How To Fund the Next Bank Bailout?

Does Europe know something about imminent "future bank bailouts" that we don't? British Prime Minister Gordon Brown surprised many at the G-20 Summit in Scotland over the weekend with a proposal to create a new global tax on financial transactions "to pay for future bank bailouts," the Wall Street Journal reports, dividing policymakers of the world's biggest economies straight down the middle. Germany, France, and Brown are solidly behind such a tax; Canada, Russia, and U.S. Treasury Secretary Timothy Geithner are dead against it. Ah, but the genie may already be out of the bottle. The tax idea is gaining momentum, the WSJ reports, particularly now that the IMF is investigating such a levy.

There was some consensus reached at St. Andrews, Scotland, this weekend, however. Geithner and his counterparts spoke of the need to continue pumping stimulus monetary support into the economy to ensure growth. When will taxpayers no longer be needed to prop up the global economy? It could be some time still, warns Geithner. "Government policy has to provide a bridge to growth led by the private sector," Geithner was quoted by Reuters as saying. "We're now in the middle span of that bridge." Perhaps it's this "do-your-part" duty that has spooked consumers into a state of extreme frugality, as the WSJ reports this morning. The newspaper speaks to consumers and big brands about the upcoming holiday season. The conclusion? "People are digging in for a long, frugal winter," the WSJ writes. 

Maybe it's not such a risky gambit to buy a railroad for $26 billion, not when your company is still making gaudy profits. According to the BBC, Warren Buffett's Berkshire Hathaway (BRK.A) reported a tripling in net profit to $3.2 billion last quarter. "Most of that was due to an unrealised $1.1bn gain on some derivatives its insurance unit holds," the BBC writes. In announcing the impressive profits windfall, Buffett announced that "the credit crisis has abated," Bloomberg reports, adding that it helped "provide a cushion for Buffett as he buys railroad Burlington Northern Santa Fe Corp." The WSJ takes a look this morning at another of Buffett's successful investments in his portfolio, MidAmerican Energy Holdings Co. (MWPSP.OB), which is trying to crack the Midwest's clean-tech market, mainly through wind power. "Iowa has become second in the nation in wind-energy capacity, behind Texas, due in part to MidAmerican," the newspaper writes.

Kraft (KFT) is set to go hostile against Cadbury, having been rebuffed in its attempts at a friendly merger, the NYT reports. Kraft has until 5 p.m. GMT today to launch a formal offer or be forced to walk away for six months under U.K. takeover rules, notes the Guardian. Kraft will take a cash-and-stock offer direct to Cadbury shareholders with the hope of reaping $625 million in annual pretax cost savings by combining "its Ritz crackers and Oreo cookies with Trident gum and Dairy Milk chocolates." That's one mixed-up power snack, or maybe a new food group in its own right?

The "equivalent of Godzilla swallowing Rockefeller Center." That's how one media watchdog describes Comcast's plans to buy NBC Universal at a reported price of $30 billion, the NYT and the WSJ write. Comcast and General Electric (GE), which owns 80 percent of NBC Universal, are inching toward a deal that would give Comcast 51 percent control in NBC. In the past, Vivendi, which owns the other 20 percent of NBC, expressed an interest in selling its stake but it is "unclear whether Vivendi has agreed to the deal being considered by Comcast and GE," writes the WSJ. Meanwhile, another Comcast (CMCSK) joint venture, Clearwire, is set to receive another $1.5 billion from its partners in an attempt to shore up the underperforming wireless-broadband firm. Lead partner Sprint (S) would kick in $1 billion with Comcast, Time Warner (TWX), Intel (INTC), and Bright House Networks LLC, adding the extra $500 million, the WSJ writes. Also: "Sprint's plans for a higher-speed data transmissions are heavily tied to Clearwire's success."
 
And, finally, the Pittsburgh Post-Gazette reports the IRS may be looking for some of you—to give you a check. "The agency is holding federal income tax refunds totaling about $124 million that it tried to distribute this tax season, but were returned as undeliverable," the newspaper writes. All told, there are about 108,000 people owed a tax refund that the IRS simply cannot find.