What we’re reading (1/18)
“Microsoft To Buy Activision Blizzard In All-Cash Deal Valued at $75 Billion” (Wall Street Journal). “The deal, if completed, would sharply expand Microsoft’s already sizable videogame operation, adding a stable of popular game franchises including Call of Duty, World of Warcraft and Candy Crush to Microsoft’s Xbox console business and its own games like Minecraft and Doom. Microsoft said the transaction would make it the world’s third-largest gaming company by revenue, behind China’s Tencent Holdings Ltd. and Japan’s Sony Group Corp.”
“Carlyle Co-Founder David Rubenstein Says ‘We’re Due For A Correction’” (Bloomberg). “‘We’re due for a correction,’ Rubenstein said Tuesday in an interview with Sonali Basak at the Bloomberg Year Ahead Summit in New York. ‘The markets have been very ebullient for quite some time. We’ve basically been having free money.’ Rubenstein said the U.S. economy is ‘generally in good shape,’ but with the Fed signaling four to five rate hikes this year, downward pressure on asset prices is inevitable.”
“After Another Great Year For Stocks, Peril Lingers” (New York Times). “‘There’s no place to hide,’ Melda Mergen, global head of equities at Columbia Threadneedle Investments, said during a presentation of the firm’s 2022 outlook. ‘Most of the markets are at the top of the bar in their current valuations.’”
“Europe’s Energy Crisis Will Trigger Its Worst Neuroses” (The Economist). “The gas-price horror movie is most terrifying for Eurocrats. The causes of the current energy snafu are hard to distil down to a single factor, says Georg Zachmann of Bruegel, a think-tank in Brussels. That leaves plenty of room to designate a scapegoat, and one candidate comes to mind. The European Commission regulates eu energy markets (mostly quite sensibly) and has made carbon neutrality a central plank of the bloc’s future (also sensible). Sound as its policy decisions may be, they have aggravated the current crisis. For example, shifting to coal to keep prices down is less of an option, since it would require buying expensive eu carbon-emissions credits.”
“Blackstone’s New Real Estate Play: The Rent-To-Buy Market” (Financial Times). “By promising tenants that they might one day own their own homes, [Lewis] Ranieri [of Liar’s Poker fame] and his team had created a rental business with economics like no other. Other corporate landlords had to hire legions of professionals to scout for properties to buy. But Ranieri set things up so that ‘the tenants were doing the sourcing for him’, says one person who heard the pitch.”
