Economy Blog

$$$ Britney’s Career Placed on ‘Celebrity Watch’ at S&P: “She May Be Less Popular than We Thought” [Jeff Matthews]

$$$ Comp [WSC]

$$$ Analogic Corporation (ALOG)

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Merrill Lynch CEO and amateur beekeeper John Thain’s daughter, Victoria, was robbed last Friday. The thieves apparently entered the Duke junior’s apartment via bedroom window, stole $9,000 worth of stuff including her wallet, camera, and TV, and exited through the front door. Run of the mill burglary or a strategic hit from one of the many enemies daddy’s racked up over the years? The fact that nothing was taken from any of Victoria’s roommates seems to imply the latter. Suspects include: Jon Corzine, Stan O’Neal, bears and vegans, which is to say—Dan Loeb. Either way, she should thank her lucky stars that the p…
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Phil Schoonover was pretty sure it would be a bad idea to sell Circuit City. At least that’s what he told Reuters back in February.

Schoonover came over to Circuit City three years ago from rival Best Buy, to increasingly underwhelming investor enthusiasm. Of course, by the time Schoonover was talking to Reuters, Mark Wattles, head of Wattles Capital Management had disclosed a 6.5% stake in the retailer along with his vague warning that he might press for a sale, or buy more stock or both, or neither. This had the effect of turning some heads. Wattles owns a controlling interest in Ultimate Acquisition Partners, that owns Ultimate Electronics, that owns 32 consumer electronics stores.
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Earlier this afternoon Bear Stearns has posted to its Web site the amended merger and guaranty agreements in connection with the renegotiation of JP Morgan’s purchase. Some quick takes:

• As has been widely reported, the new price works out to around $10 per share. Speculators, bond-holders and dissident shareholders have been greatly rewarded for owning BSC. People who bought credit default insurance, and wanted to vote against the deal hoping Bear would default on its bonds, were smart if they bought BSC as a hedge.
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Despite reports to the contrary on CNBC and the New York Times, there is no precedent in Delaware law that allows a company to sell up to 40 percent of their shares without shareholder approval. Rather, there is a rule-of-thumb employed by lawyers advising clients incorporated in Delaware that tells them deals shouldn’t lock-up a sale of more than 40% of the shares if they don’t want to risk the wrath of the courts. But the rule is cobbled together from reading a variety of Delaware cases, and it has never been tested in the courts.
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In our continuing (and continually failing) effort to provide the finest in financial musings for our readers, we at DealBreaker are pleased to announce that Equity Private, author of the much-loved Going Private blog has joined DealBreaker as a Guest Editor at least until May 1st. Ms. Private will be filling in for John Carney, who is fortunate enough to be departing for a month to enjoy a well deserved, and somewhat overdue vacation.
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Despite reports to the contrary on CNBC and the New York Times, there is no precedent in Delaware law that allows a company to sell up to 40 percent of their shares without shareholder approval. Rather, there is a rule-of-thumb employed by lawyers advising clients incorporated in Delaware that tells them deals shouldn’t lock-up a sale of more than 40% of the shares if they don’t want to risk the wrath of the courts. But the rule is cobbled together from reading a variety of Delaware cases, and it has never been tested in the courts.
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Cramer raises a good question: why, of all the many, many things he’s been wrong about in the past, did Fox Business chose to dwell on …
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The guarantee of Bear Stearns’ liabilities from JP Morgan Chase wasn’t working. Although the banking giant had put its “full faith and credit” behind Bear’s liabilities, some of Bear’s largest customers were refusing to do business with it. Counter-parties were fleeing, and Bear’s collateral was being refused up and down Wall Street. The guarantee, which was intended to keep Bear in business, had failed to provide customers with enough assurance to prevent a second round of the run-on-the-bank that nearly bankrupted Bear, people recently familiar with Bear’s operations are saying behind the scenes. (Guess who those people are!)
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(March 24, 2008 01:17 PM, by Arnold Kling) I have not had much time to pursue the folk song idea, but I have written a few snippets. First,……
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(March 24, 2008 01:16 PM, by Bryan Caplan) Over at the Freakonomics blog, Ian Ayres lists Emerson as a famous opponent of tipping, and offers this quote as……
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(March 24, 2008 12:45 PM, by Arnold Kling) In Sunday’s Washington Post, Jacob Hacker wrote, getting the government more involved in health care would actually reduce costs, improve……
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[Hilarious ad that will run in tomorrow's NYT and WSJ, via MediaBistro]

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[Hilarious ad that will run in tomorrow's NYT and WSJ, via MediaBistro]

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Winston Churchill was first to walk on the Moon
Re: The Tide Goes Out
Did JPMorgan Chase get snagged in a legal loophole?
J…
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(March 24, 2008 12:21 PM, by Arnold Kling) Crisis of Abundance is now in paperback, for ten bucks at Amazon. The fact that Peter Orszag, no ideological fellow-traveler……
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In his Easter sermon yesterday, Michael Nazir-Ali, the B of R, told a rapt audience that the “turmoil in the markets is almost certainly the result of amoral forces” possessing today’s hedge fund leaders. The Bishop admonished “those with power,” who, in his professional opinion, are on the fast track to hell, unless they start ensuring “that the poor are not disproportionally affected” and showing “gratitude” for what they have (“For instance Cohen might share those Thin Mints he’s been stockpiling, and Chanos could maybe stop to think for one second that not everyone is pulling down the kind of g’s that gets the 3-diamond girls to hover, and it would be nice if, just once, he helped a brother out.”) The Bishop did not say whether or not a return to Christian living would help things out credit-wise.
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One reason many people are so ready to believe JP Morgan’s line that the guarantee agreement was accidentally overbroad is that they don’t understand why JP Morgan would ever intentionally agree to the broad version. Why would JP Morgan want it’s guarantee to survive even if Bear Stearns’ shareholders reject the takeover offer? This sets up a seemingly perverse situation where Bear’s shareholders could seek a higher bid while still forcing JPMorgan to honor its guarantee. Clearly JP Morgan couldn’t have wanted this, right?
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Studies of twins often provide insight into the importance of genetics vs. environment. Turns out, the same could be true for 130/30 funds….
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We’ve crammed everything available on the yet-to-be-launched securities lending exchange “Lendex” into one (very brief) posting….
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