Opening Bell: 5.19.08

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Pursuit of Yahoo Shows Microsoft Needs a Franchise (NYT)
By now you've probably heard: this snoozer of a story is totally back on again. Microsoft and Yahoo are talking again, except this time, we don't know what it is. It doesn't look like it's an outright acquisition this time (so bad for Carl Icahn). It may be that they're just going to buy a slice of Yahoo, like its search business. Or it may be that they're going to provide ads for Yahoo search. The last possibility would be the most amusing, given how unhappy Carl Icahn would likely be with the result.
The True Story of a Script, Big Dreams and Vanishing Private Equity (NYT)
This is something we've been reading more and more about... the capital problems in Hollywood. Familiar pattern: dumb money for film finance is not so easy to find. It's weird though, because it's not like junk bonds or subprime loans, which for awhile offered nice returns before the boom burst. Hollywood has never been crazy profitable for financiers, but there was also some prestige and thrill in financing a film that you don't get from buying a swath of CDOs. Now perhaps, not quite so worth it.
Dairy Co-Op Faces Price-Manipulation Probe (WSJ)
Don't know about you, but to us 'co-op' always conjures some up idyllic image of farmers working together, pooling their resources, pitching in, etc. You know: working together in peace and harmony. But that's just the image. We're not that naive. Modern day coops don't differ much from their more evil-sounding cousin, the corporation. And apparently they have to play by the same rules, as this article would suggest: "In the price-manipulation inquiry, the Commodity Futures Trading Commission is looking into whether DFA sought to drive up the price of milk through its trading of cheese contracts at the Chicago Mercantile Exchange. Cheese prices at the exchange affect milk futures and also are a key component of the complex formula used by the U.S. Department of Agriculture to set the minimum prices dairy farmers receive for their raw milk." On the other hand, we can't help but think we'd be better off sans-subsidies, minimum prices, and rules about price fixing. But that's just us.
EA May Extend Deadline for Take-Two Offer (WSJ)
Electronic Arts' offer for Take-Two expired on Friday, so either they're going to extend the offer or walk away. Should get some word today. WSJ says they'll extend.


Competition, quality control and the econoblogosphere (Abnormal Returns)
Hey kids, wanna start your own site about stocks and economics and business and Wall St. and buyouts and leverage and the housing bust? Nothing stopping ya. And if it's great, it'll probably be bigger than ye olde 'Breaker one day. Anyway, Abnormal Returns takes a look at the ups and downs of the econoblogosphere and how stuff percolates to the top.
Buffett, Seeking Deals, Meets With Business Owners in Frankfurt (Bloomberg)
Earlier this month, during his annual shareholders meeting, Warren Buffett spoke a bunch about an upcoming trip to Germany. The purpose: introduce Berkshire to old, family-owned firms that might one day look to sell out. According him, the idea wasn't to push them to sell, but that when/if they're ready to, they should consider Berkshire as a buyer. Well he's there. In addition to Frankfurt, he's stopping elsewhere in Europe as well: "Buffett's trip includes meetings in Lausanne tomorrow and Madrid on May 21, finishing in Milan on May 22. The visit was arranged by Eitan Wertheimer, president of Israel's Iscar Metalworking Cos. -- acquired by Berkshire in 2006 in Buffett's first non-U.S. purchase -- and Angelo Moratti of the family-run Italian energy company Saras SpA."
Political bubbles (Unenumerated)
The other day we linked to that WSJ piece about some Bernanke acolytes at Princeton who had settle up a "bubble lab" to help them better understand the math and "science" behind bubbles, presumably for some sort of public policy end. We noted our skepticism at the time, this idea of getting real scientific, as if it were real engineering. Anyway, a great comment from Nick Szabo on some of the problems with the idea that politicians, if only they could anticipate bubble formation, could pre-emptively prick 'em. The matter: politicians (Bernanke notwithstanding) don't have a birds' eye view of what's going on. They're right there in the middle of the craziness, just like every other participant.
Working is the new retiring (Free Exchange)
As soon as we get folks to internalize this mantra, we're all set.

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