Mervyns
Shoe Pavilion
Circuit City
Linens & Things
Also in trouble: Steve & Barry's.
Macy's is closing down a number of poor performing stores. The Gap is closing 85 stores. Home Depot and CompUSA are closing down a grim number of stores. The company that owns Lane Bryant is closing roughly 150 stores. KB Toys is in bankruptcy.
Also scaling back:
Wilsons leather
J.C. Penney
Lowes
Office Depot
Ethan Allen
Sprint
Pep Boys
Talbots
Pier 1
The Disney Store
Starbucks (Yes, Starbucks. They're closing 600 stores.)
Wickes and Levitz are going out of business.
Not to mention:
Zales
Ann Taylor
Linen and Things
Foot Locker
Sharper Image
Bombay
Chains involved with bankruptcy may have to pay suppliers before paying wages. Stores are closing and a lot of people will be looking for jobs. The jobs are not there.
People with no income cannot pay credit card debt. Credit scores are therefore incapable of indicating whether an individual can repay personal debt.
The epic numbers of foreclosures means that more people will be renting, which drives up rental prices, which means that the same people will soon be evicted from rental units.
Homeless shelters are already dangerously overcrowded.
Food banks are running low on stocks.
"We have seen a 100% increase in demand in the last year … and food donations have dropped precipitously," says Dana Wilkie, CEO of the Community Food Bank in Fresno, Calif.As stores go dark, the banks who are the ultimate owners of all that commercial property will require yet another bailout, perhaps larger than any that has gone before. The money simply is not there.
The annual gross product of the entire world is only $44 trillion dollars. But that amount is not all cash -- it also includes investments. And a lot of those investments are going bad.
You have a solution to all of this? I'd love to hear it.
27 comments:
A solution? No. But I think we should be trading old family recipes from The Depression days. I have one from my grandmother called "Eyes and Balls". Also one for "Fried Macaronni".
Old info (for many of the names), I had to check your date to make sure I wasn't reading last year's news.
I'd say the tipping point came right after Katrina, when gas pump prices spiked huge, plus shortages. Lots of maxed out credit cards happened from those weeks, re-borrowing followed quickly. Plus the banks got huge windfalls from the 2-4 point vigorish. I'd also say this year's replay, when the New South's Nashville, Charlotte, and Atlanta couldn't get gas for a few weeks, can be compared to the snowstorms in the Northeast in the mid-1970s when the military seeded the clouds to simulate (as it became known) Eastern European conditions, and practiced NATO games there. There's that warrior National Guard unit recently returned from combat and stationed Stateside, at the ready (but the rednecks didn't panic!).
Follow the money and you'll learn that the foreclosure boom was the Pearl Harbor, many trillions have been looted to fill the coffers for the single purpose of developing (and hiring) private security forces like Blackwater. Everywhere. In. The World.
It's bad because something's happening and you don't know what it is, do you, Mr. Jones? You don't need a Weatherman All Along the Watchtower anymore. FISA? I nevuh even touched uh!
I knew Steve and Barry's was in trouble, but I thought if anyone could survive this they could. I mean how do you turn down $10 clothing in a bad market? It makes me fear for even Walmart, but I know Walmart has significant buying power and better connections.
This is the first time I've seen the full list of problems. Many of the people in this country work in retail. You're right; it's bad. And it's gonna get worse.
We have to take steps to bring back a manufacturing base and to make sure that it stays in this country. I think that it would be obvious to anyone, even Precious with his limited ability to comprehend or care what has happened to the working and middle classes of this country, that this free trade thing isn't working out. There will always be a country where labor costs are lower and with the way things are now structured, jobs will always move to whatever country has the cheapest labor. There can be no real bargaining power for workers unless the government steps in, as China has. Now Vietnam intends to increase the minimum wage beginning in January, so look to see some jobs moved from Vietnam to elsewhere.
Interestingly, China seems have come to the conclusion that manufacturing for the local market is the way to sustainable economic growth:
"Beijing now wants cleaner industries that produce higher-quality items for the local market, from cars and planes to biotech products and software. That emphasis not only helps boost domestic consumption -- a key national goal -- but also reduces frictions internationally from the ever-swelling trade surplus."
http://www.spiegel.de/international/business/0,1518,543929,00.html
Rebuilding infrastructure is desperately needed and could help the economy somewhat, but remember that the U.S. didn't finally shake off the Great Depression until manufacturing output, spurred by WWII, vastly increased.
As far as the great infusion of money into rebuilding our infrastructure that Precious plans, if that money is borrowed and does not come from tax increases on the wealthy, we'll be in more trouble. Also, coming from the Chicago School of Politics, it'll be interesting to see how those contracts to rebuild are given out. A scandal in this area could sink him.
