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Coca-Cola's latest bright idea: Buy back bottlers it once spun off, just like Pepsico did
In 1986, Coca-Cola (KO) split off its North American bottling division into a separate company, Coca-Cola Enterprises (CCE). Then PepsiCo (PEP) followed suit, as both soft-drink makers moved to add some flexibility to their balance sheets.
Now, Coke is following Pepsi in a transaction that reverses the spinoffs of yesteryear. Coke is acquiring the North American operations of Coca-Cola Enterprises in what the company calls a "cashless" deal that is worth about $13 billion. Last year, Pepsi coughed up about $8 billion to buy back two of its bottling partners, The Pepsi Bottling Group (PBG) and PepsiAmericas (PAS). The Pepsi deals has been approved by shareholders and the merger should close by the end of this month.
The euro has tied Spain's hands when it comes to traditional tools to revive the economy.
Spain is the No. 4 economy in the 16-nation eurozone, and it's in bad shape. Its unemployment rate is 19%. Its economy shrunk by 3.6% last year and is expected to contract again this year, according to The Journal.
And so while the focus is understandably on Greece and its enormous debt, the pain in Spain is a reminder that other euro countries are also in a deep recession and coming dangerously closer to economic collapse.
Financial analysis suggests CEO Iger is spending $12 billion in next three years, but will it pay off?
The financial wire service writes:
"Disney Chief Executive Officer Robert Iger, 59, is on a spending spree at the world’s biggest media company to transform his film studio, amusement parks and stores."
In addition to spending $4 billion for Marvel (which some believed was a serious over-spend for the characters it acquired), the media giant is building two new cruise ships and is giving its remaining retail stores a high-tech takeover.
A new study predicts that consumers will put more money toward retirement.
By Joe Mont, TheStreet
After hovering near zero for months, the savings rate among US consumers may increase to 6.5%, putting as much as $700 billion up for grabs by banks, financial service firms and the retirement industry.
That's the conclusion of a study of consumer spending patterns in the US, Germany, France and Italy by the financial services firm Allianz (AZ).
Allianz considers the shift in savings habits a positive side effect of the decline in wealth from mid-2007 to early 2009. In 2008, the financial assets of private households declined 18% from the previous year. Stock market freefalls and a collapse in home values destroyed nearly $17.5 trillion of household wealth during the first quarter of 2009. Though economic improvements made up some of these losses by year-end, estimated losses still amounted to as much as 12 trillion.
General Motors knows that helping a competitor in the booming Asian automobile market is a bad move
By Louis Navellier, Investorplace.com
We learned yesterday that GM’s tentative deal to sell Hummer has run out of gas, and that Chinese auto upstart Sichuan Tengzhong Heavy Industrial Machines will not get the iconic SUV brand as originally planned.
Forgive me if I don’t act surprised. To be honest, when GM’s deal to peddle Saturn to Penske fell through way back in September, I started to doubt how likely it was that the company could successfully shed its defunct brands.
But in particular, the $150 million deal between Hummer and Sichuan Tengzhong really struck me as a pipe dream.
Insight from the murky world of global hedge funds.
Thanks to a number of relationships with professional market watchers, I'm able get what traders call "color" on the day's activity. Last night, I received an interesting e-mail from a hedge fund manager who specializes in trading based global economic trends -- or "global macro" in the native lingo.
He is well connected but prefers anonymity. He attends exclusive strategy sessions with the big boys at Goldman Sachs (GS). He consults with Asian sovereign wealth funds.
Below is a reproduction of the e-mail, which carried the subject line "Risk-off move overnight -- 5 key triggers." There is a certain beauty to its roughshod style. It's heavy on jargon, with a mix of technical analysis and news summaries, but offers a rare look inside the minds of Wall Street's movers and shakers.
The bears will be making a stand on this snow day.
By Jim Cramer, TheStreet
Oh great, a nobody's-around snow day, which means that there will be no bidders underneath as the equity-destroying hedge funds smack down our stocks and yesterday's bulls become today's timid calves.
Given that the market is still in well-overbought territory, given that it is close enough to the weekend to make it so that players who shouldn't have to worry about 2% of the EU's GDP -- Greece -- will be, today's as good a register-ringing day as we have seen in a long time.
Yesterday I posted a piece that said perhaps tech was finally starting to break out of this trap because gold was down and only oil was up. I am not even saying, "Let's see if tech survives today's test" because there are too few players and the bears have to make a stand here.
General Growth receives term sheet from Brookfield Asset Management
Written by Douglas Estadt
Todd Sullivan from http://ValuePlays.net shares big news on his long stock-pick GGWPQ. Brookfield Asset Management trumps last week's offer from Simon Properties and have issued a term sheet to GGP. Under these terms:
company will split into 2; 1 with high quality assets, initially priced at $10/share, the other with riskier assets at $5/share
Brookfield will backstop the smaller of the 2 co.'s to guarantee that initial value for current shareholders
existing shareholders will receive share for share of new entity; they'll participate in the upside of the existing GGP shares
In addition, when they come out of chapter 11, GGP will be the 2nd - 3rd largest REIT by market cap. To learn more about Todd's thesis and GGP, view the video below.
