September 8, 2008: Trenton-Mercer airport, located just south of Princeton, NJ off route 95, is home to many corporate jets.  In the pharma world, Bristol-Myers Squibb [NYSE:BMY], Johnson and Johnson [NYSE:JNJ], Merck & Company [NYSE:MRK] and Pfizer [NYSE:PFE] all have operations there.  However, Bristol-Myers Squibb has decided to bow out.

BMS will close its aviation operations and sell off its equipment, four aircraft in all.  The company owns two Gulfstream jets and two Sikorsky helicopters, which combined could raise up to $100 million.  The thirty-two pilots employed by the company will also be furloughed.

The move is just another sign of the increasingly challenging environment in which big pharma operates.

I received an interesting alert from the Wall Street Journal when I got back from dinner this evening.    It seems that Washington Mutual [NYSE:WM] has decided to oust its CEO, Kerry Killinger.  Here's the message I received:

Kerry Killinger, who helped build Washington Mutual into the nation's largest thrift and then presided over its rapid decline, is being ousted as chief executive, making him the latest casualty of the mortgage crisis. Succeeding Killinger will be Alan Fishman, currently chairman of New York commercial mortgage broker Meridian Capital.

You can read the WSJ by following this link.   The timing is interesting, because I just posted my thoughts on WaMu at a number of boards including an article on Well Beyond the Pale.  For me, at least, iit's clear that Washington Mutual is at a high risk of being seized by the FDIC.

So, Fannie Mae and Freddie Mac have collapsed.  They exist but are in conservatorship. They'll be taken over by regulators and the Treasury will purchase the senior preferred stock, which is owned by other US banks.

The problem that the two companies had was capitalization.  Even a a month or two ago, liquidity wasn't the issue it is today, but things deteriorated quickly.  Like many banks, they have notes maturing at the end of this calendar year.  I think that there's between $80 to $100 billion in bonds issued by various banks which are should mature at year's end.  The companies don't have cash to honor their obligations and remain comfortably liquid; the capital markets aren't a friendly place to try and refinance, particularly as housing prices continue to soften.  That appears to be the problem.

So, Fannie Mae and Freddie Mac have collapsed.  They exist but are in conservatorship. They'll be taken over by regulators and the Treasury Department will purchase the senior preferred stock, a large percentage of which is owned by other US banks—neat transfer!  Many banks are facing challenges, but the question that interests me is will mortgage giant Washington Mutual [NYSE:WM] be seized by the FDIC?

July 31, 1975 was one of the darker days in the history of The Troubles.  Members of the Ulster Volunteer Force gunned down three singers from the Miami Showband, one of the more famous tribute bands that toured Ireland.  The attack happened after a botched UVF bomb attack.  The Band happened to be in the wrong place at the wrong time.

The new Miami Showband will make an appearance at the Belfast Opera House thirty-three years after the massacre.  The emotional concert, party tribute and part measure of how times of changed, is expected to sell out.