It seems that Halloween has come early this year. The dead are filing tax returns, the health bill was pulled back from the brink and Carl Icahn has shown signs that his corporate raider alter ego, which struck fear into the hearts of Wall Street firms, hasn't disappeared entirely. (If you missed last week's news, check out Water Cooler Finance:Bailouts, Buffett-Rock And Prison Brawls.)

In Pictures: The Biggest Bank Failures

The "Little" Bill That Could
It seems that, like Mark Twain once remarked, reports of the healthcare bill's demise were greatly exaggerated. It looked like the bill would die in the cold of winter due to flagging public support and skepticism over the end-cost estimates and the tax impact. Spring saw the bill rise again and it passed by a vote of 219 to 212 last week. It will be tied up in the process of reconciliation for a while, as the general public and Wall Street struggle to grasp the impact of a bill weighing in at over 2,000 pages. (Learn more about the new bill in 10 Ways The New Healthcare Bill May Affect You.)

Although there are real concerns about tax increases and runaway costs (see Medicare, Social Security, etc), some investors are already honing in on ways to profit from the change. Firms are buying up health centers and even charity hospitals on the expectation that more clients will be able to pay for the care they receive.

Tax Refunds for Zombies
Lehman Brothers (OTC:LEHPQ) has crawled from the grave long enough to file taxes. The highly leveraged firm collapsed in 2008, leading to some of the darkest days in finance. With the provisions in the stimulus bill for carrying losses back five years – three additional years than was previously allowed – Lehman's can apply the massive losses it incurred in 2008 and 2009 against taxes it paid in the high-flying bubble years. (Learn more about this company's collapse in Case Study: The Collapse Of Lehman Brothers.)

While it's not clear how much the firm will get, JPMorgan (NYSE:JPM) is asking for a $1.4 billion dollar adjustment from the government. If granted, this will essentially cover the purchase of Washington Mutual (OTC:WAMPQ). Combined with backing on the Bear Stearns (NYSE:TZK) deal, JPMorgan has become one of the biggest players on Wall Street thanks to government support. Too big to fail? Only time will tell ...

Germany to Pay for Greek Hubris
Instead of getting caught up bailing out corporations, the European Union is now in the business of bailing out nations. This is a nightmare for Germany. The fiscally conservative nation was behind many of the clauses and covenants requiring member nations to run sustainable budgets and avoid bailouts. The lessons of hyperinflation taught Germany that massive debt and the ability to inflate make for dangerous motivations.

Now the Germans, the biggest financial power within the union, have been officially put on the hook for their free-spending fellow EU members' debt. This owes more than a little to the fact that Greece is not in the minority when it comes to bending EU rules. Germany has wrangled out of some concessions of its own accord, like the involvement of the International Monetary Fund (IMF) and the re-evaluation of the oft-flaunted rules that let things get to this point. (Learn more about what's been happening in Greece in EU Economics? It's All Greek To Me!)

Lions Gate, MGM and Icahn, Oh My!
As Lions Gate (NYSE:LGF) eyed up MGM (NYSE:MGM) as a possible takeover target, Carl Icahn eyed up Lions Gate. Icahn already holds 20% of the company, but he made a tender offer to buy all of the company's shares at $6 a share. Icahn believes the company has lost its way and shouldn't be looking to increase its exposure to the movie business by taking on struggling MGM. Icahn's unique twist on the greenmail technique he pioneered seems to have been enough to make Lions Gate pull its bid for MGM and halt its acquisition plans for now. (Learn more about this famous corporate raider in Can You Invest Like Carl Icahn?)

Feinberg Making More Friends
Kenneth Feinberg, better known as the "pay czar", is far from popular on Wall Street this week. Although he has increased the cash salaries being paid at the firms he oversees, most notably AIG (NYSE:AIG) and GM, the companies still saw more wage freezes and compensation cuts than increases. While a $500,000 cap looks very generous, many of the executives at these firms are making much less than their counterparts who either did not receive TARP funds or have paid them back already. Fienberg will likely never be well-loved by Wall Street, but it's hard not to sympathize with a guy who has to balance political will and practical business on a daily basis.

