Opening Bell: 4.26.06

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Bush takes aim at gasoline prices (Reuters)
It looks like our oilman President has gone completely to the other side and is now requesting an investigation into price fixing in the energy markets. Perhaps if he read any single news source or even Dealbreaker, he'd realize that crude oil is near record nominal highs these days, and that might have something to do with the high gas prices. While the merits of anti-trust law can be debated (anytime, anyplace buddy), shouldn't its application be something other than arbitrary? In fact it's always arbitrary. As many have pointed out, if you're looking for evidence of "uncompetitive behavior" you can find it in any market condition. Prices too low? Aggressive pricing! Prices too high? Price Gouging! Prices just right? Market collusion. Yep, anytime a politician stubs his toe, anti-trust is an easy outlet.
Sirius Signs Mark Cuban (TheStreet.com)
The man who claims that only hedgers, not speculators, should be allowed in the oil market, now has his own radio show. He also says that any stock which isn't paying a dividend is no different than a Ponzi scam -- yet mysteriously all of his holding are entirely speculative small companies. People seem to like reading him, and listening to his griping, so maybe they'll listen to him on Sirius.
Job cuts not Sun CEO's priority (Mercury News)
Yikes, looks like you can give up that big gain after the McNealy resignation. Either the new CEO is a)lying or b) Wall St. is in for a serious disappointment. The fact that Sun is supposedly on a growth track, and yet 6 years after the peak of the bubble still isn't profitable, is evidence that the company needs to do more than just explore areas of growth. If we were to be, we'd bet that, a), he's lying.


Enron founder goes on offensive (AP)
So here's the part of the defense's strategy that doesn't make sense. Their argument rests on the surprising claim that there was nothing wrong with Enron before it imploded -- that it was a picture of health done in by short sellers, loss of confidence, and the media. And yet Andrew Fastow was supposedly a dirty crook who was working under the radar to bilk the company out of millions. So which is it? Was the company in great shape, or was it in bad shape -- but as a result of Fastow's actions? Were they to be consistent, shouldn't they have defended Fastow as well, saying that the man is wrongly in jail?
A return to Lay's World (Houston Chronicle)
On the other hand, this is the type of article that drives the innocent-until-proven-guilty types crazy. Basically, it asserts that Lay was entirely out to lunch with his testimony because, if you recall, the company failed and that it was not a picture of good corporate governance. First of all, the fact that the company failed has nothing to do with the case. Companies fail all the time and it's not illegal to do so. As for the corporate governance part -- well that's part of what this trial is based on, so to just assert it doesn't quite seem fair.
UST CEO says Reynolds merger shows strength of smokeless market (Marketwatch)
Everyone we talk to cringes and makes a face of disgust when the subject of smokeless tobacco comes up, but according to the CEO of UST, consumers are making the switch. He thinks that Reynold's buying into a smokeless company is a strong endorsement of the market.
Bank of America Might Create Credit-Card Processing Network (WSJ)
This would be an interesting development -- Bank of America's CEO claims to be interested in launching their own credit-card processing network, and thus a new brand of credit card to compete with Visa, Mastercard, AmEx, and uh Diner's Club. It might be a tough network to crack into, and while it's understandable that they'd want to be a network tollkeeper, as opposed to a renter, they'd have to make a compelling case to consumers and vendors. What kind of competitive advantage would they have? Worth watching if they continue to make moves or noise about this. More competition would probably be a good thing since the industry takes so much of so many purchases.
Bad Stagecraft In Hu's US Visit (Brad Setser)
We've mentioned before that certain companies seem to be getting special treatment from the Chinese. Basically, a few select winners (like Boeing) are treated very well, just as a way of appeasing US politicians who are increasingly frustrated about the trade deficit. But as Brad Setser astutely points out, Boeing isn't the one doing the complaining -- and so when Hu Jintao visited the US last week, he was wasting his time focusing on that company (and Microsoft). Instead he should have gone to some steel mill in Pennsylvania, or a sock plant in North Carolina and tried explaining to them how China is their friend. These are the companies stoking the protectionist fires, and thus the ones who need to be given some special attention.
To Pump or Not to Pump: New Jersey Clings to Self-Serve Gas Ban (Bloomberg)
This is a couple of days old, but should be amusing to New Yorkers, always looking to pick on our Garden State neighbors. So the state is one of the few remaining states that requires all gas be full serve. Governor Corzine is considering a change of this requirement to ease gas bills, since gas station attendants don't come for free. Naturally, some are opposed to this based on the always dubious argument that the full-service requirement creates jobs. Yet they're not stopping with that. According to one resident, "(Full-serve) is the single greatest cultural advantage to living in New Jersey. It's why we stay here." Wow, could you say something worse about your own state? Single greatest cultural advantage. Yikes.

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