Recent reports highlight the drop in retail sales across many sectors. Now that surveys are coming out that provide hard data on sales rather than simply projections from foot traffic, the picture is getting bleak. Resembling the recent blizzards sweeping across a good portion of the U.S, an unpleasant freeze has settled in place at the storefronts. U.S. retailers may see the worst sales growth this holiday season since 2002.
The MasterCard sales information demonstrates that focal niches have suffered drops in sales. The widely-watched women’s apparel segment endured a 6% drop in sales during the first half of the holiday shopping season. Most other brick and mortar retailing segments have not demonstrated strength either. Leading the pack were electronics, up 5.8% and luxury items, up 10.8%.
While online sales have surged 18% to $22.7 billion, this increase is a record low. Many online retailers have expressed disappointment about holiday sales.
A mere few days are left as retailers scramble to drop prices hoping to provide shoppers with an incentive to increase their purchases. Some view that this final week will serve as a desperate bid to salvage the holiday season; only time will tell if the merchants pull it off.
Overall it is difficult to find any promising stocks in the retail sector when taking in account fading consumer confidence, increasing credit card defaults, tightened lending, and sputtering holiday sales.
Retailers Face an Ominous Holiday Sign
http://www.nytimes.com/2007/12/17/business/17retail.html?_r=2&ref=business&oref=slogin&oref=slogin
Online sales disappointing
http://www.latimes.com/business/la-fi-internet17dec17,1,1730435.story?coll=la-headlines-business&ctrack=2&cset=true
See the earlier HingeFire post about retail sales:
Can Retail Sales hold up in December
http://hingefire.blogspot.com/2007/12/can-retail-sales-hold-up-in-december.html
Monday, December 17, 2007
Circuit City makes 101 Dumbest Moments List
Circuit City makes number 70 on the 101 Dumbest Moments in Business list... sometimes the citation says it all.
70. Circuit City
Good job. You're all fired.
"In a cost-cutting move, Circuit City lays off all sales associates paid 51 cents or more per hour above an "established pay range" - essentially firing 3,400 of its top performers in one fell swoop. Over the next eight months Circuit City's share price drops by almost 70%."
http://money.cnn.com/galleries/2007/fortune/0712/gallery.101_dumbest.fortune/70.html
See the earlier HingeFire post about Circuit City:
Retro: The Dumbest Retail Business Move of 2007
http://hingefire.blogspot.com/2007/11/retro-dumbest-retail-business-move-of.html
Never has a retailer deserved bankruptcy so desperately!
70. Circuit City
Good job. You're all fired.
"In a cost-cutting move, Circuit City lays off all sales associates paid 51 cents or more per hour above an "established pay range" - essentially firing 3,400 of its top performers in one fell swoop. Over the next eight months Circuit City's share price drops by almost 70%."
http://money.cnn.com/galleries/2007/fortune/0712/gallery.101_dumbest.fortune/70.html
See the earlier HingeFire post about Circuit City:
Retro: The Dumbest Retail Business Move of 2007
http://hingefire.blogspot.com/2007/11/retro-dumbest-retail-business-move-of.html
Never has a retailer deserved bankruptcy so desperately!
Sunday, December 16, 2007
Goldman Sachs: A windfall, but at what cost?
To many, Goldman Sachs defines the term “Chutzpah”. While some investors admire the power house bank for avoiding the mortgage fiasco by effectively going short subprime debt; others question the integrity of a firm pimping these structured assets as great investments to customers while simultaneously shorting the entire market with its own capital. A common place duplicity which highlights the misbehavior of Wall Street in the minds of many regulators and industry analysts.
“Goldman's success at wringing profits out of the subprime fiasco, however, raises questions about how the firm balances its responsibilities to its shareholders and to its clients.”
“Why did Goldman continue to peddle CDOs to customers early this year while its own traders were betting that CDO values would fall? A spokesman for Goldman Sachs declined to comment on the issue.”
A recent article gives an excellent overview of the structured products trading group that saved Goldman’s bacon.
How Goldman Won Big On Mortgage Meltdown
“Goldman's success at wringing profits out of the subprime fiasco, however, raises questions about how the firm balances its responsibilities to its shareholders and to its clients.”
“Why did Goldman continue to peddle CDOs to customers early this year while its own traders were betting that CDO values would fall? A spokesman for Goldman Sachs declined to comment on the issue.”
A recent article gives an excellent overview of the structured products trading group that saved Goldman’s bacon.
How Goldman Won Big On Mortgage Meltdown
Charitable Accounts: Giving Back to the Community
I have always been an advocate for giving back to the community. There are many ways to get involved from giving money to volunteering time.
One of the more difficult aspects of donating money to many different charities is the tracking and book-keeping involved in giving. Setting up a charitable foundation for giving is expensive and time consuming. Now there is a better alternative.
