Have a look at WSJ colleague Evan Newmark’s “Deal Journal” blog headlined, “Taxpayers Rejoice, Saturn Is Dead.” Evan argues that American taxpayers, General Motors and Roger Penske himself will be better off without Saturn, whose commercial raison d’etre evaporated long ago. His last line’s pretty scathing: “The sad truth is that the U.S. car market simply can’t support Saturn. And we will find out soon enough that it can’t support Chrysler, either.” I would add that GM itself needs to scuttle one or two more brands. The Buick and GMC names should be killed, and GM should shift to a streamlined Chevrolet-and-Cadillac brand strategy. Also in automotive news, today’s September car sales are abysmal, reflecting the foolishness of the U.S. government’s Cash for Clunkers program. In effect, Uncle Sam spent a lot of money to get people to trade in older cars for newer ones; people dove into the market; auto makers sold down inventories and ramped up production; the program ended; people stopped acquiring new cars; and – shock, horror! – car sales fell off a cliff. To quote my News Corp. colleague Homer Simpson: Doh!
Archive for October 1st, 2009
Entertainment, Internet, Mergers & Acquisitions / 1 Comment
Comcast doesn’t want to be a just a utility anymore.
That’s one way of looking at reports that the nation’s biggest cable operator is in talks with General Electric about some sort of hook up with GE’s NBC Universal business.
The majority of Comcast’s business today is distribution. It’s like being in the power business – these companies own the lines to your house and create the electricity that gets pushed through those lines. Except with Comcast, they don’t create the electricity.
Banks, Credit Markets, Federal Reserve, U.S. Treasurys, Uncategorized / Comments Off
Narayana Kocherlakota, former chair of the University of Minnesota economics department, has been tabbed to become the president of the Federal Reserve Bank of Minneapolis.
Though only five of the regional Fed presidents get to vote on interest-rate decisions at any one time, there are only 12 regional slots in total, so each one is important.
The Wall Street Journal today, in reporting on the appointment, wrote in part, “many of his papers have been highly theoretical works focusing on imperfections in financial markets.”
Economy, Tomorrow's News Today Video, Unemployment / Comments Off
Paul Vigna and Eduardo Kaplan discuss the latest report on manufacturing and the weekly jobless claims numbers.
The London Stock Exchange will likely be seeking a commitment from major banks to route trades through its systems as part of its discussions to buy the alternative trading system Turquoise. Turquoise was set up by nine U.S. and European investment banks as a challenge to the LSE and other traditional exchanges, providing faster and cheaper services. Today it emerged that the LSE is in exclusive talks to buy its low-cost rival. The two sides have been pushed together by the new LSE boss Xavier Rolet’s desire to repair relations with the major insitutions, not least the the Turqoise backers, and by the damage done to Turquoise’s business by the financial crisis. Trading volumes at Turquoise dropped sharply in March after the trading platform’s nine backers ended their commitments to provide liquidity, a factor behind the decision to put the platform up for sale during the summer. But it’s hard to see how any LSE purchase of Turquoise makes sense unless the LSE reaches some agreement on trades with the platform’s powerful backers – Morgan Stanley, Goldman Sachs, BNP Paribas, Soc Gen, Citi, Deutsche Bank, Credit Suisse, UBS and BofA Merrill. “(The LSE) is doing a favor to the banks, taking this out of their hands to operate it more efficiently, so the exchange would want to get an order flow commitment,” Diego Perfumo of Equity Research Desk tells DJN’s Patricia Kowsmann. ” The value of such a deal is zero if there is no commitment from the banks.”
California, Credit Markets, Financial Markets, Uncategorized, United States, Washington / Comments Off
Bill Gross is out today with his often-interesting monthly reflections and the most intriguing portion of October’s musings center on a broad changing of the guard away from the dominance of global finance.
Gross, the managing director of PIMCO, the big California-based bond investment firm, spends much of his latest piece bemoaning the budget and related woes of California, the now ironically nicknamed ‘golden state.’ (We’ll spare you his comments about cleaning up after dogs.)