According to Dealogic, the Americas accounts for 83% of global acquisition related bonds, with a record $241.7 billion issued so far this year, compared with just $62.6 billion this time last year. In Europe, 38% of all high-yield bond issuance in the first half of the year has been related to M&A activity, according to Credit Suisse.
The brilliant and very successful Jeremy Grantham of GMO in Boston has called almost every major financial market debacle over the past several decades, but tends to be far too early. I am afraid that this time he is being too cautious, not on the end possibility of total systemic system wide collapse on a globally inclusive scale, but on the timing. Although, the four swearwords of “its different this time” have stood the test of time as the absolute pinnacle of investment hubris, I think that this time may, in fact, be a tad different. The idea that the individual investor, the dumb herd, must always come roaring in and create the true top may just possibly not be so this time.
The demographics and the selective nature of the financial markets today may have driven the herd to relinquish their coveted stupidity allowing the “smart” money to cash out at major market tops. This has been a predominately M&A, stock repurchase, leveraged corporate balance sheet high net worth and professional money manager driven rally practically from the day the Federal Reserve board members decided to place the bets along with the transnational capital class and turn their backs on the American people. But then a central bank designed, secretively birthed and owned by bankers and the financier class to serve only one master, the generic Wall Street interests, could only do exactly as the Fed has done.
This one is the big one. The whole world is engaged\, as it must be to have a truly transformative catharsis of crony, elitist financial fascism. The game is played out and the elites know it, but will do all they can to keep it going to the last second, as they suck the rest of the world’s lifeblood dry. Grantham is going to be right, but waiting for the last shoe to drop or the fat lady to sing is only a fools game.