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Opening Bell: 5.24.07

European Stocks Drop on China Concern; BHP, Volvo Shares Fall (Bloomberg)
Apparently, stocks in Europe fell after Alan Greenspan voiced some concern about the Chinese stock market. Wait, what? Let's repeat that again: Apparently, stocks in Europe fell after Alan Greenspan voiced some concern about the Chinese stock market. So this would mean that Greenspan still has the power to jawbone down markets (for a day at a time), though we probably didn't need Greenspan to tell us that the Chinese stock market looks like a bubble a tad overheated. And so what if Europe declines for a day if it resumes its astounding upward ascent tomorrow? We wonder if all this lip exercise is a way for Greenspan to prove his value to potential consulting clients. After all, who wouldn't hire him if he can just talk and get the markets to move the way he says they will? All that being said, while Europe supposedly heeded Greenspan's warning, China didn't seem to care at all.
Oil Industry Says Biofuel Push May Hurt at Pump (NYT)
One of the big conspiracy theories out there is that the oil companies intentionally don't build refineries so that the price of gas stays inflated. That's never sounded particularly legitimate to us though. Apparently, however, the government's love for ethanol has got some oil companies worried enough to want to postpone plans for building new refineries. At first this sounds like a load of rubbish, and the conspiracy theorists may think that oil companies will look for any excuse not to build new refineries. But, this sounds legitimate to us. After all, if its the policy of the government to reduce fuel consumption by 20% over the next 10 yeas (which it is), why in the world would we need new refineries? That wouldn't make any sense. On the other hand, if this is just bluster and posturing from the government, then maybe our politicians need to realize that words have meaning and consequences.
Congress Calls For New Measures Against China During Wu Visit (Bloomberg)
Not surprisingly, members of Congress are starting to talk protectionism once again, even as Chinese government officials come to the US to talk trade. What's really irritating is when you read stuff about Congressman getting all upset because they don't like the way the Yuan is valued, and you just know that they don't have a clue about how currency markets work or what the implications of an artificially-low Yuan actually are. Instead, they probably just read some articles about it in the Times, or maybe got a call from a union leader and started repeating what they heard.
Lawmakers scramble to act on pump prices (Houston Chronicle)
Meanwhile, some good news for you motorists. We're finally going to get some relief from high gas prices, since Congress has passed a new law that makes price gouging a federal offense. Awesome. Sure, some cynics might wonder how much price gouging really has to do with current high prices at the pump. But that's the great thing about this. Because price gouging is a vague and nebulous concept that can be defined any which way, there's a lot of leeway for politicians and attorneys to go after people if they don't like the price that's being charged. So there you have it, pencil in that roadtrip this summer. It's on.

Toll Brothers Posts 79% Drop in Net (WSJ)
Not that it was unexpected, but Toll Brothers got slammed this past quarter as the weak housing market pushed profits down 79%. You know it was really bad when the company didn't even try to make excuses, like gas prices or the weather.
Wolfowitz Successor List Emerges (WSJ)
Oh this is awesome, former Senator Bill Frist, who famously ramrodded an anti-gambling bill through Congress by attaching it to a port security bill, is on the President's short list to succeed Wolfowitz at the World Bank. Strictly speaking, Frist's idiotic views on gambling shouldn't disqualify him from the World Bank, though we're sure that if we knew more about they guy, we'd find more to dislike. Also a candidate is Robert Zoellick, the former trade rep that now works at Goldman.
Sarbane-Oxley Audit Rules To Ease; Bad For IT Spending; Good For Corporate Earnings (Tech Trader Daily)
So the SEC revised some of its Sarbanes-Oxley rules yesterday, particularly as it pertains to the dreaded section 404 (question for Stephen Bainbridge, does this mean that it's already time for edition II of your book?). So that's good news, except for the companies making a mint by selling technology and services to facilitate SarbOx compliance. One analyst now expects to see a 7% hit in corporate IT spending, which will hit a range of companies, notably in software.
Hewlett-Packard settles with SEC (San Jose Mercury News)
HP and the SEC have settled a very narrow issue as it related to Dunn-gate (or whatever we called it at the time). At issue was the way HP disclosed the resignation of then board member Tom Perkins. Obviously, the company didn't tell investors the real story at the time it happened, since that would've required them to admit the whole fiasco, which didn't emerge several months later. It's a pretty minor issue, really, but it still looks like HP got a pretty sweet "settlement", as it paid no monetary fine and admitting no wrongdoing.