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An era ends today as Skilling learns fate (Houston Chronicle)
Today is the day that Jeff Skilling will learn his fate, but to say that the Enron Era ends today sounds like wishful thinking. We've still got the NatWest Three among other cases winding their way through the courts. Analyst consensus estimates are for Skilling to receive somewhere between 20-30 years in prison, though the whisper number is for something lower than that. 15? Ultimately though, the full burden of Enron's collapse falls on his shoulders. Fastow got a measly 6 years after his sentence was reduced; he was so relaxed during the sentencing that he drank a Starbucks in court. Ken Lay is dead, and if there were any justice that would double Skillings sentence automatically. Any guesses?
Panama backs ambitious canal expansion in vote (SABC news)
The nation of Panama comes off as something of a one-trick pony, wouldn't you say? When you think Panama, you're next thought is always Panama Canal, right? Either that, or maybe Mariano Rivera. So, the one time it's in the news, it's about a big plan to improve the economy renovating the canal. It's going to spend over $5 billion to widen its lanes, and make it friendly to massive cargo ships. And though the expense may bankrupt the nation (!) it believes it will be good for the economy because -- of course -- it will create jobs for the poor. We can't help but be skeptical that any plan that involves investing more into a centralized, government-run infrastructure project will have a limited benefit for the poor, but good luck to them.
Ford to Restate Earnings, Posts $5.8 Billion Loss
Ford reported a monster loss this morning on costs associated with job cuts, and writing down the value of Land Rover and Jaguar. The biggest joke is that the company called these expenses "one-time expenses". How many consecutive quarters do you have to have one-time charges before they're not considered one-time anymore? Without the charges, the company lost just $.62/share, which was in line with analyst expectations. But the good news ends there. The company said it needed to restate 5 years worth of earnings, get this, including those announced today. That's pretty bad when on the day a company announces results, it's already warning that they may be wrong.
Zune Shut Out (NY Post) (via Dealbook)
Microsoft was totally rebuffed after trying to strike up a deal between its Zune division and the indie online music bible, Pitchfork.com. Microsoft had approached the site about some sort of exclusive, but the site refused to sell out... to the man! It's the most punk rock rejection of a business overture we've hard of since Epitaph records refused to sell out to a major label in the late 90s for $50 million. Although, the label recently joined the industry group, the RIAA, which is about the least punk rock thing we could think of.
Celebrities Protest Malibu Gas Facility (AP)
You can officially include celebrities such as Pierce Brosnan and Tea Leoni (nope, never heard of her either) as part of the conspiracy to keep energy prices higher. Seriously, it's almost as if Halliburton, BP and Shell hired these guys to protest a natural gas facility 14 miles outside of Malibu, so we'd continue see refinery shortages. If any politician chides these companies for not investing in enough infrastructure, they can now pass the buck onto Pierce Brosnan.
Oil falls despite Saudi cut (Reuters)
As much as the celebrities want to push the price of energy higher, they haven't succeeded... yet. Even OPEC, who's raison d'etre is to stabilize and elevate the price of oil, can't pull it off. Despite promises from the cartel, and specific announcements from Saudi Arabia that it would lower its sales to Asian refineries, the price keeps going down. Does anyone actually think they'll be able to get their act together and work together. Not only is it hard on the way down, but they're out of practice. It's been years since they last tried to overcome the collective action dilemma, and it's really tough.
How Broad Coalition Stymied Wal-Mart's Bid to Own a Bank (NYT)
Wal-Mart has been on a long, well-documented quest to own a bank. The company says it would like to be in this position, so it could do its own debit and credit card processing -- thus saving fees -- though its opponents worry that the company will open Wal-Banks all around the country and put mom & pop banks, like Citigroup and Bank of America out of business. But while Target already has a bank, Wal-Mart's application appears to be dead. There have been several delays in the process, and several politicians have looked to stop it. A law's even been proposed that would prevent any non-financial organization from owning a bank -- a move that would bring us right back to the early 20th century.
Dunkin' Donuts Raids Krispy Kreme's Turf (AP)
Dunkin' Donuts has never had the kind of cult following that Krispy Kreme has had. When a new Dunkin' Donuts opens, people don't line up for hours the night before to be the first in. People don't make wedding cakes out of Dunkin' Donuts. On the other hand, Dunkin' Donuts hasn't had the same type of management and financial problems as Krispy Kreme either. By all accounts, its stores actually make money. Now the two are set to do more hand-to-hand combat. Dunkin' Donuts is expanding southward, into the heart of Krispy Kreme country. The south is one region that Double-D has yet to conquer, and old allegiances don't die hard. On the other hand, Dunkin' Donuts is more than just Donuts. Plenty of people swear by its coffee, and its collection of fancy drinks makes it something of a blue-collar Starbucks. Get ready for war.
Pilot-Fatigue Test Lands JetBlue In Hot Water (WSJ)
When did JetBlue become RyanAir? True, both are discount airlines, but while JetBlue loads up on the amenities like free wifi at the JFK terminal, TVs for each seat, and Terra Blue potato chips, Ryan Air, by all accounts, is miserable. And yet, JetBlue is now struggling, which may explain why it secretly pursued a study to have pilots fly above the legally allowed time by the FAA. Typically, pilots are restricted to 8 hours per day, but the company had a few test pilots fly 11-12 hours some days without telling the FAA or the passengers aboard. Now the company may find itself in some trouble due to the stunt, although it's chalking up the failure to inform the FAA as a 'miscommunication'. Anyway, they still have the TVs on-board, which make up for a hell of a lot.