Monday, March 3, 2008
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Tuesday, December 11, 2007
Recession Times Roundup
The Fed dropped rates today, but it will it be enough to prevent a recession?
Check out Economic Disconnect. Lots of information to digest. mmm, mmm good!
Monday, November 26, 2007
CitiGroup May Layoff 45,000 Employees
"The expected layoffs are the result of several billion dollars of mortgage losses at Citigroup.
The bank said Monday that it's in a planning process to become more efficient and cost effective as the financial-services giant grapples with billions of dollars in losses from the subprime mortgage-fueled credit crisis. "
"CNBC described the layoffs as "massive" and said they would not be restricted to the fixed income and mortgage divisions."
"In April, Citi set layoffs of 17,000 people, or about 5% of its more than 300,000 employees. "
The layoffs are probably just getting started in the financial sector. The official unemployment rate remains low but is expected to increase as layoffs continue in the financial and real estate related sectors.
Don't Look Now, Here Comes the Recession
"After years of living happily beyond their means, Americans are finally facing financial reality. A persistent rise in energy prices will mean bigger heating bills this winter and heftier tabs at the gas pump. Job growth is slowing and wage gains have been anemic. House prices are sliding, diminishing the value of the asset that's the biggest factor in Americans' personal wealth. Even the stock market, which has been resilient for so long in the face of eroding consumer sentiment, has begun pulling back amid signs of deep distress in the financial sector. "
"With consumer spending accounting for about three-quarters of U.S. economic activity, some economists say it is inevitable that the economy will stop growing at some point in the coming year, for the first time since the mild recession of 2001. "Right now, the question is how bad it's going to get," said David Rosenberg, chief North American economist at Merrill Lynch. "The question is one of magnitude." "
Saturday, November 24, 2007
Strong Black Friday Sales, But a Shift Towards Cheaper Stores
The intial reports showed shoppers appeared more interested in bargains then in upsacle shopping.The nation's retailers had a robust start to the holiday shopping season, according to results announced Saturday by a national research group that tracks sales at retail outlets across the country.
According to ShopperTrak RCT Corp., which tracks sales at more than 50,000 retail outlets, total sales rose 8.3 percent to about $10.3 billion on Friday, the day after Thanksgiving, compared with $9.5 billion on the same day a year ago. ShopperTrak had expected an increase of no more than 4 percent to 5 percent. (AP 11/24/07)
Black Friday often sets the tone for the holiday shopping season. Perhaps, this holiday season's sales will be disappointing for retailers, as consumer cut back due to economic weaknesses.With an uncertain economy, a slowdown in the housing market and high gas prices hanging over their heads, consumers flocked to discount chains like Wal-Mart, Target and Best Buy, brandishing bargain-filled fliers.
In a reversal from years past, they largely bypassed more expensive retailers, including such powerhouses as Nordstrom, Coach and Abercrombie & Fitch, according to shoppers and merchants interviewed around the country (NYTimes 11/24/07).
Friday, November 23, 2007
Black Friday
Consumer spending makes up almost 70% of the US economy. A disproportionate amount of that spending occurs in the post Thanksgiving holiday season.
As US retailers prepare for Black Friday, the day after Thanksgiving that marks the start of the Christmas season, festive cheer seems limited.What will happen to consumer spending this Black Friday compared to last year? How will the holiday season stack up against last year? Will consumers cut back, due to economic problems (high gas, housing bust, etc), or will they callously shrug off the economic problems and spend?With US economic growth hit by the downturn in the housing market, and the knock-on credit crisis, recent data has shown a sharp fall in retail spending.
And as US consumers seem less willing or able to spend, most retail analysts expect this downturn to continue.
"The holiday season will be terrible," said economist Ian Shepherdson. (BBC News 11/23/07)