Opening Bell: 2.27.07

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Shanghai's Index Plunges 8.8% (WSJ)
The Shanghai stock market got slammed, falling 8.8% off of what was an all-time high. There does not seem to have been any event driving the selling. No communist party official died. No state bank collapsed. No statements were made on the future of the Yuan. It looks like it was just good old fashion profit taking, or maybe it was a correction, depending on your choice of positive euphemisms for a market drop. And it seems that when Shanghai sneezes, the rest of Asia gets a cold, as evidenced by bad sessions in many other places, including Australia.
Panel Backs New Stamp Not Linked to Rates (NYT)
Here's a potentially interesting hedging instrument that you might want to keep your eye on. The Postal Regulatory Commission is backing the idea of a "Forever Stamp", a stamp that will cover the cost of sending a letter for the lifetime of a buyer. Apparently a forever stamp will cost whatever a first-class letter costs at the time, but if in six months, the price of a letter goes up, your stamp will still be valid. Part of the appeal for the post office is that it won't have to keep printing up $.02 stamps so that people can make up the difference between their old stamp books and new ones. Now, if you think that the cost of a letter will rise faster than the rate of inflation, a forever stamp might be a good investment, particularly if you can buy them in bulk.
Mississippi Expects to Be Site of a Toyota Assembly Plant (NYT)
Chalk up another win for the right-to-work states. The governor of Mississippi is set to announce that Toyota has chosen the town of Tupelo to build an $800 million SUV plant. Already, the company has a plants nearby in Huntsville, Alabama, but it would be the first Toyota plant for Mississippi. While people in the NASCAR belt may prefer Fords and Chevys, they've got be thinking that neither of those companies have done much for them lately. Meanwhile, Toyota and its ilk have now built several plants in the region.
Wal-Mart buys 35% stake in China rival (Reuters)
We still think that Wal-Mart needs to buy out Wu-Mart, just to stave off any confusion down the road, but in the meantime the company has bought a 35% stake in Bounteous, a Chinese retailer with 101 stores in 34 cities. Apparently, the company is not profitable, but that Wal-Mart was attracted to Bounteous for its infrastructure and locations.

Gap Will Close Forth & Towne Chain After 18 Months (Bloomberg)
No real surprise here, just 18 months after launching a new chain Forth & Towne, a retailer aimed at women 35 and older, the Gap is shutting it down. Seems that like every other Gap property these days, the unit was performing none too well. The positive spin being put out is that the move will help free up top talent to come back and work for the Gap itself and Old Navy.
Unmoved by Greenspan (New York Daily News)
Yesterday, after Greenspan uttered his remarks about a looming recession, the markets were supposed to tumble. They were supposed to fall so hard that the curbs would have to be put in place. Instead, they just fell slightly "on fears of a correction". Could it be that the Maestro just doesn't have the ear of the market like he did when he was El Jefe? As with the presidency, it appears it's more about the power of the office than the man. Or maybe traders just took solace in the fact that any economic slide could easily lead to rate cuts.
Oscar Outclasses the Super Bowl (NYT)
The Times notes that commercials during the Oscars proved superior to those run during the Super Bowl. Part of the reason is that a lot of Oscar-night commercials simply took a bunch of clips from classic movies -- so in a sense, they were cheating. But, there may be something to it. Super Bowl commercials are aimed squarely at men, and if you believed the ads, then all men are beer-obsessed troglodytes. That theme is really, really tired, no doubt. And it would probably behoove the beer industry and the ad industry to come up with some ideas.
Is an Economist Qualified To Solve Puzzle of Autism? (WSJ)
We've mentioned here before that there's something to be said for the good old days, when economists stuck to things like monetary policy, inflation, labor markets, trade, tariffs -- good things like that. But that ship has long sailed. Now we get studies on whether women's menstrual cycle is responsible for the disparity in earning, and whether Roe Vs. Wade has lead to a drop in crime. The latest study to bring up controversy is one linking television viewing to autism, which many in the scientific community see as total rubbish. We'll pass on the details for now, but just from a cursory look, it's not clear what this really has to do with economics. Sounds like he discovered some sort of pattern, and then used some tools to put the two together. At this point, there's no putting the cat back in the bag. Economists are hot, in part because their training is perceived to be universally relevant, capable of handling all fields.