Five Things We're Watching: March 21, 2011

There’s nothing like the smell of a big takeoverto get investors’ juices flowing and take our minds, even briefly, away from the horrific disaster in Japan and the crisis in Libya.

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Mutti Bell: Those with long memories know that AT&T is no stranger to the trustbusters in Washington. Its proposed $39 billion takeover of Deutsche Telekom’s T-mobile is one of the boldest bets that the Obama administration, which hasn’t been nearly as tough on mergers as initially expected, will allow the No. 2 and No. 4 players in the wireless industry to combine. AT&T’s clout in the nation’s capital is legendary, so the initial remarks from regulators – and members of Congress – will be crucial.

Sprinting Behind: The loudest opponent to the deal is likely to be Sprint , which for some time been seen as the most obvious partner for T-Mobile. Suddenly, it’s the wallflower. Some investors may be breathing a sigh of relief that Sprint hasn’t paid through the nose for another company. Others, though, are wondering if “We’re No. 3” is going to be the new corporate slogan?

Apple of My Eye: Guess which company just got access to 34 million potential customers without having to pay a dime? Apple stands to be a big beneficiary of the deal but there will be plenty of others – from handset makers to equipment companies to advertising-dependent companies – who could be big losers. Some us in the media business really liked those Catherine Zeta-Jones commercials. Watch tomorrow to see which stocks move on this news.

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A $20 Billion Loan: If there was any doubt that banks were lending again (well, at least to blue-chip clients), J.P. Morgan Chase is lending $20 billion to AT&T to finance this deal. This should be a sign of confidence for the economy and the markets. Wall Street’s money machine will certainly benefit with a passel of banks making millions from this deal. One notable exception: Goldman Sachs, which doesn’t seem to have a piece of the action.

Disaster in Japan: It’s a holiday in Japan so the Tokyo stock market isn’t open. All eyes, though, are on the currency markets and there are signs that central banks may take additional action to weaken the Yen . The situation on the ground seems somewhat betterbut the ripple effect continue to whipsaw the global supply chain, with carmakers, tech companies and others facing shortages. And then there are those companies that depend on Japan for its well-heeled consumers, perhaps none more so than luxury-goods makers. We get our first peek at the impact on this sector on Monday when Tiffany, which gets roughly 20% of its sales from Japan, reports earnings.