World The Economy of Fail - The Latest Financial Crisis News Thread

[The Helper]

ATLANTA – In a move that could greatly scale back a possible venture between UPS and Deutsche Post's DHL, the German company said Monday it will significantly reduce its air and ground operations in the U.S. and cut 9,500 jobs within the country.

The DHL-UPS deal was expected to last up to 10 years and infuse Atlanta-based UPS with up to $1 billion in annual revenue, if completed as first proposed in May.

UPS, the world's largest shipping carrier, has said the contract with DHL, which it has been working to finalize, would mostly involve the transport of DHL packages between airports in North America — not the pickup or delivery of DHL packages to customers.

If DHL made significant cuts to its ground operations in the U.S., it wouldn't necessarily affect UPS and DHL reaching a deal since their talks have solely involved air delivery of packages, not ground delivery. But Deutsche Post's announcement Monday went well beyond the elimination of ground products within the U.S. Deutsche Post said it will discontinue U.S. domestic-only air and ground products on Jan. 30 to focus entirely on its international offering.

 

[The Helper]

Circuit City files for bankruptcy protection

RICHMOND, Va. (AP) -- Facing pressure from vendors and consumers who aren't spending, Circuit City Stores Inc. filed for bankruptcy protection Monday as it heads into the busy holiday season with hopes that the move will help it survive.

Under Chapter 11 protection, the nation's second-biggest electronics retailer can keep operating while it develops a reorganization plan. Its Canadian operations also filed for similar protection.

The company also said it cut 700 more jobs at its Richmond, Va., headquarters, after announcing a week ago that it would close 20 percent of its stores and lay off thousands of workers.

In court documents, Chief Financial Officer Bruce H. Besanko cited three factors: erosion of vendor confidence, decreased liquidity and the global economic crisis.

 

[The Helper]

Postal Service Looks To Cut 40,000 Jobs In First Layoff In History

SHREVEPORT, LA (KSLA) - "We lost 2 billion dollars and like any other business we have to stay afloat." And to keep from sinking, the United States Postal Service is considering cutting thousands of jobs nationwide. Lavelle Pepper with the post office in Shreveport says they too are feeling the affects of the same disease hitting the country... a struggling economy. "We employ about 685,000 people. If we do layoffs it would include clerks, carriers, mail handlers across all crafts."

 

[The Helper]

Starbucks 4Q profit drops 97 pct on closure costs

NEW YORK (AP) -- Fewer U.S. customers and venti-sized costs for closing poorly performing stores led to lower sales and profit in the fourth quarter at Starbucks Corp., the company said Monday.

The quarter's results came at the end of a transition year for the coffee retailer, in which former Chief Executive Howard Schultz took back the reins of the company to again fill the CEO and chairman posts.

Seattle-based Starbucks said profit in the quarter fell 97 percent to $5.4 million, or a penny a share, from $158.5 million, or 21 cents per share. The coffee retailer earned 10 cents per share when the costs from closing about 600 stores in the U.S. and 61 locations in Australia are excluded.

Analysts expected profit of 13 cents per share, according to a poll by Thomson Reuters.

 

[The Helper]

McDonald's same-store sales rise 8.2 percent

NEW YORK (AP) -- Consumers worldwide who are watching their spending bought more burgers and chicken breakfast biscuits at McDonald's in October, leading to a big rise in sales at established locations for the fast-food leader.

McDonald's Corp. said Monday its global same-store sales jumped 8.2 percent during the month. That beat the company's own prediction for a rise similar to the one it recorded in its last quarter, when same-store sales, or sales at locations open at least a year, jumped 7.1 percent worldwide.

The results were a bright spot in what was a dismal month for most restaurant operators. Many sit-down chains have reported steep declines in same-store sales during October as consumers grew more anxious about the possibility of a prolonged recession.

But U.S. consumers kept spending at McDonald's, even as Congress passed a bill to bail out the economy and credit markets froze.

