Opening Bell: 6.20.07

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Housing sprouts up in Midwest (Chicago Tribune)
It's time to acknowledge that the US housing market is a myth. The US economy is also probably a myth, but we'll have to address that at a later time. Fact is, we have several housing markets. Some of them have been booming for the last 15 years. Others have barely risen at all. Some have seen lots of construction, others none. Since the "crash" began, many of the hot markets have only gotten hotter! Some of the cool markets have sagged. So when we speak of housing market growth, as if one number could represent the whole thing, we're really not doing ourselves any favors. So while construction is way cool (along with homebuilder confidence), they're still throwing 'em up in the Midwest, which is bucking the national trend. Bankers there are already talking about a turnaround. Time to go (mid)west.
Whole Foods CEO saw merger eliminating threat (Reuters)
We still think that the FTC's decision to block the Whole Foods/Wild Oats merger was sheer, unadulterated rubbish. However, Whole Foods chief John Mackey has to be feeling a bet, erm, sheepish, following the revelation of some comments he made to his board. When the FTC unveiled its complaint, it claimed that Mackey told his board that buying whole foods would eliminate the competition and help it avoid a price war and that the market wasn't just about selling organics, but about selling lifestyle and experience. Still, regardless of what he said, the existing market dynamics are what's important.
Tyson to Sell Chicken Free of Antibiotics (NYT)
Tyson Foods has said it will start selling chickens that are free from antibiotics. Things like added hormones and antibiotics have become issues with consumers lately, so the move is likely to help it win over some buyers. But there's also a greater societal good here, for which we should be appreciative, as overuse of antibiotics is what will lead to the evolution of superbugs, that can't be killed. This is one of those collective action problems that game theorists love, because no individual (or firm) has much of an incentive to quit using them so much, since the benefits only come about if everyone does the same. So, now that Tyson has signaled this move, maybe some others will follow suit.
Boeing Scores With Dreamliner Order (NYT)
The Paris air show has been pretty lucrative for both Boeing Airbus, each of which has locked down a bevy of deals there. It would seem that air shows probably lead to more direct commercial activity than even car shows, which are mainly about currying favor with the editor of Car & Driver and whoever writes auto stuff for the New York Times. Anyway, Boeing announced that it's selling 52 787 Dreamliners to the Commercial Lease Finance Corp., the world's largest leaser of planes. Well done.


Home Depot focuses on retail experience (AP)
The knock on Home Depot has always been that the in-store experience sucks, especially compared to companies like Lowe's. So, the company is set out to rectify the issue. How are they going to to do that? Apparently by... buying back a bunch of stock? Huh? Yeah, we're confused too. The company has also indicated that it could shed its contractor business (nice timing guys), so in that way, it'll free up more resources for its stores.
Black trial based on envy and prejudice, says defence lawyer (The Guardian)
We haven't been following the Conrad Black trial as closely as we should've, but what's interesting is the verdict and the sentence anyway. The lawyer for Black has lashed out the prosecution, claiming that a key part of the prosecution's strategy has been to inflame class-prejudice by inflating how wealthy Black became and how lavish a lifestyle he lived. This is almost certainly true. In the end, almost every one of these trials have been overwrought morality plays. It's not really about the criminalization of failure, but about the criminalization of success.
China calls for currency fairness (BBC)
No, China's not being facetious. Basically, China's arguing to the IMF, that US currency pressure is unfair, and that it's absurd to think that currency policy will solve global trade imbalances. In that respect, China's obviously correct, and exhibiting a sophistication greater than some politicians in the US.
Lehman Plans $500 Million Private Equity I.P.O. (Dealbook)
The public-ization of private equity continues apace, as Lehman announced that it would do an IPO of its Lehman Brothers Private Equity Partners on the Euronext exchange. The company hopes to raise $500 million in the deal. The fund won't be buying companies directly, but will, rather, invest in other private equity funds. Hey, you can never be too diversified.
Google Buys PowerPoint Rival (Red Herring)
Google has pretty much completed its online version of MS Office. It already had word processing, spreadsheets and email, and now it's got a presentation app to compete with PowerPoint. The offering was acquired by purchasing Zenter.com, which, we can imagine, only ever envisioned one day becoming a feature on Google.
Why Bearish Forecasts are Meaningless (Portfolio)
Felix Salmon hits on a point that's bugged us in the past, which is the attitude of bears or permabears. It's not that there's anything wrong with predicting that the market will go down. In fact, such predictions can be bold moneymakers when the timing is correct, or if you're Nassim Taleb, you lose a little bit for awhile and then make an obscene amount when things go down. But if you just keep talking about how things can't go on like this forever, and say that every market uptick is further proof of the bear case (that we're experiencing a mania), then you've made an unfalsifiable claim that's meaningless. What more, since all markets experience sharp downward corrections from time to time, bears can claim to be prescient whenver they're "proved right".

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