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%.
Russia had to devalue the rubble again. From Bloomberg…..
Russia devalued the ruble for the third time in a week, sending the currency to its lowest level against the dollar since January 2006, as oil’s drop below $37 a barrel dimmed the outlook for growth.
To help pay their bills, the are trying to get blood out of a stone. From a different Bloomberg article….
Russian President Dmitry Medvedev threatened sanctions against Ukraine, and state-run OAO Gazprom said it might cut off natural gas to the former Soviet republic if it fails to pay $2.1 billion it owes by next week.
Meanwhile, even their victory over Georgia is giving them problems. From Spiegel…..
In the city, 10 schools, kindergartens and the hospital have been rebuilt. But in many houses there are now plastic tarps and blankets where windows used to be. “We brought enough glass to Tskhinvali to provide it with three times as many windows as it needs,” Russian Disaster Protection Minister Sergei Shoigu said angrily.
No one knows exactly what happened to all the glass and other building materials. The same appears to apply to much of the €350 million ($490 million) in Russian reconstruction aid. To be on the safe side, Moscow did send two of its own people to Tskhinvali to serve as prime minister and finance minister. But President Kokoity has declared the budget, filled almost exclusively with Russian funds after the war, a state secret. A former security advisor accuses Kokoity of having surrounded himself with confidants from the Russian regions of Samara and Ulyanovsk and of conducting money-laundering operations with dubious companies.
Yuri Morosov, the former prime minister who resigned after the war — supposedly of his own free will — voices similar complaints. According to Morosov, 100 million rubles or about €2.7 million ($3.8 million) in salary payments for public servants were embezzled shortly before the conflict. Most of the money was intended for South Ossetia’s armed militias.
The above might seem just like western tut tuting. But the problems in South Ossetia have gotten so bad that even the normally compliant Russian media have been talking about them.
GMAC is now a bank, even though they haven’t reached requested levels of capitalization.
To me, the most interesting part of the Fed’s decision to allow GMAC to become a bank is the fact that it will be broken up to the point at which its owners will effectively have no control over it any more. The Fed seems to have concluded that GMAC has a strong management team in place, and that its current woes are more a function of its shareholders than they are of GMAC’s own internal mismanagement.
The total disregard for anything that resembles rules is going to cause big problems down the road.
The city’s approach means crews clear the roads enough for all-wheel and four-wheel-drive vehicles, or those with front-wheel drive cars as long as they are using chains, Wiggins said.
The icy streets are the result of Seattle’s refusal to use salt, an effective ice-buster used by the state Department of Transportation and cities accustomed to dealing with heavy winter snows.
From later on in the article….
Seattle also equips its plows with rubber-edged blades. That minimizes the damage to roads and manhole covers, but it doesn’t scrape off the ice, Wiggins said.
That leaves many drivers, including Seattle police, pretty much on their own until nature does to the snow what the sand can’t: melt it.
The city’s patrol cars are rear-wheel drive. And even with tire chains, officers are avoiding hills and responding on foot, according to a West Precinct officer.
I could almost understand this if the stated reason was to save money. Seattle does not get that much snow and everyone has to pinch pennies these days. But the stated reason for not using salt is the desire to protect the Puget Sound.
This does not make any sense to me. To best of my memory the Puget Sound is a body of salt water so what harm could a little salt do to it?
Japan should write-off its holdings of Treasuries because the U.S. government will struggle to finance increasing debt levels needed to dig the economy out of recession, said Akio Mikuni, president of credit ratings agency Mikuni & Co.
The dollar may lose as much as 40 percent of its value to 50 yen or 60 yen from the current spot rate of 90.40 today in Tokyo unless Japan takes “drastic measures” to help bail out the U.S. economy, Mikuni said. Treasury yields, which are near record lows, may fall further without debt relief, making it difficult for the U.S. to borrow elsewhere, Mikuni said.
From later on in the article….
Combining debt waivers with infrastructure spending would be similar to the Marshall Plan that helped Europe rebuild after the destruction of World War II, Mikuni said.
“U.S. households simply won’t have the same access to credit that they’ve enjoyed in the past,” he said. “Their demand for all products, including imports, will suffer unless something is done.”
This plan has no chance of happening. At least not officially. But it does reveal the extent to which Japan feels that its economic future depends on the US.
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.
The Treasury Department’s inspector general is probing the Office of Thrift Supervision for permitting a backdated capital infusion into IndyMac Bancorp a few months before its collapse in July.
The infusion allowed the bank to be classified as “well capitalized,” instead of “adequately capitalized,” at the end of the first quarter. That let IndyMac avoid having to take certain steps with the Federal Deposit Insurance Corp.
Japan posted a trade deficit of $2.5bn (£1.7bn) in November as exports fell at their fastest-ever rate, the ministry of finance has said.
Japan has gone from a surplus nation to a deficit nation. How the world has changed. (This is actually the second quarter in a row that it is running a trade deficit, so this is not a fluke)
This week’s rant of the week is Sears on my Mind by Megan McArdle.
Crude oil tumbled, capping the biggest weekly drop since the Persian Gulf War in 1991, as rising stockpiles at Cushing, Oklahoma, leave little room to store supplies for delivery next year.
Supplies at Cushing, where oil that’s traded in New York is stored, rose 21 percent to 27.5 million barrels last week, the highest since May 2007, the Energy Department said on Dec. 17. OPEC’s biggest output cut in more than a decade this week failed to stop a price drop as the recession sapped demand.
“At this stage it’s not what OPEC is doing that moves the market; instead it’s the big builds at Cushing,” said Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York.
Crude oil for January delivery fell $2.35, or 6.5 percent, to $33.87 a barrel at 2:46 p.m. on the New York Mercantile Exchange, the lowest settlement since Feb. 10, 2004. Futures declined 27 percent since Dec. 12, the biggest weekly drop since January 1991. Prices have fallen 77 percent from the record $147.27 a barrel reached on July 11.