Shares in BHP Billiton (BHP) and Rio Tinto (RTP) both lost over 10% of their market caps in Europe trading today. For BHP that is almost $18 billion and for RTP is it almost $12 billion.

The stocks sold off more than most others. A recession could push the value of commodities off a cliff, hurting the pricing leverage of mining companies. BHP is talking about putting on huge debt to takeover RTP.

Rio’s shares are up 80% over the last year, making them especially vulnerable to a sell-off. BHP’s are up about 60%.

It might be a good time to bet against the merger.

Douglas A. McIntyre