The above chart shows the ratio of: (a) the number of credit upgrades, to (b) the number of credit downgrades, reported by credit rating agencies for corporations in the US and Europe.
The trend obviously is that in the last 2 years, credit has been shrinking, i. e., it is getting more and more difficult for companies and people to borrow money from banks, credit unions, loan sharks, and even relatives.
This is where the rubber meets the road in terms of the real cost, and the real impact on businesses, of Obama's unfriendly, and even hostile attitude towards anyone who is an entrepreneur or business person. It is the consequence of "spread the wealth" government policies, meaning higher taxes, higher government spending, re-distribution of wealth, huge annual government deficits, and financing of government spending by issuing more and more debt, in the form of Treasuries. The effect of more and more government debt is to make borrowing more difficult for private corporations and individuals.
In particular, in the normal course of business, private corporations need to regularly 'roll debt', meaning they need to re-issue or re-lever debt, whenever existing or current loans or bonds come due. However, this is made more difficult and costly to the corporation when credit gets tighter, as is happening now, as shown in the chart. So the current difficult credit environment increases the cost of doing business, which means fewer people will be hired, and more people losing their jobs. Things are as bad as they have been since the crisis began in terms of ratings changes among investment grade and high-yield credit.
The credit crunch was aided and abetted by Obama. And it is another indicator of why we are slipping back into recession.
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