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A Mental Picture That Is Simple To Formulate Is The Look

    A mental picture that is simple to formulate is the look
on the neighborhood mortgage banker’s face if a would-be
customer walked in without warning and without proof of having
any financial worth himself, and proceeded to announce that he
had found a property without any great distinction, that may be
somewhat structurally weak, possessed only questionable appeal,
was not in the greatest of neighborhoods. And for all that
great value and “exposure,” he wanted to offer only three or
four times its market value? Oh yes—he also wants to repeat
the process the following month with a different property.
    The commercial, private or mortgage banker would summarily
dismiss the deranged soul, but that is precisely the manner in
which the flurry of mergers and acquisitions have been managed
lately: “Consolidation in the banking industry reached a
near-record pace in the third quarter, with acquirers paying
unprecedented prices to build their empires” (Elstein, 1997; p.
1). Households cannot make purchases of the magnitude of cost
and irresponsibility that these banks and other businesses in
nearly all segments of the economy are doing as quickly as they
can manage. Where we have to live on a budget and within our
means, they can always increase their revenues simply by
tapping their customers on their collective shoulder for more
input into their businesses to help pay for their purchases
while we also finance their business activities.
    Sheshunoff Information Services reported that between July
and September, 1997, $23.2 billion was committed by banks and
thrift companies for the purpose of acquiring some of their
competitors. During the spring quarter, the bank acquisition
budget was limited to $7.8 billion (Elstein, 1997). While
banking certainly is not the only industry indulging in the mad
merger race, it does appear to be the largest in the country by
most estimates.
    Houlihan Lokey Mergerstat of Los Angeles says that the
total spent by the financial sector alone for mergers and
acquisitions for the first nine months of 1997 totaled $145
billion, meaning that the first quarter total was around was in
the neighborhood of $114 billion. That $145 billion total for
the financial sector, as much as it was, equated to only 32
percent of the total merger activity in the country for the
first three quarters of 1997. Perhaps even more astounding
than the actual total spent for these purchases is the manner
in which the deals are made. “‘I just kept stackin

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