From the Wall Street Journal….
But considering individual sectors, “This will go down as the one of the worst holiday sales seasons on record,” said Mary Delk, a director in the retail practice at consulting firm Deloitte LLP. “Retailers went from ‘Ho-ho’ to ‘Uh-oh’ to ‘Oh-no.'”
The holiday retail-sales decline was much worse than the already-dire picture painted by industry forecasts, which had predicted sales ranging from a 1% drop to a more optimistic increase of 2.2%.
As it turned out, they would make it across the wadi, but not easily. Most of the Afghan “jingle trucks,” named after their tinkling decorations, got stuck in the mud, some more than once. Some of the American vehicles got stuck trying to pull them out. The crossing took three hours.
The convoy finally reached its destination, Combat Outpost Kushmand in Paktika province, but only after a 17-hour day that covered just 20 miles.
Iraq was the bad war. Afghanistan is supposed to be the good war. But before it is all done, I think that Afghanistan is going to leave deeper scars on the American consciousness.
The supply situation is just so much worse in Afghanistan then it was in Iraq that I can’t help feeling that we are a heart beat away from a detachment being surround and killed. Or even worse, the supply lines for Pakistan getting cut and forcing the evacuation of most American troops.
From the Wall Street Journal….
“We are seeing more stress in churches than we have in modern history,” says Mark G. Holbrook, president and chief executive of the Evangelical Christian Credit Union of Brea, Calif., which specializes in lending to churches. The credit union has moved to foreclose on seven of its 2,000 member churches this year, and Mr. Holbrook says he expects to take similar action against two more next year. Before now, it had foreclosed on only two churches in its 45-year history.
Church Mortgage & Loan Corp. of Maitland, Fla., another church lender, foreclosed on 10 church properties in the past couple of years. Unable to sell any of them, the company didn’t have the funds to pay more than 400 bondholders the estimated $18 million it owes, says company lawyer Elizabeth Green. Church Mortgage filed for Chapter 11 bankruptcy protection in March.
Strongtower Financial of Fresno, Calif., says two of its 300 evangelical church borrowers are in default, compared with only one in the previous 15 years.
One of the most disgusting things about the modern Christian scene is the amount of money that gets spent on church buildings. Even the ones that don’t go into debt to build still spend the majority of their budget on upkeep and expansion.
One of the reasons that this country is messed up is that we have this cultural notion that that the Government should take care of the poor and that churches should build infrastructure.
Soon after radar-guided anti-aircraft missiles became a threat, planners realized that the simplest way to stop them was to take out the radar. These radars make an easy target; in radio terms, they are equivalent to lighthouses, radiating brightly. So in 1958 the U.S. introduced the Shrike, an “Anti-Radiation Missile” that homed in on enemy radar and proved invaluable in the Vietnam War. The modern successor is the AGM-88 HARM High Speed Antiradiation missile, which has longer range and a speed of over mach 2. “No U.S. aircraft has ever been lost to surface-to-air missiles when HARM has been flying cover,” Mike Vigue, HARM Growth Manager at Raytheon, told me.
When ever you read articles like this, people act like it is a great weakness that HARM missiles can’t hit a radar set that has been turned off. But a radar set that has been turned off is not a threat. It is a lot cheaper to pay few planes armed with HARM missiles to fly cover then it is to make sure all of your planes are stealthy.
In a world of unlimited resources, naturally one would want all your planes to be stealthy. But in the real world, their are lot more pressing concerns.
AIG’s loans so far come to $1.4 million per employee, and many of whom are stationed overseas. But their requests for more cash and better terms got speedy approval, while the auto industry, on whom far more jobs depend, may be dealt a deadly blow due to the failure to due a basic investigation of likely consequences.
I get the point. But throwing money down a rat hole is throwing money down a rat hole regardless if it is the Big Three or AIG. My solution for this injustice would be to stop giving money to AIG.
Does anyone remember when the Fed use to focus on “Core Inflation?” The argument back then was that you should exclude volatile things like Energy and Food to get a true picture of the underlying inflationary pressures. Now get this from the Fed Report….
The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to 1/4 percent.
Since the Committee’s last meeting, labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further.
Meanwhile, inflationary pressures have diminished appreciably. In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate further in coming quarters.
Why don’t they strip out Energy and Food prices to get a true picture of the underlying inflationary pressures? As Megan McArdle notes…
The fall in the CPI was driven almost entirely by energy prices, without which the price index was flat.
When the CPI was high, people argued that interest rates should not be raised because underlying cause for the high CPI numbers was a rise in volatile energy prices. Now those same people argue that we need to cut rates because volatile energy prices are falling. I just don’t get it.
