The Census Bureau numbers on income and poverty in 2005, released on Aug. 29, had something for everyone going into the fall election season. Republicans could trumpet the 1.1% increase in real median household income in 2005, the first such gain since 1999, as a sign that the economy is on the right track. Democrats could point to the decline in the real median earnings of full-time male workers, to the lowest level since 1997, as an indication that the labor market is still deteriorating. Optimists could enjoy the teensy decline in the poverty rate, from 12.7% to 12.6%, while pessimists could fret about greater income inequality. And pro- and anti-immigrant advocates could argue over the fact that all the income gains came from foreign-born households, while the native-born were treading water.
The week's more recent statistics were mixed, too. Unemployment claims held at a low level, a good sign. But consumers waxed gloomier than expected, and new-home sales sagged. The dismal science consensus: Slower growth ahead, but no recession.
Just when it looked like Google (GOOG) and eBay (EBAY) were headed for a battle royal, peace broke out with a major ad deal on Aug. 28. Google will provide Web search advertising on eBay's international sites. The two will also develop click-to-call ads, which let potential buyers click on a link to talk to merchants through their computers. What gives? Pragmatism. EBay needs Google's ad expertise, and Google needs Skype's 100 million Net phone users. But it's an uneasy d?tente: They will continue to scrap over online merchants and payment systems.
See "Google and eBay's New Connection"
Just a week after Dell (DELL) announced the largest PC battery recall in history, Apple followed up on Aug. 24 with the second-largest, affecting older notebooks. The culprit was a division of Sony, (SNE) which said the batteries may cause an internal spark that can lead to a fire. Investors yawned at the news, which won't short out Apple (AAPL) earnings, but 1.7 million iBook and PowerBook owners cringed at the hassle of sending away for a replacement. On Aug. 30, Apple signaled a deepening of its ties with Google by naming the search king's CEO, Eric Schmidt, to its board.
See "The Assault on Apple's Battery" and "Time for an Apple/Google Mash-up"
Italy's banks dawdled for years instead of consolidating, shielded by regulators who shut out European suitors. But when new Bank of Italy chief Mario Draghi said in June he would welcome cross-border deals, the game of fragmented fiefdoms was up. The news triggered a shotgun merger announced on Aug. 28 between Banca Intesa and Sanpaolo IMI, the nation's second- and third-largest, creating a powerhouse with 22% of the Italian banking market and $83 billion in market cap. Now, No. 4, Capitalia, needs to find a bride and fast -- before the barbarians storm Italy's northern gates.
See "Europe's Banks: Is the M&A game Finally Afoot?"
Two giants are paying big bucks to get out from under legal clouds. On Aug. 28, Prudential Financia (PRU)l agreed to fork over $600 million to settle charges in the mutual fund trading scandal. It admitted to criminal wrongdoing, the first firm caught up in the investigations to do so. And on Aug. 29 drugmaker Schering-Plough (SGP) said it would pay $435 million to settle civil and criminal charges of defrauding Medicare. Its Schering Sales unit pleaded guilty to one count of conspiracy.
Extending BP's (BP) string of sour news, The Wall Street Journal reported on Aug. 29 that regulators are looking into whether the London oil major manipulated crude-oil and unleaded-gasoline markets. Subpoenas in the crude probe focus on 2003-04, while the gas inquiry examines New York Mercantile Exchange trading in 2002, sources told the Journal. Regulators declined to comment, and BP said the company "routinely" gets requests from authorities.
See "Did BP Manipulate the Markets?"
Can he do for laundry detergent what he did for soda? On Aug. 30, Clorox (CLX) said that the executive responsible for the turnaround of Coca-Cola's (KO) North American unit, Donald Knauss, was leaving to take the top spot at the beleaguered bleachmaker. The hard-charging Knauss will be succeeded by J. Alexander "Sandy" Douglas Jr., who has run the North American operation before.
They had to sweeten the pot a tad, but Kinder Morgan (KMI) CEO Richard Kinder, three fellow directors, and private equity investors including Goldman Sachs (GS), Carlyle Group, and AIG (AIG) won approval on Aug. 29 for a $22 billion LBO of the oil-and-gas distribution giant. The deal, first proposed in May, will roughly double Kinder Morgan's debt, to around $14 billion.
Creditors can breathe easier since Beijing on Aug. 27 passed a long-awaited corporate bankruptcy law. It takes effect on June 1, replacing a 20-year-old relic that applied only to state-owned enterprises and mainly focused on protecting workers. Private outfits and financial institutions will now be covered, and creditors will be first in line for payment, ahead of employees.
See "China's New Mantra: Creditors First"
The last big refuge for the middle class in Manhattan is up for grabs. MetLife (MET) says it's entertaining offers for 11,200 apartments on the East Side. The 80-acre complex known as Peter Cooper Village and Stuyvesant Town might fetch $5 billion, The New York Times estimates. Renters won't be tossed out on First Avenue: About three-quarters are paying below-market prices under New York's rent-stabilization law and will continue to be protected even under new ownership.
One of the Vioxx rulings that whacked the drugmaker last week was overturned on Aug. 30. The judge said $51 million in damages was excessive and called for a new trial to determine the right amount.
Where in the world is Jacob Alexander, a.k.a. Kobi? Sri Lanka? Israel? Parts unknown? The former CEO of Comverse Technology (CMVT) took a powder shortly before federal prosecutors charged him and two other ex-Comverse execs on Aug. 18 with securities, mail, and wire fraud for allegedly backdating stock options at the New York software company -- so the unfolding options scandal now features an international manhunt. A prominent Israeli businessman who also holds U.S. citizenship, Alexander vanished not long after wiring $57 million to an Israeli bank account. So far he has managed to evade capture by the FBI and Interpol while unleashing a swirl of rumors concerning his whereabouts. On Aug. 24, Moshe Buller, an Israeli private detective hired by a venture capital firm to find Alexander, claimed he'd spotted the fugitive late at night in a Sri Lankan fishing village. But some have questioned that story, and by the time it hit Israeli papers, Alexander appeared to be long gone.