Wall Street Breakfast: Must-Know News

• Rio continues divestment. Rio Tinto (RTP) sold part of its Alcan packaging unit to Bemis (BMS) for $1.2B. The deal significantly boosts Bemis' role in many foods and beverages purchased in U.S. supermarkets, and helps Rio further cut its debt load.
• GM sale approved. General Motors won approval to sell most of its assets to a new government-run company, with the bankruptcy judge saying the proposed sale was the only option available. A group including bondholders and unions had objected, claiming the 'new GM' is just the 'old GM' without the liabilities. The government will get 60% of new GM in return for $50B in bailout loans. Separately, GM said Beijing Automotive Industry Holding submitted a bid for Opel. The non-binding proposal presents a back-up option for GM if talks with Magna International (MGA) fall apart.
• Paris Re bought by Partner. Reinsurer PartnerRe (PRE) will buy Paris Re Holdings in a multi-step stock transaction valued at around $2B. The combined company will have about $5.5B of common shareholder equity capital, bumping it to the 'top end of midsized reinsurers,' said PartnerRe CEO Albert Benchimol.
• China: Time to replace dollar. Chinese officials said this morning that the economic crisis has shown the weaknesses of a dollar-led global economy and that the world should look to displace the dollar, even though that may be a slow process. China may push for the IMF's Special Drawing Right to be used as a dollar alternative.
• Pouring into Porsche. Three more bidders have expressed interest in acquiring a Porsche stake, including both a Chinese and a Russian sovereign wealth fund. The new interests rival an investment plan presented by Qatar last week.
• Second stimulus? "We misread how bad the economy was," said Vice President Joe Biden, acknowledging the administration was too optimistic when it forecast unemployment would peak at 8%. Biden didn't rule out a second stimulus, but said the first one is just starting to pick up speed. (Read the transcript of Biden's interview)
• SocGen sees small profit. Societe Generale (SCGLY.PK) expects to post a small profit in Q2, as improved operating performance at its corporate and investment bank slightly outweighs credit-default losses and debt write-downs. The statement was issued ahead of a meeting today when shareholders will vote on whether CEO Frederic Oudea should assume the chairman position as well.
• AIG gets plenty of bids. Around 10 firms have submitted bids to buy AIG's (AIG) Taiwanese insurance unit, including private equity firms Kohlberg Kravis Roberts and MBK Partners. The deal could bring in over $2B.
• UBS to shake up U.S. unit. After deciding not to sell UBS' (UBS) U.S. brokerage business, CEO Oswald Grubel is reportedly looking for a new leader to shake up the unit's top management. It's unclear if the new hire will replace Marten Hoekstra, the head of UBS’ wealth management operations in the Americas, or work with him. The reports come as Bank of America (BAC) knocks UBS out of the top spot for world's largest private-banking group. Shares -3.4% premarket (7:00 ET).
• Seven more banks shuttered. Going into the holiday weekend, U.S. regulators closed another seven banks, bringing this year's total to 52 failures. The seven closures will cost the FDIC around $314M.

Today's Markets

Asian markets closed broadly lower, and European indices are trading down. Coming off the holiday weekend, U.S. futures get off to an ugly start.

• In Asia, Nikkei -1.4% to 9,681. Hang Seng -1.2% to 17,979. Shanghai +1.2% to 3,125. BSE -5.8% to 14,043.
• In Europe at midday, London -1.3%. Paris -1.8%. Frankfurt -1.7%.
• U.S. futures: Dow -1.1%. S&P -1.2%. Nasdaq -0.9%. Crude -4.3% to $63.86. Gold -1% to $921.40.

Monday's Economic Calendar

• 10:00 ISM Non-Manufacturing Survey

Seeking Alpha editor Eli Hoffmann contributed to this post.

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Comments

[mac123449:]

Blue horse shoe loves DOW below 8000 by end of week.

Jul 06 08:36 AM

[robert.b.fe...:]

Oh that's just Joe. He never really knew anything about the economic condition. Not surprising he doesn't seem to know much about anything he talks about leading to a gaff a minute. Fifty two banks and counting. How many thrifts bit it in the eighties? Why did those crooks do the perp walk and these crooks don't? Must be all that transparency huh? I hope every one made it back safe and sound from the holyday just in time to get your portfollio into the bunker.

Jul 06 08:59 AM

[marketman54:]

Let's add up all the less bad is good:

Unemployment
Unemployment
Unemployment for the last 15 months
Housing foreclosures
Housing foreclosures
Housing foreclosures
No consumer spending
No consumer spending
No consumer spending
Personal savings increasing
Credit card defaults
Auto loan defaults
Fannie Mae
Freddie Mac
Lehmann Bros.
AIG
Financial sector minus toxic assets and derivatives
GM Dead
Chrysler Dead
Ford Crippled
States going bankrupt - California, Illinois....
Trillions to be spent by Obama
Trillions to be spent by Obama
Trillions to be spent by Obama
Retail - crap
Commodities - crap
Tech - crap
Insurance - crap
Heavy industry - crap
Travel - crap
Airlines - crap
Retail - crap
Capital goods - crap
Services - crap
Transportation - crap
Healthcare - unknown
Utilities - unknown

I guess when you get enough less is better you get a great list like this that you want to put all your money in!!

Jul 06 09:00 AM

[AndrewBaker:]

Well, welcome reality: I sure hope so, anyway. Can you imagine what the losses would be if this rally had kept going? It doesn't bear thinking about, yet there will still be politicans saying it's getting better, and mutual fund managers urging us to buy now and bankers telling us whatever the next story is they can think up to enrich themselves whilst making us pay the price.

My hope is that whilst we are struggling to get back solvent, to salvage our retirement savings, and to manage our financial matters so as to not to have debts hanging around for years to come, we manage to get new leaders of whatever calling that will actually consider ordinary people aqt the same time as they look to feather their own nests.

Jul 06 09:54 AM

[bbowen7:]

So, what pieces of data are available to Obama/Biden now that were not available back in the campaign when Obama talked of a financial apocolypse that only he could avert. The problem is that he can only blame it on Bush for so long, and needs to explain why his trillions aren't making any difference.

Jul 06 11:33 AM

[Zenfar:]

Tech - Windows 7, Nvidia Ion, Palm Pre, iPhone 3GS, XBox Natal...

Jul 06 01:36 PM

[Zenfar:]

Ford - 2010 Fusion Hybrid

Jul 06 01:37 PM

[Zenfar:]

Energy - Alternative Energy (US Solar) ready to run

Jul 06 01:38 PM

[secmaven:]

Isn't more government a good sign?

Jul 06 01:51 PM

[robert.b.fe...:]

Is more government ever a good sign? If someone aproaches you from the Federal Government unsolicited saying they want to help: RUN!


On Jul 06 01:51 PM secmaven wrote:

> Isn't more government a good sign?

Jul 06 02:32 PM

[Joseph Sherman:]

Pouring into Porsche. - The real value behind Porsche is the tribe behind the brand. People love the mythic cars. Their challenge in growth is not to watter down the tribe during expansion.

Jul 06 07:00 PM