DealZone

Terminator IV, starring Chrysler

TerminatorChrysler’s got $4 billion in emergency aid from the U.S. government and has said it will seek another $3 billion in government loans. And yesterday it agreed to form an alliance with Italy’s Fiat as it looks for the road out of the woods.

(The Fiat deal fine print reportedly makes it conditional on Chrysler’s getting that extra U.S. loan.)

But the troubled auto maker is not letting its economic ails keep it from going to the movies.

Chrysler plans to help underwrite the fourth installment of the “Terminator” movie series, “Terminator Salvation,” where it will place its vehicles in cameo roles. The film is scheduled for release later this year. Financial terms of the sponsorship deal were not disclosed.

“This spring, Terminator 4 comes out and we will be one of the sponsors,” Chrysler director of media Susan Thomson said in a presentation at the Automotive News World Congress. “We have a following with the Terminator movies and we are going to continue with that.”

Outsourcing bailout funds

SATYAM/Unsurprisingly, scandal-slammed Indian outsourcing firm Satyam says it may need some liquidity support to stay alive. Satyam founder and chairman Ramalinga Raju said he inflated his company’s reported cash and bank balances by more than 50 billion rupees ($1 billion). He seems to have taken to the Hyderabad hills — the company says it has no idea where he is. In a state known for its separatist tendencies, he may well stay disappeared for some time.

The interim CEO and company officers say they are committed to picking up the pieces. But this little “liquidity support” bombshell could prove to be a tricky one if it is directed at the biggest bail-out office currently handing out cash: the U.S. Treasury. Not being a U.S. company, Satyam probably doesn’t have the chutzpah to seek TARP funds directly. The company’s primary function as an outsourcing center would make the use of U.S. bailout funds politically repugnant to U.S. officials.

But the idea of foreign companies applying for U.S. taxpayer support is not a new one. Financial institutions the world over, saddled with dud U.S. mortgage-backed debt, have grumbled that they should get the same consideration as U.S. investors.

Wilbur still wants a bank

Wilbur RossWilbur Ross is still in the running for a bank, although his plans to buy one were delayed when the U.S. government stepped in with its $700 billion package to bail out the sector, the investor told CNN Money in an interview.

The rescue package delayed Ross’ plans by six to 12 months, the report said.

“We will end up with a bank, there is no doubt about that,” the report quoted Ross as saying.

Hank Quixote

SWEDEN/Former AIG strongman Hank Greenberg is keeping up his steady stream of bull-horn bravado against what he says are fire sales at his old firm, of which he still owns 10 percent. But is anybody listening? The bailout bill shot from $80 billion to $150 billion in just a couple of months. Greenberg’s latest complaint, dutifully lodged with the SEC (an organ of the same government that now owns 80 percent of his old firm), says the company plans to sell its HSB Group unit at a “distressed” price. He wants an explanation from the AIG board.

Hank really can’t be blamed for trying to make sure he gets the best return possible on his AIG investment. “Certainly, selling major assets at fire-sale prices is not a viable strategy for reviving the company or even repaying the government,” Greenberg, who ran AIG for 38 years, said in the letter.

Viewing the landscape for a moment, it’s clear AIG is selling into a buyer’s market, so there’s little reason to think it will have much price-setting power. And with the mandate to pay back what it can to taxpayers, a fire sale may be just the thing the financial market needs to cauterize the damage done to and by Wall Street.

Happy Thanksgiving, Citigroup

Thanksgiving has come early for embattled Citigroup. The second-largest U.S. bank by assets received a pardon of sorts from the government late on Sunday, getting a $20 billion lifeline – the biggest bank bailout yet.

The bank had been widely thought to be too big to fail because of its global reach. Chief Executive Vikram Pandit and other top management will keep their jobs, but the government will have the final say on executive pay packages.

Citigroup’s shares lost 20 percent of their value on Friday, closing at $3.77, down 60 percent for the week and reaching their lowest level since December 1992. The group’s market value fell to $20.5 billion. That’s a far cry from the good old days of late 2006 when the bank’s market value topped $270 billion.

AIG says to report ‘earnings’. Really???

American International Group, the once giant insurer which has become best known as a sinkhole for government money, says it will report third-quarter results on Nov. 10.

Most notable was how AIG described what almost certainly was one of the ugliest reporting periods in financial history: “AIG’s earnings release and financial supplement will be available in the investor information section” of its website.

Earnings? According to the Merriam-Webster dictionary the use of the word “earnings” means money was earned during the quarter, or that the company will report there was money left in the coffer after pay outs. That is unlikely, at least based on analysts’ expectations.

Before the Bell: We can work it out

Good morning and welcome to Before The BellWe are suspending operations until we can broker a deal in Congress to bailout, er, rescue Wall Street. We shall not publish until the crisis is solved.

Until tomorrow,
Derek Caney
Editor

P.S. Shares were down overnight. Suffice to say that if the market is up, it’s because of optimism about the Senate’s approval of a buyout plan. And if it’s down, it’s because of pessimism about the prospects of the bailout. Tuesday’s action took back more than half of the prior day’s record losses. The Senate is expected to vote on the package tonight.

President Bush, who has been guided by the tenets of small government and the free market for the past eight years, approved $25 billion in loan guarantees to the ailing auto industry, at a cost of $7.5 billion to taxpayers. The guarantees give the automakers access to low-interest loans to help convert their fleet to more fuel efficient vehicles.

Rebound, but no slam dunk

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Other than that, Mrs. Lincoln, did you enjoy the play?

Congress dropped a daisy cutter on the market yesterday, rejecting the $700 billion financial rescue plan and sending the stock market spiraling to its biggest one-day loss in history. But stock futures were up more than 2 percent in premarket trading.

Pundits overnight and market watchers today were laboring under the assumption that a package will ultimately reach President Bush’s desk. The process could move to the senate floor, where Treasury Secretary Henry Paulson’s plan has more support. But since House Republicans torpedoed the bill, it could face a tougher process.

In other news, Pfizer plans to drop efforts to develop medicines for heart disease, obesity and bone health as part of its plan to focus on cancer.

Because “a zillion” would be overkill

How exactly did the U.S. Treasury come up with the $700 billion price tag for its bailout package, recently known in the financial blogosphere as “the Splurge”?

“It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com last week. “We just wanted to choose a really large number.”

Well, that’s reassuring.

UPDATE: It seems that HBO’s Bill Maher first coined the term “The Splurge,” as seen in this YouTube video. Thanks to Fred Wilson of Union Square Ventures, an early proponent of the phrase.

Before the Bell: Bailouts and Buyouts

pelosi.jpgSince socialism is always more palatable when it bails out rich people, Henry Paulson’s $700 billion financial rescue package arrives in Congress today after round-the-clock negotiations over the weekend and exhortations from presidential candidates. But even as Congress prepared to vote, across the ocean the financial crisis rattled several European institutions.

The governments of Belgium, the Netherlands and Luxembourg moved to partially nationalize Fortis with an injection of over $16 billion. Also German lender Hypo Real Estate secured a credit line from the German government and banks up to 35 billion euros. And Britain nationalized mortgage lender Bradford & Bingley. Meanwhile shares in French bank Dexia fell on reports that it may need emergency capital. Rescue deals also emerged in Iceland, Russia and Denmark.

Citigroup will buy Wachovia Corp’s banking business, further consolidating power among three megabanks: Citigroup, JPMorgan and Bank of America.