Economic Recovery? 13 Of The Biggest Retailers In America Are Closing Down Stores

Submitted by Michael Snyder via The Economic Collapse blog,

Barack Obama recently stated that anyone that is claiming that America’s economy is in decline is “peddling fiction“.  Well, if the economy is in such great shape, why are major retailers shutting down hundreds of stores all over the country?

Last month, I wrote about the “retail apocalypse” that is sweeping the nation, but since then it has gotten even worse.  Closing stores has become the “hot new trend” in the retail world, and “space available” signs are going up in mall windows all over the United States.  Barack Obama can continue huffing and puffing about how well the middle class is doing all he wants, but the truth is that the cold, hard numbers that retailers are reporting tell an entirely different story.

Earlier today, Sears Chairman Eddie Lampert released a letter to shareholders that was filled with all kinds of bad news.  In this letter, he blamed the horrible results that Sears has been experiencing lately on “tectonic shifts” in consumer spending

In a letter to shareholders on Thursday, Lampert said the impact of “tectonic shifts” in consumer spending has spread more broadly in the last year to retailers “that had previously proven to be relatively immune to such shifts.”

 

“Walmart, Nordstrom, Macy’s, Staples, Whole Foods and many others have felt the impact of disruptive changes from online competition and new business models,” Lampert wrote.

Continue reading “Economic Recovery? 13 Of The Biggest Retailers In America Are Closing Down Stores”

Less Than 2 Percent of Permian Basin Is Commercial at $30 Oil

About that American oil independence narrative. Dead shale walking. The debt saturated shale oil companies are filing bankruptcy on a weekly basis and the trend will only accelerate from here as their hedges expire and oil prices continue to fall. You can stick a fork into the shale oil/gas miracle. I can’t remember who predicted this over a year ago.

Guest Post by Art Berman

Less than 2 percent of Permian basin tight oil wells are commercial at $30 per barrel oil prices.

Sorry about that. I know that many believe that U.S. shale and tight oil plays are commercial even at current low oil prices but data on the Permian basin and Bakken plays simply does not support that belief.

To make matters worse, Pioneer and EOG have made outrageous claims about Permian basin reserves in their 3rd quarter 2015 earnings reports that no sensible person should believe. Statements like these simply add to the mistaken idea that tight oil plays get a pass on the laws of physics and economics and that somehow the USA is going to beat Saudi Arabia as the low-cost “swing producer” of the world. I wish that were true but trust me–based on data, that’s not going to happen.

The Permian basin is one of the oldest producing areas in the United States. It has been thoroughly drilled and is in a hyper-mature phase of development. The Spraberry, Wolfcamp and Bone Springs plays that Pioneer and EOG are pursuing (Figure 1) are really secondary recovery projects in which horizontal drilling and hydraulic fracturing have replaced water and CO2 injection methods used in the past. Few new reserves should be expected. Most of the claims that these companies make are really about higher recovery efficiency of existing reserves.

None of these plays are remotely commercial at present oil prices. In the most-likely per-well reserve case, these plays require break-even oil prices in the range of at least $50-$75 per barrel, and current wellhead prices in the basin are less than $30 per barrel.

Continue reading “Less Than 2 Percent of Permian Basin Is Commercial at $30 Oil”

DID YOU KNOW SEARS CLOSED 562 STORES IN THE LAST YEAR AND THEY ARE STILL LOSING $450 MILLION PER QUARTER?

This bloated pig is on the butcher’s table. It’s dead pig walking. I thought they were closing 200 or so stores based on what I had read in the past. Lo and behold they have closed 562 stores, or 25% of their existing base from one year ago. Wow. That sure sounds desperate. Now for the funny part. I assume they closed their 25% worst performing stores. You would think that would result in higher sales in the remaining stores, as the reverse cannibalism affect would occur. Well these retailing geniuses managed to generate NEGATIVE same store sales of 7.5% to 9.6% at their disgustingly run down Kmart and Sears stores. Maybe their merchandise sucks and their staff is on par with their customers. 

This despicable example of a retailer has now jumped far ahead of JC Penney in the bankruptcy race. Their balance sheet says it all:

  • How could these idiots close 25% of their stores and only reduce the inventory on their balance sheet by 4%? This is a disaster in the making as this terrible Christmas season will leave them drowning in inventory.
  • They have only $294 million of cash, but owe over $700 million in debt in the next year.
  • They have NEGATIVE $1.3 billion of equity and $7.5 billion of long term debt and obligations.

