Citigroup may cut jobs, take $1 bln charge: report (Reuters)
According to rumors, Citigroup is set to lay off 15,000 workers and take a charge of $1 billion with an announcement coming some time in the next couple of weeks. The 15,000 workers would represent approximately 5% of its workforce, although the company obviously isn't getting any smaller, since it may spend several billion on both Nikko Cordial and (possibly) ABN AMRO. Maybe the company just needs to make some room for its new guests. Out with the old...
Wimpey, Taylor to Merge, Create Top U.K. Homebuilder (Bloomberg)
The US housing market probably hasn't reached its nadir yet, but in the UK the bottom was seen a couple of years ago, and now the market it surging once again -- what a difference a gulf the size of the Atlantic ocean makes. And so, against this backdrop, two of the country's largest homebuilders George Wimpey plc and Taylor Woodrow have agreed to merge, in what will create the country's largest single homebuilder. Unfortunately for them, they don't just operate in the UK, and so they're hoping to see some job cuts and efficiency gains in the slack US market.
Xstrata Agrees to Buy LionOre Mining for $4 Billion (Bloomberg)
It was right around this time last year that all of the exciting M&A was happening north of the border in the form of the Canadian copper wars. All of that eventually cooled down in the mid- to late- summer, in part because there weren't many companies left. But, there are stull a few stragglers that weren't picked up the first time around. Switzerland based Xstrata PLC the world's largest nickel producer has said it will purchase Canadian miner LionOre mining for $4 billion. And here's the great news. According to analysts, the bid isn't all that high, so there's room for another bidder to emerge. Stay tuned for last year's sequel.
Ben Stein gets his clown suit back (Ideoblog)
This weekend at brunch, someone at the table took a big pile of paper out of their purse with the words "New York Times" written boldly at the top. "Hey, what's that?" we said. "Duh, the Sunday Times," said they. And it was at that moment that we realized that the New York Times now also prints on paper. Interesting contrarian move there. Thumbing through to the business section (it has its own physical section), we came across another one of Ben Stein's ludicrous columns, and it occurred to us that it would be fun to rip it apart a la Larry Ribstein today's Opening Bell. But then we realized that there's little point in trying to imitate the master.
Can Google find the pot of gold? (San Jose Mercury News)
When Google bought YouTube last year, everyone knew that the price was sort of expensive, and that the purchase exposed it to some fresh risks. Still, for the most part, most people were pretty bullish on the whole thing. It was Google after all, do they make mistakes? It's still way too early to give the deal a thumbs up or a thumbs down, but there's no question that sentiment has turned fairly significantly. The legal woes are one problem. The other is that plenty of sides are doing the same thing is YouTube, and it looks like many of the big content owners are interested in keeping their ball and going home, or something like that. Granted, YouTube isn't entirely predicated on having professional content, though the company obviously that it could house and monetize these clips, which it certainly hasn't.
Bubble, bubble, toil, and trouble (Econbrowser)
This blog post is from Friday, but still a worthwhile read if you have a few minutes. Basically, economist James Hamilton lays out a good case arguing that it would be a mistake to characterize real estate as either a bubble or (now) a bursting bubble. The distinction he draws is between a hot market, which real estate certainly was for several years (and still is in places like New York and San Francisco), and a bubbly market, with prices that seem to move irrationally -- which, he argues, the current prices aren't.
Heart Stents Failed 'Courage' Test (WSJ)
It's hard to imagine any sub-sector of any industry more precarious than the stent space. As we've pointed out before, the companies doing heart stents seem to be the subject of more recalls and questions about the efficacy of their products than any other space. Once again, a trial has proven to be a disappointment, although this time it was old fashions bare metal stents that failed to perform, rather than their fancier drug-eluting cousin. Either way, not a surprising result if you know their history.
First two years best for hedge funds (FT Alphaville)
A new study indicates that the first two years of many hedge funds tend to be their best, and that after that, things start to level off. This is interesting, but probably not too surprising. After all, if a hedge fund actually has "hedge", as opposed to a strategy of "we buy stuff that goes up... with leverage", then after a couple of years, that hedge is likely to disappear as it gets arbitraged away.
Livedoor Given Japan’s Largest Corporate Fine (Dealbook)
Japan's Livedoor was forced to pay the largest corporate fine in the country's history, which came to a whopping $2.4 million. The fact that that's the largest in history really says something. When a Wall St. bank earns a fine of that amount, it barely warrants a mention. It might get written up in some one paragraph article buried deep in the journal (though on the front page of the Times business section). But it might not get mentioned at all. Of course, Japan is starting to go down the same road we have. Have you heard of J-SOX? It's the Japanese Sarbanes-Oxley, which was of course implemented in the wake of Livedoor. It's due to hit in 2008.