Dell

Just when you thought the M&A boom is over after a surge in bond yields that Goldman has repeatedly dubbed as "recessionary", and which will make the debt cost of any funding so high that there is barely any room for execution error, moments ago as had been extensively leaked previously, private Dell announced it would acquire tech giant EMC in a deal valued roughly $67 billion, while maintaining VMWare as a publicly-traded corporation. Good luck with raising the tens of billions in debt the deal will require: our best wish to Barclays, BofA, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan, RBC who will all be underwriting the required debt financing to Dell.

Correction continues, but it is only a correction.

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News That Matters

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News That Matters

Technological change often comes faster than what the people in it’s thrall can predict. It wasn’t that long ago when you and everyone else you knew were probably using AOL Instant Messenger, around the same time that dude, you were getting a Dell. Then one day you weren’t. Blackberrys used to be so popular that “to bbm” someone made it into the dictionary, but then the devices all but disappeared. These inflection points are seldom based on the companies failing their customers, but rather because consumers simply moved on.

This charmed circle includes Google, Amazon, Baidu, Facebook, Saleforce.com, Netflix, Pandora, Tesla, LinkedIn, ServiceNow, Splunk, Workday, Ylep, Priceline, QLIK Technologies and Yandex. Taken altogether, their market cap clocked in at $1.3 trillion on Friday. That compares to just $21 billion of LTM net income for the entire index combined. The talking heads, of course, would urge not to be troubled. After all, what’s a 61X trailing PE among today’s leading tech growth companies?

It’s not too interesting to say that Donald Trump is a nationalist and aspiring despot who is manipulating bourgeois resentment, nativism, and ignorance to feed his power lust. It’s uninteresting because it is obviously true. It’s so true that stating it sounds more like an observation than a criticism. However, 'Trumpism' is an ideology that is very much present in American life, though hardly acknowledged. It lives mostly hidden in dark corners, and we don’t even have a name for it. You bump into it at neighborhood barbecues, at Thanksgiving dinner when Uncle Harry has the floor, at the hardware store when two old friends in line to checkout mutter about the state of the country. The ideology is a 21st century version of right fascism - one of the most politically successful ideological strains of 20th century politics. Though hardly anyone talks about it today, we really should.

"China's market is highly inefficient, which means it's relatively easy to produce absolute returns. Chinese retail investors don't have any advantage over us."

"Using Bitcoin is an effete act of rebellion, a weak signifier of resistance like wearing a hoodie or getting a tattoo that’s well covered by your work clothes. Bitcoin is fashion, more than a fad but less than lasting." Strong words. Let’s dig in.

"Eighty people hold the same amount of wealth as the world’s 3.6 billion poorest people, according to an analysis just released from Oxfam. The report from the global anti-poverty organization finds that since 2009, the wealth of those 80 richest has doubled in nominal terms — while the wealth of the poorest 50 percent of the world’s population has fallen." There you have it. The reason the wealth of the richest has doubled since 2009, is because “it’s not a recession, it’s a robbery.” Central bank and government policy has done this, it is no accident.

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Prisons employ and exploit the ideal worker. Prisoners do not receive benefits or pensions. They are not paid overtime. They are forbidden to organize and strike. They must show up on time. They are not paid for sick days or granted vacations. They cannot formally complain about working conditions or safety hazards. If they are disobedient, or attempt to protest their pitiful wages, they lose their jobs and can be sent to isolation cells. The roughly 1 million prisoners who work for corporations and government industries in the American prison system are models for what the corporate state expects us all to become. And corporations have no intention of permitting prison reforms that would reduce the size of their bonded workforce. In fact, they are seeking to replicate these conditions throughout the society.

Despite the authorities' best efforts to keep everything orderly, we know how this global Game of Geopolitical Tetris ends: "Players lose a typical game of Tetris when they can no longer keep up with the increasing speed, and the Tetriminos stack up to the top of the playing field. This is commonly referred to as topping out."

"I’m tired of being outraged!"