If you can’t make money after closing your 25% worst stores, you are dead. Eddie Lampert is a blithering idiot who keeps doing real estate deals to keep this bloated pig afloat. I predict this sucker will be declaring bankruptcy before June of 2016. More empty anchor locations coming to a ghost mall near you.

Sears narrows loss, but revenue falls 20%

Published: Dec 3, 2015 7:14 a.m. ET

Sears Holdings Corp. narrowed its loss in the third-quarter as the company closed some stores.

Kmart same-store sales declined 7.5%, while Sears domestic same-store sales were down 9.6%, as apparel and consumer electronics sales declined.

Still, Chief Executive Eddie Lampert remains optimistic about returning to profitability “by concentrating on our best stores, rewarding our best members and pursuing our best categories.”

Sears had 1,687 stores at the end of the third quarter, down from 2,249 a year earlier.

Continue reading “DID YOU KNOW SEARS CLOSED 562 STORES IN THE LAST YEAR AND THEY ARE STILL LOSING $450 MILLION PER QUARTER?”

ANOTHER FOR PROFIT DIPLOMA MILL CAUGHT SCREWING THE TAXPAYER

ITT Educational Services is just another taxpayer scam. Corinthian, University of Phoenix, DeVry, and every other for profit college that spend more on advertising than the annual revenue of Ivy League business schools are nothing but government enriched phony educational fronts. The billions of loans doled out to “students” by our beloved Obama haven’t made anyone smarter. Most of this money has been absconded by these fake colleges and the fake students who pretend to go there.

WTF? Over 52% of all the students who enroll in these clown colleges drop out within one year. The graduation rates are about 20% and the number of graduates who get a job in their field of study is about 2%. Where does the money go. No one seems to know, because that isn’t the point. Obama is perfectly fine with these fake students using the money to prop up the economy by buying iGadgets and burritos. It’s all good. When the government declares each of these “colleges” to be a fraud, they’ll relieve all the fake students of their debt.

That means they’ll write off hundreds of billions and hand you the bill. Isn’t Obama’s ‘Murica great?

Via Marketwatch

The government is cracking down on funding for a major for-profit college chain

 

Bloomberg
ITT Educational Services headquarters.

ITT Educational Services is facing new restrictions on its financial aid funding from the Department of Education.

The Department sent a letter to ITT’s chief executive, Kevin Modany, on Monday, outlining tightened financial controls on the company. The new restrictions are a response to ITT’s “failure” to meet its “fiduciary obligations” to the Department since the 2009 to 2010 financial aid award year, Michael Frola, the director of the Department’s multi-regional and foreign school participation division, wrote in the letter.

Under the new restrictions for ITT ESI, -5.21% it will be required to prove to the Department that a student actually began attending classes before the company can disperse the aid to the student. Typically, schools are allowed to disburse financial aid up to 10 days before the first day of classes. The company will also face additional reporting requirements on its enrollment and disbursement of financial aid.

Since the 2009 to 2010 financial aid award year, ITT has struggled to reconcile the amount of financial aid money it pulled from the Department with the charges students actually incurred, according to the Department’s letter. The discrepancy could be an indication that a large number of students withdrew from the school after ITT had already tapped the financial aid dollars dedicated to the students, said Elizabeth Baylor, the director of post-secondary education at the Center for American Progress, a left-leaning think tank.

When Baylor worked as a staffer on the Senate’s Health, Education, Labor and Pensions committee, she said her team found that of ITT students who enrolled during the 2008 to 2009 academic year, 52% had withdrawn one year later. The average withdrawal rate for students at for-profit colleges was 54.5% that year. ITT was “falling down on its fiscal responsibility” because it was unable to even identify how quickly its own students were withdrawing, Baylor said. “That in and of itself is a huge cause for concern.”

Continue reading “ANOTHER FOR PROFIT DIPLOMA MILL CAUGHT SCREWING THE TAXPAYER”

Is Deutsche Bank The Next Lehman?

Submitted by NotQuant.com

Looking back at the Lehman Brothers collapse of 2008, it’s amazing how quickly it all happened.  In hindsight there were a few early-warning signs,  but the true scale of the disaster publicly unfolded only in the final moments before it became apparent that Lehman was doomed.

