All the media channels talk about the great recession on a daily basis, when they try to explain the current state of the economy. Should we cut or raise rates is being beaten with a stick by all the economists. I’ve heard Janet Yellens name at least a million times since she took the Chair of The Federal Reserve Bank. Now I want to talk about how the recession aftermath is still lingering and the economy is not as rosy as it may seem. Do you know that the labor market is still not doing particularly well, and many employers are padding their numbers in tactical ways? The housing market is better and people are supposedly buying again. Every time I hear the numbers I question what percentage of those new housing purchases are rich investors? In any event the recession has not fully gone away and I want all of you to get ready for a possible inflationary period to hit your wallet.
The recession aftermath is influencing major changes to corporate America, where blue chip companies are buying each other with reserve cash flow. The M& A markets are on fire in the past 2 years, and it is primarily due to all the extra cash these companies have on the side line just sitting on the bench. These companies are buying revenue instead of trying to grow revenue. What does that really mean for the average person? When a big company merges with another big company the first thing to happen is a reduction in jobs. They are eliminating more jobs without offshoring them, and nobody seems to bat an eye. To explain further, just recently Microsoft revealed it will reduce its workforce by 12K jobs, due to the merger they had with Nokia. On the drive in to work Fox Media placed a buy bid for Time Warner for 85 Billion dollars and a few seats on the board of Fox. What is the first thing they will do if this purchase gets approved? How many people can we skin? They call a reduction in jobs a corporate synergy to mask the real threat to America’s citizens. If the government keeps allowing these mergers and acquisitions to take place it will systematically reduce available labor positions by millions. When big companies get even bigger, they reduce operating costs, raise prices to justify the purchase of the smaller company, and monopolize the markets.
