by James Corbett, The International Forecaster:
As bombs begin to fall on Syria, the U.S. stock market also begins to dive, with both the Dow Jones and the S&P edging off last week’s Fed-fueled high. What’s the market take on it? Big Pharma’s to blame by way of Burger King.
In the wake of the Burger King Boondoggle that saw the King conquer Tim Horton’s and move his throne to Canada, the Treasury Department has started a crackdown on “corporate inversions” that would merge companies with overseas acquisitions to avoid American taxes. In effect the Treasury is closing the barn door behind the Burger King cow on a number of U.S. companies that were planning to do just that, including AbbVie and Medtronic, which had the two biggest inversion deals in history planned. The rules will eliminate, amongst other things, the ability of such “inverted” corporations to get foreign cash without paying US taxes through so-called “hopscotch” loans. This is spooking the market right now, which is worrying how this is going to eat into the bottom line of what could have been lucrative deals. The primary impact is on health care stocks with a secondary impact on financials, which could have raked in the merger fees if the deals went ahead as planned.
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