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Opening Bell 9.25.06

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Report: Chrysler could sell cars made by China's Chery in U.S. (AP)
Would any red-blooded American drive around a Chery? Probably not; that's why Daimler is in talks with the Chinese automaker to license one of its small, fuel-efficient models for sale in the US under the Chrysler name. Remember, Chery is the company that had been sued by GM for design piracy. It was only a matter of time before Chinese cars started hitting US streets. In general, there's nothing pathetic about the emergence of the Chinese auto industry on American shores, and we're not worried about the trade implications. But the fact that the American makers got caught so badly on the opposite side of trends -- totally failing to anticipate any meaningful demand for fuel-efficient cars -- and have to go out and license brands from upstart Chinese makers is a bit pathetic. And just in case you thought trade with China was getting to one-sided, Toys R Us is looking to open its first store in the country later this year.
Oil Falls Below $60 on Iran Talks, BP Plan to Restart Prudhoe (Bloomberg)
Whatever you think about the Iran situation -- whether you think we should pursue a diplomatic solution or the bomb -- we can all agree that it's hard to put too much faith in what the country's president has to say. He obviously wants Iran to have a nuclear program, and as an ideologue, it's unlikely that any diplomacy he enters into will be done in good faith. Yet, ostensibly, the oil markets buy it hook-line-and-sinker, as price per barrel drop every time he says something about wanting to restart talks. So gullible. One analyst says the "Iran premium" has completely evaporated. Maybe. Or, we could just be heading into a recession, and demand for commodities is slowing. But it's Monday, we can choose to look on the bright side.
Morgenson: blowing hot air on natural gas (Ideoblog)
One of our favorite weekend readings is Larry Ribstein's weekly critique of the most latest Gretchen Morgenson column. The Time's Gretchen Morgenson has the unfortunate combination of being singularly obsessed with a topic about which she's poorly informed, or, at least open to a lot of criticism (we'll opt with the former, but we're hedging in case we run into her at a party). Typically, she writes about the evils of high CEO pay (snooze button please). But, in the wake of Amaranth, she uses the opportunity to agitate for more oversight and more regulations (duh). And she's not averse to using some misleading hyperbole either. Ribstein accurately susses out the worst line " last week's implosion of Amaranth shows, Enron's' troubling legacy lives on". Ugh. It's really not an exaggeration to say that there are many who want to criminalize failure. That's a cliche, but an accurate one. If the Gretchen Morgenson's of the world really set policy, any bankruptcy or loss of money would probably be a crime -- or at least presumed to be one. We should be grateful she's consigned to the Times, and that the paper of record's influence is on the wane.
Inco backs all-cash takeover by Brazil's CVRD (Globe & Mail)
This was pretty much expected. Nickel miner Inco has recommended to shareholders that they accept a buyout offer from Brazilian copper miner CVRD. After a pitched battle between CVRD, TeckCominco, and PhelpsDodge, CVRD remained the last mine standing. And after a month of looking in vain for an even more hostile bid to save it from CVRD, Inco relented. The finaly buyout price stands at $19.4 million.

Kmart touts drug program as Wal-Mart starts plan (Reuters)
Wal-Mart's big box rivals are looking to quickly counter Wal-Mart's plan to offer generic pills at $4 per prescription. K-Mart has announced that it will sell each one for $5... uh, that's not $4 is it. What rational person would choose that? What about $3.99 or $4.99? Meanwhile, Target did announce a $4 plan -- and Taget's drugs come in cool bottles (they're designey!). Meanwhile, there was a lot of debate in the last few days about the repercussions of the Wal-Mart plan. But if it's so easy for competitors to follow suit, maybe it's not such a big deal.
Amaranth May Make Goldman, Morgan Biggest Winners (Bloomberg)
As we suggested, the orderly unwinding of Amaranth's assets could be a boon to the companies that work alongside hedge funds, particularly investment banks. The lack of fallout from such a significant blowup could be seen as an indication that the existing system works, that the seemingly complex nature of the trades is all quite stable. But one blow-up that the system absorbed doesn't mean a whole lot. And you know what we think about analogies to 'the house' in gambling (Donald Trump's bankrupt Atlantic City casinos were 'the house' too). So as long as we acknowledge the presence of black swans, it's too soon to tell that one won't appear on the East River between Goldman branch offices at some point down the road.
Young Internet Producers, Bankrolled, Are Seeking Act II (NYT)
The New York Times brings us another crazy dispatch from the Left Coast. There's no doubt that there's a lot of absurd stuff getting funding, so we're supposed to be dulled to stories like this. Nevertheless, this one hits us like a ton of bricks on a Monday morning. So you've heard about Digg, the social news site where "you" select the stories, blah blah blah. Well, now the founders of it have a new business venture that's already attracted startup money (so much for focus). They're getting funding for their video production company, which primarily consists of a weekly, 45-minute video short from their couch where they talk about computers, weird stories, skateboarding and beer. In fact, they got $1 million to keep doing this. Let it sink in.
Santander extends consumer finance drive to U.S. (Reuters)Honda Unveils 'Super-Clean' Diesel Engine (LA Times)
Typically, announcements about new 'super-clean' engines are reserved for auto shows, because the only real reason for them is to garner lots of press. It's not like those things will be on the road before any of us dies. But, seeming out of the blue, Honda has announced a new clean diesel engine, and they seem to have hit all of the right buzzwords, like fuel cells, and electric. In fact, reading over the news, one would thing they had released a new electric, diesel, fuel cell vehicle, which isn't the case. But they're certainly giving off that impression.