Community | October 10, 2009 | 7 comments

Is the United States on Sale?

source: http://www.moneymorning.com/2009/10/07/foreign-takeovers/

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Ihatethemall
When more than $14 billion in merger-and-acquisition deals were announced in a single day last week, U.S. stock prices zoomed as investors embraced a suddenly more-bullish outlook.

As last Monday demonstrated, any increase in dealmaking activity tends to move markets higher: With the chance of windfall profits from a surprise buyout, investors tend to bid up shares of companies that might be buyout candidates. It was the explosion of M&A deals two years ago that helped propel the Dow Jones Industrial Average to its Oct. 12, 2007 record high of 14,093.08.

Last week’s flurry of deals was just the beginning: It’s the opening scene of a three-act financial drama that will take years to climax. For U.S. investors, however, the Second Act is the key: It’s where deep-pocketed foreign suitors step in and start snapping up marquee U.S. companies, prime real estate and household brand names. It’s where attentive investors can recoup some of the losses they’ve incurred in recent years with some windfall takeover profits.

And it’s where America goes on sale.

Paying the Tab
Make no mistake. This had to happen.

With U.S. budget deficits on the upswing, the dollar poised for a protracted tailspin and overseas investors searching for ways to diversify away from increasingly risky U.S. financial assets, don’t be at all surprised when foreign investors accelerate their purchases of U.S. assets.

The U.S. government has committed itself to more than $11.6 trillion in new programs, many of which will lead to increased – and choking – levels of U.S. debt.

The federal budget deficit for 2009 will reach a record $1.6 trillion, more than three times 2008’s record deficit of $455 billion, the White House Office of Management and Budget (OMB) and the Congressional Budget Office (CBO) said recently.
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7 comments // Is the United States on Sale?

  • larrysnotes
  • freecrack
  • frizzlecat
    • 0
      frizzlecat  

    • I didn't know America was considered a Super Power. Perhaps for Americans it is. Personally, I'm still living with the after-effects of the one I belong to. Can't say I've noticed any others since then. You guys have some things to learn about the whole Super Power business.

    • 2 years ago
  • CarolineS
  • Solarlife
    • 0
      Solarlife  

    • Is the United States on Sale?
      When more than $14 billion in merger-and-acquisition deals were announced in a single day last week, U.S. stock prices zoomed as investors embraced a suddenly more-bullish outlook.....good explainer, thanks.

      Well don't forget the thousands of companies around the world the US ruined with MCKinsey downsizing for fit for Wall street, fire the employees, later merge.

      Enough is enough, or as Bush said they (WS) are drunk, bring them to justice

      Popular economy Ihatethemall could work out , waiting for more...

    • 2 years ago
  • hunzedog
  • freecrack
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