It sounds like a spy novel but it’s true according to the IRS and others investigating the practice of illegally hiding funds in offshore accounts. This involves all kinds of misdeeds and heads will role not only at UBS but at other institutions who did the same thing. As Roni rightly points out, the individual taxpayers, American citizens, who hid their money with this bank will also be in hot water and will likely face jail time or fines. It’s an unbelievable story.

Also joining us to discuss the details and ramifications this morning was Mark Sunshine, President of First Capital and Pauline Frommer, Creator of the Frommer guidebooks.

I must admit when I saw Merrill Lynch’s earnings announcement (which wasn’t good), I panicked. I was sure that this morning’s Citi number was going to be a disaster. I am very pleasantly surprised. Will Wall Street react as favorably as it has in pre-opening trading once the conference call begins? Time will tell. It begins at 8:30am.

I’d also like to see the street ease off of Vikram Pandit. Vikram is the CEO of Citi. Since he arrived the Street has not been happy with his appointment. They have not thought felt that he was doing enough or was as charismatic and transparent as they liked. Yes, the stock is in bad shape, very bad shape, but he’s only been in the job for just over six months. The issues with the bank are legacy issues. This morning I think he just put all of the naysayers to bed (temporarily). To be fair this is just one quarter and it could get worse but today is a good day for Citi.

Full disclosure I did work for him at Morgan Stanley. Personally I think he is one of the brightest in the business.

1. Merrill’s number was not pretty and the fact that Thain said they are not selling their CDO exposure at discounted prices or doing a fire sale suggests that they are choosing to keep a fair amount of junk on their books. I don’t like that. Thain also said that they had $1 trillion in assets and when asked if he would consider additional asset sales, he said, “There are in fact other options.” What does that mean? Will they raise more cash by issuing more stock? Will they look for a partner overseas? Read into that line. There is more to it.

2. Jamie Dimon said a lot on the JPM call yesterday. He did not pull any punches. Clearly he is considered the darling of the industry and he’s looking for other purchases but he himself suggested that they did not expect things to get worse. When talking about how the bank loosened lending standards, he said, “We were wrong. We obviously wish we hadn’t done it.” Keep an eye on that. The stock is up over 25% in two days but he did caution that things could get worse especially with prime borrowers.

3. I don’t know about you but I don’t like it when Google’s Eric Schmidt says for the FIRST TIME, that this is “a more challenging environment.” He also did something that I haven’t seen before and brought on the call his Chief Economist Hal R. Varian to talk about the outlook. VERY UNUSUAL. Note they did say that they saw fewer searches in categories like finance, real estate and luxury goods. That tells you what the consumer is thinking. They’re cutting back.

4. Citi. You know Citi, right? They are due to report this morning before the market opens. I suspect it will be pretty bloody, much like Merrill, but a look at the key financial websites this morning and you can’t find one with CITI on the COVER. What is up with that? Citi has quietly been raising money and selling assets and it has largely been going unnoticed. Today will not be a good day. Why aren’t they the cover story for every website? Is this good news for Pandit?

5. Oil….uggg…down $16 dollars in three days, now up $3 on IMF increase in global economic growth to 4.1% from 3.7%. What are they looking at that the rest of the world is not? Also Nigeria disruptions…..may not be pretty today.

The mayor and I talked about what he has done to fight crime and rising foreclosures in Newark. He is currently two years into his term as mayor and has some of best statistical rates of progress in the country. Booker also happens to be an avid supporter of Senator Obama. Listen to who he thinks Obama should select as a VP candidate, what he makes of the Jesse Jackson controversy and which team he’s rooting for as NFL pre-season training camp begins. This guy is going to have a HUGE future! He is young, articulate, handsome and very smart! Take a look.

Speaking of the long-term, today I talked to a very well known expert in all things economic, housing and energy related, Martin Feldstein, president and CEO of the National Bureau of Economic Research. When he comes on, I listen. Look at what he had to say about an energy bill, regulation and the Fed taking on too much responsibility. He made some excellent points.

