Opening Bell: 12.01.06

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Sharply Divided Reactions to Report on U.S. Markets (NYT)
A panel's recommendation to roll back some of Sarbanes-Oxley's onerous regulations is drawing a predictable response. The Hank Paulson crowd, of course, loves it, while Eliot Spitzer is outraged and promises to go to Capitol Hill to testify against it. That's a cruel joke right. We've been operating under the assumption that the only reason he was elected governor was to remove him from a position of genuine influence.... right? He needs to talk with his pal Chuck Schumer, who along with Mayor Bloomberg, penned that piece decrying the competitiveness of the US financial markets. Aren't there some budget issues in Albany or something that need attention?
Report: Payday Loans Cost at Least $4.2B (AP)
We may let out our ideology steep into our writing from time to time here, ok regularly, but here's a promise: we'll never simply reprint some press release from an advocacy group, and then add "...according to the group" and the end of each paragraph and try to pass it off as news. We already knew the AP didn't have particularly high standards -- c'mon it's the AP -- but what are you supposed to make of a story that starts with this line, "The payday loan industry took $4.2 billion out of consumer pockets in 2005 because states have not done enough to restrict high interest loans and practices that trap people in financial quicksand, the Center for Responsible Lending said Thursday."? It then repeats this format through the entire story, until it gets to the obligatory quote from someone in the industry who disagreed. As for the anti- payday loan crowd, they're doing a good job getting their pet subject into the mainstream. And with the Dems ruling the Hill, they may have a shot of getting something passed. One hopes Bush will have the fortitude to shoot it down.
Asia Finding Rich Partners in Mideast (NYT)
On the one hand, obviously it's important for New York and the US to remain competitive when it comes to capital markets, and when we see American tech startups forgoing the NASDAQ to list on the London Stock Exchange, it should be a cause for some alarm. But conversely, we can't act as though every time a new banking center emerges, or there's an increase in activity between two regions that aren't us, it's a threat. The Times has an interesting piece profiling the rise of investment deals between the Middle East, particularly rich Saudis, and the Chinese. Seems like a pretty good thing overall, and it should present opportunities for the international branches of American investment banks, if they can get into position. But then there's this stuff about the activity threatening US business, and it cites the scuttled Dubai ports deal as a reason why the Saudis may no longer want to deal in the US. But we're guessing that for some time, nobody will be able to afford not to have a serious focus on the US, least of all the Saudis, who are as dependent on us as we are on them. So any worry sounds rather premature.
Gates Foundation Sets Its Lifespan (WSJ)
The Bill & Melinda Gates Foundation announced that it was due to spend all of its money and close up shop within 50 years after the death of its founders. This is so the organization doesn't just wade listlessly in perpetuity, earnings "income" on its "investments", which is of course antithetical to its socially responsible goals. So here's a question: which will last longer, Microsoft or the Bil & Melinda Gates foundation? Leave your answer with an explanation in the comments.


Warner Music Reports a Profit From Legal Settlement (Bloomberg)
It's too bad that there's not a YouTube/Google merger every quarter, because as you'll recall, they gave the record labels a lot of money just to shut the hell up about copyright infringement. That contributed greatly to Warner's bottom line, offsetting slumping sales. The report says that sales from Danity Kane couldn't help replace the big gains from last years James Blunt sales. We know who James Blunt is, just because that song was played over and over again, but who/what is Danity Kane? When your whole company depends on one (we assume it's a) person, then you might need to make a few adjustments.
EADS OKs 10 bln-euro A350 XWB financing: report (Marketwatch)
We were going to say that the era of cheap money must still be upon is if EADS is able to secure $10 billion in financing to launch a totally new plane, but that was a silly thought. $4 billion of that will be secured by the company's state backers, France, Germany, Spain, and Britain. Boeing and the US might complain about this, or feel that it's in violation of some WTO agreement, but they'd be well off just letting it slide, seeing how little all this state aid has done for 'em in the past.
GM banking on electricity to power cars (Scripps Howard)
Back in the halcyon days of the year 2000, we had the chance to attend the Geneva Auto Show, one of the biggest auto shows in Europe. Every company back then was showing off their fuel cell vehicles, and promised that they'd be on the road by the years 2006-2007. No need to say what happened to that vision. By the next year, with the world economy in a funk, the major auto companies weren't spending so much on frivolous (sorry) projects. This isn't to say that researching alternative fuels isn't a good thing, but the internal combustion engine isn't going anywhere anytime soon, and we'd certainly hope that GM isn't actually "banking" on electric cars, cause if they are, then they're totally screwed. We'd like them to succeed though, just to discredit that "Who Killed The Electric Car?" movie.
Kerkorian Sells Last of His GM Holdings, Person Says (Bloomberg)
The reports which we first notes yesterday, the Kirk Kerkorian was in fact dumping the final share of his GM holdings are being widely confirmed today, though all seem to be relying on the same "person familiar with the matter". But, unless shown otherwise, we'll give them credit for being able to verify that this person knows what he's talking about.

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