Tom B

Why Most M&A Deals End Up Badly

"shareholders would have been better off in about 70% of the cases if they'd never set off on the path toward M&As."

M&A's are not, in general, executed for the benefit of the companies, shareholders, employees, or customers; they are executed for the benefit of senior management. The sooner stockholders comprehend this, the better. A very real example: PFE/WYE will lead to serious HARM to customers, because fewer new drugs will be coming to market after all the blood flows into the streets. But, it will make a very few people even more obscenely wealthy.

The Pfizer-Wyeth Deal: Experimenting with Taxpayer Dollars?

The Government should step in and prosecute the bankers for fraud. The TARP was supposed to rescue the economy by preventing bank failure; not to finance deals that so clearly in opposition to the public good. If the deal goes through, ten of thousands will lose their jobs, and every America will see a delay in obtaining new, life-saving medicines, because their will be fewer people to invent them. In what year of B-school do they yank these peoples brains out, or are they that way going in?

How to Spend $700B and Actually Solve the Problem

There are two main problems: 1) "opaque" instruments, like CDO's riddle with shaky mortgages 2) mortgage defaults. I support some intervention to deal with CDO's and a return to regulation of banks to prevent future abuse. As for 2, wages have been stagnant and housing prices did a huge "bubble". I think restructuring loans -- freezing ARM resets for example-- could help a lot. As for the "redlined" poor causing the mess as scrooge opines-- that attitude is contemptible. It is only a small part of the problem. The banks SHOULD have denied bad loans. And people of all income brackets are involved in this mess. Some people got into ARMS and "stretched" too much. Others willfully abused lax credit standards and bought multiple properties, hoping to "flip". The fact that real estate lloked for a long time like a "magic" investment that always goes up, clouded people's judgement. I have long looked at ratios of average salaries to housing prices. And the ratio of renting costs vs ownership costs. I could see years ago that trouble was brewing.

Changes in Market Cap for Biggest U.S. Companies

Oh, cool: Apple's about 12 months away from passing MSFT!

Time To Buy Banks? Proceed With Caution.

Why do you say BAC looks expensive? What do you think of JPM?

Still Too Early For Banks

"If we wait until all eight of your points are answered, we will be here a long time...."

Agreed. Right now is still "catching the falling knife". IMHO, a few more quarters, some less negative housing inventory news, and I'm ready THEN to look at banks.

The economy should trend up when we get someone in the White House who isn't an alcoholic big-oil man.


Anyone have an opinion on VNQ-- commercial/rental REIT? Less scary than banks and builders, but is it ENOUGH less scary? Nice 5% yield.

Under The Radar News - Monday

"Microsoft (MSFT) has for all intents gone silent. All this can mean only one thing: A deal between the two has to be getting ever closer."

Possibly. But not necessarily. People seem to keep forgetting that this merger absolutely DOES NOT benefit EITHER company or their respective shareholders. If it DOES look like it's going forward, expect numerous shareholder lawsuits.

Wall Street Breakfast: Must-Know News

"Win-win for BAC. Mortgage company at a "fire sale" price, or-- an easy escape clause."

Assuming Countrywide customer lawsuits won't be arriving in droves, of course.....

Wall Street Breakfast: Must-Know News

"If Countrywide is found guilty of fraud, it could scuttle a planned $4B acquisition of the company by Bank of America (BAC)."

Win-win for BAC. Mortgage company at a "fire sale" price, or-- an easy escape clause.

Under The Radar News - Thursday

"Then again, does anyone know what Citi's book value is?"

I don't trust their managemnet. End of story, as an investment.

Under The Radar News - Thursday

"Sources say Microsoft (MSFT) CEO Steven Ballmer is fuming over Yahoo's move yesterday to pre-empt a proxy fight by pushing off its shareholder meeting."

Maybe monkey-boy threw some chairs around. What does he expect, offering a low-ball hostile offer?

Will BofA Really Buy Countrywide?

I think BoA did a lot of diligence and will squeeze water from this stone. I'm holding-- neither buying nor selling.

Time to Short Financial Stocks - Starting with BofA

I think it's time to buy BAC. I think they factored in the Countrywide risks when they snatched it up.

Wall Street Breakfast: Must-Know News

"BlackBerry goes black - again. For the second time in 12 months, Research In Motion (RIMM) was hit with an extended outage to its BlackBerry email service, a development which threatens to undermine its high-profile reputation."

This is actually GOOD news, because it will favor less proprietary systems, like the iPhone.

Wall Street Breakfast: Must-Know News

"GM to boost ethanol-car lineup." Are they insane? Another reason to short GM. Ethanol is an OBVIOUS bubble; there isn't enough arable land in the US to meet demand.