News What is wrong with the US economy? Part 2

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The U.S. economy is facing significant challenges, highlighted by the Federal Reserve's decision to maintain interest rates at 2%, which led to a market decline. AIG's stock plummeted by 45% due to concerns over its exposure to risky derivatives, prompting speculation about a potential Federal bailout. The Fed is reportedly considering a lending facility for AIG, with major banks like Goldman Sachs and J.P. Morgan Chase involved in discussions. Despite some recovery in AIG's stock, there are ongoing concerns about the broader implications of a potential AIG collapse on the financial system. The U.S. trade deficit has also widened, raising alarms about the country's economic stability as it continues to accumulate debt.
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ALCOA to lay off 13,500 workers, freeze salaries and cut spending by 50%
MarketWatch - Late Tuesday Alcoa said it plans to cut 13% of its global workforce, sell four business units, cut output, freeze salaries and hiring efforts. The Pittsburgh-based aluminum giant said it is taking the steps to conserve cash in the current economic downturn. The meausures will result in a fourth-quarter charge of $900 million to $950 million after tax, or $1.13 to $1.19 a share.

Alcoa to slash 13,500 jobs and cut production
http://biz.yahoo.com/rb/090106/business_us_alcoa.html
Reuters - The company said it was reducing its smelting output by 750,000 tonnes per year, which is approximately 18 percent of total primary aluminum output, and selling four non-core businesses.

It is also cutting an additional 1,700 contractor positions and freezing salaries and hiring. It is reducing 2009 capital expenditures by 50 percent, Alcoa said.

Fed sees longer economic decline than earlier forecasts
http://biz.yahoo.com/cnnm/090106/010609_fed_minutes.html
The U.S. economy is likely to deteriorate further this year and unemployment will rise into 2010, according to the latest forecasts from the staff of the Federal Reserve.

This bleak forecast was presented to Fed policymakers when they met last month and lowered interest rates to near zero. Low interest rates are one key tool the central bank uses to try to spur economic activity.
. . . .
Let's see what happens by the end of the week.
 
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  • #1,102
Cheney: No one saw economic crisis coming
http://news.yahoo.com/s/ap/20090109/ap_on_go_pr_wh/cheney_interview

In an interview with The Associated Press, Cheney also said that Bush has no need to apologize for not foreseeing the economic crisis.

"I don't think he needs to apologize. I think what he needed to do is take bold, aggressive action and he has," Cheney said.

"I don't think anybody saw it coming," he said.

. . . .
:rolleyes: They certainly didn't.
 
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Stock futures point lower ahead of trade report
http://biz.yahoo.com/ap/090113/wall_street.html
By Sara Lepro, AP Business Writer (Tuesday January 13, 7:12 am ET)
Wall Street appears ready to extend losses, investors uneasy about profit, trade reports
NEW YORK (AP) -- Wall Street appeared ready to extend its losses Tuesday as investors already uneasy about weak corporate profit reports awaited a reading on overseas demand for U.S. products.

The Commerce Department will release monthly trade data for November at 8:30 a.m. Eastern time. Wall Street expects the U.S. trade deficit narrowed significantly as oil prices fell. U.S. imports of other products are also expected to have fallen in November, reflecting the deepening recession. But at the same time, spreading weakness overseas has sharply curbed demand for American exports, which until recently had been the one bright spot for the U.S. economy.
Asian and European equities markets are down in response to poor earnings (or losses) and continued weakness in the US economy.

Alcoa reported losing $1.19 billion in 4Q as demand for aluminum plunged. Other companies also are warning that their results are being hit hard by the recession.

Sony may post first operating loss in 14 years.

http://biz.yahoo.com/ap/090113/world_markets.html

Look here (after 0830 EST today for Nov 2008) for trade summary - http://www.census.gov/indicator/www/ustrade.html
 
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  • #1,104
Some good news -

Nov. trade deficit drops to lowest level since '03
Trade deficit in Nov. plunges to lowest level in 5 years as oil imports drop by record amount

WASHINGTON (AP) -- The trade deficit plunged to the lowest level in five years in November as a deepening recession slashed demand for oil by a record amount. Imports from China also fell by the largest amount on record.

The Commerce Department says the trade deficit narrowed to $40.4 billion in November, a 28.7 percent decline from October's deficit of $56.7 billion. The bigger-than-expected decrease left the deficit at its lowest level since November 2003.

The trade deficit through November is running at an annual rate of $688.2 billion, down from the 2007 imbalance of $700.3 billion. The 2007 deficit had represented the first decline after five years of record highs.

. . . .
Steep drop in imports, but exports are also falling.

Oil falls below $37 on gloomy demand outlook
http://biz.yahoo.com/ap/090113/oil_prices.html
 
  • #1,105
History tells us that economies (world domination) decline, why should the US be unique, the only way you could be is if you were self sufficient and leaders of technology, as much as i love you guys, the threat of terrorism is draining your economy, and you are not self sufficient, so your economy will decline.
 
  • #1,106
wolram said:
... your (United States) economy will decline.
That's one hell of a prediction wolram. When do you figure it will happen?
 
  • #1,107
jimmysnyder said:
That's one hell of a prediction wolram. When do you figure it will happen?


