OPEC considers modest oil output rise (Reuters)
It's great when OPEC announces plans to lift output, but it's always like they're doing us some kind of favor or something, which makes the whole thing feel dirty. It's all so condescending. We should just refuse the extra oil. Remember those old Little Caeser's commercials, where the Boy Scout troop leader refused to take the free pizza -- that guy had principles. Maybe we should do the same thing. So what if they flood the market with oil and it drops down to $68/barrel, we're paying $70!
China's Inflation Surges to 6.5%; Trade Gap Widens (Bloomberg)
China's inflation rate is it at a 10-year high, and it's painfully obvious why it is so. It's because the government never does anything to stop it? Where are the 27 basis point tightenings or the reserve requirement hikes or the currency controls? Someone in Beijing must be totally asleep at the wheel, not paying attention to anything at all, making zero effort to fix the problem, cause otherwise the country wouldn't be facing such rapid inflation. Duh.
Schumer Proposes Lifting Mortgage Caps (AP)
Senator Schumer wants to allow Fannie Mae and Freddie Mac to increase their holdings of mortgages, so as to bring liquidity to the market. On a very base level, the plan makes sense, but then so does slashing interest rates to zero, or sending checks to distressed homeowners until they can afford to pay off their loans again. Ultimately, the problem with politicians is the same on both sides of the aisle. They never suggest pulling back. If there's a problem, it's never the existing regime that's at fault, rather it's that the efforts were currently making actually don't go far enough.
The Money Honey Turns 40 (CrossingWallStreet)
We're sure we'll give her a more formal shout out later in the day, but as we at the Opening Bell are old school Maria Bartiromo fans, we'd be remiss to not wish her a happy 40th birthday.
Why Lead in Toy Paint? It’s Cheaper (NYT)
Once again, the Times doesn't fail to deliver.
Mercenaries Too (From Sun Tzu to Xbox)
We've always pointed out to people who think that massive corporations somehow control our foreign policy, that if big oil companies actually had to foot the bill directly for going to war, then they'd never find it worthwhile. And if we are going to war on behalf of corporate interests (which by the way is not for certain), then it's a reflection of our political system, not the inherent evil of large firms. That being said, there will always be a role for targeted violence, even in some sort of post-democratic, anarcho-capitalist world. Such private armies, however, would be vastly different from the very much in vogue outsourced private fighting squads, which are increasingly employed in Iraq. The good news? There's now a video game based on private warfare. Awesome.
The Downside of Homeownership (Felix Salmon)
For a long, long time, we've been questioning the conventional wisdom about home ownership. If you look through some of our early Opening Bells, before all the trouble hit, you could probably see us making the case. To be honest, anyone who knows anything about finance should be skeptical of the more wild claims about home ownership's benefit. Nonetheless, when prices were rising steadily year after year and interest rates were at historic lows, there weren't many people who would publicly voice any skepticism. Well look at 'em all now. By the way, we're not really calling out Felix here. He's long been more contrarian than most. But in the past several weeks, we've seen several people wondering whether home ownership is really all that it's made out to be. Of course, our favorite argument against home ownership comes from awhile ago, as Philip Greenspun put it "Property owners are boring." That is, unless you really get your kicks from discussions about renovating kitchens.
Too big (a man) to fail (Oligopoly Watch)
Wow, in South Korea, the chairman of Hyundai was convicted of embezzlement on a large scale, but a court ruled that he was too important to the economy to be imprisoned. Now that's the sign of a pragmatic criminal justice system. It's like, sure, maybe what he did warrants some jail time. But you know what, nobody is going to be helped by hit -- not him, not Hyundai, not the Koreans. Some people would be mortified by this. Us, not so much. If we recall correctly, there was actually a similar thing in Vermont when we lived there, whereby they were reluctant to jail this one guy, because he had so many business interests. But it was never anything stated officially, just something quiet that people seemed to know.
Open Season On Microsoft Office (GigaOM)
In addition to Windows, Office is obviously the other gigantic cash cow at Microsoft. And yet unlike Windows, the number of viable alternatives to it are proliferating rapidly. You've got open source versions of all the big productivity apps along with a slew of web-based offerings, like Google Docs, which we find ourselves using more and more. At the moment, Google Docs aren't really an alternative (especially on the spreadsheet side of things), but they're getting better and gaining credibility. Yesterday, Google announced a deal with IT consultant Cap Gemini to start pushing Google's online services together, which is a pretty big step, since so many major enterprises rely on IT consultants to figure out their appropriate IT strategy. Ultimately, Microsoft will try to milk Office as long as ti can. But the trend is definitely not in its favor.