Today's BB: A New "Friendly" Buyer

Exchange-traded fund pioneer Barclays Global Investors yesterday filed a prospectus with the SEC announcing its intention to create a publicly-traded ETF containing municipal bonds.  [free article]

Today's article is likely the first of many about the nascent product -- Barclays officials concede that the prospectus is more a statement of intention than a fully-baked product, and even a cursory inspection of the document uncovers lengthy passages that were likely lifted verbatim from the prospectuses for Barclays' more common equity ETFs. 

But while there will be lots of questions to be answered -- about fees, the underlying index, pricing policies, and exactly how the backers intend to distinguish the fund from the wide range of closed-end funds already available to investors seeking an exchange-traded muni option -- the Barclays prospectus is clear on one point, which should put the minds of nervous municipal issuers at ease:

"The Fund ... will not invest in the securities of a company for the purpose of exercising management control or purchase."

That's good, since in muniland, we have our own word to describe the people who "exercise management control" ... voters.

Short Takes - How Much Is That Toll Road on the Balance Sheet?

This morning's Wall Street Journal delivers a double-dose of criticism to pacesetting infrastructure investor Macquarie Bank, reporting on proxy advisory firm ISS's complaints about the bank's executive compensation structure, and repeating a knock on Macquarie's accounting practices by short-seller James Chanos of Kynikos Associates. [subscription article]  For those who don't recognize the name, a quick trip to Google news shows that Chanos is fairly widely described as being "known on Wall Street for predicting the collapse of U.S. energy trader Enron Corp."  Chanos' criticism rests on Macquarie's practice of re-valuing its assets quarterly -- and booking the gains as revenues, exposing the firm to a barren period should those values begin to slide.

Elsewhere, business editors who faced short-staffing limitations on the Fourth of July yesterday gave thanks for Blackstone Group's acquisition of Hilton Hotels. [free article]  That story can be covered without any reporters at all:  Simply call up a 1968 piece from their papers' archives and run the following macro:

• Find: ITT; Replace with:  Blackstone
  
• Find: Sheraton; Replace with:  Hilton
  
• Find: Conglomerate; Replace with:  Private-equity firm

I'll stop short of predicting that Stephen Schwarzman is the second coming of Rand Araskog, but you have to wonder how this decade's private-equity boom will be judged in 40 years...

Finally, China is planning to ban a million cars from Beijing's streets next month, in a dry run of its smog-management plan for the 2008 Olympics.  [free article]  Suddenly, congestion pricing looks a lot more reasonable...