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Jon Markman

SuperModels10/2/2009 12:01 AM ET

Global money thaw becomes a torrent

The evidence is there, in big deals and IPOs, in debt sales and stimulus spending: Money has started flowing again. And that could drive a fourth-quarter stock surge.

By Jon Markman
MSN Money

Money is on the march -- and money in motion makes everything better.

How many dollars are in circulation?

How many dollars are in circulation?

I know it's hard to imagine this after last year's calamities. But just keep an open mind. Just read the international news wires for a few minutes, then close your eyes and use your imagination. Can you not see dollars, yen and euros flooding the global financial arteries in the greatest acceleration of deal making, corporate expansion and infrastructure construction in a decade?

Money is on the march -- and money in motion makes everything better.

From Tokyo to Sydney, from New York to Shanghai, consumers may not be swarming retailers quite yet, but international trade data show that manufacturers are begging for product from suppliers and that suppliers are begging for raw materials from their commodity sales agents. As demand for inventory escalates amid gently rising demand from consumers, the global economy is ever so slowly healing from last year's devastating wipeout.

And most of all, credit -- the sweet-smelling lubricant of modern markets that makes transactions friction-free -- is seeping in. It may not be reaching the consumer in great quantities yet, but it will, throwing all the naysayers, muddle-throughers, skeptics and complainers for a loop.

First though, as I've reported previously, credit is going to companies as the great global debt machine whirs back to life amid a renewed appetite for risk taking. And once corporate executives smack their foreheads and remember they need employees to run the factories they've bought, employment will begin to arch higher again, as it always has.

Companies are perking up; they really are. Just peel off the news for a single day in the past week -- say, Monday. That morning, we learned that Xerox (XRX, news, msgs) will pay $6.4 billion for outsourcer Affiliated Computer Services (ACS, news, msgs), Abbott Laboratories (ABT, news, msgs) will buy the drug business of Belgian conglomerate Solvay for $6.6 billion and Chinese state-owned chemical firm Sinochem has offered $2.5 billion for an Australian company.

Video: Jon Markman on reversing the credit crisis

Nary a deal was done at this time last year, and now they're being announced like train arrivals at Penn Station. Freakin' Xerox, are you kidding me? If that zombie can come back from the dead to persuade banks to lend it the money to do a deal, anyone can. I'm serious. Xerox?

Just imagine what good companies can accomplish. Let's see: Last week, Dell (DELL, news, msgs) offered $3.9 billion for Perot Systems (PER, news, msgs). Shanda Games' (GAME, news, msgs) initial public offering raised $1 billion. Battery maker A123 Systems (AONE, news, msgs) saw its shares soar 50% after its IPO. Unilever bought parts of Sara Lee (SLE, news, msgs) for $1.9 billion. Spain’s Banco Santander (STD, news, msgs) is raising $7.2 billion.Wells Fargo (WFC, news, msgs) sold a huge stack of short-term bonds for just 50 basis points (half a percentage point) over Treasurys.

Continued: Dragging the bears back in

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Quotes supplied by Interactive Data.
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Friday, October 02, 2009 7:27:27 AM
Guys, you are missing the big picture here...the consumer! With jobs lost, credit card limits ratcheted back for nearly 80% of credit card users, this holiday season will be a huge financial bust. Companies will start reeling again, and we will be back to a 7000 DOW by January. No recovery will occur until banks loosen up the purse strings, and no amount of Obama handouts can "CHANGE" that situation.
Friday, October 02, 2009 11:09:08 AM
Wow how original, another Obama basher. Just keep blaming everything on the president it makes it easier to weed thru the posts that are worth reading and the ones that are worth skipping. Hrdwknman is an example of the latter...
Friday, October 02, 2009 11:18:26 AM
This guy markman is a complete idiot.I've been reading his articles for years, and he is never consistent , just another clueless talking head.
Friday, October 02, 2009 11:21:56 AM
Millz...wake up and smell the BEAR. Running behind Obama's skirts won't help you.
Friday, October 02, 2009 11:24:20 AM
Jack Austin, it you'd get your info from somewhere besides MSNBC then you'd be OK. Why do you think MSNBC is the lowest rated cable/internet operation?
Friday, October 02, 2009 11:26:45 AM
He is gleefully happy that Goldman Sacks is doing well? 
Friday, October 02, 2009 11:30:53 AM
This article is wishful thinking at best. All we do is spend money and manufacture nothing. When China stops financing us the dollar will be worthless. Every fiat money system in world history has eventually failed.  How are we ever to repay any of this massive debt? The answer is we can't. Read "Web of Debt" by Ellen Brown. You will be amazed at how the current system of money works. We need to look at history to see the future.
Friday, October 02, 2009 11:32:59 AM

The consumer is alive and well!  And he is credit-worthy, too. But...his name is Chang, Sugiyama, Park, Schmidt, and Chao.  You know, the guys who saved their money and invested profits in capital projects and infrastructure for the last 30 years. As for the American consumer, his name is CIAO.  He's broke and buried and jobless.  His government will run the presses to try to re-inflate his false sense of wealth with increasingly valueless dollars and stoke the flames of consumption, but it's just a last gasp down the hill to utter destruction.  This is what happens when you live beyond your means (nationally and individually).  It's only the beginning of the dreaded L -shaped recovery for us. 

 

Unless, of course, we start saving, cut spending, balance budgets and re-invest in things that add value to the nation such as infrastructure, schools, and manufacturing.  But...we'll also have to buy our own goods.  And why do that?  It's so much easier you buy your 5th Chinese-made TV and add another boat from Brazil,  or diamond necklace from Japan, or fancy car from Germany to your collection...and just go bust.

Friday, October 02, 2009 11:35:14 AM

Maybe he missed the fact that 90,000 more people were laid off than expected, which increased the number. And from the looks of it Job Loss is going to continue to climb all winter.

 

5th grade math indeed. /slap

Friday, October 02, 2009 11:36:38 AM
A very interesting perspective.  I guess he did renew his medical marijuana prescription after all.  I would like to read his first article on the economy after he loses his current job - which could very likely be today.
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