Citigroup breaking $1 intraday Thursday serves as a stark reminder of what’s really ailing the markets: The inability of policymakers to effectively address the banking crisis, much less fix it.”Lifting [toxic assets] off bank balance sheets…is the
President Barack Obama’s $75 billion effort to aid homeowners goes into effect today, and not a moment too soon: More than 8.3 million U.S. mortgage holders are underwater, Bloomberg reports, and another 2.2 million will similarly owe more on their mortga
As if the past 15 months haven’t been scary enough, the Dow was plunging to new lows Thursday afternoon. So what should already devastated investors do now?
Facebook dominated the late afternoon news and chatter in the Valley on
Wednesday with its new announcement
of a home page redesign. An
important element was integrating the “Pages” feature of Facebook into the rest
of the site. Pages
From The Business Insider, March 5, 2009: If GE Capital were a bank, it would almost certainly be insolvent (GE).The company has $661 billion of assets and only $53 billion of equity. If
its assets were marked-to-market, like those of banks, it is
Wednesday’s rally is shaping up as another one-hit wonder. Stocks slid early Thursday amid renewed concerns about a possible GM bankruptcy and disappointment over no new stimulus from China.In recent trading the Dow was down over 2%.While the market remai
Now that the government has yet again propped up the embattled insurer, Congress is hauling regulators over hot coals as they try to figure out what happened. Here are some highlights from testimony today:
Senate Banking Committee Chairman Christopher Dodd:
“That we find ourselves in this situation at all, is in my mind, and in the minds of many of my constituents, quite frankly, sickening. …
“The lack of transparency and accountability in this process has been rather stunning. Throughout the entire fourth quarter last year, it was frankly never clear, who owned AIG, or who was in charge.”
Federal Reserve Vice Chairman Donald Kohn:
“No one was minding the whole company and looking at how things interacted, and whether the whole company would, under some circumstances, put the financial system at risk.”
Acting Office of Thrift Supervision Director Scott Polakoff:
“It’s time for OTS to raise their hand and say we have some responsibility and accountability here.”
(Reporting by Reuters’ Washington bureau)
(Photo: REUTERS/Yuriko Nakao)
Once nearly as routine and immutable as its dividend and its triple-A rating, General Electric CEO Jeffrey Immelt could be counted on to step up and calm the markets when things got rough. He who guides the biggest corporate bellwether of the U.S. — nay, global — economy was to the markets what baseball, apple pie and Chevrolet were to the United States.
Now that auditors at Chevrolet parent GM have called into question its ability to stay in business, and baseball’s biggest star has admitted once being a doper, apple pie seems to be all we have left of this particular cliché of Americana. And even dessert may not be safe from recession-spending cutbacks at the kitchen table.
So back to the question of GE: facing a possible downgrade after bowing to market realities and cutting its dividend, is Immelt’s job in jeopardy? CFO Keith Sherin sat down on the conglomerate’s business TV network, CNBC, to talk financials and assure markets the company would weather the storm just fine. GE’s finance unit has no short-term liquidity issues, and speculation about its ability to maintain sufficient capital is “overdone,” he said. Sherin also said it would take an “incredibly disastrous economic situation” for GE to seek money from the government’s Troubled Asset Relief Program. Many would describe the current economic outlook as precisely that.
One can gaze at the tea leaves and wonder whether the decision, presumably Immelt’s, to put CFO Keith Sherin on CNBC was a sign that the big chief is in trouble. Or perhaps trucking out other top executives is meant to bolster Immelt by spreading the exposure risk executives run when hitting the airwaves. Markets took Sherin’s comments positively, pushing GE shares higher in pre-market trade, so whatever plans behind plans there may have been, on the surface they seem to have worked.
Deals of the Day:
* WellPoint, the second-largest U.S. health insurer by revenue, has put its pharmacy benefits management (PBM) business up for auction, the Financial Times reported.
* British convenience-food maker Uniq Plc said it had agreed to sell its loss-making UK chilled fish business for an initial 1 million pounds to The Seafood Co Ltd to focus on profit-making businesses.
* Manila Electric Co may see a battle for control after an investor group led by the chairman of PLDT bought about 6 percent of Philippines’ biggest power retailer, media reports said.
* The Norwegian government said it had finished purchases of StatoilHydro shares after raising its stake to a planned 67 percent.
* The chairman of Citic Group, China’s top financial conglomerate, said Spain’s second-largest bank BBVA has a strong desire to raise its stake in CITIC Bank.
* China’s Shougang Iron & Steel is in talks to buy Shanxi-based Changzhi Iron & Steel, which has an annual capacity of 4 million tonnes, Shougang Group Chairman Zhu Jimin told reporters.
* The parent of Dalian Port Co will buy Jinzhou Port this year, the mayor of the northern city of Dalian said.
* Wall Street bank Goldman Sachs said it has no plan to sell its 5 percent stake in the National Stock Exchange of India, refuting a local media report.
(PHOTO: Jeffrey R. Immelt, chairman and CEO of General Electric, listens to a question during a news conference in Kuala Lumpur September 27, 2007. REUTERS/Zainal Abd Halim)
With less than one week to go until the Dow-Rohm and Haas trial starts in Delaware, the companies have delivered their lists of witnesses to the court. So who’s on the list? Dow CEO Andrew Liveris as well as Rohm and Haas CEO Raj Gupta, for starters.
Rohm lists 10 potential witnesses including Gupta, COO Pierre Brondeau, Perella Weinberg partner Gary Barancik, and Greg Jarrell, a professor of economics and finance at the University of Rochester’s Simon School of Management. Dow lists 16 potential witnesses.
The full pre-trial stipulation is posted below. The witness lists begin on page 6.
