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Five Things You Need to Know: U.S. Announces Major Toll Increase on Road to Serfdom; Minyanville Presents: Daily Dose of Crushing Irony; Oh, Canada; Greenspan Predicts... Again; SABMillerMolsonCoors to Combine Beer Assets, Create World's First Super Beer


What you need to know (and what it means)!


Minyanville's daily Five Things You Need to Know to stay ahead of the pack on Wall Street:

1. U.S. Announces Major Toll Increase on Road to Serfdom

Hahaha. That headline is a funny joke. Except it is not a joke at all, but true in every sense of unironic tragedy and awfulness. This morning Treasury Secretary Hank Paulson appeared on television and announced the latest coalition of do-gooders, this time a collection of 11 of the largest mortgage service companies in the U.S, representing 60% of all mortgages, coming together to help counsel and repair the properties they now own, like so many looters working together to rebuild a burned out liquor store the morning after; the gesture is appreciated. The hangover well-earned.

The real joke, the irony of it all, is that this charade of free-market capitalism can get paraded in front of a daily audience at all, much less an audience of too-willing serfs, eager to lap up any spillage from this government's ladle of grim-faced collectivism wrapped in flag-waving triumph.

Steeped further in irony, and near impossible to tell if it was intended as a finger in the eye to the American middle class, or was simply an unintentional fragment of idiocy that slipped through the cracks, is the name this new initiative carries: HOPE NOW. The emphasis on the name is it's own. The New York Times printed it in all-caps, presumably not a typo.

Believe me when I say that this is not our defining "let them eat cake" moment. That's like blaming the looters for the power failure. The savage destruction of the dollar, its debasement, the insidious transfer of wealth by hyperinflationary Federal Reserve policies intent on serving a small collective of wealthy decision-makers and rule makers is the circle in the pond created by this tiny pebble. Eh, so what? If not a tiny pebble in the pond, then an aggravating pebble in the shoe of the wealthy few as they ride the backs of the middle class off into the sunset.

The confusion we live in these days is a deep one, traumatic in its intensity and violence. While chasing debt-soaked dollars down a filthy, rusty drainpipe, it's hard to differentiate between friends and enemies. From gutter height, everyone looks like an enemy. And that's exactly how it's meant to be; welcome to the new class war pitching the dissolving middle class against itself in one long reality TV show. Rich versus poor is a fairy tale. Middle class versus itself is the reality. The confusion is real, and it's intentional.

Meanwhile, the incremental transfer of wealth from the middle class to Asia's poor perpetuates itself, both as a cause of this new class war, and most bitterly, also as an effect; a horrible cycle of debt addiction spiraling inward and feeding on itself, an autoimmune deficiency attacking itself. The code word for this transfer is globalization. It's real name is looting.

Fifty years ago the U.S. manufactured things and produced tangible goods that allowed our fathers and grandfathers to save and invest in their families, their homes. God help us for even re-imagining what it was like to own something. Those memories lie flat now in tattered photo albums, a handful of aging black and white snapshots peeling away from the page as the glue holding them in place dissolves.

But you know what? The stock market is now at an all-time high. Man, what a cruel and vicious joke. Didn't anyone tell you that the S&P 500 stock market index has lost 60% of its value in real terms since 2000? Well, if you sit high enough in the saddle, maybe you won't notice the stench of the excrement you're trampling. In this case, that excrement is denominated in dollars.

2. Minyanville Presents: Daily Dose of Crushing Irony

Speaking of the Road to Serfdom, Friedrich Hayek's 1944 book arguing that a centrally planned economic system will inevitably lead to a distribution of goods and resources controlled by a small group and, ultimately, tyranny, was so popular after its release that Look magazine turned it into a picture book that was then made into a pamphlet. The pamphlet's distributor? General Motors (GM).

3. Oh, Canada

Canada's government is arming itself new weapons to protect against foreign takeovers that are threatening a "hollowing out" of the country's corporate sector.

  • In a major speech to the Vancouver Board of Trade, Industry Minister Jim Prentice said the government will look at adding an explicit "national security test" to Investment Canada Act guidelines to guard against foreign companies gaining control of sensitive defense- and security-related Canadian firms, Canada's Globe and Mail reported.
  • The Financial Times said recent figures show foreign companies bought almost $40 billion more of Canada's corporate assets in the past three years than Canadian businesses bought overseas.
  • This year has seen one of the sharpest jumps in foreign takeovers in Canada with more than $90 billion of Canadian corporate assets having been acquired, including some deals that have yet to be completed.
  • Canada is following the lead taken by China, India and Japan, which have introduced tighter investment regulations, the FT noted.
  • One word: Protectionism.

4. Greenspan Predicts... Again

Former Federal Reserve Chairman Alan Greenspan hit the fortune telling circuit again on Wednesday, telling the the World Business Forum at New York's Radio City Hall that the credit crunch will eventually take its toll on the economy.

  • "When you get house prices flattening out, you begin to get pressures on consumption," Greenspan said, according to Reuters.
  • Greenspan added that rising stock prices could help offset the drop in the value of home equity... but did not mention only if everyone ignores the decline of the dollar.
  • In a separate appearance, Reuters reported that Greenspan said demographic shifts will strain U.S. Medicare resources but that financing the Iraq war would have no long-term impact on those resources.
  • He also said that not all of the Canadian dollar's rise to parity with the U.S. dollar was caused by U.S. dollar weakness.

5. SABMillerMolsonCoors to Combine Beer Assets, Create World's First Super Beer

SABMiller and Molson Coors yesterday agreed to merge their US brewing operations to create a rival to market leader Anheuser-Busch, and quite possibly, the world's first super beer.

  • SAB and Coors, the second and third-largest US brewers respectively, said the operation would be named MillerCoors and each would have an equal voting interest..
  • The merger will create a venture with 69 million barrels of annual beer sales
    and $6.6 billion of revenue, the companies said.
  • The combined companies will grab about 30% of the US beer market, leaving it behind Anheuser-Busch, which has about 50%.
  • The development of a super beer has long been an elusive goal of the nation's beer makers.
  • Previous super beer efforts have been solely intended for military applications and uses, however, including the short-lived armored beer can that was introduced in the 1970s, but quickly abandoned because each can weighed 183 pounds.
  • The SABMillerMolsonCoors super beer would be the first super beer geared toward the private sector.
  • Sources close to the SABMillerMolsonCoors super beer development project tell Minyanville the new super beer will debut in a lightweight titanium-alloy can that features a high definition television screen, portable toilet, pool table, dart board, cheese sticks, buffalo wings, poker game, nap timer, angry spouse sensor, lawn mower and in-can gym.
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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