Wonder If Locust Plague Would Be Bad for Stocks: Opening LineC. Thompson
After ending last week with a contemplative, late summer reverie and getting absurdly touchy-feely, let’s return to the world we know and love: death, pestilence, disease, warfare, volcanoes, hurricanes, Ebola, terrorism, beheadings and earthquakes.
Today is National Kiss and Make Up Day in the U.S., not in Ukraine, where Russia decided over the weekend that it couldn’t wait to bring humanitarian aid to the eastern region or to take a few shots, literally, at its former republic. Another attempted incursion by armored Russian vehicles has been halted by Ukrainian forces, who say they’re still getting shelled, as Putin and Poroshenko prepare to meet tomorrow in Belarus.
In Libya, militias are fighting one another, dodging airstrikes from an unknown force (again), and the international airport in Tripoli was in flames. The defunct Islamist-run parliament is going to resume meetings, even though there’s a new parliament now. In general, it’s a chaotic power vacuum on fire.
In the Democratic Republic of Congo, there’s a new strain of Ebola that has added as many as 13 deaths to the roughly 1,400 lives that have been lost in countries such as Sierra Leone, Liberia and Guinea. A British health-care worker contracted the virus, which evidently has its own smell, in Sierra Leone and is coming home to London’s Royal Free Hospital aboard a medically equipped RAF aircraft.
In Nigeria, where at least doctors have ended their strike in order to join the fight against Ebola, Boko Haram’s putative leader, Abubakar Shekau has declared a caliphate of his own after overrunning the northeastern town of Gwoza. If you look at a map -- here, here’s a map for you -- you can see Gwoza is a spot ideally located if you wanted to expand your caliphate by gaining footholds in Cameroon, Chad and Niger without much travel.
Travel, however, does seem to hold part of the allure, whether for two teenage girls from France or for a rapper from England named Abdel-Majed Abdel Bary, aka Jihadi John, whom the U.K.’s Sunday Times identified yesterday as the Briton who beheaded American photographer James Foley. It’s getting so bad the U.K. government is now paying radical Muslim leaders to deradicalize younger Muslims in the U.K., which one MP equated to “putting the fox in charge of the henhouse.”
While Foley lost his life, the life of another U.S. journalist taken captive in Syria two years ago was spared. Peter Theo Curtis was released by the Jabhat al-Nusrah terrorist group into the custody of UN peacekeepers yesterday in the Golan Heights. That’s the good news. The bad news is that the Don’t-Call-Them-Islamic State has taken over a Syrian air base. The planes aren’t there, luckily.
Coming west, noting briefly that the bulging volcano Iceland said had erupted in fact had not (yet), a stop in the Middle East finds Hamas itching to resume the fight and Israel more than willing to oblige, as well as a curious report about the Westboro Baptist Church reportedly accepting a British television host’s offer to fly them to Iraq if they really want to protest. If this is true, might we suggest they fly to Sierra Leone next?
Lastly -- only because we’re out of room; seriously, we could do this all day -- Napa, California, got busted up by a 6.1 percent earthquake in the middle of the night Saturday/Sunday. Three of the 120 people injured were in critical condition, but there were no fatalities, at least. Not to be outdone, Chile took a 6.4 earthquake late yesterday, causing no injuries and scattered power outages.
At least you’re starting the week with all this instead of ending it, and you’ve got a long weekend coming up.
Today’s U.S. economic indicators include the Chicago Fed’s National Activity Index at 8:30 a.m. EDT, new-home sales at 10 a.m., and the Dallas Fed’s manufacturing outlook at 10:30 a.m.
Prospect Capital Corp. is the day’s only U.S. earnings report.
A short time ago, Germany said business confidence fell for a fourth month, dropping more than projected to 106.3.
