Tuesday, April 15, 2008

Retailing Chains Caught in a Wave of Bankruptcies

The NY Times has an article out today about companies across the country going out of business. I think it sounds a little too sympathetic to the business side - there is a lot of "retailing is so hard" and "we have to borrow to pay bills and salaries", etc. That just doesn't sound like a good business plan to begin with. If these businesses are so weak and rely so much on debt, then losing them is probably a better long term solution. My sympathies are with the people who work there more than the corporate/equity firm owners. There is just something about America that makes everyone think you have to have 500 stores in all 50 states, and leverage yourself up to the gills to pay for it all, blah, blah, blah. Maybe one thing this recession and global credit crisis will change for the better will be a shift to more small, family owned, sustainable businesses, a revival of some downtowns, and the realization that bigger and cheaper is not always better. It would be a nice silver lining to this mess.

Sunday, April 6, 2008

Shoppers scrimp as food prices rise

That is a Reuters headline.

SECAUCUS, New Jersey (Reuters) - Patricia Norris' family is feeling the one-two punch of higher fuel and food prices.

Her husband works as messenger, driving around to deliver packages. But the job is not as profitable as it once was because rising fuel prices are eating into his earnings.

With money tight and food prices rising, Norris can no longer afford to buy beef and chicken on a regular basis.

"We buy meat only for special occasions. Like for Easter, we had a ham," she said after a shopping trip at her local Wal-Mart in Romeoville, a mixed blue- and white-collar suburb of Chicago.

Norris must purchase only what is on her shopping list, to avoid spending more than she can afford.

"Sometimes I cry," she said, when she passes items on store shelves she can no longer buy.

Friday, April 4, 2008

Overdue Consumer Debts Highest Since 1992

There are a lot of not very good signs out there - this is one of them:

"Consumers fell behind on car, credit- card and home-equity loans at the highest level in 15 years, another sign the U.S. economy is slowing, according to the American Bankers Association's quarterly survey."

This is another:
"The Labor Department reported Thursday that new applications filed for unemployment insurance jumped by a seasonally adjusted 38,000 to 407,000 for the week ending March 29. The increase left claims at their highest point since Sept. 17, 2005, following the blows of the devastating Gulf Coast hurricanes."

I get this fleeting feeling sometime that this is as bad as it gets - that all of this money pumping by the Fed and the tax payer assisted rescue of the Robber Barons of our day has started to kick in and will have some soothing effect - but then I remember that we are still in this terrible, three trillion dollar war, that inflation is raging, real wages are falling, gas is pushing $4.00 a gallon, and that people are pretty gloomy about this whole mess - and the feeling goes away.