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M&A is back, and investment bankers across the world are counting on large deals to make them highly profitable again. The mergers business was hurt by the economic downturn, M&A deals that failed due to injured earnings, and an LBO boom in 2005 and 2006 that pushed many leveraged firms into distress in 2008 and 2009

Several huge transactions are pending now, led by the BHP Billiton (NYSE: BHP - News) offer to buy Potash (NYSE: POT - News) for more than $39 billion. But that deal is just one of many deals in the pipeline. Reuters said that first-half global M&A transactions reached $1 trillion, up 9% from the same period in 2009.

Both the enthusiasm and investment banking activity around deals may be short-lived. Most of the reasons are similar to what they were in late 2007, 2008 and 2009. The capital markets have turned cautious again, and access to money may dry up quickly.

A great deal has been made of the availability of inexpensive money for large companies, and the cash that many already have on their balance sheets. But big companies including McDonald's (NYSE: MCD - News) and Apple (Nasdaq: AAPL - News) are using their strong balance sheets for share buybacks, high dividends and in some cases nothing. Public companies may be raising hundreds of billions of dollars, but in many cases it is to replace high-coupon debt already on their books. Their balance sheets have improved very little if their long-term debt burdens are large, particularly if much of that debt is due in the next two or three years.

Access to capital may be short-lived. Banks, investment houses, and the public have a renewed appetite for corporate debt which is more "risky" than Treasuries if only by a small amount. But recent unsettled markets have caused a great deal of the money in the global capital markets to move into cash and U.S. government debt.

The economy is slowing and may move back into recession in large part because of a housing market that continues to deteriorate and intractably high unemployment. Deals like the Potash one may look promising now, but if the appetite for fertilizer and other agricultural products drops on slowing global demand, the transaction could turn out to be a colossal failure.

Many companies may become leery about transactions if their earnings deteriorate. The earnings at large companies recovered in the first half, but that was compared with very poor numbers in the first half of 2009. Corporations that feel they need to brace for another downturn many not become aggressive acquirers for some time.

The M&A boom could end as quickly as it started.