On February 15 Deutsche Boerse AG slipped a $9.53 billion all-stock bid on the "finger" of the New York Stock Exchange. If approved, the merger would create what one news site called "the Goliath Bourse" -- or the largest stock exchange on the planet.
So, there's no time like the present to start learning a few key German phrases to welcome Wall Street's would-be financial in-laws. The four expressions below make for a fitting introduction:
Wunderbar: "Wonderful," "super," "out of this world."
According to the mainstream experts, the creation of the behemoth German/American bourse is an UBER-bullish event, and reflects the global economic recovery. Here, the following news items capture the overall optimism surrounding the merger:
- New York Mayor Michael Bloomberg: "This is one of the better things for New York because what you'll do is you'll have the two strongest stock exchanges together... This is really very good." (NY Post)
- AND -- "It seems as if the market has a very strong bid under stock prices. [Mergers & Acquisitions] is a market that people are trying to get back involved with." (Bloomberg)
Doppelganger: "A double, or look-alike."
The mega-deal-zeal surrounding the potential Deutsche/NYSE merger is a spitting image of another time in recent financial history: the year 2007. Back then, M&A activity had soared to an all-time record high, valuing over $1.33 trillion. And much like today, the main focus of consolidation was on global unification. "Merger Mania Is Back With A Vengeance" said a March 30, 2007, Independent cover story, as every one from airlines to metal mines, and banks to bourses aimed to bring east and west together.
The culminating event came in April 2007, with the $14 billion merger of the NYSE and Euronext to create the first trans-Atlantic financial market AND largest stock exchange in the world.
Blitzkrieg: "Lightening-like destruction" and "obliteration."
Three months after the finalization of the NYSE/Euronext union -- in July 2007 -- the first cracks appeared in the US stock market. In October 2007, the DJIA peaked to usher in its most devastating decline since the Great Depression, and with it came the credit market bust, housing collapse, and shattering, across-the-board global market meltdown.
Gestalt: "The whole is greater than the sum of its parts."
While the mainstream pundits view the February 15, 2011 Deutsch/NYSE bid in the context of the current global economic rebound, our analysts take into account the entire picture of past, present, and future. Elliott Wave International has long since identified a historical pattern in the global urge to merge, and first touched on the matter with great urgency over a decade ago in the February 2000 Elliott Wave Financial Forecast.
That February 2000 issue went live two weeks after the January 14, 2000, union of AOL and Time Warner -- a $3 billion deal hailed world over as "The Merger of the Century." Our analysts offered this contrary point of view:
"One of the main ways companies express optimism is by taking over other companies. Such activity is indicative not of minor bull market tops, but of ones that preceded prolonged and devastating bear markets... There are so many reasons to suspect that the union of AOL and Time Warner will mark the end of the M&A boom... and market top."
The day of the deal -- January 14, 2000 -- also marked the day of the DJIA's all-time peak that remained in force for six years.
The same bearish chords were struck again, in the months prior to the April 2007 NYSE/Euronext union. There, the December 2006 Elliott Wave Financial Forecast issued this bold alert:
"Once again, the near panic to 'do deals' signals a massive reversal for mergers, and the market itself."
Our analysts have always said: "Memory loss is the number one cause of stock market loss. That's why we write this stuff down and compare what's happening to what was going on at" past turning points.
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