Archive - Oct 28, 2015

Nearly all empires end due to over-extension. If brave people from Ottawa to Baghdad simply say “enough” within a brief space of time, hopefully this empire can dissolve relatively peacefully like the Soviet Empire did, leaving its host civilization intact, instead of dragging that civilization into oblivion along with it like the Roman Empire did. But beware, the imperial war party will not go quietly into the night, unless we in their domestic tax base insist that there is no other way. Russia’s entry into Syria has thrown all of the neocons’ schemes into disarray, as even Jordan, that favorite proxy force in Israel’s dreams of regional dominance, has begun coordinating with Russia, in spite of its billion dollars a year of annual aid from Washington. Et tu Jordan?!

"Debates in Turmoil" would have been an appropriate summary for tonight's free-for-all CNBC-sponsored screamfest in Boulder, Colorado. Argumentative moderators, mis-stated facts, time complaints, and general whining was everywhere but Trump still managed to come out the other side of this gauntlet unscathed. One major highlight included Santelli and Paul pushing 'Audit The Fed', calls for gold-backed currency,and exclaimed that The Fed "has been a great problem" in US society. However, what was odd was the apparent slights to Trump and Carson (questioned less directly) which resulted in an aberrantly low 'talking time' for the leading candidates; as Politico noted, the repeated bursts of anger and anarchy were prompted, in part, by questions from the moderators that veered, at times, beyond sharp into contentiousness.

"What does this mean for investors? It means that at some point in the next year or two, I think we are all going to have a Henry Hill “Goodfellas” moment, where we think that we understand the conversation going on around us, where we think that we’re engaged with our social system in the usual way … and then everything will go sideways in a split second, and we will suddenly and with extreme clarity realize that we don’t understand anything at all except that we’re sitting at a table with a maniac."

The surge in the USDollar today after The FOMC's 'hawkish' statement has prompted strength in the Offshore Yuan, narrowing once again the spread to Onshore Yuan. Another CNY10 billion cash injection hasn't done much for Chinese stocks or liquidity markets however. After better than expected Japanese industrial production however USDJPY plunged (i.e. no imminent BoJ easing) and that dragged Nikkei 225 over 200 points lower (erasing all the FOMC gains).

Pfizer has an enterprise value of $221 billion. Allergan has an enterprise value of $160 billion. The two companies combined would have a joint EV of nearly $400 billion and a market cap of well over $300 billion. That would make a potential merger between the two the largest M&A deal in history, while a "mere takeover" of Allergan by Pfizer would still rank it as the fourth largest deal in history and the largest deal in a year that is shaping up as a record for M&A. And, according to the WSJ, such a deal may be just a few months if not weeks away.

Well, Krugman got his wish.

After decades of berating Americans for their Constitutionally protected right to bear arms, Europeans are finally starting to wake up. It took over a million Islamic immigrants and violence across their union to convince them, but it appears that they finally get it. Despite how hard it is to attain these weapons in countries like Austria, firearms are currently being sold there in record numbers much like they are in the United States. But instead of the threat of confiscation, this trend is being fueled by the refugee crisis, which as one jounalist warned "something is very wrong here" if Austrians are buying guns to protect themselves against migrants.

It's that time again. From 'jolted' Jeb to 'cool' Carly and from 'calm' Carson to 'turmoiling' Trump, for some of the GOP presidential nominee candidates, tonight could be the last hoorah in a campaign that has seen apolitical entrants dominate the mainstream Washington muppets. Moderated by John "I never met a Republican I didn't like" Harwood, we are sure there will be some tension as the "general health of the economy" planned focus may morph into any and everything as the debate pushes beyond two hours. Please watch responsibly...

“This is not my life. It just shows you how many of them are here already... It’s generally about foreign infiltration... Look, when I walk through the streets of the city, it’s only foreigners! There are walking 50 foreigners and I only see one European face... Look at the women! They’re all veiled! This is our future."

The Hills Are Alive...

While we still haven't taken out the all time highs said squeeze would lead to - there are about 30 points to go there; but as the following chart below shows, with just two trading days left, October is on pace for the biggest monthly point jump in S&P500 hi

While the likes of Fastenal CEO Dan Florness remain extremely concerned about the current industrial environment, one person who isn't concerned about potential spillover effects into the “rest” of the US economy is Goldman’s David Mericle, whose last name is not to be confused with “miracle”, although as you'll see, that’s precisely what Dave seems to be banking on.

As An American, I'm FURIOUS that We've Squandered Our Strengths and Resources ...

There is a strong evidence to suggest that representative democracy is not compatible with deep economic inequality. As a recent study found, "politicians in OECD countries maximize the happiness of the economic elite." However, it was not always that way: In the past, left parties represented the poor, the center and the middle class. Now all the parties benefit the richest 1& of earners. As FDR warned, “Government by organized money is just as dangerous as government by organized mob.”