Merge...acquire...buy...sell...deals, deals, and more deals. This month of May will see more new buyout deals bloom than any month in history. It is like the Chelsea Flower show! Buyouts so far this month total some US$82 billion. This is the 'hottest month' of deal making ever.
"Is deal frenzy nearing end?" asks the Wall Street Journal.
We don't know. But we also read that the US money supply is still expanding at a 14% annual rate - six times faster than GDP. All that moolah has to go somewhere. For the moment, it's going into deals. And the deal makers - such as über-dealer Goldman Sachs (NYSE:GS) - are making big, big money. Goldman's shares have gone up three times in the last five years.
And here comes a report that investors are more confident than anytime in the last five years. But at the same time, a lot of seasoned investors are beginning to speculate on the downside. The street hasn't seen so much short selling since 1931. Normally, people sell short at the beginning of a bull market. Prices rise and they expect them to come right back down again. But now we have a huge increase in short selling after the stock market has been running wild.
What to make of it? Again, we don't know...maybe it really is a new era....
Bill Bonner
The Daily Reckoning Australia
When will the M&A boom end? Leave a comment below.
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About the Author
Best-selling investment author Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter companies. Owner of both Fleet Street Publications and MoneyWeek magazine in the UK, he is also author of the free daily e-mail The Daily Reckoning.