MI-CB391_PECK_G_20140218184730

First, for purposes of drawing a parallel, let’s re-cap the events of 2007-2008:

There were few early indicators of Lehman’s plight.   Insiders however, were well aware:   In late 2007, Goldman Sachs placed a massive proprietary bet against Lehman which would be known internally as the “Big Short”.  (It’s a bet that would later profit from during the crisis).

In the summer 2007 subprime loans were beginning to perform poorly in the marketplace.  By August of 2007, the commercial paper market saw liquidity evaporating quickly and funding for all types of asset-backed security was drying up.

But still — even in late 2007,  there was little public indication that Lehman was circling the drain.

Probably the first public indication that things were heading downhill for Lehman wasn’t until June 9th, 2008,  when Fitch Ratings cut Lehman’s rating to AA-minus, outlook negative.   (ironically, 7 years to the day before S&P would cut DB)

Continue reading “Is Deutsche Bank The Next Lehman?”

JC PENNEY LOSES ANOTHER $167 MILLION – WALL STREET CHEERS

Yippee!!! JC Penney ONLY lost $167 million in the first quarter. The Wall Street shysters are ecstatic because they BEAT expectations. Buy Buy Buy.

This loss now brings JC Penney’s cumulative loss since 2011 to, drum roll please, $3.5 BILLION. They haven’t had a profitable quarter in over four years. But, they are always on the verge of that turnaround just over the horizon.

Wall Street has told you to buy this stock from $42 in 2012 to it’s current pitiful level of $9. They tout the wonderful 3.4% increase in comparable sales. They fail to mention that first quarter 2016 sales are only 30% below first quarter sales in 2011.

They fail to mention that JC Penney burned through another $274 million of cash in the first quarter. Their equity has dropped by $1 billion in the last year, while their long term debt has gone up by $500 million.

In 2011 they had $5.5 billion of equity and $3.1 billion of debt. Today they have $1.8 billion of equity and $5.3 billion of debt. They are dead retailer walking. The only reason they haven’t gone belly up is the Federal Reserve manipulated ultra low interest rates that encourage mal-investment and keep zombie companies like JC Penney alive.

Being able to borrow at low rates will delay the end, but the end is still coming for this bloated dying pig of a company. The future is certain.

But don’t listen to me. Listen to Wall Street. This is the buy of a lifetime.

 

CHICAGO HAS SOME JUNK IN THE TRUNK

I love the smell of arrogant, liberal, tax and spend, Democrat, union loving, Keynesian douchebags when their city’s finances blow up in their faces. It seems Obama’s pal Rahm Emanuel has put another nail in the coffin of Chicago. The only thing going up faster than the body count in Chicago is the interest rate on its now junk bond debt. Chicago is now the Greece of the United States.

I can’t think of a better place to house the Obama library than a bankrupt city, run by corrupt politicians, and more dangerous on a Saturday night than Yemen. The death spiral of our urban ghetto shitholes run by liberal Democrats continues unabated. These corrupt politicians and their union acolytes are running out of other people’s money. The producers have left the building. All that is left are parasites and cockroaches.

By Darrell Preston

Chicago may have to pay banks as much as $2.2 billion after Moody’s Investors Service dropped its credit rating to junk, deepening the fiscal crisis in the third-largest U.S. city.The company’s decision Tuesday to cut Chicago’s $8.1 billion of general obligations two ranks to Ba1, one step below investment grade, allows banks to demand that the city repay debt early and exposes it to fees to end swaps contracts, Moody’s said in a statement. JPMorgan Chase & Co., Barclays Plc and Wells Fargo & Co. are among the city’s bankers.The downgrade adds to the financial pressure on Chicago, which was already the lowest-rated of any big U.S. city except Detroit. It follows an Illinois Supreme Court ruling last week that safeguards retirement benefits, casting doubt on Chicago’s ability to curb its $20 billion pension-fund shortfall.

“It certainly becomes a wakeup call for action for the political leaders, and also other parties, to come to the table and find a solution,” said Dan Heckman, senior fixed-income strategist at U.S. Bank Wealth Management, which oversees about $128 billion in Kansas City, Missouri.

