Opening Bell: 3.5.06

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Delta pilots OK a strike (Memphis Business Journal)
Normally, it's right to scoff at strike talk and pedantically explain how workers generally just hurt themselves when they do it. By now everyone knows that strikes don't do anything to bring either side to the negotiating table, that they reveal no new information, and that they don't magically give the company the ability to pay more. But a strike at Delta may give the dreamers something we've been hoping for, for a long time -- an airline that disappears. For a while it looked like the bankruptcies would do it, finally clear out the tired legacy overhead to make more room for the jetBlues, Southwests and Virgins. But airlines in bankruptcy courts is like Marxism at the universities, a place where rejected concepts get to live on forever (as Adam Smith once said), taking in new generations of thinkers and frequent fliers. A strike would put an end to that, so if it happens, we'll be marching right along side them.
Citi: Back in the M&A Game? (BusinessWeek)
Now that The Fed has lifted a Citi-specific merger ban, does this mean the behemoth will kick off a new round of consolidation in the industry? The company, which has been plagued by regulatory mishaps, may look for deals overseas. But maybe there's something to the idea that the company is just too big and unwieldy. Perhaps the management should take all of their problems as a signal that things won't get better by adding more units and divisions. Still, despite denials, let the dealmaking begin. Ousted CEOs make for good blog copy.
Wal-Mart Offers Aid to Rivals (NYT)
Talk about capitulation. In urban areas, where Wal-Mart's growth has been stymied, the company plans to offer seminars to small business on how to compete with a new Wal-Mart store. For example, they'll explain that customer service is a weakness of theirs, and if local operations can focus on that, they'll have a better chance of surviving. The company even plans to allow local companies to advertise within a Wal-Mart store. There's something creepy and brilliant about this. It may help them win over hesitant local boards, impressed with their 'community investment'. but it's really not likely to change the game much. If Wal-Mart is the low-price leader in the areas they go into, they should take a lot of business, seminars or not. The company has been very shrewd in trying to improve their image while hurting their competitors. Last year, the CEO, Lee Scott, called on Congress to raise the minimum wage. What? Are they crazy? Far from it; it's their competitors who are more likely to pay workers the minimum wage, meaning that any increase will put more of a squeeze on the mom and pop operations, than it will themselves.


Arcelor Swallows Another Poison Pill (Independent, UK)
Arcelor is upping their anti-takeover activity, putting their recently acquired Dofasco unit into a separate foundation, not controlled by the Arcelor board. Already shareholders have reacted with hostility to the plan, and it may turn out that this poison pill is actually poison, is they risk totally upsetting the shareholders who they need on their side. It would appear that Arcelor is really scrambling for a defense here, and maybe put in the same position that PeopleSoft was when they went up against Oracle -- weak to the point where they had to sell out. Perhaps Mittal will really lower the boom by reducing the bid.
International Paper Sets Sales Of Timberland for $6.1 Billion (WSJ)
International Paper became the latest in that space to sell off their timber assets, taking advantage of the bull market forests (yes). Paper products aren't the only commodity to see this kind of de-verticalization, Del Monte recently sold off their pineapple trees, opting instead to buy the raw, uncanned product on the open market.
Software maker Corel files for 8 mln share IPO (Reuters) (via dealbook)
If this doesn't spell '.com is back', nothing does. Corel, the company did everything from office software to their own version of Linux, but which never really sold any product has filed for an IPO again. It's probably a totally different company at this point, but to think that the Corel brand name still means anything is pretty surprising.
Experts: Illegal Immigrants Help Economy (AP)
The debate goes on, with experts chiming in that illegal immigrants do help the economy, but (you knew this was coming) hurt the wages of low-end earners. Don't worry if you're on the other side, it shouldn't be a problem to whip up a study that says exactly the opposite. Too often this debate seems to revolve around simple points like an increase in hospital and school spending per capita among illegal immigrants, as if that alone were enough to tip the debate, with no discussion of benefits. Or, the supporters will say something about jobs that Americans won't do, by which they mean, "won't do... at the current market price". Even the wage data, however, is suspect, as Russ Roberts aptly pointed out this weekend, debunking a horrendous NYT article on the subject.
Netflix sues Blockbuster to shut online service (Reuters)
Here we go again, another instantly dubious patent case. Netflix claims a 2003 patent on a method to receive DVDs selected over the internet. Another patent, just obtained yesterday (boy that was quick), covers customer ability to keep DVDs as long as they wish. If anything, the big loser continues to be the USPTO. You'd think they'd be a little more judicious when handing out patents. When they hand one out, and it leads to a lawsuit the very next day, patents can't be said to foster innovation, but rather litigation. We're bullish on Netflix's lawfirm, Keker & Van Nest. No wonder everyone wants to go to law school despite the horrendous pay.
Massachusetts Sets Health Plan for Nearly All (NYT)
Every business is freaking out about healthcare inflation, so it will be worth watching what happens with new Massachusetts reforms. Impressively, this isn't just a socialist, single-payer system, but one that supports the private market, instead of supplanting it. The fundamental idea, that every citizen of the state be legally bound to buy insurance, is actually one that's been bandied about for some time in libertarian circles, as a means of addressing the high ranks of the uninsured. It's nice when theory gets put into practice, and we get a chance to see how it works out.

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