Back in the late winter of 2006 rally, I was asking myself ,and indeed the list members, why was it that M&A activity was so fierce close to market highs rather than bottoms. One will note some very interesting answers and comments on the subject, although none really final and conclusive. At the time Merck was trying to take over Schering, only to be beaten on the final stretch by rival Bayer. Vivendi of France saw some aggressive purchases by funds almost at the same time of the Schering takeover and Thales witnessed some interesting movements on its capital structure. Now, 6 months later, Merck is back in the game, launching a 16b chf takeover bid on Serono; the bid , seemingly greeted with a large smile by the Bertarelli family, 75 percent owners of the company, comes with the stock markets close to their highest mark of the year. there are other rumors, gossip is growing ,at times literally like mushrooms — out of nowhere and after a heavy thunderstorm.

Of course some fierce selling of commodities and the Fed's keeping on hold breath and rates, have helped the bulls make their point. Cane lovers will note only a handful of markets are left behind , like tired bikers trying to catch the group uphill, (namely the US market, and especially considering it from a none US$ point of view.)


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