Opening Bell: 4.19.06

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Yahoo! Hits the Spot, Bubble Back (TheStreet.com)
Yes, there's an overabundance of bubble talk these days, sorry. Yesterday Yahoo! reported earnings that were in line, with guidance that was in line as well, and the stock spiked after hours. Umm...? What happened to the days when you need to beat in order to say you had good earnings? This was the situation back in 1999 too, when investor's standards were so low, that anything constituted strong earnings. It's always fun to read the poor TheStreet.com writers whose job it is to explain inexplicable earnings and price movement.
China's Hu Pledges Action On Piracy (Bloomberg)
Speaking to Microsoft's Bill Gates, Hu Jintao declared that the company and his country were friends, and that friends don't let friends suffer from piracy. Apparently this is the standard in the country -- if you're a friend of Hu, you get your intellectual property protected, if not, you've got to take it to the WTO. It's hard to imagine he'll be able to get much done. Not too many people are going to spend a third of their annual salary on an operating system, when they get one for a nickel on the corner. The company has admitted in the past they benefit from piracy, as it's better to have people using illegal versions of Windows, than legal versions of Linux. It makes it seem like this whole piracy argument is a bit of a smokescreen for something else, though it's not clear what. Perhaps Microsoft is going to get the Boeing treatment, as China hopes to mollify a few well known companies and the Senators who claim that the company isn't doing enough make trade "fair".
Invest in Web 2.0 without getting burned (Fortune)
If Dealbreaker is the only blog you read, then perhaps you've mercifully been spared from the term Web 2.0, a catch all for a host new 'net startups. The name simply screams bubble (yes, that word again) and headlines like the one above should cause most people to run for the hills. Still, Fortune's Adam Lashinsky has the unenviable task of explaining how investors can invest in mania 2.0. The names he throws out are an odd mish-mish of 1.0 names and others: Cisco, Comcast, Akamai, Adobe, et. al. Not exactly sure how these are 2.0, or how he can guarantee that investors won't get burned from these, but investing in buzzwords, well, eh, not so much.


CBOT profit up 69 pct on heavy futures volume (Reuters)
No wonder stock exchanges are so hot these days. Wasn't the Chicago Board of Trade a stodgy old institution? Weren't all of these? That was before speculating became a national international obsession, with money flowing to every type of odd commodity, bond, and hedging instrument known to man. Can it last? We'll get back to you on that.
Jobs rise signals 'turnaround' in US IT sector (The Register)
Could globalization be working the way Bill Clinton advertised it? Are jobs really not disappearing to India and China? According to reports, in 2005 the tech sector showed strong job growth -- even the tech manufacturing sector added jobs. That puts the sector on the same page as the rest of the economy, in terms of jobs, though there's been a lot of debate about the quality of the employment numbers lately. If your model requires you to enter in some employment data, you might want to read up on the issue.
McDonalds Is Back (NY Times)
This can't be good news for the Supersize Me crowd. Even though McDonalds is now offering healthy items like fruit salads, people can't stay away from burgers and milkshakes. In fact, we'd venture that McDonalds would be better of doing away with all of the healthy stuff, and just focus on the fat. Perhaps all the salads just serve as insurance from the nanny-state trial lawyers who want to control what people eat... or at least place blame on someone else when their clients are obese.
Executive Pay: A Special Report (NY Times)
In case you've been missing it, and luck you if you have, The Times has been running a series of articles on executive compensation. And of course, as the geniuses at The Times note, not everyone is an executive, so not everyone can get paid $150,000/day like Exxon's Lee Raymond. Of course, not everyone is fit to lead the world's largest oil company either. As they put, some people's salaries are off to the races, while some are stuck at the start line. Except the economy isn't a race against others, and there's no starting line. Furthermore, probably because it doesn't fit nicely into their picture of the economy, they ignore some analysis suggesting that the income gap is narrowing because heretofore well-paid desk workers are competing with Indian call centers, while low paid service labor can't be outsourced.
Senator rips ex Exxon CEO's retirement package (Reuters)
This doesn't come as any surprise; a Senator is calling for an investigation into Lee Raymond's $400 million retirement bonus. Of course, if Sen. Byron Dorgan read Dealbreaker yesterday he'd know that Raymond didn't receive $400 in retirement money, but actually closer to $100 million. And on what ground does Dorgan think the Senate can monitor retirement packages? Just the usual rubbish, nonsense, and rhetoric. These are dangerous times, indeed, for the oil companies and the economy, as Senators talk about a windfall profits tax, to rebate money to the consumers. Yeah, right... rebate? That money would flow straight to DC, never to be heard from again. How about this, if you want to the consumers to be hedged against high oil prices, how about investing some of the Social Security money into a basket of stocks, which would include the energy sector. That would do more than a windfall tax, which would only penalize companies for enjoying good times.

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