Former Merrill exec gets $25 million for doing nothing; buys co-op originally appeared on BloggingStocks on Wed, 31 Dec 2008 18:00:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• The Wall Street Journal reported that is is not yet certain whether Merrill Lynch & Co Inc (NYSE: MER) will need to raise money. If it does, selling common stock could be expensive due to a 12-month protection the bank offered the investors that bought $12B in common and preferred shares earlier this year and selling assets like its interest in Bloomberg may present a different problem.
• The Wall Street Journal also reported that investigators from the European Union are probing deeper into the pharmaceutical industry in an effort to determine whether drug companies have used unfair tactics to increase prices and block competition. Investigators have reportedly ask for views on direct-to-pharmacy distribution channels, which Pfizer Inc (NYSE: PFE) and AstraZeneca Plc (NYSE: AZN) recently established in Britain.
• After Anheuser-Busch Companies Inc (NYSE: BUD) said it would reject InBev's $46B bid as "financially inadequate," InBev said it would launch a hostile bid. According to court documents, the Financial Times reported that InBev is preparing to launch a proxy battle seeking the removal of Anheuser's entire board.
• The Financial Times also reported that soaring energy prices are forcing U.S. consumer goods company The Procter & Gamble Company (NYSE: PG) to rethink how it distributes products. The company may consider shifting manufacturing sites closer to consumers in order to lower its transport bill.

Newspaper wrap-up: InBev says its bid for Anheuser Busch will turn hostile originally appeared on BloggingStocks on Fri, 27 Jun 2008 08:13:00 EST. Please see our terms for use of feeds.

The board of directors of Morgan Stanley (NYSE: MS) has sent a letter to shareholders defending John Mack, the company's chairman and CEO, and urging rejection of one shareholder proposal to push him out of the chairman's job. According to MarketWatch, "The endorsement came in response to a letter earlier this month from CtW Investment Group, an organization representing several unions, calling on shareholders to withhold their votes from Mack." The letter also suggested that two Morgan Stanley directors be pushed out.

Shareholders in the investment bank are understandably red with rage. Morgan Stanley's stock has lost almost 50% of its value over the last year and, at one point, was down almost two-thirds. The brokerage has already fired its president, but some who have lost money do not think that is enough. The CEOs at Merrill Lynch (NYSE: MER) and Citigroup (NYSE: C) have already lost their jobs because their companies where so badly hurt by investments in subprime mortgage instruments.

Separating the CEO and chairman jobs at banks and brokerages is probably a good idea, especially if the chairman has the role of overseeing risk management. Boards seem to have been blind to the massive chances that financial companies took when they put substantial sums into volatile securities.

Mack should count himself lucky to keep his job at all. Remaining CEO and passing the chairman's job to someone else to encourage a balance of power make sense and should be a model for other firms. Someone has to keep an eye on the risk profile of companies that have already lost billions of dollars.

Douglas A. McIntyre is an editor at 247wallst.com.

Morgan Stanley board defends chairman John Mack originally appeared on BloggingStocks on Sun, 23 Mar 2008 11:40:00 EST. Please see our terms for use of feeds.

We're reading monthly about numerous U.S. financial institutions needing to turn to foreign governments for money to stave off financial disaster. While some investors cry foul, alluding to nefarious plots to take over America, Bloomberg examines uber-investor Warren Buffett's take on what's occurring in the economic world today.

Instead of some global plot against the U.S., Buffett says that investments by foreign government-controlled firms are fueled by U.S. spending overseas, not political motives. These so-called sovereign wealth funds are merely responding to some to our own activities.

"This is our doing, not some nefarious plot by foreign governments,'' said Buffett, chairman of Berkshire Hathaway Inc. (NYSE: BRK.A), in his annual letter to shareholders. "Our trade equation guarantees massive foreign investment in the U.S. When we force-feed $2 billion daily to the rest of the world, they must invest in something here.''

Bloomberg reports that countries like China, Russia, and Dubai have deployed record central bank reserves to set up funds to invest as much as $2.9 trillion. We've already seen a flurry of activity. Investment funds from Singapore, Korea, Kuwait, and Abu Dhabi bought stakes during the past four months in the largest U.S. bank in terms of assets, Citigroup (NYSE: C), and Merrill Lynch (NYSE: MER), the world's biggest brokerage.

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.

