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.

DaimlerChrysler AG (NYSE: DCX) and Kirk Kerkorian's Tracinda Corp. are renewing their long-standing feud in the pages of the Wall Street Journal.

Kerkorian, the billionaire who tried to buy Chrysler in 1995, last week offered to by the money-losing automaker for $4.5 billion and even promised to put down a $100 million deposit. DaimlerChrysler's executives, though, aren't taking the bid seriously, the Wall Street Journal said.

According to the Journal, Tracinda wanted DailmerChrysler to shoulder some of Chrysler's $15 billion in pension liabilities and retiree health care costs, something that other bidders haven't sought. DaimlerChrysler also balked at Tracinda's request to for exclusive rights to conduct due diligence for 60 days, the paper said.

Of course "people familiar with the matter" in Tracinda's camp see things differently. DaimlerChrylser, which is holding meetings with the private equity companies interested in buying Chrysler, denied to the Journal that its discriminating against Kerkorian.

This is what people mean when they talk about negotiating though the press.

The campaign of leaks and counter leaks has just begun.

Time Warner Inc. (NYSE: TWX) may yet take Carl Icahn's advice, according to Wall Street analysts.

Spencer Wang of Bear Stearns suggested yesterday that Time Warner was contemplating a "strategic event" for AOL, according to The New York Times's DealBook blog. UBS analyst Aryeh Burkhoff said that chances of an AOL sale are "high," the blog reported. Another possibility raised by analysts is a disposal of the Time Inc. magazine publishing business, Dealbook said.

Chief Executive Richard Parsons has called AOL a strategic asset. Companies, though, often say nice things about assets they plan to sell.

If AOL gets sold -- and it wouldn't shock me if it happened -- the usual suspects, Google Inc. (NASDAQ: GOOG), Microsoft Corp. (NASDAQ: MSFT), Yahoo Inc. (NASDAQ: YHOO) and Barry Diller's IAC/InterActiveCorp (NASDAQ:IACI) would take a look at it. The Time business would probably fall into the hands of a private equity outfit.

All of this should have a familiar ring to it. Icahn made many of these same points during his recent crusade against Time Warner management.

One interesting question: What to call the company if Time is sold? I hope Parsons chooses a historic name highlighting the company's connection to Warner Bros. The world doesn't need yet another quasi-Latin sounding corporate name that no one understands.