This morning he joined me on Money for Breakfast to address many of the concerns that I listed in that last blog and the growing speculation that the SEC has failed to do its job and is now stepping in to protect those institutions. Institutions that have been given access to the discount window, some temporarily, to prevent further losses at these institutions, and in turn, prevent losses to the U.S. government, (i.e. the taxpayer), which has become the back stop for many of these institutions.

Take a look at how he answered his critics.

We talked about everything from Dick’s controversial research piece this past weekend entitled “Who’s Next?” implying which bank might be next to fail and if he believes the SEC’s rule changes on naked short selling make sense or if they have simply failed to do their job. Take a look. Dick makes some excellent points…as usual.

It’s been 7 hours since I walked out of the “Dark Knight” IMAX premiere in Manhattan and I am still speechless. The kick in adrenaline has not left my body. I LOVED “Iron Man” and this is just as good, if not better. Yesterday on Your World (Neil’s show on Fox News that I have been anchoring while he’s on vacation), we did a segment on whether Hollywood is exploiting the loss of Heath Ledger in all of the advertising and promotion of the movie. Yesterday, I might have wondered. Today, I know why. HE STEALS THE SHOW!!!!!!!!!!!!!!!!!!!!!!! Never have I seen a performance that I was so drawn to. He is OUTSTANDING. He sucks you in with his bizarre looks and witty one-liners. I have not read one review of this film although I know the hype is huge. This lives up to it.

Christian Bale is fantastic, as always, along with Michael Caine, whom I met this week at lunch with Steve Tisch, and Morgan Freeman is quintessentially calm and suave and brilliant. Aaron Eckhart gives a masterful performance of good guy turned bad guy as Harvey Dent the Attorney General. Even Eric Roberts, Julia Roberts’s brother, gives a great performance as a mobster. And let me not forget Gary Oldman, as Lieutenant James Gordon (or should I say Commissioner Gordon…J), who is everything you want in a Lieutenant to make you feel safe. He pulls off another unbelievable performance. I adored Maggie Gyllenhaal as Rachel Dawes, Batman’s childhood friend and long-time love.

Last night in the taxi ride hom,e my husband, whom I should note for the record, owns thousands of comic books and knows every single detail of this comic book series and what happens next (I wouldn’t let him tell me too much), and I thought about the best performances by a villain and Heath Ledger is now one of them. If he does not win the Oscar I will be SHOCKED. We rattled off our top five favorite performances. What are yours? Couldn’t think of all of them. Look at what company we thought he falls in.

Anthony Hopkins, “Silence of the Lambs”

Jack Nicholson, “The Shining”

Robert DeNiro, “Cape Fear”

Al Pacino,  “Scarface”

Heath Ledger “Dark Knight”

The key to this entire movie was Christopher Nolan, the director, and IMAX. Last night’s premiere was hosted by the co-CEO’s of IMAX, one of which is my friend Rich Gelfond. Before the movie, he told me about Nolan’s masterful work shooting six scenes in IMAX. How did he do it? A first for a movie of this magnitude! By using a camera the size of a Volkswagen. And guess what? You can see the difference. If you see this movie, see it on an IMAX screen. It is EXTRAORDINARY because half is shot in IMAX and half in 35 mm, and the IMAX experience makes it come to life. It is the cleanest, crispest and best way to see this film.

Rich told us a brief story before the film. He attended the worldwide opening on Monday night in the same theater that I sat in. Michael Caine, at the end of the movie, told him that usually by the opening he has seen the film two to three times and he’s kind of over it. This time he said he was totally mesmerized. The first 10 minutes is shot in IMAX and it is hard not to tell the difference. I should also note that IMAX, a publicly traded company, is seeing record box-office numbers. He told me that they had sold $4.2 million in advance ticket sales as of yesterday. That didn’t even account for most of yesterday, today or tomorrow. It will be their biggest box-office draw in the history of their company. The IMAX theaters around the country are running movies all night long. In Chicago they’re running them for 72 hours straight to meet all of this demand. UNBELIEVABLE!

GO SEE IT.

Take a guess? Sports? Football? No.1 running back in the league? No.1 Fantasy Football pick? My new crush?

As an elder statesman he used a lot of common sense and made some very strong points. Take a look at what he had to say.