Uh Oh…Two Nuclear Powers Start Bombing Each Other
India and Pakistan have never been close friends ever since the countries were divided into two separate states in August 1947, but now that they both possess nuclear weapons, one would really hope that they keep calm. Unfortunately, Pakistan just downed two Indian aircraft after India bombed what it called a terrorist training camp inside Pakistan. (Osama bin Laden was ultimately found and killed inside Pakistan.) The target, according to Bloomberg was a camp run by Jaish-e-Mohammed which claimed responsibility for the Feb. 14 suicide car bombing in Kashmir which killed 40 members of India’s security forces. So India wasn’t bombing Pakistan just for fun. So far, nothing else has happened, and let’s hope it stays that way. Meanwhile, one Indian airman whose plane was shot down, parachuted down into Pakistani territory and is now being held in Pakistani custody. Financial markets aren’t going crazy just yet, and US futures are down only moderately.
Goldman Sachs $1.9B in the Hole
The big investment bank, Goldman Sachs (NYSE:GS) may be in the hole $1.9 billion more than previously thought, after already setting aside $787 million in order to deal with lawsuits related to its 1MDB scandal, where Goldman employees attempted to bribe Malaysian state officials. 1MDB is a Malaysian sovereign wealth fund and Goldman was trying to get more business for it through bribery. Earnings last quarter were $2.3 billion, so even if the $1.9 billion figure is correct, Goldman is still in the black for the quarter.
AT&T Time Warner Deal Upheld By US Appeals Court
The AT&T (NYSE:T) Time Warner merger has been upheld by a US appeals court, to the chagrin of the US Department of Justice, which opposed the deal for what it calls monopolistic reasons. The ruling was unanimously made by a slate of three judges who rejected the DOJ’s arguments on antitrust grounds. The DOJ was not happy about this, saying that the original ruling ignored the principles of economics and common sense. The judges didn’t agree with this, saying, “The government’s objections that the district court misunderstood and misapplied economic principles and clearly erred in rejecting the quantitative model are unpersuasive.” So HBO now belongs to AT&T, along with some other stuff.
Housing Prices Climb At Slowest Pace in 4 Years
Some headlines are jumping the gun saying that housing prices have “slumped to a 4-year low” but that’s not the case, just clickbait, as the truth is that housing prices are still climbing, just at the slowest pace in 4 years. Much like the federal government calls a reduction in the rate of growth of spending a “spending cut”. The US Home Construction ETF (BATS:ITB) was down slightly yesterday, which wouldn’t be the case if home prices were actually declining in an absolute sense. If that were so, then homebuilder stocks would be in freefall as they were in 2007. They are still climbing at a 4.2% annual clip. As it happens, the ETF looks like it has put in a double top as of the beginning of 2018 and is now trending downward. Las Vegas is once again at the epicenter of the housing boom, with prices up 11.4% since last year. Runner up is Phoenix. This should go splendidly, just like it did last time. Grab your popcorn.
Wynn Resorts Fined $20M For Ignoring Steve Wynn Abuse
The Nevada Gaming Commission has fined Wynn Resorts (NASDAQ:WYNN) $20 million for failing to address worker complaints against founder and former CEO Steve Wynn, who allegedly harassed several female nail salon workers for happy endings and various other sorts of endings while CEO of the company. He has since resigned as head of the company though maintains his innocence. Wynn Resorts settled with the Nevada Gaming Commission earlier, allowing it to keep its gaming license. The fine constitutes 3.4% of its 2018 earnings. Take that.