Buffett: Not auctioning off America to the highest bidder originally appeared on BloggingStocks on Sun, 02 Mar 2008 12:10:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• The Wall Street Journal reported that in a list released last night by the FCC, Google Inc (NASDAQ: GOOG), Cablevision Systems Corporation (NYSE: CVC) and other "nontraditional" players are set to compete against more traditional wireless companies like Qualcomm Incorporated (NASDAQ: QCOM) and MetroPCS Communications Inc (NYSE: PCS) in the federal government's spectrum auction next month.

• Banks that include Merrill Lynch & Co Inc (NYSE: MER) and The Bear Stearns Companies Inc (NYSE: BSC) are reportedly in talks to help bail out struggling bond insurer ACA Capital Holdings, which lost $1B in the most recent quarter, according to two people briefed on the situation and reported by the New York Times; ACA Capital has guaranteed $26B in mortgage securities.
• Executives at Tribune Company (NYSE: TRB) were faced with last-minute questioning from bankers that were reluctant to fund the final portion of the $8.2B deal to take the company private, according to sources close to the company, the Chicago Tribune reported.

• Barron's Online's "Inside Scoop" reported that analysts are not convinced that the deal with Citadel is enough to save E*Trade Financial Corporation (NASDAQ: ETFC), as it does not eliminate E*Trade's $12.4B second-lien mortgage exposure, and the company could potentially face further customer attrition, which many think will continue to pressure the shares.

Newspaper wrap-up: Google, Cablevision to bid for FCC spectrum originally appeared on BloggingStocks on Wed, 19 Dec 2007 08:15:00 EST. Please see our terms for use of feeds.

In the latest string of write-downs caused by the mortgage mess, the Wall Street Journal reports that UBS (NYSE: UBS) may take a $7.11 billion write-down in the fourth quarter and that analysts expect that Citigroup (NYSE: C) has not yet finished announcing its write-downs. The big problem all the banks and brokerage houses are facing is that no one really knows how to value these CDOs because not all CDOs are the same. The underlying assets may or may not be at risk of default.

Merrill Lynch (NYSE: MER) took a more conservative view and wrote down its losses on these assets more significantly than Citigroup because it put lower values on some of its CDOs. Analysts expect that Citigroup, UBS and others may have to follow Merrill Lynch's lead by the end of the year as the underlying values of the mortgage securities they are holding comes to light.

In reality, no one can be sure of the value a CDO until they can actually sell it. There are no set rules on how to value these instruments. Until the mortgage mess started most of these holdings were considered safe investments and rated AAA. Obviously, the ratings agencies need to get their act together and come up with a standard. But the only thing any of us can know for certain is that the values will continue to drop until the mortgage crisis eases and we see a slow down in foreclosures.

Lita Epstein has written more than 20 books including the "Reading Financial Reports for Dummies."

UBS may write down more than $7 billion originally appeared on BloggingStocks on Thu, 15 Nov 2007 08:40:00 EST. Please see our terms for use of feeds.

GE after the bell 10/16/06: stock slips slightly on analyst downgrade originally appeared on BloggingStocks on Mon, 16 Oct 2006 17:49:00 EST. Please see our terms for use of feeds.

Apple's stock price jumped 15% last week thanks to the release of its new Boot Camp software.  Its investors hope this software, which enables Apple users to run Microsoft operating systems, will help Apple grab market share from its rival PC makers.

Merrill Lynch analyst Richard Farmer thinks Apple investors were a bit too optimistic about Boot Camp's impact on Mac sales, but still thinks Apple will benefit long term from its new software.  Farmer thinks Boot Camp has two barriers.  One is the $200 to $300 Windows license that must be bought.  The second is that fact that users must reboot their machines in order to switch operating platforms.

Apple's Mac is preferred by many graphics designers.  If Boot Camp makes it easier for Apple's users to communicate with other Microsoft based PCs, it should increase Mac's use in the workplace. 

Framer said, "we do expect some incremental Mac buyers and are raising our fiscal year 2007 estimate of Mac revenue share of the global PC market by 0.25 percent from 3.45 percent to 3.7 percent."  He also cut Mac unit sales estimates for the past quarter to 1.1 million from 1.3 million because MacBook Book Pro production did not do as well as expected.

Will Apple stock continue to soar this week? originally appeared on BloggingStocks on Mon, 17 Apr 2006 05:08:00 EST. Please see our terms for use of feeds.