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Opening Bell: 11.6.07

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California State Revenues: Into the Housing Abyss (Infectious Greed)
As if you needed more evidence that houses are/were the .com stocks of the day, look at what the housing market is doing to California's state coffers. The state is expected have a $10 billion shortfall in the coming year... and we all know how these estimates have a way of creeping upward as the year goes on. The really crazy thing is not the big change in revenue, but the fact that state spenders will have been caught totally unprepared for the revenue shift, despite having experienced this exact phenomenon just a couple years ago. That time it was with stock options, of course. Now, what's going to happen if the techonomy craters next?
China shares mixed in early trade; PetroChina lower (AFX)
Yesterday, PetroChina debuted on the Chinese stock market, instantly becoming the world's first trillion-dollar company. It's now twice as big as Exxon Mobil despite turning half as much profits (but they're Chinese profits!). Anyway, we were hoping that it would jump to $2 trillion today, but we might have to wait a couple weeks for that. The stock actually slipped in its second day of trading.
PepsiCo reorganizes into 3 units (Reuters)
You probably missed this blockbusting news yesterday, what with all the Citi, TWX, IACI and PetroChina news, but PepsiCo is splitting into three. It's dividing its US food and beverage operations and then creating a separate unit for all of its international stuff. You have to wonder if when this news was first leaked to, say, someone at the Wall Street Journal, if the reporter was like, hey guys "might want to hold on that for a day or two, otherwise we can't promise coverage of that". That probably never happens, but it'd be useful.
Ron Paul Raises More Than $4.2 Million
This headline sort of misses the point... Ron Paul raised $4.2 million in one day, yesterday, as his supporters opened up their checkbooks in commemoration of Guy Fawkes Day. Granted, this isn't explicitly finance or business or Wall St. related news, except that Paul is obviously tapping into some deep concern over monetary policy... obviously that's what's inflaming is supporters. And if there's any truth to the Guy Fawkes angle, you have to be amused by the pure seditiousness of it all.

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EqualLogic buy boosts Dell role in region (
Interesting bit of trivia here... the $1.4 billion paid by Dell for virtualization startup Equalogic is the largest ever buyout of a venture backed firm. That still seems a little hard to believe, though, most companies are either acquired before they get to that point or do an IPO once they're that size. Still a little skeptical though. You have to wonder how much Dell could've gotten the company for six months ago, in the pre-VMWare IPO world.
Sun Reports Modest Profit, but Revenue Disappoints Investors (NYT)
No, really, Sun is on the turnaround path, and is best poised to take advantage of all things open source, web2.0, networked computer, post-Microsoft, mobile, grid computing, on-demand infrastructure, Software-as-a-Service, and virtualization. Let us know if we've forgotten a few buzzwords, cause surely Sun is all over it. With all of these tailwinds, surely success is only a matter of time.
Waning Support Led to Ouster of Citigroup Chief (NYT)
Well this is about the most obvious thing you can say about the whole Chuck Prince affair... 'twas waning support that done him in. Seems that everything else could be stomached, but billions in losses were the last straw. Meanwhile, it's not all bad for Citi, as Eddy Elfenbein correctly notes: "Google (GOOG) now has a market value of $225 billion which is well ahead of Citigroup (C) at $175 billion. Citigroup, however, still has the lead in number of employees; 327,000 to 16,000."
How long will the writers' strike last? (Knowledge Problem)
So yeah, the writers' strike. If we were bid Daily Show fans, we'd probably more upset. Also, probably a good thing that Stephen Colbert was kept off the ballot in South Carolina, since this is a real momentum killer. Michael Gilberson muses on how long the strike will last (our prediction of 6 hours already seems to have passed), though ultimately he doesn't come up with anything. He did set up a prediction market of sorts where you can register your view, so go ahead. Even if you don't think you know anything, the crowd needs you to balance out the other idiot who doesn't know anything but who has the opposite view.
CRB Index, ex-Food and Energy (Big Picture)
We're pretty tired of the core vs. non-core debate. At times we've thought there was some logic to taking a picture of inflation while excluding energy, but at other times we're not so sure. Also, excluding food doesn't make as much sense to us. The thing is, inflation as a useful measure shouldn't really be looking at prices, but the underlying weakness of the currency. So, if you were convinced that energy was rising simply due to peak oil and China (not that we are), then okay, maybe exclude it. But as Barry points out, you can exclude all the hell you want these days and still not eliminate evidence of inflation. His chart says it all, so check it out.
Greenspan and Soros are cheerful chaps… (FT Alphaville)
The title is sarcastic, cause actually they're all pretty dour chaps. Greenspan, Soros and Bill Gross are all predicting longer and more painful downturns as a result of this housing bust than others are anticipating. Of course, you knew that already, cause these guys hve been saying it for awhile. Still, there doesn't seem to be a shortage of stages for these guys to come say the same thing over and over again.