Facebook IPO Settlement: Morgan Stanley's paying $5 million to settle a Massachusetts probe of how it handled the Facebook IPO. According to a Journal story crosschecked between the state's attorney general's office and people "familiar with the matter," star tech analyst Michael Grimes wrote a script with detailed, non-public information for Facebook's CFO to share with investors. Then, in what might seem a cynical approach to dealing with Morgan Stanley's supposed Chinese walls, Grimes walked down the hall so that he was out of earshot when the CFO read it. "I took extra precaution to do that, and sat on the floor," Grimes later said, according to the Massachusetts order. The two takeaways from this one are: that Morgan Stanley's actions do appear to run against post-Spitzer prohibitions of selective disclosures and analysts in bed with bankers, and that nobody seems to care enough to do anything serious about it. Financial Times, New York Times

Fiscal Cliff Breakthrough: Maybe. Conventional wisdom in Washington is rapidly congealing around the idea that the Obama administration and House Republicans will work out a budget deal. New York Times, Wall Street Journal, Financial Times

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