Halliburton to move headquarters, CEO to Dubai (Reuters)
It's hard to imagine that any news could better capture the spirit of the times than this. Halliburton, the most reviled company in the world, is moving to Dubai. The Houston-based oil services firm will still keep some office in Houston, but its CEO and main headquarters will be located in Dubai, and it plans to list on a regional stock exchange, once it gets there. You might expect US politicians to simply say good riddance to a company that many have made a career our of bashing. But, naturally, some claim to be incensed, and are demanding hearings. While some are wondering whether there are tax advantages associated with the move, it seems most likely that the move is more strategic. Dubai is hot right now -- a lot hotter than Houston -- and the company wants to be where the action is.
Citigroup Pressed to Raise Nikko Offer as Funds Balk (Bloomberg)
Citigroup may have to raise its offer for Nikko Cordial, after the company's biggest shareholders expressed concerns that the initial bid was too low. It doesn't help Citigroup that the Tokyo Stock Exchange has decided not to delist the company over a major accounting scandal, which removes some of the pressure on shareholders to sell out. In fact, it was the specter of imminent delisting seemed to allow Citigroup a chance to get Nikko for a song.
Subprime journalism (Ideoblog)
It's Monday, we're linking to a Larry Ribstein post, and the title is "subprime journalism", whoever could he be talking about? Yup, Ribstein's decision to go cold turkey on Gretchen Morgenscreed (nice one) didn't last for long. She's momentarily moved on to a new topic, subprime mortgages (don't worry, she'll be back to executive pay shortly), so it's worth seeing what she has to say. Well, actually, that's wrong. She really doesn't have much to say at all. In her typical style, she just piles on, and invokes Enron and WorldCom without any serious analysis. In her view, just saying those names is probably enough. And in fact it probably provokes a predictably satisfied reaction out of many of her loyal readers that otherwise would never make it past the Sunday puzzle, Week in Review or Arts section.
KKR to buy Dollar General for $22 per share (Reuters)
It's not the biggest private equity buyout of all time, so it's really not clear why we care. But if you own shares in Dollar General, be aware that the company has accepted a $22 buyout offer from KKR, and will be taken private. Including debt, the deal is worth $7.3 billion.
http://www.marketwatch.com/news/story/us-study-seeks-changes-earnings/story.aspx?guid=%7B26B5D99F-80E2-430A-9CB8-FB142B71AC00%7DStudy seeks changes to earnings guidance, more (MarketWatch)
The US Chamber of Commerce has been harping on this point for a long time, and now they're making the case again. The group does not think it makes sense to give out quarterly earnings guidance, as it believes that the focus on hitting short term results leads to a overemphasis on short term performance, to the detriment of long-term health. It's really hard to see that changing, and -- although we can't prove it at the moment -- we sort of expect there to be some efficient markets explanation for why this doesn't matter at all.
Broadcasters use antitrust rules to kill off weaker competitors (DC Examiner)
In theory, anti-trust law should help the little guy stave up the big bad monopolist. Quick, think of an example where it works this way. As a certain Dealbreaker sibling points out, in practice, it's often the reverse. In the case of the proposed Siriux-XM merger, it's the terrestrial radio behemoths standing athwart its smaller competitors, Sirus and XM, because they recognize that a merger between them could create more robust competition in the radio space. They say, of course, that the merger would create a monopoly in satellite radio -- but if they really don't have any competition, then why do the terrestrial radio stations care?
China to Develop Commercial Jet by 2020 (AP)
We keep hearing so much about the Chinese auto industry, which is supposed to take over the world any day now. While we're waiting on that revolution top happen, here's another to write down. China promises that by 2020, it will have developed a major full-size airplane, to compete with Boeing and Airbus. The government-funded airline industry is due to deliver its first regional jet next year, and leaders are brimming with confidence. While Boeing may be nervous, it's really Airbus that should be worried, as it may lose its monopoly as the premier government-backed plane maker.
Of Private Equity, Politics and Income Taxes (NYT)
Despite the government's seeming omnipotence, it's had a hard time consolidating power over the hedge fund industry. So, it's shifting its sites to the other tower of power, the private equity guys. Iowa Senator Chuck Grassley, a Republican is looking at the way PE firms are taxed, and argues that they're improperly booking their gains as capital gains, when in fact they should be taxed as income. Andrew Ross Sorkin seems to agree, and appeals to the managers' sense of patriotism to explain why they should be eager to face a higher tax bill. We'll just say that in our experience, patriotism has never been a reason to want a higher tax bill. If anything, it's a friendly business climate that make for the best reason to be patriotic.
Florida Is Favored to Win NCAA Tournament, Vegas Oddsmakers Say (Bloomberg)
This article appeared on Bloomberg and it involves money and odds, which in our book is enough to to write about it. So you have three days to fill out your brackets. While baseball gets plenty of attention from the stats-wonk quant crowd, now is time to focus your analytical skills on college basketball, and fill out a winning bracket. Can anyone point to some research on how best to do this? We'd love to gain an edge if anyone knows of one.