Opening Bell: 3.23.06

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How To Fix Time Warner, Web 2.0 Edition (Business 2.0)
If Carl Icahn's proposal to fix Time Warner was too "concrete" or "numbers based" based for you, you may like this proposal from Erick Schonfeld, an editor at Business 2.0, a Time Warner publication (ooh daring). He starts off with an interesting point: Time Warner says it will buy back $20 billion of its own shares, well, that seems to me like an unimaginative use of capital. The entire U.S. venture capital industry invested roughly the same amount last year -- and it pumped life into 3,000 new companies. Wouldn't it be better for Time Warner to use some of that money to create the media company of the future? But it all quickly goes downhill once he busts on the new tech vernacular of "nichebusters instead of blockbusters", "content rebuilders", and "cost of attention". For the most part, it's utterly incomprehensible, and based on some new-new economy theories that seem to have sprung up in the last 2 months.
GM, UAW have mostly themselves to blame (Chicago Tribune)
There's been uncertain reaction to the news that GM basically told all their employees to scram yesterday. Despite some early optimism over the deal, it's clearly a mess. It really speaks to how far your business has fallen when you view each one of your employees as a liability to be bought off. Now, how large of a one-time buyout would you demand if asked to quite your job?
No Monopoly On Dark Matter (The Big Picture)
Those arguing that our current accounts deficit and the seeming global imbalances are misunderstood have popularized a theory of late known as Dark Matter -- basically that the US has all these intangabile assets out there in the world (knowledge, brand equity, experience) that pay dividends to our economy, but which don't get picked up in the actual economic measurements. When these assets are included, they argue, all of our external debt would just disappear. But Barry Ritholtz, in a wonderfully sharp piece, says hogwash. If we have dark matter, floating out there in the world, don't the rest of the countries we trade with. The brilliant managers at Toyota, who have taken manufacturing to an art represent hidden value. He also points out the cultural and design strength of the European economies. Arguing that we have a monopoly on knowledge and wisdom sounds less like economics than it does arrogance.
Morgan Stanley's Funds Challenge (WSJ)
The verdict on yesterday's Morgan earnings is that they were okay. Probably too early to call Mack a turnaround king, though they beat numbers like everyone else has been doing lately. Still, their main weaknesses remain, well, weak. Their retail stuff (mutual funds, asset management) aren't doing that great, as investors are basically dumping out of their positions. The company says they remain optimistic about the business, but everyone knows they basically wish they were Goldman -- trading, trading, trading, with a little bit of hedge funds, some more trading, and maybe some M&A
Why Stock Exchanges are Scrambling to Consolidate (Knowledge @ Wharton)
Yes, they are, aren't they? Well, there's economies of scale for one thing, and there's the fact that as exchanges go electronic, it makes sense to build up one centralized location. There's another pragmatic reason for international consolidation, like the NASDAQ's bid for the LSE, which is to serve companies that want to avoid Sarbanes-Oxley regulations. London's Times Online recently looked at how Sar-Box is pushing more companies to list over there. And what does it say about the regulations that even Eliot Spitzer thinks it goes too far.


Amex to Become For-Profit Firm, May Hold IPO (WSJ)
Aww, this is cute. They think they're a real exchange, just like it's older cousins, NASDAQ and NYSE, which have also gone public. They're also looking into this whole electronic trading thing to see if it's something that they could get into.
Dell to Buy Alienware, a Maker of High-End PC's for Gamers (NYT)
Dell confirmed, after having denied it all last week, that the company would be buying Alienware, a niche producer of high-end PCs aimed at gamers. Their top of the line products go for nearly $10,000. The move may be a quiet way of establishing a relationship with chip-maker AMD, which supplies to Alienware, but currently not to Dell.
Stephen Roach: Inside The China Debate (Morgan Stanley Global Economic Forum)
Morgan Stanley's Stephen Roach spends every waking moment thinking and writing about China, and the growing trade imbalanace, so one would hope that he knows what he's talking about. He recently went to the country, deeply analyzed their economic transition from central planning to the free market, and even spoke to the premier, Wen Jiabao. All in all some worthwhile reading if you have the chance. Shanghaiist has this to say about our protectionist Senator who has been touring China: Senator Chuck Schumer is a blithering idiot.
The Container That Changed the World (NYT)
It's a pretty common sport among writers to make analogies between modern technology and age-old innovation. -- "The internet is like the railroads, no wait, it's the telegraph. Text messaging is what postcards used to be." you get the idea. Virginia Postrel writes that the computer today is like the ship container 50 years ago, in terms of revolutionizing supply chains and consumer access to goods. She also has some fresh insights into the Dubai ports scandal that are worth keeping in mind amidst all the noise. Also, this is Postrel's last column for the times, the econo-blogger extraordinaire, Tyler Cowen, will be taking over the slot -- congratulations!
KB Homes Reports Earnings (WSJ)
KB Homes (Isn't that who Tom Cruise is with?) announced earnings after the bell yesterday. Basically, they looked like most of the other homebuilders -- strong this quarter, but demand is clearly slackening going out. Still, they've basically defied the analysts who predicted these companies would plummet along time ago. By the way, if you're in the market for a bland house, at a good price, the homebuilders have been offering weekend sales with as much as $60,000 off recently. Could you imagine buying a house, and then a few weeks later something equivalent is on the market for so much less than what you paid? Oh wait, yeah you probably can. "Honey, there goes the equity".

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