Now, It's Real Money
J.P. Morgan Chase acknowledged last week that its ties to Enron and other scandal-ridden companies could eventually cost it an additional $1.3 billion, on top of the $500 million in Enron loans already written off. The announcement followed settlement of a $1 billion dispute between Morgan and a group of insurance companies over its Enron dealmaking.
Henry Blodget, the former Merrill Lynch stock analyst who helped create the dot-com bubble, got word that he's likely to face sanctions from NASD, including possible fines and a ban on working in the industry. Blodget's own e-mail has revealed that he didn't believe all the go-go advice about Internet stocks he gave investors. He left Merrill in 2001.
Fiddling Over Fiat
Italy headed toward a political and financial donnybrook over the future of Fiat. The government appeared to back a plan by Robert Colaninno, former head of Telecom Italia, to invest $1 billion and take control -- and prevent control from slipping to General Motors. But the plan has received a cool reception from the Agnelli family, which hopes to retain control and rescue the automaker by selling assets and cutting 8,000 jobs.
A GAAP in Logic
A report last week by lawyer David Boies found that although Tyco International hadn't violated generally accepted accounting principles, it had engaged in financial gimmickry that inflated earnings and misled investors. Boies also revealed that former chairman L. Dennis Kozlowski once spent $110,000 of the company's money during a 13-day stay in London, putting a new twist on the concept of the all-inclusive package.
Oil Heading Back Up
The general strike in oil-rich Venezuela will temporarily push up the price of gasoline at U.S. pumps by at least 15 cents, analysts said. Crude oil topped $33 a barrel on spot markets last week. Crude inventories were at their lowest levels since 1975, 11 percent below last year's levels. Particularly hard hit: Citgo, which is owned by Venezuela's state oil monopoly and relies on it for half its supply of crude.