Bad news for PPAA, Win43 and all of the other Obama Zombies–the weak economic recovery is faltering and worse is to come. Let me start with a personal anecdote. A friend of mine who still lives in the People’s Republic of Maryland is having a very difficult time trying to refinance his home. He and his wife have a credit rating above 750 and have assets, other than the house, in excess of $500,000. They can’t get refinanced.
My point? If someone like that is having trouble refinancing a home, what do you think is happening to the average Joe and Jane? This is not a sign of a healthy economy.
Let’s look at Merger and Acquisition activity. From the Financial Times:
Investment banks face the prospect of another disappointing year as companies put off dealmaking, depressing fees for the first quarter of 2012 to their lowest level for three years.
Fees from mergers and acquisitions, equity and debt capital markets totalled $15.9bn, down 24 per cent year-on-year, according to data provider Thomson Reuters.
With companies spooked by the uncertainty triggered by the eurozone debt crisis, five successive quarters of falling M&A volumes have depressed fees. Global M&A volumes dropped to $393.2bn, down 14.6 per cent on the fourth quarter of 2011, according to Mergermarket. The collapse in fees has set up expectations among some senior executives of a shake-up in the industry, with leading banks grabbing greater market share. . . .
While the US saw the biggest drop in deal volumes, Europe was the only region to show an increase in activity on the fourth quarter, helped by commodities trader Glencore’s $53.5bn acquisition of shares it does not own in miner Xstrata. But with parts of the eurozone in recession, some bankers are more pessimistic about a recovery in dealmaking. “You will need to see a lot more confidence from US and Asian companies to invest in Europe,” said Philip Noblet, co-head of Emea M&A at Bank of America Merrill Lynch. “You are already seeing signs of it but the floodgates aren’t opening.”
How are things on the consumer electronics front? Just dandy. Just ask the folks at Best Buy:
Best Buy plans to close 50 big box stores and open 100 small mobile locations in the U.S. in fiscal 2013 and cut $800 million in costs by fiscal 2015. . . .
Best Buy, which has 1,450 locations nationwide and 2,900 globally, is focusing on closing some of its hulking stores to concentrate on smaller Best Buy Mobile outlets because of two emerging trends. Sales of TVs, digital cameras and videogame consoles have weakened, while sales of tablet computers, smartphones and e-readers have increased. And with the rise of competition from Internet rivals like Amazon.com, shoppers aren’t flocking to big-box stores like they used to.
A list of the stores to be closed was not immediately available. Best Buy said Thursday: “We will announce details about specific store locations and timing for closings once they are finalized.”
Best Buy is trying to avoid the fate of its former rival Circuit City, which went out of business in 2009. Other retailers with large stores are also shrinking their footprint. Sears Holdings, for example, said earlier this month it would close 100 to 120 stores to become nimbler.
You realize, I hope, that this means the loss of thousands of jobs. Not just for the folks who go to work in those stores but also for the suppliers and restaurants the sold to the store or provided services for the employees.
The high gas prices are not helping things. Restaurants are suffering because people have less disposable income for eating out. We probably will not see numbers reflecting this decline for a month or so, but it is very unlikely that sustained high gas prices makes things better in the economy.
Meanwhile, initial jobless claims remains above 350,000. If jobless claims are 300,000 or less then you have tangible evidence that the job market is heating up and people are getting back to work in numbers that will start making a dent in the number of unemployed.
The high oil prices are not only hurting America. Countries around the world are suffering. These are not the kind of signs you want to see if you are Barack Obama and running for another four year term.
Okay, we’ll now be inundated by deluded Obama Zombies swearing up and down that things, economic wise, are just swell. They aren’t, but facts mean little to that crowd.