Opening Bell: 5.11.06

Author:
Publish date:
Updated on

Fed Raises Rates Again but Clouds Next Move (NYT)
Bartiromo was right; it's not over. Well, maybe. Nobody really knows, but Bernanke isn't ready to relinquish his inflation hawk credentials just quite yet. The whole thing is getting to be something of a joke. It's like traders have to pretend to be upset at rate hikes, even though this last rate-hike cycle has been one of the longer bull markets in history. And then there's that whole question of what will happen to the dollar once rates stop going up.
Jersey to be Alcatel/Lucent's R&D HQ (Telephony Online)
Good news if you're worried about the trade deficit. The headquarters of the new Alcatel/Lucent is going to stay in New Jersey. Of course, that doesn't really affect the operations of the company one iota. And it doesn't change where the shareholders are, or what employees are going to get paid (outside of a few janitorial staff, perhaps). Perhaps, Jersey will collect some more taxes than they otherwise would have. But really, it's hard to see how national origin matters at all in a situation like this. But still, we win. Well, Jersey wins.

Mom, Apple Pie and...Toyota? (WSJ)

Speaking of corporate national identity, here's your must-read article of the day. Basically, the idea of an American car, or an American car company, or being "Made in America" is a horrendously quaint idea. Read it for yourself: Few sports cars have captured the nation's imagination like the sleek Ford Mustang, a 21st-century reincarnation of an American classic. The Toyota Sienna minivan, by contrast, speaks to the utilitarian aesthetics of Japan: refined interiors, arm rests and lots and lots of cup holders. Yet, by a crucial measure, the Sienna is far more American than the Mustang. Statistics from the National Highway Traffic Safety Administration that were publicized in "Auto Industry Update: 2006," a presentation by Farmington Hills, Mich., research company CSM Worldwide, show only 65% of the content of a Ford Mustang comes from the U.S. or Canada. Ford Motor Co. buys the rest of the Mustang's parts abroad. By contrast, the Sienna, sold by Japan's Toyota Motor Corp., is assembled in Indiana with 90% local components.
White House Rejects Tough Line Over the Yuan (WSJ)
So despite the fact that China is plainly a manipulator of their currency (C'mon, it doesn't move. How obvious can they get!?!?), The Treasury has decided not to brand the country as a currency manipulator. Somewhere Chuck Schumer just ruptured his colon. Still, Secretary Snow is urging China to let their currency rise sharply. We'd really like it if Hu Jintao got on TV and said all sarcastic like "But if we're not a currency manipulator, how can we let our currency rise?", and then started high-fiving all his comrades.


Stock analysis software a big help, expert says (Denver Post)
Once again, the SEC is making noises about pushing XBRL forward. XBRL is basically a way of tagging SEC documents to make them computer readable. So instead of scrolling through them looking for a specific number, like customer acquisition costs. Then you can instantly have the computer collect that data on 100 different companies, compile it, put it into a chart, take the moving average of it, et. al. So for all you analysts Excel monkeys out there, uh... this might make you less relevant. That being said, they've been talking about this for years and years and nothing ever seems to happen, so don't go updating your resumes just yet.
Luttig resigns. (Althouse) Federal Judge Michael Luttig is leaving the bench to become the general council at Boeing. It's a big move. Federal Judges don't leave very often, and becoming a corporate lawyer at a high profile industrial power is big news. Law Prof Ann Althouse thinks the reason he left is more than just the money (though that had to have helped a lot), and that he really loves the company Boeing. There's some speculation that Boeing is about to launch some massive lobbying effort, and so they want a well-known legal mind to back the campaign. Either way, one doesn't hear about general councils too often, so it's big news for that reason alone.

Wachovia deal may force more mergers (Marketwatch)

Wachovia's move to buy west-coast thrift Golden West may prompt more industry mergers (though they say this after every single merger), and it seen as putting pressure on Wells Fargo to expand eastward. This is all according to one analyst who is making drastic noises about how Wells Fargo has gone a whole 8 years since buying another bank, and how small banks will see rapid earnings declines. Congrats buddy, you got your press coverage. Really though, the banking industry isn't that unique, you can't just grow earnings by making acquisitions.
House passes capital-gains tax bill (SF Gate)
Remember all that stuff about how that tax cuts weren't really tax cuts, how they were all bs, how it was just a shift in accounting, and how you couldn't extend tax cuts that didn't happen? Well... just... eh, forget all that. Don't worry. Why? They're keeping the capital-gains tax cuts!! Excuse me while I wipe champagne off my screen. (pause) Ok, back. So how to explain our about face on the subject? See, what we don't like is across-the-board tax cuts that really doesn't help anyone. But targeted tax cuts that shift the burden from one group to another are great, particularly if you're in the group from whom the burden is being lifted. Hey boys, let's try to keep them permanent this time.
Enron Jury (AP)
Once again, the world of legitimate journalism is holding on to its track record of completely avoiding substance when discussing the most important corporate trial in Anglo-Saxon jurisprudence. Apparently, the jury, "...will be able to consider whether the two men closed their eyes to possible crimes at their company, the judge decided Wednesday." Really? Is this what the jury is tasked to do? There is one controversial thing to note, as the judge ruled that the jury can return a guilty verdict based on deliberate indifference. Please, please, please return a not guilty verdict, just so we get to see all these reporters lose their lunch on live TV.

Related