When your budget against terrorism exceeds your countries income, or terrorism er rodes your income, you are not self deficient.
 
  • #1,108
wolram said:
When your budget against terrorism exceeds your countries income, or terrorism er rodes your income, you are not self deficient.
The budget against terrorism is tiny and it all gets spent either on minimum wage mall-cops at airports or on security contracts that you give to your own defence companies. It's really just a slightly annoying version of the dig-a-hole, fill in-a-hole YTS schemes the UK used to run.

You only really have to worry when you have no natural resources and no industry, you make all your money on 'services' and you have a 3rd world currency that nobody wants.
ps. Anybody want to buy my house there!
 
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wolram said:
When your budget against terrorism exceeds your countries income, or terrorism er rodes your income, you are not self deficient.
I am frequently self deficient.
 
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mgb_phys said:
The budget against terrorism is tiny and it all gets spent either on minimum wage mall-cops at airports or on security contracts that you give to your own defence companies. It's really just a slightly annoying version of the dig-a-hole, fill in-a-hole YTS schemes the UK used to run.

You only really have to worry when you have no natural resources and no industry you make all your money on 'services' and you have a 3rd world currency that nobody wants.
ps. Anybody want to buy my house there!


True, but as your country wants resouces, who will guaratee that they will be given ,you will have to fight more and more for them ,who will gurantee that the USA will be given preference?
 
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wolram said:
True, but as your country wants resouces, who will guaratee that they will be given ,you will have to fight more and more for them ,who will gurantee that the USA will be given preference?
Wolram - I am curious, could you lay a finger on a particular news source or group (e.g. Guardian, Times?) on which you construct these views? That is, the view that the US is running out of resources, that 'terrorism' or even defense spending in general is the majority of US spending, and so on?
 
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mheslep said:
Wolram - I am curious, could you lay a finger on a particular news source or group (e.g. Guardian, Times?) on which you construct these views? That is, the view that the US is running out of resources, that 'terrorism' or even defense spending in general is the majority of US spending, and so on?

I think it's part of a more general antipathy against the US in Europe. Additionally the US has made a lot of decisions in this decade which have lead to a clear decline in it's reputation. Especially unfortunate has been tolerance towards torturing.
 
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mheslep said:
Wolram - I am curious, could you lay a finger on a particular news source or group (e.g. Guardian, Times?) on which you construct these views? That is, the view that the US is running out of resources, that 'terrorism' or even defense spending in general is the majority of US spending, and so on?

Look to history books, no nation will be eternally the super power, i just think the reasons i have given will be a factor in the fall of the US.
 
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misgfool said:
I think it's part of a more general antipathy against the US in Europe. Additionally the US has made a lot of decisions in this decade which have lead to a clear decline in it's reputation. Especially unfortunate has been tolerance towards torturing.
Well that's one thing. For that matter, one doesn't have to have much of any reason at all to dislike another country, but Wolram say's '...I love you guys', as in we're on the road to ruin and he mentions some some reasons why.

wolram said:
Look to history books, no nation will be eternally the super power, i just think the reasons i have given will be a factor in the fall of the US.
Well I venture that most American's don't forever want to be the only super power, rather, they generally want to be prosperous, free, secure, and have the opportunity for happiness. If that could be insured with half or a quarter of the present defense budget, the budget would go there, with some yelling and gnashing of teeth from the industry but decline it would. Personally I could care little about the US being a super power if the other conditions were met.*

I was more interested in the immediate reasons why Wolram might think a US collapse is near. If it is, it is clearly not because the US is starved of physical resources or needs to go fight for them, we have ample within our economic means (if intelligently managed), and in the list of stresses on our government spending, defense spending is not the big problem, entitlements are - the 'structural deficit' being the phrase currently favoured by the President - elect.

* One of the measures that would help allow the US retire the super power crown is for the EU to step up and carry more of the military load for NATO. :wink:
 
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mheslep said:
Well I venture that most American's don't forever want to be the only super power, rather, they generally want to be prosperous, free, secure, and have the opportunity for happiness. If that could be insured with half or a quarter of the present defense budget, the budget would go there, with some yelling and gnashing of teeth from the industry but decline it would. Personally I could care little about the US being a super power if the other conditions were met.*

I was more interested in the immediate reasons why Wolram might think a US collapse is near. If it is, it is clearly not because the US is starved of physical resources or needs to go fight for them, we have ample within our economic means (if intelligently managed), and in the list of stresses on our government spending, defense spending is not the big problem, entitlements are - the 'structural deficit' being the phrase currently favoured by the President - elect.

* One of the measures that would help allow the US retire the super power crown is for the EU to step up and carry more of the military load for NATO. :wink:
This seems to reflect my experience as well.

Meanwhile Nortel Networks has filed Chapter 11 bankruptcy.
http://news.yahoo.com/s/nm/20090114/ts_nm/us_nortel
. . . .
According to the court filing in U.S. bankruptcy court for the district of Delaware, Nortel's major creditors include Bank of New York Mellon, with claims valued at nearly $4 billion.

