The bullshit is the Amurkn people's dinner.
The bonuses are going to the richers!
"As Lenders Tighten Flow of Credit, Growth at Risk" by PETER S. GOODMAN
Credit flowing to American companies is drying up at a pace not seen in decades, threatening the creation of jobs and the expansion of businesses, while intensifying worries that the economy may be headed for recession.
Policy makers at the Federal Reserve are growing increasingly alarmed about the problem, which is an outgrowth of the woes of the housing and mortgage industries. Just yesterday, the Fed’s vice chairman, Donald L. Kohn, said that the latest market turbulence appeared to be reducing credit to businesses and consumers, hinting that the central bank, in response, was prepared to cut interest rates further.
Mr. Kohn’s unexpected pledge that the Fed would pursue “flexible and pragmatic policy making” that might help counter the trend and shore up the economy spurred a rally on Wall Street that sent stocks soaring. The Dow Jones industrial average jumped 331 points.
For now, though, the situation is looking bleaker for many businesses. Already, companies in everything from furniture manufacturing to Web site design are tightening their belts, delaying expansion and scrambling for other sources of cash.
Andrew Tilton, a senior economist in the United States Economic Research Group at Goldman Sachs:
“This is a very big deal. You’re basically crimping the growth of the more vulnerable companies. If they can’t borrow the money, their options are much more limited. They’d have to have less ambitious hiring plans, buy less machinery and cancel projects.”
Two years ago, in what now seems like another era, Carmen Murray easily borrowed $100,000 from a local bank to finance her company, Rodeo Carpet Mills, which makes high-end rugs in an industrial stretch near Los Angeles. Getting a check was as simple as returning a mass-mailed flier.
Today, Ms. Murray is seeking a fresh loan from the bank to finance an expansion to supply Las Vegas hotels with floor coverings. She needs new machinery and 15 more workers, bringing the total work force to 45. If she manages to get the money, it will not come easily.
Ms. Murray sighed: “They want this; they want that. I got the sense that I have to start all over again. They need to know who I am and all about my business.”
By themselves, commercial bank loans have actually surged: large companies have tapped prearranged lines of credit to weather the financial chaos that has accompanied the unraveling of the American real estate market.
Yup, the BIG BOYS aren't getting hurt at all!
But this source of finance has been nowhere near enough to compensate for the virtual shutdown of the short-term commercial paper market. Much of this debt had been pledged against the value of mortgages, making them effectively radioactive in markets around the globe.
In recent years, a lot of commercial lending was inspired by an upward spiral of enrichment: banks made new loans, then swiftly sold them off for profit, using the proceeds to extend still more.
What loans are being extended are going primarily to companies with longstanding relationships with banks. Lenders are reluctant to bet their increasingly scarce capital on riskier, less-established companies in a time of economic anxiety. That leaves many of those companies on a limb.
That means Mom & Pop stores are fucked!
Jody Keenan, who chairs the board of the Association of Small Business Development Centers in Burke, Va.:
“Small businesses are just inherently more risky, and banks are going to be more conservative in protecting their assets. We’re starting to see a tightening already, particularly for very small companies. We’re talking about real impacts in local communities.”
A slowdown among smaller companies could be especially costly to the economy in terms of jobs. More than half of American jobs are at companies with fewer than 100 workers, according to Moody’s Economy.com.
In recent months, smaller companies have been adding jobs even as larger firms have been shedding workers, according to the ADP National Employment Report, which tracks changes at companies with payrolls overseen by ADP. From May to October, 276,000 of the 378,000 jobs added were at companies with fewer than 50 employees, the report found.
To be sure, the strongest companies with property to put up as collateral and years of profits they can point to are still able to borrow, often at increasingly favorable terms.
As I said the BIG BOYS aren't getting hurt at all!
The downturn in the housing market has made banks reluctant to sink money into anything related to real estate, from title companies to bathroom tile manufacturers.
But lenders have sought refuge in more vibrant areas — notably agriculture, which has benefited from the rise in global demand and the sudden boom in ethanol production.
Richard Brown, president and chief executive of the Krause Corporation, which makes soil-tilling equipment at its factory in Hutchinson, Kan., relies upon lines of credit from banks to smooth out the seasonal nature of the business. Though it sells its products mostly in the spring and fall, the company must make them year-round.
Mr. Brown said banks had been calling him relentlessly to offer new loans:
“They’re trying to maintain their business and get past the subprime debacle, and where can they go? Agriculture in this country is very strong.”
But in other parts of the economy, notably the auto industry, access to credit has tightened considerably, as banks steer their limited capital away from companies with declining sales.