Chicago’s cash-strapped retirement funds are exerting a growing strain on the city after it failed for years to set aside enough money to cover the benefits it promised. The annual payment into workers’ pensions is set to rise by $600 million next year.

Beyond RealityMayor Rahm Emanuel, a second-term Democrat, criticized Moody’s decision.

“While Chicago’s financial crisis is very real and at our doorsteps, today’s irresponsible decision by Moody’s to downgrade the city’s credit by two steps goes far beyond that reality,” Emanuel said in a statement Tuesday.

Chicago was already rushing to refinance $900 million of floating-rate debt to reduce the penalties it now faces because of the Moody’s downgrade. It’s planning to go ahead with sales set for next week, according to city officials who weren’t authorized to discuss the deal publicly. Some $383 million of bonds are scheduled to be sold, according to data compiled by Bloomberg.

The city still has investment-grade ratings from Standard & Poor’s, Kroll Bond Rating Agency and Fitch Ratings.

Higher YieldsStill, Chicago will confront higher borrowing costs if it proceeds with next week’s sale, said Michael Johnson, managing partner at Gurtin Fixed Income Management, which oversees $9 billion of munis in Solana Beach, California.

“I don’t necessarily think it would totally lock them out of the market, but I’m not sure they’re prepared to pay the interest rate they may have to pay to actually sell the bonds,” said Johnson, whose firm sold its Chicago holdings years ago.

The yield on taxable city bonds maturing in January 2035 rose Wednesday to 7.55 percent, the highest since March 2011. The price has fallen 16 percent since mid-February to $1.02 on the dollar.

The rating cut triggers provisions in variable-rate bond and swap contracts that allow banks to “immediately demand” termination fees and accelerated payments of interest and principal, Moody’s said. That’s similar to requiring a homeowner to repay a 30-year mortgage in a matter of years. Such provisions helped push Jefferson County, Alabama, into bankruptcy after the 2008 credit crisis.

Persuading BanksJPMorgan, Barclays and Wells Fargo are among those that have agreed to act as buyers of last resort for Chicago’s variable-rate debt or sold it swap contracts, according to city documents.

Jessica Francisco, a spokeswoman for JPMorgan in New York, declined to comment. Elise Wilkinson, a spokeswoman for Wells Fargo in Charlotte, North Carolina, had no immediate comment. Mark Lane, a spokesman with Barclays in New York, didn’t respond to a request for comment.

City officials may be able to persuade its banks not to demand the penalties as long as Chicago can move ahead with its refinancing plan, said Johnson, the partner at Gurtin Fixed Income.

“I would guess that most of their counterparties would be fine letting them go,” he said. “If they end up not selling it, then that creates significantly more risk.”

The obstacles raised by Chicago’s underfunded retirement system increased after the May 8 Illinois Supreme Court decision, which held that the state couldn’t cut retiree benefits.

Court ChallengeThat ruling may bear on legal challenges to Chicago pension overhauls that affect about 60,000 employees.

The suits were put on hold pending the outcome of the Illinois lawsuit. With the ruling in hand, lawyers for the city, the state, the workers and their pension fund appeared before a Chicago judge Wednesday to map out a plan to resolve their cases. At the hearing, Cook County Circuit Judge Rita Novak said the state’s high court will have the last word on the case.

Moody’s said in a statement that the city’s options have “narrowed considerably” because of the ruling.

“The Supreme Court ruling in our view raises the risk that Chicago’s pension reform won’t work,” said Matthew Butler, an analyst with Moody’s.

OBAMA’S PLAN IS WORKING TO PERFECTION

The destruction of our coal industry by Obama is proceeding perfectly. So 4,000 workers have to be sacrificed at the altar of global warming. Big deal. They’re just peasants. Al Gore, Leonardo Dicaprio, and our savior Obama don’t need coal to fuel their luxury jets and Air Force One. They say “Let Them Eat Sunshine”. We are on the verge of green energy independence. Everything would be perfect if Buffett’s oil trains would just stop derailing and blowing up every week.

FORWARD!!!!

Second Largest Coal Miner East Of The Mississippi Files For Bankruptcy: 4000 Patriot Coal Jobs In Peril

Tyler Durden's picture

At last check Patriot Coal had around 4000 employees. Those soon to be former employees will soon require yet another massive seasonal adjustment by the BLS to be “adjusted” out, because moments ago the second largest coal miner east of the Mississippi and the second largest producer of thermal coal in the eastern US filed Chapter 11 bankruptcy.

