Post Tagged with: "small business"
Questionable Rally
We continue to be amazed at the eagerness of the market to rally in the face of negative fundamental data. The U.S. stock market rallied today on the news that the European Central Bank is getting together with other Central Banks (Bank of Japan, Federal Reserve, Bank of England, and Swiss National Bank) to provide more liquidity to help Europe as they are trying to keep their heads above water. The coordinated action between governments has generated a “trust” that we expect to be short lived
China: no hard landing, but no solution
I have been arguing for a while that as long as the Chinese government retains its capacity to raise debt we are not going to see a sharp slowdown in economic growth – at least until 2013. Any indication that the economy is slowing too quickly will be met with a relaxation of credit controls, and the concomitant rise in investment will spur growth
Contrarian data point to downside risk
The mitigating factors are the recent manufacturing data and the pickup in small business credit. I especially like to see small business with access to and take up of credit because that could mean renewed hiring. The jobless claims numbers are not moving yet though. Overall, the data are still soft and the surprise index is still saying that earnings estimates will be cut. In my view that means the risk is still to the downside
Small companies feel pain as China tightens
Michael Pettis writes that in the current environment is that small and medium enterprises (SMEs) are hurting, and last week’s minimum reserve hike – which came out the same day as the CPI number – will undoubtedly make things worse since any withdrawal of credit is unlikely to affect the top customers (SOEs and local governments) and will fall disproportionately on marginal borrowers
U.S. Policies Undermining Community Banks
According to Louis Hernandez, U.S. government policy is geared toward the too big to fail banks and this undermines community banks and Credit Unions which serve small and medium sized businesses. His contention is that there is a vast difference between ‘main street banking’ which serves local communities and SMEs and ‘wall street banking’ geared
Jamie Dimon on CNBC
Jamie Dimon’s 17-minute interview by Maria Bartiromo below was done earlier in the week before JPMorgan Chase released their numbers. The numbers were good, showing quarterly profits of $4.8 billion or $1.12 a share. Dimon expects to resume a dividend of 75 cents a share when his firm gets the green light to do so.
The Big Interview with Austan Goolsbee
Also see: Big Interview: Goolsbee Defends Obama Record on Business – Real Time Economics
More on retail sales, small businesses and economic growth
There were three pieces of data today that give the complete picture for the consumer economy right now. My read of the data says we are now in a holding pattern awaiting more concrete evidence that the technical recovery which began last summer actually has legs and will become a real recovery. There are tenuous
Small business optimism sees slight uptick
CNBC discusses the small tick up in the NFIB Small Business Optimism Index with William Dunkelberg, Chief Economist for the National Federation of Independent Business. Note that despite the uptick, small businesses are not saying they plan to hire more workers or increase capital investment. The world in small business land is in a world
Hiding Bank Losses
In a recent post on the money multiplier, a reader Luis Enrique asked about bank lending and capital constraints. Anecdotally, much of the reduction in credit is supply-constrained as well as demand-constrained. That means it’s a matter of banks not lending; it’s not just about firms and individuals not borrowing. Banks are capital-constrained even if
Whitney: The Small Business Credit Crunch
Meredith Whitney sounds off in today’s Wall Street Journal about small businesses. She is worried about the lack of credit they are getting and its effect on the tenuous economic recovery in keeping the unemployment rate high. She writes: [S]tates will approach their June fiscal year-ends and, as a result of staggering budget gaps, soon
The Economy’s Vicious Cycle for Michigan Banks and Business
The video below from the Wall Street Journal gets at the heart of why the bailouts have been so toxic for the economy. Banks, still laden with existing bad loans to small businesses, are unwilling to make new ones. Businesses, unable to receive credit, cannot expand or must downsize. This in turn puts a squeeze