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While Washington Stews, You Can Cash In on the Biggest "Tax-Inversion" Deal in History

Back in June 2012, we recommended that you pick up shares of Big Pharma player Abbott Laboratories Inc. (NYSE: ABT). The reason: Abbott was planning to split in two at the end of the year, meaning folks who took our advice would end up with stakes in two companies for the price of one.

There was more than bargain-basement thinking at work here.

You see, these corporate breakups – known as spin-offs – have a habit of turning into market-beating profit plays. And the newly minted spin-off firms often end up as takeover fodder – also at big profits.

Abbott followed part of that blueprint.

  • US Economy

  • The Big Banks On Trial, Again It looks like the big banks aren't out of the woods from past indiscretions yet. Just this week the most powerful court in Europe has accused 13 major global financial institutions (many US based) of colluding back in the heady days that led up to the 2008 financial reckoning.

    But that's only the tip of this high-end iceberg...

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  • The Latest Obama Outrage: the Family's $100 Million Vacation Flip flops Q

    How much do you spend on your summer vacation? American households usually spend about $1,200 per person on summer vacations, according to a recent American Express survey.

    Presidents spend more on their vacations than you or I. They have to. Air Force One and security does cost more than loading the Honda and heading to the beach.

    Here's how much some recent presidents spent our tax dollars on vacation.

    Ronald Reagan spent most of his free time at his California ranch. Taxpayers covered the cost of approximately $8 million for presidential travel during Reagan's first six years in office, according to the Los Angeles Times. That amounts to $1.3 million a year.

    For George Bush the cost of flying Air Force One to his Texas ranch was approximately $56,800 per trip, for each of the 180 trips according to Media Matters. President Bush spent Christmas during his two terms at the White House so his staff and secret service could spend the holiday with their family, according to Conservative Byte.

    Now Obama plans to blow away all previous presidents' leisure travel costs on our dime with a better than Disney World extravaganza trip to Africa.

    However Obama had to cancel the safari because of the need to fill the surrounding jungle with snipers to guard the president from wild animals!

    To continue reading, please click here...

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  • How Big Corporations Are Destroying the "Free Market" Business problems As an economist, I wince whenever I hear someone say that we live in a true free market.

    The reality is we live in a semi-free market where regulation stifles business and corporate money influences and distorts what would normally be a highly competitive marketplace.

    And over the last two decades, the situation has only gotten worse for consumers, producers, and defenders of the so-called "free market."

    From 2008 to 2010, 30 major corporations paid more money in lobbying fees than they did in taxes, according to the Public Campaign.

    But while traditional lobbying once centered on altering tax rates and encouraging legislation to liberalize and deregulate the economy, it has now evolved into a competitive weapon for companies trying to box out competitors and raise barriers to entry in their markets.

    It's a business phenomenon that I like to call the "Rise of the Fifth Rail."

    You see, in traditional markets, companies compete on four specific principles: Price, product quality promotion, and place (market access). These principles are known as the "four P's."

    The first three are self-explanatory in that customers want the highest quality product at the cheapest price. Companies use promotional techniques to instill a need for its products and do so by marketing against the offerings of a competitor.

    The fourth principle centers on a company's ability to reach new markets and still provide low prices for high-quality products. A strong coordinated distribution network tends to make this possible.

    Naturally, when all four work together, you end up with a company like Walmart (NYSE: WMT), which has the ability to provide low, everyday prices due to its best-in-class distribution network.

    But over the last few decades, this new phenomenon of using lobbying as a competitive tool has altered the course of market economics, and driven fair competition into the ground.

    And that phenomenon is rotting the American free market from the inside.

    To continue reading, please click here…

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  • It's Enough to Make Your Blood Boil According to Shah Gilani, the usual suspects are at it again and nobody but Elizabeth Warren is willing to push back. Read more... Read More...
  • Check Out Who's Hiding $32 Trillion in Offshore Accounts Treasure chest H Emails uncovered by British media and a DC-based group show $32 trillion has been hidden in offshore accounts. Guess who the culprits are... Read more... Read More...
  • A Simple, Scary Way to Neuter Goldman Sachs and Friends  Two Senators have just introduced their own TBTF bill. It stands for “Terminating Bailouts for Taxpayer Fairness” and it’s a thing of beauty. Read more... Read More...
  • There is No Such Thing as a "Safe" Big Bank Shah Gilani pulls back the curtain on dangerous big bank shenanigans. The bottom line: The 2008 financial crisis could happen all over again. Read more...

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  • The Next Bank Meltdown Won't Be an "Accident" Do you want the truth about what shape banks are in right now? Sure you can handle it? Shah Gilani explains why nothing has really changed. Read more... Read More...
  • Paul Krugman May Be the World's Last Flat Earth Economist Nobel Prize-winning economist and New York Times columnist Dr. Paul Krugman is at it again. He claimed earlier this week that fixing the deficit is important, but added that "doing it now would be disastrous." He also observed that the 10-year U.S. debt situation isn't really all that bad.
    I don’t know how he can make that argument with a straight face.
    For five years now, Dr. Krugman has argued that increasing U.S. government spending is vital to our nation's recovery. And for five years he's been dead wrong.
    Dr. Krugman claims that "we" just haven't spent enough money... yet.
    Here's why that makes him very dangerous... Read More...
  • Why There's No Real Inflation (Yet) According to Nobel Prize-winning economist Milton Friedman, "inflation is always and everywhere a monetary phenomenon."
    Well, apparently not...
    There's certainly plenty of cause for inflation today. Every central bank in the Western world is holding interest rates down, and almost all of them are printing money like it's going out of style. And the big deficits governments were running should be making inflationary matters even worse. Taken together, monetary and fiscal policies are far more extreme than they have ever been.
    But today inflation is only running at around 2% - well below where it should be, according to Milton's monetarist theories.
    What does it all mean? Read More...
  • Why The Fiscal Cliff "Deal" is Spelled P-O-R-K Savings piggy bank

