Opening Bell: 11.28.06

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Boeing Not Afraid to Say ‘Sold Out’ (NYT)
We've been commenting a lot lately that everything seems to be going swimmingly for Boeing, almost to the point where things might be looking too good. A run like this seems destined for a stunning reversal of fortune, or at least it would if this were a work of fiction. The Times notes that it's biggest challenge now is the tragedy of abundance; it's basically got too many sales to handle, and it risks stumbling if it can take on more than its chew. It recently told Southwest, one of its major customers, that it would not raise an order from 80 planes to 82, because it simply didn't have the capacity. The firm also knows that orders can fail to materialize, and so there's a danger in overextending itself, as it did in the mid 90s. Meanwhile, we've been noting how just about every airline is shifting orders away from Airbus to Boeing, but the US Air-Delta merger could have the opposite effect. Delta's a Boeing shop, while US Air has big orders in at Airbus. In fact, Airbus has an investment in US Air, which was made as an incentive to buy Airbus planes. So it's possible that Boeing could lose some major Delta business. Note: this is why airline mergers are so hard. Think of the added costs, just associated with dealing with multiple airline vendors now.
Hu Tells Bush He'll Seek Balance in U.S.-China Trade (Bloomberg)
Why do we find it worrying that Chinese President Hu Jintao is pledging to take measures to balance US-China trade. That's apparently what he promised Bush, during a recent telephone call. What does he mean? Will he promise to make Chinese goods more expensive? Will the Chinese buy plastic toys, cellphones, and sneakers from the US? Sorry, but we don't make those things. Maybe the newly rich Chinese elites will fly here to get massages, hair frosting, and formica countertops from our creative class. That'd be nice.
Buffett's Berkshire complies with SEC request (Reuters)
Despite Warren Buffett's supposed love of plain-folks talk and clear financial reporting, we've always found it difficult to delve into Berkshire's financials. His insistence one solely reporting using GAAP means that there's not much clarification, or indications about what items are one-time in nature. Of course, he'd scoff at the idea of a one-time expense, but come on, it can be helpful. Apparently, the SEC agrees that the firm to could do a better job opening up, and asked the company to be a bit more forthcoming. Busted.
EMI Says It May Draw Takeover Offer (Dealbook)
The major record labels could be fertile territory for private equity to conquer. For one thing, they're really not doing very well these days. In part it's due to changes at the industry, but the management is really stale at them. It's easy to imagine that with a little bit of work, they could start to right the ship, or at least chart a better course. They're also, of course, sitting on piles of assets, namely, their extensive music cataloges, much of it is under-monetized, or, perhaps, dribbling out a few sales on iTunes. So it'll be interesting to see what happens with EMI, which may be in talks with Kravis Kohlberg to go private. Wonder what they've got cooked up for the company.


Russia's unhealthy interest in gas endangers growth (Times Online)
Apparently, the OECD's been reading Dealbreaker. In a new report, it warns of the same thing we've been hitting on, the global reverberations from Vladimir Putin's "interest" in the natural gas market. It said that the government's activity in a range of sectors, from energy to finance and aerospace has been picking up, and that the government's history of owning private industry is poor. Hmm, we wonder how long they're going back when they're talking about the Russian government, because if they're using a long time frame, then it's definitely true.
Online holiday sales rise 24 percent (Sacramento Bee)
Remember how they've been saying that exit poll data is becoming increasingly unreliable, ever since Gore/Bush? It seems like it's the same with shopping. Either online holiday sales are up 24%, or "Online Shopping Falls Flat". Just goes to show that the only poll that really matters is the one filed to the SEC.
Nintendo Sells More Than 600,000 Wii Units in 8 Days (Bloomberg)
Somehow Nintendo forgot that the videogame market was supposed to be a two-horse race. While Sony and Microsoft focused exclusively on battering one and another, the grand dame of the industry dropped its latest offering a few weeks ago at a price well below the new PS3. And they're selling like crazy: 600,000 units in 8 days. And the company says it can churn out 250,000 per week, to meet demand. And the crazy part; it's making money on each one. Sony's much more expensive consoles are a loss leader for the company, which hopes to profit selling $80 games. Maybe it will once again become a two horse race before long.
12 Days of Christmas cost more (AP)
According to PNC Financial Services, the basket of goods represented in the song the 12 Days of Christmas have hit a new record high price, were you to actually buy these items. Altogether they'd cost you $75,122, 3.1% higher than the year before. But that doesn't sound so bad. 3.1% is not enormous, and besides, it's not clear that the firm is making hedonic adjustments. The real culprit is actually the cost or hiring people, such as the drummer drumming, do to wage inflation. Congrats PNC FInancial, we gave you some attention for this blatant publicity stunt. Now don't bother us again until next year.
Thai Government to Remove Martial Law in 41 Provinces (Bloomberg)
Remember a few months ago, when the Thai democracy caught the flu, and markets panicked for a few minutes? Yeah, we forgot about that too, probably within a week. So far, it looks like the markets were right not to care too much. There's really nothing wrong with a military junta as long as it's not one of those juntas that wants to nationalize everything and return it to the "people". 10 weeks later, the government's getting ready to lift martial law. We're guessing that even most people in Thailand have forgotten about it, with the lifting of martial law only serving as a reminder.

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