Beware the insurmountable barriers to entry which the retailing of organic tomatoes bestows on its business owner. We mentioned this situation whereby the Whole Foods/Wild Oats completed M&A was under fire since the "deal would harm consumers who shop at "premium natural and organic supermarkets."", treating this business as if it were impenetrably walled off from the rest of the economy. 

U.S. Circuit Court Judges Janice Brown and David Tatel "agreed that this Court has the power to grant relief despite the merger having already taken place." That could mean either stopping further efforts to eliminate Wild Oats as a separate brand or possibly ordering Whole Foods to reconstitute Wild Oats, re-creating the same level of competition that would exist today if the merger had not taken place. That process, known as "unscrambling the eggs," is a rarely used remedy in antitrust law.

It would seem to make more sense just to let the merger happen, give it some time, and then see how badly luxury grocery shoppers are hurt rather than assume this will be the case. If not to allow for economic freedom to exist, then merely to set us up for the next round of hilarious opposition in say two years, whereby Whole Founds becomes accused of price gouging on life necessities such as Cornish Hens. 

But why wait for future comedy, when there's more nonsense to expose in the current situation.

The U.S. Federal Trade Commission also said that if the court ruled that the agency had a strong case against Whole Foods, the government would also seek to rebrand the acquired stores with their former Wild Oats signs and create an independent management team to supervise them.

So we could be on the way to national control of the organic and premium grocery industry, as to some this business seems too important for private market forces to control. Ahem.

For a simple way to just end the discussion with any naysayers, show them Whole Foods stock, (WFMI), it has been creamed, down massively from 52-week highs. Also, its all time high was in 2006, before the merger. Obviously a whole lot of people don't see some sort of invincible monopoly ahead due to Wild Oats being acquired! So why do a few judges see it this way? Someone should send them a WFMI stock chart, its been falling for years from its 2006 peak and speaks for itself. This debacle is complete baloney and unfit for the US.

(Vincent)

I've noticed a few pieces of good news starting to peek through, though still a lot of bad news out there. It makes me think an interesting book I read, called Anatomy of the Bear. Its published by CLSA and looks the four worst bear markets of the 20th century, this one not included. What I like about the book is that it doesn't hit you with all kinds of vague pronouncements and conjecture as to when "the cycle has turned". It it pretty fact-based, simply recounting what happened step by step, piecing together the story from old news clippings. It provides a reader with news in chronological order both leading up to and following market bottoms. 

This means that the book is a useful read even if in the end you don't agree with the author on some points. Nevertheless, of all the information and analysis provided, I found the most interesting to be the authors conclusion that for each of the four bear markets analyzed, market bottoms did not come when bad news was at its peak. This sort of proves false the maxim that its the best time to buy when things look the worst. The interesting thing that the authoer found is that actually, for the four bear markets analyzed, what marked a market bottom was when good news was increasing, yet was being still being heavily discounted by the market. So just as bad news can get heavily discounted and ignored towards peaks, the author shows how market bottoms can be when good news in regards to signs of a turn around are already out there, but most simply don't believe them yet or just ignore them after being shellshocked by the bear market.

Now, the full week’s data are in, and it is looking certain at least that the credit markets are more open than they have been for at least a year and investor appetite is allowing for multibillion-dollar deals. Last week, companies raised $152.6 billion by selling debt to investors. That is the highest volume since the first full week of 2008, when volume was $176.3 billion, according to Thomson Reuters data.

It is a sign that investor nervousness has dispelled considerably since the near-total shutdown of the summer and fall, when bond investors were reeling from the unexpected collapse of Lehman Brothers Holdings and were reluctant to deploy their cash.
Now, big deals are packing the market. Of the 105 debt offerings last week, more than one-third, or 37, were bigger than $1 billion, according to Thomson Reuters.

Report from an auto consultancy saying auto sales could bottom in 2009.

The Northville, Mich., firm projected 2009 global sales would fall about 8 percent to 56.8 million units. However, CSM forecast 2010 sales would rise nearly 7 percent to 60.8 million units.

