Opening Bell: 5.17.07

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Cerberus's Chrysler Buy Helps It Mimic GE, Snow Says (Bloomberg)
Cerberus chairman John Snow said that his firm will take a deep interest in the operations of Chrysler, as he compared the firm to a highly sophisticated conglomerate like GM. The "highly secretive" company seems to be making a lot of noise in the media these days, if you ask us. Sorry, but now that we think about it, we prefer the black box "hocus pocus" style of private equity, where the company seems to vanish for a couple of years with no information and then voila, they're back, better than ever (balance sheet notwithstanding). Forget what we said yesterday about private equity needing to do a better job of explaining itself.
Clear Channel Sale Is Gaining Momentum (WSJ)
Terrestrial radio network Clear Channel may be getting closer to a takeout, as more major shareholders are lining up in support of a deal. Early private equity offers were deemed to be too low, but the, ahem, sweetened deal may have worked out. The big question mark out there is ISS, which has yet to make a decision.
Burger King sued over trans fat in oil (Reuters)
Anyone else noticed that a lot of the city's greasy delis are starting to put signs in their window touting their lack of trans fats? Just wondering about that. Anyway, the Center for Science in the Public Interest -- a political group that tries to cloak itself as being a scientific group -- has sued Burger King for not yet acquiescing to the anti-trans fat crusade. While we don't doubt that partially hydrogenated oil is bad for you, we're also 100% certain that Biggied colas with 60g of sugar are really, really toxic and just as damaging -- plus, they're addictive, which trans fats aren't . So why isn't the CSPI suing about that? Unfortunately, the answer is probably just "give it time".
News Doesn't Matter, Dell Edition (Market Movers)
One of the areas where the Opening Bell and Dealbreaker proper are in agreement is the ridiculousness of so many attempted explanations for why markets move in a certain way at a given time. Not to point any fingers, but TV talking heads and newswire journalists seem to be the most flagrantly guilty of grasping for straws when it comes to looking for an answer. Felix Salmon notes a particularly absurd quote from yesterday about Dell and the reason its stock rose despite Andrew Cuomo's lawsuit against the company: "Goldman Sachs analyst Laura Conigliaro said she thinks investors might be pleased the suit wasn't connected to a separate investigation by the S.E.C. into Dell's accounting practices, the Associated Press reports." Brilliant. Our explanation is that Andrew Cuomo is a total lightweight (look at me, I'm wearing daddy's suit!), and nobody thinks he'll be able to accomplish anything.


Japan's Economy Cools; BOJ Leaves Rates Unchanged (Bloomberg)
The Japanese economy slowed in the recent quarter, ostensibly due to concern that US demand may slow. The BOJ left interest rates unchanged, but if the weakness continues, will it be able to resist slashing rates to zero again?
Li, Asia's Richest Man, Says China Has Stock `Bubble' (Bloomberg)
Usually, bubbles don't burst when everyone is calling the bubble a bubble. On the other hand the Chinese stock market is up 85% this year and it sports a valuation three times richer than the Hong Kong market. Scarier than the raw numbers is the apparent enthusiasm that so many Chinese consumers have for playing the market, and the leverage that they're taking on in order to place their bets. So, as Asia's richest man Li Ka-Shing (now there's an aptronym) is now saying, things really do look bubbly.
Google 2.0: Google Universal Search (Search Engine Land)
Google's main home page hasn't really changed in years, as the company has always opted for an ad-free, spare look that users love. So the company is obviously going to be very cautious about changes it makes. Nevertheless, the company has unveiled some significant changes for the first time to its search results, as it attempts to bring in more things like maps, videos, pictures, books, etc. all into the same results page. Danny Sullivan, whose pretty much the world's top expert on the search business has the lowdown of the changes. A commenter on the post seems to nail the fundamental reasons behind the shift. As search results draw from more areas, it's going to be harder and harder for companies to achieve coveted top spots on search results. So, if they want to be seen, they're going to have to pay even more for premium ad listings. More cash to Mountain View.
China Urges U.S. Not to Punish All Food Exporters (NYT)
The case of the poison pet food seems to have died from the news, but now comes the time when the US has to decide what it's going to do as a punitive measure. You know the US isn't just going to let things go, that's not our style. You also know that whatever we do do, it's not going to be particularly effective, as that is our style. China, keen to avert a trade war of any sort, is now promising that it's taking care of punishment at home, and that there's no reason for the US to apply any extra pain.
H-P Raises Fiscal-Year Forecast (WSJ)
The mighty and resurgent HP continues its impressive retreat from the precipice as its sales continue to surge while projecting more good times ahead. The difference between the Carly era and the post-Carly era is starker than ever, as Mark Hurd continues to impress.
Why Is Income Inequality in America So Pronounced? Consider Education (NYT)
Surprise, the Times today has another article about income inequality. Ah but it's written by Tyler Cowen, so it's not the usual bromides about executive pay and the hollowing out of the middle class. In fact he starts of by pointing out that the Times' unusual focus on executive pay is really a distraction since the "top 1%" is, well, just 1%, and thus not that big of a deal. Besides, there's always been a big gap between the very top and the masses, so that's not really the most concerning area. Real inequality comes from skills inequality. If you know something and can do something (whether it's building a financial model, laying a foundation, redoing the plumbing, or coding a website), you can make money. If you can't do anything or don't know anything, then it's really difficult to capture the spoils of the economy. So if you're going to talk about inequality, that's the area that needs to be addressed.

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