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Profitable swingers, Outflanked energy dealers
The gyrating markets are good for at least one type of investment: volatility hedge funds. Britain’s BG gives up on its $11 billion takeover bid for Origin Energy. And cars are less efficient than they were 15 years ago.
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EWS AT A GLANCE

Swinging markets pad volatility funds

The stock market has been so unpredictable that for the first time in five years, volatility hedge funds are outperforming stocks, bonds, and commodities. The volatility funds, which profit from turbulence in the market, are up 7.3 percent this year, according to the Newedge Volatility Trading Index. “Nobody knows the direction of the markets or economy at the moment, and we’re profiting from that uncertainty,” said Trevor Taylor, co-chief investment officer at Innovative Options Management. (Bloomberg) Asian markets closed broadly lower today, paring some of yesterday’s sharp gains. (MarketWatch) But European markets were higher early today. (AP in Yahoo! Finance)

BG drops $11 billion bid for Origin Energy

BG Group, the U.K.’s third-largest oil and gas company, threw in the towel on its unsolicited $11.2 billion takeover bid for Australia’s Origin Energy Ltd. BG said it will not raise or extend its offer, which formally expires Sept. 26, to compete with ConocoPhillips’ investment of up to $8 billion for half of Origin’s coal-seam gas unit. (Dow Jones in CNNMoney.com) The ConocoPhillips offer, unveiled yesterday, “is an extraordinary transaction,” said analyst Paul Johnston at Commonwealth Securities in Melbourne. “I think Origin are a bit surprised themselves that they could elicit this type of value.” (Bloomberg) BG could look to buy up another Australian firm, like Queensland Gas, or become a takeover target itself, analysts say. (Reuters)

Google and NBC reach TV ad deal

Internet giant Google will start selling ads on some cable networks owned by NBC Universal, the two companies said last night, as Google makes new inroads in the TV advertising market. Google entered the TV ad business 17 months ago, with limited success. Its Google TV Ads programs aims to help steer commercials to target audiences and better gauge their impact. (The New York Times) Google already sells ads for some slots on the Dish Network. “This raises its profile and gives it a lot more credibility,” said analyst Greg Sterling at Sterling Market Intelligence. “Other media companies will take notice of this.” The NBC-Google deal covers the SciFi, Oxygen, MSNBC, Sleuth and Chiller channels. (Los Angeles Times)

Speeding forward, going backward

Automakers are focusing on fuel-efficient cars now, but in terms of fuel efficiency they’re behind where they were in 1992. In the ‘92 model year, there were 33 cars with a combined city/highway EPA rating of at least 30 miles per gallon; this model year, there are 12 cars. GM, which doesn’t currently offer a 30 mpg car in the U.S., is spending $500 million to get a new compact, the Cruze, to market by 2011. The Cruze will have a highway rating of 45 mpg, which is still 13 mpg less than its most efficient Geo Metro 14 years ago. Metros now sell for more than their original list price of just over $6,000. “Now that consumers are clamoring for them,” says Eric Noble of the Car Lab, “those cars are pretty much all gone.” (Los Angeles Times)

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