What's The Big Deal?

“Yahoo-Microsoft? Small potatoes. It's time to talk about how the potential formation of the second-largest public company on the planet could affect your life.

“If you want to understand how the great flows of people and material will shape our future, it's essential to understand BHP Billiton's $132 billion unsolicited offer for Rio Tinto. The Anglo-Australian mining companies are the world's first- and third-largest by market capitalization, which combined would have a firm hand in iron ore, coal and copper, pulled across 154 separate mines from Madagascar to Michigan…

“Companies like BHP, and countries like China, are putting up hard cash -- at huge valuations -- to secure their positions in tomorrow's flow of natural resources. In the 19th century, countries were prone to dispatch navies to secure a flow of goods. Today, they send investment bankers.

“If the offer is successful, the new $350 billion company would be larger than General Electric and behind only Exxon Mobil, pulling out nearly double the profit of Microsoft and 45 times the profit of Yahoo. It would create a company so geographically dispersed, and so politically influential that it would become almost a country unto itself.

“BHP's offer for Rio bares the fact that ‘there is not enough to go around,’ says BMO Capital Markets mining analyst Tony Robson… Feeding Chinese skyscrapers, Indian bridges and copper-wired hybrid Priuses, BHP and Rio saw quarterly revenue grow at 15% and 13%, respectively, from the year earlier. By comparison, a nominal growth stock like Yahoo saw its revenue rise over 7%...

“Research from Ernst & Young also takes mining-sector analysts to task, saying… the market ‘is undervaluing mining assets by not fully appreciating how long demand will outstrip supply’ …

“If that's the case, a BHP-Rio deal would be but an opening act in a world-wide competition for resources for which there are few precedents. And that will matter a lot more to you and your family than whether Microsoft or Yahoo appears on your screen in the morning.”

(“The Game: Proposed Mining Megadeal Could Make the Earth Move.” Dennis K. Berman. Wall Street Journal: February 12, 2008. pg. C.1)

SEEING WHAT OTHERS CANNOT is insight.

Understanding why things are the way they are, and comprehending how they work is discernment. Focused discernment may lead us toward insight.