Perhaps you guys can help me understand something.
Word comes today from a most credible source that the failure of smaller banks may soon lead to more consolidation and mergers in the banking industry. One analyst told the New York Times that 200 to 300 small banks might fail in the near future, and be forced into mergers, presumably with larger entities.
This is a solution?
Didn't we just see what happened to Citigroup (C) and Bank of America (BAC)? Aren't both now being deconstructed due to unsuccessful, if not heedless, acquisitions? Haven't empires from Rome to ITT fallen into rubble as a result of getting too big, too fast? And haven't we seen ample evidence of that fact as recently as this morning, as the implied value of AOL ratchets down in the wake of a Google writedown (GOOG)?
This is not to say, as some have contended, that all mergers and acquisitions are bad. When two strong entities come together, it's a beautiful thing. But ugly monsters made out of dead body parts yield the expected results, usually ending when a group of townspeople with pitchforks chase the poor creature into a barn that is then burned to the ground.
Certainly the merger of these bankettes, which are now suffering from being in the same room with the commercial real estate market, is preferable to their failure.
But is the future truly served if the muscle of capital does its usual thing, providing fees to all the lawyers, MBAs and other financial types as they once again set up great hulking behemoths destined to lurch over the cliff in the next high breeze?
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Should there be some prevention of companies merging their way into becoming 'too big to fail' because of the public risk? The problem is that there are other ways of growing to that size. Instead perhaps a look at the tax code should attempt to compenstae the public for the risks inherent in 'too big to fail' institutio
However, you fail to link that to other industries
If the big 3 car companies were broken into the nimble 9, some would fail, but it would keep us from the devastatio
If Microsoft was broken up, we would see a new era of innovation in software (as the parts of Microsoft competed to provide top value).
If the Oil companies were broken up we would see more competitio
etc etc etc...
The current wall street/ bank bailout heist has achieved nothing. I for one am tired of taxpayers supporting the rich. They created the mess, let them eat it.
I am certain there are enough people around who have money to start moral banks again.
I don't see any problems down the road that won't be there if Pfizer does nothing. Drug developmen
Pfizer had so many phase 2 and 3 failures that their pipeline is really weak. Even without the crappy economy their stock would have fallen the way it has fallen. Major reason.
Their bread and butter, big earner Lipitor is going offpatent IN 2011. Thats only 2 years from now. Lipitor currently earns 25% (or close) to their revenue. Can you imagine the drop of sales (or more like abyss of sales) thats coming 2011 !! its buy another company or tanking to single digits (i think current price of pfizer reflects most of that pessimism)
We all blame FDA. but people dont realise that FDA works so diligently (most of the time) that drugs are taking longer and longer to come to market. Which is good for public because we dont want people dying due to side effects and also saves pharma from multitude of lawsuits.
but that makes the patent period very small because clock starts ticking when applicatio
And no one will even notice them of course.
Payback (atonement
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