Opening Bell: 5.1.06

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Immigrants Plan Nationwide Day of Protest (AP)
It's May Day, which, as leftists will repeat to you ad nauseum, isn't a celebrated holiday in the US, but is in Europe. But there's nothing like a general strike to get those Continental juices flowing. If the immigrants actually achieve a critical mass, and a number of them walk off their jobs, it could be pretty interesting. We might get a chance to live out that movie A Day Without A Mexican -- though if they really wanted to make an impact, they should strike for a whole quarter. Would love to see the new GDP numbers. The Feds might actually come out with guns forcing them back on to their jobs, as opposed to off. And what would Lou Dobbs say?

Immigration Reform On Whose Dime? (Forbes)

Forbes nails a major problem with so-called immigration reform; the idea that there should be an increased burden on businesses to correctly identify who among their workforce might be illegal. It sounds nice, since they're the ones coming in contact with the immigrants, but it's a tough problem to solve. For one thing, neither the federal government nor the state governments have been able to crack this problem, so it's hard to imagine that companies have much greater ability. Secondly, and heres the real kicker, companies have to tread a careful line about verifying legal status, not going so far that they appear discriminatory against certain ethnicities. The article points that often, companies face legal challenges on two fronts -- for not verifying legal status, and trying too hard to verify it. People always talk about the costs of immigration (welfare, schools, social services), but never seem to balk at the cost of legal enforcement -- as if somehow those costs were just more worth it. It's definitely tough issue.

AMR: Making Every Gallon Count (BusinessWeek)

People often talk about technology as the way out of our oil 'crisis', as if it's as simple as finding the philosopher's stone, and turning water into hydrogen. But on the other side, the demand side, changes are happening rapidly. The higher oil prices are turning the economy into a more efficient machine. The price of oil, at which the airlines could turn a profit, has double in the past few years. AMR, for one, attached small devices called "winglets" to its planes that marginally reduce their drag. They've even been examining the way they user water on toilets and in making coffee. What's great about all of this stuff is that it will last. Even when oil gets cheaper, AMR will probably continue to use efficiency maximizing techniques and technologies.


Airbus Courts Beijing With Assembly Plan (WSJ)
We've talked a lot before about Boeing getting the soft-gloves treatment from Beijing, as the Chinese government seeks to lavish money on some select American companies. It looks like Airbus is going on a counter-offensive, as they step up plans to build a factory in China. If there's one thing China likes more than a good plane, it's new factories to keep unemployment and civil unrest low. They also like technology transfer, something that a new airplane factory would help do. If Airbus' charm offensive has some effect on the government, they may start splitting their purchases more equally between the two aviation giants.
Merrill holders nix compensation reform (CNNMoney.com)
Shareholders continue to make rational decisions when it comes to CEO pay -- namely that they don't care. What's clearly happening in the "complain about CEO pay"-industry is that those getting upset are the activists. It's not the activist investors, per se, but the normal political activists that happen to own shares. In the case of Merrill, it was the Catholic Equity Fund urging a rejection of the latest executive pay package. But you never see the regular, non-ideological funds getting too concerned about executive pay; and it's not cause they're any less interested in getting a good return. It's cause pay doesn't affect returns. The other cohort that gets upset about CEO pay is ideological journalists. Larry Ribstein has a good writeup of Gretchen Morgenson's (NY Times) latest rants on the subject.
Assuring The Seller (Matrix)
We're clearly on the backslope of the housing boom. Jonathan Miller points to an interesting condo ad that offers to lower the unit price should the value drop before construction is complete. Remember condo-flipping? People were buying pre-construction condos and then selling them before completion. Now it's just the opposite. They need guarantees that if the value drops before completion, they won't start off with a quarter-million in negative equity. No fun.
Dollar Hits 11-Month Low (WSJ)
Dear Bernanke, about those rate cuts. Maybe we could use a few more. Sure, there are some who wants a weak dollar, but does anyone think that movement of 10% is all of the sudden going to induce massive buying of US goods? Meanwhile, look for higher costs for US consumers and producers, as well as higher borrowing costs. Please, just a few more hikes. Barry Ritholtz has more on the Dollar's ominous decline.
Beer Ads That Ditch the Bikinis, but Add Threads of Thought (NYT)
Now this makes sense; instead of simply relying on blondes and boobs to sell beer, Miller is going in the other direction. The company's ads will feature a roundtable discussion of various celebrities having a serious discussion on the meaning of manhood, and the edifying events of their life. Even if this won't change the taste of their beer, which at this point people probably know, it's wise of them to go contrarian with their advertising. Surely, the ROI on B&B had become fairly minimal, thus presenting a huge opportunity to go in the opposite direction.
Netflix vs. Blockbuster Revisited (Thomashawk.com)
Davis Freeberg is the best writer on the web for understanding the changing video industry, and Netflix in particular. Fortunately for us, unlike many who write about tech, he also injects his analysis with a healthy dose of finance and stock talk. Famously, Freeberg's been tracking Wedbush Morgan analyst Michael Pachter, and his pessimistic view on Netflix. One year ago he wrote up an excellent debunking of Pachter's analysis and does so again today. Definitely worth your read.

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