Sanofi drops after FDA staff comments on Acomplia (Reuters)
Sanofi's Acomplia is thought to be the wonder of wonder drugs. Weight loss? You got it! Depression? Gone! Addiction? Gone. Unfortunately, it would also appear to lead to an increase in suicidal thoughts, which actually seems to be fairly common among drugs that mess with the mind. The drug, which is already on sale in Europe, had been expected to be a $3 billion per year franchise, though if the government (and insurance companies) put restriction on it, that could be just a bit of a problem. Or the FDA could not approve it at all. Meanwhile, if you're looking to lose weight, a healthy diet and exercise go a long way.
ESL Is Said to Seek Billions in New Investments (Dealbook)
There's a big fear that hedge funds and private equity funds are swimming in too much cash, as their outsize returns have attracted more capital than they know what to do with. At least one UK PE firm stated as such last week, and common sense dictates that this would be so, since the number of undervalued firms is limited, while arbitrage opportunities become harder to come by (though there's always wine funds). And yet Eddie Lampert is on the hunt for more cash, as he's looking to raise between $3 and $5 billion for his main fund. Is they any question of whether he'll be able to raise that much cash? Nada. He's probably raised it already.
For KKR, Bumps in Its Buyout Binge (WSJ)
Meanwhile, The Journal reports that KKR is looking for partners to help it finance its purchase of First Data Corp. Apparently, some of its traditional partners are feeling "tapped out", while other institutions are overexposed to KKR, on account of the number of deals it's doing. The situation may hasten the long-predicted meeting of hedge and PE funds, as the latter increasingly turn to the former for financing.
Are Americans too stupid to handle credit on their own? (Free Exchange)
The Economist's blog Free Exchange discusses a professor at Harvard who argues for more regulation of subprime mortgages on the basis that since we regulate toasters (so that they don't explode), we should be regulating something far bigger, like mortgages. First of all, it's not obvious that we need to regulate toasters. Just cause we are, it doesn't mean we should be; reasoning by analogy fails when the premise is on shaky grounds. What's more, mortgages don't just combust all of the sudden. You can't leave for work one day and then return home to see that your mortgage has wiped out your home (the way a toaster fire could). It's the borrower that combusts, which is obviously a bad situation, though not something within the control of mortgage regulators. Already, the supbrime collapse has made housing less available to people with bad credit histories, so it's not even a theoretical complaint to say that more regulation of this industry would only lower the supply of homes.
Employers in U.S. to Keep Hiring at Same Pace, Manpower Says (Bloomberg)
In the end, the only economic indicator that matters much to people is jobs. Sure, inflation hurts a little bit (after all, it's the other component to the misery index), but when people are working, they're happy, and when they're not, they're not. Pretty simple. The latest report from Manpower finds that business has no plans to slow down on hiring anytime soon, which is mainly a relief to politicians, since most real people aren't paying attention to Manpower surveys. Of course, from a business perspective, it's worth challenging the notion that the need to constantly be hiring more people represents some happy state.
Peru Copper finds a buyer in China for $840 million (Vancouver Sun)
Peru Copper, a copper company based on Vancouver that operates in Peru will sell itself to Aluminum Co. of China for $840 million. It's not a real big deal in terms of dollars, but with the amount of cash that China has sitting around, it could afford to do more than 100 of these deals. Of course, then all that cash would be back on this side of the world, so maybe it's no big deal.
Top Executive at EADS Quits in Dispute Over Marketing (NYT)
Jean-Paul Gut, a 24-year old veteran and COO of EADS, has announced his resignation from the company due to disagreements over handling certain strategic and marketing issues. The move is seen as pushing the company into further turmoil, as it's already reeling from the lack of success at Airbus. But it's hard to see how the loss of any veterans could really be too damaging. After all, EADS veterans are the ones that got the company into this mess in the first place. Probably time for a fresh cleansing across the board.
Buy A Loft, Get A Land Rover (Jalopnik)
It's been a cruel irony of the housing slump that some of the hardest hit markets are ones that weren't the standout gainers to begin with. In places like New York and Silicon Vally, prices are still growing, just by not as much. Meanwhile, in Detroit, things are looking pretty ugly. Not only is the housing market have its own endogenous issues to deal with, but things are being compounded by the weakness of the Detroit automakers. Seems a lot of UAW workers are being forced to scale down on second and third homes. In fact, it's gotten so bad, it would seem, that one loft is offering a free two-year lease on a Land Rover for buyers. Hmm, maybe some enterprising investors could find a way to buy the loft, rent it out, and then lease the Land Rover to someone else, making a profit.