Opening Bell: 1.16.07

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UK inflation climbs, Bank just escapes letter (Reuters)
Oh those Brits and their stuffy traditions. Did you know that if the rate of inflation deviates by more than 1% from the central bank's stated goals, the the bank has to write a letter to the government explaining itself? We can only imagine that it's a major humiliation for whichever top-level manager has to actually pen the damn thing, assuming they don't just pass it off onto some low level civil servant. The good news is that inflation is exactly 1% higher in Britain than it's supposed to be, which means, they've won a reprieve (good thing for generous hedonics).
Bank of America Quietly Targets Barrier to Growth (WSJ)
With 9% of America's deposits, Bank of America has basically hit its full potential. Sure, it can grow along with the industry (which can't be very much), but it can't make the kind of big name acquisitions that it's made in the pas.t That's because of Byzantine regulations limiting one bank's deposits to no more than 10% of the nation's total. Why 10%? Because it sounded like a nice round number to whatever regulator dreamed it up. Slowly, however, the bank is chipping away at the support for this arbitrary cap, and it may see it reversed at some point. At which point, we can only imagine the frenzied speculation about which of its rivals its going to buy out. Actually, it's never to early to start guessing.
More evidence on backdating and stock prices (Ideoblog)
Larry Ribstein picks up the backdating baton once again noting a study that looks at the relationship between options backdating and stock losses at the companies that did backdate. It's true that companies that engaged in the practice did tend to see losses in their stock (which would seem to bolster the claims that there's something "wrong" with the practice). But, aha, it appears the real reason that these stocks went south is because of the loss (or the fear of a loss) of a chief executive. Ribstein notes the momentary weakness in Apple's stock recently when it appeared that Jobs might be forced out. So it's not the backdating itself, but the fear that people are going to make too big a deal out of it.
H.P. to Report an Advance in Adaptable Circuitry (NYT)
HP claims to have developed a technology that could revolutionize consumer electronics, by allowing the company to update and modify a devices innards after the item has already been sold. Sounds pretty great. Just remember that term "adaptable circuitry", since it already seems bound to go down with a host of other technologies that will revolutionize the world, but are always a few years off. Others include: pharmacogenomics, fuel cells, black light power, nanotech and space elevators.


Storm Blacks Out Parts of Northeast (Forbes)
We've been hearing about some ice storm or something that apparently blanketing the rest of the country with, well, ice and grinding commerce to a halt. And now they say the storm has moved into the northeast, but from our makeshift weather observatory here, it seems like business as usual. The only thing that doesn't seem right is that tomorrow's not even going to be above 30 degrees, according to the weatherman, which means that something is seriously wrong. And Friday we might even get snow. So as you're trading energy, you might want to keep in mind some of the bizarre, unseasonal cold we're supposed to get this week. That being said, oil has already taken a big hit in today's trading. Seems that not even colder weather and the Saudis can save the stuff from a changing supply/demand picture.
Premium ranges buoy Tesco's Xmas (The Guardian)
While many retailers in the US turned in a disappointing Christmas shopping season that wasn't the case at Tesco. The UK supermarket did a brisk business in non-food items along with premium quality foodstuffs. Goose fat (seriously) reportedly was in high demand (selling at a pace of 500 jars an hour) after some cooking guide recommended it. The company also did well in organics along with meat and poultry.
(Canadian) Hedge fund managers will have to register with regulators (Globe and Mail)
Ever have a conversation with your Canadian friends, and they get all on your case because the US doesn't have nationalized health care? Well we've finally evened the score. Now you can get up in their grill because their hedge fund managers are required to register with provincial authorities, while our hedge fund managers don't owe nothing to the SEC. The regulation follows huge "scandals" aka collapses, leading to major losses for investors. In other words, failure must be punished.
Google is Running Penny Stock Promotions (Infectious Greed)
This year has seen an explosion in penny stock spam, in part because it really works. Studies have shown that it's basically a sure thing to make a tidy profit for the scammers. Paul Kedrosky notes that the scammers are moving beyond pure spam, and are buying Google ads promoting their favorite shares. Not too surprising really, but given all of the attention paid to this issue this year, you'd thing Google would be a tad more vigilant.
Hyundai chairman may face 6-year jail term (Reuters)
The chairman of Hyundai is likely to spend six years in prison for setting up a personal slush fund and embezzling money from the company. Six years actually sounds pretty light for what sounds like blatant theft. We're not talking about accounting tricks here, or selling stock at a high price when you knew that it might go down. This isn't much different from walking into a bank's vault and taking out cash. Maybe the Koreans just have a more relaxed sense of white collar crime.

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