Opening Bell: 8.7.08

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Toyota Profit Falls Most in Five Years on U.S. Slump (Bloomberg)
Toyota had a rough quarter, but everyone knew it would. For these last six months or so the bloom has come off the rose a bit on that one. Still it's a solvent, profitable, going concern that runs excellent manufacturing operations. You still have to give them a lot of credit. That being said: Did they drink too deeply of the SUV and truck cup in order to make inroads in the us? Probably. And though it may have been worthwhile to expand their presence here, now they're going to have to pay for that. Good for them that the oil bubble finally burst.
What's causing the swings in oil prices? (Detroit Free Press)
At least that's the latest buzz --- that the decline in oil means the "bubble" is finally bursting and that it really was all speculators in the end. Here we have the very partisan Detroit Free Press hoping that that's true. But again, if oil falls back to $80, and folks wants to say it was all speculation, as long as they don't act on that (punish traders or trading) we can live with that.
Soup Lines Growing (Infectious Greed)
It's our view that the fundamental difference between a recession and a depression is the presence of soup lines. What else is there, really? Anyway, in the San Diego area they're up way big (the line lengths) year over. Not surprising. Between fires and the worst housing market in the country, that area might legitimately be in depression. And have you seen all the Hoovervilles they have there? Seriously, you can check out the tent cities on YouTube.
Cutting the Pai (Houston's Clear Thinkers)
If you watched The Smartest Men in the Room (aka that Enron movie) one of the more interesting stories was of Lou Pai, a key executive who left the company shortly before they imploded. The insinuation: he left cause he knew it was about to unravel. Also, apparently he had affairs too. With strippers. Anyway, seeing as Enron legal action is still going on, it seems he eventually had to fight the law. Tom Kirkendall has a good account of what happened and how it all went down. Well worth your read.
The Path to Prosperity (The American)
The tagline: "A new report confirms that low taxes, limited government, and flexible labor markets help to spur economic growth." Wait, when did Larry Kudlow start writing for them. Not that we disagree, it just sounds like one of his lines.


The Byzantine world of shareholder voting (MarketWatch)
In the end, we'll probably need some sort of commission or a blue ribbon panel to look into fundamental flaws of the shareholder voting system in this country. Also, it's only reasonable to ask for a recount of every single shareholder election that but a currently standing board member in their seat... or at least everyone who was elected, with, say, only 80 percent support. No, but really. We're kinda fascinated with the Yahoo debacle, and secretly hoping there's still another screw to turn.
Monsanto Looks to Sell Dairy Hormone Business (NYT)
Interesting, it seems that consumer apathy towards hormone laden milk has hurt the dairy hormone business. Monsanto says it will sell this unit, and focus on its core seed business, where it sees itself as the "Microsoft of agriculture." Obviously we knew that people weren't crazy about hormones -- once they got it into their head -- though we'd have expected the affect to be a lot more marginal.
Chrysler, Nissan in Talks To Team Up on Key Cars (WSJ)
More car stuff today! The Journal reports that Chrysler is talking about some partnership whereby Nissan would build mid-size cars, but Chrysler would slap it brand name on it for resale in the US. Sound familiar: it's like when HP sold the HP iPod, made by Apple, but with the bland HP logo. Fortunately, it's not like Nissan has some amazing brand that's being wasted. In the end, it's probably not as groundbreaking as they might make it out to be.

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