The Senate passed health-care reform legislation Thursday morning, bringing America “incredibly close to making health insurance reform a reality in this country,” as President Obama told reporters.The Senate bill means “for the first time,
America continues to crawl out of recession. The U.S. economy is growing at a snails pace, 2.2% annually, while China’s emerging economy is expected to grow at 8% (if you believe their government figures.)The difference is perhaps best exempli
From The Business Insider, Dec. 24, 2009: The New York Times delivers a front-page expose on the original Goldman Sachs scandal:
How the firm created derivatives (synthetic CDOs) to allow investors to
bet on the housing market, sold the CDOs to clients
Think you’ll need a vacation after spending the holidays with the family? Want to seek refuge from the snow with a trip to sunny Florida?Good news! There are lots of deals out there for bargain shoppers. The travel industry is struggling
Las Vegas ends 2009 on a horrific losing streak, hit hard by the bursting of the housing bubble and the recession, which put a serious crimp in vacation budgets and corporate conventions. But hope springs eternal in America’s gambling Mecca and local offi
Warren Buffett is in talks to buy GMAC’s mortgage lender Residential Capital, the New York Post reports. Teamed up with Appaloosa Management and Avenue Capital, Buffett has large debt positions in the gut-shot company, according to the Post. In September, Buffett’s Berkshire Hathaway and Leucadia National agreed to buy Capmark Financial Group’s mortgage loan and servicing business for up to $490 million.
If the residential property market hasn’t begun a solid recovery, it certainly established a solid bottom over the past six months. New home sales figures out yesterday were shockingly weak, but keep in mind that November and December are not particularly hot months for residential real estate, and new home sales are a much smaller chunk of the market than the existing portion. Lots of analysts were expecting the housing recovery to face a test as we get closer to the extended deadline in March for the $8,000 homebuyer tax credit.
But it’s a rare investor who gets rich betting against Warren Buffett. And if he’s looking to buy low, he could hardly have done better than ResCap. The lender has been flirting with dangerously low capital levels, with the Post reporting it is bouncing around the minimum required net worth of $250 million. It had a tangible net worth of $409 million at the end of the third quarter. The mortgage company has lost over $10 billion in the last three years. The number of loans delinquent rose to 13.40 percent at the end of June from 11.50 percent at the end of 2008.
ResCap has been kept on life support by parent GMAC, which itself been a primary beneficiary of government assistance, after being caught out with loans to weak borrowers. Perhaps one of the events in its tumultuous recent past that caught the oracle of Omaha’s eye was GMAC’s reinvention as a bank in order to qualify it for more government aid under TARP. As the auto and commercial lending arm of GM, becoming a bank made almost enough sense to seem inevitable during the nadir of the crisis. Having been kept warm through the worst of times, bailed out businesses like ResCap are naturally hot targets when recovery is at hand.
After a relatively frantic day with Glencore, the sale of RBS’s asset management business kept us busy on Christmas Eve. We hope it’s safe to take a short break now — but we’ll keep you posted if anything breaks next week. Have a wonderful Christmas and the team here wishes you a very happy New Year.
For savvy investors, shorting the dollar and being long commodities proved to be smart strategy for most of the decade. But is this party ending as the aughts give way to the 2010s?Commodity prices will move sideways next year, forecasts Nariman Behravesh
“The recovery will be slow and things will be fairly fragile,” and that might be the best we can hope for in 2010, according to Nariman Behravesh chief economist at Global Insight, the world’s largest economic forecasting and consulting firm.&qu
Is the U.S. economy running on fumes or picking up steam? That’s a question many are asking after Tuesday’s data showed a sharper-than-expected downward revision to third-quarter GDP but also a much stronger-than-expected November existing home sales repo
News that Ford expects to finalize the sale of Volvo to China’s Geely in the first half of 2010 caps a year that saw China overtake the United States as the world’s biggest auto market, something that would have been unthinkable only a few years ago. With Geely rival BAIC announcing its intention to harvest intellectual property from Saab, Chinese automakers are going into high gear in both their short-term goal of serving the high-octane domestic market and their longer-term ambition of retooling their manufacturing base to better serve the global automotive market.
Geely is China’s largest private automaker. Its charismatic founder, Li Shu Fu, is known as the Chinese Henry Ford. He has shown global ambitions and has pushed for Geely to become a global brand.
It’s a road well traveled, the highway from Asia’s industrial heartlands to the world’s garages. Japan and South Korea have blazed the trail thoroughly. Rather than ponder the significance for lumbering Western automakers who are shedding assets to stay alive, it’s worth wondering what Toyota and Hyundai make of their Chinese cousins.
Wednesday’s highlights:
Ford Motor Co (F.N) and China’s Geely are set to report progress as soon as Wednesday in talks to sell Ford’s Volvo unit to the Chinese automaker, two people with direct knowledge of the matter say.
Spyker Cars presses ahead with efforts to cut a deal for Saab with General Motors, with talk of possible backing from a Dutch billionaire fanning the Swedish carmaker’s faint hopes of an eleventh-hour reprieve.
Chinese Internet firms are eyeing more spin-off offerings after raising nearly $1.5 billion this year as they bank on strong foreign interest in high growth China plays.
Australia’s Macquarie agrees to acquire the derivatives business of private bank Sal. Oppenheim as a way to boost its presence in Europe, the companies say. Neither gives financial terms, but one source close to the matter said the deal valued the business — which focuses on equity derivatives and structured products — in the double-digit million euro range.
For more on these stories and the rest of the latest deal-related news from Reuters, click here.
And elsewhere:
German biotech firm Morphosys (MORG.DE), which supplies research services to drug majors, is looking for takeover targets to expand its range of experimental drugs, Chief Executive Simon Moroney tells a German newspaper. Reuters story here.
Waste management group Shanks has refused to open its books to Carlyle, its private equity suitor, until the new year after the US buy-out house refused to increase its 135p-a-share cash offer, according to the Daily Telegraph.
A group of institutional investors led by U.S. private-equity firm First Reserve Corp. is set to announce a roughly $2.2 billion cash infusion into Glencore International AG, the WSJ says, in a move that could be a precursor to an initial public offering of stock for the closely held Swiss natural-resources trading giant.
It’s been a long time in coming, but early 2010 should see the final consummation of the Novartis AG’s deal to buy Alcon, the eyecare company. As the WSJ explains, under that deal, announced in 2008, Novartis initially bought 25% of Alcon from Nestle for $11 billion. In the second step — which could happen starting January 1 — Novartis has the right to buy another 52% for roughly $28 billion.
The Royal Bank of Scotland (RBS) is considering selling parts of its estimated GBP15 million art collection, when the art market improves, as pressure mounts on state-owned banks to dispose of non-core assets, says Financial News (link via the WSJ). The collection of the bank, which is majority-owned bank by the U.K. government, comprises works by artists LS Lowry, Anne Redpath, Jack Vettriano, Patrick Caulfield and Peter Howson.
And Clusterstock says it has found “pretty much the perfect metaphor for 2009: Darth Vader ringing the opening bell at the New York Stock Exchange surrounded by a goon squad of Storm Troopers.”