General Electric to Buy Vetco Gray for $1.9 Billion (Bloomberg)
GE is apparently not too worried about the future of the energy markets. The company announced the acquisition of Vetco Gray, a maker of oil drilling systems, for $1.9 billion. Vetco Gray was another well-timed buy for its private equity investors, which took the company private three years ago for $925 million. However, when you factor in the leverage, the firms (3i and JP Morgan chief among them) made around 3.5 times their money. Not bad. Probably has something to do with why there's so much money in that business these days.
GM betting on a greener future (BBC)
Just in time for the sequel to "Who Killed The Electric Car?", GM has unveiled a brand new concept car, the Chevy Volt. Here's the idea: it runs on batteries, and you charge it by plugging it in to your electrical socket. And then of course, you charge it again when you get to work. Of course, just don't take any road trips with it, and less you've Google-mapped all of the key stops along the way where every few hours you'll have to recharge and wait around. Actually, this could bring back the great American roadside attraction. Novelties, like the world's biggest ball of rubber bands or giant statues of Indian chiefs will spring up once again, selling tourists a chance to recharge their cars and take some souvenir pictures. GM, congratulations, we're not skeptical at all on this one .
Poland Says Oil Deliveries Disrupted (AP)
Will this be the week that oil markets roar back to life? First, you've got the return of winter weather to the northeast. No more 72 degree days for awhile. Then, more importantly, you have a deteriorating situation in Europe, as Belarus is completely blocking Russian oil, preventing deliveries to Poland and Germany. Belarus and Russia have been going at it lately, with Belarus holding one key trump card: it's geography. Russia may do all kinds of nasty stuff, but unless it wants to re-annex Belarus, it doesn't have control of its territories. So yes, we do expect Russia to acquire Belarus, as part of its broader energy strategy.
Good bye Gretchen (Ideoblog)
Say it ain't so, Gret-Gret's won! First, she singlehandedly ended the career of Bob Nardelli, an event she'll probably have written about on her tombstone. And now here original bete noir, Larry Ribstein, seems to be throwing in the towel, noting how much more pleasant his life has been since stopping his weekly reading and bashing of the Morgenbot's column. Unfortunately, we don't have the same luxury as a tenure professor, so we'll be wading in the muck with her for the foreseeable future.
Highbridge Hedge Fund Buys Stake in Louis Dreyfus Energy Business (NYT)
Highbridge Capital Management, a hedge fund, announced that it has bought state in the Louis Dreyfus group, a commodities broker. As you should know, the Louis Dreyfus group is the same Louis Dreyfus as Julia Louis Dreyfus of Seinfeld fame, and since we assume that young Julia has some shares in the company, today represents another nice payday for her. Granted, the New Adventurs of Old Christine hasn't been quite the flop we all assumed it would be, so Julia isn't exactly starving these days. Highbridge says it bought the stake to give it more direct access to the commodities it trades.
Global Markets Face `Severe Correction,' Faber Says (Bloomberg)
They don't call Marc Faber Dr. Doom for nothing. Dr Gloom Boom Doom, to be precise, is living up to his name and encouraging everyone to liquidate their assets before a coming crash. Of course, this could easily turn into a self-fulfilling prophecy if anyone listens to his advice. At some point, people will sell their assets, en masse, and at that point markets will go in the tank. All we know is that Marc Faber tends to be, by far, the most inscrutable of all the analysts at the Barron's roundtable, who's advice is impossible co comprehend. But we'll have to remember him for next year's Halloween costume, since he is always scary.
Caremark snubs $26 billion bid, favors CVS (Reuters)
Caremark has rejected a $26 billion buyout offer from Express Scripts, opting instead to hook up with CVS, which is only willing to pay $22.6 billion. Sweet Jesus, are these people allergic to money? Actually, their rationale sounds fine. The company said the Caremark deal involved too many assumptions about costs savings, and it predicted the deal would take much longer to close amid anti-trust scrutiny. The CVS deal has already been given the green light by regulators, and it's expected to close this quarter.
Grading Bonds on Inverted Curve (WSJ)
We'd almost completely forgotten about it, what with all the good economic times and all, but apparently the yield curve is still inverted, and economists still think that it is a solid indicator of a coming recession. In fact, the duration of the inversion is getting impressive long, as it's been upside down since last July. But, there are of course those who dismiss the curve-obsesses as being old fashion and not with it. They argue that there are other reasons for the low rates on the right side of the chart, none of which portend weakness.