What you may have missed in the business news:
1. BATS goes Directly to the Edge.
BATS (of failed IPO fame) and Direct Edge announced that they would be merging next week, making themselves the second-biggest US stock-exchange (second only to the New York Stock Exchange). Oh Nasdaq – how quickly you are falling from grace!
That said – this is a slight misnomer, as BATS and Direct Edge own four stock exchanges between them, and they have no plans to integrate them. Meaning that they just formed the second-largest exchange holding company – but nothing more impressive than that.
2. Why Is Vladimir Putin so crazy?
If you want to read an article that doesn’t really answer that question, then you can read this one.
The basic summary:
- Russia is the world’s largest energy exporter (No. 1 in oil, and No. 2 in natural gas after the US).
- That position is under threat, now that the US has discovered fracking and plenty of natural gas.
- Oh – and Russia’s known oil reserves will only last for the next 20 years, next to Saudi Arabia’s 70 years and the US’s 90 years.
- This has made Putin very nervous about his power base.
- So Putin is now all antagonistic about Edward Snowden, Syria and gay rights.
- In order to make the Russians think that he’s strong because he’s petulantly not doing what the US wants?
I guess stranger things have happened.
3. Investors make hay while Syria burns.
With all the talk of chemical weapons usage in Syria, defence contractor stocks have soared in the US. Here’s a graph of out-performance:
In the blue corner is Raytheon, in the orange is Lockheed-Martin. I really only know who they are thanks to the military court episodes in The Good Wife.
The point is: there’s clearly been growing anticipation of further wartime effort in the market…
My concern: how many now have growing vested financial interests in the wartime effort escalating?
4. The Debt Ceiling: Here We Go Again
The US Treasury has announced that they should hit the ceiling again sometime in mid-October. As usual, the Republicans are demanding more spending cuts in exchange for raising the limit; and the Democrats are demanding no conditions to the limit-raising.
And once again, Obamacare sits at the core of the discussion.
It’s almost boring.
5. Vodafone-Verizon discuss their break-up.
Vodafone owns about half of Verizon Wireless, and has announced that it is in talks to sell its 45% stake in Verizon Wireless to Verizon Communications. The ballpark estimate of the selling price is around $125 billion.
The interesting part would be to try and explain why it’s happening. Verizon Wireless is the largest cellphone carrier in the US by market share. That market is expected to grow, apparently – as more devices become reliant on cellular data networks for their internet access… So it’s “obvious” why Verizon Communications wants to buy Vodafone out.
Only, Vodafone would only be selling out if it was not so obvious, otherwise it would just keep its stake…
It’s a $125 billion bet.
6. The Indian rupee goes diving.
The Indian government has its work cut out for them, as the Risk-Off trades continue to hammer the rupee (here’s the link to my earlier post on Risk-On, Risk-Off trading).
7. Nissan promises us a self-driving car.
Harry September 6, 2013 at 13:30
Once again awesome articles this week… just one point though. Since when is Russia the number one oil exporter? Doesn’t this claim go to Saudi Arabia?Reply
Jayson September 6, 2013 at 13:57
Thanks Harry! That claim comes straight from a Bloomberg Businessweek article. I was also shocked! Maybe I should have wiki’ed to check…Reply
Harry September 9, 2013 at 12:06
No worries… keep up the good work. I finally understand what the ALSI is. Gareth would be so happyReply
Jayson September 9, 2013 at 12:14
PS: I checked. Here’s the wikipedia entry (seems Russia is number 1!). And if you really want some discussion on the subject, there’s this Forbes article.
Hope that helps!Reply