Bank ratings intact despite LBO funding jam -S&P (Reuters)
Repeat after me: the problem is contained. That seems to be the message coming from S&P, which says that bank rating will be held steady... unless problems extend to investment grade credit. In the meantime, their models almost certainly don't foresee any problems, so no need to get worried.
Corporate Bond Risk Surges as IKB Reports Subprime-Loan Losses (Bloomberg)
Speaking of contagion, the subprime meltdown has claimed its first victim in Germany, as a bank there has reported significant losses stemming from losses in the US market. This is beginning to feel a bit like a made-for-TV disaster move, as some disease is rapidly breaking out, while biologists and epidemiologists sit in front of a big map of the world trying to predict where it will strike next. Meanwhile, the phone rings, and the person on the other end gives the somber news that they have to put a red pin over Dusseldorf.
Bancrofts' Jockeying Over Murdoch Deal Goes Down to the Wire (WSJ)
You already know what today is: the day we get some sort of 'yes' or 'no' from the Bancrofts. We have this nightmare that somehow the whole thing is going to get delayed and we'll be talking about this for the next six months. Word is that it's close. There may have been some late switchers to the 'nay' column, although it's hard to see how anyone has a good count right now. As far as we care, the family can do whatever the heck it wants at this point. Originally, we'd have said that it would be rubbish for it to reject the deal and screw over shareholders. However, the stock price has been high for quite awhile no, so any shareholders were free to sell out for almost the price the Murdoch is willing to pay. Thus, if the Bancrofts do refuse to sell, the only ones getting screwed will be the people that couldn't forgo one or two extra dollars. Seems they need a reminder about the old aphorism of picking up pennies in front of a steamroller.
Pearson lifts guidance for second half, posts first-half loss (MarketWatch)
If News Corp. is successful in acquiring Dow Jones, the big winner is likely going to be Pearson, particularly if Rupert Murdoch messes with the Wall Street Journal's style at all (which will happen, at least to some extent). Already there's been talk that the FT is the new WSJ, and you have to figure that the FT has a handicap, in that it's printed on pink paper. Pearson says things are looking bright, as it's raised its guidance for the second half of the year.
Deutsche Bank Payday Burgeons on Subprime Trading Bet (Bloomberg)
Not all of Germany is singing the subprime blues. Deutsche Bank, apparently, made significant bets against the subprime market over the last two years, and now is reaping the windfall. Congratulations to them for successfully anticipating and then profiting from a black swan. Taleb would be proud, particularly if this strategy had shown losses in every quarter for the last two years.
China Curbs Bank Lending to Cool Economy, Inflation (Bloomberg)
As we've said before -- seriously, this time China is going to do what it takes to cool things down. Seriously.
Monday on Wall St.: Jitters Rather Than Mergers (NYT)
Admittedly, it's sometimes hard to wake up on Mondays to write the Opening Bell. That's okay, though, because there's typically a plethora of large deals, like-for-like M&A or private equity, making it easy to write stuff up. But what if the dealflow dried up? Mondays would become hellish. We'd be scrapping the barrel for articles about obscure companies releasing earnings on Monday morning or debates about peak oil. Yikes. Please, let it continue. Then again, we could always be writing Dealbook, which might as well completely fold in such an event.
Whole Foods, U.S. Take Fight To Courtroom (WSJ)
Given everything that's transpire, the Whole Foods/Wild Oats/FTC trial should be a fun one to watch. Granted, we don't think that Court TV is going to have anyone on the scene, which is lame (perhaps CNBC should do a spinoff of all corporate trials all the time -- talk to us).
SOX is 5 (Ideoblog)
We'd be remiss not to note that today Sarbanes-Oxley has turned five. Wow, it's grown so fast in such short of a time. It's really still a boy. You know it's young because people still debate and talk about overturning it. That's not going to happen. Give it 10 years and the debate will die down. It'll grow old and mossy at which point people will forget that it was ever something that was dispute. Just completely settled law of the land.