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Net Net: Promoting innovation and managing change

Last Call: Starbucks Hopes for Big Dough From Bread

Emile Wamsteker | Bloomberg via Getty Images

“How can a nation be called great if its bread tastes like Kleenex?”

-Julia Child

- Below, look out Panera, Starbucks in investing $100 million in dough into the bread business.

MF GLOBAL AUTOPSY FLAGS CORZINE'S RISKS/WSJ – Aaron Lucchetti, Mike Spector, Julie Steinberg:  “A bankruptcy trustee blamed former MF Global Holdings Ltd. Chief Executive Jon S. Corzine for events leading to the financial firm's collapse, saying he may pursue legal claims against the former financier for ramping up risks and failing to safeguard money belonging to customers. James Giddens, the trustee trying to recover money for the company's U.S. brokerage unit, said in a 275-page report Monday that he may pursue claims of "breach of fiduciary duty and negligence" against Mr. Corzine and other officials at the firm for revving up the firm's risk-taking appetite without improving controls needed to keep customer funds safe. He cited Mr. Corzine's giant trading bets and failure to put systems in place to prevent improper transfers of customer money.”

AIRLINES WEIGHING FEE FOR OVERSIZE CARRY-ONS/NY Times – Joe Sharkey: “Some domestic airlines are weighing the idea of discouraging passengers from lugging oversize carry-on bags onto planes by imposing a $25 charge, at the gate, on bags that exceed the posted size limits. Alaska Airlines, the No. 7 carrier in domestic market share, is already quietly doing just that, in fact.”

BLACKROCK CHIEF EQUITY STRATEGIST BOB DOLL TO RETIRE/ “BlackRock announced that Chief Equity Strategist Bob Doll is retiring after 34 years with the firm. Doll said he feels the time is right to shift priorities, focusing more of his time on family, faith and philanthropic interests.”

JOHN PAULSON BUYS SAUDI PRINCE’S $49 MILLION ASPEN PALACE/ – Robert Frank:  “Hedge fund billionaire John Paulson has purchased the famed Hala Ranch along with another property in Aspen for $49 million, according to people familiar with the matter. The lavish ranch, sold by Saudi Prince Bandar bin Sultan, was once the most expensive estate ever listed in the U.S., with a price tag in 2006 of $135 million.”

IS STARBUCKS GOING AFTER PANERA?/MSNMoney - Kim Peterson: "Starbucks is spending a whole lot of money on a new baker.  The company is shelling out $100 million in cash for Bay Bread, the parent company of the La Boulange brand. Starbucks said it will start adding croissants and other French pastries to its menu early next year. Why would Starbucks spend that kind of cash on better croissants? For the answer to that question, you only have to look at shares of Panera Bread, which fell more than 1% Monday and were down another 1.6% in after-hours trading. Starbucks didn't explicitly say it was making a run at Panera's business, but investors made that leap pretty easily. La Boulange has 19 locations in the Bay Area, selling ham and cheese croissants, sandwiches, salads, soups and desserts."

GERMANY PUSHES EU BANK OVERSIGHT/WSJ – William Boston: “German Chancellor Angela Merkel on Monday suggested that European Union leaders consider putting the largest banks in the 27-nation bloc under direct European supervision, opening the door to more centralized oversight of the region's financial sector. The German proposal, which echoes a similar call from European Central Bank President Mario Draghi last week, comes as the region's leaders are trying to rebuild confidence in Europe's battered banking sector. In contrast to Mr. Draghi and the European Commission, however, the German leader stopped short of endorsing more ambitious plans to safeguard the region's financial system by creating a "banking union."

CBS'S OUTDOOR AD BUSINESS COULD FETCH UP TO $6 BILLION/WSJ: Ryan Dezember, Christoper Stewart, Anupreeta Das: “Bankers are gauging interest in CBS Corp.'s outdoor advertising business, which the media company hopes could fetch as much as $6 billion, people familiar with the matter said. The bankers have recently reached out to private-equity firms about the unit, called CBS Outdoor Inc., the people said. They added that these efforts are preliminary and no deal is imminent. A potential sticking point is the roughly $6 billion price tag that CBS wants for the unit, which sells spaces for advertising, including on billboards, bus panels and transit shelters. Buyout firms and some competitors have long eyed the asset, but many see $4 billion as a more-realistic price, the people said.”

QANTAS FORECASTS 91% PROFIT PLUNGE/Sydney Morning Herald: “Qantas Airways expects a fall of up to 91 per cent in its full year underlying profit due to the troubled European economy and soaring fuel costs.”

Economic Data                                                      

1000    May     ISM Nonmanufacturing


Before the bell

United Natural Foods

After the bell:

Hovnanian, Ulta Salon, Bob Evans

Key Guests

Jon Hilsenrath, WSJ Chief Economics Correspondent (620a)

Roger Altman, Evercore Partners (700a)

Arne Sorsenson, Marriott International CEO-Elect (710a)

Colin Reed, Gaylord Entertainment CEO (710a)

Donald Trump, Trump Organization Chairman (730a)

Shervin Pishevar, Menlo Ventures Managing Director (840a)

Shawn Matthews, Cantor Fitzgerald CEO (1000a)

Hans Vestberg, Ericsson CEO (1030a)

Adeyemi Ajao, Identified Co-CEO (1100a)

Brendan Wallace, Identified Founder (1100a)

Jonathan Golub, UBS Investment Research Chief US Equity Strategist (110p)

Kyle Harrington, Harrington Capital Management Founder (200p)

Reggie Fils-Aime, Nintendo of America President and COO (220p)

Wick Moorman, Norfolk Southern CEO (315p)

Larry Kantor, Barclays Managing Director (400p)

Bill Clinton, Fmr President of the United States (430p)

Anne Mulcahy, Fmr Xerox CEO (430p)

Edward Lazear, Stanford University (700p)

Follow Tom Rotunno on Twitter: @tomrotunno

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