'Net Neutrality' Setback
In a legal victory for broadband service providers, a federal appeals court ruled on Apr. 6 that federal regulators didn't have the authority to intervene in the Internet management practices of Comcast (CMCSA), the nation's largest cable company. The Federal Communications Commission censured Comcast in 2008 for blocking subscribers from using peer-to-peer software to view videos. The appeals court's unanimous decision represents a setback for companies such as Google, Amazon, and Skype Technologies that have advocated for so-called Net neutrality rules to prevent Internet service providers such as Comcast, Verizon Communications, and AT&T (T) from blocking or slowing services offered by rivals. In a statement, the FCC said the court decision does not "close the door to other methods" of "preserving a free and open Internet."
Sales of Apple's (AAPL) highly anticipated tablet computer topped 300,000 on Apr. 3, the day of its introduction—about 30,000 more than the iPhone sold on its debut weekend in 2007. Eager owners quickly set about downloading more than 1 million applications and a quarter million books. Among the best-selling paid apps were Apple's own Pages, a word processor; Numbers, a spreadsheet; and a $20 task manager called Things. The device is already making waves in the publishing industry. Amazon (AMZN) and Barnes & Noble (BKS) on Apr. 2 raised prices on e-book versions of many best sellers in a bid to curry favor with publishers, several of whom have inked deals to sell their titles on Apple's iBooks store.
Treasury Secretary Timothy Geithner was in India on Apr. 6 and 7 to kick off the first round of the U.S.-India Economic & Financial Partnership. The visit yielded plenty of photo ops and goodwill but no banner trade and investment initiatives. An unscheduled stop in Beijing, where Geithner was scheduled to meet with Vice-Premier Wang Qishan on Apr. 8, may prove more fruitful if it helps set the stage for an appreciation of the Chinese currency—something for which the U.S. Congress has been clamoring. Recently there has been speculation that Beijing is considering widening the yuan's daily trading band to allow it to strengthen against the dollar. The issue will no doubt be on the agenda when President Barack Obama and Chinese President Hu Jintao hold a tête-a-tête in Washington this month.
Coal: Death and Scrutiny
An Apr. 5 explosion inside a West Virginia coal mine owned by Massey Energy (MEE) killed at least 25 people, the highest death toll for a mining accident in decades. The industry is likely to face increased scrutiny from safety authorities. Massey's Upper Big Branch mine has racked up more than $900,000 in fines over the past year. On the same day, in China, which leads the world in mining fatalities, rescuers pulled 115 men from a coal mine. They had been trapped for more than a week.
The uncertainty surrounding Tiger Woods' return at the Masters Tournament (Apr. 8-11) after a nearly five-month absence has many sports books projecting record betting totals for a golf tournament. Gamblers worldwide will wager $60 million on the 2010 Masters, a 50% increase on the typical $40 million, because of Woods' appearance, estimates Pregame.com, the largest handicapping information Web site compliant with U.S. laws. Look for Tiger to resurface in ads, too. The Wall Street Journal reported on Apr. 7 that Nike (NKE) was set to air a new TV spot featuring the scandal-plagued golfer.
European Auto Union
In the latest step toward auto industry consolidation, Renault-Nissan and Daimler (DAI) on Apr. 7 announced plans to share the costs of developing engines and small-car technologies. As part of the linkup, they will swap 3.1% stakes. The partnership is projected to generate $5.3 billion in savings and revenues over five years, with the companies jointly developing Renault and Daimler subcompacts, and Daimler providing engines for Nissan's Infiniti line. The move underscores the pressure on automakers for economies of scale. The trio produces a combined 6.7 million vehicles annually, fewer than No. 1 Toyota (TM) but ahead of European rival Volkswagen (VLKAY).
With Britain struggling with a yawning budget deficit, economic platforms could prove decisive in parliamentary election scheduled for May 6. That gives unusual prominence to the two leading contenders for Chancellor of the Exchequer. Alistair Darling, who would stay on in that post if Labour prevails, favors a redistribution of income. He has already raised the personal income tax rate on top earners (those making 150,000 pounds and above) to 50% and wants to introduce a levy on purchases of properties worth more than $1.52 million. Darling's plan to notch up contributions for unemployment insurance has drawn opposition from business. His opponent, Anglo-Irish aristocrat George Osborne of the Conservative Party, wants bump up the threshold for the inheritance tax to $1.5 million, from $500,000.
Argentina's Iron Lady
President Cristina Kirchner moved forward on a controversial plan to tap central bank reserves to help cover a $204 million payment to bondholders. The government is looking to pave the way for a restructuring of debt that Argentina defaulted on in 2001. That, in turn, would facilitate the country's eventual return to the international capital markets. A four-month effort by opposition legislators to block the administration from siphoning off foreign reserves has been undermined by infighting.
Banking's Early Adopter
John G. McCoy, the man who transformed a small Columbus (Ohio) bank into one of the largest in the country, died on Apr. 4 at the age of 97. McCoy, who was chief of Banc One from 1958 to 1983, was a banking pioneer. In 1950, the bank, then known as City National Bank & Trust, inaugurated the first drive-through branch in the Midwest and began installing automated teller machines in 1970. McCoy also embraced innovations such as credit and debit cards. And he did not shy away from unorthodox marketing efforts. Facing down angry board members in 1962 over the use of comedian Phyllis Diller in radio and TV commercials, he said: "Gentlemen, it's very simple. You can have either dignity or dividends. I vote for dividends." Banc One was acquired by Chase in 2004.
I Love Warren, Why Oh Why Do I Love Warren...
Ah, Paris in the springtime. Exploring The City of Light is a treat almost any time of year, but the first weekend of May is especially inviting. Visitors could watch the May Day parade from the Place de la Bastille or attend a twilight concert at the Jardin de Luxembourg.
So what could possibly compete with that? Try Omaha. A nonstop airline ticket from New York to Paris on the first weekend in May costs $1,142. A Continental Airlines flight to attend Warren Buffett's Berkshire Hathaway shareholder meeting in Omaha the same weekend: $1,433, according to a Mar. 31 Bloomberg News story.
Last year a record 35,000 people attended the event the Oracle of Omaha once called "Woodstock for capitalists." To capitalize on this year's bout of Buffett mania, carriers including Continental and Delta have been raising prices. They're asking four times the normal rate for round-trip tickets for nonstop flights.
Attendees will fill the Qwest Center arena to listen as Buffett fields questions on investing, politics, and the economy. Extracurricular activities may include visits to former President Gerald Ford's birth site and what's billed as the world's largest indoor desert. Is all that worth more than a thousand dollars for a weekend in Omaha?
Before you answer, consider this: We'll always have Paris. Sadly the same cannot be said of the 79-year-old Buffett.
The Optimism Meter: Continued Improvement
The Meter hit 55 on Apr. 6, up from 52 one week earlier. Only 15% of Americans believe that U.S. stocks will lose value over the next 12 months, while 32% say the rally will continue. Developed by Bloomberg BusinessWeek using data from pollster YouGov, the Meter is a proprietary measure of sentiment and expectations, economic statistics, and market forecasts. It evaluates shifts in outlook among individuals, professional investors, and economists in areas of U.S. economic growth, jobs, equity markets, and real estate. (Calculated using consumer polling, economic forecasts, and financial markets data; 0=lowest and 100=highest) Data: YouGov, Bloomberg BusinessWeek