The Best of Today’s Business: July 29, 2009

Microsoft’s Bing and Yahoo! Tie the Knot

CNNMoney’s David Goldman reports that f ollowing a year and a half courtship, which at times looked more like a messy divorce, Yahoo! and Microsoft announced that they have finally struck a deal on a search partnership.  Under the 10 year agreement, Microsoft’s Bing will power Yahoo! sites while Yahoo! will provide search technology and its global sales force to Microsoft. 

Full Story: http://money.cnn.com/2009/07/29/technology/microsoft_yahoo/index.htm?postversion=2009072908

Found: A Construction Company Attracting Investors

China’s economic climate shows increasing signs of life with the latest evidence being the IPO of China State Construction Engineering Corp.  Joe MacDonald of BusinessWeek reports that the builder of such Chinese icons as the “Water Cube” and Shanghai World Finance Center (China’s Tallest Building) ended its first day of trading up over 56.2% after surging 80% early on.  The company raised $7.3 billion making it the the largest IPO since Visa’s 19.7 billion offering. 

Full Story: http://www.businessweek.com/ap/financialnews/D99O243O0.htm

Rational Free Market or Siding with Evil?

Yesterday’s news that the CFTC will soon publish a report stating that speculators were to blame for oil’s fast rise (and subsequent crash) in 2008 certainly came as a breath of fresh air to many stung by those high prices.  This was not the case with Jon Birger of Fortune magazine.  In his article published late Tuesday, he defends the practice of speculation primarily relying on the fact that futures markets are not set up to take delivery and therefore prices must, in general, line up with overall supply and demand.  He goes on to say that removing speculators from the market would provide strong incentive for those who can buy and sell these contracts to hoarde the supply, thus driving up the price even higher, akin to when the silver market was cornered in the 1970’s.  Moral of the story: Be careful what you wish for; you just might get it.

Full Story: http://money.cnn.com/2009/07/28/news/economy/oil_prices_speculators.fortune/index.htm?postversion=2009072816

Proof of his argument: http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article5528333.ece

Noted:  Mortgage applications fell by 6.3% for the week ended July 24, 2009.