vikram.pandit@citi.com.