Opening Bell: 7.2.08

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Microsoft Seeks Deal Allies (WSJ)
Just end already! Seriously! The latest version of the MSFT-YHOO story, which changes on a daily basis, is that Microsoft is seeking partners to revisit some kind of deal. You can pick your poison on who those partners would be. News Corp. and Time Warner are the obvious ones. You could even throw in GE, Comcast and maybe a PE firm like Bain as long as you feel like playing the parlor game.
Starbucks to Shut More Stores (WSJ)
So Starbucks is actually shutting down stores. Not that many, mind you. It's just 500, which is as many as they have in some medium-sized cities. Still, it's an admission that they overbuilt, something the market realized a lot earlier. Hey, remember a couple summers ago, when Starbucks said it had weak earnings, because lines were too long. Here's where we wrote about it, on August 4, 2006. That really was a total line of rubbish wasn't it?
Moody's Says Workers Rated Some Securities Incorrectly (NYT)
And they would have gotten away with it too, if it were for those darn market forces.
June car sales plummet; more declines expected (AP)
It's never too early to look back on recent history. And in fact, early July -- the beginning of q3 already -- is the best time to do it. So yeah, June car sales were bad bad bad. Even Drudge had a screamer about them. But the good news for you pro-America types is that GM held of Toyota, extending its run probably by one more month, maybe too. It's super obvious by this point, but the American automakers' big-car strategy hasn't helped: "Ford sold 41 percent fewer of its perennial best-seller, the F-series pickup truck, and it sold fewer than half the number of Explorer SUVs as it did in June 2007. George Pipas, Ford's top sales analyst, said SUV sales are probably down for good."


CDO Creators Seek Redemption, and Profits, From Mortgage Market (Bloomberg)
Managers who rode the CDO/mortgage mess on the way down are looking to stay on the rollercoaster for the upswing. Bloomberg notes a high correlation here for the hedge funds raising money aggressively to invest in home debt. Here's the spin from one CDO manager: "``Despite what's been said about CDOs, having a background with the securities is a positive... We have experience managing the underlying mortgage assets, which is where we are seeing the opportunities.''
Blockbuster abandons Circuit City acquisition (Thomson Reuters)
Good. This never really made any sense and the market let Blockbuster know that by punishing its stock. Granted, Blockbuster is on a long, slow decline into irrelevance, but that's, well, irrelevant for now. Buying Circuit City, whose performance declined materially just since Blockbuster made its bid, never made any sense. And the notion of combining some media retailer with electronics was beyond ludicrous. Now probably some PE firm will come pick up CC for a few dimes.
The Big Bang: More Firearms, Less Ammunition (Metal Miner)
So you know about the Supreme Court ruling striking down handgun rulings. Perhaps now the opponents of gun use will embrace the free market. Evidently, with the cost of metal soaring, ammunition prices are way up. Some types of bullets have seen a 3x increase. And of course that has a dampening effect on the desire to buy and use bullets --- probably it's a lot more effective than any actual laws.
Interview With Barney Pell and Ramez Naam About Microsoft's Powerset Acquisition: Integration By End Of Year (TechCrunch)
It's such a small deal, that Microsoft didn't even bother putting out a formal release, but yesterday it acquired Powerset, a hypey search startup working in the area of "semantic" or "natural language" search. Rumored price is about $100 million, and it's mainly about adding some technology to Microsoft's own also, also-ran Live Search. Anyway, TechCrunch has an interview with Powerset founder Barney Pell and Microsoft's Ramez Naam. Might be worth reading if you're interested in this market.

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