Big Business Loves This Economy: Small Business? Not So Much

Survey finds executives at small and medium size manufacturers pessimistic about U.S. economy.

The Financial Times reports that, according to consultancy RSM McGladrey, “[n]early 80 percent of senior executives at small and medium-size U.S. manufacturing companies are pessimistic about the prospects for economic growth.” The Times attributes the fact that “[m]anufacturing has held up better than the service sector” recently to the “resilience of companies that employ fewer than 2,000 workers,” which “account for about 40 percent of U.S. manufacturing production and make up 99 percent of the country’s manufacturers.” However, in the McGladrey survey, “[f]ewer than 40 percent of respondents said their businesses were ‘thriving and growing’ — down by 10 percent from last year and 19 percent from 2006.” Also, the report “[w]orringly” indicates that “small and mid-size manufacturers are retreating from the global economy just as large manufacturers…have offset falling sales at home by increasing market share internationally.” Still, “those companies with a global strategy reported on average a four percent higher gross margin.”

B’Man: I call on companies of every size, from a 3 or 4 man shop to several thousand employees (Nissan, Honda, Delphi, etc). With very few exceptions, they all are complaining about business and many have informed me that if something doesn’t give, they will be foirced to close their doors, or, at the very least, conduct massive layoffs (massive means up to half or more of their employees).

By and large, I don’t think it is that Big Money thinks the economy is good, but that if they begin to address the truth, they realize that it could all fall apart.

It is similar to sticking their heads in the sand to ignore the truth.

But just look at the “indicators” and see how bad things actually are. To understand the truth of the matter, please turn off your TV (especially Fox Noise) and read. Print media, especially Finacial publications, most especiially foreign, are addressing what the American Media is staying away from, by and large.

No use causing a panic by telling the truth. Right?

What Economic Problem, You Ask?

B’Man: I feel like I am screaming at the top of my lungs to totally deaf and blind people. They can’t hear me, nor can read my lips. Maybe they view me as the crazy preacher-type on the street corner screaming doom and gloom?

But I believe I have a pulse on what is happening to a certain sector of business in the SE USA. My business is set up to call specifically on manufacturing in the SE USA. If you read anything I write about, you understand that I am seeing American companies dry up and blow away or move out of country (furniture has been hard hit, along with American automakers). Many folks who work (worked) in these factories know exactly what I’m talking about. Good jobs are scarce and even harder to obtain nowadays.

There is an influx of foreign manufacturers coming in (transportation costs are getting high combined with our labor force getting cheaper to hire). If you are swift on your feet, you will find products that these foreign companies like and try yo sell them, but by and large they prefer their country of origin (if Japanese automaker, they try to buy Japanese products to manufacture with… understandably). But Americans lose.

Stephen Pizzo writes about the financial side and how many Big Banks in the world see the US as on the very brink of financial failure and doom. These sources ain’t just some redneck crying wolf, ya’ll:

Freedom: Nothing Left to Lose?

by Stephen Pizzo

Fortis Bank predicts US Financial market meltdown within weeks
(Fortis is a large bank and insurer in the Netherlands and Belgium.)

28th of June, 9:10
BRUSSELS/AMSTERDAM – Fortis expects a complete collapse of the US financial markets within a few days to weeks. That explains, according to Fortis, the series of interventions of last Thursday to retrieve € 8 billion.

“We have been saved just in time. The situation in the US is much worse than we thought”, says Fortis chairman Maurice Lippens. Fortis expects bankruptcies amongst 6000 American banks which have a small coverage currently. But also Citigroup, General Motors, there is starting a complete meltdown in the US”

And,

Royal Bank of Scotland Warns of Global Crash
Financial Times of London

The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.

“A very nasty period is soon to be upon us – be prepared,” said Bob Janjuah, the bank’s credit strategist.

A report by the bank’s research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as “all the chickens come home to roost” from the excesses of the global boom, with contagion spreading across Europe and emerging markets.

The Fed is in panic mode. The massive credibility chasms down which the Fed and maybe even the ECB will plummet when they fail to hike rates in the face of higher inflation will combine to give us a big sell-off in risky assets,” he said.”

And,

Barclays: “US central bank accused of unleashing an inflation shock that will rock financial markets.

Ambrose Evans-Pritchard
Business Editor, Financial Times

“Barclays Capital has advised clients to batten down the hatches for a worldwide financial storm, warning that the US Federal Reserve has allowed the inflation genie out of the bottle and let its credibility fall “below zero

Simmons says market forces driving crude to $600
Press/Journal/ UK. 1 July 2008: The chairman of energy investment-banking firm Simmons and Company International has predicted that oil prices could double or more within a few years.

Matt Simmons said that in his view oil was “dirt cheap at $140 a barrel”, and with supplies having peaked and demand growing prices were bound to go higher.

He said: “It is not beyond the pale of imagination to see oil at $300, $400, $500 or even $600 a barrel within a relatively short time, much less than 20 years. It is not speculators who are driving oil prices. It’s simply about supply and demand.”

B’Man: We are treading very dangerously on the “cliff” Stephen mentions in the article (you should go read the entire thing) and we aren’t really hearing any warning about this from the media and the Fed (or the American banking institutions, in general). Do you think that the rest of the world is crying wolf or that most of America is dumbed down and oblivious to what is about to happen?