) annual meeting on May 6. The 75-year-old CEO and chairman quieted some of the intense acquisition buzz when he said the night before that the insurer was buying 80% of Iscar Metalworking, an Israeli company, for $4 billion. With $43 billion in its piggybank, Berkshire is eager to buy more. Buffett as usual dropped only cryptic hints, alluding to a $15 billion deal as a "remote" possibility.
Buffett is still bearish on the U.S. dollar because of the escalating current-account deficit. But he's moving away from foreign currency derivatives, a pricey strategy right now. Instead he's looking to "develop earnings power in other currencies around the world," whether by buying stocks or businesses outright. Of course, his shareholders are counting on him to boost their earning power at home.See "Under Warren Buffett's Big Top" The sun rose in the east, the tides flowed in and out, and the Federal Open Market Committee raised rates for the 16th time in a row, to 5% -- all equally surprising. Ben Bernanke's Fed had telegraphed the May 10 move, and now the real guessing game intensifies over when the long rate-hiking streak will come to an end. Fewer Fed watchers than before expect it to sit tight at the June meeting, but the FOMC left wiggle room either way, saying decisions will depend on how the economy seems to be behaving.See "Interest Rates: Look, Ma, No Pause!" It's the third-largest U.S. deal of the year, but Wall Street greeted it like a plugged nickel. Wachovia (WB
) on May 8 agreed to pay $24 billion for California thrift Golden West Financial (GDW
). While the cross-country hookup makes Wachovia a bigger player in a rich market, the Charlotte (N.C.) bank's shares tumbled nearly 7% amid fears that it was buying Golden West -- and its huge portfolio of adjustable-rate mortgages -- at a time when many analysts figure overheated California housing may cool off.See "Banks: Let the Bidding Begin" Lately the big D stands for disillusionment. On May 8, for the third time in a year, Dell warned that fiscal first-quarter earnings and sales wouldn't meet expectations. Shares of the world's No. 1 computer seller, which have been sliding for nine months, fell 4.6%. Dell (DELL
) blamed its most recent troubles on its strategy in the second half of the quarter, when it cut prices on some boxes to superlow levels in order to soup up unit sales.See "Dell: Burned by a Fire Sale" Finally, Congress is achieving a meeting of the minds on taxes. It's moving fast to O.K. $70 billion in tax cuts that will extend the 15% rate on capital gains and dividends from 2008 through 2010, shield about 15 million taxpayers from the fearsome Alternative Minimum Tax (but only for a year), and allow wealthy investors to convert their regular IRAs to more generous Roths. Small businesses get fat new breaks for buying computer equipment, but oil companies, the ogres of the day, will lose $189 million in breaks over 10 years. The Dow flirted with its record high this week, closing on May 10 at 11,643 -- about 80 points short of the last top reached in January, 2000. That has investors wondering whether this level might become a new floor -- or remain the ceiling. In any case, the excitement seems misplaced since taking six years to claw back is nothing to crow about. The broader S&P 500 and tech-heavy NASDAQ remain well below their peaks. Massachusetts medical gizmo makers sure are doing their bit for merger mania. On May 8, Thermo Electron (TMO
) and Fisher Scientific announced a $10.6 billion deal that creates a lab equipment colossus with $9 billion-plus in sales. This follows Boston Scientific's (BSX
) grab of Guidant that closed in April. Wall Street can't wait to see who might be scooped up next. Stocks of competitors like Varian and Applied Biosystems levitated on the news. Everyone knows Kodak's (EK
) film business is in free fall. Now, CEO Antonio Perez admits the $2.7 billion medical imaging unit has no chance of catching the top three players: GE (GE
), Siemens (SI
), and Philips (PHG
). "We need more scale," Perez told BusinessWeek. On May 4 he revealed that he's looking to sell or find a partner. Don't expect him to dawdle: "I don't want to keep this out there too long, because that would destabilize the business." Estimates of what the unit could fetch range from $1.5 billion to nearly $4 billion. Big Pharma may need to pop some Prozac after this. On May 4 a Boston jury ruled that Eli Lilly (LLY
) must pay $65.2 million in royalties to Ariad Pharmaceuticals (ARIA
), a biotech outfit that has licensed the patent to a cellular process in the body triggered by a major protein. Lilly's osteoporosis drug Evista and its septic-shock medication Xigris trigger the same process. Lilly vows an appeal, contending Ariad's patent is almost as broad as claiming the rights to gravity. The drugmaker has at least one ally: In a separate suit, Amgen is asking a judge to zap Ariad's patent. Conseco (CNO
) investors must wish they had CEO coverage. Wall Street slammed the Carmel (Ind.) insurer when Chief Executive William Kirsch abruptly quit hours before reporting a 21% slip in quarterly operating income. Conseco stock slid nearly 7.4% on May 4 and 5 as analysts groused about the lack of explanation from Kirsch, who cited unnamed personal reasons and fielded no questions during an earnings conference call. He's leaving on May 23 but will stay on the payroll until Aug. 31 -- two weeks after his options and stock grants vest. Having absorbed Maytag in April, Whirlpool (WHR
) started its cleanup cycle on May 10, saying it will shed 4,500 workers and shutter several facilities, including Maytag's historic headquarters in Newton, Iowa. How did such a hot company go so cold? Silicon Graphics, founded in 1982 by Stanford professor Jim Clark and some grad students, hopes to end a long death watch via a Chapter 11 restructuring announced on May 7. The computer maker once was a bastion of hardware breakthroughs, especially in "visualization" -- whether helping engineers lay out millions of circuits to create a new chip or bringing the dinosaurs in Jurassic Park to life. But disastrous strategic bets and management turmoil caused SGI to miss out on the Internet boom, a mistake that was compounded by a short-lived attempt to split from its high-end ways to create Windows-based computers. Even as it floundered in recent years, SGI remained a haven for talented techies, who kept pushing the state of the art in many directions, including the use of computer networks for homeland security applications. By shedding $250 million in debt, the company hopes to emerge in six months with a rosier outlook.