August 15, 2011
Merger & Acquisition activity continues despite the recent market volatility. This morning we have Google buying Motorola Mobility for $12 billion, and the world's largest oil driller, Transocean, making a bid for Aker Drilling, a Norwegian firm. Both deals are for huge premiums over Friday's closing prices. Apparently big companies with cash and access to capital have confidence in the economy, or they would be keeping their checkbooks closed.
Warren Buffet has an Op-Ed piece in the NY Times where he details his low tax rate and why he (and others in his shoes) should pay more. Hard to disagree with him. And Floyd Norris reviews wild stock markets of the past, and who is (and isn't) to blame. Both of these are excellent start-your-week reading.
NPR has a story about record-low mortgage rates and why that may not do much for homeowners. Many people who could benefit from lower rates can't refinance since the value of their home has dropped and they don't have enough equity. They quote a guy who suggests that Washington get involved. Yeah, brilliant idea. The big banks lowered lending standards and look how well that worked: most of the biggest banks nearly put themselves out of business. And they should be pushed to lower their standards again? Insanity. The LA Times has a different angle.
Bank of America is shrinking, announcing today the sale of its international credit card business. So here's the capsule history of BofA: get big, choke on bad growth, get bailed out by taxpayers, get smaller. I wonder when they'll write the chapter about taking care of their shareholders?
GTC
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).