Nestlé to Buy Gerber for $5.5 Billion (Dealbook)
Swiss food maker Nestle announced that it would take baby food maker Gerber off the hands of Swiss pharmaceutical firm Novartis for $5.5 billion. We haven't heard this in a long time, but has anyone met people that refuse to buy Nestle products for political reasons. That might've faded in the 90s, but Nestle once brought a lot of controversy on itself by trying to get poor mothers in developing countries to serve their babies formula instead of breast milk. You can read the whole thing under the controversy section of the company's Wikipedia page. We're not sure if many people are still harboring resentment over the issue (there was a major boycott at some point), but if there still are a lot of anti-Nestle people out there, then the company may not be able to extract full value from Gerber.
Vonage CEO Resigns (WSJ)
This story is hitting just as we get ready to hit the publish button, so forgive the lack of detail. Seems that Vonage, which is totally screwed, toast and on crack (among other things) has dumped its current CEO (he resigned, so you can make your guess what that means), and will bring Jeff Citron in as interim CEO. Of course, we thought the whole reason that Citron wasn't the CEO was because he was barred by the SEC, stemming from his time at Datek. So we'll have to see what the deal is there.
U.S. trade chief sees momentum in WTO trade talks (Reuters)
It hadn't really clicked before, but it seems like there have been quite a number of free trade deals signed over the past few months. Some have involved the US, while others have been bilateral accords between two countries. The funny thing is, all of this is supposedly coming at a time of creeping protectionism, or at least a period when the specter of protectionism looms as one of the most serious threats to the global economy. At least folks like Stephen Roach have been sounding the alarm about it for some time. But that doesn't seem to be materializing at all. If anything, things seem to be moving in the other direction, albeit in fits and starts.
Nassim Taleb's "The Black Swan" (Statistical Modeling, Causal Inference, and Social Science)
Tax day is just five days from now, so if you owe anything make sure you've got enough in the bank to cover the expenses. Also, be sure you have another $20 left over because that's the day that Nassim Taleb's new book "The Black Swan" will be available. Taleb fanboys that we are (yes he has flaws, we'll acknowledge), we hope to have the book completed by the 18th or 19th, and then for the next week, we'll be dropping references to it across our entries. Meanwhile, we came across Andrew Gelman's early review of the book, so if you're on the fence about it you might want to check it out. We once sent an email to Taleb, asking him if he thought -- as we do -- that the placebo effect is a myth. He responded that the question would be addressed in this book, which we're hoping that he follows through on. Please oh please.
U.S. Stock-Index Futures Decline Before Import Prices Report (Bloomberg)
And here we had been doing so well. The Dow had notched a very impressive winning streak, its best in years, as investors blissfully ignored a deteriorating earnings picture. Then yesterday came and the streak came to an end, which is ok, because all streaks must come to an end. But now bad news is creeping out again. The Fed minutes suggest that the governors want to revisit their own sanguine views on inflation. Meanwhile, import prices are on the rise, which may hasten the Fed's revisitation. And, since ultimately inflation is the numero uno enemy of stocks, the futures are already down, signaling that the up streak may soon be replaced by a down streak.
Borrowers may be hurt by subprime turmoil (Seattle Times)
It's really amazing that the National Association of Realtors gets quoted in news articles, as if its this totally unbiased research firm that just happens to always come to the same conclusion "that there's never been a better time to buy!!!" In a rare moment of moderate pessimism, the group warned that the continuing subprime fallout will make it harder for some people to buy a house (duh) and that this will slow down the budding recovery in home prices (huh?). In other words, even their warnings are just thinly veiled attempts to make the case that home prices are rising again.
For Black, the writing is on the travel memo (Toronto Star)
The American press does its obligatory summary of each day's Conrad Black trial, but it's obviously just going through the motions. Nobody here really knows (or cares) who he is, so there's only so many inches alloted to him each day. North of the border though, it's the trial of the millennium. Imagine if BIll Gates and Donal Trump were co-defendants in a major conspiracy case involving defrauding the entire Social Security fund. Today, the Toronto Star gets a handwriting expert in to examine Black's memos to figure out what kinda guy he was. Apparently, he's "intelligent, creative and sophisticated, although he's probably someone who can be evasive, secretive and devious." Thanks a lot for that.
Comcast Does the Fandango (Dealbook)
Yesterday, Comcast announced the purchase of movie ticketing service Fandango. We don't really get the deal, or how their businesses are a natural fit, but no big deal, since it's a tiny deal. That being said, we think it's time for Comcast to overhaul Fandango's branding and maybe get rid of the whole paper bags as mascot things, which really, really don't make much sense. Seriously, that's all we're asking. Otherwise, you've got our total endorsement.
The rich don't get richer - at least not in laboratory games (MoneyScience)
Sorry dear readers, but at least in behavioral economics lab experiments, people have a natural egalitarian tendency and want to take away from the rich while giving to the poor. This has to be pretty disheartening to hear for most of you. But don't worry, we're just talking about labs, not the real world.