- The CME is trading again after a four-hour disruption. - Iran says it shot down an Israeli drone over the Natanz nuclear-enrichment site. - Merkel meets Rajoy in Spain, with a press conference to follow. - Xi hosts Mugabe in Beijing. - The Summer Bank Holiday in England, Wales and Northern Ireland has markets closed. - The ONS Conference on energy begins in Stavanger, Norway, and runs through Aug. 28. - The second televised debate between Salmond and Darling over Scottish independence airs at 8:30 p.m. local time/3:30 p.m. EDT. - More than 260 are feared dead in attempts to migrate from northern Africa to Italy. - France’s government collapses. - Tropical Storm Cristobal is meandering north of the Bahamas. - Valeant and Pershing Square say they have the share of Allergan votes they need to call a special meeting on the Valeant’s takeover effort. - A group holding Argentina’s exchange bonds will seek consensus from the rest to waive the RUFO clause that’s supposedly the stumbling block to a settlement. - Richard Attenborough has died at 90. - China executes eight ethnic Uighurs on terrorism charges - And shuts down the Beijing Independent Film Festival. - This weekend’s Chicago shootings injured 11, including a 3-year-old. - Russia’s not amused by Bulgarians painting Soviet-era monuments to look like superheroes. - Artie T. is poised to emerge victorious in the battle for Market Basket Inc. - SpaceX will delay a satellite launch after a rocket’s test flight exploded last week. - St. Louis County cop proves he’s not prejudiced. - The Emmy Awards are presented tonight and, suddenly, everybody cares about them. - Brazil prison riot has killed four, two of them decapitated. - The 2015 Farmers’ Almanac comes out this week, and the news is not good. - Suge Knight was shot, again. - The New York Jets’ Dimitri Patterson returned to the team last night after vanishing before the game with the Giants on Friday night. - Marky Ramone waits for the Talking Heads puppets to finish, then sits in with Arcade Fire, making Arcade Fire cool for at least a few minutes.
Monday is the right day to bring up the chill that’s settled over the deals market since Obama and Jack Lew start musing aloud about how little they think of inversions and the “corporate deserters” who execute them and about what tools they have to discourage them.
Walgreen pulled up short of moving its domicile to Europe after acquiring Switzerland-based Alliance Boots, and no inversion transactions had been announced since, Matthew Campbell, Manuel Baigorri and David Welch report.
Pfizer, which tried and failed to acquire U.K.-based AstraZeneca (so far), is moving cautiously toward another attempt at an overseas address while it gets a better sense of which way the wind is blowing, they write, and at the moment the U.S. isn’t providing a lot clarity as to what it could or would do to get in the way.
This might be by design. The Treasury Department “might like the current uncertainty just fine,” Phil West, a former Treasury lawyer, tells them.
Yet, there’s a less publicized route for companies looking to cut their tax bills and who don’t want to go with the straight-up inversion route. They can just sell themselves to private equity, go dark for a while, and re-emerge as a public company somewhere in Bermuda or the Caymans after a firm like Bain Capital does some retrofitting, Zach Mider reports.
That was the move made by Sensata Technologies Holding of the Netherlands, which used to be General Plate Co., Mider writes. It is not without some irony that the company that helped restore the Statue of Liberty became Exhibit A-ish in this kind of U.S. tax dodge, which, yes, is totally legal.
Then, in a bit of cosmic convergence, Burger King Worldwide -- which is controlled by private-equity firm 3G Capital -- announced last night it was in talks to buy Tim Hortons and acquire a lower-tax address in Canada.
But Harvard economics professor N. Gregory Mankiw reminds us of the moral center of this argument in his New York Times Op-Ed yesterday. He thinks all the debate is a waste of time. The law of the jungle dictates that corporations do what they must to get the conditions for their shareholders, and if that means eating their young along the way, that’s life.
The real discussion should be about scrapping the corporate tax entirely and shifting to a European style consumption tax -- the kind immortalized by the Beatles’ song “Taxman": If you drive a car, I’ll tax the street; if you try to sit I’ll tax your seat, etc.
Or you could just let the European companies do the buying.
The U.S. Open Tennis Championships get under way today out at the USTA Billie Jean King National Tennis Center in Flushing Meadows, New York, and as yet there are no signs that anyone is going to black out the Tennis Channel over a contract dispute like they did to Verizon customers two years ago.
But there is a TV angle to this year’s tournament. To those old enough to remember the days when the former ‘‘U.S. National Championships” were held on the grass courts of the West Side Tennis Club in Forest Hills, New York, and who still hear the voices of Pat Summerall and Tony Trabert, it is almost unthinkable.
This will be the last year CBS broadcasts the event, at least for the next 11 years, as ESPN will bring its rich history of tennis coverage to Flushing Meadows starting next year. But not before Dick Enberg makes an auld lang syne return engagement to the CBS broadcast booth to close out its 47-year run as the tournament’s network home.
Just as Saturday Night Live performers described hearing the sound of their names coming from the recently departed Don Pardo as proof of their career, so too one would think a rising kid in the game would skip a heartbeat the first time his or her game is dissected by John McEnroe.
It just won’t be the same.
Given how much expense and sacrifice young players and their families face these days, it’s reasonable to think a little of the prestige will be missing when Chris Berman is barking “back back back” during a lob shot.