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The days of cheap capital are gone for good. This is a good read for any business owner thinking about external financing issues and/or selling the company at some point in the future. It is an interesting perspective and goes to the root cause of what we have seen in the recent past, as well as a good perspective on that the “new normal” is.
We face a lot of discussions like this with our clients and it is sometimes hard to get a good pulse on what the “market rate” is for a given hypothetical small business equity transaction, mainly because every business is different and market conditions have been changing so rapidly. We serve the role of bridging the gap between the business owner and the financing community which is the supplier of capital.
The broadly watched indicator of initial jobless claims for unemployment for the week ending January 2nd came in at 434,000. The four week moving average is at its lowest level since September of 2008. The highest was 674,000 in March of 2009 which was a 26 year high. Some economists are saying that if this goes much lower, the economy should start adding jobs on a net basis.
Allen
Link:
(LINK TO ARTICLE) By CHRISTOPHER S. RUGABER, AP Economics Writer Christopher S. Rugaber, Ap Economics Writer
WASHINGTON – The number of newly laid-off workers seeking unemployment benefits fell last week to the lowest level since early July, evidence that job cuts are slowing.
The Labor Department said Thursday that initial claims for unemployment insurance dropped to a seasonally adjusted 545,000 from an upwardly revised 557,000 the previous week. Wall Street economists expected claims to rise by 5,000, according to Thomson Reuters.
The decline was the third in the past four weeks. The four-week average, which smooths out fluctuations, dropped 8,750 to 563,000. Despite the improvement, that’s far above the 325,000 per week that is typical in a healthy economy.
Commentary:
Continuing drop in initial jobless claims is further positive sign that the economy has bottomed out and is poised for recovery, barring any unforeseen shocks.
China is engaging in some sabre rattling with comments about its holdings of US Treasuries. China is the single largest holder of US treasuries. If China sells, long term interest rates will be under pressure to go up.
“The US sought to ease Chinese Premier Wen Jiabao’s concern about the security of his country’s investments in US government debt,
reiterating pledges to cut the budget deficit in half in four years.”