Whither the Vaunted Obama “Recovery”?
By John W. Lillpop
With just over five months to go before the 2012 presidential elections, Barack Obama’s “Recovery” seems to have gone missing.
The reports below chronicle a drop in consumer confidence, home prices at new lows, and the collapse of one of the largest law firms in America, all ominous signs for a president struggling to convince voters that “America is back!” and that his tenure should be extended another four years.
Consumer Confidence Goes South: Reference 1
NEW YORK (AP) — Americans' confidence in the economy in May had its biggest drop in eight months as consumers fretted about slow hiring, a big stock market drop and the global economy, says a private research group.
The Conference Board says its Consumer Confidence Index now stands at 64.9, down from a revised 68.7 in April. It was the biggest drop since October 2011.
Economists were expecting a reading of 70, according to a FactSet poll of analysts. The current level is below February's 71.6, which is the highest level it's been in a year.
Consumer confidence is widely watched because consumer spending accounts for 70 percent of economic activity. The measure is significantly below the 90 reading that indicates a healthy economy. But the current level is well above the 40 it hit last October.
Home Prices at New Lows: Reference 2
Home prices fell in the first quarter to new post-crisis lows, but prices were up in March from February for the first time in seven months.
The increase is the latest evidence of a slow recovery taking shape in the troubled housing market.
The Standard & Poor's/Case-Shiller home price index showed that prices increased in 12 of the 20 cities it tracks.
Still, the major indexes ended the first quarter at new post-crisis lows, the report said. For the first quarter, prices were down 2 percent, compared to a 3.9 percent decline in the last three months of 2011.
Prices increased in Tampa and Miami — two of the hardest hit markets.
Las Vegas — the nation's worst market — saw no change in prices. Prices dropped sharply in Detroit, Chicago and Atlanta.
The increases partly reflect the beginning of the spring selling season. The month-to-month prices aren't adjusted for seasonal factors.
The overall index of 20 cities was essentially unchanged in March, after falling 0.8 percent in February.
Major Law Firm Files for Bankruptcy: Reference 3
(Reuters) - The crippled law firm Dewey & Leboeuf LLP filed for Chapter 11 bankruptcy protection Monday night and will seek approval to liquidate its business after failing to find a merger partner, marking the biggest collapse of a law firm in U.S. history.
Once one of the largest law firms in the U.S., Dewey has been hit by the loss of the vast majority of its roughly 300 partners to other firms amid concerns about compensation and a heavy debt load.
"Dewey's failure is rocking the industry in the sense that most firms are saying to themselves, if Dewey could go down, could we?" Kent Zimmermann, a legal consultant at the Zeughauser Group, said in an email Monday night.
Dewey said in a filing it had decided to wind down its business following unsuccessful negotiations with other law firms to strike a deal. It said it would ask about 90 employees to remain on staff to assist in the liquidation, which it expects to be completed in the next few months.
Negative economic conditions, along with the firm's partnership compensation arrangements, created a situation where its cash flow was insufficient to cover capital expenses and full compensation expectations, Dewey said.
The firm's collapse is expected to be the subject of years of court proceedings, and a number of former partners have already retained lawyers to represent them.
Monday's filing follows months of turbulence, as wave after wave of partner defections shattered the high-profile firm from within. In April, the Manhattan District Attorney's office launched a criminal probe of former firm chairman Steven Davis. He has denied any wrongdoing.
The result of a 2007 merger between Dewey Ballantine and LeBoeuf, Lamb, Green & MacRae, Dewey & LeBoeuf had about 1,450 attorneys at its peak, according to The National Law Journal.
The BIG Question: Just where the hell is the Obama “Recovery”??
And: Is Mitt Romney ready to take over in January?
Ref 1 http://news.yahoo.com/consumer-confidence-plunges-may-140420807--finance.html
Ref 2 http://www.cnbc.com/id/47597053
Ref 3 http://www.reuters.com/article/2012/05/29/us-deweyandlebouef-bankruptcy-idUSBRE84S01R20120529
Posted by John W Lillpop at 9:47 AM