Or as Jack Ablin, Chief Investment Officer at Harris Private Bank puts it, “A lot of these deals are motivated by self-defense.”

But they’re wrong.

Even though this Monday wouldn’t even make the cut for the top 20 deal days during the last takeover boom (in 2007), it’s more than just a function of survival or some freak bear market anomaly.

Another takeover boom is brewing. Here’s how I can be so sure…

Takeover Boom Catalyst – Private Equity

We all know the catalyst behind any serious takeover boom is private equity. Because when they’re flush with cash, competition for targets heats up and bidding wars ensure.

• We also know such activity sputtered along in the first quarter.
• Only $8.7 billion worth of private-equity-led deals were completed, compared to the $57.6 billion in the first quarter of 2008, according to Dealogic.
• Moreover, private equity fundraising – the fuel for future activity – also fell off the cliff, dropping 81%, to its lowest level in over five years.

But those are only the headlines. And sadly, most investors stop there. Digging deeper, though, reveals a new trend is unfolding.

The number of firms hitting the pavement to raise new funds is on the rise. In January, there were 1,624 funds trying to raise $889 billion, a 25% increase from last year… and a 43% increase from 2007.

And they’re enjoying success.

Morgan Stanley raised a record-setting $1.14 billion for its Private Markets Fund IV. Abbott Capital Management also raised more than $1 billion for their latest fund.

In other words, the next takeover boom is incubating. And it makes perfect sense. Despite such a challenging environment, the smart money knows it’s time to make a deal…

Stock valuations rest at historically low levels. Financing, although hard to come by, is similarly cheap. And thanks to the bear market, every manager is amenable to a deal. In many cases, it’s their only hope at quickly restoring shareholder value.

So if you’re not preparing for the imminent takeover boom by investing in potential takeover targets now, you should be. After all, the institutional money is getting ready. And history proves the premiums will be rich and the opportunities plentiful.

Of course, half the battle is being prepared, like a Boy Scout. The other half is knowing where to look, a la G.I. Joe.

An Imminent Takeover Boom In These 3 Sectors

In my opinion, you should focus on the following three sectors because they will attract both private equity suitors and publicly traded competitors. Thus, bidding wars will erupt and premiums paid to shareholders will be the greatest.

• Health care (specifically drug makers) – All major pharmaceutical companies are scrambling to replenish pipelines. Sure $150 billion worth of deals have already been announced this year. But the largest drug makers are still sitting on a $100 billion in cash and need to replace $84 billion in annual sales.
• Energy – As famous oilman T. Boone Pickens famously acknowledged, it’s much cheaper to drill for oil on Wall Street than in the ground. The pullback in oil and natural gas prices should entice cash-rich international giants to try to replenish reserves on the cheap.
• Technology – This is another cash-rich sector with cheap valuations and technologies becoming more essential to everyday life. At the same time, the industry heavyweights are struggling to grow organically. Acquisitions are the only quick fix. Yet private equity shops are equally eager to pounce on the high margin, high penetration products in this sector.

Next week, I’ll show you how to do identify the most attractive takeover targets in each sector. I’ll even include three companies at the top of my list. So stay tuned.

Source: The Coming Takeover Boom: 3 Sectors Ripe for Mergers & Acquisitions

Wen’s new stimulus outline will raise the old-age pension for retired workers, boost the salaries of 12 million teachers, increase farmers’ income and provide more subsidies for them.

China will also cut taxes by $88 billion (600 billion yuan) and spend $124 billion (850 billion yuan) to reform reform the country’s hhe health care sector within three years.

These investments are considered separate from the $585 billion (4 trillion yuan) stimulus announced in November, but Wen made it clear that Beijing stands ready to expand its package as needed.

“We already have our plans ready to tackle even more difficult times, and to do that we have reserved adequate ammunition,” Wen said, referring to his nation’s nearly $2 trillion in foreign currency reserves. “That means that, at any time, we can introduce new stimulus policies.”

Investors’ confidence in China has started to wane recent months as unemployment has risen sharply and the nation’s once-vibrant manufacturing export sectors have shown signs of weakness.

After falling 17.5% in January, exports plunged 25.7% last month to $64.9 billion.  Imports fell 24.1% in February to $60 billion. Slightly more than 15% of China’s 130 million migrant workers – about 20 million people – have lost their jobs since the start of the global financial crisis.

However, Chinese officials continue to point to increases in fixed -asset investment and bank lending as evidence that the current stimulus plan is working. Fixed-asset investment in China climbed an estimated 26.5% year-over-year in the first two months of 2009, the National Bureau of Statistics said last week.

New domestic currency lending has increased as well, surging to 1.6 trillion yuan in January.