With some deals, such as Pfizer-Wyeth, already sealed this year, all other drugmakers appear to be on the hunt for their own partner. That could create a “perfect storm” for an uptick in partnerships and acquisitions through the rest of 2009, according to Leerink Swann Healthcare Equity Research.
“In biopharma, we see an unprecedented confluence of highly motivated buyers (large- and mid-cap biopharma companies with substantial portfolio gaps but a surplus of cash) and sellers (biotechnology companies holding valuable assets but desperate for cash),” Leerink Swann analysts said in a research report.
The potential buyer with the greatest combination of urgency and therefore investor mandate and available cash is Bristol-Myers. The company could go for a series of smaller acquisitions for less money, however, than pursuing one mega-deal.
On the acquisition side, Leerink Swann sees 10 likely targets with attractive assets, identified by a value and/or analyst screen, including Alexion Pharmaceuticals, Biodel Inc, Elan Corp, and Inspire Pharma.
On the partnership side, Leerink Swann said it expects deals could be imminent for Cardiome Pharma Corp’s oral vernakalant and Inspire Pharam’s denufosol.
Meanwhile, much investor attention focuses on companies such as Schering Plough, Bristol-Myers and Sanofi-Aventis purusing deals.
It seems that regardless of the name in pharam these days, there seems to some storm of rumors brewing on the horizon.
They say that if you want to find an outlaw, you hire an outlaw. This may be the thinking behind UBS’s move to put some political muscle into the chairman’s office. The bank, facing a U.S. inquisition over providing sanctuary for wealthy U.S. tax dodgers, says former Swiss Finance Minister Kaspar Villiger will succeed Peter Kurer as chairman. Later this morning, a U.S. Senate panel holds a hearing on offshore tax havens and IRS attempts to get names of U.S. clients from UBS. Mark Branson, chief financial officer of UBS Global Wealth Management, is scheduled to testify.
On Monday, legislators took aim at offshore tax havens in Switzerland, the Cayman Islands and other nations, targeting them for shutdown with bills introduced by Democrats in both chambers of Congress. The whole sordid business has become very public, and very un-Swiss-bankish.
Villiger will have to deal with the scandalous allegation that USB kept its clients’ financial information secret. Given that secrecy is perhaps the biggest marketing plank of Swiss banking, he may find it hard to distance UBS from the political fallout. Perhaps the best he can do is keep secret the details of any deal the bank makes with U.S. authorities.
On Monday, Switzerland’s top justice official met with her U.S. counterparts and said the Obama administration is not interested in escalating a dispute with Switzerland over bank secrecy laws. So a more private sort of arrangement may yet be agreed over coffee and chocolate. But the bill may be steep for UBS, as there appears to be little incentive for Washington to play ball.
Deals of the Day:
* General Motors’ Saab brand has received interest from several potential bidders including China’s Geely Automobile and Dongfeng Motor Group, sources with direct knowledge of the sales process said. But a senior Geely executive said the company is not interested in foreign brands.
* Rio Tinto shareholders are warming to the miner’s proposed $19.5 billion tie up with China’s top aluminium maker Chinalco, Chief Executive Tom Albanese said.
* Royal Bank of Scotland said it plans to sell the retail and commercial banking businesses of newly acquired ABN AMRO China, part of efforts to exit from these operations in Asia.
* U.S. Hartford Financial Services Group is in talks to sell most of its life insurance unit to Canadian Sun Life Financial Inc, Bloomberg reported, citing three people with knowledge of the matter.
* J Sainsbury, Britain’s third-biggest supermarket group, said it has bought 24 stores from smaller rival the Co-operative Group for 83 million pounds ($117 million).
* Private Greek carrier Aegean Airlines submitted a surprise offer to buy ailing state carrier Olympic Airlines, to rival a previous bid from Marfin Investment Group (MIG).
* Israeli flavors and fine ingredients maker Frutarom Industries Ltd said it agreed to acquire the U.S. company Flavors Specialties Inc (FSI) for $17.2 million.
* South Africa’s fourth-biggest bank Nedbank said it is in talks to buy Old Mutual Group’s interests in certain joint ventures in exchange for its shares.
* Australian coal seam gas firm Arrow Energy is considering its position in relation to its stake in and bid for rival Pure Energy Resources Ltd after Pure shareholder Royal Dutch Shell decided to sell to a rival bidder.
(PHOTO: Former Swiss finance minister Kaspar Villiger talks to the media after a briefing in Zurich March 4, 2009. REUTERS/Miro Kuzmanovic)
It wasn’t quite the market response Genentech CEO Arthur Levinson was looking for.
Levinson and his team worked hard to make the bull case for the biotech group by providing long-term forecasts to prove it is worth far more than Roche is willing to pay. Yet Genentech shares still ended down 4.6 percent, or nearly $4, in line with a grim market on March 2.
Roche investors, by contrast, were in distinctly chipper mood on March 3, marking up the Swiss group’s stock by more than 5 percent.
Why the skewed response? JP Morgan analysts put it down to the fact that positive news for Genentech is also good for Roche (after all, it already owns 56 percent of the U.S. business) and such news could actually have a bigger impact on the Swiss group because it trades on a much lower multiple.
“Most factors cited by Genentech to highlight the value of the business represent an even greater upside to Roche shareholders, as that upside could be leveraged outside the U.S. and should boost what is currently a much lower Roche valuation,” the brokerage’s analysts adds.
Ironically, one reason Roche lost some of its previous lustre was worry over its multibillion play for Genentech.
Roche is attempting to acquire the 44 percent of Genentech it does not already own for about $42 billion, or $86.50 per share. Most analysts expect it to end up sweetening the offer to clinch the deal.