Nortel's shares have tumbled along with the company's fortunes, sinking into penny-stock territory in recent months. In mid-2000, at the zenith of the company's success, they were worth more than C$1,100 each, adjusted for a stock consolidation that took place in late 2006.

"It's obviously a remarkable transformation from where it was as the largest company in Canada worth about 35 percent of the TSX in 2000," said Gavin Graham, director of investments at BMO Asset Management.

"But this is a reflection of the way that the telecommunications industry has changed."

Nortel has faced intense competition from North American and European rivals such as Alcatel-Lucent, as well as low-cost Asian vendors such as Huawei Technologies.
. . . .

Retail sales plummet 2.7 percent in December
http://news.yahoo.com/s/ap/20090114/ap_on_bi_go_ec_fi/economy

And the Dow30 were down about 2.8% in the first hour of trading, and has been down as much as 300 pts this morning.
 
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  • #1,117
mheslep said:
Well that's one thing. For that matter, one doesn't have to have much of any reason at all to dislike another country,

Ehh.. well no need to give any more reasons.

mheslep said:
Well I venture that most American's don't forever want to be the only super power, rather, they generally want to be prosperous, free, secure, and have the opportunity for happiness. If that could be insured with half or a quarter of the present defense budget, the budget would go there, with some yelling and gnashing of teeth from the industry but decline it would. Personally I could care little about the US being a super power if the other conditions were met.*

I bet the romans felt the same way. But they couldn't get prosperity, freedom, secury etc. So they satisfied with the second best thing, which was the greatness of Rome.

mheslep said:
I was more interested in the immediate reasons why Wolram might think a US collapse is near. If it is, it is clearly not because the US is starved of physical resources or needs to go fight for them, we have ample within our economic means (if intelligently managed), and in the list of stresses on our government spending, defense spending is not the big problem, entitlements are - the 'structural deficit' being the phrase currently favoured by the President - elect.

I can't see any immediate catastrophic collapse ahead, but Wolram is right in saying that all empires of the past have fallen.

mheslep said:
* One of the measures that would help allow the US retire the super power crown is for the EU to step up and carry more of the military load for NATO. :wink:

NATO isn't only a burden. NATO is the worlds biggest weapons fair. It's a marketing subsidy to the US military industry by the US government. And the US isn't a superpower because of NATO. It's those 5000+ nukes.
 
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msgfool said:
NATO isn't only a burden. NATO is the worlds biggest weapons fair. It's a marketing subsidy to the US military industry by the US government. And the US isn't a superpower because of NATO.
Eh? You misread me, I didnt say NATO was a burden, and I didn't say (the opposite) NATO makes the US a super power. I say that NATO is insufficient. The US need not be, would not want to be a superpower if the EU part of NATO stepped up.
It's those 5000+ nukes.
Since they have not been used in the post WWII world and realistically can't ever be used outside of an all out of a civilization ending WWIII, one would have to say its the often used conventional aspect of the US military that makes it 'super.'

The three parts of US superpower status per N. Ferguson:
1. Military
2. Economic. ~1/5 of world GDP.
3. Cultural. English language, etc.
 
  • #1,120
mheslep said:
Eh? You misread me, I didnt say NATO was a burden, and I didn't say (the opposite) NATO makes the US a super power. I say that NATO is insufficient. The US need not be, would not want to be a superpower if the EU part of NATO stepped up.

Even if EU would assume more responsibility in NATO, what would prevent the US of claiming that NATO was not doing it's duties and campaigning on it's own?

mheslep said:
Since they have not been used in the post WWII world and realistically can't ever be used outside of an all out of a civilization ending WWIII, one would have to say its the often used conventional aspect of the US military that makes it 'super.'

I don't doubt the firepower that the US has, but you can't say that the adversaries since WWII have been the toughest on the planet.
 
  • #1,121
misgfool said:
Even if EU would assume more responsibility in NATO, what would prevent the US of claiming that NATO was not doing it's duties and campaigning on it's own?
Because, I assert, the US people don't want a large military if its not necessary. We're not Rome.
 
  • #1,122
Dow 30 is down about 800 pts so far this year

More job cuts are on the way

Motorola to cut 4,000 more jobs in 2009
http://news.yahoo.com/s/ap/20090115/ap_on_bi_ge/motorola_cuts

Microsoft may lay off as many as 15,000
http://news.yahoo.com/s/ap/20090115/bs_nm/us_microsoft
 
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  • #1,123
mheslep said:
Because, I assert, the US people don't want a large military if its not necessary. We're not Rome.

You didn't answer my question. The way I see it stepping up in NATO would only bring costs to EU while the US would operate in the world as usual. So why bother?

I agree that the US is not Rome, although a part of it is inherited. However, in practice the US has a large military. What evidence do you have to back you assertion?
 
  • #1,124
misgfool said:
You didn't answer my question.
Yes I did, directly, though it was just an assertion on my part, just as you are doing here w/ 'the way I see it'
The way I see it stepping up in NATO would only bring costs to EU while the US would operate in the world as usual. So why bother?
Even if you are correct about US intentions, the EU&Canada still have an obligation to meet for NATO in areas like Afghanistan, as Sec. Gates makes clear, diplomatically, nearly every time he speaks on the subject.

