Faangs looking long in the tooth

Daily Analysis - 06/06/2019

Facebook and Google are in the US antitrust busters’ crosshairs

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For anyone who experienced the testimony of Mr. Zuckerberg before the US congress one year ago, or before the EC last July, the awareness that the good times had gone on for about as long as these capable and powerful legislators would continue to condone was palpable. The dismissiveness with which the Facebook chair dispatched the concerns of the very people poised to clip his firm’s wings was astonishing. And so the inevitable has come. The antitrust authorities in the US of which two are charged with this crucial task are the Federal Trade Commission and The Department of Justice, have announced their intention to investigate these two firms for antitrust violations. This means that the US government wants to know if these firms act in a way to restrict competition and or abuse their market positions. Think they will find from what to make a case? Google has fallen about 9% and Facebook about 11% since the announcement. The declines are likely to be only the opening salvos in the first major attempt to reign in the abuses of firms selling our personal information to advertisers at a huge profit and keeping all of that profit without sharing any with those from whom the data was obtained.

Oil falls on large inventory build


Yesterday’s Crude Oil Inventory report compiled by the International Energy Agency a body of the US government, reported that inventories increased by nearly 5 million barrels over the week than experts were expecting. This had the effect of continuing the price depression of Texas Tea to under $52/bbl. Curiously the two carrier assault groups and the strategic bombing task force in Qatar have dissuaded OPEC from any supply curtailments that will likely raise prices in the near future.

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FED hints at rate cutting, major US banks whine like scared schoolchildren


US banks, at the suggestion that the FED may POSSIBLY lower rates and thus reduce the margin between what banks charge for long term capital versus what they will have to pay on short term assets, predicted doom and gloom for their stock prices should a rate decline indeed occur. The FED will do what is in the interest of the US and world economies.

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US Stock Indices are up on the same “suggestion” of lower interest rates in the near term


It’s not as if the Fed said anything that specific, still stock traders are so used to the low interest rate environment as a built in stimulus to stock market buying that the mere whiff of further cuts sent investors to the purchase windows of all of the major US indices yesterday. This is likely short lived as the continuing threats and damage from the escalating trade dispute become more evident across the world’s economies. Growth in Korea and South Africa, not to mention China has showed significant declines and bode for a slowdown worldwide.

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