Plenty of Mergers Look Ripe to Be Done

The bulls seem out of capital. I keep hearing that there is a huge pool of money on the sidelines. But then I read about how the California Public Employees' Retirement System or the state of Florida needs money and has to sell stocks. I read about the liquidations and I say to myself, "There are more sellers than buyers here." I look at what used to be Merger Monday, and all I see is some alleged deal in Australia, and I say "alleged" because it doesn't seem to me that the target is taking it seriously.

Instead of Merger Monday, I hear Concession Monday, as the private equity guys are saying, "You better give us concessions on the moronic deals we did, or we will really hurt you." In all of these, the trick is to simply say, "We will go bankrupt if you don't," which then forces a write-down in the position, and the funds that bought them are then totally sunk, because right now they are able to use bogus valuations to mask how poorly they are doing because the stuff is illiquid anyway.

Remember Merger Monday? I recall it because of the excellent note by Doug Kass about how it is too late to sell the cyclicals. What I don't understand is that now that the values are really there, many of them created because of endless redemption selling by hedge funds, no one does a thing

For example, why doesn't ABB (ABB - commentary - Cramer's Take) roll up McDermott (MDR - commentary - Cramer's Take), Foster Wheeler (FWLT - commentary - Cramer's Take) and Shaw Group (SGR - commentary - Cramer's Take) and Jacobs Engineering (JEC - commentary - Cramer's Take)? Why doesn't privately held Bechtel do so? Why doesn't Fluor (FLR - commentary - Cramer's Take)?

So many restaurants were taken private with private equity, but now we have stocks like Cheesecake Factory (CAKE - commentary - Cramer's Take) and Brinker (EAT - commentary - Cramer's Take) so low that it might actually at last make sense to buy them. Why doesn't private equity take advantage of these? Some of these are so low that they can be justified as cash on cash acquisitions.

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