What evidence do you have to back you assertion?
The US military and its industry have always lobbied to increase themselves in size and budget, but historically the US electorate has repeatedly demonstrated a wariness of its military. In the 20th century the US government drastically and repeatedly cut the size of its armed forces after the public concluded some threat or other was essentially vanquished or contained. In the first month after WWI the Army released 650k personnel and 3.25 million within nine months. The Army again became a volunteer force at a little over 5% of its WWI peak. In the 1920s Congress cut the small volunteer force by a third again. After WWII military spending was cut seven fold, as a percent of GDP, and the peak of nearly 10 million personnel in the WWII armed services was cut within a year to several hundred thousand; similar but smaller reductions were made after the Korean conflict in ~1955-56, after the Vietnam war, and again in the early 1990s (the 'peace dividend') after the collapse of the Soviet Union. The US has cut its nuclear arsenal by more than half of its cold war peak.
There has been a security cost to most of these sharp reductions, as the US military was clearly outmatched at the beginning of WWII by the far better equipped and trained Nazi Germany, began the Korean conflict with rusting WWII equipment, and so on. Still my view is that the sense of the US people to reduce the military was wise, even if the execution of those reductions was poor.
http://www.truthandpolitics.org/military-relative-size.php#gdp-graph
http://www.history.army.mil/books/amh/amh-19.htm
http://www.history.army.mil/books/amh/AMH-20.htm
 
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  • #1,125
mheslep said:
Yes I did, directly, though it was just an assertion on my part, just as you are doing here w/ 'the way I see it'

I have no problems with assertions, but you do have to provide some reasoning that lead you to that conclusion.

mheslep said:
Even if you are correct about US intentions, the EU&Canada still have an obligation to meet for NATO in areas like Afghanistan, as Sec. Gates makes clear, diplomatically, nearly every time he speaks on the subject.

The US still has the option to do as it pleases whether EU/Canada likes it or not. So I can't see any reason to invest more resources than "necessary" to NATO.

mheslep said:
The US military and its industry have always lobbied to increase themselves in size and budget, but historically the US electorate has repeatedly demonstrated a wariness of its military.

US military spending as a proportion of the global military spending is substantial (47% 2003 [1]). Still you may be right, I guess we will just have to wait and see.

mheslep said:
In the 20th century the US government drastically and repeatedly cut the size of its armed forces after the public concluded some threat or other was essentially vanquished or contained.

However, you don't seem to be too concerned of the endless supply of threats or others which require military solutions.

[1] http://en.wikipedia.org/wiki/Military_budget_of_the_United_States
 
  • #1,126
Stock rallied during the afternoon as the next installment of $350 billion was approved, and the Congress seemed to have reached some agreement on the next bailout package, which is somewhere between $775-825 Billion.


Meanwhile - Band of America (B of A) looks to be in some trouble too
http://marketplace.publicradio.org/display/web/2009/01/15/pm_b_of_a/

KAI RYSSDAL: Bank of America. For the past couple of months it's been one of the good banks. In good enough shape to buy the failed mortgage lender Countrywide last summer. Big enough to not need money from the TARP.

But CEO Ken Lewis took $15 billion anyway just to make everybody else feel OK about it. Healthy enough to buy Merrill Lynch when it was going under back in September. And oh, by the way, getting Merrill's $10 billion in TARP money as a sweetener.

Now we know all was not as it seemed. Even before the books were closed on 2008, B of A went back to the Treasury to report problems with that Merrill deal.

From New York, Ashley Milne-Tyte reports.

. . . .

Christopher Whalen: Primarily it's been used for absorbing losses. You know, all three of the top banks have different problems but they all are seeing loss rates for both securities and loans going up.

He says the government shouldn't extend any further largesse to the bank.

Whalen: If we keep putting money into big banks where we're essentially just covering operating losses, but we're not dealing with the solvency issue, we're just buying time.

But Jamie Peters, an equity analyst at Morningstar, says the government will pony up the extra funds.

Jamie Peters: We've seen in this series of bailouts that the government doesn't want these too-large-to-fail institutions to actually fail. And so stepping in and bailing out Bank of America is pretty much the only option.

. . . .
Peters: Bank of America's dividend, probably going to go away, . . . .

Bitter cold hits hard because of economic meltdown
http://news.yahoo.com/s/ap/20090115/ap_on_re_us/winter_weather
ST. LOUIS – William Davis has lived on the streets since the recession cost him his job as a commercial painter. Over the last eight months, he's made it through heat waves, wind storms, rain, snow and ice.

But the 51-year-old finally sought help at a homeless shelter Thursday after enduring a night shivering alongside a downtown wall in temperatures that bottomed out at zero — the coldest reading here in eight years.
. . . .
Ray Redlich, assistant director of New Life Evangelistic Center in St. Louis, said the homeless population has changed as the financial crisis has grown worse. Now it includes more people like Davis who just months ago were working for a living.
. . . .
Matt Ivey, who was driving a AAA tow truck to jump start stalled cars, said many automobiles were in rough shape. "Because of the economy, people don't really have enough money to repair their vehicles," he said.
. . . .
 
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  • #1,127
The economy is still shaky.