As part of its filing, the Peabody spinoff announced it had obtained a $100 million DIP, which will be sued to fund the company until it finds a “strategic buyer” or otherwise restructures its balance sheet. Alas, with the price of coal being where it is these days, the most likely outcome for ticker formerly known as PCX is an outright liquidation and another 4000 people in the rest belt left without jobs who, just like the case of Denny Ryder of Decatur, IL, will promptly disappear from the labor force so as not to spoil the US “recovery” propaganda.

Continue reading “OBAMA’S PLAN IS WORKING TO PERFECTION”

Half Of US Frackers Will Be Dead By Year End, Weatherford Warns

Tyler Durden's picture

Following the CEO’s comments that over 100,000 energy jobs will be lost this year, an executive with Weatherford International – the fifth largest US fracker – has warned half of the 41 fracking companies operating in the U.S. will be dead or sold by year-end because of slashed spending by oil companies. “We go by and we see yards are locked up and the doors are closed,” said Rob Fulks, seemingly confirming what Weatherford CEO Duroc-Danner said earlier in the year, “we’re now confronted with an unusually severe market contraction.”

 

As Bloomberg reports, there were 61 fracking service providers in the U.S., the world’s largest market, at the start of last year. Now there are 41… and it’s going to get a lot less…

Half of the 41 fracking companies operating in the U.S. will be dead or sold by year-end because of slashed spending by oil companies, an executive with Weatherford International Plc said.

 

There could be about 20 companies left that provide hydraulic fracturing services, Rob Fulks, pressure pumping marketing director at Weatherford, said in an interview Wednesday at the IHS CERAWeek conference in Houston. Demand for fracking, a production method that along with horizontal drilling spurred a boom in U.S. oil and natural gas output, has declined as customers leave wells uncompleted because of low prices.

Continue reading “Half Of US Frackers Will Be Dead By Year End, Weatherford Warns”

Next Mega-Bailout On Deck: White House Studying “New Bankruptcy Options” For Student-Loan Borrowers

Who could have predicted the American taxpayer would be on the hook for $1 trillion of student loan losses? Oh Yeah. Me.

Obama must have read my Breaking Bad series and decided it was time to implement operation Subprime Student Loan Bailout.

This is classic government policy. The government creates the problem by handing out $500 billion to dumbasses in order to artificially keep the unemployment rate down. The government policies on taxes, healthcare, environment, and dozens of the other areas result in no job growth, except for bartenders, waitresses and fry cooks. Since there are no jobs for the millions of dolts who took the money from the government to get a liberal arts degrees, they can’t repay their loans. True default rates are above 23% and are headed to 40%.

Government solution – allow students to get rid of student loan debt by declaring bankruptcy.

National debt goes up by another $1 trillion and the Fed prints up a new $1 trillion. It all works beautifully, until it doesn’t.

Tyler Durden's picture

A quick reminder of what the biggest debt bubble currently facing America’s population is.

 

Why is this a problem? Because as the TBAC revealed a few months back, the default risk from the $1 trillions in student loans is several orders of magnitude above the 9% student loans which the Fed has revealed as currently “in default”, as one has to add those 12% of loans in deferment and 11% in forbearance to the entire risk pool. In short: a third of all student loans are likely to end up unrepaid!

 

And, the punchline: according to the TBAC’s worst case scenario of the future of student debt, this gargantuan load will triple over the next decade, to as much as $3.3 trillion by 2024.

 

Continue reading “Next Mega-Bailout On Deck: White House Studying “New Bankruptcy Options” For Student-Loan Borrowers”

FOURTH TURNING – THE SHADOW OF CRISIS HAS NOT PASSED – PART TWO

In Part One of this article I laid the groundwork of the Fourth Turning generational theory. I refuted President Obama’s claim that the shadow of crisis has passed. The shadow grows ever larger and will engulf the world in darkness in the coming years. The Crisis will be fueled by the worsening debt, civic decay and global disorder. I will address these issues in this article.