 

[The Helper]

General Growth considering bankruptcy as credit crunch squeezes cash flow

CHICAGO – General Growth Properties Inc. (NYSE: GGP), whose properties include Providence Place, the Swansea Mall, the Silver City Galleria in Taunton and Boston’s historic Faneuil Hall Marketplace, may seek bankruptcy protection.

In a regulatory filing last night with the U.S. Securities and Exchange Commission (SEC), General Growth expressed “substantial doubts as to our ability to continue as a going concern.”

The company – one of the nation’s largest real-estate investment trusts (REITs) – has seen profits turn to losses over the past year as retail sales have faltered and land sales have plunged. In February, General Growth posted a 2007 profit of $287.95 million, or nearly five times the previous year’s $59.27 million, on total revenue that increased 0.2 percent to $3.26 billion. (READ MORE)

Last week, it posted a third-quarter loss of $15.41 million, on total revenue that fell 5.73 percent year over year to $814.70 million. (READ MORE) The company cited a $40.34 million provision for impairment in its master-planned communities division. Occupancy at the retail centers that comprise the majority of its holdings dipped half a percentage point to 92.7 percent, but that decline was partly offset by a 3.8-percent rise in comparable-tenant revenue, General Growth added.



-------------------------
This one hits close to home as my girlfriend works for this company :thdown:

 

[The Helper]

Sirius XM Radio posts $4.88B loss after charge

NEW YORK (AP) - Sirius XM Radio Inc. (SIRI) said its loss widened to $4.88 billion in the third quarter after the satellite-radio provider booked a hefty impairment charge related to a drop in the company's stock.

Sirius XM was created by the combination of satellite-radio companies Sirius and XM in July. It reported results Monday after the closing bell.

For the quarter ended Sept. 30, the New York-based company's losses widened to $1.93 per share, from a loss of $120.1 million, or 8 cents per share, a year earlier.

The company's results include only two months of operations at XM. It also includes a $4.8 billion impairment charge to goodwill, mostly related to a drop in the company's share price since its agreement to combine in February 2007.

 

[The Helper]

California faces $28 billion deficit

SACRAMENTO (AP) - California's budget deficit will grow to $28 billion through June 2010 unless lawmakers take bold action, possibly including a hike in the state income tax, the Legislature's nonpartisan analyst said Tuesday.
The Legislative Analyst's Office urged lawmakers to act immediately on Gov. Arnold Schwarzenegger's proposals to close the deficit for this fiscal year, projected at $11.2 billion—about 11 percent of the state's general fund. They include a 1 1/2 cent sales tax increase and $4.4 billion in across-the-board spending cuts.

The Schwarzenegger administration had projected a $24.5 billion hole for the rest of this fiscal year and the one that runs from July 1, 2009, to June 30, 2010.

But the analyst's office estimates tax revenue will be even lower than the administration expected.

 

[MasterOfABCs]

To think,

I wrote, in mid 2006, a rather in-depth research paper on the subject of the economy.

I proposed large scale economic downfall.

Many fellow students and the local economics instructors labeled me an economic radical.

Now, however, they all hope that unemployment may not rise above 20%.

1up's for me.

However,

When GM, Chrysler, DHL, Circuit City, US Post, General Growth and Sirius all begin lay-offs, 20% unemployment will become a matter of not how but when.

As this infrastructure of the country collapses at an alarming rate, what other industry will be hit hard in the coming months?

May it be communication, entertainment, or even textile?

All in all, this is a problem that can't be avoided with the intervention of several trillion dollars - let alone 750 billion -.

Finally, to possibly lighten the mood of the pending 2nd Depression, here's a picture I found.

 

[The Helper]

What is going to fail is all the things that blew up when America went crazy spending money they did not have (Credit) on things that they did not need. There will always be rich people so people will still buy but a large portion of the public is reeling from Credit Card debt and once they find out they can just walk away from it and nothing will happen - like the people that took ARM financing on houses paying less than what you could rent and your property value was going up so the bank would continuously loan you more money is gone.

