Court Rules Against Gabelli (NYT)
Mario Gabelli, mutual fund star, media staple, and Barron's Roundtable fixture, suffered a setback when a judge agreed that Gabelli's company illegally prevented an insider from selling his stake, paving the way for a trial to determine whether Gabelli Group Capital Partners should be legally dissolved. It's been a tough time for the man from Rye, as the DOJ recently announced civil fraud charges against him, relating to federal wireless spectrum auctions. No word on whether he'll be invited back to next year's Barron's Roundtable. We always skipped over his picks anyway.
House Members Condemn Immigration Bill (CNN)
For those who suggest that illegal immigrants do jobs that Americans don't want, the anti-immigration wing of congress has one thing to say to you, "Let the prisoners pick the fruit!" Hmm... there's a logic to that, although Rep. Steve King of Iowa said, "Anybody that votes for an amnesty bill deserves to be branded with a scarlet letter 'A'". Is everyone who voted for the bill also an adulterer? Rep. Virgil Goode tried to match his colleague in the non sequitur dept., "I say if you are here illegally and want to fly the Mexican flag, go to Mexico and wave the American flag." With brilliant statements like these, it's clear who has the facts on their side in this debate.
No IPO For Vonage? (CNN Money)
Despite the fact that they've filed their S-1, there's been no amendments in 2 months, and that's leading some to speculate (and it appears to be entirely speculation) that company is putting themselves on the block. The S-1 was received unenthusiastically as they're already facing moderate churn and high customer acquisition costs (perhaps you've seen their ads?). So who would buy them? Maybe AT&T could get them cheap, and switch their customers to its Callvantage plan. An interesting development in this space was also Comcast's recent announcement that they plan to charge over $50/month to some customers for their digital voice (VOIP) offering. Seems like quite a lot, a high enough price point to keep the Vonages of the world in the game.
J.P Morgan Wants Rivals' Branches (WSJ)
J.P. Morgan is still really interested in physical bank locations. The company is looking to pick up 300 of Bank Of New York's locations, probably via an asset swap, giving the nation's oldest public company some of their corporate-trust division. This would probably work out for both, as it allows BONY to focus on their core business, while JP Morgan can invest the money to spruce up and improve the technology at the locations.
Lay-Skilling Week Nine (Houston's Clear Thinkers)
Houston Attorney Tom Kirkendall has the best coverage of the Enron trial. He knows the facts and the law better than anyone at The Journal and usually makes a surprisingly compelling case, in his writing, that the government's case is week. He has a good wrapup of the case, so far, and a look at what's ahead. Also, it appears the government has seen a setback in the Nigerian Barge part of the case, with ex-Merrill Lynch exec. William Fuhs gaining temporary release from prison on appeal. This is shaping up to be a Spring of vindication for all the former bad boys.
Fed Report Verifies Low Unemployment (WSJ)
There's been dispute, for several years, over the unemployment figures that don't actually calculate unemployment, but the percentage of people actively looking for work. There's a belief that many who are unemployed aren't even bothering to look, which skews the numbers. But a new report pegs the so-called participation rate (those looking for work) at 66.1%, not far off the 2000 highs of 67.3%. Even at it's low, just over a year ago, the number stood at 65.8%. None of these fluctuations are too big, which explains why they don't get a lot of attention. Not surprisingly, most people who are unemployed look for work. The irritating part of this discussion is that the talk inevitably turns to wage-push inflation, which isn't a big deal. There's no sound reason to want higher unemployment, just so that prices don't rise. Rising prices can be a good thing, and they send important signals to producers. What's worrisome is money-fueled inflation, which is always the government's fault -- no wonder they try to confuse people.
The Patent Land Grab in Nanotechnology Continues Unabated (Nanowork News)
It's possible that the next "next big thing", nanotechnology, will be stymied by legal issues related to intellectual property. Despite the fact that the field has yet to produce any significant innovations, already over 5000 nanotech related patents have been handed out. Knowing how liberal the USPTO is these days in granting them, we're bound to see many innovations tied up by legal wrangling. Perhaps this won't be a big problem to some large concerns (The Intels or DuPonts), but will nanotech ever see a renaissance of small entrepreneurs creating brilliant inventions out of their garage? If legal fees become such an important cost, the answer is probably no. It's a loss for the economy, but chalk up another win for lawyers.
4th-Quarter Growth Put at 1.7% (Bloomberg)
And yet businesses keep reporting earnings growth in double digits... how?
WTO might hear dispute with China (Detroit Free Press)
It would seem that both sides want to have it both ways in some of the recent free trade debates. While some, here, have been calling on steep tariffs against Chinese goods, a limits to foreign investments, we'll still go running to the WTO when the Chinese slap a tariff on imported car parts. Granted, China, with its entrance into the WTO, probably needs to look at dropping that stuff, if for no other reason than to mollify rabid US politicians. According to the Detroit Free Press, China puts a 28% tariff on imported cars, and 14% parts. Then again, ever heard of the Chicken Tax?
More Setbacks For Airbus (BusinessWeek)
One of the few recent brightspots of American manufacturing, Boeing, should keep dominating its cross-Atlantic rival, Airbus. Customers and critics are strongly urging the European company to modify its design of their new plans, which are seen as less efficient, with poorly shaped wings, and limited cabin width. One of outspoken critics is the International Lease Finance Corp. (ILFC), the airplane leasing division of insurance giant AIG. It's strange you don't hear as much about them as you do GE's equivalent division, but it's interesting that they're so vocal in issuing directives to the plane makers.