Filed under: Deals, Industry, JPMorgan Chase (JPM), Bear Stearns Cos (BSC), Federal Reserve

Hyperbole? Maybe.

The former head of monetary policy at the Fed called the agency’s action on Bear Stearns (NYSE: BSC) the “worst policy mistake in a generation.” To some extent, the comments by Vincent Reinhart reflect his thought that the Fed didn’t look at a number of other alternatives for saving the investment bank. According to The Wall Street Journal, “seeking other suitors, removing certain assets from Bear’s portfolio or swiftly implementing its previously announced offer to temporarily swap Treasury securities for dealers’ less liquid assets” were all options.

The comments beg the question of what would have happened to the financial markers if Bear Stearns failed. The answer the Fed gives is that assets of other firms could have been destroyed or at least might have lost some of their value.

Rienhart may have a point. The Fed has made funds available to banks in exchange for paper, some of it with little value, which is, in many cases backed by mortgage-related securities. More recently it has let primary brokers have access to money on a similar basis. That mechanism wasn’t in place when Bear Stearns was sold to JP Morgan (NYSE: JPM) with Fed backing. Reinhart’s real question is whether it was necessary to wipe our the investment bank’s shareholders in exchange for saving its customers.

The Fed probably did act too fast. How many days would it have taken to ask for other bids for the investment house? Could the Fed have kept Bear afloat during that period? The answer is almost certainly “yes”.

Douglas A. McIntyre is an editor at 247wallst.com and writes the Ten Stocks Under $10 Letter.

Share This

Share This

Filed under: Before the bell, Earnings reports, Deals, Ford Motor (F), General Motors (GM), Berkshire Hathaway (BRK.A), Market matters, Wrigley, (Wm) Jr (WWY), Economic data, Housing, Federal Reserve

Stocks futures were lower early Tuesday morning ahead of the Federal Reserve Open Committee two-day meeting set to start today. On Wednesday, Fed chairman Bernanke will announce the policy decided, and while most investors expect a quarter point rate cut, they also anticipate the Fed to announce a pause in the cuts following some inflationary pressures.

On Monday, stocks completed the day little change ahead of the Fed meeting and despite some massive deal news involving candy maker Mars and Warren Buffett’s Berkshire Hathaway (NYSE: BRK.A) buying chewing gum maker Wrigley (NYSE: WWY) for some $22 billion. Also, Kirk Kerkorian’s Tracinda Corp. announced its intention to purchase 20 million of Ford (NYSE: F)’s shares at $8.50 per share. With that, the Dow industrials ended the day down 20 points, or 0.16%, the S&P 500 fell 1 point, or 0.11%, while the Nasdaq rose 1 point, or 0.06%.

Not many economic releases this day. Still, already RealtyTrac reported that foreclosures soared 112% in the first quarter, compared to a year earlier. And still in the housing sector that doesn’t seem to be able to find a bottom yet, before the bell, the S&P/Case-Shiller home price index is due for release.
Also this day at 10 a.m. EDT, April consumer confidence index will be reported and economists are expecting the index will slide from the previous month. With higher food and energy prices, along with the troubles in the housing sector and the increasing troubles in the labor market, this is far from surprising.

In corporate news we’ve Visa (NYSE:V), which reported its first quarterly results since going public. While net income climbed 28% and earnings per share of 52 cents handily beat estimates of 45 cents per share, the stock is trading down over 5% in premarket trading as expectations were likely for even better numbers.

Meanwhile, Deutsche Bank AG (NYSE: DB) reported Tuesday its first quarterly loss since 2003 as it announced that it wrote down $4.2 billion during the first quarter. Shares are down 1.2% in premarket trading.

Finally, General Motors Corp. (NYSE: GM) announced it plans to cut one shift each at pickup truck and large sport utility car plants in Flint and Pontiac, Mich.; Janesville, Wis.; and Oshawa, Ontario, resulting in about 3,550 layoffs. GM stated it will make about 88,000 fewer pickups and 50,000 fewer huge SUVs this calendar year.

Share This

Share This

Money Center Banks Industry News: Industry Center - Yahoo! Finance
Money Center Banks News: Industry Center - The latest news and top stories for the Money Center Banks.

Excite Help
Excite Who are your News providers? What does ! next to a News link mean? Q: Who are your News providers?

ITN - Money News
Strike ‘could close key pipeline’. Builder warns of market slump. OFT wins right to probe bank charges. FTSE closes at 6050.7. Tax row confusion among MPs. High street feels

Money & Business - NY Daily News
Get up to the minute business news and financial information including Wall street, interest rates, company profiles and more. Strike threat at Bloomingdales. Workers have

Microsoft Money News
IGEL Unveils Elegance 9319 LX, 9619 XP Thin Clients with 19″ LCDsIT News Online, India - 38 minutes agoAlongside the high quality display, the latest Elegance models contain a

Money news, personal finance news, financial news - Money extra
Money extra - money news and personal finance in-depth news published each day Top Story. Home prices static in March. The latest FT Home Price Index, in association with

First Coast News - Money - Business and Consumer News
First Coast News Money - Business, financial and consumer news ATLANTA (AP) — The jackpot in the multi-state Mega Millions lottery drawing grew to 85 million dollars yesterday

Money | Real Estate, Banking, Credit Cards, Superannuation | News.com
The latest hints and tips for managing your money including the news on property banking, credit cards and superannuation.