Bank of America posts first loss in 17 years
http://news.yahoo.com/s/nm/20090116/bs_nm/us_bankofamerica
NEW YORK (Reuters) – Bank of America Corp (BAC.N), posted its first quarterly loss in 17 years on Friday and slashed its dividend, hours after winning a multibillion-dollar lifeline from the U.S. government to help absorb Merrill Lynch, which lost a record $15.31 billion in the quarter.

The dismal results came as the largest U.S. bank faced mounting pressure from investors who questioned how well it will absorb a tidal wave of soured loans in an economy showing no signs of escaping a deep recession. Bank of America cut its quarterly dividend to a penny from 32 cents.

"It is difficult to focus on what is going right at this time," a clearly downbeat Chief Executive Kenneth Lewis said on a conference call. "The economy and subsequently the credit markets literally hit a wall starting in September and culminating late in December, with the greatest impact of my almost 40 years in banking."

Shares of Bank of America fell 7 cents to $8.25 in morning trading.

Hours after it obtained $20 billion in new capital from the government's $700 billion Troubled Asset Relief Program (TARP), the bank reported a quarterly loss of $1.79 billion, or 48 cents per share, compared with a year-earlier profit of $268 million, or 5 cents.

Lewis sought government help after it became clear that Merrill's credit losses were far higher than expected, and had threatened last month to scrap the $19.4 billion takeover without government help.
. . . .
Absorbing Merrill Lynch wasn't the best for B of A, but it rescued ML.



Citigroup capped a devastating 2008 by announcing Friday that it would split into two entities and that it had posted an $8.29 billion loss for the fourth quarter. Citigroup’s rival, Bank of America, also posted a loss, just hours after receiving a new infusion of government support, The New York Times’s Matthew Saltmarsh and Eric Dash reported.
. . . .
Bank of America’s earnings were released just after the government agreed early Friday to provide an additional $20 billion infusion of capital into the bank and to cover the bulk of up to $118 billion in losses, largely arising from the bank’s Merrill acquistion.
I have to wonder if there is a decimal point (order of magnitude) off here.

Overall for 2008, Bank of America posted a net profit of $4.01 billion compared with net income of $14.98 billion a year earlier.

It said earnings were driven reflected “the deepening economic recession and extremely challenging financial environment, both of which significantly intensified in the last three months of 2008.”

Bank of America’s net revenue during the quarter rose 19 percent to $15.98 billion from $13.45 billion a year earlier. The bank also said it would pay a dividend of just 1 cent for the first quarter.
B of A itself seems to be doing well. I believe the management declared not bonuses for 2008, even though they made a profit.
 
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  • #1,128
Astronuc said:
Dow 30 is down about 800 pts so far this year

More job cuts are on the way

Motorola to cut 4,000 more jobs in 2009
http://news.yahoo.com/s/ap/20090115/ap_on_bi_ge/motorola_cuts

Microsoft may lay off as many as 15,000
http://news.yahoo.com/s/ap/20090115/bs_nm/us_microsoft

Is that 50,000 Microsoft workers, or 50,000 schlubs they palm off their Vista/7.0 beta versions on because I'm ok with that either way?
 
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  • #1,129
Circuit City to liquidate remaining US stores
http://news.yahoo.com/s/ap/20090116/ap_on_bi_ge/circuit_city_bankruptcy
Bankrupt Circuit City Stores Inc., unable to work out a sale of the company, said Friday it will go out of business — closing its 567 U.S. stores and cutting 30,000 jobs.

The nation's second-biggest consumer electronics retailer is the latest casualty of an unprecedented pullback in consumer spending that has driven other brands such as KB Toys, Mervyns LLC and Linens 'N Things into bankruptcy. Experts believe there will be more to come.

"This is the only possible path for our company," Circuit City's acting Chief Executive James A. Marcum said in a statement. "We are extremely disappointed by this outcome."

The company had been seeking a buyer or a deal to refinance its debt, but the hobbled credit market and consumer worries proved insurmountable. Negotiations for an acquisition went past midnight on Thursday, a Circuit City lawyer said in court.

. . . .
Employees were being notified Friday that they would lose their jobs and, if a judge gives final approval to the liquidation, stores would begin the closing process as early as Saturday.
. . . .
2009 is starting out rather badly.
 
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  • #1,130
It's tough on the people involved - but a lot of the victims of this recession should have gone under 10years ago, they have just survived because of the boom.
Nortel, Circuit city, Linens 'n things, Woolworths, even chrysler - none of these are exactly best of breed in their markets.
 
  • #1,131
mgb_phys said:
It's tough on the people involved - but a lot of the victims of this recession should have gone under 10years ago, they have just survived because of the boom.
Nortel, Circuit city, Linens 'n things, Woolworths, even chrysler - none of these are exactly best of breed in their markets.
I have to agree with all of those choices. Chrysler in particular has been designing body-styles that go 100% against safe engineering. Look at some of their sedans with their high trunk heights and tiny rear windows. How many people are going to back over their own children/grandchildren just because they cannot be seen out the back of the vehicle? My brother-in-law is the chief mechanic for the local Chrysler dealership, and he is really ticked off at some of these design flaws. He has grandchildren that love to play in his gravel driveway with toy trucks and tractors, and he is keenly aware of such shortcomings.

