Eaton Vance Insured Florida Municipal Bond Fund (AMEX: EIF) shares rose marginally this week after the board recently announced its intentions to merger EIF into the Eaton Vance Insured Municipal Bond Fund (AMEX: EIM) at a special meeting of shareholders to be held in October.

The closed-end fund was facing some shareholder concerns that its valuation was being hurt through concentrated geographical risk that was unnecessary to endure. Karpus Management, which owns around 14% of the fund, had been a vocal advocate of such a merger in order to unlock value in the fund. In fact, the activist withdrew its hostile intentions and complimented the fund in its most recent Schedule 13D filing with the SEC.

"We would like to commend the Board for its recently announced recommendation to EIF shareholders to merge EIF into the Eaton Vance Insured Municipal Bond Fund ('EIM') at a special meeting of shareholders to be held in October," said Sharon Thomton of Karpus. "Consequently, we wish to withdraw our termination proposal, director nominees and shareholder list request, which were submitted to EIF on April 17, 2008 and April 24, 2008."

However, Karpus did bring up the fact that a related closed-end fund owned by the same group is facing similar problems:

"Given the Board's recently announced action, we also believe that the Board must also address similar circumstances facing shareholders of FEV. In fact, a press release issued by FEV on December 12, 2007 and reiterated again on June 19, 2008 indicated: '... the Board of Trustees of FEV may in the future consider other actions, potentially including a merger of FEV into a similar closed-end Eaton Vance national municipal bond fund.' Without further action by the Board, shareholders of FEV continue to bear concentrated geographical risk without any additional benefit for doing so."

Both of these funds could represent strong buying opportunities for those investors looking to jump on board an activist campaign. The success in EIF will become apparent when the fund is absorbed by the parent and value is unlocked in the fund's shares. A similar story may emerge in FEV, which makes that stock one worth watching closely!

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Insiders know a lot about the companies they work for, so watching their actions can help bank some serious profits. These transactions can be monitored by the public through forms 3, 4, and 5 filed with the U.S. Securities and Exchange Commission (SEC). Here are the top 5 insider buys from last week, which can be useful when creating a watchlist of stocks with a potential catalyst for this week:

1. Lamar Advertising Company (LAMR) - 10% owner Edward McDermott purchase a substantial block of shares valued at over $20 million.
2. Stericycle Inc. (SRCL) - The company's chairman and director each purchased substantial blocks of shares valued at over $10 million.
3. Orbitz Worldwide, Inc. (OWW) - Par Capital Management Inc. purchased over $12 million in new shares.
4. Saks Inc. (SKS) - Inmobiliaria Carso purchased over a million shares for nearly $10 million.
5. Hearst Argyle Television Inc. (HTV) - Hearst Family Trust purchased nearly a half million shares in a transaction worth some nearly $10 million.

Cardiome Pharma Corp. (NDAQ: CRME) shares moved sharply higher today after the company announced positive phase IIb results for its oral Vernakalant drug. The experimental drug reduced the rate of abnormal heart rhythms in patients with recurrent atrial fibrilation - a condition in which the heart's top two chambers quiver instead of beating regularly, thereby reducing the heart's ability to pump blood efficiently.

Cardiome said it would move forwards with phase III study and seek a development partner or strategic buyer for the entire company. Investors clearly applauded the move since the likelihood of a strategic buyer is substantially higher with every development milestone that they pass. These latest results demonstrated that the dosing group significantly reduced the rate of arrial fibrillation relapse as compared to the placebo group.

"We are delighted to report clearly positive clinical results from our vernakalant (oral) program, which continue to support our belief in the exciting potential of vernakalant as a therapy for atrial fibrillation," said Bob Rieder, Chairman and Chief Executive Officer of Cardiome. "With 949 patients and subjects exposed to vernakalant (oral) in this development program, we now have an extensive safety and efficacy dataset to guide us as we move this exciting clinical program forward and finalize our strategic discussions with interested parties."

Shares of Cardiome Pharma rose 27.46% to $10.63 on the news today.

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Freddie Mac (NYSE: FRE) and Fannie Mae (NYSE: FNM) shares are finding themselves under increased pressure as concerns about liquidity continue to mount. Many regulators are now calling for government intervention in order to save the government-subsidized entities and preserve the struggling housing market from a larger collapse. Unfortunately for shareholders, federal bailouts are only aimed at saving the company and not necessarily its shareholders.

A government takeover of both organizations is among several options being weighed by the Bush Administration. Officials may push for the firms, which own or guarantee almost half of the $12 trillion in home loans in the United States. Such a government takeover is likely to make the common stock of each company worthless, since paying off shareholders with taxpayer dollars may present a problem to perhaps everyone in the USA (minus those shareholders).

Fannie Mae has lost about 80 percent of its value during the past year while Freddie Mac has tumbled more than 85 percent during the same time. The reason is simply because many of these loans are going bad and requiring the companies to come up with capital that they are unable to raise. The government is expected to wait until these losses hit some $77 billion before it would be compelled to start a rescue.

Others insist that a government bailout would be unlikely because the two institutions have some $1.5 trillion in un-pledged assets and access to the debt market. Some insist that Fannie Mae would have to lose $40 billion immediately and Freddie Mac would have to lose $37 billion immediately in order to be considered insolvent. Housing prices would have to decline 40% nationally and delinquencies would have to rise as much as 10 fold to 12 percent to reach critical levels, according to these analysts.

In the end, there is still a lot of uncertainty as to whether or not the two housing market giants are in trouble. If they are, however, it is clear that shareholders will likely lose out in the event of a bailout. The only people that can hope to get their money back would be bond holders.