How about entire malls and hotels going to foreclosure?
I've never heard of anything like it before with no end in sight.
And the Bail-Out has done nothing for Homeowners facing foreclosure! Nothing, nada, zero!
Here is a breakdown of how the Bail-out has been spent so far:
http://pumasunleashed.wordpress.com/2008/11/29/follow-the-85-trillion-breakdown-of-the-govs-rescue-funds/
As an aside, I hafta say that it just breaks my heart that parents would let their child go without a name so that 'it' must go through life as "Anonymous". It's so sad! But worse is that they would raise a child without imagination enough to even think up a fake name.
And maybe reliance on bread lines and soup kitchens is in doubt:
Kevin over at Cryptogon.com has a post entitled
"The Famine of 2009".
There is no solution in the short term. I think now we need to allow the collapse to happen - if only to see what is left to rebuild with. Or, more on point, to see if there is anything worth rebuilding.
This thing called the "economy" is crumbling anyway. The best thing to do now is get out of the way of falling debris...if possible.
Some of your links are old, Joseph. I work on the front lines of retail, and I can tell you that the consumer is not dead yet. "Black Friday" was at least as good as last year, notwithstanding the travails of Steve and Barry.
But things are going to get worse in 2009. That's why we need to keep up the pressure on Obama to give us the mother of all stimulus packages.
I'm not terribly optimistic. Barack is essentially a Joe Klein Democrat. He won't want to piss off the "moderates". Why should he?
Peter of Lone Tree:
Any info coming from Daily Kos is highly suspect!
Think about Obama's plan to cut faming subsidies. I've never heard of a rich family farmer have you?
When they lose their crops due to extreme weather conditions they rely on government subsidies to help get them to next Spring's planting.
I don't feel that ADM and Monsanto qualify for government subsidies but they always end up with the Lion's Share of Government $$$ don't they?
Bottom Line: The planet cannot support the current population or population growth rate. Nor can it support the absurd level of production and consumption.
The only solution, which the planet is probably about to bring about, is a drastic reduction in the population.
Another industry that will go down with the retail is marketing and promotions. Usually there are tons of extra promotions during the holiday season...not this year, plus the same work from the same company a few months ago now pays 20% less.
Not to mention, both my son and I will be temporarily housing homeless friends. The foreclosures and job losses will affect everyone, even those managing to hang on.
One solution I can think of is to re-negotiate debts.
If we can bail out corporations, we can at least reconfigure people's debts so they can manage them, instead of gouge them further and further until they simply implode. Who does that help?
Ending the war in Iraq will help alot but Bambi lacks the courage to do it. 2 of the big 3 auto makers must re-org and come up with better products or they will all die next year w/ or w/o bailout money.
In order to renegotiate debt, the lending source has to be agreeable. The Banks are not loaning money for renegotiating mortgage debt at the present time.
The news reports announce the government's plans for helping home owners but the follow through of releasing the funds never comes.
Promises unfulfilled since September-
solution? Not having enough money doesnt have a "solution", per se.
But a) set up social programs to deal with the distress of dislocation b) scale down non essential and non-productive spending while boosting fiscal programs - how many aircraft carriers do you need? How about universal health care instead? c) go and talk to americans trade partners - make the issues starker to them. If they wont lend to the market perhaps they will lend to the state. The disaster will affect them too.
America has been consuming beyond her means as has the UK and Spain. In these matters you dont go cold turkey. Its too painful. You smooth the adjustment.
So lets see some humility from your leaders in their discussions with the rest of the world to try and come to a cooperative solution before we all end up in the crapper or the military.
Harry
Joseph, There IS a solution, policy-wise. You have asked me (to state it mildly) not to post links to the source and description of that solution.
Implementing that solution, in the face of widespread high-level opposition to FDR-type policies, is the main difficulty. One of the helps to that would be for more people to understand what's going on and thus the solution, and influence policy-makers.
At least people could go read or view Bill Moyers' Oct. 24 interview with James K. Galbraith, who seems to have a pretty sane view.
http://www.pbs.org/moyers/journal/10242008/transcript2.html
Those who persist in claiming that my references to the group you don't want me to mention are not worthy of viewing or discussion might go to the link below, to find a more balanced view.
http://www.isgp.eu/index.html
Not having enough money need not necessarily be a problem if one has CREDIT.
Our present world monetary-financial system (especially since 1972-73) is a MONETARIST system, as opposed to a CREDIT (the Constitution, Lincoln, FDR, Hamilton, Cary, Clay...) system.
By far the biggest part of the "not enough money" problem is that insane policy now is to bail-out the derivative casinos. They should never have gotten one damn dime! (At least not until the mess was put into bankruptcy receivership and sorted out.)