As he puts it "why design poor rear-visibility into a car when you know it will cost lives?" Chrysler's take on "style" sure isn't worth that cost.
 
  • #1,132
Astronuc said:
Circuit City to liquidate remaining US stores
http://news.yahoo.com/s/ap/20090116/ap_on_bi_ge/circuit_city_bankruptcy
2009 is starting out rather badly.

Not if you never shopped there in the first place.

Now when Radio Shack goes under, I'm cutting my wrists.
 
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  • #1,133
http://americanmemories.us/americanmemories/ebay/MUSIC/supertramp-crisis-1.jpg
 
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  • #1,134
Crime of the Century might have been more appropriate. :biggrin:

Supertramp = Crime of the Century
https://www.youtube.com/watch?v=CVPhVV1dYd0
 
  • #1,135
Astronuc said:
Crime of the Century might have been more appropriate. :biggrin:

Supertramp = Crime of the Century
https://www.youtube.com/watch?v=CVPhVV1dYd0

Hey!

Supertramp said:
...Who are these men of lust, greed, and glory?
Rip off the masks and let's see.
But that's no right - oh no, what's the story?
There's you and there's me
That can't be right

We are the men of lust, greed, and glory!

I was so impressed with the album that I purchased 3 different pressings, culminating in a MFSL UHQR pressing for $50 back around 1982.

I sold the album about 15 years ago for $10 when my turntable went TU. I see now that it's worth close to $700. Hmmm... Shoulda kept all that old vinyl after all... :cry:

I still have a metal cassette tape recording though. It still sounds incredible, even with my hearing loss from having listened to it at well over 120 db about a hundred too many times.
 
  • #1,136
I have about 300 albums in my collection. Maybe I can make up for some of my IRA losses and my wife's 401K losses. Nah!
 
  • #1,137
turbo-1 said:
I have about 300 albums in my collection. Maybe I can make up for some of my IRA losses and my wife's 401K losses. Nah!

The UHQR's are going for a much as $1700 a piece. You might make up some.

Perhaps this is a new business opportunity for someone. I'd personally like to see them come out with a new format of cd that had a sample rate above the abysmally slow 45kb/sec. I laughed when I heard that. "Oh, but there's no more popping and clicking". Yah right. And there's no more sonic excellence either. A bunch of digital crap as far as I'm concerned. Thank god I'm going deaf, or I'd really be pissed.

No wonder the economy's gone to crap, it's because we've settled for buying it.
 
  • #1,138
OmCheeto said:
The UHQR's are going for a much as $1700 a piece. You might make up some.

Perhaps this is a new business opportunity for someone. I'd personally like to see them come out with a new format of cd that had a sample rate above the abysmally slow 45kb/sec. I laughed when I heard that. "Oh, but there's no more popping and clicking". Yah right. And there's no more sonic excellence either. A bunch of digital crap as far as I'm concerned. Thank god I'm going deaf, or I'd really be pissed.

No wonder the economy's gone to crap, it's because we've settled for buying it.
I have quite a number of the remastered high quality pressings, and some rarities like Buckingham and Nicks's first album (before they were assimilated by the remnants of Fleetwood Mac) and a couple of copies of the eponymous "Pure Prairie League" that I don't think have ever been re-released in other formats. Killer album! "Tears" and "Take it Before You Go" are the best road songs ever.
 
  • #1,139
It will be interesting to see how the US stock indices respond to Obama's inauguration.

The Asian markets are down about 3% in early afternoon trading (Jan 20).


Apparently the additional banking problems are worrisome to the markets:

Banking fears grip European markets despite latest British bailout
http://finance.yahoo.com/news/Banking-fears-grip-European-apf-14096348.html

RBS expects full-year loss up to 28 billion pounds
http://finance.yahoo.com/news/RBS-expects-fullyear-loss-up-apf-14097594.html

Rescue efforts show difficulty of fixing bank woes
US, British rescue plans shows difficulty of forcing banks to lend as credit crisis mushrooms
http://finance.yahoo.com/news/Rescue-efforts-show-apf-14097543.html


Investment Outlook
Bill Gross | January 2009
http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2009/IO+Gross+Jan+09+Andrew+Mellon+vs+Bailout+Nation.htm

Apparently Gross did pretty well in his investing during the 4thQ 2008 - when the markets lost 30+% and some equities lost 90+% of their value.
 
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  • #1,140
Astronuc said:
It will be interesting to see how the US stock indices respond to Obama's inauguration.

The Asian markets are down about 3% in early afternoon trading (Jan 20).

Gads! I've never seen a logarithmic scale to measure a stock markets drop.

http://finance.yahoo.com/echarts?s=^N225#symbol=^N225;range=my

35,000 to 8,800. But that's old news I guess. (1990-2009)

But if the Dow had followed the Nikkei over the same period it would be at 2000 instead of 8200.

Wow. Maybe McCain was right. Maybe there is nothing wrong with our economy. :rolleyes:
 
  • #1,141
OmCheeto said:
Gads! I've never seen a logarithmic scale to measure a stock markets drop.

http://finance.yahoo.com/echarts?s=^N225#symbol=^N225;range=my

35,000 to 8,800. But that's old news I guess. (1990-2009)

But if the Dow had followed the Nikkei over the same period it would be at 2000 instead of 8200.

