It is a well-documented fact: merger and acquisition waves tend to coincide with stock market peaks and their immediate subsequent downturns. solis-mullen_picture1.png The latter phenomenon is fairly easy to understand.
Many argue that Fed policy is the main reason financial assets rose to record highs over the past decade. Many also argue that the horrible performance of both stocks AND bonds this year are due to a switch in Fed policy. Which, mind you, was made to combat raging inflation, which can also be argued the Fed is responsible for creating.
On Tuesday, the New York Fed’s trading desk released its annual report showing what it was up to in 2021. The New York Fed is the only one of the Federal Reserve’s 12 regional Fed banks to have a trading desk operation with speed dials to Wall Street’s trading houses, so we’re always interested in reading the “official” version of what’s been happening there.
Federal Reserve Chairman Ben Bernanke told a panel investigating the financial crisis that regulators must be ready to shutter the largest institutions if they threaten to bring down the financial system.