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Rohm and Haas Company (NYSE: ROH) shares surged over 65 percent today after rival Dow Chemical (NYSE: DOW) agreed to purchase the company for $15.3 billion. The $78 per share takeover deal includes funds from a Kuwaiti sovereign wealth fund and Warren Buffett's own Berkshire Hathaway. The 74 percent premium may seen hefty to some shareholders, but Dow Chemical executives insist that the strong brands and technologies make the premium worth paying.

The acquisition represents Dow Chemicals' efforts to expand higher-margin specialty chemical markets, which can help protect it from the ups and downs of basic chemical sales. Recently, the company has been struggling with the performance of its basic businesses due to increases in raw material costs that it has tried to pass on to consumers. This deal will make Dow the largest specialty chemical and advanced materials company in the world.

So, just how much will this magic deal help Dow in the future? Well, some analysts are expecting a big boost. Before the deal, analysts have been expecting Dow to earn around $3.50 per share in 2010 and 2011 during the industry trough, but now they are expecting around $4.50 per share. Meanwhile, in 2015 when dow forecasts the peak, EPS is expected to exceed $10 per share. Meanwhile, Dow expects to realize pretax annual cost synergies of at least $800 million per year.

In the end, many investors view this as a very positive move and do not believe that Dow overpaid. The company has entered into a higher-margin business, which should boost growth and earnings multiples. Meanwhile, the move also helps the company realize cost benefits through economies of scale.

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The car market may be hurting in the United States, but sales in Europe are booming for at least one U.S. company. General Motors (NYSE: GM) reported record sales of nearly 1.2 million vehicles in Europe for the first six months of the year. Sales grew 58% in Eastern Europe and 60% in Russia, which offset a weaker market in Spain and Italy.

General Motors has been struggling in the United States recently thanks to a slowdown in the housing market and consumer spending. The result has been an environment where consumers are pinching pennies and loans are difficult to obtain even for qualified buyers. As a result, GM has cut many jobs and taken other measures to reduce costs to salvage its earnings.

The Wall Street Journal also published an interesting piece today pointing out the only way for General Motors to emerge from this mess may be bankruptcy. The automaker is not only too large right now, but also employs too many people in too strong of a union. These are problems that aren't easy to circumvent, especially when it needs $15 billion just to make it to 2010.

General Motors shares are down more than 70% during the past 52-weeks and continue to struggle. European sales may be doing very well these days, but the market is simply too small to make a material difference. And a turnaround in the way it operates in the United States may be too costly to undertake and too difficult with unions.

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VMWare Inc. (NYSE: VMW) announed this morning that its co-founder and chief executive, Diane Greene, is leaving the company. Ex-Microsoft executive, Paul Maritz, is set to replace her as the head of one of the most popular technology companies in the market. Predictably, the stock moved down $13 - or 25% - on the news.

VMWare also took the opportunity to lower its financial expectations for the year, since the stock was already going to be down on news of the departure. The company said it expects revenues for the full year of 2008 to come in modestly below the previous guidance of 50% growth over 2007; however, the company did not update its guidance with specific numbers for Q2.

VMWare was one of the hottest IPOs ever one Wall Street before the economy turned south last year. The company is a provider of virtualization solutions from the desktop to the data center. The company's suite of virtualization solutions addresses a range of information technology problems that include infrastructure optimization and desktop management.

Many investors are now wondering whether or not the drawdown today went too far. The departure of Ms. Greene was a long time in coming due to a lot of friction between VMWare and its former parent company EMC. Greene had had a lot of leeway within the company because VMWare was somewhat of a golden egg for the company. However, her failure to perform caused friction.

Some investors are bullish on news of new blood within the executive ranks. Meanwhile, the growth prospects for VMWare remain relatively strong despite the slowdown in technology spending on the part of corporations. The technology itself is used to reduce costs and improve performance, which is why the company used the word "modest" in its statement.

In the end, it will be interesting to see just how much VMWare can fall before investors take into account future growth and realize its relatively low valuation - for a tech company - of 68x earnings. Some are even saying that it could become an eventual takeover target for a larger business technology firm looking to move into the high growth virtualization arena.

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Microsoft Corporation (NDAQ: MSFT) said today that it might revive takeover talks with Yahoo Inc. (NDAQ: YHOO) if billionaire activist Carl Icahn's campaign to takeover the board is successful. Icahn is quickly building momentum ahead of a Yahoo annual meeting scheduled for next month after he promised to oust the board and chief executive Jerry Yang in order to pursue a sale. The billionaire activist has already won support from several hedge funds and is expected to put up a fight.

Icahn insists that Yahoo must combine with Microsoft in order to effectively compete against Google and has already won backing from large holders, including T. Boone Pickens, and John Paulson. The reason, according to many, is that any campaign by Carl Icahn generally draws a great deal of support given his popularity as an activist. Shareholders also clearly appear to be supporting him as shares rose sharply today on the news.

Microsoft originally offered around $44.6 billion for Yahoo, which comes in at $31 per share. That's 62% more than the search company's stock price before the takeover talks. However, the company rejected the offer saying that it was worth more because of its growth prospects and strong presence in Asia. Unfortunately, conditions have worsened since then and many investors are wondering if they can even get that much from Microsoft anymore.

Carl Icahn has nominated nine directors to replace Yahoo's board, including himself, Mark Cuban, and Frand Biondi Jr. The annual meeting is currently scheduled for August 1st, but it would not be uncommon for the meeting to be delayed if the existing board feels that they will lose the vote. It will be interesting to see what becomes of this situation...

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