Opening Bell: 9.5.07

Author:
Publish date:
Updated on



A Closing, Not a Sale, for Business 2.0 (Dealbook)When word first hit that Time Warner was considering shuttering Business 2.0, we briefly wondered what we would read on 6-hour flights now. Sure, there's Wired (as well as The Atlantic and Harper's, also plain-only reading for us). It's just that it's nice to mix things up. We were then hopeful that maybe it would stick around, as the magazine was said to be considering a sales. But, alas, no. Word is now official that they're just gonna wind the damn thing down, moving its main editors to other jobs within the company, which is cool. It won't be missed by too many, since if it were, then it wouldn't be closing down.
Citigroup Inks Movie Deal With Wild Bunch (Dealbook)
A couple weeks ago, it looked like one of the first casualties of the liquidity crunch would be Hollywood, since it's increasingly relying on Wall Street for financing, and film financing is about the only think shakier than a subprime mortgage right now. But, although one major deal has fallen through, a number of financing agreements continue to come over the wire, including this latest from Citigroup. It's going to provide both debt and equity financing for Paris-based Wild Bunch to produce and distribute films costing up to $150 million. Of course, $150 million is a mere pittance for a move these days, right? That's probably what Clerks II was made for.
Toyota May Overtake GM in Global Output on U.S. Sales (Bloomberg)
Toyota and GM are beginning to resemble Boeing and Airbus. To matter how much the former dominates the latter, the latter finds away to hold onto the #1 position, years after it's clear who is tops. We've been operating under the assumption that Toyota completely surpassed GM sometime last year, but apparently that's not the case. However, it looks that may finally happen, as weak US sales will cause GM to cut production volumes.
Home Depot shares decline on buyback (Bloomberg)
The situation at Home Depot seems to perfectly encapsulate everything that is/was wrong with buyback culture. The company dumped a pretty significant business for the sole purpose of buying its own shares, which is only a good idea if you accept the premise that the shares are currently undervalued. But there's no particular reason to think that they are, seeing as the market typically does a fairly good job of valuing companies. But of course the management thinks they're undervalued -- management always thinks their own stock is. That's practically managements's job, to believe just that. All in all, sounds like a pretty thorough waste of money.

Click Here


Lenders Urged to Help Avoid Foreclosures WSJ In the end, every action is either an interest rate cut or a tightening. Sometimes, the decision isn't made by the Federal Reserve, and sometimes the nominal interest rate doesn't actually seem to change. But a policy stance or a subsidy or a special tax status for thrifts or a suggestion to private businesses that they be kind about mortgage defaults can function the same way, more or less. So the fact that government regulators and the state and federal level are urging lenders to "be nice" to borrowers is really an attempt to pass some backdoor rate cute onto borrowers, since that's what the ultimate effect would be. What else could be? Of course, it won't help lenders a whole lot, which is why Wall St. won't rally on that news.
Scholars Link Success of Firms To Lives of CEOs (WSJ)
Researchers are increasingly looking into the personal lives of CEOs to determine whether things like family deaths have a consistent impact on a company's stock price. We're a little skeptical of some of the research (naturally), but some studies to suggest a strong link between certain events, such as a death, and a company's future earnings growth. Not that we want to be reporting on whose spouse is sick, but on the whole, it's good news for us at the 'Breaker if the personal lives of executives becomes relevant information for stock selection.
China Steps Up Efforts to Cleanse Reputation (NYT)
Two things: the picture accompanying this article is pretty creepy. And the New York Times seems to be downright obsessed with Chinese manufacturing quality. That hadn't really dawned on us before, but really, a day doesn't go by without an article about this stuff. What's up with that?
Mandelbrot's Financial Revolution (Mahalanobis)
An interesting post about fat tails, stable distributions, fractals, blowups and finance. It's a little dense for us at this our of the morning, but we think it can be summarize as don't mistake chaos for randomness.
There's gold in them thar standards! (Megan McArdle)
We basically see it as a foregone conclusion that we'll never return to a gold standard in this country. It's just not going to happen, so we probably don't know as much as we should about what that would mean, were we to. Either way, here's an interesting piece from Megan McArdle, arguing why such a move wouldn't be the salve to cure our monetary woes.

Related