{"id":16495,"date":"2016-01-15T06:40:04","date_gmt":"2016-01-15T11:40:04","guid":{"rendered":"http:\/\/olduvai.ca\/?p=16495"},"modified":"2016-01-15T06:40:27","modified_gmt":"2016-01-15T11:40:27","slug":"hey-wall-street-this-buds-for-you","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=16495","title":{"rendered":"Hey, Wall Street\u2014\u2014-This Bud\u2019s For You!"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"http:\/\/davidstockmanscontracorner.com\/hey-wall-street-this-buds-for-you\/\" target=\"_blank\">Hey, Wall Street\u2014\u2014-This Bud\u2019s For You!<\/a><\/h3>\n<p class=\"entry-meta\">The hordes of\u00a0Washington politicians promising to boost the nation\u2019s\u00a0economic growth rate\u00a0and the\u00a0posse of\u00a0monetary central planners and their\u00a0Keynesian economists (excuse the redundancy) lamenting\u00a0that\u00a0\u201cescape velocity\u201d appears to have\u00a0gone\u00a0MIA\u00a0have one thing in common. To wit, they have never looked at the chart below, or don\u2019t get it if they have.<\/p>\n<\/header>\n<div class=\"entry-content\">\n<div class=\"pf-content\">\n<p><em><strong>Plain and simple, the sum of Washington policy is to induce the business economy to eat it seed corn and bury itself in debt.<\/strong>\u00a0<\/em>Capitol Hill does its part with a tax code which provides a giant incentive for debt finance, and the Fed completes the job through massive intrusion in the money and capital markets. The result of systemic financial repression is\u00a0deeply artificial, subsidized interest rates and free money for carry trade gamblers\u2014\u2013distortions which have turned the C-suites of corporate America into stock trading rooms.<\/p>\n<p>As a case in point, the $46 billion of bonds sold by the owners of Budweiser last night where priced at a ten-year yield of 3.67%, which means that after taxes and inflation, the company\u2019s borrowing cost was hardly 1%.\u00a0Yet, as\u00a0explained more fully below, the only point of this massive offering was to fund with nearly free long-term capital\u00a0the huge payday for\u00a0speculators in SABMiller stock that will\u00a0result from the $120 billion\u00a0Anheuser-Busch InBev (BUD) takeover transaction.<\/p>\n<p>But\u00a0consider the\u00a0economic context. As\u00a0astounding as it may seem, US\u00a0net business investment in fixed assets last year was\u00a0<em><strong>10% below its turn<\/strong>\u00a0<\/em>of the century level. And that\u2019s in nominal dollars\u2014-in real terms its down by nearly one-fifth.<\/p>\n<p>Moreover,\u00a0<em><strong>net investment<\/strong>\u00a0<\/em>is the right measure, and its not at all comparable to the what\u00a0Wall Street stock peddlers, who claim to be economists, are always bloviating about.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Hey, Wall Street\u2014\u2014-This Bud\u2019s For You! The hordes of\u00a0Washington politicians promising to boost the nation\u2019s\u00a0economic growth rate\u00a0and the\u00a0posse of\u00a0monetary central planners and their\u00a0Keynesian economists (excuse the redundancy) lamenting\u00a0that\u00a0\u201cescape velocity\u201d appears to have\u00a0gone\u00a0MIA\u00a0have one thing in common. To wit, they have never looked at the chart below, or don\u2019t get it if they have. Plain and [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[11471,5979,2120,11728,467,4401,860,865],"class_list":["post-16495","post","type-post","status-publish","format-standard","hentry","category-economics","tag-capitol-hill","tag-contracorner","tag-david-stockman","tag-inbev","tag-keynesian-economics","tag-merger","tag-wall-street","tag-washington"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16495","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16495"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16495\/revisions"}],"predecessor-version":[{"id":16497,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16495\/revisions\/16497"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16495"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16495"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16495"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}