So all the companies that expanded to take advantage of all the money given to the people that they did not have will have to shrink or go under.

The problem is the government is addicted to the status quo - like in the Auto Industry - they say they let it fail they lose all the jobs which is ridiculous - you just lose alot of overpaid and unnecessary jobs. Those companies factories, stock and dealerships will go up for sale and get bought by people that can change and apply innovation to make a new and better car industry. Same with all the other bailouts we are doing. Propping up Epic Failures - not letting survival of the fittest and the free market work.

When that happened, when goverment started to influence the markets, that is when this started.

 

[The Helper]

Sun to cut up to 6,000 workers, 18 pct of staff

Sun Microsystems cuts up to 6,000 jobs, or 18 pct of staff, software chief leaves

SAN FRANCISCO (AP) -- Sun Microsystems Inc. plans to cut up to 6,000 jobs, or 18 percent of its global work force, as sales of its high-end servers have collapsed.

The drastic move announced Friday highlights Sun's desperation to cut costs and survive as an independent company. Sun's shares have fallen so steeply they've crossed an ominous threshold, driving the company's market value below its cash on hand.

Its shares fell 9 cents, or 2.2 percent, to $3.99 in premarket trading Friday.

The Santa Clara, Calif.-based company said the job cuts will include between 5,000 and 6,000 employees over the next year. The cuts should save an estimated $700 million to $800 million annually.

 

[The Helper]

Citigroup to cut at least 10,000 jobs

(Reuters) - Citigroup Inc is cutting at least 10,000 jobs in its investment bank and other divisions throughout the world, the Wall Street Journal said, citing people familiar with the matter.

Citigroup Chief Executive Vikram Pandit and his deputies have instructed managers to slash their budgets for employee compensation by at least 25 percent, the paper said citing the people.

"We will continue to carefully manage our head count levels as we re-engineer the company in line with our stated goal and market realities," Citigroup spokeswoman Christina Pretto told the paper.

Citigroup announced last month it cut 11,000 jobs in the third quarter, bringing the total number of job cuts in 2008 to 23,000.

More.

 

[The Helper]

J.C. Penney profit falls 53 percent

NEW YORK (Reuters) - Retailer J.C. Penney Inc (JCP.N: Quote, Profile, Research, Stock Buzz) on Friday said quarterly profit fell nearly 53 percent and warned of worsening results for the rest of the year, just weeks before the crucial holiday shopping season begins.

The mid-tier department store operator forecast fourth-quarter earnings of 90 cents to $1.05, much lower than analyst expectations of $1.33 per share, according to Reuters Estimates.

The Plano, Texas-based company said it expects total fourth-quarter sales to fall 7 percent to 9 percent and sales at stores open a least a year, a key retail metric, to drop 9 percent to 11 percent.

Penney said it expects the rough economic conditions to continue well into 2009.

More.

 

[The Helper]

Retail sales fall by record amount in October

WASHINGTON (AP) -- Retail sales plunged by the largest amount on record in October as the financial crisis and the slumping economy caused consumers to sharply cut back on their spending.

The Commerce Department said Friday that retail sales fell by 2.8 percent last month, surpassing the old mark of a 2.65 percent drop in November 2001 in the wake of the terrorist attacks that year.

The decline in sales was led by a huge drop in auto purchases, but sales of all types of products from furniture to clothing fell as consumers retrenched.

The 2.8 percent drop marked the fourth consecutive monthly decline in retail sales and was much bigger than the 2 percent fall economists expected.

 

[emjlr3]

we are getting owned - thank god there will always be money to spend on national defense

 

[The Helper]

Stocks retreat as investors refocus on economy

NEW YORK – Wall Street retreated sharply from the previous session's big gains Friday as investors absorbed another wave of downbeat economic news and took little comfort from hints that an additional interest rate cut might be possible. The Dow Jones industrials fell more than 230 points.

Some retrenchment was to be expected after such a big advance Thursday, in which the Dow rallied more than 550 points after falling near its lows for the year. But there was also plenty of discouraging news for investors to focus on, including comments from Federal Reserve Chairman Ben Bernanke that the markets remain under "severe strain" and a sobering report on October retail sales.

