by Daniel Costello

Good morning. Hope everyone had a nice holiday and is enjoying the New Year. Here are some highlights from this morning's business news:

In twin speeches at the annual meeting of the American Economic Association in Atlanta, Ga. this weekend, Federal Reserve chairman Ben S. Bernanke and his vice chairman, Donald Kohn, responded to critics who suggest that the Fed's policy of very low interest rates from 2001 to 2005 was the root cause of the most recent real estate bubble.

In his strongest language yet, Bernanke said the Federal Reserve clearly had a role in inflating the housing bubble, but it wasn't low interest rates alone in the U.S. that fueled speculation in housing around the globe.

 

On Sunday, Bernanke said it was lax supervision of toxic mortgages by the Fed and other bank regulators — along with excessive flows of capital around the globe — that inflated the bubble, setting up a housing bubble that led to the worst recession since the Great Depression and the loss of more than 7 million U.S. jobs.

The Fed may soon be open to raising interest rates to pop asset bubbles, even though stronger regulation remains the best solution to prevent a repeat of the crisis, Bernanke and Kohn said.

Here are links to Bernanke's and Kohn's speeches.

Swiss pharmaceutical giant Novartis offered to buy the rest of Alcon Inc., the world's largest eye-care company, from Nestle SA and shareholders for a total of $39.3 billion, as Chief Executive Officer Daniel Vasella expands into products for eye surgery.

Nestle will sell a 52 percent stake to the Basel, Switzerland-based drugmaker for $180 a share, up from the 25% stake it bought from Nestle in 2008, Novartis said today.

The deal continues a broad push toward greater consolidation in the worldwide drug business in recent years as many drugs are losing their patent protection and companies seek manufacturing cost savings. The deal is also expected to bring together research and development operations, potentially saving tens of millions of dollars for both companies.

Commenting on the deal, Daniel Vasella, chairman and chief executive of Novartis said: "The addition of Alcon will strategically strengthen our healthcare portfolio and our position in eye care, a sector with dynamic growth due to the increasing patient needs of an ageing population.

And advertisers appear to be willing to bet big on the Super Bowl once again.

The Los Angeles Times says, "CBS appears to be ahead of NBC's progress at this time last year, when the network reduced its $3-million asking price for a 30-second spot to attract skittish advertisers. The network that broadcasts the Super Bowl allocates about 45 minutes for commercials, including about seven minutes to promote shows... CBS has been charging $2.5 million to $3 million a spot for the game that airs Feb. 7, roughly the same rates as last year's, according to people familiar with the negotiations."