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Smith & Nephew to bid $11B for Biomet (Reuters)
The joint implant market is about to get fused together. No wait, that doesn't work. The joint implant market is about to see some compaction. Eh, that's ok. Either way, Europe's top medical device maker, Smith & Nephew are looking to make a play for Biomet, in a bid to rocket to the top of their market and break the bones of competitors J&J, Stryker and Zimmer. But the move is by no means a done deal. Other bidders may emerge, looking to stick their ball in Biomet's socket without rupturing the company's bursa sack.
S.E.C. to Ease Auditing Standards for Small Publicly Held Companies (NYT)
Good news for small companies: the SEC has finally come up with its rules explaining how SarbOx applies to smaller companies, clarifying the controversial section 404. Bad news to all the IT firms, software makers, auditors, consultants and lawyers that make a fortune helping companies weave through the labyrinthine regulations. Just kidding, it's doubtful that most of that business is really going to evaporate. The commission has stated that auditors must only examine controls deemed to be material to the company's results, which should leave plenty of wiggle room for both companies, and for zealous prosecutors claiming that the companies were wiggling too much.
China OKs 2 foreign banks to offer overseas investment products (Marketwatch)
Will the financial services sector come to the rescue of the trade deficit? As China liberalizes its banking sector, and American banks increasingly set up shop, offering a range of investment products, will we finally start to get back all the dollars we've been sending over there? As in all of our greatest times of need, it's this industry which lifts the economy onto its back, whether it's trade with China, or singlehandedly propping up the Manhattan real estate market, when things are looking slack.
Dairy Industry Crushed Innovator Who Bested Price-Control System (Washington Post)
We're sometimes surprised to find out that inflation is one of the things that the government cares about. That's because we've seen so many stories like this, about cartels that crush price cutters with the blessing of the government. Recently, a supermarket was fined because they gave a discount on gasoline if drivers did their shopping there. The horror. And in California, the milk producers ganged up on a dairy farmer, who had figured out how to make the system more efficient and reduce the price of a gallon by $.20. Of course, it's not illegal to go outside the diary system, per se. Surely, there's no shortage of $8/gallon organic milk varietals found in California supermarkets. But go the other direction; start bottling plain white stuff at a better price, you better watch your utters.
Goldman Hires Amaranth Traders as Hedge Fund Stumbles (Bloomberg)
We're glad to see that Amaranth traders are landing on their feet. 17 of them have landed at Goldman Sachs, where they will be tasked with resurrecting the company's high risk investments, after its flagship hedge fund suffered major declines recently. Something about this move feels a little bit like a roulette player using the Martingale system. That system has players double their bets after every loss, so that the moment they get a victory, they'll recoup all of their previous losses. Of course if you keep doubling, you can quickly run into betting caps and ruin your whole vacation. Still, good to see that the name "Amaranth" isn't like having the name "Enron" on your resume, back in 2002.
Northwest Hires Investment Bank for Possible Sale (Dealbook)
We've been skeptical that any mergers are actually going to occur in the aviation sector, despite all the talk of late. But maybe we'll get one; apparently, Northwest is in talks with a bank to help it explore strategic alternatives. But look, it's Northwest, the company that's had more troubles and labor disputes than all the rest combines. This is the company that told its employees to go dumpster diving for food, after they'd been laid off. So really, they're the exception that proves the rule.
California crops again put in question (Boston Globe)
Who needs bioterrorism when you have the US food supply? In case you haven't noticed, there seems to have been a major deterioration in crop quality lately, or maybe it's just in the news a lot more. And though we may be losing the so-called agricultural base in this country, maybe we should look at whether it's worth hanging on to. At least the service-based economy isn't prone to e. coli outbreaks.
Nissan planning new fuel-cell vehicle for early 2010s as part of environmental strategy (AP)
Right on schedule, just as all the futurologists predicted, Nissan is promising a commercialized fuel-cell vehicle for the year 2010. Several questions remains up in the air, of course. Like, how you're going to fill it up, and how the fuel is going to be produced in a manner that's consistent with being good for the environment. Well, that's probably why they're going to wait a few more years to release it, just to have some time to figure these questions out.
Tax, trade bills passed (Marketwatch)
The lamest of lame ducks, the post-election Congress, got a few things done in its final week of work for the year (lazy). They passed some trade bills, with Vietnam and Haiti, and passed some tax cuts for offshore drillers, just as a reminder to America that the Republican party hasn't completely lost its principles. Outgoing Senate Majority Leader Bill Frist said, "Just when everyone bets against us, Republicans put together a broad package of energy, tax, trade and health care measures". Um, no, it's not that everyone bet against you, it's that everyone voted against you. You lost. The betting window's long been closed.
Sabre Holdings Is on Auction Block (WSJ)
It wouldn't be anywhere near a record deal, so there's no reason to get excited, but according to "people familiar with the matter", Sabre Holdings is on the block, ready to get taken down by private equity. Remember travel agents? They still exist. If you walk through any ethnic neighborhood of Brooklyn, there are still plenty of them, with big posters in the window featuring sunny getaways back to Poland. They're probably the ones still using Sabre Holdings services, the original database of flights, cars, and hotel rooms, before all that stuff went online. Just guessing that any private equity buyer is probably eying all these travel agencies as an ongoing source of revenue that most public investors are totally ignoring.