The Fed chief said during a speech in Frankfurt, Germany, that he would work closely with other central banks to try to alleviate the global financial crisis and left open the door to a fresh interest rate cut. The Fed is scheduled to meet Dec. 16 at its last regularly scheduled meeting this year.

While Wall Street would like to see another rate cut, many investors aren't sure, given the litany of bad economic and corporate news, of how effective a rate reduction would be in the near term. Many investors are still trying to assimilate to the idea that the economy's downturn would be protracted, lasting well

 

[The Helper]

Citigroup to shed another 53,000 jobs

Citigroup to shed about 53,000 more jobs, bringing total work force reduction to 20 percent

NEW YORK (AP) -- Citigroup Inc. is shedding approximately 53,000 more employees in the coming quarters as the banking giant struggles to steady itself after suffering massive losses from deteriorating debt.

The New York-based bank, which has already reduced its assets by about 20 percent since the first quarter of the year, also plans to trim expenses by 19 percent in 2009 from third-quarter levels, to $50 billion.

The plans, posted on the company's Web site, were discussed by CEO Vikram Pandit at the company's town hall meeting in New York Monday with employees.

The company said it is shrinking its work force by 20 percent from its 2007 peak of 375,000. The company had already announced in October that it was eliminating about 22,000 jobs from that level.

 

[The Helper]

Florida pension fund loses a quarter its value

TALLAHASSEE, Fla. (AP) -- Florida's public employee pension plan has lost more than a quarter of its peak value, but Gov. Charlie Crist and other officials Monday said the fund is built for the long haul and there's no need to panic.

They said Florida has fared no worse than most big investors -- a bit better than some major Wall Street indicators -- due to slumps in the stock market, real estate and other segments of the national and world economies.

The fund, which covers state and local government employees including teachers, lost $37.9 billion -- 27 percent -- over 13 months through Oct. 31, said Dennis MacKee, spokesman for the State Board of Administration. That dropped its value to $100.5 billion.

The three-member board chaired by Crist manages 34 public funds totaling $125.4 billion, including investments for the Lottery, the state's hurricane catastrophe fund and local governments. The largest by far, though, is the retirement plan covering almost 1 million public employees, retirees and their families.

 

[The Helper]

Congress set to question Paulson, Bernanke

WASHINGTON (AP) - The two top salesmen for a $700 billion financial bailout are in for a grilling by Capitol Hill lawmakers just one week after the administration officially ditched the original strategy behind the rescue.

Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson are expected to provide greater insights into the shift when they testify Tuesday before the House Financial Services Committee.

In a profile published Tuesday in The Washington Post, Paulson, who is overseeing the bailout program for the Bush administration, said he was also working on a proposal that would allow the government to take over a wide range of financial institutions - not just banks - that are in danger of collapse.

Last week, Paulson changed course and announced that the government would not use any of the $700 billion to buy rotten mortgages and other bad assets from banks. That had been the centerpiece of the plan when Paulson and Bernanke originally pitched it to lawmakers.

 

[The Helper]

Auto chiefs on hotseat in Congress

The chiefs of the "Big Three" US automakers travel to Congress Tuesday to plead with lawmakers to save their talismanic American industry, despite fading hopes for a quick congressional bailout.
The chairmen and CEOs of General Motors, Ford and Chrysler will testify to the Senate Banking, Housing and Urban Affairs Committee as Democrats mount a long-odds bid to pass a 25-billion-dollar rescue package.

Their testimony, to be followed by an appearance before a House of Representatives panel Wednesday, comes with millions of jobs threatened as the industry's crippling losses are exacerbated by the deepening economic crisis .

Ford CEO Alan Mulally, Chrysler boss Robert Nardelli and Richard Wagoner of General Motors will testify to the committee, under the chairmanship of Democrat Chris Dodd who has already cast doubt a bailout can pass this week.