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?
Nissan's Turnaround Threatens to Skid (Washington Post)
Carlos Ghosn heal thyself. Just as (turnaround specialist) Carlos Ghosn looks to sink his fangs into GM, signs appear that Nissan may be running aground. Sales in the US appear to be sputtering, while its fleet of autos looks stale. It makes one wonder whether Ghosn is simply the Moses of the auto industry -- a man whose knack is in leading the lost through the wilderness, delivering them to the promised land, but then stepping back and letting others take the lead. Or, less Biblically, does Ghosn just want to ally with GM because Nissan is weaker than everyone thinks? Certainly something for Wagoner to think about.
Pickens bets on $80 a barrel (CNNMoney)
Does the oil market catch a cold when T. Boone Pickens coughs? We'll see as the legendary investor believes that the price of the dirty stuff will hit $80/barrel by the end of the year. Frankly, that doesn't seem all that ambitious or that he's really going out much on a limb. If he'd said 90 or even 100, then we'd have something to chew over and debate, and wonder about whether the wheels of the economy will grind to a halt. But $80? Show some guts man.
XM Installs New President, COO (BusinessWeek)
Satellite radio operator XM is shaking up their management ranks, a little, with the announcement that board member Nate Davis would take on newly created roles of President and COO. The company's been locked in a pitched battle with arch-rival Sirius, whose bet on Howard Stern seems to have paid off in increased visitors. Of course, the more cynical out there might rightly wonder why the company thinks its problem is that they don't already have enough executives, and that it needs to add one more. Then again, there are those who dispute that the company actually has major problems. Though it's seen its market cap wilt in recent years, some analysts say a natural even-ing is going on in the market. In other words, it may look like XM is taking it on the chin, but in fact the market share of the two companies were always going converge. Still, at some point investors will probably want to see a profit.
Goldman fund of funds heads for listing (Telegraph)
The typical investor is of course barred from participation in hedge funds. Well, not our typical investor/reader, but instead the everyday man on the street who thinks he's hot stuff cause he trades the Qs back and forth while his boss isn't looking at his monitor. Oh, and then there's Christian Baha's Superfund (is that still around anymore?), which even has a mid-town retail office. But there's been an increase of flotations of funds of funds, mainly on the London markets it seems, so that retail investors can invest in an extremely opaque, watered down, expensive and directionless assets. At least then they can say they have their money in hedge funds when they're in polite company.
India 'to pursue own trade deals' (BBC)
Well, if the so-called developed nations can't get their act together to hammer out a deal to end ag subsidies, it makes sense that the developing nations act on their own behalf. India, which is one of these countries that finds itself on the wrong end of the wishbone, when the US and EU conspire to hurt poor farmers is looking to strike a series of bilateral accords, so that it may open up free trade with specific economies. It's looking to Japan and the EU as likely partners in the negotiations.