Harold Maass of The Week The Best of Today's Business

NEWS AT A GLANCE

Clear Channel deal on the rocks

The $19.5 billion acquisition of radio giant Clear Channel Communications by private equity firms Bain Capital and Thomas H. Lee Partners has reportedly been thrown into doubt after the banks financing the deal balked. Clear Channel and its buyers are preparing to sue the lenders to force them to complete the deal. (The New York Times, free registration) Clear Channel shares fell 21 percent in extended trading, to $25.82; the agreed purchase price is $39.20 a share. (AP in Yahoo! Finance) The deal is the latest leveraged buyout to face dissolution. "If it fell apart, it would be seen as a casualty of the credit crunch," said RCB analyst David Bank, as well as "cyclical challenges of the radio industry." (Reuters)

Vale, Xstrata merger called off

Brazilian miner Vale and Switzerland's Xstrata PLC said they have terminated merger talks, scuttling what would have become the world's largest mining company. The merger was reportedly worth about $90 billion. (MarketWatch) The deal hit a snag over commodity trader Glencore International, Xstrata's biggest shareholder, which wanted to keep marketing rights to several of Xstrata's products. (AP in CNNMoney.com) That was "the real stumbling block," said analyst Peter Arden at Ord Minnett in Sydney "It is not as if Vale are novices at what they are doing, they don't need anyone to hold their hand to sell their product." Xstrata shares fell as much as 12 percent in London early today. (Bloomberg)

Cable providers mull WiMax stake

Cable giants Time Warner Cable and Comcast are in talks to finance the high-speed WiMax wireless network being pushed by Sprint Nextel and Clearwire, The Wall Street Journal reported. Comcast would invest up to $1 billion, while Time Warner would contribute $500 million. Other investors include Intel and Google. (Reuters) The investment by the cable firms would be a direct challenge to wireless companies Verizon and AT&T, which have made big pushes into TV and Internet service. "Comcast and Time Warner are home-, broadband-, and PC-oriented, so WiMax as a choice to get into wireless makes sense for them," said Jupiter Research analyst Julie Ask. (The Washington Post, free registration)

Cutting costs, and hair, in Miami

The Miami area tied Las Vegas for the dubious prize of quickest-falling house prices, at 19.3 percent, according the S&P/Case-Schiller index, and local residents are feeling the squeeze. As their houses lose equity, Floridian homeowners are cutting back on expenses. In Miramar, 23 miles north of Miami, Richard Welch has canceled his cable and is cutting back on groceries, after his house lost $145,000 in value since last year. And Rita Roland cut off 11 inches of her 14-inch-long hair to save $1,600 a year in salon trips. "I looked at my house as a bank account," she said. "I'm looking at not gaining money on this stock that I call a house, and may actually lose money." (Bloomberg)

BEST COLUMNS OF THE DAY

Why housing prices drop slowly

Real estate, more than any other asset, is "conducive to hopeful overvaluation," says David Leonhardt in The New York Times. Even though home sales have fallen "a remarkable 33 percent" since 2005, prices are down only 10 percent in the same period. That's because "houses are almost perfectly engineered to trick owners into overvaluing them." There's the obvious "emotional connection" to a home that makes it hard for sellers to "submit to reality." And it's even harder when the reality is that your house is worth less than you paid for it. It's human nature to "go to great lengths to avoid taking a loss," but in this case "admitting defeat" will end the pain quicker.

Rally or rest stop?

After the "tough winter for the stock market," says Ben Steverman in BusinessWeek.com, are we finally seeing "some signs of spring"? Maybe. But there is a better than equal chance that the rise in stock indexes is merely a "classic 'bear market rally.'" Like a "sprinter," the stock market "needs a breather now and then" -- even in a bear market "stocks will bounce back. Temporarily." Investors look for signs of "extreme levels of pessimism" to signal the end of selling, but the problem now is that there are good reasons for pessimism. Until economic signals clear up regarding a recession, stocks can maybe count on only one thing in their favor: investors have a "dearth of viable alternatives."

GOOD DAY FOR: Retaking the lead, after Exxon Mobil once again became the world's largest company by market value, following a five-day decline for PetroChina. PetroChina overtook Exxon five months ago, after its IPO valued it at $1 trillion. Exxon is now worth $455.8 billion, PetroChina $453.1 billion. (Bloomberg)

BAD DAY FOR: Being grounded, after a U.S. appeals court struck down New York State's "Passenger Bill of Rights," which guaranteed stranded airline passengers fresh air, water, food, and working toilets. The court ruled that the 2007 law would encourage other states to come up with laws governing airlines, in violation of the 1978 federal law relaxing regulation of the airline industry. (Bloomberg)

NOTED: Video game maker Take-Two Interactive rejected an unsolicited takeover bid by larger rival Electronic Arts, calling the $26-a-share offer "inadequate in multiple respects." Take-Two said it wil reassess its options after it releases "Grand Theft Auto IV" at the end of April. (MarketWatch)

This column was written by Peter Weber and edited by Harold Maass of TheWeekDaily.com.