mostly palaver

How do you say "Bye-Bye" in Flemish?

In French?  In Portuguese? Budweiser is going to be a Belgian-Brazilian brand now. Which doesn't sit well with some red-blooded Americans:

Jordan Moore took the news that his beloved Budweiser could soon fall into foreign hands very personally: He decided he would scrap his plan to get the logo of the King of Beers tattooed on his right rib cage.

"I'll tell you one thing," said the 21-year-old concrete worker during his lunch break at The Brick of St. Louis bar, in the shadow of this city's storied Anheuser-Busch Cos. brewery, "if Budweiser is made by a different country, I don't drink Budweiser anymore. I'll go back to Wild Turkey." (Wild Turkey, a Kentucky bourbon, is owned by French drinks giant Pernod Ricard SA.) [emp added]

Oh, the irony makes me laugh.  Wait, isn't irony French too?  Mon dieu!  

Noted in passing

In today's NYT:

Blockbuster said on Tuesday that it was withdrawing its proposal to acquire Circuit City Stores. The company’s chief executive, James W. Keyes, said that the company had decided that acquiring Circuit City was not in the best interest of Blockbuster shareholders

That deal never made sense to me.  Now if BoA could only walk away from Countrywide.

Pass the chips

This is going to be fun:

PHILADELPHIA (Reuters) - Anheuser-Busch Co <BUD.N> is expected to reject InBev NV's <INTB.BR> unsolicited $46.3 billion offer as too low and outline its own restructuring plan, the Wall Street Journal reported on Wednesday.

The U.S. brewer plans to map out its own restructuring plan soon that would include the sale of nonessential assets such its theme parks in an effort to boost its stock price, the newspaper reported in its online edition, citing people familiar with the matter.

It'll be fun to watch this if it gets nasty, after all, they speak FRENCH in parts of Belgium for God's sake!

Well they always said that Stella was the Bud of Belgium

We'll see if this goes through.  They don't like foreign companies producing our Air Force planes, can they be OK with Brazilians making Budweiser?

A deal, if reached, would combine Anheuser-Busch’s best-selling Budweiser and Bud Light brands with InBev’s Stella Artois, Beck’s and Bass and would create the world’s largest brewer, with distribution channels around the globe.

InBev’s bid is likely to set off a bitter battle for control of Anheuser-Busch, based in St. Louis, which has been led by the Anheuser and Busch families for 148 years. The company, led by a scion of the Busch family, August A. Busch IV, has signaled that it will fight a takeover. In recent weeks, in anticipation of InBev’s bid, privately called Project Aluminum, Anheuser-Busch has hired an army of bankers, lawyers and other advisers to help it mount a defense.

The battle may stir a national debate filled with patriotic fervor over a company ingrained in the American consciousness. Anheuser-Busch spends more money than any other advertiser during the Super Bowl each year; last year alone, it spent $23.9 million, according to TNS, a market research company.

Of course I was kidding about patriotism thing, but it'll be interesting to see how this plays out - if people are really going to get outraged at Bud being Belgian/Brazilian.

Drip, drip

Today's events:

The struggling investment bank, Lehman Brothers, shook up its management on Thursday as it tries to win back the confidence of Wall Street. The bank said its chief operating officer and president, Joseph M. Gregory, and its chief financial officer, Erin Callan, had been removed from their posts.Ian Lowitt, 44, now a co-chief administrative officer, will succeed Ms. Callan, the bank said, and Herbert H. McDade III, 48, global head of equities, will succeed Mr. Gregory.

Going to help?  Not at all. 

Lehman

Lehman is in trouble.  They rushed out an earnings report that showed a loss 10X what they were whispering to the Street to try to get all the bad news out as they announced they had raised additional capital.  It didn't work:

Merrill Lynch downgraded its rating on Lehman Brothers Holdings Inc to "neutral" from "buy" on Wednesday, just a week after upgrading the stock, and Lehman shares fell 8.4 percent.

Merrill analysts Guy Moszkowski and Patrick Davitt lowered their price target to $28 from $36, saying Lehman's "business mix is poor for this environment," according to a research note obtained by Reuters.

Big trouble.  And the shorts are not getting the hammering that Fuld was threatening to put on them.

BTW, FWIW,  I still can't get over how each of these companies can rate each other.  It's amazing that Merrill or Goldman or any other firm can downgrade Lehman when they have so much to gain from a Lehman going out of business.  Maybe this is one of those business things I don't understand, but the situation seems rife with conflicts of interest.

