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Opening Bell: 10.18.06

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Producer price fall sharpest in 3 years (Bloomberg)
All of the sudden, nobody wants to talk about core inflation or anything that could exclude energy prices. Not when gas prices are down 22% in the period, leading to a steep pullback in the PPI. Meanwhile, core PPI was up by .6%, the biggest increase in several months. However, analysts were quick to dismiss that: "The headline [figure] is so overwhelming that an uptick in core inflation, especially when it's led by autos, is not credible," said interest rate analyst Richard Gilhooly. The overall drop is almost certainly due to a slower economy... which will make the market happy because it means the Fed probably won't raise interest rates again. But the more pessimistic side has been anticipating rate cuts starting in 2007. If the economy really is slowing -- and you wouldn't know it from the "forward looking" stock market -- then Bernanke's gonna have to give it some juice, or at least feel some pressure too.
Not Coming Soon to a Lot Near You: Chinese Cars (NYT)
There's been a lot of chatter lately about the Chinese automobile industry, and how it would soon land on US soil. Some had even said we'd see them as early as next year. Now it looks like we may have to wait a little longer; some Chinese auto execs are pushing the year back to 2020 before the industry will be mature enough to compete in the land of the car. That's a long time. A lot can change before then, including the possibility that we all take commuter jets to work. However, it does highlight a theme we've seen before. For all the talk about China's manufacturing prowess, many of its companies aren't "world stage ready". They still lack a lot of technical sophistication, in many cases, and their traditional advantage of cheap labor isn't really enough to get them real far.
Wal-Mart Heads for Wall Street, Changing Analyst-Session Venue (WSJ)
Wal-Mart has been trying to court New Yorkers for sometime. We keep getting promises of a Wal-Mart opening up, possibly, maybe even in Manhattan, but so far no dice. You have to go out to Jersey for that. So for now we'll settle for the next best thing. Next week Wal-Mart will hold its annual analyst and investor conference in the area. And, as an added treat, jsut in case the chance to see Lee Scott in person weren't enough, Garth Brooks is going to be strumming out some tunes. Don't laugh, his concert in Central Park was a monster hit. Already, protesters are gearing up, arguing that the presence of Wal-Mart's meeting will be harmful to small cap companies looking to have their meeting around the same time but can't compete with Wal-Mart.
Heinz veteran joins Motorola (Chicago Tribune)
Motorola has had a nice run with its RAZR phone. Just look around. They're the only device that comes close to matching the ubiquity of the iPod. Well, there's the Blackberry too, and probably most of you roll in that set, but trust us about the RAZR thing. Since then, just as Apple has come out with many derivatives of the iPod, so too has Moto been bringing more RAZR-like phones to market, like the KRZR and the SLVR. Technical innovation? Not so much. More slim phones with silly names? Payday. Well, we can expect more of this it looks like. Motorola has hired Kenneth "Casey" Keller Jr to be its head of marketing. Keller was formerly at Heinz where he was the ingenious visionary behind purple and green ketchup, which is disgusting, but kids like disgusting stuff. Motorola already makes the RAZR in many colors, so it's hard to see what value he'll be able to add.

CME move to spur European exchange consolidation (Reuters)
Just yesterday morning we noted that there had been a slowdown in M&A among financial exchanges; then a few minutes later, the Chicago Mercantile Exchange and the Chicago Board of Trade announced a civil union. And now the talk is back on again about what European exchanges will have to play let's make a deal to stay in it. So the LSE is a natural one, since it's been quiet. And the Deutsch Borse will probably make a move as well. So far, there have been regulatory barriers and shareholder objections, but in light of the new Chicago powerhouse, all sides might be willing to let their objections slide.
Ken Lay's conviction tossed out by judge (CNN)
It's not the editorial stance of the Opening Bell that Ken Lay is or even might be alive -- as much as we'd like it to be true. But, just in case you are Ken -- and if you are you'd certainly be a Dealbreaker reader -- it's safe to come out of hiding now. The conviction against you has been dismissed. Anyone who speak of the "convicted Ken Lay" is lying and smearing your name. Now your partner Jeff Skilling. That guy's a crook.
Trip to Japan will save you gas (Daily News)
A new survey of automobile gas mileage finds, not surprisingly, that hybrid cars dominate the last. In particular, hybrid cars from Toyota and Honda did really well. That's great, and while your saving money at the pump, and chatting at parties about how you "hardly even noticed the gas price spikes with your new Prius" remember to point out how much extra money the thing cost, and the fact that whatever savings you did get were a result of tax breaks -- and how liberal are tax breaks? Realistically, we probably should make a separate list for the two types of cars, though that might deprive hybrid owners of a certain psychic joy, which has to account for mush of the list value.
Yahoo Profit Falls Sharply on Weakness in Advertising (NYT)
The market got this one right. Shares of Yahoo have had a really rough summer, as everyone sees the writing on the wall at the company. It's getting is lunch eaten by Google, a company it used to own a major share of. The internet is moving away from the kind of exclusive, Yahoo-hosted content that was once its bread and butter, and what makes it (still) the number one site on the 'net. Unlike Google, it really doesn't have any coherent strategy, just a mix of a bunch of different offerings. So it's search market share is on the decline, and so is its ad revenue. It had to dim its outlook going forward. Bring back the yodeling.
Time Warner Cable Files for Initial Public Offering (Bloomberg)
Time Warner has filed with the SEC to go ahead with a spinoff of its cable division. This had been rumored for some time. Analysts estimate that the division could be worth as much as $45 billion, making the 84% stake the company will hold on to worth about $35 billion. Of course, analysts see the move as a positive because it will "unlock value", as well as create some nice business for their firms.