Archive for June, 2007

  • Sorry Ladies
    , June 11th, 2007 at 9:17 am

    DealBook‘s Andrew Ross Sorkin is off the market. My congratulations to the happy couple.
    (Hat Tip: DealBreaker)

  • Dick Parsons on Wal-Mart
    , June 8th, 2007 at 1:45 pm

    AdAge via Drudge:

    “It will be a cold day in hell that I would actually get up from my apartment to go to the video store,” Mr. Parsons added. “I’ve never actually been in a Wal-Mart.”

  • Defending Bed Bath & Beyond
    , June 8th, 2007 at 10:58 am

    I’m not the only one who still likes Bed Bath & Beyond (BBBY). Here are some other views:

    SunTrust Robinson Humphrey analyst David Magee stood by his “Buy” rating and said the company will be one of the first to gain when the housing market shows signs of a bottom.
    Magee also said the lowered expectations, while disappointing, are not that bad and its balance sheet remains strong. Magee also expects the company will use its $1 billion share repurchase program to enhance shareholder value.
    “We had actually expected the market reaction to the news might be worse, and while we do believe there could be some additional near-term volatility, (we) don’t anticipate significant further declines in the multiple,” Magee wrote in a client note.
    Meanwhile, CIBC World Markets Corp. Vivian Ma said a decline in the share price presents a buying opportunity. She remained bullish on the company’s long-term value.
    “We think the sales environment could remain very competitive in the second quarter, but Bed Bath & Beyond may see some rebound sequentially,” Ma wrote in a client note. “Bed Bath & Beyond has been a consistent outperformer in other periods of consumer pullback.”

  • The Yield Curve Widens
    , June 8th, 2007 at 10:54 am

    Yesterday’s real action was in the bond market. The 10-year Treasury had its worst day in over three years. Here’s a chart of the 10-year T-bond along with the three-month Treasury bill to show you how much things have changed in the past month.
    image477.png

  • Breaking: Bill Gross Is Now a Bond Bear
    , June 7th, 2007 at 3:40 pm

    After 25 years of being a bond bull, Bill Gross has turned bearish:

    Long-time bond bull Bill Gross, just one year after declaring the end of the bear market for U.S. Treasuries, on Thursday conceded the snappy pace of global economic growth will likely keep bonds on their heels.
    Furthermore, Gross forecast that benchmark Treasury yields will range higher than previously thought, prompting him to acknowledge he is now a “bear market manager” after a quarter century as the global bond market’s most powerful bull.
    Gross, chief investment officer for Pacific Investment Management Co. and manager of the world’s largest bond fund, said solid global growth and a mild acceleration of inflation in the United States and abroad will drive 10-year U.S. Treasury note yields to top out at 6.5 percent over the next three to five years as opposed to the 5.5 percent ceiling previously forecast and 5.1 percent seen on Thursday.
    Gross’s comments were included in a note summarizing an annual gathering of Pimco investment managers, a copy of which was obtained by Reuters.

  • The 10-Year T-Bond Breaks 5%
    , June 7th, 2007 at 11:44 am

    image%20477.png
    This is the first time this has happened since last August.

  • Victory!
    , June 7th, 2007 at 9:57 am

    Or something not as close to defeat.
    The private equity consortium looking to buy Biomet (BMET) has increased its bid to $46 a share. The vote scheduled for this Friday has been canceled.

  • Citi’s Top Secret Plan
    , June 6th, 2007 at 1:28 pm

    DealBreaker’s Bess Levin looks at Citigroup’s (C) newest strategy, breaking into the Boston banking market.
    Pardon me while I go bang my head against the wall. First off, the Boston banking market is what? Four hundred years old. I’m sorry but this is just plain silliness.
    Citigroup’s strategy is that it’s a “financial supermarket.” They figure “hey, we have credit card customers with Boston addresses, so they’ll certainly buy Smith Barney mutual funds!” You can just feel the synergy!
    Let’s take a step back and look at this. We’re waiting to see if a company with $2 trillion in assets can make impact its business by impressing Bostonians with having one statement for their credit cards and investments.
    Please, this is secret so whatever you do, don’t tell Fidelity (or State Street or Bank of America or Merrill Lynch or anybody else with $30 in deposits).
    The financial supermarket idea doesn’t work. Repeat after me, Mr. Prince, it doesn’t work. I know, it sounds good on paper, but people don’t do their finances that way. They never have and they’re not about to now. This was just a nice idea to justify some lousy acquisitions many, many years ago.
    Eddy’s rule of business #15,783: No matter who is put in charge to execute a dumb idea, when it starts to fail, people will blame the execution, not the dumb idea. Lots of people are ready to toss Chuck Prince overboard. Fine, but he’s not the problem.
    Twenty-five years ago, Sears bought Dean Witter. They had this great idea. Stick brokerage offices in the stores! Well, it didn’t work and Sears eventually sold Dean Witter. Later Dean Witter bought Discover and turned it into a hugely profitable credit card business. Then Morgan merged with Dean Witter, and made a whole lotta money.
    Guess what Morgan is spinning off now? Discover!
    Think about it, Chuck. Split Citi up.

  • The Coolest Water Buffaloes Versus Lions Versus Crocs Video You’ll See All Day
    , June 6th, 2007 at 11:19 am


    Funny, this is oddly familiar to the J&J/Guidant/Boston Scientific fight last year.

  • Trophy Stocks
    , June 6th, 2007 at 9:13 am

    Tom Wolfe coined the phrase “trophy wife.” Now, Michael Lewis says the reason the rich want to own newspapers isn’t for the money, but for the status.

    This logic explains what appears to be happening right now inside the two great national newspapers, the New York Times and the Wall Street Journal.
    The cachet of the New York Times is worth more to the Sulzberger family than to anyone else. The Sulzbergers’ relationship to the Times is the chief source of their status; without it they are mere mortals with a bit of cash; and so the Sulzbergers cling to their control of the Times as tightly as ever.
    Instead of getting out while the getting is good, they flop around looking for new ways to raise money without ceding control, and to make money without leaving the news business. Which is to say, they are working as hard as they possibly can to throw good money after bad — with the predictable result that they have alienated their outside investors.

    When you have nothing else to offer except a gazillion Class A shares, you’ll naturally overvalue your role, which the Bancrofts see as protecting the Journal’s independence. They’re confusing vanity for high-mindedness.