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Opening Bell: 6.30.06

Stock option questions at Apple (Chicago Tribune)
When it rains it pours. Last year Apple could do no wrong, always beating estimates with higher and higher sales of its iPods. Even the scratchy faces on the Nano didn't seem to bother anyone. Let's take stock of the company's hits of late. First there's a growing drumbeat over concerns about Apple's finances, which are seen as opaque. And an increasing number of analysts are sounding warnings about slowing iPod sales, which had to happen eventually. That one's a matter of if, not when. Then there's the abandonment by the digital elite; Macs aren't cool and different enough anymore. They're no longer rebellious, so they're all switching to Linux. All this is not to mention those obnoxious Apple ads with the hipster and the geek; of course everyone identified with the geek, and wanted to punch the hipster in his face, which is a natural reaction. And finally there's this, a backdating scandal at 1 Infinite Loop (and by the way, if they ever do a movie on this, "A Backdating Scandal at 1 Infinite Loop" has to be the title). It may even go as high as Steve Jobs, which certainly won't square well with his reputation.
Ex-Governor and Executive Convicted of Bribery (NYT)
It looks like the Christian magic finally ran out for Richard Scrushy. In his trial for charges of fraud, the former Healthsouth CEO basically subpoenaed Jesus to get on the stand as a character witness. At the time of the trial Scrushy even started his own Christian radio show, which was another way of communicating to jurors the argument of "How could you put a Christian in jail?". But even Alabamians get tired of the crown of thorns act eventually, and after 11 days, he's been implicated in a bribery scandal alongside former governor Don Siegelman. He could face up to 20 years in jail.
A case for breaking up Iraq (Stumbling and Mumbling)
Paging Carl Icahn. The results of a new study imply that the breakup value of the country of Iraq would be higher than its existing market valuation. Three economists have quantified the negative impact on the economy that results from artificial borders that surround ethnic enemies, as opposed to the efficiency of several nation states. Obviously there are some questions ahead, like leadership and the tax implications of a Kurdistan spin-off, but it should be doable. Of course, after a few years of independent states, we can expect the banker reports suggesting that for competitive reasons, they should all consolidate on the basis of synergies and cost savings.
Gay, lesbian workers gradually gain benefits (San Francisco Chronicle)
According to a new report from the Human Rights Campaign, 253 of the Fortune 500 companies now extend benefits to domestic partners, and most have internal policies banning discrimination based on gender orientation. Compare this to the percentage of states that allow gay marriage, and it seems clear that corporate America dominates is far superior to the government as an avenue for equality. There's something about market forces that prompt companies to not want to lose 10% of their potential workforce out of prejudice.

EMC to buy RSA for $2.1 billion (CNET)
The Rumors started yesterday morning with a piece in the Times strongly suggesting that a buyout of RSA was very likely, with data storage firm EMC identified as the likely suitor. It's been a trend of late whereby established tech players have been snapping up security firms in order to integrate security (encryption, access control) directly into their products, instead of having those things be sold as an add-on by a third party. There'll probably be more acquisitions of this sort, as sellers of rapidly commoditizing IT need to find new features to help differentiate themselves.
Microsoft delays Office '07 (Seattle Times)
Here's a yawner. Microsoft has announced yet another product delay based on reports coming out from the latest beta test of Office '07. Instead of a planned October launch date, the product will now be pushed back until the end of the year. Meanwhile, the company insists that there's been no slip in the planned release of Vista, which itself is undergoing a massive beta round. The new Office is seen as crucial to the company's strategy, since they don't want it to be a standalone product. Instead they want it to form the kernel of a host of new business and intelligence software that interacts with Word and Excel. Do you think they jinxed by naming it Office '07? Now it seems destined to actually come out in '07.
Fed Raises Rates, but Scales Back Talk of Inflation (NYT)
The market had their strongest day in years, yesterday, as investors felt comforted by Fed language indicating this just might be the last one. We didn't get a decisive 50 basis point move as had some had expected, but now there's optimism that we may get... "A Soft Landing". It seems that that phrase should never be uttered aloud; perhaps ASL would be more appropriate, since just saying the whole thing is really jinxing it. Water can't boil in a watched pot, and economies can't land softly when everyone is hoping it will. But really, what about soft landings and interest rates at their peak warrant such a major market rally? Just curious.
NYSE, via Euronext, Aims to Regain Its Appeal for International Listings (WSJ)
Other than its desire for untrammeled world domination, it's clear that one of the main reasons that the NYSE is going after Euronext is capture the market for world listing that it's lost in the wake of Sarbanes-Oxley, which makes stateside listings untenable for many companies. Publicly, Thain and the rest of the exchange support SarbOx, but do say that parts of the bill are too onerous on public companies. As Larry Ribstein points out the cost of the buyout should basically be seen as the cost of SarbOx for the NYSE and that after it all goes through, they should just hand Congress the bill.