CSM said it expects 2009 sales in the U.S. to hit a 27-year low of 11.5 million, then rebound to 13.6 million in 2010.

Many thanks to a comment from Pej. It turns out we have a fifth Dr. Doom. Peter Schiff.

His extremely bearish views on the U.S. Dollar, the United States stock market, bond market and the United States economy have earned him the nickname "Dr. Doom." ^[3]...

In an August 2006 interview Schiff generated much controversy when he repeated his long-held investment thesis: "The United States economy is like the Titanic and I am here with the lifeboat trying to get people to leave the ship ...I see a real financial crisis coming for the United States." On May 16, 2006 in debate on Fox News, Schiff accurately forecast that the U.S. housing market was a bubble that would soon burst.^[7] On December 13, 2007 in a Bloomberg interview on the show Open Exchange, Schiff further added that he felt that the crisis would extend to the credit card lending industry.

Thus Peter Schiff appears to have indeed laid claim to the alias Dr. Doom, in addition to Nouriel Roubini, Marc Faber, Stephen Roach, and Henry Kaufman. Though from a preliminary read of his views, his gloom and doom seems to have been de rigeur, in terms of a housing bust and excessive consumer credit. I feel a lot of people sort of acknowledged that US housing prices were quite high and that growth in consumer debt would have its limit. Twin deficits was another bandied about problem on the radar. But the real suprise was when US housing weakness caused damage in all sorts of seemingly random, far flung places, knocking unexpected companies into insolvency and freezing up credit markets as the entire financial system, globally, lost confidence in itself. Who thought that major US financial giants would be blown to bits within months by the eventual fall in housing? Anyhow, we now have five known Dr. Dooms. 

The idea for this came via a friend, and then I looked a bit more into it. Basically the spread between inflation protected US government bonds and standard US government bonds has become extremely small vs. history and even potentially nonsensical, which could be do to panic buying of US government bonds as money has sought a safe haven. Some investors might just have a mandate for plain bonds, rather than TIPs. Or perhaps there still isn't enough liquidity in the TIPs market to accommodate everyone.

Energy smart money buys into distressed Sandridge. (SD) Chesapeake Energy (CHK) also gets a dose of cash by selling assets to the same smart money.

In regards to US refiners still being priced for good times, in my view as per EV/Capacity analysis. If you have a bullish near term view on their industry, think we're going back to 2006-2007, then fine. The point I make is that if you think we're going back to a 1999-2002 environment, then US refiners such as VLO, TSO, HOC, and FTO still look a bit overvalued despite their massive declines this year. Original refiner piece here.

Great satire via the Onion.

Even CEO Can't Figure Out How RadioShack Still In Business

One of Day's theories about RadioShack's continued solvency involves wedding DJs, emergency cord replacement, and off-brand wireless telephones. Another theory entails countless RadioShack gift cards that sit unredeemed in their recipients' wallets. Day has even conjectured that the store is "still coasting on" an enormous fortune made from remote-control toy cars in the mid-1970s...
In the cover letter to his December 2006 report to investors, "Radio Shack: Still Here In The 21st Century," Day wrote that he had no reason to believe that the coming year would not be every bit as good as years past, provided that people kept on doing things much the same way they always had.
Despite this cheerful boosterism, Day admitted that nothing has changed during his tenure and he doesn't exactly know what he can do to improve the chain.
"I'd like to capitalize on the store's strong points, but I honestly don't know what they are," Day said. "Every location is full of bizarre adapters, random chargers, and old boom boxes, and some sales guy is constantly hovering over you. It's like walking into your grandpa's basement. You always expect to see something cool, but it never delivers."

Shares of M&A target Puget Energy (PSD) jumped last week as Washington state regulators finally approved the company's acquisition by Macquarie and a group of pension funds. Still, rather oddly, the shares are well below the $30 take out price (at $27 and change right now) for a deal that should be closing in 1Q09 as far as I have understood. Perhaps financing and Macquarie & Friends' commitment to the deal is in question, but hard to see how as we have large pension funds involved and the investors have waited patiently for a regulatory outcome, now in their favor.