NEWS AT A GLANCE
Chrysler doubles down on Dodge
With its $7 billion bet on Chrysler looking less likely to pay off, Cerberus Capital Management is putting most of its remaining chips on the new Dodge Ram pickup. If the fully redesigned Ram is a hit, it could push Chrysler toward profitability. If not, Chrysler doesn’t have much else in the pipeline. And truck sales are down, with gas prices up. “A lot of vehicles Chrysler has coming are of the large variety, which aren’t selling right now,” said CSM Worldwide analyst Michael Robinet. (The Wall Street Journal) Chrysler is also pushing a proposed $25 billion federal loan program, saying it would use the money to invest in electric and other alternative-fuel cars. (The New York Times)
Wall Street banks accused of aiding tax dodge
Top Wall Street banks, including Morgan Stanley, Citigroup, Lehman Brothers, and Merrill Lynch, are marketing and selling schemes to help foreign hedge fund investors illegally avoid billions in U.S. taxes, a U.S. Senate investigation found. Up to $100 billion a year is lost to offshore tax abuses, the Senate panels says. (The Wall Street Journal) Foreign investors are taxed on dividends from U.S. investments. The banks allegedly came up with schemes to disguise the dividends as tax-free earnings. (The New York Times) A separate U.S. government report said that 13 Interior Department officials in charge of oil royalties had wild parties and accepted sexual and other favors from oil company employees, in return for rigged contracts. (AP in CNNMoney.com)
Deutsche Bank in talks with Postbank
Deutsche Bank is in advanced talks to buy a stake in Deutsche Postbank, which would greatly expand its retail operations. Deutsche Bank would buy the stake from Deutsche Post, which owns half of Postbank. (Reuters) Deutsche Bank is initially expected to snap up just under 30 percent of Postbank, Germany’s largest retail bank, for about $2.9 billion. Deutsche Bank is under pressure to match the recent coupling of Commerzbank and Dresdner Bank. (Spiegel Online) Spain’s Banco Santander is reportedly also interested in buying Postbank. “We believe Deutsche Bank’s move to secure ‘a stake’ represents a preemptive strike to try and block out other suitors,” said analyst Matthew Clark at Keefe, Bruyette & Woods. (MarketWatch)
Beer rises as other vices slip
In most economic downturns, drinking, smoking, and gambling usually come out OK. Not so much this time. Smoking is facing hard times, including several municipal and state smoking bans, and high fuel prices are crimping the casino business. Beer sales, however, are up. More than 16 million barrels of domestic beer was sold in the U.S. in July, and annual sales through July were up 1.4 percent, the highest rise since 1990—another year of hard times. “People gotta drink no matter what’s going on with the economy,” says author Dan Ahrens, who puts beer up there with toothpaste and soap as a recession-proof staple. (Los Angeles Times)
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
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- The hilarious hypocrisy of Republicans complaining about the imperial presidency
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