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

NEWS AT A GLANCE

Chrysler and Nissan look at joint midsize cars

Chrysler LLC is reportedly in talks with Japan's Nissan about jointly making midsize cars for the U.S. market. Under the deal, Nissan would make midsize sedans that Chrysler would sell under its own brand name, in a big departure from Chrysler's business model. Chrysler is focusing its engineering resources on its areas of expertise -- trucks, SUVs, and minivans. The two automakers already have a deal in which Chrysler will make a full-sized pickup for Nissan and Nissan will make a subcompact car for Chrysler. This is the model used by companies like Dell, but when people can just buy the Nissan version, success "comes down to marketing and branding," says analyst Michael Ward at Soleil Securities Group. (The Wall Street Journal)

AIG posts $5.36 billion loss

American International Group, the world's largest insurer, reported a $5.36 billion quarterly loss, on housing-related writedowns and other losses. The loss, AIG's third straight quarter in the red, was worse than expected, and AIG shares lost 7.7 percent in extended trading. (AP in Yahoo! Finance) AIG wrote down $5.56 billion, pretax, in the value of credit default swaps -- a type of insurance against defaults for bondholders -- and $6.08 billion in the value of other mortgage-backed investments. (MarketWatch) "It was a pretty horrific quarter, just scary," said analyst Donn Vickrey at Gradient Analytics. (Bloomberg)

Toyota gets dented by U.S. slump

Toyota reported a 28 percent drop in quarterly profit, to $3.23 billion, as the stronger yen, weaker sales in North America and Europe, and rising raw material costs hit its bottom line. (MarketWatch) European sales dropped by 9.6 percent, and North American sales were down by 4.3 percent. Still, Toyota said it gained U.S. market share in the quarter, to a record 17.4 percent. (AP in Yahoo! Finance) Toyota is better off than its U.S. rivals because it depends less on SUVs and trucks. But SUVs and trucks have higher profit margins than small cars. "Toyota can't escape a terrible market," said Fumiyasu Sato of Milestone Asset Management. "Truck demand will keep shrinking and the shift to small cars will accelerate." (Bloomberg)

Coke's secret formula, a tiny bit less secret

Coca-Cola's secret recipe dates back to 1886, when Atlanta druggist John Pemberton created it, and Coke wants you to know that the formula doesn't call for any added preservatives or artificial flavors. In a new ad campaign being rolled out worldwide, designed to counter widespread beliefs that Coke is unhealthy and unnatural, Coke is divulging some hints about the recipe: it contains spices from around the world, and it hasn't changed in 122 years. Soft drinks like Coke, as they lose ground to bottled water and tea drinks, "are having to work out what their future looks like in this very health and diet-obsessed world, and it is a source of considerable anxiety," said Jasmine Montgomery at consultancy FutureBrand. (The New York Times)

BEST COLUMNS OF THE DAY

Why oil is falling

"The commodities bubble is dead," says David Callaway in MarketWatch. Oil is down almost 20 percent, and gold and agricultural commodities have also fallen steadily in recent weeks. This is due to supply and demand, but "not the way most of the pundits have argued" -- it's instead "the supply of investments in commodities vs. the demand from investors to buy them." The market for commodities is small, so speculative "walls of hot money" can easily push up prices. And they have. But now, like "every other Wall Street fad," the "hot money pendulum" has swung back away from the inflated market, at least temporarily. And it will swing again. But in this cycle, the "easy money" has been made.

Despite what you've heard, "futures-market speculators have nothing to do with the price of oil," says Fortune's Jon Birger in CNNMoney.com. For one thing, where is this windfall that speculators are said to be reaping? According to a Merrill Lynch analysis, "the average commodity futures fund lost 5.85%" over the past year. The Commodities Futures Trading Commission similarly found that commodities traders for institutional investors haven't pushed prices up. Oil is falling because fuel prices usually fall in late summer, after rising in the spring, ahead of the summer driving season.

GOOD DAY FOR: Preboarding, as JetBlue is asking 1,000 of its frequent flyers to show up at its new Terminal 5 at New York's JFK airport to check in and go through security, then go home. The mock check-ins are designed to help JetBlue avoid the massive, costly, baggage-malfunction-driven delays that hit British Airways' new Heathrow Terminal 5. JetBlue's Terminal 5 is slated to open in September. (Reuters)

BAD DAY FOR: Rolex dealers, as Wall Street bankers' hefty bonuses will be cut by up to 45 percent this year, according to compensation consultancy Johnson Associates. Senior management will see the biggest percentage cuts, Johnson forecast, as banks bleed money and most Americans pinch pennies. Hedge fund managers and real estate brokers can look for 10- to 15-percent cuts. (CNNMoney.com)

NOTED: Agribusiness giant Monsanto is looking to sell its dairy hormone business, which makes the artificial growth hormone Posilac, also called bovine somatotropin (BST). Posilac can increase a cow's milk production by a gallon a day, but several countries ban it and consumer leeriness has prompted most U.S. milk sellers to avoid using it. Monsanto says BST is safe, and that Posilac is selling well. (The New York Times)

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