Monday Morning Quarterback
It's been a busy weekend for investment bankers around the world as billions of bananas have traded in bunches.
"It's not a question of enough, pal. It's a zero sum game, somebody wins, somebody loses. Money itself isn't lost or made, it's simply transferred from one perception to another."
--Gordon Gekko, Wall Street
Good morning and welcome back to Let's Make a Deal! It's been a busy weekend for investment bankers around the world as billions of bananas have traded in bunches.
Just another Manic Monday? Yeah, you could say that, with Goldman and TPG coughing up $25 billion for Alltel, Italian banks UniCredit SpA and Banco Popolare di Milando plunking down $37 billion in Lira lassoes, Hologic merging with CYTYC in a $10 billion marriage and Beijing wiring $3 billion over to their new buddies at Blackstone.
Man, if purple is the new pink, 'billion' must be the new 'million,' staggering in size and comprehensive in scope. These deals are large and they're cumulative, adding to the record-setting pace of corporate consolidation.
Minyan Michael Santoli offered a stellar summation in this week's Barron's, offering that while we're certainly extended in the near-term, we've not yet reached the 'silly' phase of this M&A cycle. As he so eloquently scribed, "Looking for huge upside here involves riding the pendulum from the rational to the silly, without a clear idea of where the border lies."
That's a valid observation, albeit a tough nut to crack. For in a globalized economy, borders are amorphous.
In other Monday Morning Musings…
S&P 1527 is the obvious beacon in the night as the S&P attempts to play ketchup in the headline grabbin' daily Dow Wow Wow's. It's almost too obvious not to happen, although the banks, as it stands, have yet to confirm the squirm. That, along with market breadth (which has lagged in recent sessions) remain the flies in the upside try.
Does anyone else think that it's interesting that the pre-market futures are flat given the eye-popping weekend activity? As with any post-expiration Monday, understand that the true market tone likely won't arrive until we start eyeing the lunch menus.
Shrek the Third took in $122 million in its first weekend, breaking the franchise's own record for best debut ever for an animated film. That record should last for a while, or at least until Hoofy and Boo make their big screen debut.
Asia has overtaken continental Europe as the top investment option for investors living outside their country of origin. A year ago, continental Europe was the most popular region, followed by the United States, Asia and the UK (Internaxx). Shocker, given the 85% pop in Shanghai, right?
Speaking of which, Billionaire Lee Shau-kee, chairman of Henderson Land Development Co., said Chinese shares trading on mainland markets are at an "unreasonable'' premium to those in Hong Kong, threatening to create "a bubble.'' This is the third warning in as many days, following Merrill's China chairman and the richest man in the region.
There's a slew of new supply coming to market this week as bankers look to pay for their new summer Carreras. Expect liquidity to be thin as the week progresses and folks eye the official summer kick-off party.
If you haven't checked out our latest installment of Separated at Birth, start your week with a smile. They're awesome!
Television's JeffMacke®, MacroMaven
Stephanie Pomboy and Minyan Michael Santoli just pinged to lemme know how jacked they are for Wednesday night's Miracle in Manhattan. This won't be a Critter's Choice Style Soiree (not many things are) but it is for a worthy cause and it's an opportunity to share hugs and handshakes with our community as we enter the summer.
Join us for a "Miracle in Midtown"
Wednesday May 23rd... benefiting charities including the Ruby Peck Foundation for Children's Education