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Opening Bell 9.21.06

Calif. sues over auto emissions (Detroit News)
There had already been talk that Bill Lockyer, the California Attorney General was the Spitzer of the west coast. Any doubt has now been put to rest. Lockyer, who is is currently in an election, looking to make a horizontal shift over to State Treasurer, announced a lawsuit against all the major automakers for selling products that contribute to global warming. How absurd. How... California. At least Spitzer, when pressed insists that he simply goes by the law on the books. Lockyer is just inventing law as he goes along. We wonder how it would go over politically if he sues every resident of California who drives a car.
HP CEO Allowed 'Sting' of Reporter (Washington Post)
If you ask us, there aren't too many scandals worthy of a -gate suffix. It's thrown about way too often. But Pretextinggate, as it's been called a few times is certainly one of them, as the All The Presidents Men-like quality of the scandal spirals on a daily basis. For the first time, CEO Mark Hurd is said to have had involvement with the spying. Memos obtained by the Post suggest he approved the sting operation to determine the leaker, though it's not clear that he knew of any of the investigation's tactics at this time. If he did, or if he was kept apprised, then that will come out. And for the first time, now, this scandal has the potential to affect HP stock. The shareholders love Hurd, who is widely viewed as having rescued the company from the Carly-induced wilderness. If he goes, or is damaged, that'll hit shareholder confidence.
Wal-Mart to Test Price Cuts on Range of Generic Drugs (NYT)
The latest argument employed by the anti-Wal-Mart crowd, as we've mentioned is that the company isn't a monopolist, but a monopsonist. It's a buyer, so large, the critics argue, that its ability to dictate pricing to its suppliers is akin to price controls in a communist country. First of all, it's not. Second of all, why do these bleeding hearts care more about Wal-Mart suppliers than Wal-Mart customers? Now comes word that the company will make similar moves in the drug market, drastically lowering the price of generic drugs. This will cause some people's head to explode, since the one bete noir that people hate more than Wal-Mart is the drug companies. And the high cost of drugs is one that people routinely harp on. So if Wal-Mart uses its considerable presence in the pharmacy business to squeeze drug sellers, what will people say?
Former Enron CEO Arrested in Dallas (AP)
Ken Lay was alive all this time, and they finally caught him! No. Once again, Jeff Skilling is in trouble for public intoxication. Last time it was in our fair city, the Upper West Side, if memory serves. This time it was in Dallas at 1:45. Fortunately for Skilling the arrest -- made at 1:45 in a "swanky" neighborhood -- won't send him immediately to jail. But a judge did insist that he make more regular trips to an alcohol counselor. Why? Why not let him leave out his life in a drunken stupor if that's what he desires? Surely that's just adding insult to injury, if in the final few months before he's to spend the rest of his life in prison, he has to meet with a counselor to discuss his drinking problem. "You know doc, I gotta be honest, I really want to get out of here quickly today, have some other shit I need to get taken care of".

Market gossip goes high-tech (Financial Times)
New tools being developed and marketed towards hedge funds will automatically scan millions of online sources -- including blogs -- in an attempt to divine information about stocks or companies. The move is part of a growing trend in analyzing "chatter", a word we've heard a lot about with respect to national intelligence (though all that chatter never seems to reveal a whole lot). The problem with this idea is that most ink that gets spilled is just bunk, so any manager using this system would first have to realize that he's coming through garbage. That's not to say you can't find something worth dumpster diving, but in the end, is it really worth it?
EADS confirms further A380 delays (MarketWatch)
Lingering wiring issues will push the A380 back even further. 'Nuff said.
Germany's Merck to buy Serono for $13.3 bln (Reuters)
German drugmaker Merck (which is not the Merck that you know) earlier tried to buy rival Schering (which is not the Schering-Plough that you know) but failed. It's now agreed to swallow Swiss biotech Serono (which you've probably never heard of). The company is fairly large -- over $13 billion -- but has foundered on its own in recent years, and has been the subject of many buyout rumors. The move automatically propels the German Merck into a higher strata, making it a much more significant player.
Experts: Fed Could Be Done Raising Rates (AP)
We had a nice rally yesterday, just in time for a nice hangover. Luckily, it wasn't a dream; you didn't misread the Fed statement. Even 'noted Fed watchers' agree with you. Perhaps for the first time, Bernanke is none and done. All this, though, raises some new hard questions about what's going on with the economy, and what would catalyze the market going forward. Remember, it's not as if all this tightening made any dent in stocks. Meanwhile, oil stocks keep building up, the word "soft landing" keeps getting muttered, and it may be that come spring, we're in a loosening cycle once again, which would be great if it didn't signal further recession and chop the legs out of the dollar.
Hawkeye IPO delayed as ethanol makers sag (MarketWatch)
As bubbles go, the ethanol bubble always made us feel icky. For one thing, nobody has convinced us that the technology really does what it purports to do. This is usually how it goes, after struggling (and failing) to argue that using ethanol is true alternative to oil, they always end up bringing a moral argument like "ultimately, we just have to stop polluting the air with fossil fuels". Or, if they're of a different political persuasion, they and up saying "ultimately, we can't keep forking over money to the Saudis". Either way, it's a cop out, and not the kind of stuff that's likely to bring a wholesale change to our energy picture. So it's good to see the bubble bursting. It was built, really, on that Bush State of the Union, in which he hit on the corn-based fuel. Not only are ethanol producers pulling their IPOS, but Archer Daniels Midland, a prodigious consumer of ag subsidies is pulling back from its highs. One day, honestly, we'd like to see that company go bankrupt.