Bear Stearns: I forecast at the beginning of the year that a major US bank would fail but be taken over and it is of course in one way pleasing when our direst predictions come true. This wasn’t too difficult, though. I fear Bear may not be the last. It is the result of managers being too busy to check what risks they were taking.
Alitalia ‘Struggling Alitalia is bought by Air France’ says the Daily Telegraph. I am afraid however that this is not yet the done deal people expect. Air France has imposed conditions. Raffaele Bonnanni, the union leader has said ‘the government is sending us naked into the meeting’ and ‘whoever has committed this grave mistake will pay for it’. This is good news for Berlusconi if he can just keep his mouth shut - the government will have to signal its acceptance of Air France’s conditions before the election. Many Italians, wrongly in my view, will see the loss of their national flag carrier as a symbol of decline and Veltroni may pay a price.
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