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The recent market churn continues, as stocks give back yesterday’s gains. The bulls aren’t scared, the bears aren’t scared. There’s no fear out there right now, is there? But does that even matter any more, when the market doesn’t “rhyme” like it used to.
I take the word “rhyme” from Todd Harrison because that’s how it put in in the latest Cody Underground podcast and on the Scutify Scuttles Network when I asked him about his outlook for this stock market. You know Todd Harrison from Minyanville and of course from here on Marketwatch.
Todd said to me, “The market used to rhyme, through the interplay of technical analysis, fundamental analysis, psychology and the structural influences of [policy/economy].”
One of those how influential the Central Banks had become on the stock market, but the same concept applies to even the beer industry. The FTC and Department of Justice in this country also used to be a “balance of power” as Todd put it. But they aren’t any more. Maybe we should all just buy beer stocks because prices and quality are about to go in opposite directions, which will be very good for beer shareholders, but very bad for consumers.
And maybe that’s a large part of why the bulls just don’t get scared much any more. The giant corporations of the world are more powerful and positioned to profiteer in robber baron kind of ways than ever before.
So it’s okay to let two beer companies, through mergers, control more than 3/4 of the beer market but it’s not okay to let Amazon-meat Staples and Office Depot combine through a merger?
Read this article about consolidation in the beer industry with facts like this:
Anheuser-Busch and Miller obviously saw North America as the biggest hurdle to get over, as they’re the top two brewers in the region, controlling 70% of the market. To ease fears over market dominance, they crafted a side deal to sell to Molson Coors (NYSE:TAP) the 58% stake in the MillerCoors joint venture it doesn’t already own. Molson has agreed to pay $12 billion for the global rights to the Miller brand that will launch it into the No. 2 spot, with about a 25% market share.
Versus this article about the Staples/Office Depot merger anti-trust action with quotes like this:
The FTC sued to block the merger late in 2015, arguing that business customers would have much less bargaining power if Office Depot disappeared. “This deal would eliminate head-to-head competition between Staples and Office Depot and likely lead to higher prices and lower quality service for large businesses,” says FTC competition chief Debbie Feinstein. “Today’s court ruling is great news for customers in the office supply market.”
If you don’t think you face higher beer prices for the exact same reason the Debbie just explained (“eliminating competition” will “lead to higher prices and lower quality” beer), I might suggest otherwise.
Anybody wonder if the beer lobby/special interest spending might be 100x bigger than the office supply lobby/special interest spending, thus the difference in policy from the Republican Democrat Regime and their supposed enforcement of the anti-trust laws of this country?
And as you can see from the crashing Office Depot and Staples stock prices today that the market knows you want less competition so you can charge higher prices or crappier product. And the flipside of that is that the beer stocks aren’t going to rhyme much any more, at least not to decades past when they actually had to compete to profit.
So I was thinking about my long-held theory that virtually every policy in every major developed economy is all about maximizing profits for global corporations. as I thought about this over a Bud Light that I’d had in my fridge for a while but hadn’t gotten around to drinking. We need to accept that the policies of the Republican Democrat Regime and every other major developed nation and their central banks are pro-global-corporate. And that, as I’ve said for the many years now, is probably bullish for mega cap stocks and bad for society. That contributes to the lack of “rhyme” in the stock market. And the most important point of all this: Drink local craft beer — it’s the only way to fight the global beer oligopoly.
Be sure to check out Todd and myself on the Scutify Scuttles Network which you can also find on the Minyanville.com homepage. Subscribe to the Cody Underground Podcast on iTunes. And drink local beer.