    Behind the scenes of the Fiscal Cliff debate, there was plenty of f-bombing, poison pilling, and grandstanding leading up to the deal - and that was before the members of Congress and the Senate actually got serious with their usual ultimatums, followed by earnest- looking sound bites and posturing. But what gets me really riled up is the amount of "pork" contained in the bill...

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  • Why Japan's "Lost Decades" Are Headed to America in 2016 It's only been a little more than a week since Shinzo Abe won election as Japan's latest Prime Minister in a landslide-election victory and the pundits are already lining up telling investors to "buy Japan" because it's "dirt cheap."

    The hope is that Abe's promises of fresh stimulus, unlimited spending and placing a priority on domestic infrastructure will be the elixir that restores Japan's global muscle.

    As a veteran global trader who actually lives in Japan part time each year, and who has for the last 20+ years, let me make a counterpoint with particular force - don't fall for it.

    I've heard this mantra eight times since Japan's market collapsed in 1990 - each time a new stimulus plan was launched - and six times since 2006 as each of the six former "newly elected" Prime Ministers came to power.

    The bottom line: The Nikkei is still down 73.89% from its December 29, 1989 peak. That means it's going to have to rebound a staggering 283% just to break even.

    Now here's the thing. What's happening in Japan is not "someone else's" problem. Nor is it something you should gloss over.

    In fact, the pain Japan continues to suffer should scare the hell out of you.

    And here's why ...

    The so-called "Lost Decade" that's now more than 20 years long in Japan is a portrait of precisely what's to come for us here in the United States.

    Perhaps not for a few years yet, but it will happen just as we have already followed in Japan's footsteps with a "lost decade" of our own.

    The parallels are staggering.

    To continue reading, please click here...
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  • Here's What President Obama's Win Means For Your Money Bitter, negative, expensive...I am hard pressed to find any positive adjectives describing this year's presidential campaign.

    Evidently, the markets are struggling, too.

    As was widely expected leading up to the election, all of the major averages got slammed in early trading on news of President Obama's victory. Just over an hour into yesterday's session, the Dow dropped 262.51, the S&P 500 tumbled 27.58 and the tech- laden Nasdaq fell 59.55. Oil tanked 2.95% and $2.62 per barrel to $86.08 while 10-year bonds saw yields plummet 6.20% to 1.63%.

    O-bummer.

    There is a bright side, though. Now that all the hoopla is over, investors can get down to business.

    Here's what I'm expecting:

    To continue reading, please click here... Read More...
  • What the Last Roman Emperor Would Tell President Obama Today Over the course of 700 years, the ancient Roman Empire grew from a small republic to one that stretched from London to Baghdad at its peak.

    As one of the world's first true superpowers, the Empire's achievements included the world's first standing professional army, economic prowess, intellectual growth and governance principles that are commonly regarded as the basis for modern society.

    But it is also remembered for its spectacular collapse in less than a century under the weight of bad debt, an overextension of the Empire, a collapse of morals that led to a deluded and self-absorbed political elite and reckless public spending that far outweighed collections.

    Given the parallels to our situation, I can only imagine what Romulus Augustus, widely considered to be the last of the Roman Emperors, would tell President Barack Obama today about how to prevent the wholesale destruction of our own "Empire."

    But it would probably go like this...

    Cara praeses Obama, (Dear President Obama)

    Like mine, your world is changing fast. No doubt it's very different from the one you thought you'd inherited. Your success will depend on new thinking and an eye to the future taken from lessons of the past.

    I wouldn't be offended if you have never heard of me.

    I oversaw the dying days of what you know as the Classic Western Roman Empire. My fall in September 476 marked the end of centuries of greatness and the fall of ancient Rome.

    Some historians consider my departure as the beginning of the Middle Ages. I understand the nature of collapse: how it begins, how it progresses, and where it all ends.

    As a historical footnote to a once great empire, here's my advice to you, Mr. President.

    To continue reading please, please click here...

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  • How the Fiscal Cliff will Deal a Blow to U.S. Defense Industry The fiscal cliff is taking down more than U.S. taxpayers - it will tear through the U.S. defense industry.

    At the end of this year, current tax policies are set to expire and new ones will go into effect at the start of 2013. What Americans can expect if the policies are not extended is a painful combo of tax increases and spending cuts that will thrust the struggling U.S. economy back into a recession.

    If U.S. lawmakers fail to act, scores of economists agree what we'll get is a $600 billion drag on the already sluggish economy. The tax implications have been widely discussed, but there has been little chatter about the impact on the defense sector, which stands to sorely suffer since it is subjected to half of the proposed spending cuts.

    To continue reading, please clich here... Read More...