Legg Mason's Unit Increases Countrywide Stake to 14.9% (WSJ)
Legg Mason is making a big arbitrage bet on Countrywide, as it now owns 14.9 percent of the company that may get bought out by Bank of America. Additionally, there's some hope that another bidder may emerge, which Legg believes may happen if Countrywide were to remove a poison pill. All in all, sounds a little risky to us. But, no doubt, Bill Miller is willing to pull out the stops to get back to his old S&P-beating ways.
Venezuelan State Company Stops Sales of Oil to Exxon (Bloomberg)
Is Venezuela freezing oil shipments to Exxon all that big of a deal? Our hunch is no. We can understand why people might think so, but if anything, we suspect that all this whole little episode will do is basically just expose the Chavez regime as a bit of a fraud. An analyst at CERA said the same, that it's all rhetoric, with little real impact likely. Wake us up when some rebels set a pipeline fire in Nigeria.
Delta CEO Waives Merger Compensation (WSJ)
We're always skeptical of airline mergers. That they'll happen and that they'll work if they do. But first they have to happen and it does seem like something is likely to occur soon, although we've been hearing that some big announcement is going to happen "any day now" for like three months. The CEO of Delta has decided to waive pay he'd receive in the event of a merger, which is taken as a sign that Delta is serious about getting a deal done. Perhaps. But why do CEOs get merger pay? Severance pay is one thing. And it's another thing if a merger would results in the CEO getting shown the door. But just as a payment to get a deal done, it seems like one of the more perverse forms of compensation, no?
Writers Vote to End Strike (NYT)
Now this is the real vote that mattered. With 100 percent of the votes counted, 92.5 percent of the writers voted to end the strike. It's not clear who the other 7.5 percent were. Probably the nerdy ones who have run all the regressions on the math and feel like they're getting shafted on digital revenues. Or maybe they're just the hardcore unionites that believe a strike is the soul of the union, the bracing tonic through which it finds its identity.
Yahoo employee Twitters his layoff (BTL)
Yesterday was ax day at Yahoo, as about 1000 folks got laid off. This was expected, and basically had nothing to do with Microsoft's bid for the company. In fact, it was originally announced to get people convinced that Yahoo has taking the hard steps on its own. Anyway, we can't get too excited about Twitter, the hot web2.0 messaging service, but interesting nonetheless to read a guy Twittering the layoff process.
Bank Bailouts: A Billion Here, A Billion There (Infectious Greed)
Interesting chart measuring the percentage of GDP that various bank bailouts have cost. The biggest, Argnentina in 1980-1982, which cost 55 percent of the country's GDP.
the failure of the superdelegates (Org Theory)
For some reason, we can't get as worked up about super delegates as some people. Is there something "undemocratic" about them? Perhaps. But political parties are private entities. Other countries don't have this system. The party elects the standard-bearer, so in essence, it's only super-delegates. The existing system seems like a nice mix. Plus, they only come into play if there's a stalemate, which is incredibly unlikely. If one candidate has a real substantial lead going into the convention, we'd be shocked to see it end up otherwise. In other news, Intrade has Barack Obama at $.75 to win the Dem primary. That's just a couple pennies of where he stood after last night's blowout elections, so despite their lopsided nature, they didn't really reveal new information that wasn't priced in. A little surprising, perhaps, since one of the big stories was his success among Women and Latinos. He's really going to have to break through in Texas or Ohio to punch higher at this point.
Criminalizing Capitalism (Houston's Clear Thinkers)
A good rant about the absurdity of criminalizing capitalism never hurt anyone.