Wal-Mart Pushes Financial-Services Menu (WSJ)
Opposition from various groups means there won't be a First Bank of Wal-Mart anytime soon (at least not in the US). But the company is stepping up its financial services offerings. New services will include check cashing and wire transfers. Hmm, one wonders what the reaction of Wal-Mart's critics would be if the company proposed to enter the payday loan business, but with dramatically lower rates than most operations. Most of these people hate the payday loan business, calling their rates extortion. But would we hear whining about the imminent deadh of mom & pop extortionists if Wal-Mart came in and underpriced them? Probably not going to happen, because Wal-Mart would need that damn bank charter for that, but a useful mental exercise nonetheless.
Private Equity’s Technology Buying Spree (Dealbook)
More attention is being paid to private equity's dalliances on the left coast. Apparently, the dealflow throw through the first five months of 2007 has exceeded the entire activity from 2006. Altogether, there have been 121 deals worth $109.9 billion, which suggests that most of the deals remain real small, with few megadeals taking place. That being said, it's probably only a matter of time before one of these firms bags a real monster. Got any names?
From Turkey Waste, a New Fuel and a New Fight (NYT)
Anyone who got a dollar for everytime a politician at a debate said "energy independence" would become quite rich. Actually, that's not a theoretical comment or even a trite aphorism. Lots of people are getting lots of dollars because of our new found obsession with energy independence. The Times has a good article about a plant in Minnesota that burns turkey manure and turns it into electricity. At first blush, this might seem to be a nice example of good ol' American ingenuity -- turning our waste into energy. But as critics point out, turkey manure is already used quite efficiently as fertilizer, which is just another way of turning waste into energy, except your using a chemical process rather than just burning it. It's also damn expensive, as the whole plant only produces a tenth of the energy that a coal plant would make. But, given our attitudes these days, that anything that's "alternative" is good, when it comes to energy, expect a lot more plants to just, you know, burn shit.
Buddy, can ya spare $3 (Daily News)
All you subway commuters better get ready for some serious inflation over the next few years. Word is that the price of a subway ticket may rise to $3 a ride by 2010. The only way this won't happen is if the city or state kicks in more tax dollars to help make up a big shortfall. So, the question is: will the cost of a ride by shouldered by, you know, the riders, or will it fall on all taxpayers? Seeing as some of us have a commute from our bedroom to our kitchen table, you can guess which side we're on.
GM CEO Touts Turnaround At Annual Meeting, Faces Criticism (Dow Jones)
Speaking at the company's annual shareholder's meeting, GM CEO Rick Wagoner proclaims his company to be on track with a successful turnaround. Not surprisingly -- probably because they've heard this at every other shareholder meeting for the past several years -- shareholders weren't buying it. The articles notes that despite criticism, none of the pro-shareholder measures that came up for a vote passed, although this isn't neither surprising nor reflective of shareholder frustration. Note: these things never pass.
Honda Pulls Plug On Accord Hybrid (Forbes)
Honda is deep sixing the Accord hybrid due to poor sales. It's no mystery why: the car doesn't even get 30 MPH. For some idiotic reason, the company designed the care more for speed and horsepower rather than fuel economy, which is an egregious misunderstanding of the hybrid-buying public. Like, really. What the heck were they thinking?
Officials: Throw out beef from bad batch (Salt Lake Tribune)
Stories about food chain safety are coming hot and quick these days. First there was pet food. Then there was anything with gluten in it. Then it was arsenic-laced toothpaste and now its e. Coli tainted beef. And let's not forget the big spinach stuff from last year. The thing to realize is that when you break down the numbers, it's not all that big of a deal, and an individuals' likelihood of getting sick remain really low. The real risk, we hate to say it for fear of sounding like a broken record, is some major government response that does little but add more expense and hassle to the system. If these stories keep up, then that's what you've got to expect.
Greedy Floor Brokers Sued for $4.5B (Mahalanobis)
Mahalanobis has been one of our favorite finance blogs for some time because of its interesting content and sharp writing. Eric Falkenstein, who formerly used the nom de blogue of hedgfundguy, has a worthwhile read about the various subtle ways that traders can cheat their clients, and how easy it is to get away with it all. The lesson pertains to a recent lawsuit regarding some shady dealings by some guys named Louie and Vinnie on the floor of the NYSE.
ECB Raises Interest Rates to Six-Year High to Stem Inflation (Bloomberg)
The ECB raised interest rates in order to head inflation off at the pass. Apparently, the bank is worried that "companies will use the strongest period of economic growth this decade to increase prices". So the bank isn't really worried about overheating per se, it's just worried that some greedy men in suits will raise prices. Odd. In other words, it's better to slow growth than to have strong growth, which might allows business to have some pricing power. Again, odd.