My favorite business-news item this week didn’t have anything to do with business per se, appearing as it did in the New York Times’ “Food Chain” column, where readers write in to ask Melissa Clark about porridge and the like. This week, a correspondent had run out of baking powder and, noting that its ingredients are cornstarch and baking soda, wanted to know “the proportions necessary to make baking powder at a fraction of the cost.” “At a fraction of the cost” of baking powder: If you want to know we have no inflation, this is why. Even in boom times, we’re not letting the baking-powder manufacturers get away with anything. Now if only someone can give me the proportions necessary to turn a CRT tube, glass, and lots of shiny metal into a new Sony WEGA television. Thus inspired, on to this week’s Cocktail Chat.
1. “In a would-be clash of titans, MGM Grand, controlled by Kirk Kerkorian, made a $3.4 billion offer to acquire Mirage Resorts, run by casino mogul Steve Wynn. Of course, that $3.4 billion is only about one fifth of what it would cost to acquire an Internet company like Akamai. (Never heard of Akamai? Exactly my point.) So maybe ‘clash of titans’ is wrong. Maybe ‘interesting little sidelight to the real action’ would be more accurate.”
2. “Anglo-Dutch conglomerate Unilever, the world’s largest maker of consumer goods, announced a sweeping restructuring plan–only ‘sweeping’ plans matter–that could result in Unilever’s cutting loose 75 percent of its products. Time to get out there and start hoarding the Promise margarine before it’s too late!”
3. “Responding to allegations that he suggested a failed day trader who had lost $227,000 trading stocks at All-Tech Direct should open up his own All-Tech trading branch, All-Tech CEO Harvey Houtkin told the Wall Street Journal that offering bankrupt day traders jobs was ‘a nice thing to do.’ And it probably reduces the chance that they’ll go postal on you, too. Which is a good thing.”
4. “The World Trade Organization ruled against the United States this week, saying that a $2.2 billion tax loophole that lets companies set up offshore subsidiaries to export goods was a violation of WTO rules. The White House said it had no plans to change the tax code to comply with the ruling, a response straight out of the ‘Badges? We don’t need no stinkin’ badges!’ school of international relations.”
5. “The CFO of Citigroup, Heidi Miller, announced she was quitting her job to oversee finance and strategy at Priceline.com, the second prominent Citigroup exec to do so. Citigroup reportedly tried to convince her to stay by promising to use William Shatner in an upcoming ad campaign, but it was no dice.”
6. “Testifying on Capitol Hill Wednesday, Alan Greenspan said of the U.S. economy, ’We’re like a boat heading toward the dock.’ ‘And I’m the king of the world!!!’ he might have added, but didn’t.”
7. “Former Cendant chairman Walter Forbes, who left the company after an immense accounting scandal but still walked away with a severance package worth $47 million, has finally repaid $2.3 million in travel-and-entertainment expenses that Cendant said were improper charges. That’ll teach him to stay away from the macadamia nuts.”