Opening Bell: 7.23.08

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Costco Warns on Profit As Inflation Clouds Outlook (WSJ)
Costco, the big discount retailer that rich and upper middle class folks like to shop at, says it will miss upcoming expectations for a variety of reasons. Among them: Lower profits on gasoline sales (interesting) and a general inability to pass along prices. They're Costco, after all, high prices aren't their deal. Just to note, we like it when you pass along prices. To the restaurant we ate brunch at on Saturday: please lift your prices on steak & eggs $1 or $2, rather than serve that fat-riddle sponge you gave me. Blech.
Gambling on Facebook Games, Zynga Cashes In (WSJ)
And here's all you need to know about how things are going on over on the other coast. Zynga, a company that makes time-waster Facebook apps, like money-less poker (yes, we know), just raised a $29 million second round, not long after raising $10 million. There's been some consternation lately about how nobody will fund Facebook apps anymore, though that's obviously just not true. Also, for those really watchign this space, Facebook CEO Mark Zuckerberg is giving a keynote at the company's developer conference today. And here's a post from Zynga investor Fred Wilson called Raising the Stakes. Oh, and while we're using the gambling metaphors. The WSJ headline really shouldn't call this 'cashing in'. That's when you take your chips off the table and leave the casino. It's really more like they plunked another $1000 down, or stepped up to the 2-5 no limit table.

If You Didn't Believe the Airlines Had to Keep Flying to Support The Underlying Credit Card Business... (View from the Wing)

Interesting nugget from View from the Wing. It seems that airlines are getting the hookup from their credit cart partners, when it comes to financing. United, for example, is getting $600 million from Chase, the bank with whom it offers co-branded rewards points credit cards. It sounds like the banks really have a lot to lose when one of these airlines fail.
Volkswagen Profit Rises on New Car Models, Tiguan SUV (Bloomberg)
This is weird... a car company showing a profit rise. And even weirder, Volkswagen was helped by sales of a new SUV. It's too early in the morning for stuff like this.
Prospects for the Freakonomics Documentary (Freakonomics)
The ultimate Freakonomics post. So ultimate. It's about the prediction market prospects on Freakonomics the movie. We still can't quite figure out what it's talking about though. We just hope there is one. Anyway, here's some info from IMDB, which might be more reliable than a prediction market. But anyway, the film discussed here and at IMDB is a documentary. Wasn't there supposed to be a narrative as well? Something with Matt Damon? Or are we thinking about Blink the movie?


Los Angeles condo sells for $2,848 (per square foot) (LAT)
Even in this market, you can still have records broken at the high end... a condo in LA that's not even built yet has been sold for $2,848 per square foot, which comes out to $47 million. The acquirer: 62-year old Candy Spelling, widow of Aaron. Evidently the second-most expensive condo of all time in LA was also sold in the same building for $2700 per square foot.
Costco Warns on Profit As Inflation Clouds Outlook (WSJ)
Costco, the big discount retailer that rich and upper middle class folks like to shop at, says it will miss upcoming expectations for a variety of reasons. Among them: Lower profits on gasoline sales (interesting) and a general inability to pass along prices. They're Costco, after all, high prices aren't their deal. Just to note, we like it when you pass along prices. To the restaurant we ate brunch at on Saturday: please lift your prices on steak & eggs $1 or $2, rather than serve that fat-riddle sponge you gave me. Blech.
Bush on Economy: 'Wall Street Got Drunk' (The Hill)
We haven't read this article. After all, it's about lame duck bush, so who cares. But you should click over to Drudge, cause the picture he put next to this link is awesome, and it's why Drudge is awesome.
'They're All Toast': Roubini Says Brokers, Even Goldman, Can't Stay Independent (TechTicker)
Yahoo's TechTicker had as its guest yesterday local economist and doomsayer Nouriel Roubini. His prediction: pretty much every bank is going to have to sell or fail, even a seemingly secure bank like Goldman. He says that in the end they're all based on the same business model: acquiring money cheaply and lending out at a pricier rate and that on Wall St. it's even more leveraged than at the banks that failed. Believe? Eh. Still, can't deny the power of the headline message.

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