M&A across international borders has risen about 75% over the past two quarters. Since M&A protects firms from deflationary risk, while at the same time causing it, the increased activity tends to indicate a global financial crisis.
The Bank for International Settlements (BIS) says that a crisis proportion now exists.
(BIS is an international, financial regulator. It exists to regulate the nuisance value.
Being the central bank of central banks, otherwise existing without any liability, BIS regulates the probability of “best practices,” which are probably so overwhelmingly bad that the value it produces demands government intervention to manage the overwhelming risk.)
BIS has recently been assaying the processes for securitizing debt. Securitization is essentially an insurance product. Again, remember, allowing big banks and insurance companies to exist in the same market in the name of free-market capitalism is to rig the market for financial failure. Companies are merging up to survive failure in a TBTF proportion.
Really, the way the market is rigged through securitization, combined with M&A, is no different from insuring your house and setting it on fire.
Remember that “securitizing the debt” (which President Clinton and his Goldman Sachs Ivy Leaguers said frees the market to be “made” more efficient) was a dominant feature of the last financial crisis. It determines the risk, but the liability is limited since, mainstream economics tells us, firms will not invest and make markets TBTF and securitize the debt without the liability being limited.
(Making the liability unlimited–immediate and proprietary on demand, like in a real free market, without the need for government regulation–sounds like a good plan to me!)
Keep in mind, an on-demand existence busts the social contract. Government does not exist in priority. Being self-governed–with risk management deconsolidated in a non-TBTF proportion–government exists on demand. There is little need for government intervention if firms, without limited liability, fail the test of operating in your self-interest.
Does existing without limited liability mean firms will not be out there trying to add supply and make money? Of course not! The only difference is that “the people”–actual living people–assume all the liability and apply it as they fit. “The people rule” becomes “objective reality” and the attribution of a “natural identity.”