Slump will go on "5 to 10 years," private investors say
Weak demand, and no quick end in sight: ACG
Slump will go on "5 to 10 years," private investors say
Joseph N. DiStefano
U.S. hiring, business, and investment will stay slow for years. That's what people who ought to know - about 1,200 private-company investors and deal-makers who packed the Association for Corporate Growth's yearly conclave - were telling one another at the Convention Center last week.
"The big internal debate in our firm is whether the malaise is going to go on for five to seven years, or seven to 10," Mike Conaton, New York-based managing partner at buyout firm Cyprium Partners, said. Either way, "a long time."
American investment funds have plenty of money, he added. "There's a terrific overhang of capital," Conaton said, so much that companies in some industries are selling for more than sales, growth, or profit numbers justify.
And financing is cheap, if your credit's solid. The old Philly banks are gone, but lenders such as Susquehanna Bank, Tristate Capital Bank, Sovereign Bank, TD Bank, and M&T Bank Corp. "are very active" for business borrowers, said Graeme Frazier, president of Private Capital Research here.
For these capitalists, it's not the supply of money that's out of whack. It's demand for what business sells. (From my Sunday column in the Philadelphia Inquirer. Read the whole thing here.)
unless of course the corporations receive massive tax breaks to spur hiring.....meanwhile property values at the shore are holding steady. i wonder why? maybe profits are finding their way to corporate pockets and not into new jobs. massive corporate profits "used" to mean more jobs. now it just means more beachhouses.— slanted and enchanted- Let's not forget stock buybacks. No money for jobs, but money for share value support. Oh yea, buying companies, like Google buying the local fulfillment outfit GSI for billions. I mean it's not a new company and new jobs, but it is business investment, just not job creation. Oh yea, other assets are bought in speculative fashion, like gold, oil and equities. Plenty of money to bid up Netflix and Apple shares. But watch the downside.
- Nando, it was eBay that bought GSI http://www.philly.com/philly/blogs/inq-phillydeals/eBay-buys-GSI-for-24-billion.html— Joe D
- The US economy, growth & investment will remain ground to a halt until government aggressively embraces a pro- free market/ pro- business agenda.— kelprod2
- Nice theory, Kel, but did you read the article? These guys say demand is down, period, and it's gonna take awhile to resurrect, government or no government. Maybe even a lot longer with no government.— Joe D
Comment removed.- 10 years of strong military action against Iraq and Afghanistan, Pakistan and look how our boats have been lifted. Please, we will all drown at this rate.
- James, 2 questions: Isn't the Iran regime wrecking itself/won't we get what we want in time without starting a third war in the region against a much stronger opponent than the last two? And don't health insurance increases reflect higher medical costs/shouldn't we focus on bringing Medicare drug prices down and other direct cost savings stead of cramming down the insurers?— Joe D