The economic meltdown opened a window for a new global currency standard, but no good candidates exist.
After predictions of certain doom, the dollar is back and enjoying a major rally, Time reports. The U.S. dollar index is just off an eight-month high.
"Like the slasher in a cheesy horror flick, the dollar keeps coming back for another go, just when you least expect it," writes Michael Schuman of The Curious Capitalist.
Cantor Fitzgerald set to launch online box-office futures trading service.
Global financial services firm Cantor Fitzgerald is set to launch a real-money-driven futures trading market based on its popular Hollywood Stock Exchange multiplayer online game.
Domestic Box Office Receipt Movie Futures -- DBOR for short -- will offer both movie enthusiasts and serious, money-minded traders a 24-hour online market in which they will seek to predict the North American performance of movies after their first four weeks in theaters.
Acquired by Cantor Fitzgerald in 2001, the Hollywood Stock Exchange currently touts 1.7 million users, about 200,000 of whom use the site actively.
The U.S. unemployment rate is stuck just under 10%, and Congress isn't doing much to fix that.
According to forecasts by the Federal Reserve, U.S. unemployment will linger at a horrendous 9.5% at the end of the year. That's just about where unemployment stands now, at 9.7%.
So, I certainly understand why lawmakers will want to hear from Fed chairman Ben Bernanke on the issue when he testifies in front of Congress this week.
And I'm sure that some member of Congress will ask Bernanke what the Fed intends to do about unemployment. I'm betting that Bernanke won't blow his top at the question, but I sure wish he would.
A recent incident highlights the friction between airlines and larger passengers.
Americans are getting bigger, but airplane seats are not -- and that can lead to awkward moments between airlines and passengers.
The issue was thrust into the spotlight recently when director Kevin Smith was booted from a Southwest Airlines (LUV) flight when the crew decided he was too large for one seat. (Smith had booked two seats on another flight, but wanted to fly standby on a flight with just one seat available.)
The incident has ignited a new discussion about what some newspapers are calling a "collision course" for obese passengers and airlines.
The video store chain will need a home run from its kiosk strategy to stave off another brush with bankruptcy.
Video chain Blockbuster (BBI) has more lives than a cat. Over the last two years the company has had at least two brushes with bankruptcy but managed to survive.
It appears another brush with death is forthcoming, according to The Wall Street Journal on Wednesday. Although the company claims no intention of filing for bankruptcy, the hiring of restructuring advisers cannot be a good sign.
While shutting stores in droves, Blockbuster has pinned its hopes on mail order and rental kiosks. But can a copycat strategy akin to a knockoff straight-to-video movie right this ship?
I'm adding an old favorite brand name to my Wall Street Survivor portfolio: Arm & Hammer. Like me, you might not know the name Church & Dwight.
First let's see why it came up on my list. The stock had a price appreciation in 14 of the last 20 trading sessions and was 5 for 5 recently. It has enjoyed a 7.97% price increase in the last month. On Barchart's 13 technical indicators the stock has a buy signal on 12 of the 13 indicators. This stock has the positive and consistent price momentum I like.
We get no relief from the roadblocks this administration throws up.
By Jim Cramer, TheStreet
Another day starts with no compromise in Washington at the helm, with the press secretary saying the president isn't backing away from the absurd Volcker Rule -- the rule that punishes the diversity that allowed Goldman (GS) and JPMorgan (JPM) to survive but would have done nothing to stop the collapse of Washington Mutual, Wachovia, Fannie (FNM) and Freddie (FRE) as well as AIG (AIG), Lehman and Bear. And, of course, the faux walk across the aisle for health care where there is no compromise of substance that anyone expects.
Why do we care? Same old reasons: Suppose you are a bank. Do you hire and expand or do you hunker down? You do the latter. Do you lend, which is what Sheila Bair bashed the banks for not doing yesterday? Yes, you lend if someone wants to borrow, but who wants to borrow if they can't figure out the health care budget for their potential employees? Have any of these people debating these issues ever started a business? I just helped start my fifth, and the big hole in the budget is what we are going to have to pay people for health care. My reaction? Don't hire until we know. And I am not assuaged by a potential tax credit. Who cares about a tax credit? We may not even make money!
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[BRIEFING.COM] Stocks entered the weekend on a mixed note as the S&P 500 shed 0.1% while the Dow ended with a gain of 0.1%.
The major averages began the day on a lower note as nine of ten sectors saw losses of more than 0.5%.
The consumer staples sector was the lone exception as the group spent the entire day in positive territory thanks to the relative strength of Dow component Procter & Gamble (PG 81.89, +3.19). The second-largest staple stock advanced ... More
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