Apple Capitulation
When there is blood on the streets….
Shorting Apple here is most likely unwise. Time to buy some as the hedge funds are now puking the darling.
Chart Bloomberg
Google Antitrust Suit?; Legal Weed; Law Firm Mega-Merger Mania
Latest from Bloomberg Law.
Big changes may be in store for Google. The tech giant was given an ultimatum by FTC Chairman Jonathan Leibowitz to settle its pending antitrust probe in the coming days or face a lawsuit, sources tell Bloomberg News. The agency has been investigating Google for almost two years for favoring its own services in search results, providing exclusive search services to online publishers and a whole host of other issues. If it chooses to file a complaint, the FTC can do so in either its own administrative court or the Federal court system.
Next, voters in Colorado and Washington legalized marijuana for recreational use last week, but the federal government still bans the drug. So what to do? State AGs from Washington and Colorado are meeting with US Attorney General Eric Holder’s office to see if the federal government plans to sue to block the measures. Does the federal law trump the state pot measures? We wouldn’t be surprised to see the issue eventually end up in court.
Finally, more big firms are feeling the urge to merge. On Wednesday, the UK’s Norton Rose announced it is merging with U.S. firm Fulbright & Jaworski, creating a 3,800-attorney firm with 55 offices worldwide. It’s not the first time Fulbright has considered a merger. Earlier this year, it was reportedly in talks with Pillsbury Winthrop. And it’s the second major cross-border merger announced in as many weeks. Last week, SNR Denton announced a three-way merger with Canadian and European firms, creating a 2,500-lawyer conglomeration.
Full video below.
Spain Will be Forced to Choose
Spain has a few choices in order to start dealing with the pain the country is experiencing. None of the choices look very attractive, but something must be done in order to start fixing the economy. Mr Rajoy, what u gonna do? Via the think tank Carnegie Europe
In the great debate over the economy we sometimes forget the simple arithmetic of economic rebalancing. This arithmetic, like it or not, severely limits the options open to Spain.
For many years, thanks partly to bad policies in Spain but mainly to aggressive attempts by Germany to achieve growth by forcing a trade surplus onto its European neighbors, Spain, and many other countries in Europe, ran enormous trade deficits. It is easy and popular to blame the greed of the Spanish and the stupidity of the government for the mess in which Spain has found itself, but the policies Germany put into place in the late 1990s guaranteed that Germany, a country that had run massive trade deficits in the 1990s, would run equally massive trade surpluses in the subsequent decade.
Treasury Yields/Mortgage Rate Update: Historic Low 30-year Fixed
Guest post by Doug Short.
I’ve updated the charts below through today’s close. The S&P 500 is now 7.66% off its interim high set on September 14th, the day after QE3 was announced. We’re still above the 10% correction benchmark. The 10-year note closed today at 1.58, which is 30 basis points off its interim high of 1.88, also set the day after QE3 was announced. The historic closing low was 1.43 on July 25th. But the big news today is Freddie Mac’s Weekly Primary Mortgage Market Survey. The 30-year fixed has set an all-time low of 3.34 percent.
Are yields heading lower? If the post-election selloff in equities continues, the 10-year yield could certainly revisit the levels of late July. Japan is an example (admittedly an extreme one) of a developed nation with its own currency that has experienced a relentless demand for government bonds, as this chart illustrates. Currently Japan’s 10-year yield is around 0.75, less than half that if its US counterpart.
Here is a snapshot of selected yields and the 30-year fixed mortgage one week after the Fed announced its latest round of Quantitative Easing.
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