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The Maven: Making the Most of Bad News

From war abroad, let's turn to natural disasters at home, like Allstate (ALL). There is a good Inside Wall Street capsule in the BusinessWeek hitting the stands this morning on what a good buy the company might be. Its P/E trails other insurers badly, but a cut in risky exposure and price increases puts it in good standing.

Also in the latest BusinessWeek is a good note of caution, specifically on tobacco. The Florida State Supreme Court's dismissal of the Engle suit earlier this month and the decrease in other claims in recent years has been received as good news for the tobacco companies. But the overall level of litigation is still high and some of it might be successful, according to BusinessWeek, which offers a good primer on the litigation out there.

And wouldn't it be nice if we could litigate inflation away? We can't, but The Economist points out what is emerging as the obvious: For the first time in years, interest rates in the U.S., Europe and Japan are cycling in the same direction. Hopefully more to follow on how this will help and challenge investors.

And an unlikely bit of good news at Pepsi (PEP), where the flagship brand fell worse than flat (Pepsi volume slipped 1%) but the company at large outperformed due to an increasingly successful noncarbonated business. It's adding to its noncarbonated businesses and wrote off soft drink weakness to price and obesity concerns.

The company also did an "at least" numbers guidance, my favorite. They said full-year earnings would be "at least" $2.95 a share, up from $2.93.

A key factor going forward was left unsaid. Pepsi executives are quoted all over creation (including in The Wall Street Journal ) as saying that carbonated beverages should improve. But there seems to be little in the way of explanation (even in the Journal) as to why. The mystery answer is important. If it can get that carbonated business going again, look out above.

Also in The Wall Street Journal, an interview with Carlos Ghosn , who is said to have the powers to save General Motors (GM). We'll see about that. Ghosn got busy in the interview lowering expectations and telling the cornered General Motors CEO Rick Wagoner that he had nothing in the world to worry about. Would I like to be a fly on the wall at today's meeting.

And while we are on the subject of marriages, let's end the week with an annulment. In what Variety called a "stinging blow" to the music industry, a European court nixed the Sony- Bertelsmann merger. The 100-page judgment was "caustic," Variety noted, never a tone you like coming at you from the bench.

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