Wow. Maybe McCain was right. Maybe there is nothing wrong with our economy. :rolleyes:
You know the Japanese have spend the last 10 years doing massive amounts of fiscal spending in attempts to stimulate their economy, similar to what the US is poised to do. Looks like, economically speaking, all they are getting from this spending is a huge pile of debt.
 
  • #1,142
Astronuc said:
It will be interesting to see how the US stock indices respond to Obama's inauguration.

The Asian markets are down about 3% in early afternoon trading (Jan 20).
Way down today, but I wouldn't read much into it. I was listening to the news during the opening bell and the commentator said it has dropped on 70% of inauguration days. Apparently, the optimistic bulls are watching the inauguration while the pessimistic bears are trading stocks.
 
  • #1,143
Banks sink deeper into crisis on Obama's first day
Bottom falls out of bank stocks as investors expect need for far more aggressive bailout steps
http://finance.yahoo.com/news/Banks-sink-deeper-into-crisis-apf-14110026.html

So what happened to those free-marketeers on Wall Street?
 
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  • #1,144
Fiat have bought 35% of Chrysler, which with Mercedes still owning 20% means they are presumably no longer a US bailout candidate.
You know things are bad when Fiat are rescuing you - and Fiat shares actually went UP on this news!
 
  • #1,145
What does this bank stock news:
Astronuc said:
Banks sink deeper into crisis on Obama's first day
Bottom falls out of bank stocks as investors expect need for far more aggressive bailout steps
http://finance.yahoo.com/news/Banks-sink-deeper-into-crisis-apf-14110026.html
have to do with
those free-marketeers on Wall Street?
?
 
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  • #1,146
Reference to the people who detest government regulation, and who rave about the wonders of free-market and unfettered captialism, who then blow it big time, and run hat in hand for bailouts from Uncle Sam to cover their negligence.


Meanwhile -

Banks battered as sector matches worst day ever
For investors who might have thought the worst was over after the nation's big three banks aired some dirty laundry last week, Tuesday provided clear evidence that the horror show continues, as well over half of the financial stocks in the bellwether S&P 500 Index lost more than 10% of their value.

State Street an ETF that tracks financial stocks in the S&P 500, fell almost 17%, matching its record one day percentage drop of on December 1, 2008.

Most of nation's top banks were trading at levels last seen in the mid-1990's, including Citigroup (C: $2.82, -$0.68, -19.43%), Wells Fargo (WFC: $14.23 -$4.45 -23.82%), and J.P. Morgan Chase (JPM: $18.09, -$4.75, -20.78%).

Bank of America (BAC: $6.00, -$1.18, -16.43%) shares traded at their lowest level since 1986.
. . . .

B. of A. needs more than $80 billion: FBR
Wells Fargo also will likely cut dividend to boost capital, analyst says

And these guys get to keep their jobs?
 
  • #1,147
Astronuc said:
Reference to the people who detest government regulation, and who rave about the wonders of free-market and unfettered capitalism, who then blow it big time, and run hat in hand for bailouts from Uncle Sam to cover their negligence.
Okay, if we grant all that for a minute, how does that follow from the bank stocks decline link?
As to the details. Two points.
1) Is this free-market raving?
44 said:
...Nor is the question before us whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched, but this crisis has reminded us that without a watchful eye, the market can spin out of control ...
2) Given the framework the government setup for the TARP money, everybody - banks, auto companies, universities and colleges, porn kings - is dreaming up some tortured rationale to get hold of the money whether or not they had anything at all to do with creating financial instruments.

Meanwhile -

Banks battered as sector matches worst day everB. of A. needs more than $80 billion: FBR
Wells Fargo also will likely cut dividend to boost capital, analyst says

And these guys get to keep their jobs?
Who, BoA execs? TARP Treasury officials? Congressional members that wrote and supported TARP? Merrill Lynch CEO Thain certainly has lost his job as their is (soon anyway) will be no more ML. BoA is looking for more money to cement the huge acquisition of Merrill Lynch, otherwise they're likely fine. Should BoA instead just dump ML and let it disintegrate? I'd have to say no, but I wouldn't give them (BoA) all of the $80B either.
 
  • #1,148
mheslep said:
You know the Japanese have spend the last 10 years doing massive amounts of fiscal spending in attempts to stimulate their economy, similar to what the US is poised to do. Looks like, economically speaking, all they are getting from this spending is a huge pile of debt.

It might be easier to let the master explain.

http://web.mit.edu/krugman/www/jpage.html
 
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  • #1,149
misgfool said:
It might be easier to let the master explain.
Who says in Japan's trap (May 1998):
http://web.mit.edu/krugman/www/japtrap.html
Fiscal policy: ...
While this policy could work, however, is it the right one for Japan? Japan has already engaged in extensive public works spending in an unsuccessful attempt to stimulate its economy. Much of this spending has been notoriously unproductive: bridges more or less to nowhere, airports few people use, etc.. True, since the economy is demand- rather than supply-constrained even wasteful spending is better than none. But there is a government fiscal constraint, even if Japan has probably been too ready to use it as an excuse. And anyway, is it really true that it is impossible to use the economy's resources to produce things people actually want?
Edit: later in 99 he said in
http://web.mit.edu/krugman/www/SCURVE.htm
Japan is currently engaged in the largest peacetime fiscal stimulus in history, with a budget deficit of around 10 percent of GDP. ...
a simple statement of fact, Japan tried fiscal stimulus. Look at results for yourself now and ask: did it work? I have to say no.