Back Scratching Abroad
Two globe-spanning bribery cases also emerged this week. In China, Rio Tinto PLC (NYSE:RTP) employees admitted in court that they accepted bribes. Many aspects of the case are unclear, including the charges of stealing commercial secrets. Although Rio Tinto was supportive of its employees leading up to the trial, with almost a quarter of its revenue coming from China, it looks like the company will let the Chinese courts settle the score.

On home soil, the SEC has settled with Daimler AG over bribery allegations. The German company was under scrutiny for paying millions in bribes to secure foreign business. Daimler will pay $185 million to settle the case, which dates back to 2004.

________ It
The Chinese will no longer be able to "Google it." It takes a big story to grab as many headlines as the healthcare bill, but Google (NYSE:GOOG) managed it with ease. The internet giant announced that it was pulling out of China and ceasing to censor results from the Hong Kong site. According to reports, the cyber-attacks originating from China that hacked Google's servers were the last straw in an already strained relationship. For years, China has been testing whether capitalism can work without democratic freedom. For Google, at least, the answer is no. (For related reading, see Top 6 Factors That Drive Investment In China.)

Related Articles
  1. Investing Basics

    The Biggest IPO Flops

    Even with the uncertainties of IPOs, companies will keep issuing them in efforts to grow their enterprises, and some will end in disaster.
  2. Investing

    What a Fed Delay Means for the ECB & BoJ

    The Fed’s continued delay has repercussions for more than just the U.S. economy and markets. The ECB and the BoJ may support the case for stocks in Europe.
  3. Investing

    Latin America’s Economic Forecast

    After a ten-year run, the economies of Latin America are in a decline. For sustainable, long-term growth, the region needs structural reforms.
  4. Economics

    Why the Euro Failed to Become the World's Reserve Currency

    Examine the current state of the U.S. dollar as the world's reserve currency; learn the major reasons why the euro has failed to replace it in that capacity.
  5. Stock Analysis

    This Is What Carl Icahn's Portfolio Looks Like

    Read about some of the holdings in Carl Icahn's portfolio. Learn about his activist campaigns against companies that he believes are performing poorly.
  6. Mutual Funds & ETFs

    An Investor's Guide to the European Economy

    Below is a brief overview of the countries which make up the Eurozone and how their economy and markets have been performing in order to put things in perspective for an investor.
  7. Markets

    Why European Energy Business Is in Decline

    We look at what's hitting the European energy business and the outlook for the sector in the mid- to long-term.
  8. Economics

    The US Will Remain the World's Reserve Currency

    Learn why the U.S. dollar is not in any danger of losing its reserve currency status and understand how China is pushing the yuan to be a reserve currency.
  9. Stock Analysis

    What Led to Lumber Liquidators' Decline?

    Read about how a "60 Minutes" story on laminate flooring sold by Lumber Liquidators led to a massive decline in the share price for the company.
  10. Economics

    Understanding the Bretton Woods Agreement

    The Bretton Woods Agreement is a famous international monetary agreement that came out of a meeting of the UN Monetary and Financial Conference.
  1. What are the major laws (acts) regulating financial institutions that were created ...

    Presidents George W. Bush and Barack Obama, in conjunction with Congress, signed into law several major legislative responses ... Read Full Answer >>
  2. What are the advantages and disadvantages of the International Monetary Fund?

    Established following World War II to help with post-war recovery, the International Monetary Fund (IMF) serves as a lender ... Read Full Answer >>
  3. How did Enron use off-balance-sheet items to hide huge debts and toxic assets?

    Prior to its infamous accounting scandals and collapse, Enron used off-balance-sheet special purpose vehicles (SPVs) to hide ... Read Full Answer >>
  4. Who are Family Dollar's (FDO) main competitors?

    North Carolina-based Family Dollar (FDO) is one of the biggest discount retailers in North America. Competitors include companies ... Read Full Answer >>
  5. Where did the term 'Nostro' account come from?

    The term "nostro" is Italian in origin. It means "our" or "ours." In accounting and finance, nostro accounts are often differentiated ... Read Full Answer >>
  6. How do externalities affect equilibrium and create market failure?

    The International Monetary Fund (IMF) was created in 1945 and is governed by and accountable to its 188 member countries. ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Purchasing Power

    The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing ...
  2. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  3. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  4. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
  5. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  6. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!