Kuwait Gets Cold Feet

Kuwait has pulled out of a multibillion-dollar deal with Dow Chemical, a move that the Wall Street Journal calls "the latest sign of how roller-coaster energy prices are whipsawing the global economy." The planned joint venture had been announced a year ago and was set to close Thursday. Under its terms, a state-owned petroleum company was to pay Dow Chemical $7.5 billion for a 50 percent stake in various chemical companies used to make plastics. It would have been the largest outside deal ever for the Kuwaiti government, which, like many of its neighbors, was trying to cash in on the oil-price spikes of the last several years.

But over the weekend, Kuwait got cold feet, citing the perilous global economy and the recent plummet in the price of oil. Bloomberg reports that the jilted Dow may be entitled to a couple of billion dollars in a breakup fee. Still, the question on investors' minds is whether Dow will now have enough capital to finance its planned takeover of Philadelphia-based Rohm & Haas. The company insists that it is going forward with the takeover, but in morning trading on the German market, Rohm & Haas shares fell as much as 6.3 percent, according to Bloomberg.

Fallout from the Bernard Madoff debacle continues. The WSJ examines the effects of Madoff's Ponzi scheme on Latin America's wealthy families. Although exposure in the region was clearly substantial, the Journal notes, "many are reluctant to step forward due to the private nature of Latin American fortunes, worries about security, and concerns about tipping off local tax authorities." Meanwhile, the Financial Times details the difficulties that several nonprofit organizations face in the wake of Madoff's ignominious decline. Jewish charities, in which Madoff played a prominent role, have been particularly hard-hit, and some are now calling for an amendment to the U.S. tax code to provide tax-deductibility for charitable organizations. One nonprofit official suggests: "They could make it that to get the 503(c) exemption, your investments might have to conform to certain criteria," reports the FT.

Will American workers and labor unions be better off when Barack Obama, almost certainly the most pro-labor presidential victor in decades, takes over the White House? The answer is not as straightforward as some choose to portray it. New York Times writer Steven Greenhouse, whose book The Big Squeeze makes him one of the foremost authorities on such topics, sifts through the claims made by unions and their loudest opponents. On the one hand, organized labor worked hard and spent hundreds of millions of dollars to elect Obama and will look for payback, specifically in the passage of the Employee Free Choice Act, which Obama has supported and which should make it easier to organize unions in workplaces where it's been tough in the past. On the other hand, the auto-industry bailout will require major union concessions and has arguably highlighted union intransigence. "A lot of people see that the unions drove the auto companies off the cliff," a Chamber of Commerce official tells Greenhouse. At any rate, the Obama administration also seems keen to enact an immediate personal tax cut, which would be administered through reduced withholding tax in workers' paychecks, according to the Washington Post. That ought to please the working class—at least those who still have paychecks.

What's going on with GMAC? As of Monday morning, no one seems to know for sure. The troubled financial arm of General Motors (which is also partly owned by private equity firm Cerberus) was approved last week to become a bank so that it could benefit from the Treasury bailout. But it's also engaged in a complicated tango with its bondholders over how to restructure a crippling $38 billion in debt, and a Friday deadline for terms of that bond deal to be finalized came and went. But the details of that deal have yet to be disclosed. A company spokeswoman told Reuters that they would be announced in "the near term."

Finally, consumers have been sending out mostly grim signals this holiday season by spending less in the malls and even online. And yet a movie about a dog seems to be enough to open the wallets; Marley & Me hauled in $51.7 million in opening-weekend box office sales. But studio execs aren't popping champagne corks yet—overall movie attendance is down by more than 5 percent in 2008. "Meanwhile, Hollywood also is starting to feel a decline in DVD sales and is bracing for a possible strike by actors," reports the WSJ.