Ten years after Symantec paid $13.5bn for Veritas, Carlyle Group agreed in August to buy the data-storage business for just $8 billion (the biggest LBO of the year). Of course, the buyout deal made sense when the cost of funding was negligible and The Fed had your back but, as Bloomberg reports, amid soaring borrowing costs, banks have pulled the $5.5 billion debt offering for Veritas signaling a clear end to the reach-for-yield, nothing is a problem, bond market's risk appetite..
110,000 current and soon to be eligible retirees working for IBM woke up to an unpleasant surprise this morning, when the WSJ reported that as a result of soaring healthcare costs, the tech bellwether giant will be terminating its company-sponsored health plan and instead giving (soon to be former) beneficiaries a lump sum payment to buy coverage on a health-exchange: a move which the WSJ characterized as indicating that employers are unlikely to keep providing the once-common benefits as medical costs continue to rise.
Following Yellen's Friday speech, the phrase "High-Pressure Economy" has attained something of a viral status within the economist community. And while there is little risk of US economic growth, much of its supported by mandatory spending on Obamacare which now feeds directly into GDP as a component of "healthcare spending", hitting an even remotely "high-pressure" state, with both Q3 and Q4 GDP expected to print below 2% according to regional Fed forecasts, one place where there is substantial "high pressure", is in inflation.
Despite the eagerness of Abenomics and the new BOJ head Kuroda to have their cake and eat it too, in this case manifesting in soaring stock prices, plunging Yen, rising GDP and exports, and most importantly, flat or declining bond yields, so far they have succeeded in carrying out three of the four (assuming Japanese economic data reporting is more accurate than that of its neighbor China), as it is physically impossible for any central planner to completely overrule the laws of math, economics and physics indefinitely.
There was one topic prominently missing from last night's debate - Obamacare and soaring US healthcare costs- and with good reason: with most middle-class Americans suffering as a result of surging premiums, and even the Obama administration admitting, if only behind the scenes, that Obamacare needs a major overhaul, why tempt the presidential candidates with a topic that would sour the public's mood about the defender of the status quo on the first debate.
After all, anyone who points out all that is wrong with Obama's recovery is "peddling fiction."
ByBen Kramer-Miller:Semafo (OTCPK:SEMFF) just reported its second quarter earnings results and they were nothing short of spectacular. The company's earnings came in at $13 million or $0.05/share on revenue of $88 million. Operating cash-flow came in at $38 million.
It seems the US "costs" are not working on Russian assets. Apparently on the back of diplomatic-sounding comments from Putin, Russian stocks, bonds and currency are the new fear-of-missing-out trade and are soaring:
Add Desert Hot Springs, CA to the list of California cities in dire straits due to poor management, union wages, and ridiculously unaffordable pension promises.
Please consider Another U.S. city mulls bankruptcy due to soaring wages and pensions