ALL OF THIS was foreseen and preventable. Those few who saw it and tried to prevent it
a) are humans with faults and limitations, just like the rest of us.
b) have been and continue to be "silenced" and smeared by essentially the same power-hungry greedy ass wipes who are stirring up most of the world's major problems.
c) are persistent and patient almost beyond belief.
But civilization is running out of time here.
That said, a whole lot of people haven't even reached the stage of realizing "there's not enough money." Here is a spiffy graphic you can share with them:
http://4.bp.blogspot.com/_H2DePAZe2gA/STAqqdE8CfI/AAAAAAAAGks/WrursaMDRIM/s1600-h/expend.png
In the San Fernando Valley rents are falling. Rents have risen as insanely as housing prices and people can't afford to rent either. So rents are starting to drop. A year ago, a ratty studio apartment in a lousy neighborhood in North Hollywood was $800 a month. It's now down to $700 and they are offering deals as well. Wages simply have not kept up with the cost of housing and the whole thing has become undone just as it was in the early 90s.
It's staggering to me that anyone over the age of 40, that has lived their life in Cali, bought a house after 2003.
What Bad Looks Like...
Argentina
Out of control foreign debt..enriched bankers and big business...made it easy to loot the country...and turned a rich country into a poor, one wiping out its middle class in the process.
Sound familiar?
video
http://www.brasschecktv.com/page/445.html
Go left, President Obama--go leftward far and fast, I implore you.
If your Presidency fails, it will be through failing to move left far enough and fast enough. Progressive policies are clearly the only solutions to the mess we're in.
You got the job. Now please stop listening to neocons and flying neocon ideas being friendly to neocons and trying to please the neocons. You are way too impressed with these guys. They are not the geniuses they say they are. They're the ones who screwed up--remember?
Gar, I know that lyn always make a big show of praising FDR -- I've seen his televised spiels -- but in certain of his writings, lyn reveals an affection for the OTHER guy. You Know Who.
I'm all in favor of going back to FDR, but I'll let someone other than LL lead me there, thank ye very much.
"We are all Keynesians now," said Nixon. Not many years later, Reagan ended Keynesianism. I happen to think we were better off during the years of JMK. At one time, he was thought to have saved capitalism. After Reagan, people all started to say that Keynes and Marx were so close as makes no difference. The people making that latter argument have a hard time arguing against history: We were prosperous in the 1945-1980 period; even the Carters years look pleasant compared to what lies ahead. Hoover and GWB believed in unbridled laissez faire, and both gave us Depressions.
Lori, I am stupefyingly aware of the rental sitch in the SF Valley, being the bane of several landlords there. But as it happens, I'm now acquainted with a landlord who is trying to rent out rooms in order to make his house nut. (He bought at the top of the market, poor slob.) He thinks he can get 600 bucks for a room not much larger than this computer screen -- and you know what? I think he can.
Rents won't go up, because just as there are rising numbers of renters, there are even bigger numbers of people who are desperate to rent their empty "investment vehicles." In my bubblelicious neighborhood, houses are sitting vacant for a loooong time because sellers still haven't faced the ugly reality that the rest of the country's homeowners have. But they will...oh they will. There's a house down the street for me that has been for rent for almost a year--the renter they just got in defaulted on the lease before she moved so much as one stick of furniture in (turns out she wanted to run a daycare in it, which is illegal in that zone--and she also owns another house that is slated for foreclosure). They want $1400 a month for it, which is mid-bubble pricing and completely ludicrous. I am waiting for it to sit empty another six months before offering them half of that, and I bet they'll take it.
As to a solution: A new WPA and CCC. These are the only things that will get Americans working and shore up our ruined infrastructure. We will have to add to our crushing debt, of course, but it's the type of spending that has positive results and leads to overall economic growth. Also, stronger unions and less money/power to corporate executives who drive their companies into bankruptcy through lousy business decisions.
End the f***ing war. That's a HUGE one. Of course, we then have to find employment for all those soldiers and contractors coming back. Contractors did well during the Clinton years, when we had the tech boom; this time around their talents could be diverted to green energy--make it another WPA-type deal if necessary.
Don't know, beyond that. Wages have to rise (that's why we need stronger unions), universal healthcare is a necessity at this point, and housing prices have to come into line with incomes. The market is fixing that, but not fast enough. People still cannot find affordable housing.
You should amend the list to take off JC Penny. While they have been mentioned among retailers in trouble, they have responded to deny that is the case, and instead, they are going forward with their expansion plans, including having opened all the extra stores they planned to this year, as well as a number still to come in '09. No decrease in their expansion, which is on track.
