Eq: Total Market

(New York)

Any stock investor, especially those who have been investing over the last twenty years, has noticed that there is a dearth publicly traded companies these days. Years of mergers and acquisitions, combined with a lack of IPOs, means there are many less publicly traded companies these days. Now, in what seems a strong move to change that, the SEC is considering making a new rule that would bar shareholders from suing companies, with all claims moving to arbitration instead. Doing so would eliminate one of the headaches of going public for companies, and would move the relationship between shareholders and companies to something more akin to clients and advisors, where arbitration is the norm.

FINSUM: This is an interesting move, but we do not think it is enough to push companies over the edge to IPO. It might also prove poor from a corporate governance perspective.


There has been a lot of talk lately about a coming US and global trade war. A lot of the focus has been on China, but also NAFTA. Well Bloomberg says the idea of a looming trade war is wrong, because it is already here. Over the last few months the US has already added some stiff barriers to trading with Canada. The moves show that the US is not afraid to throw up tariffs even in trading relationships that are pretty balanced.

FINSUM: Trump and the US government are now taking a very firm line on trade by increasing tariffs and launching investigations into potential violations. We like the idea of the making US trade more fair after years of undermining ourselves, but do have some concerns it could backfire in the long run.

(New York)

While everyone expects that we will have a recession at some point, and likely a significant correction, one of the big questions regards the depth. The Wall Street Journal has something to say about this issue, as the paper is arguing that the next recession is going to be brutal. The reason why is that the government won’t have as much firepower to stimulate the economy in coming years. That is because the newest tax package will send the deficit surging, and there will not be further room to cut once the recession takes hold, eliminating one of the government’s main weapons in combating recessions.

FINSUM: This makes sense to us. Several weeks back we ran an article where an analyst said he loved the tax cuts, but wished they could have been saved for the next recession. We couldn’t agree more.

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