ABC News: Online news, breaking news, feature stories and more
Online news, breaking news, feature Home | News Brief | World | U.S. | Investigative | Politics | Money | Health | Entertainment | ESPN Sports | SciTech | I think it’s very unfair when I’ve

Money news articles News Articles - Mobile Alabama News AL Pensacola
Money News Articles Money news stories Money articles from WKRG News Mobile Alabama and Pensacoal Florida Gulf Coast News

Money.org | Home
The content here is for a dynamic news portal.  If you are getting this message then Visit the Money Museum! Coins, Crown, And Conflict Faces of Money Harry Bass Collection

Share This

Share This

Filed under: Deals, US Airways Group (LCC), UAL Corp (UAUA), Delta Air Lines (DAL)

Another day. Another merger of two struggling airlines.

This time it’’s UAL Corp.’s (NYSE: UAUA) United Airlines and US Airways Inc. (NYSE: LCC), which together lost more than $773 million in the first quarter are reportedly in are “advanced” merger speaks, two sources familiar with the situation told The Associated Press. These “sources” might be public relations people who are leaking details of the deal at the direction of the investment bankers and the companies themselves.

Wall Street is reacting positively to the news sending shares of US Airways in mid-afternoon trading. I’m not so sure a party is in order. For one thing, as Reuters and the Associated Press both have noted this is a marriage of necessity.

“The discussions intensified over the weekend after Continental Airlines Inc, which had been in negotiations with United, pulled out to explore a potential marketing alliance with AMR Corp’s American Airlines and British Airways Plc,” according to Reuters.

The combined company would have to compete against the combined Delta Airlines Inc. (NYSE: DAL) and Northwest Airlines Corp. (NYSE: NWA) which will create the largest airline.

Airline mergers have had such a lousy track record, what makes people think these will be any different?

Share This

Share This

Business | www.kentucky.com
Business extra description Daily Business Report. Lexmark shareholders ask for say in executive pay; IPO of American Water closes lower

Georgia’s flagship business school, founded in 1912 | Terry College of
Founded in 1912 as the School of Commerce, the Terry College is the flagship business school in the state of Georgia and one of 15 schools and colleges at the oldest say

Business Banking | Sovereign Bank
Business Banking Services provided by Sovereign Bank. We invite you to learn more about our comprehensive range of banking, credit, investment, insurance, international trade and

Business | PE.com | Southern California News | News for Inland
Get the latest business news from Inland California and top business technology stories and ap business headlines including stock market information from pe.com

Business News, Stock Market & Financial Advice - BusinessWeek
Read the latest international business news & stock market news. Get updated company profiles, financial advice, global economy and technology news.

Perform business searches on WhitePages.com
Search for businesses by name, type, or perform a nationwide search by name. Searching for a business? Enter a business name or a broader category such as “restaurant” to find

Business - Lebanon Daily News
Business AES will produce electricity from PPL natural gas By STEVE SNYDER Staff Writer PPL Corp. has entered into an agreement to buy capacity and energy rights at the AES

Business & financial news headlines, latest market updates, breaking
Msnbc.com publishes an up-to-the-minute report of business and financial news with personalized stock quotes as well as investing tools and tips. The business report combines the

NJ Business Portal | Taking Care of Business | Home
NJ Business Portal Homepage Whether you are a new business start-up, a growing company considering expanding in the state, a big corporation about to move or expand, or an

Business - The Connecticut Post On the web
Connecticut Post Business The founders of a South Norwalk real estate investment firm — who trace their friendship back to junior high school in New Canaan — are part of

Share This

Share This

Filed under: Deals, Internet, Competitive strategy, Microsoft (MSFT), Yahoo! (YHOO), Technology

Discretion is the superior part of valor — that’s what I was always taught. Perhaps the time for a strategic withdrawal has come in the battle of Microsoft Corp. (NASDAQ: MSFT) vs Yahoo Inc. (NASDAQ: YHOO). Somehow, though, I can’t envision it will take that turn, as I read the analysts, strategists and pundits. How could it have become so adversarial? Surely something unsightly may be at hand.

Did Steve Ballmer imagine this type of scenario when launching his original bid for Yahoo? Did he ever envision the attempted synergy would become a battle of wills as much as money? To what degree does pride factor into this pending recipe for disaster? I dare state that is what it has all come down to now. Pride goes before a fall, they state.

