Saturday, June 21, 2014

Today's links

1---Stocks are ‘dangerously overvalued,’ M&A deals suggest , marketwatch


Analysis: Every big wave of mergers has ended with a drop in equities...


“The marked increase in recent M&A activity is one more piece of evidence that the market is dangerously overvalued,” says Dennis Mueller, an emeritus economics professor at the University of Vienna in Austria who has studied M&A cycles in the U.S. as well as overseas...


Here’s one sign a significant stock market decline might occur sooner rather than later: the rapid acceleration of recent merger and acquisition activity.
                                        
This past week saw news of another big deal, led by medical-device maker Medtronic’s /quotes/zigman/233680/delayed/quotes/nls/mdt MDT -1.25%  announcement of its $43 billion bid to acquire rival Covidien /quotes/zigman/4475320/delayed/quotes/nls/cov COV -1.24%
At the current pace, M&A deals could reach $3.51 trillion this year, the most since 2007, according to data provider Dealogic.
                                        
It wasn’t a fluke that a surge in M&A activity coincided with that year’s market top, according to Matthew Rhodes-Kropf, a professor at Harvard Business School and an expert in the field. “Each of the last five great merger waves on record” — going back more than 125 years — “ended with a precipitous decline in equity prices,” he says.
Some experts have found that merger activity surges when stocks are richly priced, at least in part because companies can use their inflated shares to pursue acquisitions.


2--IMF Girds for Market Storms Ahead , wsj


What’s one of the International Monetary Fund’s top priorities?


3--Economy Slumps, Wall Street Booms, wsws


One statistic, often cited but nonetheless extraordinarily revealing and damning, encapsulates the irrationality and bankruptcy, moral and historical, of the capitalist system: 85 billionaires today have as much wealth ($1.68 trillion) as the bottom half of the world’s population—3.5 billion people.


4--Putin offers Iraq's Maliki 'complete support' against jihadists, Daily Star
5---Washington escalates intervention in region-wide Middle East war, wsws


While claiming that its intervention in Iraq is meant to quash ISIS, the reality is that this Islamist militia is Washington’s own Frankenstein’s monster. It was forged first through the US military destruction of Iraqi society and the divide-and-rule strategy of the American occupation that fueled the bitter sectarian bloodbath that wracked the country. While suppressed in Iraq, this tendency had a dramatic resurgence in Syria as the US, Saudi Arabia, Turkey and other regimes in the region funneled arms and other support to the Islamist-dominated “rebels” carrying out the sectarian war for regime change against the government of President Bashar al-Assad.


Last September, the Obama administration was forced—in the face of massive popular opposition—to back down from its plan to carry out US air strikes against the Assad regime, and in support of the ISIS and other Islamist formations. Now it is preparing to reverse this humiliating climbdown on the pretext of pursuing the ISIS both in Iraq and across the border in Syria.


6---Washington escalates intervention in region-wide Middle East war, wsws


“Cooperation between Iran and the US will never take place and is meaningless,” declared Major General Hassan Firouzabadi, the Chief of Staff of Iran’s Armed Forces, Wednesday. Earlier in the week, Firouzabadi had accused the US of seeking to force Maliki from office through “meddling and military intervention,” adding that the “crocodile tears” of the US over extremism in Iraq “should not receive any attention, as they are still the allies of the sponsors and supporters of terrorists in the region.”


The US and its regional allies, including Saudi Arabia, Qatar and Turkey, have armed and financed Islamist militia, including ISIS and other al-Qaeda allies and affiliates, to spearhead their campaign to overthrow Syrian President Bashar al-Assad and his Baathist regime. Moreover, they have done so as part of a drive to isolate, threaten, and bully Iran—Syria’s closest regional ally...


Although the ISIS-Sunni militia offensive in Iraq threatens Iran’s strategic position, Rouhani and his faction of Iran’s bourgeois elite view it as having a silver lining in that it offers them an opportunity to demonstrate to Washington that Iran is ready to assist it in securing US strategic interests in the Middle East.
Over the course of several days beginning late last week Rouhani, his aides and supporters repeatedly signaled their readiness to work with Washington. Iran’s president, after declaring that all countries should work together to fight terrorism, said, “Any time the Americans start to take action against terrorist groups [in Iraq], we can consider that.” On Monday, one of Rouhani’s closest foreign policy advisors, Hamid Aboutalebi, tweeted a series of messages arguing for US-Iranian cooperation in Iraq. “Iran and America,” asserted Aboutalebi, “are the only two countries, from a perspective of regional power, that can peacefully end Iraq’s crisis.”


Since coming to power last August, Rouhani has sought a rapprochement with Washington. Under an interim nuclear deal reached in late November, Iran made major concessions to the US and its European Union allies, curtailing its civilian nuclear program and placing it under unprecedented international scrutiny. In return, the US has slightly eased the economic sanctions that have halved Iran’s oil exports and halted most of its foreign trade.
Rouhani has also signaled his intention to reorient Iran’s economy to the West, wooing European and US transnationals with promises of oil and other concessions and announcing plans to dramatically accelerate Iran’s privatization drive. ...


On Wednesday—no doubt due both to the opposition from within Iran’s security apparatus and the contradictory signals emanating from Washington about the wisdom of any form of cooperation with Tehran—the Rouhani administration appeared to back off from its offer to work together with the US to prop up Iraq’s government. Rouhani’s chief of staff, Mohammad Nahavandian, told an international relations forum in Oslo that a final agreement on the nuclear issue would need to be reached before strategic cooperation between Iran and the US can proceed.


7--Russia Reignites The Proxy War: Putin Offers "Complete Support" To Iraq Prime Minister Scorned By Obama, zero hedge


8--New and resale home sales slump in 2014 prime home selling season , ochousing


9--Epic miss on housing starts is a wake up call, HW





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