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No respite from recession for small businesses

Source: http://www.investmentpostcards.com/2009/12/11/no-respite-from-recession-for-small-businesses/
Posted on Friday, December 11th, 2009 | In Investing Lessons, Market Commentary
Contributed by: Prieur du Plessis (http://www.investmentpostcards.com) -

Despite the marked improvement in a number of credit spreads – including the TED spread, LIBOR-OIS spread, mortgage spreads, high-yield spreads and credit derivative indices – the credit situation for small businesses remains tight. The graph below shows the percentage indicating it was harder to obtain credit, as reported in the National Federation of Independent Business Optimism Survey, remains at crisis-type levels.

credit-remains-pci1

Source: Gluskin, Sheff & Associates – Breakfast with Dave, December 9, 2009.

The dilemma of small businesses is also illustrated by data from DiscoverCard Small Business Watch, showing the proportion of small businesses that have experienced cash-flow problems over the past 90 days.

clusterstock

Source: Chart of the Day, Clusterstock – The Business Insider, December 10, 2009.

Without a turnaround in the above, small businesses will not create jobs. And this is key to the overall economic recovery as small businesses are responsible for more than 60% of employment.

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About Prieur du Plessis (http://www.investmentpostcards.com)
Prieur du Plessis has 25 years’ experience in professional investment research and portfolio management. More than 1,000 of his articles on investment-related topics have been published in various regular newspaper, journal and Internet columns. He has also published a book, Financial Basics: Investment.
Prieur is chief executive and principal shareholder of South African-based Plexus Asset Management, which he founded in 1995. The group conducts investment management, investment consulting, private equity and real estate activities in South Africa and other African countries.
Plexus is the South African partner of John Mauldin, author of the Thoughts from the Frontline e-letter, and also has an exclusive licensing agreement with California-based Research Affiliates for managing and distributing its enhanced Fundamental IndexTM methodology in the Pan-African area.
Prieur is 52 years old and lives with his wife, television producer and presenter Isabel Verwey, and two children in Cape Town, South Africa. His recreational activities include long-distance running, motor cycling, traveling and reading.

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  1. No respite from recession for small businesses | Stock Market News … | Self Directed Investor News Says:
    December 11th, 2009 at 3:55 pm

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