Opening Bell: 9.5.06


Oil steady, US summer driving season ends (Reuters)
We did it America, congratulations. Another summer in the books, and with it another summer driving season is history. Our reckless, fossil fuel-based, unsustainable standard of living has been vindicated. But it's time to mothball your car and take the bus to work, because summer driving season is over. That's right, summer driving season is finished, no more, terminated, and deep-sixed. Wave goodbye to your car, Mr. & Mrs. Taxpayer, hope you had a great Labor Day weekend, visiting the relatives. You can see them again on Memorial Day, or around the 4th of July. Oh, and if you're an investor, time to dump that oil, because summer driving season '06 is a museum piece.
Buybacks: The Next Corporate Scandal? (Infectious Greed)
Yoohoo, Wall St. Journal, are you there? Here's a tip. Once your self-fulfilling options scandal starts to die down, here's the next thing you can hype to keep yourselves busy. A new paper identifies stock buybacks as a scandal just waiting to be uncovered. See, there's nothing wrong with buybacks per se (sounds familiar already), but what if they're not necessary, and simply a waste of shareholder money? And what if all of those buybacks were only authorized to mask exorbitant stock options grants to executives!?! Why, we'd say this is a story. Now, all you have to do is hire a forensic accountant to go back and find buyback announcements that coincided in some way (time, size, etc.) with the awarding of new options packages. This is gonna be big. Responds To NYT Bitchslap (Paid Content)
On Friday, just as you were hightailing it to some rain-soaked beach for the weekend, a mini battle erupted between and the Times. If you'll recall, the Times recently ran a piece that questioned the traffic data being presented by (which if you'll recall is at the center of Bono's recent investment in Forbes). The Times suggested that was inflating its numbers, and that its site wasn't so hot. Going on gut, we agree with the Times. doesn't seem like much of a big deal at all. But was upset, and its CEO called out the the Times for the way it reports traffic at Jim Spanfeller called the Times shameful and hypocrites for running the piece. Sadly, the volleying seems to have already died down. Good thing you were out of town, and didn't get caught in the crossfire.
A Cock-and-Bull Story (Slate)
If you're an urbane New Yorker, then you've no doubt seen the stories. Every sophisticated magazine from Harper's to Atlantic to the Economist (probably) has felt compelled to run articles in recent years on the sex lives of teenagers, usually with a heavy emphasis on their proclivity towards practicing oral sex. There's no doubt that these are big sellers on the newsstand, but surely something must explain this veritable epidemic of articles about the fellatio epidemic. And before we go any further, we know that this doesn't qualify as an epidemic, which must be spread from one person to another, but that's the word that gets used. Writing in Slate, Tim Harford breaks it down; why the sudden in trust in the activity. Of course, it's all about incentives. Diseases are seen as being up, and pregnancy is no fun. Furthermore, evidence suggests that stricter laws against abortions actually do impact teens' decision. So there you have it, teens of America are just rational, economic actors. And there all the experts thought there was something wrong with them.

How Scotia missed the mining wars (Globe and Mail)
For the first time, the mining wars are being referred to in the past tense, which is a little sad here at the Opening Bell. In the first of that is likely to be many post-mortems on all the mergers between copper miners, the Globe and Mail has an interesting story from the investment banking side of the picture. Of the main banks in Canada all profited nicely from the M&A in the space, all except Scotia bank. And why did it fare so poorly? It seems likely due to the fact that its CEO sat on the board of Inco, and thus participation in any of the dealmaking would probably have been a conflict of interest. You'd think that Scotia shareholders would be pretty upset by the situation, considering how avoidable it seems to have been. He should at least distribute the $160,000 he made by sitting on Inco's board to Scotia shareholders.
Airbus sacks third chief over A380 debacle (The Guardian)
Earlier this summer, the big story was the bloody mess at Airbus, where top brass got let go in the wake of delays for the A380 jumbojet. Somehow, in all that, while the top guys were given the axe, the actual head of the A380 program was allowed to keep his job. You'd think he'd be the first to go. Well, his number finally came up, probably a few months too late, but fittingly on the day that the A380 took its maiden passengered (with reporters) flight. But don't feel too sorry for Charles Champion, he's being retained as a 'special advisor' to CEO Christian Steiff. By 'special advisor', of course, they mean shoe shiner.
Leaving Behind the Torn-Jeans Look (NYT)
The Times reports that mainstream clothing retailers are pushing new lines aimed at the more adult, post-college crowd. Apparently there are some people who don't realize that post-college, the torn jeans look isn't as cool, and they need American Eagle to prod them along. For the times, this may be its most culturally incisive piece since last September, when it finally discovered the 'fauxhawk'.
In Gulf of Mexico, Industry Closes In On New Oil Source (WSJ)
Are we finally seeing the benefits of $70 oil? The key to defeating gloom-and-doom 'peak oil' scenarios is for high oil prices to spur more discovery and production in area that weren't economical when oil was cheaper. In theory, as more oil is brought online, the price should revert to the mean, and the process should start again. But for all the hype about new oil fields, there hasn't been a whole lot doing. The Canadian oil sands remain a mess and where still not anywhere near the price for shale to profitable. But Chevron, Devon, and Statoil have announced the first oil production from the deep-water region in the Gulf of Mexico, which could be quite the field. It may even top Alaska's Prudhoe Bay, which is currently the US' largest area. But you can see why this is gonna be some expensive stuff; it's miles underwater, and buried beneath ancient rock. This is some damn good shit, and you can see why they ain't selling it at $50/barrel.
Viacom names new CEO as Freston resigns (Reuters)
The cruel world of new media spits out another industry stalwart. Tom Freston, CEO of Viacom has resigned, and judging by the smoke signals, it looks like he's been pushed out. Freston was a founder of MTV, as well as the marketing force behind the "I Want My MTV" marketing campaign. He also managed MTV networks, which included Comedy Central and Nickelodeon. Anonymous insiders cited one fundamental reason that Freston couldn't cut it anymore, "He didn't understand blogs". Sorry, Jeff Jarvis, we just made that up.