Opening Bell: 3.30.06

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Nasdaq Abandons $4.2 Billion Takeover Offer For LSE (Bloomberg)
This shouldn't do anything to quell investor enthusiasm over all things stock market related. The exchange had to drop their offer, when the market pushed shares of the LSE almost 20% higher than the offered price. We can probably expect to see more mergers, as the white-hot exchanges go hunting for global expansion. In the age of electronic trading, it's all about having the largest network, with the most opportunities for participants. Furthermore, The Nasdaq would probably like a European branch to market to tech upstarts discouraged from US listing on account of Sarbanes-Oxley. Such companies use to be their bread and butter, but are now frequently listing in London.
Google's Surprising Stock Sale (BusinessWeek)
This S&P 500 inclusion has been quite the boon for Google. For one, it reversed a flagging share price. Secondly, the company is going to issue another $2 billion of stock, just to sell to index funds, as they stated in an SEC filing. Here's how Ben Elgin of BusinessWeek puts it: Why would an outfit with so much cash in hand sell stock worth another $2 billion? In part, to dampen recent price fluctuations. Hmm, that seems generous. We're guessing they're doing it for the money. Also, after the bell, S&P announced that Dean Foods would be included in the index to replace Maytag; ka-ching!
Lifetime Ban On Quattrone Reversed! (The Register)
Eat your heart out Henry Blodget! The Quattrone comeback is in full swing after the SEC decided to reverse a lifetime ban on his working in securities, just a week after a Federal Judge overturned his obstruction of justice conviction. There are still some lingering legal issues, and we're not sure who would hire him at this point, but crazier comebacks have happened in the past.
CEOs Fight Foreign Investment Restrictions (MarketWatch)
Does The Congress get the global economy? The answer seems invariably to be no, as it weighs further restrictions and delays on foreign investment into the United States. Despite our seemingly massive need for foreign capital, some would like to make it even less appealing for foreigners to invest in the country. Fortunately, the CEOs of the major financial firms are fighting back, and have written a letter in protest.


Oil at $66 (Reuters)
Once again, take your pick as to who's responsible. Today, Iran seems to be taking the blame. Well, it's not that Iran did anything, to push oil to within $4 of an all-time high, but Condoleezza Rice brought up the country to the UN Security Council, so there must be a connection. If the market goes down today, people will blame her for that too.
UK Home Prices Jump In March (Guardian)
It's been said that the UK has seen a similar housing cycle to ours, only it's a year a head or so. I guess that means we have the 'all clear' to stop worrying about the housing bubble. The UK market, after weakness last summer and spring that some said presaged our doom, has been putting in strong gains since the fall.
Bush Increases Fuel Efficiency Standards For SUVs (Reuters)
The conventional wisdom is that this move, which gives the automakers until 2011 to get their mileage up, is another blow to the US automakers. Granted, compared to their other problems, it's relatively minor. There's also a theory among some environmental economists that such regulations may actually be good for the affected companies Such dictates force them to become more efficient, learn about new technologies quicker, and all around become a better operation. But there's a catch. If the development of these products requires abnormal expenditure, more intensive engineering, etc. any efficiency gains on the consumer end may be cancelled out on the producer end.
Justices Hear eBay Patent Case (SF Chronicle)
The Supreme Court heard the case of MercExchange Vs. Ebay yesterday, a battle centered on MercExchange's patent of the "Buy It Now" feature. As we discussed, at issue is not the patent itself, but whether an injunction is the appropriate response in an infringement case. The conservative Scalia put it like this: "The property right is explicitly the right to exclude others. That's what the patent right is: Give me my property back." There's truth to this, and such strictness would probably be okay if that patent office were more discerning. As it is, should companies face shutdown for infringing on some bogus patent? Doesn't this defeat the purpose of intellectual property? Perhaps the problem could be solved if the USPTO reviewed questionable patents on a quicker timetable. In the RIM-NTP case, for example, everyone knew that NTP's broad patents over wireless email would be eventually stricken down, but that might have taken up to four years. Clearly, some sort of reform is needed.
Lou Dobbs Influential On Immigration Issues (NYT)
It's amazing that Fox news has the reputation for being biased, when the most agenda-driven TV personality is on CNN. Lou Dobbs used to host their nightly business show 'Moneyline' but they had to change the title to 'Lou Dobbs Tonight' when he stopped talking about business altogether, and became obsessed with the issue of immigration (he's against it). The show is almost entirely devoted to "anarchy on the borders" and the "exporting of America" and other segments that are little more than one-sided propaganda. But Congress is paying attention to him and his ratings are soaring. He's even put CNN in the awkward position of having to say that Dobbs will not be an influence on the rest of the network. Too bad Space.com never worked out.
Congressional Insider Trading (TCS)
Much of the noise about insider trading, short selling, and market manipulation these days is overdone. The fact that Overstock'is Patrick Byrne is a major driver of this says a lot about what this is all about. But, there is strong evidence that members of Congress routinely trade on insider information. One study expresses 99% confidence of this, based on statistical analysis. This is a legitimately troublesome issue for many reasons, one of which is that it gives Congressman the wrong incentive to, say, investigate a company. You'd hope that such tactics would be used only for matters of law and not as part of someone's due diligence.

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