Since the start of the recession two years ago, corporate and consumer balance sheets have been engaged in a forced bout of cutbacks that figure prominently in fourth-quarter earnings reports coming out now.
The signs are everywhere. General Electric Co.'s chief financial officer on Friday referred to the "focused shrinkage" of its financial unit. A day earlier, Target Corp. said it plans to test stores that will have 50% fewer items. Today Walmart, the nation’s largest retailer, announced it is cutting about 11,200 jobs at its Sam’s Club warehouses.
Of course, cutbacks of staff, assets and inventories have helped the bottom line and the stock market, an incredible opportunity if you are a bank and have cheap leverage financed by the FDIC available for your forays into the markets.
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