Corporate welfare program: More easing ahead

On Saturday I wrote how the global equity markets soared on the news of central bank moves or promises of moves to pumped more cash into a slowing economy.

All these moves do not foretell a growing world economy. If fact it’s the complete opposite as predicted by the move announced Monday that America’s biggest retailer is dramatically cutting inventory at all its stores.

WalMart has cut 15% of its skews or products that it carries in the past 6 months and plans to cut an additional 8%-10% over the next year.

The moves are playing havoc with the retailers whole supply chain, most of which begins with Chinese manufacturers.

To prove the point America’s largest manufacturers and consumers band companies have told us what the federal government cannot or will not. We are in a recession.

CEOs from Caterpillar, 3M, Kimberly Clark and Johnson & Johnson have all recently said that times are hard, sales are down and there will be layoffs.

So let’s say this is the new MO for the US economy.

What’s good for corporate America is no longer good for America, because if the Fed eases again due to a slowing economy, then causing corporate stocks go up, but what Americans owe for that corporate welfare program will go up sharply.


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