From the Morning Desk - I'm Into M&A!

When we start to see mergers and acquisitions getting done, that is another sign that this bear market may be getting long in the tooth. It’s easy to forget that underneath stocks are real, living (living-dead zombies in the case of AIG), companies. They have employees and product or service lines and they produce stuff.

When deals start getting put together, it usually means two things are starting to work. The first is that although credit is still very tight, it is showing signs of life and that’s going to be important to finance these multi-billion dollar deals. The second is that it makes good fiscal sense to acquire companies on the cheap. And as dire as the economy is right now, companies are getting optimistic and are starting to think about the business two, five or ten years out. And when they can buy their competitor for half or a third of the price of 2007, they are finally beginning to pull the trigger.

Look around. We are seeing major M&A in biotech. And today we saw IBM making a bid for Sun Microsystems for $6.5 billion. That’s a good deal. JAVA alone is worth at least $6 billion and Solaris UNIX would fit in at IBM perfectly. Let’s watch to see what HP or Dell is going to do. Technology deals make sense as these companies actually have a lot of free cash sitting on their books.

Oh and remember to follow the money trail. Who’s going to finance these deals? Take a wild guess.

I know Mr. Popular, Nouriel Roubini, who is obviously the genius de jour, may not agree with these ideas, but folks we keep watching the same movie over and over again. I don’t want to stick my neck out and say that this is a new bull market. But if you watch closely, you can see that there are things going on this time that nobody is paying attention to. And they are all good things.

Folks, this is Johnny Newsmaker signing off. We now return you to your regularly scheduled programming… "When Black Swans Attack!" only on Ranting-TV…