Barclays Bank Makes Inquiry on Takeover of ABN Amro (NYT)
Britain's Barclay's has brought up the idea of a merger with the Netherland's ABN Amro, a move which would create a $155 billion banking giant. It would also put Barclays in the same league as larger rivals HSBC and RBS. It's probably not going to be so easy. For one thing, other bidders may emerge; names like ING and Banco Santander are being thrown about. Also, it's Europe. Now in theory, the whole idea behind pan-Europeanism or EU-ism is that countries should be able to buy each other across borders, and it shouldn't make any difference at all. But most European politicians still get really hung up on nation of origin, so it's not hard to imagine some Dutch politicians worrying about whether the combined company would be Dutch enough.
U.S. stock futures point to higher open (MarketWatch)
From the look of things, today promises to be a good one. The snow on the ground should do some serious melting, and it'll at least be warm when it rains in the afternoon, so no sleet. Also, the Asian and European stock markets are setting the right mood, so that helps. Also, there's a smattering of M&A news today, including the aforementioned early-stage courting between Barclays and ABN Amro, and you know how the markets love mergers.
US Airways works to find flights for stranded travelers after weather clears (AP)
The weekend almost turned out good for jetBlue. The company diligently canceled its flights, just like all the other airlines did, and in fact it was US Airways that had the most logistical problems. It just proves that these meltdowns can happen to any airline, so jetBlue looks better in comparison. But then it went ahead and squandered everything by having a plane malfunction early in the flight and returning to the departing airport. Apparently, a big part of one of the engines just fell of the plane, which really doesn't do a lot to restore confidence in the airline.
The Great Unraveling (Morgan Stanley Global Economic Forum)
Morgan Stanley's Stephen Roach has been pretty negative on the world economy for quite some time, as anyone knows. Of course, you actually picked stocks based on his overall advice, you'd be doing horrendously, though you would've had a couple good days over the last few weeks. And now (in retrospect), it's clear to him that subprime is the new .com. It's a matter of spillovers. When the last bubble burst, it wasn't just the .coms that went down, but the much broader market. To Roach, the mistake is in focusing too much on the subprime market as being distinct from the broader housing market, which he says is in serious trouble.
The Renter's Manifesto (Slate)
Those who rent their dwellings are frequently chided by their condo-owning friends for being, well, idiots. "I'm building up equity; you're throwing your money down the toilet each month..." Stuff like that. Of course, it's not so simple, but if you're just in a bar, you don't typically have much time to explain the nuances of renting vs. buying, and why, at times, the former is the superior choice. Tim Harford, writing in slate, points to a study suggesting that home ownership is correlated with unemployment because the owners of homes are less flexible and less able to go where the jobs are on a moments notice. They get tied down to economic tar pits like Detroit. This isn't itself conclusive evidence against home ownership, but it is indicative of a broader point; home owners' lives typically revolve entirely around their home, the condo board, the coop board, renovations, their refinancing, their new kitchen, their new bathroom etc. Renters tend to fret about prices, but generally aren't so obsessed with their dwellings.
Earthy crunchy… (Footnoted.org)
Footnoted.org went trawling through the latest 10-K of Wild Oats market, and found that CEO Perry Odak resigned last October in part because he and the company couldn't agree to adequate terms of compensation. We were wondering why that name Perry Odak sounded so familiar, and then we realized (from the time we spent living in Vermont) that Odak was formerly the CEO of Ben & Jerry's. This made us realize that there's a whole segment of the executive population that must specialize in this kind of thing. They probably go from one green company to another, and within that community they're probably big stars. Maybe this is totally obvious, but we hadn't thought of that before.
Europe's 'Ever Closer Union' Drifts Apart on Anniversary's Eve (Bloomberg)
We mentioned above that while the EU is supposed to be all about holding hands and loving a single Europe, underneath everything lies significant tension and patriotic sentiment. Turns out, this week is the EU's 50th birthday, and as Bloomberg notes, the sentiment is not all celebratory. Things are increasingly complex, and with 27 countries now members, there's a lot of disagreement between parties. That being said, who can really be surprised by this. Nobody likes to turn 50.
Daimler Unions Vow to Fight Bid (WSJ)
Big surprise there.