Skip to main content

Opening Bell: 11.9.06

Sponsored by
Big Board, Moving Toward Electronic Trading, to Lay Off 500 (NYT)
Now that it's a public company that has to answer to shareholders, the New York Stock Exchange is trimming the fat. The company announced that it would lay off 500 workers, a week after announcing that it would close one of its trading floors. Clearly, the old institutions are getting slammed pretty hard by changes in trading, though in a way, the NYSE has done a good job of hanging on, and convincing people it's got a good future. Still, it's going to be getting threatened, and the 500 layoffs today may be just the beginning.
Airbus parent vows to take 'drastic measures' (Globe and Mail)
It's been how long since the Airbus superjumbojet fiasco began? Quite a while, and yet it took the cancellation of a major order from FedEx for parent group EADS to say that something was seriously wrong, and that it would take dramatic steps to fix the situation. It sounds a little bit like every GM or Ford conference call: "Ok boys, now we're in crisis mode". The company was naturally short on specifics, though it said it planned to "do more with the Russians", a reference to the Russian state-owned bank that bought a portion of the company recently. For a company beleaguered by European politics, why does it seem like a bad idea to let Vlad Putin get involved?
What Business Should Expect In Next Congress (WSJ)
We promise that election-related news will end shortly (they finally called the Virgina senate race for Webb, so at least the election itself is over). But there could be some implications for business that are worth noting. Now the whole appeal of divided government is that the government can do nothing, and that's something that a lot of people are really banking on. So whatever the Democrats want, the assumption is they won't achieve it. But they will have the power to annoy and to irritate (just as the Republicans did when the brought the oil executives to the hill). The thing is, it's pretty clear why they won: Iraq, Bush-fatigue, etc. They didn't win because people wanted a higher minimum wage. In fact, you can assume that the number of voters who make anywhere near the minimum wage was rather small. And they didn't win because people want investigations into executive pay and free trade. So if that's the path they go down, well, they might not be around for that long.
FDA May Broaden Access To Experimental Drugs (WSJ)
The classic complaint about the FDA is that for all of the lives it "saves" by ensuring the safety of a drug, it causes so many more deaths by delaying drugs that were safe to begin with. Responding to criticism -- much of it from (surprise) patient groups -- the agency is seeking to improve the availability of experimental drugs for the seriously infirm. Of course, the rule change has to be run by the White House's Office of Management and Budget before they can be approved. Ah, the OMB, always the last defender of health and safety.

Billionaires Fight to Buy The Los Angeles Times (NYT)
Entertainment mogul David Geffen is among those looking to buy the Los Angeles Times from the Tribune company. The Times has been something of a "problem" holding for Tribune, though one of the big ones was finally resolved yesterday, when the paper's chief finally resigned. It sounds like Geffen may fancy himself a newsroom friend; word is that he's willing to accept lower profits if that's what it means to be a world class operation. But does he really have what it takes to make it succeed, or is buying Hollywood's hometown paper a vanity exercise. Perhaps some benefit of doubt ought to be given, if only because he has shown impressive success in much of his dealings, and is seen as quite "driven".
Sam's Club said to open door to MasterCard (Reuters)
Somewhere we remember hearing that Wal-Mart's warehouse club, Sam's Club only took Discover card. That always seemed very odd, seeing as, well, nobody carries a Discover card. Rumor is that the division will finally accept MasterCard, which is a big win for the company over its rival. But really, why don't they just to the typical package, with Visa, MasterCard, Amex, and Diner's Club? What's the holdup?
McDonald's Sales Rise 5.5% on New Sandwich in Europe (Bloomberg)
You might think of McDonald's as just selling mass-market junk food, but in fact the company knows how to tap the long tail of what people want to eat. The company's announced strong sales yesterday, particularly in Europe where the company is doing more to focus the menu on regional tastes. So, for example, in Italy they're selling pasta on the menu. In the UK they sell "Ham & Cheese Toasties", which sound fairly foul.
AOL acquires financial news search company (CNET)
Not really sure where AOL is going with this one, but it's bought out a small private company called Relegence that delivers financial news straight to your desktop in real time. It sounds like the company trawls through all media, from television to stock message boards, looking for things you might be interested in (mentions of a specific stock we assume) and then delivers it. This is definitely a hot area. Some companies promise to give hedge fund managers that extra edge by scanning blogs for the mentions of stock, and the using algorithms to compute whether all the discussion portends good or ill. And since they've got years and years of blog-borne stock discussions to go on, we can assume that their algorithms are finely tuned.
Dubai May Buy EADS Shares, to Cut Daimler Investment (Bloomberg)
And in other EADS news, hey would you look at that, another state-owned firm is looking to buy a slice of the company. This time it's Dubai International Capital LLC, a state-owned private equity firm, which has mentioned wanting to take an interest in the company. The good news, is that since it's Dubai, they'll no doubt want to trick out Airbus planes even more than they already are. That's right; the planes aren't just going to have swimming pools, they're going to be wave pools.