The market has increasing doubts on Bunge Ltd’s $4.4 billion plan to buy Corn Products International Inc for $4.4 billion to gain a leading position in corn-based starches and sweeteners.

The spread on the deal is currently 144.8 percent, with both stocks down from the merger announcement in June, according to Reuters data. Agriculture and fertilizer stocks have plummeted along with the broader market amid a global credit crisis that has investors worried that economic growth will slow and demand for raw materials will fall.

Bankers have already had a barrage of abuse, so an article in New Scientist comparing them to pond life will perhaps raise few eyebrows.

But it is worth a closer look.

The popular science journal cites experts in complexity and ecology in its latest edition explaining how the financial system is a tangled network of relationships, like the ecosystem of a pond.

Normally, life ticks over just fine. But then the wrong set of circumstances - an explosion of algae, perhaps – trigger a change, throwing the whole community of life forms off balance. The result is a stagnant, smelly swamp.

“Slow changes have been accumulating for years, such as levels of indebtedness. None on their own seemed big enough to trigger a response,” says Johan Rockström of the Stockholm Environment Institute. “But then you get a trigger – one investment bank falls – and the whole system can then flip into an alternative stable state, with different rules, such as mistrust.”

The $9 billion stake in Morgan Stanley that Mitsubishi UFJ Financial Group bought earlier this month was a risky bet for a Japanese bank. Often leaning heavily on state support, banks in Japan aren’t known for taking chances. Perhaps betting with house money is going to their heads. 
 
MUFG bought just over a fifth of Morgan Stanley for more than the whole bank was worth back on Oct. 13. Now it is raising up to $10.6 billion by selling new shares — 18 percent more than it paid for the Morgan Stanley stake, not even counting the huge run-up in the value of the yen that makes any local share issuance pricier than anywhere else on the planet. Meanwhile, back in the United States, shares of Morgan Stanley have fallen 9 percent since revised terms of the MUFJ deal were announced on Oct. 13, and the dollar has fallen another 8.6 percent against the yen.
 
MUFG’s fund-raising helped convince investors to dump Japanese shares today, sending the Tokyo market to its lowest level in 26 years. This prodded the Japanese government into action. Japan’s banks are heavily exposed to the local equity markets, and were bailed out less than a decade ago. The government says it wants to set up a state body to buy shares from banks, and limit bank recapitalizations.
 
Japan is the best versed industrialized economy when it comes to zero interest rates and deflation over the past two decades, though all that practice has not made it very adept at stimulating growth. With the yen soaring toward 90 to the dollar, U.S. assets are going to look mighty cheap again, and if Japan’s newly risk-embracing banks are looking for entry points, it could well be the Bank of Japan that takes on the mantle of global lender of last resort. 
 
Deals of the day:

* Porsche plans to gain control of more than 75 percent of Volkswagen in order to pass a domination and profit transfer agreement that would grant it full control of VW’s cash flows, Porsche said on Sunday.

* General Motors and Chrysler have moved closer to offloading two niche vehicle brands associated with the era of cheap gasoline and big profits for Detroit, even as both sides intensified talks on a merger that would combine the struggling automakers. The two auto makers are discussing a merger that would keep some of Chrysler’s operations intact and save jobs with the aim of securing the U.S. government financial aid the high-stakes deal would require, people familiar with the talks said on Sunday.

* CenturyTel plans to buy Embarq for $5.8 billion in stock, in an effort to cut costs and stay competitive amid a decline in the traditional phone business.

* India’s Mahindra & Mahindra repeated it was not interested in General Motors‘ Hummer brand, which the cash-hungry U.S. automaker has put up for sale.

* German oil and gas company Wintershall has bid 110 Norwegian crowns per share to buy Norwegian Revus Energy, a premium-rich offer that Revus’s board has unanimously backed, the firms said on Monday.

* Canada’s Enbridge is considering offering aboriginal groups an equity stake in its planned 525,000 barrel a day Northern Gateway oil sands export pipeline in order to secure support for the project, a company official said on Friday.

* British energy firm BG Group will buy Australian coal seam gas firm Queensland Gas in a deal worth up to A$5 billion ($3.1 billion), the Australian Financial Review reported on Saturday.

* Libya is considering investing in Telecom Italia, its ambassador to Italy told Il Sole 24 Ore newspaper, and could ask for a deputy chairman’s post at UniCredit bank, where it is now a top shareholder.

* Telecom Italia has no intention of selling its German operation despite recurring rumours that the Italian operator is looking to dispose of Hansenet, its chief executive said on Saturday.

* OAO Severstal, Russia’s largest steelmaker, said on Saturday it would pay major shareholders of PBS Coals C$382 million ($302 million) less than it agreed in August to acquire the company, reflecting a collapse in coal and steel prices.

* Saudi-owned MBI International will sign an agreement to buy 12 hotels in France from Starwood Capital in deal that could be worth $2 billion, a local newspaper reported on Sunday.

* Israel’s Bank Hapoalim said on Sunday regulators forced it to cancel a planned purchase of a controlling stake in Ukraine’s OJSC Ukrainian Innovation Bank.

* Britain’s London Scottish Bank is considering selling its debt collection division and closing its lending and other businesses after failing to find a buyer for the whole thing, the Sunday Express reported.

* Qatar Airways has expressed an interest in taking part in the privatisation of Greece’s state-owned Olympic Airlines, Greek Prime Minister Costas Karamanlis said on Sunday.

* The privatisation of Austrian Airlines will be postponed because it involves the assumption of part of its debt by the government, a supervisory board member of Austrian government holding company OeIAG said on Sunday.

* Malaysia’s state investment arm Khazanah Nasional said it has bought a 10 percent stake in Jadwa Investment, a Saudi-based shariah investment firm, for 270.9 million ringgit ($75.7 million).

* China Huaneng Group, one of the country’s largest power generating firms, has bought a 40 percent stake in Huating Coal Group, the top coal mining company in the northwestern province of Gansu, the company said.

* South African stock exchange operator JSE Ltd said on Monday it planned to acquire the Bond Exchange of South Africa for 173 million rand ($15.3 million) in cash, to compete better internationally.

* The United Arab Emirates central bank governor said on Monday mergers between banks in the Gulf state would be a good choice because consolidation would help cut costs.