Merger Mania
06/02/2014 | | econ70, Economic forecasting, economist on radio, economist on TV, eisenberg and economics, Eisenberg and housing economics, Eisenberg and public speaking, Elliot eisenberg, funniest economist, funny housing economist, Graphsandlaughs, graphsandlaughs and eisenberg, housing sales, MLS, mortgage banking, Multiple listing service, politics and economics, Public speaking economist
Given slow growth, low interest rates, firms with record cash holdings and high stock prices, the record $650 billion in mergers and acquisitions announced YTD isn’t surprising. It’s safer to buy than build, and if done right, mergers boost profits by eliminating redundant staff. However, in the short run, mergers rarely lead to employment growth or plant construction, thereby limiting the financial gains to investors and not the labor market.