Brutal economic conditions unsurprisingly hit global accounting giant Deloitte Touche Tohmatsu this year.

The firm reports that revenue for fiscal 2009 (which ended May 31) fell 4.9% from the year before, settling at $26.1 billion. A decline in deal flow and the economic downturn around the world are cited as the primary reasons for the performance. Only the consulting business posted a gain. At the same time, Deloitte's workforce grew globally by 40,000 to 169,000, but the net increase masks a turbulent year for the employees.

M&A activity is heading for the dust bin. The should put additional pressure on the earnings of big Wall St. banks and brokerages. According to the FT," KPMG's Global M&A Predictor – an index that looks at 1,000 companies and the ratio of their share price to earnings – is forecasting a decrease in both appetite and capacity of companies to make deals."

The major reason for a potential shift in M&A sentiment is the failing P&L prospects of many companies as the economy falls under more and more pressure. Who wants to buy a company which is likely to do poorly?

Short-term, the real burden of the fall-off in deals will be investment banking operations. With the financial fortunes of many firms like Lehman (NYSE:LEH) and Morgan Stanley (NYSE:MS) already in enough trouble to cause worries about whether they can stay independent, losing most of their fees for merger advisory service comes at an especially hard time.

When it rains, it pours.

Douglas A. McIntyre is an editor at 247wallst.com.

MAJOR PAPERS:

• John Meriwether, whose Long-Term Capital Management lost $4B in 1998, has new troubles with JWN Partners, as his Meriwether's largest hedge fund has fallen 28%, and another market fund is also down. Investors have until Monday to ask to pull out their investment, the Wall Street Journal reported.
• The Wall Street Journal also reported that failed mortgage provider New Century Financial might be able to get back some of its lost funds by suing its auditor KPMG, according to a court appointed investigator who looked at the company's demise.
• After reaching a deal that allows its customers to access many of Universal Music's songs, the Financial Times reported that Nokia Corporation (NYSE: NOK) is in talks with the other three leading record companies - Sony Corporation's (NYSE: SNE) Sony BMG, EMI and Warner Music Group Corp's (NYSE: WMG) - about giving its customers access to their catalogues.

• Comscore has released its February "U.S. paid clicks" report, according to a source, which reportedly said Google Inc's (NASDAQ: GOOG) paid clicks in the U.S. during the month increased 3% year-over-year; however, the 'slight, slight improvement' from January may not actually be, the Silicon Alley Insider reported, since Comscore did not adjust for Leap Year. Google's paid clicks in December were up 12% and up 27% in November.

In what could be a a key ruling for those of us hoping to learn more about shady subprime lending practices, a bankruptcy judge has given New Century Financial until February 6 to turn over a report of an investigation into the firm's cash handling practices to bankruptcy monitors.

Michael Missal was appointed by judge Kevin Carey to look into the accounting mistakes and/or fraud that led the firm to file false financial statement with the SEC in 2005 and 2006. According to the AP, "That report has yet to be filed. Missal said that continued foot-dragging by the defunct lender, former leaders and accounting firm KPMG will hold it up until March."

However, he has filed the report on possible cash mishandling, but it has not been made public at the request of New Century.

• The Wall Street Journal reported [subscription required] that News Corp. (NYSE: NWS) reached a tentative accord to buy Dow Jones (NYSE: DJ) for $5B. The Dow Jones board will vote tonight.
• The Journal also reported that Ford's (NYSE: F) rumored sale of Volvo is to raise cash for a deal with the UAW.
• FDA inspectors see less than 1% of all food imports and it is expected to get worse, according to the Wall Street Journal.
• The Financial Times reported that a U.S. judge dropped charges in KPMG case.

• According to the UK Guardian, OPEC is under pressure for an increase in production following Goldman Sachs' advisory that oil could hit $95 a barrel by year's end.