US heat stretches energy supplies (BBC)
As a heatwave engulfs the entire world, power is running low in the US. Of course parts of Queens remain without power, last we heard, while the state of California has declared a power emergency. It’s been urging consumers to reduce their use of air conditioning and other power-intensive devices. Even the local tech industry has been hit by a lack of power to computers. But if the lights go out, who are they going to blame this time? There’s no Enron to kick around. There’s no (aptly named, to use the cliche) Gray Davis either. Will Arnold take the fall? Seems hard to imagine. It’s always a tough spot for politicians when something bad happens and there’s no obvious criminal.
Betonsports Ousts Carruthers After His Arrest in U.S. (Bloomberg)
As if getting arrested weren’t bad enough, David Carruthers has been canned as the CEO of Betonsports. Of course, one can hardly blame the company as it hasn’t had contact with Carruthers since being taken in while changing planes on the way to Costa Rica. Still, it would seem only fair to allow him some honorary position, CEO emeritus perhaps. And it turns out there’s more to the arrest than just a desire to take shots at online gambling. Apparently, back in its pre-IPO days, the company held wild parties at its Costa Rica offices. We’re not sure what about these wild parties were illegal, though perhaps the logic is that only law-flouting companies have wild parties, so there must be a crime somewhere.
Trade Talks Fail Over an Impasse on Farm Tariffs (NYT)
Honestly, it wasn’t hard to see this one coming. Negotiations among six economic blocs primarily centered around agriculture subsidies were suspended, with WTO chief Pascal Lamy declaring little hope to resolve the impasse. Naturally, the powerful farm lobby opposed any deal that would have cut subsidies more than it opened new markets for export. While the Bush administration would like to spin this as a defeat, it’s probably relieved that it didn’t have to make any tough choices, or spend political capital lobbying congress to ratify a deal. If the administration wanted to, it doesn’t need a WTO agreement to push for agriculture subsidies. It could just attack, and attempt to repeal the farm bill. Don’t see hit happening.
Behind $21 Billion Buyout of HCA Lies a High-Stakes Bet on Growth
There are a some differences between HCA going private this time, and the last time it was taken private back in 1989. Back then, it was only worth $5 billion, so the company has grown a bit since then. And as Christine Hurt points out, we know longer call them leveraged buyouts. The leveraged is implied, and if you ever said the word leveraged at a cocktail party, or on CNBC, you’d be laughed at for being painfully quaint. And we don’t call the buyers ‘raiders’ anymore, perhaps for good reason. The acquirers of HCA claim they’re not looking to slash costs in a bid to juice cash flow. Instead they’re focused on HCA’s potential as a growth engine. Instead they hope to capitalize on the aging boomers, and their frequent trips to the hospitals. Of course, every healthcare company in the world has been banking on the aging boomers. Why do they think they’re so special that they can pull it off?
Archive for July 2006
Someone has done us all the enormous favor of resurrecting the trailer to “In Your Wildest Dreams”—a low-budget, straight-to-video film from the early nineties that tells the story of a high school senior who strikes it rich on the stock market by accidentally purchasing an under-performing tech stock. Soon he finds himself embroiled in an insider trading investigation and pursued by an unscrupulous trader dressed in full-out Gordon Gekko-fabulous fashion. It’s a bit, well, lessony for our tastes–almost a financial version of reefer madness movie–but the trailer also has some very fun moments.
We’ve got quite a few comments from people who want us to write about the most recent issue of Barron’s, which touts “10 cheap stocks” and a generally bullish tone. Unfortunately, today we’re feeling all fair and not at all bubbling over with the anger and bile that makes this sort of thing fun. So we’ll leave the job to the blogger at the helm of Roberto’s NASDAQ Trader, who writes:
Take a look at the cover of Barron’s this weekend here. Apparently it’s time to buy stocks according to Barrons. Spare me Barrons you are the same people who graced us with the Dow 12,000 cover in April here. You have no credibility and some of us know exactly what you are up too. In this pathetic piece by Barrons titled “10 cheap stocks” they give us the earth shattering picks of stocks like General Electric, Home Depot, Cisco, and Lehman Brothers to name a few. Let me get this straight you have supposedly the smartest minds writing for one of the most well known rags and you come up with those dogs. How do they keep subscribers? Maybe the cover should read “Time to Cancel My Subscription” it’s fitting isn’t it. Barrons is a compromised rag and they continue to demonstrate that with there ill timed advice. To the bloggers who like to promote them I wonder how you sleep at night. Shameful.
