Reading Murdoch’s Time Warner tea leves

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Global click-bait media is today a flutter about Rupert Murdoch’s incredibly big play on Time Warner summarised here by Chanticleer:

His $US80 billion bear hug takeover proposal for Time Warner is a sure sign that all of the impediments to mega deals caused by the global financial crisis are dead and buried.

The last time Murdoch was making headlines with a takeover offer was his emotional $US5.7 billion bid for Dow Jones & Co. About half the value of that deal was written off within 18 months.

The stars are aligned for a deal 13 times the size of the Dow Jones offer. Debt capital markets are offering the cheapest lending rates since 2007. Equity is about twice the cost of debt but big institutional shareholders have shown enthusiasm for supporting deals that promise growth.

One thing it certainly does not signify is the end of the GFC. On the contrary, it clearly illustrates that another round of under-priced risk is building to a crescendo.

The bearish blogosphere would have you think that that climax is near, excitedly pointing at the following chart:

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Fair enough, I guess, but why isn’t the $7 billion Hughes Electronics purchase from GM in 2003 on the chart? Couldn’t be because it was at the bottom of the cycle could it?

In fact, FTAlphaville provides a nice table with the history of Murdoch deal making which shows there really isn’t much of a pattern at all:

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Could the Time Warner acquisition signal the top of the market? Sure. Could it signal we’re entering the blow off phase of the cycle? Sure, that’d be my guess. Could it signal that the cycle has years to run? Sure. Could it signal that Rupert wears lucky red undies when making these bids? Sure it could.

5 Responses to “ “Reading Murdoch’s Time Warner tea leves”

  1. Cornflakes says:

    The idea of luck red undies for Rupert went when Wendi left.

    Looking at the other side of the coin, Time Warner’s merger with AOL was a clear sign that the Tech boom was getting out of control. How did that work out again?

    • Like I say, it looks like we’re entering blowoff!

    • Mambarino says:

      Rupert Murdoch owns Fox Noise. That’s all you need to know about this insane right-wing bloodsucker. His plan is to die the richest man on the planet before the crap impacts the fan.

      Toady he said ”If the sea level rises six inches, that’s a big deal in the world, the Maldives might disappear or something, but OK, we can’t mitigate that, we can’t stop it, we have to stop building vast houses on seashores.”.

      The problem with people like Murdoch, other than his sociopathic attitude to the rest of the planet, is his simplistic attitude to complex global issues that require an understanding of multi-dimensional problems.

      For example, in Bangladesh or indeed Florida, a rise of six inches effectively means that – despite the origin being freshwater glacial ice – there will be a huge number of estuaries and deltas that will become inundated with more saltwater inflow effectively pushing more brack water into freshwater resources that are already under pressure.

      In the event of flooding, that will contaminate agricultural land and reduce its fertility, possibly pollute the water table and aquifers that are important for potable water.

      In ecological terms, this can also be disastrous to wetland habitats and the food chain: river channels might lose the ability to support insect life, fish dependent on those insects will begin to suffer and then the food chain starts to be compromised.

      This isn’t an issue of how rich people will deal with the problem on Long Island; it’s how populations operating at the coastal margin and dependent on their environment in very tenuous circumstances can guarantee their long-term survival.

      Not that any of that would matter to a man whose business interests aren’t above hacking into the voicemail of dead teenagers.

  2. Mambarino says:

    That’s all we need: this toxic robber baron buying up more of the corporate media market and having a wider platform to push his nonsensical ideas, such as that climate change should be viewed with “much scepticism” and that “we shouldn’t be building windmills and all that rubbish.” :roll:

    Sweet Jeebus, I feel nauseous.

  3. Mayan says:

    It’s a sign of the Cowpocalypse, when our Bovine Overlords will slaughter all non-vegans!