There have been a lot of analogies to describe the financial pain of the current economic recession, but CCMP Capital Chairman Gregory Brenneman evoked a more holy view.

“A prolonged recession feels a little Biblical to me. It’s like the story of Joseph — seven years of feast, seven years of famine. It feels like we’re in year two to me,” Brenneman said.

He said he expects U.S. unemployment to hit 10-11 percent before the recession ends, and real GDP (gross domestic product) will be down 2 percent.

“Recovery won’t happen until the back half of 2010. That means nobody really knows, but it’s going to be a long time from now,” Brenneman told the Wharton Restructuring and Turnaround Conference in Philadelphia on Friday.

Despite his view that the U.S. was mired in economic famine, Brenneman said it was a great time for private equity firms to buy good assets for low valuations.

“Really good companies are priced the same as so-so or bad companies. It’s a great time to buy things you couldn’t otherwise buy,” he said.  ”The best P/E times have been in times like these,” Brenneman said.

Blackstone’s CEO Stephen Schwarzman, who didn’t take a bonus this year, sounds pretty frustrated with the public market’s attitude to Blackstone’s stock.

A discussion about the firm’s dividend — it is eliminating the fourth quarter but thinks 2009 will be OK — turned into an exercise in thinking aloud tinged with annoyance.

COO Tony James explained succintly on a conference call with analysts how Blackstone’s cashflow meant the dividend looked pretty secure.

Schwarzman added: “Its frustrating being us. Because if we do pay that, with the stock at this kind of dimwitted price — you could say, why even pay the thing, because nobody cares.”

“But from our perspective, the numbers say we ought to be able to do that. We do hope that someone out there appreciates it. It is frustrating.”

Financial public relations firms, who elevated the honing of corporate messages to a highly profitable art form, are having to adapt their businesses and in some cases cut staff as the economic gloom intensifies.

With far fewer deals to publicize and lucrative “retainer” contracts under pressure, companies are cutting costs and are increasingly focusing on work thrown up by the crisis, such as capital-raising, restructuring and repairing tarnished images.”

So what exactly are they up to?

Some recent pr industry blogs and other web postings shine a light on some of the spinmeisters’ latest tactics.

Flacking firm Fishburn Hedges openly boasts about how a big capital-raising by a UK mortgage lender was kept off the front pages by presenting it as “a technical, esoteric story suitable for business sections”.

For former News of the World Editor Phil Hall, who advised former RBS boss Fred Goodwin on his parliamentary testimony a few weeks ago, there’s apparently no such thing as bad publicity.

Even amid the current financial wreckage, financial pr remains a fiercely contested field as shown by the fact that there’s even a dedicated M&A league table for PR advisers.

Deal-making in the U.S. media and entertainment sectors is going to be down this year, says a new PricewaterhouseCoopers survey (request a copy here). Now, that’s not a new or startling conclusion given the state of the economy, but it’s just another piece of evidence that when consumers and advertisers get thrifty, deal makers can end up become benchwarmers as companies struggle with cost cuts and other exigencies.

Here are some industry trends for 2009 from the PWC survey:

• Declining consumer spending is hitting many media and entertainment companies. What’s more, these declines were exacerbated by technological convergence, as these firms adapt to and look for ways to make money off new Internet technologies.
• Overall U.S. advertising market is going to shrink as sponsors cut ad budgets across retail, consumer goods, automotive, financial and other sectors.
• Companies will continue to divest their non-core assets, but those that don’t get a good price will prefer to hold on rather than sell at bargain prices.
• Bolt-on deals will likely be popular for risk-averse companies, so deals below $1 billion — mostly small and mid-market companies — will be a rising trend.
• Private equity will remain quiet since the debt markets aren’t really healthy yet.
• Deal structures will change this year, given the difficulty of getting debt financing. The strategic rationale for doing a deal will be more important than getting a favorable capital structure.

But all hope is not lost, according to PWC’s Transaction Services Entertainment & Media Leader Thomas Rooney:

With M&A activity ingrained in the DNA of so many companies and the ever growing presence of private equity, E&M deal activity might not be as quiet as many expect in 2009… History has shown the E&M industry to be one of the more active M&A sectors irrespective of market and economic conditions.

And there have been a couple of deals already this year, although no mega-transactions, as the PWC report suggests. Live Nation wants Ticketmaster and Sumner Redstone’s National Amusements theater chain is being shopped to potential buyers. Could Lions Gate be next?

(Photo: Viacom chairman Sumner Redstone/REUTERS)

Given Citigroup stock’s dizzying tumble toward nationalization (wipeout) levels, it would appear Uncle Sam’s conversion of Citi preferred shares into common broadly supported anyone shorting the stock. The government did a deal to convert $25 billion of its Citi preferred stock, giving it a stake of up to 36 percent in the bank.

Other moves announced this morning also have a decidedly more managerial tone. The bank’s board is to be reconstituted. Other major shareholders, including the government of Singapore, said Uncle too, getting on board with the Treasury plan, which supporters will argue is better than no plan at all. Singapore was an early adopter of the failed investment strategy of bailing out the bank.

Where we are in this latest wave of the financial tsunami is difficult to calculate. Globally, this week has seen tremendous activity between governments and banks. Lloyds Banking Group is prepared to tap a 500 billion pound ($715 billion) insurance scheme concocted by Britain to cleanse risky bank assets. And a deal struck yesterday could raise the British government’s holding in Royal Bank of Scotland to 95 percent. Global development banks have launched a two-year plan to lend up to 25 billion euros ($32 billion) to shore up banks and businesses in crisis-hit Eastern and Central Europe.

The problem with lenders of last resort is that they are a monopoly and their doors can never close. Notice the queue of seemingly defunct businesses lining up for ever more cash, whether it be Fannie Mae looking for another $15 billion, or the $30 billion GM says it needs to forestall a meltdown of industrial proportions.

Deals of the Day:

* The chairman of China Huiyuan Juice Group, the country’s top juice maker, said he would meet with Coca-Cola Co executives next week to discuss their $2.5 billion bid for his company.

* Beckman Coulter, a maker of medical test systems, said it agreed to acquire the diagnostic systems portion of Olympus Corp’s life sciences business for about $800 million to broaden its clinical chemistry offering.

* Britain’s BG Group sweetened its offer for Australian coal seam gas firm Pure Energy, now valuing the company at A$1.03 billion ($671.9 million), in a bid to eliminate rival bidder Arrow Energy from the race.

* Commodities trader Noble Group launched a takeover bid for Australia’s Gloucester Coal, valuing the miner at nearly A$400 million ($261 million), looking to thwart Gloucester’s planned merger with Whitehaven Coal.

* Indonesian coal miner, PT Indika Energy Tbk said it agreed to buy an 81.95 percent stake in engineering firm PT Petrosea Tbk from Clough International Singapore Pte Ltd for $83.8 million.

* China National Petroleum Corp launched a friendly C$443 million ($357 million) offer for Verenex Energy Inc to give the state-owned oil company a stake in a Libyan oil concession.

* Coal miner Caledon Resources said it has received an indicative approach “significantly in excess” of its current market price.

* UK-based NeutraHealth said it received an unsolicited offer from India’s Elder Pharmaceuticals, at an indicative partial offer price of 5.5 pence per share.

(PHOTO: Workers are reflected in the window of a Citibank branch in London January 16, 2009. REUTERS/Toby Melville)