- What the AT&T verdict means
- The coming Golden Age of Fake News
- The Grand Unified Theory of Trump
- The reckless Fed
- China’s growing influence
Après AT&T, le Deluge
(Bloomberg Opinion) -- What a time to be alive, especially if you're an M&A banker or lawyer.
AT&T Inc.’s legal victory over the Department of Justice will let it buy Time Warner Inc. for $109 billion. It also rings a big, clanking dinner triangle for starving dealmakers, according to Tara Lachapelle.
The DOJ had valid concerns about the AT&T deal, Tara says. AT&T is buying Time Warner because Netflix Inc. is driving down the price of television content. The consumer may not be front-of-mind here.
Joe Nocera argues the DOJ case was weak, suggesting it smacked a bit of trying to find a legitimate reason to justify President Donald Trump’s desire to punish one Time Warner subsidiary and Enemy of the People (meaning Donald Trump), CNN. Now, however, the DOJ may be leery of prosecuting other, perhaps more-deserving antitrust cases. (Cough, FAAMGs, cough.)
And now that we’ve set the sky as the limit for vertical deals such as AT&T's, maybe we can test the horizon too. Anthem Inc. + Humana Inc.? Why the heck not? asks Max Nisen.
Yesterday, Brooke Sutherland noted we’re on pace for a record number of “megadeals,” worth more than $10 billion, this year. It now seems safe to say we'll hit that record – and not all of these deals will be as consumer-friendly, or well-considered, or cheap, as AT&T-Time Warner.
Fake News: The Movie
For most of the history of the moving picture, we’ve mostly been able to trust what we see with our eyes (fuzzy images of Bigfoot and the Loch Ness Monster notwithstanding). We soon won’t have such confidence any more, now that video-faking technology has advanced so much that all kinds of highly convincing, “deep-fake” videos can be created, Bloomberg’s editors warn. We are not yet ready for this Golden Age of Fake News.
The Grand Unified Theory of Trump
Whether you are pro- or anti-Trump, it’s always tempting to attribute deeper motives to his day-to-day activities. Trump’s trashing Canada? He must be a Russian sleeper agent. He’s tweeting angrily about Robert De Niro? He’s just playing 3D chess, setting the stage for peace with a denuclearized De Niro.
But we’re all overthinking this, writes Tim O’Brien. There are just two things that motivate Trump: self-aggrandizement and self-preservation. Every one of his behaviors can be explained by those two things.
Inverted Yield Curve Watch
The Federal Reserve today raised its key short-term interest rate, along with expectations of more hikes to come. Once the Fed gets its policy rate back to “neutral,” whatever the heck that is, then it will watch for either inflation or economic weakening. Inflation typically triggers Fed hikes. But Conor Sen suggests the Fed should let inflation run hot a while this time, as it might be more a result of supply constraints than high demand.
In any case, Brian Chappatta tried to warn the Fed to be careful about raising market expectations of higher rates, or risk losing its flexibility. The Fed didn’t listen. Partly as a result, the “yield curve” – the spread between short-term and long-term interest rates – is closer to zero than it has been since 2007. An “inverted” curve – when short-term rates are higher than long ones – is a recession signal.
How Do You Solve a Problem Like Big China?
This assumes, of course, that the U.S. still has allies. Trump is not helping the cause by trashing America’s pals at the G-7 and elsewhere; such behavior only bolsters China’s influence, writes Mihir Sharma.
Bond shaman Jeff Gundlach sees the yield on the 10-year Treasury note hitting 6 percent by 2020 or 2021, writes Brian Chappatta. that would be … quite a move. Of course, people have been saying stuff like this for the past 10 years or so.
Why isn’t Wall Street freaked out about Trump? Because so far he is just predictable background noise. – Barry Ritholtz
Since the crisis, in their quest for yield, investors have crowded into thinly traded investments. That’s going to make the next financial crisis worse. – Satyajit Das
The risk of the U.S. cutting off the head of China’s ZTE Corp. is that it springs forth a bunch of mini-ZTEs. – Tim Culpan
Note: Please send simulations, suggestions and kicker ideas to Mark Gongloff at firstname.lastname@example.org.
Like Bloomberg Opinion Today? Subscribe to Bloomberg All Access and get much, much more. You'll receive our unmatched global news coverage and two in-depth daily newsletters, The Bloomberg Open and The Bloomberg Close.
©2018 Bloomberg L.P.