Blockbuster buyouts may be rare this year, but small remains beautiful. Here’s why action in the middle market has rarely been more brisk and how some savvy players are creatively mining it.

It's more than just a theory that the perception of a recession, spread by the media and word of mouth -- whether or not economic indicators are there -- can actually cause one. Consumer confidence, of course, is a leading driver of growth.

But does this concept hold when dealing with far more sophisticated observers, who aren't necessarily swayed not to buy a car because Fox News airs a story about the price of rice? Sophisticated observers like, say, the M&A world, filled with financial professionals whose success more or less entails reading the markets correctly? The past few months have provided something of a test, with headlines like at the gates of hell, from the Economist, bolstering the notion that the private-equity sky is falling.

Such an environment provides an opportunity for savvy dealmakers to make serious returns, as long as they're prepared to adapt. The rules until recently -- cheap debt and outbidding one's opponents -- have been replaced by smart debt and outthinking one's opponents. Whereas two years ago, just about anyone with a smidgen of money could do a deal, we've now entered a period in which to create fruitful opportunities, it helps to be a true master.

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