Opening Bell: 6.29.06

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BP unit accused of price-fixing plot (Houston Chronicle)
When Bill O'Reilly gets out of bed this morning, you can be sure that he'll hit his head on the ceiling from jumping up and down with excitement. Finally, vindication, they're all price fixers! Eh, not so fast Bill. Turns out, it's just some Houston-based energy traders who may or may not have cornered the propane market back in February of 2004. That's right, the propane market. So after all these investigations into price fixing and price gouging, etc. this is what we get. One month of propane price fixing. Actually, it's more like a couple of days, making this sound like the lamest price-fixing scheme ever. Basically, traders bought a bunch of propane, held onto it, and then sold it to desperate businesses who were short on propane near the end of the month. Seem weird that such a grade-school scheme actually works in the real world, but apparently it did.
SEC probe on Pequot was 'blocked' (Telegraph UK)
Doesn't the Pequot Capital story have the makings of a great Hollywood film? Picture it: The earnest SEC bureaucrat is mindlessly doing some paperwork, drinking a Diet Coke, when he notices that two numbers aren't matching when they should. Thinking it must just be a typo, he ignores it, only to discover a series of similar mistakes. He takes the issue to his superior, who looks darty and tells him not to worry about, that he'll look into it. Unconvinced that any action will follow, he starts taking home papers in his briefcase, launching a full-scale forensic accounting investigation from his living room. He drives himself crazy; what is he missing!? Aha, one month later, on virtually no sleep he puts together a conspiracy that encompasses Pequot Capital, John Mack and... the commissioner of the SEC!! Right about this time he gets a knock on the door, but he smartly goes out the back door, stuffing his papers into his briefcase, jumps in his car, and vows to shine the light on the corrupt (though more importantly unregulated!) world of hedge funds. He never wanted to be a hero -- the SEC gave him no choice.
Do not undervalue the impact of business education (Financial Times)
Hey, quit yer attacks on MBAs. No more jokes about powerpoints, powersuits and powerlunches, thank you very much. Glenn Hubbard, dean of the Columbia Business School (where among other thing they learn to rap), passionately defends the business school, claiming that by practicing the tenets of applied management, we've added another point to GDP growth on an annual basis over what economists thought possible. And if we're to lift the world out of poverty, it's going to be the business school gospel of management theory and respect for capital markets that will do the trick. Seriously, moving stuff.
Betting scam claims overshadow British victory (The Independent)
What do you think of when you think Wimbledon? White attire, perfectly maintained lawns, Tim Henman, Queen Elizabeth, Strawberries & cream and.... Insider Trading!? The manicured symbol of English refinement has been rocked by scandal this week, as the British bookmaker Betfair has blown the whistle on a suspiciously large bet placed in the first round. £300,000, 30 times more than what would be typical, was placed on a win by 259th ranked Richard Bloomfield, to beat higher ranked Carlos Berlocq. Bloomfield won in straight sets, triggering alarm bells that perhaps the fix was on. For his part, Berlocq claims his loss was due to an ankle injury. Adding to the suspicion bookmaking housed William Hill, also noted some suspicious betting, though not as dramatic. There's still no hard evidence, of course, but let the witch-hunt begin. Perhaps Gary Aguirre would like to come by and help?


Japan bond trading hit by technical glitch (Financial Times)
No offense, but Japan really seems to be having trouble with this whole stock market, smooth trading thing. The latest is that bond trading was hit by a technical problem that severely curtailed volume. This is the latest in a serious of financial Snafus ranging from the Livedoor scandal, issues surrounding the country's top banker, and of course infamous 'fat-finger' mistakes, which amounted to major trading errors. Though these events supposedly have led to a "loss of confidence" it still seems unlikely that any of this will lead to lasting damage.
Ford bails out on hybrid promise (Detroit News)
Ford has backed out on its pledge to build 250,000 hybrid vehicles by the end of the decade. But cleverly they've turned the tables, arguing that to build them wouldn't be going far enough to help the environment. So if you're a green, and you complain about Ford's broken pledge, it's you who doesn't care enough about global warming. Not surprisingly, they now intend to shift their focus to Ethanol, which comes with all kinds of juicy tax incentives, subsidies, and, frankly, patriotism. Hybrids, sorry to say, are just a little too Japanese for American tastes. We like our cars to run on Iowa corn, and if we could run 'em on bratwurst, that would be pretty good too. Bill Ford, a lover of earth and country.
EU approves sale of MS drug Tysabri (AP)
Nearly two years and a countless amount of suffering later, the EU has approved the MS drug Tysabri, developed by Biogen and Elan. The drug was supposed to be revolutionary -- head and shoulders above the other ones on the market -- but mere days before it was to be released, some in the clinical trials came down with a rare, but deadly disease. So you'd think that the issue might best be left up to the MS sufferers, who could best weigh the risk against their own suffering. Not so much. Both the FDA and the EU decided to take on the task themselves. In the EU's ruling, the drug is allowed to be sold, but only to patients who can demonstrate that current drugs aren't helping them at all. This is definitely not what the two companies had in mind for the drug.
With Inventories Bulging, Detroit Rolls Out the Incentives (NYT)
Despite Detroit's adamance that it wouldn't be a summer of outrageously insane incentives, like last year's was, it looks like the automakers are going down that road once again. Starting today, buyers could take up to $8,400 off the price of a new Chevy Tahoe. Ford is offering $5,300 in incentives, including cheap gas, for their SUVs. They've really gotten themselves into quite a fix. During the fall, winter and spring, buyers of American cars know to hold off until the June discounts. So even if the automakers would have liked to break free from the incentives game, they've built up so much inventory that they have no choice. One year, they'll really have to go cold turkey and put their foot down. That'll probably be the year they go bankrupt.
Pfizer to Make Generic Version Of Its Zoloft (WSJ)
Pfizer has plans to produce its own generic version of Zoloft, the company's anti-depressant cash cow, once it comes off patent. Pfizer has been in the generics game for some time, via its Greenstone subsidiary, which is now ranked as the 7th largest generics firm in the country. The company could not be more clear as to why they're in the space. "The generic companies hate it, of course. They don't want the competition," said CEO Hank Mckinnell. As the adage goes, if your sales are going to be cannibalized, you might as well do it yourself -- and if you can inflect damages on the leeches competition, that's just an added bonus.

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