Rumors are spreading that MGM may offer a takeover bid for Caesars Entertainment. The New York Post cited an unnamed gaming source “close to the situation” as saying “The next 3 to 4 months will be fascinating.” If that has any implications for an actual timetable, we’re talking about some very dangerous timing here.

Remember that what began the whole saga of Caesars’ ungodly debt fiasco was a leveraged buyout by Apollo Global Management partnered with a few other funds at the worst possible time right at the beginning of the worst recession since the Great Depression. If anyone high level involved in that deal knew anything about business cycle dynamics, they would have waited another 6 months for Caesars to be repriced if they were still interested. At that point it was 7 years since the last recession that had taken place in 2001. We are now 10 years past the 2008 financial crisis with signs of a turn proliferating throughout the economy with quite a few potential triggers ahead of us in the exact 3 to 4 month time frame that a deal may go down.

Not that acquiring Caesars is in itself a bad idea. It all depends on the terms, which are based on projections, which better be correct in order to justify whatever valuation they come up with. Like President Donald Trump, most successful businessmen have little grasp of the workings of the business cycle within which they operate. If business leaders did understand it, there wouldn’t be one. What characterizes the turn of the business cycle is that business are all caught off guard together. So it’s safe to assume that the executives in charge of pushing any sort of deal through have no better grasp of economic cycles than did Apollo’s senior management back in 2008.

If the number crunchers at MGM and Caesars are merely projecting out current trends as if they will be forever linear and coming up with valuations based on those sorts of assumptions, things probably aren’t going to turn out too well. Will it be as bad as the Caesars/Apollo fiasco of 2008? That’s hard to know and I won’t try to answer that one. But it’s looking more and more likely that, a few months from now, the volatility cat that is coming out of the bag now is going to be a lot angrier and more volatile come 2019. Caesars will be valued lower than it currently is, and MGM will find itself trudging through another difficult period.