Opening Bell: 3.20.06

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Lehman, Bear Sterns Hit By Housing Market (Bloomberg)
Pity poor Lehman. They didn't quite blowout earnings the way Goldman did last week. The Fed's tightening has led to a predictable slowdown in home sales and the lucrative mortgage-backed securities market. Guess that's Lehman's penalty for being a more-diversified operation, and not simply a i- bank trading house. Of course there's still record profits on tap this year, which should help fortify the continued divergence between Wall St. and the rest of the economy.

Supreme Court to Weigh in on Patents (Forbes)

Up until now, the Supreme Court has steered clear of the patent mess. It didn't intervene during the terror-inducing fiasco of the RIM-NTP case, when the latter held a broad patent for 'wireless email', that even the USPTO said should be invalid. Now Ebay is defending itself against MercExchange which claims to have a patent on the concept of 'buy it now', even though it's a well-known application of game theory. The big issue for the court to decide is whether an injunction, against doing business, is the appropriate response in a patent issue. It's such a harsh penalty, that the defendant almost always settles, given the stakes.

You Are What You Post (BusinessWeek)

Dear college graduates looking for a job on Wall St., you might want to take those pictures of you sitting on the toilet off of MySpace. Oh, and while you're at it maybe those testimonials on Friendster about being king of the keg stand. In fact, probably wise to mothball the whole thing. Surprisingly enough, your prospective employer knows about these sites, in fact they're big business. So if you have anything on there that might be embarrassing, it's best to err on the side of caution, because there's no drugs or sex allowed on Wall St.

America Increasingly Foreign Owned (AP)
Will foreign nations keep graciously lending us money if they can't buy anything with it? First we blocked CNOOC's (China) attempted buyout of Unocal, and now the Dubai ports deal. Some in congress are calling for out-and-out protectionism.

Former US Pres Bush asks China to support Citigroup's bid for bank (AFX)

Just because we don't want foreign interests controlling our important industries, doesn't mean we want the same rules applied to us. Former President Bush, on behald of his investment group, strongly urged the Chinese to allow Citigroup's purchase of the Guangdong Development Bank.
Dell to Double Its Staff in India by 2009 (AP)
Speaking of protectionism, politicians have floated the idea that companies must give their employees several months warning if they're going to be laid off, with their jobs shipped oversees. Seems like there's a pretty simple loophole -- just build the factories and hire the overseas workers first, later laying the American ones off. Apologies to low-level bankers, we're not trying to give your employer any ideas.
Snow Defends The Wage Gap (WSJ)
Politicians and government officials tend to look for excuses and rationalizations, when it comes to the growing wage gap -- "Oh, well when you adjust for benefits and health care expenses, and factor in the diminishing marginal returns on dollars, the gap is shrinking." -- so we can all admire treasury secretary Snow's position that the growing gap is the market's way of rewarding productive workers.
French Unions Threaten to Strike (WSJ)
"French Unions Threaten to Strike" -- sounds like a headline from The Onion. Let's get some perspective on the trouble en France. Autumn 2005: Riots in Muslim neighborhoods, high unemployment blamed. French government tries to improve employment picture by increasing labor flexibility. No, this isn't doublespeak. Spring 2006: Privileged students, whose job prospects are bright, revolt violently, threatening to derail the legislation, and hurting the minority populations. This is class warfare.
In Boomtown, but Still Stuck on a Bubble
It's a fact: businesses fall on hard times. Sometimes they have to seek 'strategic alternatives'. Most of the time, nobody except shareholders care, except when it's a newspaper and it becomes a national issue or a threat to democracy. All of the sudden, greedy beancounters threaten the civic fabric of America. Some are arguing that the San Jose Mercury News, because it wasn't included in the Knight-Ridder/McClatchey merger is a blow to Silicon Valley, which needs this news source. Please, you can't walk five feet without hitting a technology news source.
Wal-Mart To Grow In China (CNN Money)
The head of Wal-Mart Asia thinks that in 20 years, Wal-Mart's presence in China will be as big as it is in the US. It may seem like a surprise that the retailing giant can make a business of selling Chinese goods back to the Chinese with a markup, but the stores have been a big hit. The big challenge has been finding quality workers, so the company may start their own university to train prospective employees.
Oil Price Seen Dropping On Inventory (AP)
Okay, is this the drop we've been waiting for? Seems that warm winter and a slowing economy have led to large inventory buildups and lower demand expectations. And it's not just us, demand across Asia is slowing as well.
Harlem Globetrotters In Anti-Trust Investigation! (Sports Law Blog)
Who says there aren't anti-trust investigations anymore? Our beloved Harlem Globetrotters are the subject of an FTC complaint, by the Harlem Ambassadors (boo, hiss!), that the zany basketball team uses monopoly power to keep their lesser-known rival from playing in the same arenas. What about the Globetrotters' unrealistic winning streak? Surely that must stem from monopoly power too, no?

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