“I really believe we will be able to walk out of the shadow of the financial crisis at an early date,” Premier Wen said. “After this trial, I believe the Chinese economy will show greater vitality.”

With respect to the rising tide of unemployment, which could spur social unrest, Wen promised to focus on job creation, and to extend more aid to small businesses.

“We will pay all attention possible to this issue and we will never overlook this issue,” he said.

While many analysts have reduced their growth forecasts for the Chinese economy – some to as low as 6% – Wen continues to assert that China’s economy is on track for 8% growth this year.

“I believe that there is indeed some difficulty in reaching this goal,” Wen said. “But with effort it is possible.”

Premier Wen ‘Worried’ About U.S. Treasuries

While Premier Wen remains optimistic about the state of the Chinese economy, he is decidedly less confident in the outlook of the United States. Particularly, Wen voiced his concern about the value of China’s large holdings of U.S. Treasuries.

“We have lent a huge amount of money to the United States,” he said. “Of course, we are concerned about the safety of our assets. To be honest, I am definitely a little bit worried. I request the U.S. to maintain its good credit, to honor its promises and to guarantee the safety of China’s assets.”

Of China’s $2 trillion in foreign currency holdings, about $1 trillion is invested in U.S. Treasuries and notes issued by other government affiliated agencies, such as Fannie Mae (FNM) and Freddie Mac (FRE).

Last summer, China’s big state-owned banks began dramatically reducing their holdings in Fannie Mae and Freddie Mac debt. China had held about one-fifth of its currency reserves in Fannie and Freddie debt last fall, The Washington Post reported.

At the end of last year, China held about $696 billion in U.S. government securities – 46% more than at the end of 2007.

“They are worried about forever-rising deficits, which may devalue Treasuries by pushing interest rates higher,” JP Morgan & Co. (JPM) analyst Frank Gong told The Associated Press. “Inside China, there has been a lot of debate about whether they should continue to buy Treasuries.”

Earlier this year, the Congressional Budget Office (CBO) projected that the U.S. budget deficit would nearly triple from last year’s $455 billion – and would reach a staggering $1.2 trillion. And that was even before President Obama unveiled his $787 billion stimulus, bank-rescue and anti-foreclosure plans – or other fix-up initiatives that are sure to surface in the months ahead.

The value of U.S. Treasuries has dropped steadily since the Obama administration began selling record amounts of debt to finance its economic stimulus packages. Investors lost an average of 2.9% in 2009, according to Merrill Lynch’s U.S. Treasury Master Index.

China should seek to ”fend off risks” by further diversifying its reserves, Wen said.

“We have already adopted a guiding management policy of diversifying our foreign exchange reserves, and at present our foreign exchange reserves are safe overall,” Wen said. “Our first principle in managing foreign currency is averting risk. We have always adhered to the principles of foreign currency security, liquidity and maintaining value, and implemented a strategy of diversification.”

As Money Morning detailed in as investigative report last September, the very possibility that China and other foreign countries would stop buying U.S. bonds already was enough to prompt the U.S. government to take control of foundering mortgage giants Fannie Mae and Freddie Mac.

If China, which is the United States’ largest creditor, were to continue to shy away from U.S. debt, it might find itself with even more influence over U.S. government policy. And if China were to stop buying Treasuries altogether, the results would be catastrophic. It’s conceivable that the United States wouldn’t be able to continue with its current rescue strategies, and that could ultimately lead to the collapse of the U.S. dollar.

The U.S. Treasury Department responded to Wen’s concerns Friday.

“The U.S. Treasury market remains the deepest and most liquid market in the world,” said Treasury spokeswoman Heather Wong. “President Obama is committed to taking the steps necessary to restore growth and put this country on the path of fiscal sustainability, including cutting the long-term deficit in half over the next four years.”

Source: Chinese Premier Announces New Spending Plan, Voices Concern Over U.S. Treasuries

Thanks to the recent stock market crash, we have the opportunity to pick up seriously cheap shares that were flying high until mid-September. In some cases, this is a chance to hop into a time machine and buy these stocks before they became household names. Until recently, these stocks were the darlings of Wall Street. And when the market stabilizes, these stocks could quickly return to favor…

There are few defensive plays like health care – after all, people don’t stop getting sick, and health benefits aren’t something that cost-conscious employers can cut without enduring the wrath of angry employees. But despite health care’s promise for weary investors, the sector hasn’t been immune from the losses seen across the board in the last year.

As a whole, the health care sector has fallen almost 30% since the beginning of 2008. Health insurers have had it worse – these names dropped 40% in the last quarter alone.

If you’re wondering why one of the most regularly profitable sectors in the market has taken such a beating, you’re not alone. Billionaire Carl Icahn is among the many investment pros that have seen their health care losses mount this year. So are Warren Buffett and George Soros.

