M&A Bonanza And Its Implications...

Sometimes I wonder whether the recent surge in M&A activity (both in the U.S. and across the Atlantic) is not going to spell the end of the 3.5-years old bull market -- just like it did in 2000. It's not just one or two sectors but it's actually across the board -- companies are simply wallowing in cash and are sallivating to throw money at juicy morsels of business.

As you know, I view all of this with great suspicion. History does repeat itself as people do make the same mistakes over and over again. The Fed is still raising rates (and some savvy observers even think they are not even close to stopping), which should increase volatility, which, in turn, should make the market environment a lot less savoury than we've had it for a while. Bernanke's Fed may well be trying to administer a painful medicine to asset price inflation (read here stock and real estate markets), which hasn't worked so far. I don't think the Fed will lose this fight... Do you?