A year ago, when he needed new machinery, Doyle Hayes, president and chief executive of Pyper Products, an auto parts maker in Battle Creek, Mich., went back to the local branch of Comerica bank, where he has been doing business for years. He borrowed $300,000.
Last week, when Mr. Hayes needed $140,000 for a new robot, he did not even bother to inquire at the bank.
Mr. Hayes, meaning the bank would have turned him down:
“We knew what the answer was going to be. When the auto industry goes down, anything that has four wheels becomes suspect.”
Mr. Hayes did not put off the purchase:
“You can’t save yourself into prosperity."
He managed to borrow the money instead from Battle Creek Unlimited, a nonprofit economic development arm of the city.
In Arizona, Dennis Long, president of Enterprise Resource Group, which manages computer networks for businesses in the Phoenix area, is keen to expand, particularly by picking up work from the federal government. But that requires hiring a sales representative, and he lacks the capital to go beyond his $100,000 line of credit from Wells Fargo Bank.
Mr. Long complained:
“The bank says we’re maxed out. It just seems like before they were a little more ‘Let me see what I can do,’ where today I just get ‘no.’”
In Los Angeles, Ms. Murray, too, has grown accustomed to a less-than-exuberant reception from the bank. Having started at the rug factory as a receptionist some 25 years ago, she now owns the company. A Mexican-American entrepreneur, she hopes to capture contracts that are set aside for minority-controlled companies.
That's what the set-asides are meant to do: DIVIDE US!
Where's my contract?
She may eventually try an alternative source of finance aimed at small lenders, with the state guaranteeing her loan. Curiously, at one such institution in Los Angeles, Pacific Coast Regional Small Business Development Corporation, the volume of lending has slowed considerably in recent months, said Mark Robertson, the firm’s president and chief executive.
It may be that the effects of the credit tightening are still unfolding, he suggested. Eventually, a parade of would-be borrowers may show up at his door. His business tends to move in the opposite direction of the economy: when times are bad, more people need help to qualify for a loan. Perhaps things just have not gotten bad enough."
Oh, yeah, they can get even worse -- and likely will!
"Dow Surges on Hints of a Cut in Interest Rates" by MICHAEL M. GRYNBAUM
Capping a series of wild swings, the Dow Jones industrial average soared to its biggest one-day percentage gain in more than four years yesterday after a top Federal Reserve official hinted at another interest rate cut and oil fell below $91 a barrel.
Still, few analysts were willing to call an end to the upheaval, and the rally came amid new indications that problems in the credit market are taking a toll on businesses and consumers. Analysts described the volatility as a symptom of the uncertainty that has racked Wall Street for weeks.
But it was a wave of relief that moved the markets yesterday. The comeback began on Tuesday, after a $7.5 billion foreign investment in Citigroup helped restore investors’ confidence in the ailing credit market.
The Fed’s vice chairman, Donald L. Kohn, further reassured investors yesterday by pledging to follow “flexible and pragmatic policy making” as the bank decides how to cope with the financial upheaval. The unusually candid remarks were taken as a sign that the Fed policy panel was considering a rate cut at its Dec. 11 meeting. A steep drop in oil prices and bargain-hunting added to the rally.
The Dow has gained 546 points over two days. It gained 331 points yesterday. Even as Mr. Kohn suggested that market turbulence could tighten credit lines, there were other signs that the economy was slowing. Orders for durable goods fell more sharply than expected in October, and a Fed survey found business conditions gradually deteriorating across the country. Housing inventories rose last month as existing-home sales continued to decline.
On Monday, both major stock indexes were down 10 percent from their record highs. The Dow’s gain yesterday was the fifth consecutive day of triple-digit moves in the blue-chip index.
Howard Silverblatt, senior index analyst at Standard & Poor’s, noting that the market has exhibited a touch of melodrama, but he warned that the market’s erratic behavior, where triple-digit gains or losses are caused by news from a single event, speech or company, reflected the knee-jerk mentality of investors who simply do not know where the economy is headed:
“This is a soap opera. We see a light at the end of the tunnel, and it could be another train.”
Many analysts echoed the sense of uncertainty.
Brian Gendreau, an investment strategist at ING Investment Management:
“We’re flying blind. [In this environment], you can talk yourself into any kind of position.”
Investors chose bullishness yesterday, in large part because of Mr. Kohn’s remarks that the Fed “will act as needed” to address the current volatility. Anxiety in the credit markets has made banks and mortgage companies less eager to lend, leading many investors to call for another cut in interest rates.
