How easy it is to focus on the tortured talks of Washington. You don't have to do a lot of work. All you need to do is turn on the television and see two leaders who obviously despise each other talk about how his opponent wants to raise taxes on the middle class. We only need to know when they are coming on, not what they are going to say -- we have that nailed down -- and then we can watch, with awe, at how hedge funds come out of the woodwork to blast down the S&P 500 futures.I just wish they would make it even easier. I wish when Speaker Boehner would come on he would dispense with the formalities and say, "I would sell the S&P down 2% based on my talks today." Or the President should limit his comments to "You better bang out of some Apple (AAPL), and be careful of the 50-day moving average of the transports because Speaker Boehner wants to raise taxes on everyone rather than hit up the hedge fund managers for their fair share." Hedge fund managers should have to pay more given the annuity stream these two are generating. But then, every once in a while, the real world intrudes, and you realize that the indices that are bouncing around off of the sinking below in Washington are made up of stocks and that stocks actually represent the fortunes of real companies. Right now the real world is intruding in a big way with NYSE Euronext (NYX), Gardner Denver (GDI) and Alterra Capital Holdings (ALTE). The first, you know by nature, but probably not by reason. CNBC's own David Faber broke the story this morning that NYSE Euronext is in talks to be acquired by IntercontinentalExchange (ICE) for about $33 a share. We think of NYSE as the place at which equities trade. IntercontinentalExchange, however, most likely thinks NYSE Euronext is a worldwide futures exchange with an unfortunate equities business with too much overhead. I bet IntercontinentalExchange thinks it could come in, smash the paternalism of the place and just get its hands on the machines, rationalizing a growth business (i.e., the futures) while stemming losses in a no-growth business (i.e., the equities).
It makes sense as a terrific consolidation play, and it is something that is happening irrespective of Washington. The second intrusion of the real world into the surreal Washington world? Gardner Denver is in talks to be acquired by SPX Corporation (SPW). You may not know Gardner Denver, but it is integral to the oil and gas food chain because it makes air compressors. Oil and gas drilling is very much in bull market mode because of the combination of hydraulic fracturing and horizontal drilling, and SPX is a classic industrial good manufacturer that needs to have more exposure to growth. SPX could end up stealing Gardner Denver, which has been hit hard by the slowdown in natural gas drilling, for $4 billion, barely unchanged for the year. Still, it's a huge win if you bought it when Gardner Denver announced a shortfall earlier this fall and fell to $55. An impatient activist, ValueAct, obviously not focused on the charade in Washington, is getting the job done. Finally, there is Alterra, a very big reinsurance company that just caught a bid from Markel (MKL), a well-respected insurer that's always been undervalued. Markel is picking up Alterra for $3.1 billion, a nice chunk of change, yet it seems as if the market didn't even notice. And that's really the point. Three big deals, three that happened without worries of fiscal cliffs and off-again/off-again talks. Real money changing hands. Real wins to be had. If anybody cares to have them.