Proof Positive of Merger Mania - TheStreet

Proof Positive of Merger Mania

Workers are getting involved, and that could be a sign of the end.
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In the "

What's News" section of

The Wall Street Journal's

front page, the paper's top editors -- those hard-bitten souls who have seen all there is to see in the world's financial markets and report for their page-one duty only because they are the best and brightest of the business media field -- tell us what will happen in the stock market this week.

I've learned to hold these little capsules, designed as quick reference points, in a depth of suspicion. But this morning's version is tops -- or, uh, bottoms.

Pontificated the

Journal

: "

Profit news is set to drive the stock market in coming weeks; slower growth may not upset the market, but warnings or big declines could roil investors."

You don't say. Slower growth may be no biggie, but warnings or big declines could be? Wasn't it lucky we read that? Thanks for parsing the future for me, boys and girls at the

Journal

; you really made it come alive and seem to make sense. Who says the perspective of newspapers will ever lose its relevancy?

Wait, this just in.

The Wall Street Journal's

new weather page says that if it drizzles, people will just get damp. Then again, a downpour might really soak people.

Yes, The Business Press Maven is starting off the week by making fun of the low mentality of workers at the

Journal

, mostly because I am worried about the low mentality of the workers at

Tribune

(TRB)

and now, quite possibly,

Chrysler

(DCX)

.

Proof of Merger Mania

Most importantly, my one big fear of the current market has been the chance that this merger game would turn into mania. I have been looking for signs, and I think I might have just found one, thanks to workers at Tribune and Chrysler, who just might be willing to bet their futures on the slim chance that deals for their companies will help them survive.

Though the business media, in their infinite lack of wisdom, haven't drawn a connection between the proposed Tribune and Chrysler deals (forgive them -- they were busy linking big earnings declines with sad investors), I unfortunately see the chance of a big one.

Workers at both incredibly troubled enterprises appear ready to accept -- in some cases even welcome -- big equity stakes in their respective deals. Don't get me wrong: Equity stakes for workers are, in normal circumstances, good for all concerned. Workers benefit, and with them as stakeholders, shareholders benefit too.

But

Chrysler and Tribune are in total chaos. They are the corporate equivalents of the fall of the government in Jakarta. Buying into one is like having an equity stake in the whooping cough.

And yet look at the quotes we've seen in the past week, at least from the Tribune side. If you think the top editors at

The Wall Street Journal

can have only a tenuous grasp of how the real world of business works, have you gotten a load of what some of these non-business journalists at Tribune are saying? Tell me if the most vulnerable out there -- the workers, journalists even -- aren't falling for the merger-mania bait, hook, line and sinker.

Workers have admitted to feeling flattered that the billionaires were interested in them. They've said that they welcome the upside that an employee stock ownership program gives. They've been relieved that the long era of merger rumors might be over.

None, of course, makes the case against putting retirement cash toward ownership, which you basically won't be able to cash out of (if there's even a dime to get out in the future, a highly debatable point).

Essentially, it looks like Chrysler workers might be headed toward a version of the same.

But desperation -- plus the temptation of playing a merger game that seems to be making everyone else rich -- starts leading to bad decisions at the market's top by the most vulnerable: workers.

Unlike most of the media, The Business Press Maven is unwilling to declare this a trend after two instances. But if workers keep helping ugly, bat-faced merger deals go through by giving up their futures for the unrealistic dream of future wealth, well, that, my friends, is as good an indication as any that we have reached the end of this deal binge.

Be careful out there. Workers especially.

Pick Your Camp

Separately, a

debate started this weekend as to which economy was better -- Bush or Clinton. Notice how I failed to use the possessive? That was for a reason.

You can take your pick of which is better, but remember that the discussion has all the larger impact of debating whether you're in Jennifer's or Angelina's camp.

Unless you are crediting former

Fed

Chairman Paul Volcker for slaying inflation a generation ago or Ronald Reagan for bringing down the top marginal tax rate by about 40 percentage points, no one gets credit, as a president is rarely at the ship's wheel, steering the economy.

Let's review: The only real evidence of liberal bias in the business media is the frequently expressed thought that the government has the force to have a wide impact on the economy. And so we get thousands of worthless articles about how a $50 billion spending package will help a $30 trillion economy or how a targeted tax cut to the wealthier among us will help -- or hurt -- an enormous, intertwined, international economy. Or whether Clinton or Bush has done a better job on the economy.

Those who have political leanings are unable to predict the economy accurately, so captive are they to one party or the other and to the thought that, when it comes to the economy, their guy did well and the other guy messed up.

The Business Press Maven is no Bush fan. But I'll take the sustainability of this economy over the 1990s any day. Oh, and I'm on Angelina's side.

At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.

A journalist with a background on Wall Street, Marek Fuchs has written the County Lines column for The New York Times for the past five years. He also contributes regular breaking news and feature stories to many of the paper's other sections, including Metro, National and Sports. Fuchs was the editor-in-chief of Fertilemind.net, a financial Web site twice named "Best of the Web" by Forbes Magazine. He was also a stockbroker with Shearson Lehman Brothers in Manhattan and a money manager. He is currently writing a chapter for a book coming out in early 2007 on a really embarrassing subject. He lives in a loud house with three children. Fuchs appreciates your feedback;

click here

to send him an email.