Wall Street Breakfast: Must-Know News 9 comments
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- Novartis, Elan in talks. Novartis (NVS) is reportedly in talks to buy parts of Elan (ELN), including its key multiple sclerosis drug Tysabri and Alzheimer's disease drug pipeline, but a final deal is still 'some way off.' Earlier this year, Elan said it was open to a merger or sale, and on June 10 said it expects to complete a strategic transaction 'in the near term.' Premarket: NVS -1.4%, ELN +1.9% (7:00 ET).
- Anglo seeks merger defenses. Sources say Anglo American (AAUK) is building its defenses against a merger offer from Xstrata (XSRAF.PK) by engaging in early stage negotiations with Chinalco (ACH) and at least one unidentified Middle Eastern investor to inject hundreds of millions of dollars into Anglo's Brazilian iron ore business. Anglo is also reportedly renewing its efforts to bring Sir John Parker in as its new chairman.
- UBS nearing tax settlement? According to Swiss newspaper reports, UBS (UBS) will pay 3-5B Swiss francs ($2.77-4.62B) in the next two weeks to settle a U.S. tax probe, and is under pressure by the Swiss central bank to sign the deal in order to bring stability back to the Swiss banking sector. However, some following the case are skeptical the U.S. government would drop its probe without major concessions from Switzerland. Shares -2.8% premarket (7:00 ET).
- Vodafone mulls T-Mobile bid. Vodafone (VOD) is reportedly considering a bid to buy T-Mobile UK (DT) in a move that would shake up the U.K. mobile phone market and potentially face resistance from regulators. The deal would create a company with around 35M subscribers, or about half of the U.K. mobile market. T-Mobile UK has underperformed for several years, and JPMorgan has been appointed to advise parent company Deutsche Telekom on strategic options for the business.
- DoJ extends Oracle-Sun review. The Department of Justice extended its review of Oracle's (ORCL) proposed acquisition of Sun Microsystems (JAVA). The government's 30-day period to review the deal expired Friday, but the Justice Department requested both companies provide more information before it gives any sort of acquisition approval. Though the extension is unusual, an Oracle representative said the investigation is expected to end soon and that discussions with the Justice Department had been positive.
- GM accepts product liability. Under pressure from more than a dozen state attorneys general and several consumer-advocacy groups, General Motors agreed to assume legal responsibility for injuries caused by vehicle defects after GM emerges from bankruptcy. Under GM's original bankruptcy plan, future car-accident victims seeking to sue GM would have been treated as unsecured creditors and forced to fight over GM's old bankruptcy estate. Car-accident victims with pending lawsuits and those who won damages against GM before it filed for bankruptcy will still be unable to bring claims against the new GM.
- GM holds back-up talks on Opel. Belgian and Chinese bidders may sign non-binding agreements to buy General Motors' Opel unit as a fallback to the carmaker's proposed deal with Magna International (MGA). RHJ International and Beijing Automotive Industry Holding Co. have gotten involved as the Magna talks slow down.
- Watson Wyatt/Towers Perrin merger. Consulting firms Towers Perrin Forster & Crosby and Watson Wyatt Worldwide (WW) plan to merge in an all-stock deal valued at around $3.5B, seeking to cut costs as clients pare back discretionary spending. Watson Wyatt shareholders will get 50% of the shares in the combined company, to be named Towers Watson & Co. Watson CEO John Haley will be chairman and CEO of the combined company, while Tower CEO Mark Mactas will serve as president and COO.
- Porsche claims VW blackmail. Porsche's chairman Wolfgang Porsche accused Volkswagen (VLKAY.PK) of attempting to blackmail the debt-ridden company into accepting a reworked merger plan, reigniting an ongoing dispute between the two firms. Porsche rejected the Monday deadline he claimed Volkswagen had imposed, saying "ultimatums do not belong in the 21st century. We won’t be blackmailed." Volkswagen denied it had issued an ultimatum.
- Madoff faces the music. Madoff goes to court today to be sentenced, and is expected to receive an effective life term. On Friday, the judge in Madoff's criminal case ruled Madoff's multiple houses and apartments will be sold to raise money to pay back victims of his $65B Ponzi scheme, along with Madoff's Mercedes Benz and VW cars, boats and trailers. Ruth Madoff will retain $2.5M and give up her claims to more than $80M in assets.
- Five more failed banks. Five more banks were seized by regulators, bringing this year's total failures to 45. All told, the five banks held assets worth around $1.04B.
Today's Markets
- In Asia, Nikkei -1% to 9,783. Hang Seng -0.4% to 18,529. Shanghai +1.6% to 2,975. BSE +0.1% to 14,786.
- In Europe at midday, London +0.6%. Paris +1.3%. Frankfurt +1.2%.
- U.S. futures: Dow +0.3%. S&P +0.4%. Nasdaq +0.4%. Crude +1% to $69.82. Gold +0.2% to $942.30.
Monday's Economic Calendar
- 3:00 PM Farm Prices
- Notable earnings after Monday's close: APOL, HRB
Seeking Alpha editor Eli Hoffmann contributed to this post.
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This article has 9 comments:
Tort bar raised to a new high.
But the unions get a sweetheart deal from Obama as the maimed and injured get nothing even though they won a lawsuit against GM. Gotta wonder if the Democrats are really compassionate after all, or if it is just very selective.
Tort bar raised to a new high. " >>
Not really. There's winners and losers in every bankruptcy.
Probably $1000 of every new car's cost is for lawyers and litigation. Same for $100 or more of every insurance premium. We - each and every one of us - pay a very high price for our litigious society. 5% of the world's population with 90% of the world's lawyers doesn't come cheap.
Our national health care cost would drop 30% without the cost of litigation/insurance.
The answer is of course, very little that is any good. Waiting for the real and bad news about the banks' bad assets is like watching a car crash in slow motion: you see it happening, but it seems like it's taking forever.
Maybe if each of us told three people that bank stocks must be sold and for them to do so and tell three other people the same, the message may get home just a little sooner: falling stock prices will alert people more than anything else, and the false hype that's keeping them up won't have so much affect then. Worth a try!
150 divided by 65 billion = 2.30769231 × 10-9
an incomprehensible calculation for most of us, while many of his investors are living day-to-day trying to cover their debts, working as housemaids and eating out of dumpsters. Counter-party risk on an institutional level is almost the norm on 2009 Wall Street, while Main Street picks up the tab through their hard earned and easily spent tax dollars. But in this case a man who began with $5000 and worked as a lifeguard stole equally from the rich, the poor and the in-between. Equal opportunity theft including charities.
It is easy to condemn this man. Madoff is a scoundrel on a gigantic scale and deserves to spend the rest of his life in prison. But he will have a roof over his head, four walls and three square meals daily with time out for recreation and health care available when needed. That is more than some of his investors are left with.
There can be no forgiveness perhaps, nor redemption but in the end, Bernie will die and his name will go down in History as a liar, cheater, thief, leaving a trail of plunder which rivals Attila the Hun. I need to add however that the negativity which this episode has exploded in the minds and hearts of his trusting, perhaps too trusting investors is itself a burden. Time to refocus, take heart and move on. Impossible for some who have literally lost everything, but allowing Bernie to have your hearts and minds too, your first thought in the morninng and last thought at night, is, in the calculus of all this madness, yielding too much to him.
I hope the victims, true victims, learn and grow and prosper. For those who will not have the time left in their life-spans to recover, I can only hope that somehow, some way, they will find comfort. Trusting, like loving, "not too wisely but too well" is as great a risk as any in nature. A hard lesson and huge tuition but it is what it is and naught can change that I'm afraid.