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Opening Bell: 11.8.07

Homeowners Feeling the Pinch of Lost Equity
And here's that other shoe. That second ATM, homes... yeah, not there are anymore. No more borrowing against it. No more taking a home equity loan for a trip to Tahiti, as someone profiled here did. No more borrowing for a flat-screen TV. Needless to say, this is the stuff that recessions are made of. At least subprime is contained to the financial sector.
Bending Ears on Economics as ’08 Nears (NYT)
The Times looks at the economic advisors for each Presidential candidate, trying to divine the meaning of the selections. None are all that exciting. Austan Goolsbee is the top advisor to Barack Obama-- that's the closest any of them get to a pop-star economist. Pretty surprising that nobody peaked Steve Levitt or Tyler Cowen, just because of the attention they'd get from that (on blogs). Besides, if you pick Levitt, people will know your policy on baby names will be top notch.
Oil prices drop below $96 in Asia (AP)
Well, the century mark will have to wait another day. Not sure why, but the price of oil dropped off a bit, perhaps because it was low tide in the North Sea, or something like that. Another explanation: "The U.S. Energy Department's petroleum supply report Wednesday confirmed a view that oil supplies are falling, but offered no real surprises." Evidently the 'whisper number' for petroleum supplies was worse than what was reported, causing traded to breathe easy.
Southwest Ends Open-Boarding Policy (NYT)
The great egalitarian business experiment is over.Southwest has officially abandoned its open boarding system, allowing the well-heeled to pay more for first entry onto the plane and a "free" onboard drink. The company thinks its adherence to the silly, but somewhat popular system, may have cost it $100 million in revenue. Though who knows, maybe it was worth it in terms of psychic benefits, or something like that. There was once a time when Southwest was the "quirky" airline but now it's just great Greyhound in the sky, as all the cool kids have jumped over to jetBlue.

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AIG, Morgan Stanley Show Subprime Losses Aren't Quite Over Yet (WSJ)
Nope, troubles for subprime aren't over quite yet. Almost, but not quite. Morgan Stanley announced (duh) that it had already taken a few billion in related losses through the beginning of the year (again, duh), while insurer AIG took a $2.7 billion writedown despite "minimal" exposure. The stuff is obviously quite toxic.
AMT alternatives (LA Times)
If we had put some time into thinking about it, we would've gone as the Alternative Minimum Tax for Halloween this year, but it'll have to wait until next year. Hopefully, such a costume will look like a retro-amusement, a la Reefer Madness videos and "Duck & Cover". Of all of our life fears, the AMT has to be the biggest one... well, followed by the Donut Hole of Medicare Part B, we're a couple years from having to face that. Although it hasn't happened yet, we're just sure we're going to get slammed by the AMT one of these years.
Hedge-Fund Tax Rise Faces `Uphill Climb' in Senate, Baucus Says (Bloomberg)
All this talk about increased taxes for hedge funds or PE guys or VC funds keeps popping up, only to (seemingly) die soon thereafter. But it's never quite dead yet. For fiarly stuff -- taxing alternative investment vehicles -- it has a lot of legs. Senator Max Baucus is keen to close any loophole, real or perceived, that public firms like Fortress and Blackstone are able to receive, though he says it's an uphill battle.
BHP Billiton Offered to Acquire Rio Tinto; Proposal Rejected (Bloomberg)
Interesting little tid-bit for you base metal mining buffs: In a regulatory filing, BHP Billiton indicated that at some point it made an offer for arch-rival Rio Tinto. The offer was rejected.