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You are cheating - this is not a basic question.

As such, I don't really have an answer, just speculation. I see increased M&A activity as a sign that things are returning to normal.

As I see it, if corporate executives are poking their heads out to venture M&A deals, they must not be scrambling to cut costs and optimize internal operations anymore. When the world is going to pot, execs don't have time to float acquisition balloons because they are making sure their own operations are secure. If things are in shape and there isn't the looming threat of an exploding balance sheet, execs can resume empire building and risking shareholder assets with loftier actions.

Also, acquisitions usually require funding, so for companies to move down the path, they have to be reasonably sure they can access funds. If funding is available, it would indicate banks and credit markets are becoming less fearful.

That is why I think markets see merger activity as a positive thing.
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