Big Bayer-Monsanto Merger Sign of Continuing Economic Health or Part of the End Game?
The Bayer-Monsanto merger tells us one of two things: the economy's as healthy as most economists tell us it is; or the topping action seen in the stock market since 2015 reflects an economy on its last legs. Which is it?
We recently noted that "one of the signs of liquidity drying up is the decrease in M&A deals." So doesn't this deal tell us liquidity's, well, still pretty liquid? That seems to bolster the argument that economic activity continues improving, albeit slowly. On the other hand, the issue is "decrease" in deals, not "cease." And in fact a big individual deal like this can very well be the symptom of the topping - i.e., final stage - of an economic expansion, even as the number of total deals declines.
Meanwhile, Monsanto's decided that Bayer's offer isn't up to snuff. They want more. So for those of you inclined to follow these financial dramas, you've got game. In the end, though, it's the shareholders of these two companies who'll really focus on what unfolds in the days to come.
For the rest of us, the more interesting action appears to be taking place in the gold market. Could the long-awaited correction for bullion and mining share prices (both of which - especially the latter - exploded in February and haven't looked back since) finally be here? Now there's something that might attract our hard-earned money if and when the price is right.
We recently noted that "one of the signs of liquidity drying up is the decrease in M&A deals." So doesn't this deal tell us liquidity's, well, still pretty liquid? That seems to bolster the argument that economic activity continues improving, albeit slowly. On the other hand, the issue is "decrease" in deals, not "cease." And in fact a big individual deal like this can very well be the symptom of the topping - i.e., final stage - of an economic expansion, even as the number of total deals declines.
Meanwhile, Monsanto's decided that Bayer's offer isn't up to snuff. They want more. So for those of you inclined to follow these financial dramas, you've got game. In the end, though, it's the shareholders of these two companies who'll really focus on what unfolds in the days to come.
The Associated Press reported that some Bayer shareholders expressed concerns about the new shares and whether it would dilute their holdings. Others worried about an expansion away from Bayer’s core pharmaceutical business, especially into the world of genetically modified crops. Some countries have blocked such seeds, and the business had been a target of environmental activists.If you're in that camp, you can read more about it HERE.
For the rest of us, the more interesting action appears to be taking place in the gold market. Could the long-awaited correction for bullion and mining share prices (both of which - especially the latter - exploded in February and haven't looked back since) finally be here? Now there's something that might attract our hard-earned money if and when the price is right.
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