Here we go again? - Part 2

From AP:

Moody's Investors Service says it may downgrade the ratings on bond insurers MBIA and Ambac.

Moody's says it is reviewing the AAA insurance financial strength ratings on Ambac Assurance Corp. and MBIA Insurance Corp.

Moody's says the "most likely" outcome of the review will be a downgrade.

I'd read many opinions over the last few weeks that we were not actually out of the storm we were in a few months ago, rather in the eye of the hurricane.  It looks like they were right and the back-end of the storm is swinging around right now.

Here we go again?

No, not Obama-Clinton, Lehman:

After opening only slightly down Tuesday, the Wall Street firm's shares had tumbled nearly 15% by midday as investors fearing that their stakes would be diluted sold their shares and rumors flew around trading desks that Lehman had gone to the Federal Reserve for funds. Lehman said that wasn't true.

But what rumor was true?

In the wake of the stock fall, the company began using its capital to buy back its shares, according to a person familiar with the matter. It was unclear how much stock Lehman bought back, but with shares trading at roughly 22% below its book value at the end of the first quarter, the buying could be seen as a vote of confidence by management.

Uh huh, or...

Alternatively it could be viewed as a waste of precious capital...

I vote #2.  Something tells me they may need that cash in the coming days. Remember that LEH was in quite a bit of trouble while Bear Stearns was melting down, but was able to convince the markets that they were a different animal than BSC.  The vultures are back, however and supposedly the short interest around LEH is huge and they could be in quite a bit of trouble this time around. 

What will the Fed do this time?  This one should be interesting. 

Who you gonna believe?

You or my stupid models? 

Saw this on a quick scan of the papers this morning and laughed:

GM spokesman Tony Cervone said the company didn't overestimate demand and blamed the current sales slump on the U.S. economy's slowdown. Earlier in the decade, he said, trends in household income and spending power all pointed toward steady growth. A Chrysler spokesman says the company sees long-term growth in the U.S., driven by its growing population and income levels.

Because, you know, when you estimate demand for motor vehicles in the US the state of the economy is external to the model. 

No wonder they're in trouble.

Microsoft and Yahoo!

I was as surprised as anyone when MSFT pulled the bid for Yahoo!. I didn't think that Yahoo! could walk away (and still don't). But the bid from MSFT never really made much sense to me, I never really understood what MSFT got from the deal (and I still don't). Sure they improve their search rankings and gain some content. They get access to the excellent and well-received Yahoo! Finance. But then? It could be a lack of imagination on my part, but I don't see this making MSFT any stronger.

For the longest time I didn't even think that MSFT really had to do anything at all in a timely manner, it is a very entrenched entity with a huge market share in the desktop OS. Sure, things are starting to move off the desktop, but people are creatures of habit and moves off the desktop are going to be a while. And who wants to surf the web on a Motorola Razr anyway?

I was reminded of a case study I studied in grad school that discussed how IBM was able to monitor new entrants to the hard disk drive market and watch to see if new standards took off. IBM started with something like 14" drives, moving to 8" once those took off (and putting the companies who introduced 8" drives into the market out of business in the process) and repeated the process with 5.25" drives and eventually 3.5" drives. I thought MSFT was essentially in the same place, able to monitor developments and adjust accordingly.

Then, something happened that changed my thinking completely. I got an iMac. No, this isn't a Mac-love post (although I do), it's a bye-bye MSFT post. Once I got my Mac, I was off Windows. For browsers I use Safari and Firefox (and had been using Firefox for a while anyway). All of my personal MS Office files? They went either to Open Office or up to Google Docs. Poof! In a day, literally, I was off MSFT products. And there is no reason to go back.

If anything, the Mac is going to be more central to my life than our old PC ever was - it's got a big screen (bigger than our TV) and a remote for watching DVD's, wireless (Bluetooth) keyboard and mouse for improved range, applications galore. This will be the hub that MSFT wishes it was.

So I get it now. MSFT is sitting on a mountain of cash but they are toast, if not now, soon. If not Apple, then Google or some other company we've not heard of yet. The infamous lock-in of the OS and Office are gone. I LIKE being able to access my spreadsheets from anywhere I can get a net connection. I like hardware (and software) that just works. I like, no, I love Gmail. And that's got them panicked. And panicked people make bad decisions - like bidding for Yahoo!

Thoughts?