As for any solution to this debacle, it really would have to be the dissolution of the current system, which may happen whether it is planned or not.
SO MUCH debt can only be discharged by bankruptcies, and/or debasing the currency by monetizing the debt. The Bible called for a 'Jubilee' every so often, wherein all outstanding debt obligations were zeroed out. This is smarter than anyone realized.
Marxism has it that capitalism has internal fatal flaws that doom it. After the end of the Cold War, any kind of analysis to that point became apparently insane. Yet, a mere 16 years or so after capitalism became the 'last economic order standing,' its internal contradictions (meaning the avarice of its chief actors, among other things) has put capitalism, so-called, on life support, similar to what happened in the Great Depression.
XIslander
“You Know Who.”
Actually, I really don’t. You’ve left me guessing. Leibniz?
“Reagan ended Keynesianism.”
Who ya gunna tax? Hey, that’s great! Let’s get everyone arguing about that while we take over the world. Alternatively, we could have all people professing macroeconomics shut up and go learn sheet metal working or dentistry or something useful. There is a chart on macroeconomics at Wikipedia that looks like something from The Onion. I can’t help but imagine comedy routines when I look at it.
“We were prosperous in the 1945-1980 period”
Yes, it did take a good many years to tear to shreds the work of FDR. Same thing happened after pre-Keynesian President Lincoln. Strange, that. (Henry C. Carey was Lincoln’s economic advisor. I misspelt his name in a comment above.) Meanwhile in India, millions died in famine while the British vastly expanded the railroad system to export all the food produced.
Then they started WWI and the like to stop that American System prosperity from being successful in Germany, Russia, Japan, China and elsewhere where it was being successfully introduced.
Good article Joe. Boy is everyone going to be surprised to learn why some of these companies are in deep doo doo. Steve & Barry's as an example is privately owned which some will say is fine but those knowing the swamp they are involved in will tell you to be very careful
I've been talking for a long time about a family I was in for more than 26 years who joined a huge criminal system back in the later 70's. Their business is Real Estate Development and when the two sons were to restart Dad's business, they ran into difficulties. It was very serious and happened after when I married in. For reasons to keep this post as short as possible, I'll omit some things.
Many horrible crimes were commited for the family as it also seemed to be their introduction into this mess. It wasn't until later that my brother-in-law explained why the family decided to join. He said that it's a huge conglomerat of companies (among other things) involved criminal activities and if they didn't join, they would have been stopped frmo doing so. He mentioned that any effort to work with law enforcement wouldn't work either and I can explain why another time. So they joined and a few who are part of this are Sears, Wal-Mart, NICOR and many others. It's beyond huge and they employ the latest in technologies for micro-snooping. They will not react to anything, instead they study and plan and execute their plan with precision sometime later when the moment is right.
It's easy to see that Steve & Barry's was one of thier targets. They are as ripe as ripe can be for the "Big Boys". S&B seemed to be smart people with setting up their marketing ideas, but there wern't any match for muscling around in the Big Boys. The Big Boys have it all which we all will learn when it surfaces. Manuvering around in a safe way when you don't know what you're involved in eventually takes you down AND you don't have any proof to explain why or who did it.
And of course they eventually found themselves in deep doo doo and because of what it is, have to blame themselves, which is part of the plan. So why were Steve & Barry's targeted? Simply put, their marketing was great and they proved it by running past everyone in short order. How this criminal group went after S&B will amaze everyone. I'm tempted to talk about it but won't at this time. I'll wait for when it surfaces.
Above I mentioned Sears and Wal-Mart as two personally known criminal companies involved. Guess who is interested in purchasing their marketing contracts?
Remember, if you're part of the group, they protect you. But if you're not part of the group, they will destroy you. Furthermore, if such a huge cirminal system exists why haven't we heard about it before? They are discilpline with how they proceed and won't ever cross the line. Considering this, they always work under our radar and are powerful enough to modify our radar lower limits so we don't catch on. Knowing this helped me alive safe all these years as I know many who were murdered.
Marty Didier
Northbrook, IL
In 1996 I bought two Adirondack chairs made by a Jazz sax player, who also did handyman work for a licensed building contractor. The musician was antisemitic, so his story about two Gentile business partners sounded believable. Here it is: the landscapers wanted to bid for county work - tree trimming. But they needed a cherry-picker truck. And they couldn't afford one. If they bought one on the installment plan, they would owe more than the county job paid - unless they could trim twice as much and bill the county accordingly, meaning they'd need a second cherry-picker truck, which they really couldn't afford. So they bought two trucks on installment plans, trimmed plenty of trees, paid off the one truck but made zero payments on the other and let the bank eat it. The 'partnership' got the bad credit rating, not the guys haha.
Post a Comment