Professor Elam

Merck MRK acqauired Schering Plough SGP over the weekend for $41 B in cash, wow. The wow is

the size of the deal

and the fact that acquisitions and mergers hardly ever happen at market bottoms, rather they are a market top phenomenon. Why?  Again, Socionomics tells us that positive social mood generates inclusive emotions, we want to be together, we want to believe, in the face of contrary evidence, that a Chrysler Mercedes merger would work. That merger took place in a bull market, in the bear market years later Mercedes paid Cerebus to take it off their hands.

Anyway, it makes sense to buy a quality company when it  is on sale, SGP is well off its weekly highs and MRK bought, this is helping buoy the markets this morning, looks to me like those that shorted bank stocks are covering as all even the XLF is up nicely.