Does Steve Ballmer have the grace within him to fold his tents and quietly withdraw? Or shall his siege works be lain against the walls of Yahoo in an attempt to forcibly take it? Already he has warned that he’ll appeal to the sensibilities of Yahoo’s investor rank and file. It’s a tactic which has been used in many a war. However, attempting to romance the populace away from their leaders seldom, if ever, has worked. In the meantime, Microsoft’s own shares are on the decline, diluting the strength of its acceptable offer.

I submit to you that at this time Microsoft should disengage from the situation entirely. Giving Yahoo some time to fully digest the reality of what it is facing might be a worthwhile strategy. To force the matter any further right now may only lead to the degradation of the reputations of both companies. That’s something that no one desires.

The powerful silence emanating from an adversary which has quietly withdrawn places nothing but unanswerable questions on the horizon.

Gary Sattler is a freelance blogger. He does not knowingly have interest in the companies mentioned in this blog post.

Share This

Share This

Filed under: Deals, Blackstone Group L.P (BX)

Since 1992, the The Blackstone Group L.P. (NYSE: BX) has been a top real estate investor with 229 transactions for over $132 billion. With lots of firepower remaining, the firm is striking yet more deals.

The latest is for Synergy, a major real estate development and management firm in India.

The investment amount comes to $18 million, relatively low for the folks at Blackstone, but it’s a highly strategic deal.

Synergy has developed a variety of projects - spanning 100 million square feet — for office buildings, hospitals, hotels and so on. In other words, the firm should be a nice way to source lucrative deals in the fast-growing Indian market.

Tom Taulli is the author of various books, including The Complete M&A Handbook (www.mergerbook.com) and is also a principal in Averiware, which provides an ERP system to small and midsize businesses.

Share This

Share This

Filed under: Deals, Berkshire Hathaway (BRK.A), Hershey Co (HSY), Wrigley, (Wm) Jr (WWY)

Shares of Hershey Co. (NYSE: HSY) have jumped more than 6% on the news of the $23 billion takeover of Wm. J. Wrigley Co. (NYSE: WWY) by Mars Inc. and Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK.A) as investors bet that the maker of the eponymous chocolate bar won’t stay independent for long.

Hershey, though, is a basket case thanks to soaring commodity costs and hopefully the growing interest in healthier eating. That will heighten the pressure on Hershey management to do a deal with Cadbury Schweppes Plc. or find another sugar daddy (pun intended).

The case for a merger between Cadbury and Hershey are pretty compelling as Reuters notes.

“The deal would have clear strategic logic, as Cadbury, the world’s biggest confectionery group, lacks presence in the U.S. chocolate market, while Hershey is looking to expand overseas,” according to the news service.

During the first quarter earnings conference call, Chief Executive David West sounded upbeat, saying the company was “making progress, while it is slower than we would like, we do see the initial signs of improving marketplace trends.” He has high hopes for new products such as the Hershey Bliss. Investors, though, may not be patient.

The Hershey Trust Co., the chocolate company’s largest shareholder, has resisted buyout offers in the past from Wrigley and has vowed to keep the company independent. You have to figure that the trust’s board will change its tune at the right price.

Share This

Share This

Filed under: Deals, Berkshire Hathaway (BRK.A), Wrigley, (Wm) Jr (WWY)

On CNBC this day, Warren Buffett talked about politics, foreign currency - and oh, his financing of Mars’s $23 billion deal for Wrigley (NYSE: WWY). He likes the deal for a variety of core reasons: a sustainable long-term business, strong management and the fact that the business is something that’s simple to comprehend (chewing gum is fairly basic, right?)

Yes, this is vintage Buffett.

As usual, the deal started with a phone call to the oracle of Omaha, and he wasted tiny time in getting things moving.

Wrigley is the largest maker of gum and Mars is a big maker of candies, with Snickers, M&Ms and so on in its arsenal of products. In all likelihood, this deal will spur further M&A activity in the global sector. Such deals will help companies deal with spiking commodities’ prices as well as the difficulties in creating new brands.

What’s more, both Wrigley and Mars are family dynasties. The former got its start in 1891 and the latter was launched in 1911. Basically, for such firms to link up, it’s important that the principals comprehend the complexities of family dynamics. And, for the most part, Buffett seems to understand such things. In other words, he is a value-added investor who takes the long view. More importantly, he has a war chest of over $40 billion. So as time goes by - and more family businesses look to consolidate — I’m sure Buffett will get more phone calls.

Tom Taulli is the author of various books, including The Complete M&A Handbook (www.mergerbook.com) and is also a principal in Averiware, which provides an ERP system to small and midsize businesses.

Share This

Share This

Filed under: Deals, Berkshire Hathaway (BRK.A), Wrigley, (Wm) Jr (WWY), Options

Mars Inc. and Warren Buffett’s Berkshire Hathaway (NYSE: BRK.B) were close to a pact to acquire WM. Wrigley Jr.Co (NYSE: WWY) for more than $22 billion according to people familiar with the situation at The Wall Street Journal.

WWY over all option implied volatility of 24 is near its 26-week average according to Track Data, suggesting non-directional price risk.

Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Share This

Share This