Opening Bell: 4.19.07

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UAW leader to DCX: Keep Chrysler (Detroit Free Press)
UAW president Ron Gettelfinger is making the case to Daimler that it should just keep its Chrysler unit, instead of selling it to another party as planned. It's not hard to see why the union would have its stance. If Chrysler were to fall into the lap of another car company, there would be redundancies out the wazoo. And you can only imagine the type of scorched-earth tactics that a private equity shop would be willing to use to cut costs. Meanwhile, Gettelfinger seems to have missed out on the entire history of DaimlerChrysler because he sees a lot of "synergies" between the two sides of the company. Maybe he's been asleep for the past 9 years.
Democrats Seek Shareholder Voting on Executive Pay (NYT)
The Democrats, many of whom probably read the New York Times this weekend, have come up with the brilliant idea that shareholders should be able to vote on issues of executive pay. That sounds bad, but it looks like the vote would be non-binding, so it really doesn't make much of a difference (hmm, the Dems are really into non-binding votes these days, aren't they?). Actually, we think the bill could have real merit. No, we haven't gone completely off the reservation, just hear us out. Suppose shareholders were given the option of registering the pleasure or displeasure with executive pay packages, what do you think would happen? Obviously, the Democrats must think that there would be a wave of displeasure voiced and that companies would get the message. The more likely scenario, however, would be for shareholders to respond with total ennui. Fact is, most of 'em just wouldn't care very much. For all the talk about shareholder activism and such, most shareholders can't be bothered to give a damn, even major institutions. So it might blunt some of the criticism over executive pay (which is really an issue that should only affect shareholders) if the shareholders themselves don't care.
HP keeps PC market lead over Dell in 1Q (AFX)
A couple of years ago, this headline would've looked like a total joke, maybe something from the onion. But although the two companies are close, HP continues to hold on to its market share lead over Dell, by about 4%. In the US, Dell maintains a very slight lead, despite HP getting Jay-Z to endorse its products. The weird thing is that every time we go to a coffee shop to get our work done, 90% of the people in there are typing a way on Macs, so we'd have assumed that Apple's getting 90%, with the others fighting for the scraps. Must be our selection bias.
China growth sparks overheating fears (Fin24)
The Chinese economy grew by 11% in the last quarter, once again inducing concerns about overheating. This really doesn't make sense though; wasn't the government going to do something about this? What about those interest rate moves, or foreign exchange regulations? What about tighter lending standards? We were sure that the government was really going to slow down growth last time it promised to. This time, though, they'll really do it.


Profit seen rising, will add 250 stores (Chicago Tribune)
Retailer JC Penney said its profits are rising strongly and that it will open 250 stores, including a large store in Manhattan just away from the Macy's flagship store. This is getting ridiculous. Is it just us or is Manhattan being turned into nothing more than a town full of big box retailer, like the kind you'd expect to see next to the exit while driving on a Missouri freeway? Ok, that's total hyperbole. We're just annoyed that every other two-bit retailer can come here, but we'll never get a Wal-Mart.
BlackBerry outage: RIM a victim of its own success? (ZDNet)
Man will be mulling over the great Blackberry Outage of 2007 for some time, trying to divine its meaning. In all honesty, it would've been really interesting to see what would've happened if it had occurred smack dab in the middle of the day. No doubt the impact would've been orders of magnitude greater. Meanwhile, it's worth asking whether this outage was a pure blip, or whether it says something about Research in Motion and whether its dominant position could be in any danger. This incident may have awoken some people to the Blackberry's architecture and the fact that every message runs through Research in Motion's own servers, so if that system goes down, the whole thing must necessarily fail. It may bring about interest in other solutions that are less centralized and less prone to catastrophic, across-the-board failure.
Fannie and Freddie Polish Image With Subprime-Loan Purchases (WSJ)
It's really heartening to know that two of the most important financial institutions in the country, Fannie and Freddy, are willing to spend gobs of money to polish their image and artificially prevent a collapse in the subprime market. The shareholder must be really pleased by that.
Delta unveils environmentally friendly 'carbon-offsetting' option (Today in the Sky)
Do you feel guilty about flying an a plane because planes emit greenhouse gases? Neither do we. But if you know someone who does, then point them to Delta. Now when they buy a ticket, they can pay $11 extra and purchase a carbon offset. Somewhere, someone will plant a tree to absorb the carbon that was emitted by you on that flight. Someday we may wright a long entry about carbon offsets, because they're all the rage these days. Al Gore uses them to offset the carbon produced by his enormous home, and yesterday Yahoo (in addition to announcing weak earnings), announced that they would go carbon neutral, by purchasing these offsets. There's a few problems with this, which is why we think it's a scam. The first is that most of these tree plantations create environmental problems of their own. Most of them simply plant fast-growing, non-native trees (like eucalyptus), which degrade soil and negatively impact an area's biodiversity. Furthermore, when these plantations catch fire, which does happen, all of that carbon goes back into the atmosphere in one tremendous blast. Still, if you feel you need indulgences to get into heaven, then go right ahead.

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