Several major brokerage firms and community foundations now offer donor-advised funds often called charitable checking accounts. These accounts help disperse the funds and minimize the administrative headaches while enhancing your tax deduction reporting for the current year.
The donor-advised accounts can be set up to give cash, stock, or other assets to multiple charities. There are benefits to funding these types of accounts with appreciated stock; it allows the contributor to avoid large capital gain taxes on equities whose price has greatly appreciated. Currently, most contributors fund these accounts with non-cash assets.
Major brokerages such as Schwab and Fidelity support donor-advised funds often for minimums as small as $5000; the fund sponsors handle all of the administrative, legal, and accounting requirements for you.
One recent article provided a good summary of charitable donor-advised accounts.
'Charitable Checking Accounts' Make Giving Easy
http://finance.yahoo.com/expert/article/moneyhappy/55741;
One of the more difficult aspects of donating money to many different charities is the tracking and book-keeping involved in giving. Setting up a charitable foundation for giving is expensive and time consuming. Now there is a better alternative.
Several major brokerage firms and community foundations now offer donor-advised funds often called charitable checking accounts. These accounts help disperse the funds and minimize the administrative headaches while enhancing your tax deduction reporting for the current year.
The donor-advised accounts can be set up to give cash, stock, or other assets to multiple charities. There are benefits to funding these types of accounts with appreciated stock; it allows the contributor to avoid large capital gain taxes on equities whose price has greatly appreciated. Currently, most contributors fund these accounts with non-cash assets.
Major brokerages such as Schwab and Fidelity support donor-advised funds often for minimums as small as $5000; the fund sponsors handle all of the administrative, legal, and accounting requirements for you.
One recent article provided a good summary of charitable donor-advised accounts.
'Charitable Checking Accounts' Make Giving Easy
http://finance.yahoo.com/expert/article/moneyhappy/55741;
Friday, December 14, 2007
Quick Takes: Greenspan says Odds of recession 'rising'
Confirming what many other economists have outlined lately.....
Greenspan: Odds of recession 'rising'
http://www.chicagotribune.com/business/chi-fri_greenspan_1214dec14,0,1659270.story
WASHINGTON - Former Federal Reserve Chairman Alan Greenspan said the odds the U.S. will fall into a recession are "clearly rising," and he believes economic growth is "getting close to stall speed."
Greenspan: Odds of recession 'rising'
http://www.chicagotribune.com/business/chi-fri_greenspan_1214dec14,0,1659270.story
WASHINGTON - Former Federal Reserve Chairman Alan Greenspan said the odds the U.S. will fall into a recession are "clearly rising," and he believes economic growth is "getting close to stall speed."
Where is the Real Estate Bottom?
Most falling real estate markets follow a standard historical pattern. The first year is the year of the slide, while the bottom is established during the second year. Clearly 2007 established itself as the year of the slide which means the bottom for most local markets should occur in 2008.
This is good news for many homeowners; if they can just make it through 2008 then they are likely to start seeing their home prices increase in 2009. However for owners that must sell during the upcoming year, the real estate market experience is likely to be even more painful than those who are marketing their homes today.
A good number of seasoned real estate investors are hunting for the market bottom; many expect to find it during 2008 and start purchasing select properties at low prices. However these types of experts represent a minority of the overall set of speculators, but they normally serve as a great benchmark for establishing the market trough. When homeowners start seeing articles in the press highlighting these type of investors than they can start to fell more comfortable about their real estate prospects. Nonetheless owners should understand that the recovery from the bottom is normally slow and requires many years. Usually it takes eight years for a real estate market to recover to its pre-collapse prices; which is still bad news for those who purchased at the peak.
Will Home Prices Hit Bottom in 2008? Yes, But . . .
http://finance.yahoo.com/real-estate/article/104024/Will-Home-Prices-Hit-Bottom-in-2008-Yes-But
This is good news for many homeowners; if they can just make it through 2008 then they are likely to start seeing their home prices increase in 2009. However for owners that must sell during the upcoming year, the real estate market experience is likely to be even more painful than those who are marketing their homes today.
A good number of seasoned real estate investors are hunting for the market bottom; many expect to find it during 2008 and start purchasing select properties at low prices. However these types of experts represent a minority of the overall set of speculators, but they normally serve as a great benchmark for establishing the market trough. When homeowners start seeing articles in the press highlighting these type of investors than they can start to fell more comfortable about their real estate prospects. Nonetheless owners should understand that the recovery from the bottom is normally slow and requires many years. Usually it takes eight years for a real estate market to recover to its pre-collapse prices; which is still bad news for those who purchased at the peak.
Will Home Prices Hit Bottom in 2008? Yes, But . . .
http://finance.yahoo.com/real-estate/article/104024/Will-Home-Prices-Hit-Bottom-in-2008-Yes-But
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