Even relative optimists like Felix Salmon are starting to get a little worried. At the closing of his post dealing with today’s cuts he says…
Did we really need a zero interest rate policy, or Zirp, on top of this? It would be great if we could get some reassurance from FOMC members that they understood the downside of today’s move and know what they’re doing. Because it really worries me.
Editors Note: The “This” in the above quote is referring to the Fed’s promise to print money and intervene directly in the markets.
In October, China was about the only central bank adding to its reserves (I suspect, it hasn’t formally released its reserves data). Most central banks were selling. That shows up in the US TIC data. South Korea, Brazil, Mexico, Russia and Ukraine were all net sellers of long-term US Treasury bonds …
The big central bank flow was a reallocation away from Agencies toward Treasuries. And specifically toward short-term Treasury bills.
China increased its holdings of short-term Treasury bills by a stunning $56 billion while also buying $10 billion of long-term Treasuries. That flow alone would have been enough to cover the trade deficit in the absence of any offsetting outflows.
You have got to admire China’s determination to make this all work. But how much longer can the prop us up.
(I know, I know, people can stay stupid for longer then I think. But I have to believe they are pushing their limit)
Over a weekend, word leaked out that AIG is paying yet more retention bonuses. This move is making a complete and utter sham of the supposed punitive elements of the rescue. But clearly, there was not enough of an adverse reaction to the earlier announcements of retention bonuses to deter the giant insurer. A few Congressmen saying bad things hasn’t deterred exhorbitant CEO pay, so why should it be more effective here?
Some readers have written in to say they have friends or family at AIG who had worked very hard for many years and continued to work hard, and deserved better.
I hate to say it, but the party line on capitalism is that the participants are supposed to bear both risk and reward. Top people at AIG were very well paid just on a cash basis. Yes, it is sad if savings in the form of stock holdings are wiped out, but the government is not supposed to be in the business of saving private enterprise from its bad decisions. There were hardworkng people at Enron and Bear who were not at all culpable in the demise of those firms, but they had their savings wiped out.
I lot of people have made some good arguments in the comment section that some people at AIG needs to be paid bonuses or the business will just collapse. This may or may not be true. I don’t know enough to say for sure.
I have to say that even though many of the people arguing in favor of some of the bonus seem like intelligent and knowledgeable people, I have hard time buying their argument. I can’t help but notice that white collared people are quick to get outraged at the high wages that the blue collar auto workers make. But when it comes to bankers they think that it is critical that they keep their high pay come hell or high water.
My gut feeling is that if a operation can’t be run by paying people the same kinds of wages and benefits that they would get for government work, the the government should not be running an operation. Put it another way, if you have to pay people at AIG more money then you pay the head of the Federal Reserves, then it must be that AIG is to complex for the Federal Reserves to bail out.
But what do I know? I never wanted AIG to be bailed out to begin with.
In short, swoopo is about as close to pure, distilled evil in a business plan as I’ve ever seen. They get paid for everything up front, and as they drop ship everything there’s no inventory or overhead to worry about. It is almost brilliantly evil, in a sort of evil genius way. You can’t stop people from endowment effect fueled bidding when they have the individual chance, however small it may be, to win a $2,000 television for $80 — while collectively sending the house $10,000 or more.
Read the whole post to get the details of what Swoopo does. I have to say that I don’t understand what this guy is getting on his high horse for. Does he call casinos evil and get all outrage by them?
I would not call these people honorable businessman out to provide a needed service. But there are a lot of companies out there there who rip people off in worse ways. At least these people are up front about how everything works.
Still, I share his sneaking admiration for their brazen upfront manipulation of human psychology for their own profit. But I don’t think they will make money for long. If they don’t get shut down under some obscure hypocritical law (How can any state that has a lottery prosecute these guys with a straight face?) they are going to face a whole bunch of competition from other people looking to do the same thing. That will drive down profit margins in a big way. Why pay 75 cents for a bid when some other site will let you do it for a nickel or less?
I also think that greed got the better of them when they started offering cash auctions. That is just asking to be shut down. They would have been better off sticking solely with auctions that gave you an actual product. At least then they would a have a little bit of a fig leaf to hide behind when they got accused of being a gambling site by some regulator.
On several occasions have we heard rants about the profligacy of the deficit nations and how, in more polemic circles, the surplus countries were holding the deficit countries by the, erm, b’lls. Of course, once you stop to think about it is not certain who is holding whose private parts here.
The point Claus Vistesen makes is basically the same one as I made here.