From Further Notes:
http://web.mit.edu/krugman/www/liquid.html
4. Isn't fiscal policy an alternative answer?

Fiscal expansion is certainly an alternative way of pumping demand into the economy. And given Japan's grievous plight, coupled with the real uncertainty about what will work, I would advocate fiscal expansion as well as a commitment to inflation.

But I have doubts about fiscal policy's effectiveness on its own, for three reasons.

First, if Japanese consumers really do exhibit something like ARicardian equivalence@, there will be no multiplier effects from government spending. My previous note actually misstates the implication of the model (that's one of the marks of a good model - it is sometimes smarter than you are). The true implication there is that current consumption is completely unresponsive to current government spending (it's tied down by the Euler condition, if you really want to know), so that public works projects will increase spending by exactly the amount the government spends - no more.

Which brings us to the second point: Japan's long-term financial position is a bit worrisome, so keeping the economy afloat with year after year of massive deficits is a problem. And absent powerful multiplier effects, it will take massive deficits to keep the economy from slipping ever deeper into recession, unless a one-time fiscal push has a long-term effect.

And that is the third point. Although serious discussion of the long-term implications of fiscal stimulus is rare, most people probably have in mind some idea about A pump-priming@. (Actually, very few people either in the United States or in Japan have any idea what that means. AJump-start@ is probably a more useful metaphor). The idea is that once the economy is moving again, confidence will return and spending will no longer need to be supported. Now this might be true, but there is not much evidence for it; it is at least possible that Japan has a structural negative real interest rate that will last for a number of years. That means that the economy must either receive continuing massive fiscal stimulus, or have sustained inflation.
That last line in the 2nd point, "absent powerful multiplier effects, it will take massive deficits to keep the economy from slipping ever deeper into recession, unless a one-time fiscal push has a long-term effect". One time fiscal push? What a colossal gamble. Sounds like the advice of a disparate gambler betting the mortgage.

I advise caution with the 'master' outside of the area for which his work was recognized: trade. In 2003 he prophesied deficits running at the time would surely send the US 'off the cliff'. Then in 2007 he says, never mind, forget about deficits, we should go New Deal Two full speed ahead.
http://www.charlierose.com/shows/2003/09/15/2/a-conversation-with-paul-krugman-of-the-new-york-times
http://www.charlierose.com/shows/2007/12/26/1/a-conversation-with-paul-krugman
 
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  • #1,150
C'mon, I think you intentionally misunderstood him.

mheslep said:
Krugman said:
Japan is currently engaged in the largest peacetime fiscal stimulus in history, with a budget deficit of around 10 percent of GDP. ...

mheslep said:
a simple statement of fact, Japan tried fiscal stimulus. Look at results for yourself now and ask: did it work? I have to say no.

Krugman said:
I believe that actual business cycles aren't always real business cycles, that some (most) recessions happen because of a shortfall in aggregate demand.

When there is a shortfall in aggregate demand, public construction projects are a very efficient way to pump money into the economy.

Krugman said:
4. Isn't fiscal policy an alternative answer?

Fiscal expansion is certainly an alternative way of pumping demand into the economy. And given Japan's grievous plight, coupled with the real uncertainty about what will work, I would advocate fiscal expansion as well as a commitment to inflation.

But I have doubts about fiscal policy's effectiveness on its own, for three reasons.

I think you bolded wrong words in the above text. I emphasized my view.

mheslep said:
From Further Notes:
http://web.mit.edu/krugman/www/liquid.html
That last line in the 2nd point, "absent powerful multiplier effects, it will take massive deficits to keep the economy from slipping ever deeper into recession, unless a one-time fiscal push has a long-term effect". One time fiscal push? What a colossal gamble. Sounds like the advice of a disparate gambler betting the mortgage.

Again most recessions are caused by a shortfall in aggregate demand. It's really simple, people and corporations have to start spending. If there was no public spending, bankruptcies would increase and unemployment would increase. These events don't increase the confidence of people and corporations. Instead they begin to fear and start saving money, which is bad.

mheslep said:
I advise caution with the 'master' outside of the area for which his work was recognized: trade. In 2003 he prophesied deficits running at the time would surely send the US 'off the cliff'. Then in 2007 he says, never mind, forget about deficits, we should go New Deal Two full speed ahead.
http://www.charlierose.com/shows/2003/09/15/2/a-conversation-with-paul-krugman-of-the-new-york-times
http://www.charlierose.com/shows/2007/12/26/1/a-conversation-with-paul-krugman

He is a 'master' when compared to individuals like you. What he says in those documents is that deficits are bad if they don't result in a surplus in the long term. Obama's plan has that potential.
 
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