Opening Bell: 1.3.07

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Nucor to acquire rival steelmaker (Tribune)
It's no Mittal-Arcelor, of course, but for the North American market, Nucor announcing the acquisition of Canada's Harris Steel is a pretty big deal. The company will pay $1.07 for its north of the border rival, in a deal that comes at a time when steel prices continue to slacken. You've gotta figure that the North American steelmakers are absolutely terrified that they'll see a return to the late 90s, when bankruptcies were standard, and Asian producers dumped excess steel onto our shores. So this time the consolidation is happening preemptively it seems.
The Squeeze on Belarus (Washington Post)
If you didn't get a chance to check out the recent copy of The Economist featuring Vladimir Putin on the cover holding a gas pump as if it were a tommy gun, you really ought to. The power he's consolidated for himself, in terms of control over world energy supplies, really is rather impressive, and it seems far more likely that the "oil weapon" will be wielded by Russia than by any country in the mideast. You think Iran could really afford to cut off oil somehow? The country's oil industry is in such bad shape that it's become a net importer of the brown stuff. This past week, slipping under the radar with all of the Saddam, Ford, James Brown and holiday shopping news brought a nasty dispute between Russia and Belarus over shipping natural gas through Europe. Eventually the matter was resolved, but one gets the distinct impression that it's just the tip of the iceberg in terms of the kind of fireworks we might expect to see going forward.
What the Congress Can Do for America (WSJ)
Hey look at that! George W. Bush has an op-ed in the Journal today. On the even of the Democrats' return to power in Congress, The Prez lays out his vision for what they can do to help better the nation. And, of course, one obvious area they could work on is tax cuts. He also pays lip service to entitlement reforms, which is frankly a joke. It's not that entitlement programs don't need reforming. They really do. It's just that Bush as done more to set this cause back than any recent president. It'd have been much better if Bush had just done nothing about the problem, like Clinton did. It sure is nice that the Journal gave him op-ed space, and didn't make him express his views in a letter to the editor. Oh, he also talked about working together with the Democrats in some bi-partisan manner. Puke; obviously if the people anted the president and congress to work together, they'd have sent back the Republicans.
Junk Bond Boom Lures Crowd to Bulgarian Steel, Kiev Chickens (Bloomberg)
Bloomberg has a nice anecdotal piece about the lengths investors are taking in the quest for yield. It describes a five-hour long taxi-ride into the depths of Bulgaria to visit a steel company whose bonds had recently plunged after a profit warning. Other recent investments include a chicken farm and a ball bearing factory in Moscow. It's to easy to say that this is all a sign of some impending bust in the junk bond market. But, we will say that if a bust happens, people will certainly look back at the chicken farms and ball bearing factories, and say they should've been a warning sign.


Animal fat may become biodiesel ingredient (Toronto Star)
One of the basic concepts of physics is that everything is potentially a form of energy if you burn it at a high enough temperature. So as energy prices remain strong, the hunt for burnable alternatives will only increase. You can be pretty sure that any time there's spare stuff lying around, someone will propose setting up a factory to turn it into a fuel. And so it is that some enterprising businessmen in Canada are hoping to make money selling chicken fat, a bi-product of the local Purdue chicken factory. Why not? Just mix it with some soybean oil, and whatever random offal lying around the floor, and you will certainly power some hippie's biofuel VW bus on some cross-country road trip.
Sensing Opportunity in Dormitory Air (NYT)
Are the air freshener companies really just now discovering that college dormitories would make for an, ahem, ripe market for their products? Come on.
Exodus of Skilled Workers Leaves Germany in a Bind (WSJ)
For Germany, it's really felt like one of the best years the country's had since re-unification. They got a brand new president, the stock market chugged higher, and by most accounts the economies fired smoothly on all German-made cylinders. Yet there does seem to be some chinks in the armor. Yesterday, we mentioned that the rising Euro was already having an impact on manufacturing numbers, which turned in their worst performance in nine months. And structural problems persist. There's a record amount of talent flight, as top engineers and professionals seek work outside of her borders. This is leaving some of the titans of German industry in a bind as many positions go unfilled. Granted, the market should work itself out over time, as lucrative wages bring in skilled immigrants, and keep the skilled at home. But the rosy picture of Germany remains cloudy as well.
Class Action Suits Hit All-Time Low in 2006 (Dealbook)
In light of all the backdating stuff, it comes as a real shock that in 2006, securities-related class action lawsuits plummeted. The study says "all-time low", but that can't really be right. One reason for the lack of lawsuits is that the market turned in a strong year, and when people are making money, they're not in the mood for suin'. Also, it seems possible that the crackdown on sleazy class action firms could have something to do with it, as lawyers may be reluctant to use shady practices to get things moving forward.

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