Treasury yields ticked up for a second day, a sign that investors were confident enough to move away from the safe quarters of government bonds.
Safe quarters in a bankrupt government?
Mr. Kohn, in his speech at the Council on Foreign Relations in New York, acknowledged:
"Uncertainties about the economic outlook are unusually high right now. The increased turbulence of recent weeks partly reversed some of the improvement in market functioning over the late part of September and in October. Heightened concerns about larger losses at financial institutions now reflected in various markets. [The results could be] a more defensive posture in granting credit, not only for house purchases, but for other uses as well.”
Foreign money appears to be keeping many domestic businesses in the black, as tourists and export buyers are attracted to American goods by a record-low dollar."
Great! My dollar ain't worth shit, while the foreigners keep our economy afloat!
GLOBALIST GLOBALIZATION has FAILED! But don't worry!
The big boys on Wall Street won't be hurting this Christmas -- even as their lowly employees are given the ax!
"Bear Stearns to cut 650 jobs as bonuses loom" by Associated Press November 29, 2007
NEW YORK - Battered by the subprime mortgage crisis, Bear Stearns Cos. yesterday cut 4 percent of its staff in a move that could prelude a final push by investment banks to cull their ranks before bonuses are handed out.
The nation's fifth-biggest investment bank will cut 650 jobs in all departments from its staff of about 15,500. This marks the third wave of layoffs to sweep through Bear Stearns, which as of last month eliminated about 900 positions.
Bear Stearns has been among the hardest hit on Wall Street as investment banks reel from deterioration in the subprime mortgage and leveraged loan markets. US banks and financial service companies are cutting tens of thousands of jobs in an attempt to lower costs and trim underperforming businesses.
The investment bank's decision to cut jobs with the end of the year just weeks away also spreads worry on Wall Street that other firms will do the same. Year-end bonuses represent a large part of compensation for everyone from support staff to investment bankers, and eliminating those payments could free up a significant amount of money.
For BONUSES for the BIG GUYS!
Christopher W. Hunt, whose Stamford, Conn., firm Hunt-Scanlon conducts market research for the executive search industry:
"They are cutting overhead and shoring up positions for next year. Many people have bonuses guaranteed, but many firms would indeed save on all the other bonuses."
He said Wall Street firms that are trying trim expenses, and slim down before beginning a new year, often use this tactic. Typically, though, only back-office staff such as assistants and secretaries, who aren't guaranteed the kind of blockbuster bonuses reaped by investment bankers and traders, get laid off at this time of year.
Yeah, LAYING OFF the STRUGGLING RABBLE so richers can GORGE themselves on wealth!
What scumshit elites!
The round of earnings warnings and layoffs at Wall Street investment banks likely means bonuses will decline this year, or will be paid out using stock instead of cash to retain key employees. The New York State Comptroller's office said in a report earlier this month that bonuses are likely to shrink 10 percent from the record levels reached a year ago, when they hit $23.9 billion, or more than $136,000 per employee at major US financial institutions.
So if the bonuses shrink 10 percent, they will be handing out 21.4 BILLION in BONUSES!
The elite rulers of our society are sick people, folks!
THEY are the ones who are mentally ill!
Bear Stearns in a memorandum distributed to employees obtained by The Associated Press said the latest cuts are part of an ongoing review "to best position Bear Stearns for 2008 and beyond." Employees affected would get severance, benefits, and outplacement services, the memorandum said.
Yeah, thanks!
Russell Sherman, a spokesman for Bear Stearns, said the jobs cuts would come from across the firm and were not restricted to one particular business.
In October, Bear Stearns cut 300 jobs from areas including its equity trading business. The company, which is the nation's second-biggest underwriter of mortgage bonds, also slashed about 600 positions from its mortgage-origination unit.
Further pain might lay ahead for Bear Stearns, which earlier this month said it would write down another $1.2 billion linked to its mortgage-backed securities business. The biggest global investment houses and major banks collectively wrote down some $80 billion worth of assets because of the market crisis this summer.
This puts even more pressure on chief executive James Cayne, whose leadership has been under scrutiny since Bear Stearns revealed the collapse of two hedge funds in July. Rival Merrill Lynch & Co. ousted chief executive Stan O'Neal earlier this month, and Citigroup Inc. did the same to chief Charles Prince a week later.
Cayne, who owns about 4 percent of Bear Stearns, has refused to relinquish control of the struggling firm."
Who cares about the problems of these scumshit robber barons!
Merry Christmas, Amurkn shit-eater!
What do you think Santa is going to poop in your stocking, readers?