Explains BusinessWeek’s Ben Steverman:

“On a basic level, investors are worried that Democrat-led health care reform in Washington is going to shake up the health care sector and hurt profits. But it’s actually more complicated than that. The U.S. health care system is astonishingly complex and few people know exactly what President-elect Barack Obama may propose nor what Congress would approve. And few can predict how that legislation (if it passes at all) would impact particular subsectors, industries and individual companies.”

That doesn’t mean that moves in Washington won’t impact the health care sector – they will, though not necessarily in a bad way. Analysts recognize that whatever plans are put into place will most likely involve the private sector. Government changes could actually be good for scores of health care companies, especially health insurers.

Buying into the Health Care Comeback

Drug companies large and small have renewed their interest in one specific health care sector. It’s a true form of preventative medicine — a rapidly growing field that’s already decimated countless dangerous and deadly diseases.

Now biotechs and Big Pharma are in a race against time. Their mission is clear: Rid the world of the onslaught of superbugs and diseases that could cause the next great epidemic. And they’ll use second-generation technology to create some of the world’s most powerful drug saviors.

There’s money to be made in this field — and it hasn’t gone unnoticed by some of the planet’s top investors…

**********Only 10 Hours Remain **********

Respond Today and Get 50% Off the Millionaire’s Market

You’ve seen it before, so I won’t waste your time… If you act before tonight at midnight, I’m willing to do something very special for you.

I’ll give you a full 50% off the normal one-year price of Resource Trader Alert.

But space is extremely limited. And when the clock strikes midnight tonight, I’ll be forced to close this offer… So, read this before it’s too late…

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George Soros’ resume is nothing short of impressive. His legendary Quantum Fund returned investors an average 42.5% per year for 10 years — a total of 3,365% gains. In 2007, he raked in a staggering $2.9 billion, making him the Street’s No.1 earner for the year…

And then there’s Warren Buffett — an investor who needs no introduction. An initial $10,000 investment in Buffett’s famous holding company Berkshire Hathaway would have been worth more than $1.2 million at the end of last year…

Sure, they’ve made their money by occasionally taking different routes. However, Soros and Buffett are “sharing” some intriguing ideas these days, according to James Altucher, managing director of Formula Capital and author of Trade Like Warren Buffett. The two moguls are putting up big bucks for health care, he says, with a concentration on vaccines…

This bit of info may go against perceptions of Buffett as the ultimate value investor. Altucher claims this is a common misconception. Rather, Buffett is what he calls a “long-term demographic investor.”

That’s why Buffett and Soros are investing in health care and biotech stocks like GlaxoSmithKlein, Johnson & Johnson and Sanofi Aventis. These companies have a lot in common — most importantly, they are the world’s most prolific developers of vaccine treatments.

We’ve found an opportunity Warren Buffett can’t get his hands on — an opportunity to get in on not one, but two emerging biotechs in a race to create the ultimate cancer vaccine. More on them in just a minute…

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Superleverage: The Secret to Getting Rich in the Market

Back in 2003, you could have bought AngloCold stock for $32 and done very well when it climbed to $41 three weeks later. That’s a nice gain of 28%…

But if you had used my Superleverage technique, you would’ve turned that 28% gain into 528% in no time flat, with limited risk. See how it works here…

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The New Way to Fight Disease

For years, the vaccine landscape was ruled by the basics — measles, mumps and rubella. And, of course, annual flu shots for the elderly and those affected with immune disorders. The market for vaccines was relatively stagnant. In 2005, vaccines accounted for less than 3% of the global pharmaceutical industry, according to the Wharton School of business.

It just wasn’t very profitable to make cheap flu shots. And the antiquated process of incubating the inactive viruses to go into the shots is time-consuming, and the shots are easily contaminated.

Now we’re looking at a transition to a different kind of vaccine. In fact, we saw the wave of next-generation vaccines hit the development pipeline as early as three years ago. Professors at Wharton saw the transition coming:

“In the past, a lot of attention was paid to the childhood vaccines, but more and more research and development is focusing on vaccines for adolescents and young adults, or even on adult vaccines for diseases such as cancer,” Wharton health care systems professor Patricia Danzon commented more than two years ago. “The health system approach to vaccines really has to adapt to accommodate these new products.”

This quote appears very prophetic today. Just look at Merck’s recent success…

Merck’s most recent quarter, reported in May 2008, saw revenue rising to $5.8 billion, with much of its sales growth attributed to Gardasil, the company’s blockbuster cervical cancer vaccine.

Merck, along with many of the other major drug companies, is in the process of developing numerous vaccine treatments for a variety of diseases — some common, some deadly.

We’ll keep our eyes open. Until next time…

Best,
Greg Guenthner