Northwest's dumpster-diving tips crash (AP)
This story is bound to go down in the annals of 'reasons why some people hate corporate America'. As everyone knows, Northwest is in quite a bit of trouble, and its bankruptcy restructuring has been far from smooth. Every other day there's a hint of a possible strike. Realistically, they should probably just pull the plug on the company, though we thought that about half of the airlines that are now profitable. So as the company is set to make major layoffs, it kindly handed out a booklet telling employees how to deal with being laid off (their version of severance). For some reason, people didn't take kindly to this tip: "Don't be shy about pulling something you like out of the trash." Unfortunately, the company has now removed this tip from the website, and is changing the book, but god, it's hard to imagine a stupider, less sensitive move. Here's our tip for soon-to-be-laid-off-employees: Put that booklet up on eBay, it's bound to be worth something.
Airlines set to sue for £300m over terror losses (Times Online UK)
There's something incredibly audacious about airlines suing their government for the lost revenue caused by last week's terror crackdown. A group of European airlines, lead by Ireland's RyanAir, want the government to pay up to £300m for all the problems they caused when they arrested the suspected terrorists, hastily implemented sweeping security changes, and caused the cancellation of several flights. Of course, others would point out that had the government not done anything, and had a major terrorist attack happened, the airlines would be out for a lot more money than this. But, in defense of the airlines point of view, government really do suck at this stuff. Does anyone really think that banning liquid is going to stop a terrorist from bringing a bomb on a plane? Or what about confiscating iPods from teenagers? Perhaps the airlines should go further and sue to get the government out of airport security altogether, and make it totally unregulated and privatized, as the Times' John Tierney suggested this weekend.
Yankees Get Lower Rate Than Mets on Stadium Municipal Bonds (Bloomberg)
If you follow baseball, you know the fanbase has really been taken over by geeks in the last several years; these guys are fond of coming up with their own statistics, or explaining why some guy you've never heard of is actually the best player in the league base don his win shares. Now we have something that baseball geeks and finance geeks can chew the cud over. Both the Mets and the Yankees are floating nearly identical bond offerings to build their new stadium. Both will pay off the biggest portion of their offering over 40-years, and they have the same credit rating. Yet the Yankees got a yield of just 4.51%, while the Mets have to pay 4.57%. So perhaps a new stat can help predict future wins based on market rates for their bonds. Also, it's pretty obvious that a lot of fans wanted in on their offerings. Both teams got some pretty sweet rates that even Uncle Sam is jealous of. And US Bonds are 'risk free', right?
Former BetOnSports chief executive out on $1 million bond (St. Louis Post-Dispatch)
The list of former British business executives just hanging out with nothing to do in the United States just grew one person longer. David Carruthers posted $1 million bail, though the terms of his pre-trial incarceration are pretty strict. He can't leave his suite at the Clayton hotel unless the trip is pre-approved. It's not clear how strictly they're defining suite. Hopefully, he can at least go down to the lobby to get a bagel and a USA Today.
Teck surrender sets stage for new era of mining mergers (Globe and Mail)
In the end it was all too much for them... or something like that. By now you know that Canada's Teck Cominco gave up on its bid to acquire Inco meaning there'll never be a company called TeckComincoinco, which is a loss. Remaining now are PhelpsDodge and Companhia Vale do Rio Doce, and it seems likely that Vale is in the driver's seat. It has the heft to offer the most cash for Inco shares, as it was them, not Phelps, that caused Teck to give it up. After his ambitions fell through, Teck's CEO bemoaned the fact that nationalism (the desire to keep the Canadian Inco owned by a Canadian company) was no match for cash. That's nice, but if shareholders left cash on the table because they wanted to sell to a Canadian company, they'd need their heads checked.
Web Two Point Ooh: Ladies' round (Valleywag)
Silicon Valley gossip rag Valleywag is running a tournament to determine the hottest people in the valley (and specifically in tech). This is pretty standard fodder for any gossip site. It's about the easiest thing to run, and people always like it. But take a moment and check out the pictures. Yeah, whatever. Yet another reason to t be glad you're on the right coast. If we were to ever scrape the barrel of ideas and run something similar, the Wall St. #8 would crush their #1.
Cable Industry May Need to Spend Heavily on Broadband Upgrades (WSJ)
This was not what the cable industry playbook was supposed to look like. The whole "thesis" for companies like Comcast was that after years of mad capex to build out their broadband network, it was finally time to sit back and take in the free cash flow. But savvy investors had a feeling that capex-intensive industries would always be just that, capex-intensive industries. Now a new internal report is confirming this -- the cable companies may be in for another round of upgrades to compete with the telcos, which are paving the streets with high-speed fiber optic lines. The cable companies are playing the spin game, calling the report speculative and flat out wrong. But whatever, if Verizon gives 10x faster internet speeds in a few years and can offer me TV as well, we're switching.
Drop in clothing prices key in lowering inflation (AP)
It's been a strong week for the market. First we got the cease fire rally and then a two day rally celebrating benign inflation data. Perhaps the economy will just go stag, no need for flation to come along. But whether you, as a consumer, experienced inflation last month has a lot do with what kind of purchases you made. Did you buy a plane ticket? You probably got squeezed. Did you buy a lot of gas? Ouch. Did you eat a bunch, or make a big dinner for your friends? Sorry. But if you bought a lot of clothes, you did well. Maybe it was the month that you threw out all of your sucks and replaced them. Perhaps you splurged on a new suit. Or maybe you went to the Abercrombie Store, and ended up buying something even though you promised yourself you were just going as a social experiment. If you did any of this stuff, well done. Clothing was cheap last month, and if it hadn't been, the inflation picture might have looked ugly. Thank god we get to exclude the crucial stuff from the data.