March 2011

US executives are starting to spend the record $940 billion in cash they built up after the credit crisis, just in time for annual shareholder meetings. Takeovers topped $260 billion this quarter, the most since the collapse of Lehman Brothers Holdings Inc. in September 2008, according to data compiled by Bloomberg. Standard & Poor’s 500 Index companies authorized 38 percent more buybacks in 2011 than a year earlier and dividends may increase to a record $31.07 a share in 2013, data compiled by Birinyi Associates Inc. and Bloomberg show. Chief executive officers are looking for ways to increase investor returns after posting the biggest gain in profits since 1988 by relying on near-zero Federal Reserve interest rates and cost cuts that have kept the unemployment rate near a 26-year high. More takeovers were announced last week than any time since March 2010 after AT&T Inc. in Dallas offered $39 billion for Bonn-based Deutsche Telekom AG’s U.S. wireless unit and San Francisco-based Charles Schwab Corp. agreed to buy OptionsXpress Holdings Inc. of Chicago for $1.11 billion in stock.

[Commentary] It’s no secret that the mobile Internet – smart cellphones and tablets – is a hothouse blossoming with innovation. Every day these devices become more useful (some argue “essential”). The wireless future isn't largely about voice calls: It’s about reading (books, newspapers, magazines), shopping, and staying in touch with social networks. Coming soon will be communicating with other devices (such as a car) and even replacing a credit card to make on-the-spot retail purchases. That’s why federal regulators must take a long, thoughtful look at the proposed merger of wireless carriers AT&T and T-Mobile proposed last week. The merger could threaten the very competition that has benefited consumers and created new opportunities for countless startup companies. Decades ago the federal government broke up a telephone monopoly and brought in an era of unprecedented innovation, choice, and price competition for consumers. Now government may need to step in again to make sure that the heat stays on in the innovative hothouse that was created.

Despite criticizing the quality of data posted on federal transparency websites like Data.gov and USASpending.gov, the Sunlight Foundation is urging Congress not to slash funding for the programs.

The government transparency watchdog wrote to the leadership of both parties on Monday voicing their concern about a measure in the House spending bill that would cut funding for the sites from $34 million to $2 million. "An open and accountable government is a prerequisite for democracy. Keeping these programs alive would cost a mere pittance when compared to the value of bringing the federal government into the sunlight," the letter states.

Tribune Company bondholders led by hedge fund Aurelius Capital Management filed a revised bankruptcy reorganization plan for the media company, hoping to overcome objections by senior creditors.

The revised plan calls for lower sums to be set aside to address litigation stemming from Tribune's $8.2 billion leveraged buyout in 2007, which was led by real estate developer Sam Zell. Some senior creditors had complained that too much of the equity in a reorganized Tribune would be tied up while the litigation, which could last for years, proceeds. Under the bondholders' revised plan, about 20 percent to 29.5 percent of Tribune's value would be held in the litigation trust, down from 50 percent to 65.4 percent in their earlier plan.