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SunTrust poised to cut 7% of its workforce (Toronto Star)
If this keeps up, we're going to need to start a spreadsheet to keep up with all of the data. So far we've got layoffs at Bear Stearns, Countrywide, CapitalOne and Now SunTrust, plus a bunch more that we've probably overlooked. Between this news and hedge fund blowups, the Opening Bell practically writes itself. Actually, we stopped mentioning every last little blowup a long time ago. Boy did that get old quickly.
Luminent, Thornburg take liquidity steps (Reuters)
When you can't raise capital through traditional means, what do you do? Duh, sell off part of your soul to the devil at a steep discount. Mortgage buyer Luminent has announced that it will sell a stake in itself to an investor for a deep discount, just to keep the cash flowing. We could easily see this becoming a new strategy at hedge funds -- looking for companies with sever liquidity problems and then buying out stakes in them at below-market rates, capitalizing on their desperation. Then again, is any stock sale really below market?
KKR Financial to Raise $500 Million From Investors (Bloomberg)
And here's another one -- beleaguered KKR financial, affiliate of KKR, has announced plans to sell a stake in itself to investors at below market rates. Fallon Capital Management and Morgan Stanley will together buy $16 million shares at $1 off the list price.
Plaintiffs Find Payday Elusive in Vioxx Cases (NYT)
We were just thinking that it'd been awhile since we'd read anything on the Vioxx cases. Last we checked in, Merck had continued its impressive run in the courts, vindicating its decision to take on each trial one-by-one, despite the significant legal fees. As the Times notes, it's really been quite a victory for the company, as its yet to pay out anything, even in cases that its lost. You can probably guess the Opening Bell's stance on the whole thing, just as you can guess the Times'. The article seethes with resentment, noting that the general council who crafted the defense strategy has now been promoted, a Michael Moore like charge (promotions awarded for defending the company against patients...). Though of course he deserves to be promoted. Analysts now estimate $5 billion in total damages, down from a high estimate of $25 billion at one point.
Nasdaq retreat marks triumph for Furse (FT)
The NASDAQ's decision to unload its 31% stake in the LSE is a victory for the exchange and its chief executive Clara Furse. The move confirms that the LSE will be among the ranks of the consolidators, rather than the consolidated. Despite all of the deals that have happened so far, one does get the impression that we're only at the beginning of the stock exchange consolidation on wave. After all, there are still a ton of independent national exchanges to be gobbled up. Eventually, there's just going to be one exchange, open 24/7, with branches on every corner where you can plunk down a $20 to buy a share of some obscure Vietnamese trading company. Only then will the whole process be complete.
China Raises Rates for a Fourth Time This Year to Cool Economy (Bloomberg)
In a bid to -- get this -- cool down the economy, China has raised its lending rates for the fourth time this year. We're sure this will be as successful as every other attempt the country has made to do this in the last 5 years. Then again, we do applaud their attempt at precision. Rates were bumped exactly .18%, to 7.02%.
After the Tumult, Is It Buffett Time? (WSJ)
As the 'Breaker has noted several times in the past, Warren Buffett is a master opportunist. You can decide for yourself whether that's a good or bad or neutral trait, but he clearly has a gift for taking advantage of others' precarious situations to the benefit of Berkshire Hathaway shareholders. So is he facing the opportunity of a lifetime? We already noted that we're starting to see companies sell stakes in themselves on the cheap. And there's nothing Buffett likes more than to buy a slice of a company at a good price. Not to mention the fact that the guy has plenty of cash sitting around. While it's all speculation now, it's possible that Warren Buffett could be furiously whipping up spreadsheets, figuring out which companies to buy and when. Some thing that Countrywide could be a logical choice, but that's really because it's been in the news so much this past week.
Private-Rocket Venture Failing to Win Investors (WSJ)
Can't really say we're surprised.
Dont panic! (Megan McArdle)
This is mainly an excuse to note the fact that one of our favorite bloggers, Megan McArdle (AKA Jane Galt), has moved her blog to The Atlantic, where she is now paid to do her blog full time. Very cool. McArdle had previously been at The Economist, where she anonymously contributed to its Free Exchange blog, along with other magazine content (we assume). Had she not been writing anonymously/pseudonymously all these years, she'd certainly be a household name by now. Looks like that'll happen yet.