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Todd Harrison
Nov. 10, 2010, 12:01 a.m. EST
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Market vets put their mouths where their money is
First Take "º
Start the speculation, deal-making is back
By Todd Harrison
NEW YORK (MarketWatch) "” I'll be the first to admit I'm no geopolitical expert; to be honest, I've got my hands full trying to map our next steps as the rules of engagement continue to change.
Evolving socioeconomic strife was, however, one of my primary themes for 2010. Read Minyanville's "Ten Themes for 2010."
As discussed in early January:
"In 2007, we previewed the deterioration of the middle class and the friction between the "?haves' and "?have nots.' In 2008, we forecast percolating societal acrimony and last year, we spoke of the migration towards social unrest and geopolitical conflict.
As this dynamic evolves, real risk remains across the spectrum of social strife. While this assumes many shapes and forms "” populist uprising, the rejection of wealth and an emerging class war "” we should remember that many global conflicts have historically been triggered by financial hardship.
An Israeli strike on Iran remains a top-line concern, as are uprisings in South America (Venezuela), protectionist policies in China (isolationism is the death knell of globalization), and saber rattling in Russia."
Fast-forward to present day. While some of those dynamics have proved true "” societal acrimony, including a bulls-eye on the back of Goldman Sachs /quotes/comstock/13*!gs/quotes/nls/gs (GS 166.55, -2.65, -1.57%) , BP /quotes/comstock/13*!bp/quotes/nls/bp (BP 43.00, -0.23, -0.53%) , superstar athletes, policymakers, and politicians, as well as select cases of social unrest, stateside and abroad "” others thankfully haven't, at least not yet. Read Minyanville's "The Short Sale of American Icons."
I'm reminded of these lyrics by Robert Hunter, as sung by the Grateful Dead:
"We used to play for silver now we play for life,
And one's for sport, and one's for blood at the point of a knife
And now the die has shaken; now the die must fall
There ain't a winner in the game, he don't go home with all, not with all."
The talented Mr. Hunter was right "” there are no winners in war. As the computer Joshua said in the movie "War Games," "The only winning move is not to play."
Dude, before you call me a barefoot tree-hugging pacifist, I realize the notion of perpetual world peace, while wonderful, is highly unrealistic. I ate dinner with Don Graham of the Washington Post a year or so ago and he asked what worried me most. Before I could self-edit, I said "World War III; global conflicts are usually born from economic hardship and that's where the needle seems to be pointing." Read Minyanville's "Lloyd's Wall of Worry."
I'm not talking nuclear Holocaust, mind you. That's, well... game over. I'm talking about global friction reaching a tipping point, sovereign nations protecting themselves, lines being drawn in the sand "” and those lines being defended.
As referenced above, protectionism is the "other side" of globalization and that makes this topic fair game for a financial forum. We strive to see both sides in Minyanville, even when the other side isn't particularly pleasant. Optimism and realism make for strange bedfellows but they beat the pants off ignorance and apathy.
As the dollar weakens, cash-rich companies are tempted to spend for growth. That's giving hope to Wall Street's deal makers who hope the recent M&A uptick is the start of something more, writes David Weidner.
12:42 p.m. Nov. 9, 2010
- tecnodog | 1:55 a.m. Today1:55 a.m. Nov. 10, 2010
"China's trade surplus widens more than expected to $27.1 billion, according to state media http://on.mktw.net/9JjcaV" 9:18 p.m. EST, Nov. 9, 2010 from MarketWatch
"Hong Kong stocks slip, as banks weaken; Hang Seng Index down 0.2% http://on.mktw.net/ajSms9" 9:04 p.m. EST, Nov. 9, 2010 from MarketWatch
"Japanese stocks open higher, with banks advancing; Nikkei Average up 0.9% http://on.mktw.net/bdqQYh" 7:10 p.m. EST, Nov. 9, 2010 from MarketWatch
"Videogame business at a crossroads http://bit.ly/aT95BI" 6:23 p.m. EST, Nov. 9, 2010 from MarketWatch
"RT @MKTWArends: Five reasons #business people make bad #politicians http://on.mktw.net/btZVWh" 5:54 p.m. EST, Nov. 9, 2010 from MarketWatch
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