The best part is his kicker: “Full Disclosure: I hold zero subscriptions to Barrons.”
Propaganda at Barrons [Roberto's NASDAQ Trader]
DealBreaker has obtained a copy of Ken Langone’s memorandum supporting his motion to dismiss the case brought against him by New York Attorney General Eliot Spitzer. Before we got this, we called Wednesday’s battle between Langone and Spitzer a “smackdown”–and we thought we were kind of joking. We were wrong. It is so on.
“Strongly worded” doesn’t quite cover it. More like biting, even sarcastic. It says that Spitzer “ignored the evidence” and that his memorandum opposing dismissal is “breathtakingly misleading.”
The Langone memo goes on to accuse Spitzer of flooding the court with irrelevant documents in an attempt to cloud the issues. “[I]t is apparent that the plaintiff’s ‘strategy’ to is to submit as many documents as possible, and then mischaracterize them, in an effort to discourage the Court even from attempting to conduct the required search for an issue of material dispute fact,” the complaint says.
“Langone has suffered through [Spitzer’s] meritless public allegations of wrong doing for more than two years. These allegations have now definitively been show to be utterly baseless,” the memo concludes.
But don’t take our word for it. Read the whole thing.
And remember, you read it on DealBreaker first.
Per today’s DealBreaker Interview, below is an excerpt from Andy Kessler’s new book, The End of Medicine
I was back in New York again. The American Airlines shuttle across the U.S. – another 3 mrems of radiation.
The Grand Hyatt hadn’t changed much. Same crowded sidewalk next to Grand Central Terminal. Same bustling lobby. Same set of four or five escalators up and over and up and over until you reach the ballroom level. As with every investor conference, it is filled with scurrying mice in tailored suits, all looking for the next greatest thing. And for days, every thirty minutes in six different tracks, companies endlessly pitch their golden prospects. Every damn one of them sounds like the next greatest thing, so the mice scurry some more, discuss amongst themselves and probe and prod CEOs with insightful questions until the mice are so confused, they just ask someone else what they should buy.
Ex-hedge fund guy (and DealBreaker blogrollee)Andy Kessler, author of Wall Street Meat and Running Money, recently took time to talk to DealBreaker’s Carolyn Okomo about his new book, The End of Medicine, a witty, engaging examination of the heathcare industry in the not-too-distant future.
DealBreaker: Finance and technology has sort of always been your thing. In The End of Medicine, you utilize your expertise to analyze the healthcare industry. Was this an easy transition to make?
Andy Kessler: I spent 20 years looking for ever cheaper silicon that could change industries. Over the last few years, I’ve gotten bored. Wi-Fi and Wikis are cool, but a little dull. So I started looking for something else besides computing and telecom and music and stock trading and banking that technology would surround, squeeze, suffocate old business models and reshape in its image. In the meantime, a friend was diagnosed with cancer, only because he banged his head on a mogul skiing and an X-Ray showed a tumor on his neck. And a brother-in-law had a heart attack in the middle of the night. I wondered if there was some technology that could find this stuff early, before it was life threatening. Us baby boomers (I’m a late boomer at 47) are entering that fragile age.
So I started following doctors around, cardiologists, radiologists, researchers at cancer centers and universities, looking for silicon. What I found was astounding (and quite funny; I live to tell funny stories which is most of the book). It’s really just starting.
And the answer apparently is not “they remind us of things we heard about years ago but now seems horribly dated.”
Levitt: Selling Cable Is Like Dealing Crack [Multichannelnews.com]
- Use the Bloomberg command
NH BLG_DEALBREAKER <GO>
to access Dealbreaker
