Despite a 50 basis point drop in the price of money, the Bernanke bailout is not helping the LBO market much. The New York Times [registration required] reports that a $25 billion deal to take student loan bundler Sallie Mae parent SLM Corp. (NYSE: SLM) private is on the skids.

Meanwhile, Bloomberg News reports that the negative side effects of lower interest rates is helping weaken the dollar. This morning it hit a record low of $1.40 relative to the euro. This may actually be good news for companies that derive a significant portion of their revenues from overseas -- particularly in Europe. But as someone who is thinking about taking a trip to Europe next year, I am concerned about how outrageous the prices there will seem to me.

J.C. Flowers, the firm spearheading the SLM buyout, may be willing to walk away from the deal and pay the $900 million breakup fee. Sallie Mae stock now trades 17% below its 52-week high of $58, probably because the market anticipates the deal will either fall apart or be concluded at a much lower price.

The Wall Street Journal [subscription required] suggests that with the collapse of financing for leveraged buyouts -- their share of total M&A rose from 14% in 2000 to 37% through July -- the M&A business is contracting. Deal volume in August fell by more than half from the previous month. Specifically, August deal volume globally was $222 billion -- the lowest monthly total since July 2005 -- a third of the $695 billion figure struck in April and less than half the $579 billion in July.

But hope springs eternal for the deal salesmen. With the drying up of credit for the LBO crowd, M&A professionals are hoping that so-called strategic deals -- merger pacts made between corporations -- will pick up the slack. Tuesday I happened to be watching CNBC when a couple of strategic acquisition cheerleaders tried to outdo each other talking about all the wonderful corporate mergers on the horizon.

The deal bust will have significant economic repercussions in New York. Lower M&A volume means lower bonuses for M&A bankers and those financiers that raise the capital to pay for LBO deals. Moreover, the collapse in the alphabet soup of securities backed by subprime mortgages, credit card receivables and others will lead to more layoffs. Finally, hedge funds which invested in this toxic waste will continue to fold -- diminishing the bonuses of those who run these funds.

For months now, there has been endless speculation in the market that Monster Worldwide Inc (NASDAQ: MNST) would be taken over. In the past days, including today, and weeks, rumors are coming fast and furious. Thanks to the recent appointments of CEO Sal Ianuzzi and CFO Timothy Yates, who worked together at Symbol Technologies Inc (NYSE: SBL), the stock has been trading up. These appointments were "designed to simplify and streamline [Monster's] operations on a global basis," the company said in a press release, and are intended to fuel future growth.

Possible suitors for Monster have included Yahoo! Inc (NASDAQ: YHOO) and Google Inc (NASDAQ: GOOG), as well as newspaper publishers and, more recently, private-equity firms. Does this mean a sale will come any time soon for the global online employment solution provider? It depends on who you ask:

On the "not for sale" side of the fence is Wachovia, who says that after speaking with management, they're confident the company has no intention to sell in the near-term. Analysts at Goldman Sachs appear to agree, as they believe the restructuring in the upper ranks provides a second data point, indicating the company will not be sold. Goldman specifically says that the company's June and July volatility is near a 26-week average, which suggests non-directional risk.

Okay, but other firms beg to differ, including Stifel Nicolaus, which says the appointment of Yates is evidence that management would consider strategic alternatives - alternatives which may include selling the company. The firm points to the sale of Symbol Technologies to Motorola Inc (NYSE: MOT) on Ianuzzi's and Yates's watch.

LBO or no, many firms agree that now is the time to buy shares of Monster.

Stockholders yesterday approved the long-planned acquisition of gaming giant Harrah's Entertainment Inc. (NYSE:HET) by Apollo Management and the Texas Pacific Group (TPG). Two-thirds of voting shares agreed to the $90 per share purchase price, which was recommended by Harrah's Board. The final price was $6.19 over the stock's closing price on March 8th, the cutoff for inclusion in the deal.

In the $17.1 billion buyout, TPG and Apollo take on $10.7 billion of debt. Paying down this debt will overshadow any expansion plans for the foreseeable future.

A number of regulating agencies in areas where Harrah's operates have yet to review and approve the deal. Harrah's expects the deal to be completed by the end of the year.

Harrah's, by revenue the world's largest casino company, has facilities in the U.S. and around the world, including some of Las Vegas' prime properties.

For more about Apollo, see Tom Taulli's post in BloggingStocks.

Follow Harrah's story at BloggingBuyouts

MOST NOTEWORTHY: General Electric Company (NYSE:GE) was the only notable company on the upgrade list today

• Goldman Sachs added General Electric (NYSE:GE) to their Conviction Buy List with a $42 target, suggesting a 19% upside from current levels; Goldman thinks the December 12th outlook meeting could be a positive catalyst for the stock.
  

OTHER UPGRADES:

• Keefe Bruyette upgraded shares of Prudential (NYSE: PRU) to Outperform from Market Perform following the company's increased return-on-equity guidance.
• Barnes & Noble (NYSE: BKS) was upgraded to Outperform from Underperform at Credit Suisse citing relative valuation and the likelihood of a leveraged buy out event.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

As we approach the holidays, some private equity firms are still working. Now we hear that Texas Pacific Group and Macquarie Bank Ltd. approached Qantas Airways to do a leveraged buyout, worth about $8.5 billion.

The Australian airline has provided few details, but it doesn't seem to matter. The company's stock price has soared 20% on the speculation.

Keep in mind that Qantas was formerly owned by the government. As a result, there are likely to be many regulatory complications for a deal. For example, no investor can have a stake in excess of 25% and foreign ownership must not exceed 49%. And there will need to be negotiations with the unions.

But aren't airlines a terrible investment? Their collective history is certainly frightening. Nevertheless, Qantas appears to be under-leveraged, has a dominant share in Australia, has access to the lucrative Asian markets and has been profitable for more than a decade.

Further, the Texas Pacific Group has tremendous experience in the airline sector. Their first investment was in 1993 with Continental Airlines, which turned out to be a home run. Other investments include US Airways and Ryanair Holdings Plc.

Yes, Texas Pacific Group likes to venture into areas that the rest the crowd avoids – and so far, it's worked out very well.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.