Merrill

Merrill
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Mega M&A Is Back: Abbott Buys St. Jude Medical For $25 Billion, 37% Premium





The great megadeal M&A drought of 2016 just came to an end when moments ago Abbott announced it would acquire St. Jude Medical for $25 billion, roughly a 37% premium to St. Jude's Wednesday closing price. According to the press release, under the agreement, St. Jude Medical shareholders will receive $46.75 in cash and 0.8708 shares of Abbott common stock, representing total consideration of approximately $85 per share. At an Abbott stock price of $43.93(2), this represents a total transaction equity value of $25 billion.

 
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As Fed Meeting Begins Futures Are Flat In Sleepy Session; Apple Earnings On Deck





With the Fed decision just one day away, followed the very next day by the increasingly more irrational BOJ, stocks had no desire to make significant moves and overnight's boring session was the result, as European stocks and U.S. index futures rose modestly but mostly hugged the flatline while Asian declined 0.2% for a third day as raw-material shares declined and Tokyo equities slumped before central bank meetings in the U.S. and Japan this week. China’s stocks rose the most in almost two weeks, up 0.6% but failed to rise above 3000 on the Shanghai Composite, in thin trading.

 
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"The Damage Could Be Massive" - How Central Banks Trapped The World In Bonds





Yields on $7.8 trillion of government bonds have been driven below zero by worries over global growth, forcing investors looking for income to flood into debt with maturities of as long as 100 years. Worse still, as Bloomberg reports, central banks’ policy is exacerbating matters, as the unprecedented debt purchases to spur their economies have soaked up supply and left would-be buyers with few options. This has driven the 'duration' - or risk sensitivity - of the bond market to a record high, meaning, as one CIO exclaimed, even with a small increase in rates "the positions are so huge that the damage can be massive... People are complacent."

 
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Stocks Soar As Corporations Are Defaulting On Their Debts Like It's 2008 All Over Again





The stock market and the economy are moving in two completely different directions right now. Even as stock prices soar, big corporations are defaulting on their debts at a level that we have not seen since the last financial crisis. In fact, this wave of debt defaults have become so dramatic that even mainstream media is reporting on it...

 
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Institutionalized Lying - Why Central Bankers Never See Bubbles





Every day there is more confirmation that the casino is an exceedingly dangerous place and that exposure to the stock, bond and related markets is to be avoided at all hazards. In essence the whole shebang is based on institutionalized lying, meaning that prouncements of central bankers, Wall Street brokers and big company executives are a tissue of misdirection, obfuscation and outright deceit. And they are self-reinforcing, too.

 
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Is Deutsche Bank’s Gold Manipulation The Main Scam Or Just A Side-Show?





Is Deutsche's gaming of the London precious metals fix the same thing as - or even tangentially related to - the main manipulation of the gold price, which is the practice of central banks “lending” their gold to big commercial banks, which then sell that gold on the open market to depress the price?

 
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Peter Schiff Slams Managers' "Denial... And Mindless Optimism"





The Winter of 2015-2016, which came to an end a few weeks ago, has been officially designated as the mildest in the U.S. in 121 years according to NOAA. While this fact will certainly add a major talking point in the global warming debate, it should also be front and center in the current economic discussion. The fact that it isn’t is testament to the blatantly self-serving manner in which economic cheerleaders blame the weather when it’s convenient, but ignore it when it’s not.

 
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Former Fed Advisor Asks "Has The Fed Bankrupted The Nation"





In 1977, the total indebtedness of U.S. government, corporate and household borrowers was $323 billion. By 1985, that figure had grown to $7 trillion. Volcker left the Fed in August of 1987 after handing the reins over to Alan Greenspan. By year’s end 2015, U.S. indebtedness had swelled to $45.2 trillion. Tack on financials, which few do, and it’s $64.5 trillion and unabashedly growing. We are a nation transformed. What has today’s vast store of debt purchased? Certainly not freedom.

 
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In Its Second Attempt At Going Public, BATS Prices $253 Million IPO At $19/Share





It's time for try number two. Moments ago BATS announced that it has just priced its second attempt at going public by pricing its (second) initial public offering at a price to the public of $19.00 per share (this time the high end of the range). The size of the offering has been increased from the initially announced 11,200,000 shares of common stock to 13,300,000 shares of common stock.

 
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The ECB Effect: European Telecom Issues Largest Ever Junk Bond After More Than 100% Upsizing





The market bond market, which is now frontrunning not just what the ECB has announced it will buy but what it may buy, just led to a record European junk bond issuance, when French cable and telecom operator Numericable "stunned the market" (as Reuters put it), when it upsized what was originally supposed to be a $2.25 deal by more than 100% to a whopping $5.2 billion bond deal on Wednesday. This was the largest single high-yield bond tranche ever issued.

 
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USDJPY Crashes, Drags Equities With It As Gold Soars





Ever since the USDJPY breached the 110 support level three days ago for the first time in 17 months, the pressure on this all important FX carry cross has been rising, and then overnight, following the latest bout of recurring and increasingly ignored jawboning by various Japanese officials, the Yen soared, with the USDJPY plunging first below 109 and then moments ago dropping as low as 108.02 before rebounding modestly, dragging US equity futures lower with it.

 
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2016: The End Of The Global Debt Super Cycle





The credit markets are signaling that the debt fueled expansion that began in 2010 is turning to bust. This is the most precarious moment in financial market history because as the world slides into recession global central banks have no ability to soften the oncoming recession with debt creation. The world economy is on the precipice of another Great Depression.

 
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European Peripheral Corporate Bond Yields Tumble To Record Lows Ahead Of Draghi's Monetization





On the day Mario Draghi announced that the ECB would launch a historic corporate bond monetization program, the first of its kind, we said that we expect bond yields to tumble imminently as the market frontruns the ECB's open-market purchases of corporate bonds and soaks up all available supply in the market. Not even we expected what would happen next though.

 
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It's Not Over Yet - Moody's Put Deutsche Bank On Review For Downgrades





In a worryingly coincidentally timed move, Moody's has put Desutche Bank on review for downgrade, citing "execution challenges" in its new strategic plan. The worrying aspect comes from the fact the timing is entirely fitting with the ratings downgrade that started the last and most painful down-leg in Lehman's collapse...

 
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