China Inc. Runs the Bulls (WSJ)
The Chinese stock market is a castle made of sand built on top of a house of cards, jacked up with maximum leverage. Ok, that's way to extreme, but the more that gets revealed about who's bidding up shares, the more worried we get. It's one thing that pensioners are going into credit card debt in order to play the market. It's hard to see that ending well. And as the Journal points out, many companies themselves are major buyers on the exchange. After all, if you can do your normal business and get 20% ROI or invest in stocks and get 30% ROI, which would you choose? Duh. Such behavior isn't really that unusual. It was routine for .com highflyers to get paid in stock, when their customers didn't have much in the way of real cash, which unnaturally inflated everyone's profits. Unless the government in China can get that soft landing they've been hoping for (ha!), then the unraveling could get really ugly.
Jury in Black trial struggling to reach verdicts (Times Online)
Well this might be disappointing. After nine days of deliberation, weeks of a trial and months and months of a buildup, it looks as though jurors in the Conrad Black trial may come back hung in some way another. Yesterday, the jurors informed the judge that they were having trouble locking down unanimity, although he implored them to keep trying. If they can't reach a decision, maybe we'll get a retrial, which would be good, only in the sense that it'd be a second chance to pay attention.
Sears' sales woes cut into investor patience (Chicago Tribune)
Investors pushed down shares of Sears yesterday, after the company warned that sales growth would come in below expectations. The warning and the response were a rare setback for Eddie Lampert, often described as the next Warren Buffett. Frankly, we're a bit surprised at the way investors reacted to the news. As Lampert has pointed out in the past, if you think something's wrong with the health of Sears, it's you who's messed up. It's you that's got something wrong in the head. Take heart, Eddie. For every seller yesterday, there had to be a buyer, someone who actually "gets it".
A wrong remedy by the US (People's Daily Online)
Not that this should come as much of a surprise, but an editorial in China's People's Daily newspaper comes out opposed to potential steps taken by the US to limit trade with China. It specifically calls out Democratic Senators that have sought a "punishment" for China's manipulated currency. The editorial even cites the New York Times opposition to a trade war, although if anything, that just proves that the Times provides aid and comfort to the enemy. China, we jest.
Infosys profit up 34.5% on orders, tax benefit (MarketWatch)
There have been a number of analyst reports questioning the health of Indian outsourcing firms in light of the strengthening Rupee. It looks like they were right to be concerned, though the extent to which is unclear. One of the big ones, Infosys, report solid earnings (in part aided by a one-time tax benefit), although it did predict softness going forward, in light of the Rupee. On balance, it would seem that the Rupee is a headwind, although not an insurmountable one, as the underlying business remains solid.
Live from Sun Valley 2007 (Dealbook)
The Sun Valley get together is a bit like the World Economic Forum in Davos. Except in Davos, you get a lot of do-gooder celebrities like Angelina Jolie, Bono and Kofi Annan, whereas in Sun Valley, it's all about money and ego... oh wait. Either way, last year, if you'll recall, Sun Valley functioned as YouTube's coming out party, as Chad Hurley was the big star of the event. There's really no new YouTube this year as YouTube itself is still big enough to be the new YouTube. Anyway, there are sure to be some good stories.
Bush Seeks to Stave Off More Defections Over Iraq (WSJ)
Is it just us, or is Bush setting the groundwork for an Iraq evacuation? Yesterday, he rejected calls for an early exit, saying that no decision will be made until after a progress review this autumn. But what's he really saying there? Basically, we know what the progress review is going to say: things are going bad. So does Bush's stance mean that at that point he'll be ready to talk pullout? It would seem so, though by waiting for an official report, it allows him to save face, basing any pullout on some hard facts, rather than political pressure.
MooBella Scoops Up $25 Million in First Round (Dealbook)
Is there too much money in venture capital? Moobella, which makes an ice-cream vending machine, just took in $25 million in funding. If we recall, the machines run on the open source Linux, which should make it popular among geeks.
Swivel: The Toast Of The OECD (TechCrunch)
The rest of the world can have its YouTube, honestly, we're completely tired of lame, contrived viral videos (though Ghostriding the Whip is pretty cool). More appealing to us is Swivel, the YouTube for data. It lets you upload data, design charts and then embed them, just as you would a YouTube video. The good news it that the site is gaining traction, even among stuffy OECD suits, who, gasp, use PCs and not Macs. That being said, we've used it a bit, and it still needs to beef up its capabilities.