Opening Bell: 8.16.07

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Asian Markets Continue Slump in Thursday Trading
Well, so much for 2007. If you erase China from the map, we're pretty much in a global bear market. You might call it a slump, but the way stocks have been trading -- up in the morning, run out of gas in the afternoon, has that "we're not going anywhere" feel. Don't worry, the US isn't alone. Asian markets took it on the chin for the second night in a row, averaging down 5%. Japan was down 2.7% on a sharp jump in the yen. Meanwhile, the Korean market got absolutely creamed, shedding 6.9% all while you were restfully sleeping. (The Picture on the left is intended as a reminder of happier times in Korea, or so it would seem.)
Poole Says Only `Calamity' Would Justify Rate Cut Now (Bloomberg)A Commercial-Paper Hit Close to KKR (WSJ)
It hasn't been the best month or so for KKR. It wants to go public, a la Blackstone, but the chaos in its industry will almost certainly preclude that reality for the foreseeable future. Now it has announced that an affiliate , KKR Financial Holdings, would like to suspend payment on $5 billion worth of commercial paper -- you know, the stuff that's thought to be as close to risk free as you can get. It's often found in money markets, so it's practically seen as a cash substitute. It's not clear what the fallout would be here. $5 billion isn't nominally a huge amount, but these things make waves. If another enhanced money market fund attempts to cut off redemptions, expect another crippling round of panic.
Beazer's Accounting Woes Extend Roller-Coaster Ride (WSJ)
The SEC is likely to stup up an investigation into accounting woes at Beazer Homes, which like all the rest of the homebuilders, has seen better days. You have to figure that if the SEC finds anything damning, then they're not going to just stop at Beazer. The SEC will (probably correctly) assume that any practices going on there were widespread, meaning we could have a whole nother Enron on our hands, except it'd be a whole industry, not just one company. Wasn't Sarbanes-Oxley supposed to prevent this from happening?

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Venezuela's Chavez proposes six-hour workday (Reuters)
C'mon Chavez, as long as you accept the premise that the government can raise workers' standard of living by limiting their work hours, why not mandate a four-hour workday? Wouldn't that be nicer than six? or does the theory start to break down around there.
Amgen to slash up to 14% of workforce (MarketWatch)
Yesterday after the bell, Amgen announced that it would slash 14% of its workforce, a move that had been rumored for some time. The big-cap biotech has suffered a stunning reversal of fortune of late, as its begun to look much like a traditional pharma company. That's because it basically is. While biotech drugs might be more promising in a certain sense, in terms of making up a large share of future treatments, when you're big and bloated and dependent on a few blockbusters to make money, you're going to suffer these sharp downward swings.
Macy's cuts outlook after profit falls 77 percent for the quarter (Chicago Sun-Times)
Macy's isn't quite the consumer bellweather that Wal-Mart and Home Depot are, but it's not doing particularly well, so it might as well be. The company is struggling to integrate its acquired May department stores at the same time that revenues are going into the can. As such, it's slashed its profit outlook going forward. Time to turn on the cash spigots again.
Motorola-Cisco case may be pivotal in Enron suits (Bloomberg)
As we're fond of pointing out, there are still Enron-related charges and lawsuits wending their way through the court system. Granted, the suits against Enron may be waning, but the suits against Enron partners hasn't even gotten rolling. For example, one might look to sue the makers of Enron's trading terminals. After all, without those terminals, the company wouldn't have been able to commit fraud via trading. And what about Blockbuster, the partner in Enron's failed broadband offering. Surely it new something was up and failed to speak out. Hmm? Unfortunately for the legions of lawyers looking to file these claims, the Bush administration has sided with Motorola and Cisco in a similar case brought by Charter Communications investors alleging fraud. At issue is the extent that a company's business partners can be held liable for certain things. Granted, the Supreme Court could go anyway, though hopefully they'll get this one right.
American Airlines to Recall Workers (AP)
American Airlines is warning customers that some of its employees may contain lead and that you ought not to lick them. That, and they're also going to undo 460 layoffs, bringing back workers that had temporarily been "furloughed".

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