Debt, Civic Decay & Global Disorder

The core elements propelling this Crisis – debt, civic decay, and global disorder – were obvious over a decade before the financial meltdown catalyst sparked this ongoing two decade long Crisis. With the following issues unresolved, the shadow of this crisis has only grown larger and more ominous:

Debt

  • The national debt has risen by $7 trillion (64%) to $18.1 trillion since 2009 and continues to accelerate by $2.3 billion per day, on track to surpass $20 trillion before Obama leaves office and $25 trillion by 2019.

  • The national debt as a percentage of GDP is currently 103% (it would be 106% if the BEA hadn’t decided to positively “adjust” GDP up by $500 billion last year). It is on course to reach 120% by 2019. Rogoff and Reinhart have documented the fact countries that surpass 90% experience economic turmoil, decline, and ultimately currency collapse and debt default.
  • Despite the housing collapse and hundreds of billions in mortgage, credit card, auto, and corporate debt being written off, dumped on the backs of taxpayers and hidden on the Federal Reserve balance sheet, total credit market debt has reached a new high of $58 trillion.

  • Harvard professor Laurence Kotlikoff has been a lone voice telling the truth about the true level of unfunded promises hidden in the CBO numbers. The unfunded social welfare liabilities in excess of $200 trillion for Social Security, Medicare, Medicaid, and Obamacare are nothing but a massive future tax increase on younger and unborn generations. Kotlikoff explains what would be required to pay these obligations:

To honor these obligations we could (a) raise all federal taxes, immediately and permanently, by 57%, (b) cut all federal spending, apart from interest on the debt, by 37%, immediately and permanently, or (c) do some combination of (a) and (b).”

The level of taxation and/or Federal Reserve created inflation necessary to honor these politician promises is too large to be considered feasible. Therefore, these promises, made to get corrupt political hacks elected to public office, will be defaulted upon.

Continue reading “FOURTH TURNING – THE SHADOW OF CRISIS HAS NOT PASSED – PART TWO”

RADIOSHACK IS NO MORE

At least you get 1,500 more Sprint stores in the deal.

The fact of the matter is there will be 2,500 more SPACE AVAILABLE signs in dying malls across America.

The fact is that at least 20,000 more Americans will be losing their jobs.

And this isn’t the end. Guitar Center is about to go bankrupt.

JC Penney and Sears are on a Bataan Death March towards bankruptcy. The entire debt financed, consumption based, mallcentric delusion is being shattered. Get used to it. It has only just begun.

Make sure you pick up a remote control car during their liquidation sale.

RadioShack files for bankruptcy

TWO RETAILERS DOWN, WET SEAL & RADIOSHACK CLOSE BEHIND

Delia’s and Deb Shops filed for bankruptcy in December. That’s 438 more vacant storefronts across America. Now Wet Seal will close at least 338 more stores, and likely all 500 when they file for bankruptcy in the next couple weeks. Then the biggie. RadioShack will end up closing 5,000 locations when they file for bankruptcy in the very near future. Once the financial results are reported in February for all the major retailers you will see announcements from Sears, JC Penney, Macys and many others closing hundreds or thousands of more stores. Sure sounds like a consumer driven economic recovery.

Wet Seal may be too late to stave off bankruptcy

Published: Jan 7, 2015 12:16 p.m. ET

Teen retailer is closing most of its stores and laying off staff

 

NEW YORK (MarketWatch)—Teen retailer Wet Seal Inc. said Wednesday it is shutting two-thirds of its stores as it races to shore up liquidity and keep its operations afloat. But it may be too late to avoid the fate of former rivals Delia’s and Deb Shops, which filed for bankruptcy protection in December.

Already, a lender on some of the company’s senior convertible notes has issued a default notice with a deadline of Jan. 12. Unless Wet Seal meets its obligations or strikes a new agreement, the company is facing bankruptcy, said former bankruptcy attorney David Tawil of hedge fund Maglan Capital.

Wet Seal

 

“I don’t think that there is a good chance (of it surviving) unless there is a trick up someone’s sleeve that we haven’t seen yet,” Tawil told MarketWatch. “It has been a long time coming.”

Wet Seal didn’t respond to a request seeking comment.

Wet Seal said the store closings came after it failed to get concessions from its landlords. The retailer, once a destination for teen and college girls, has lost sales to other fast-fashion players such as Forever 21 and H&M.

The teen sector has generally underperformed the broader retail segment, and other companies including Aéropostale Inc. ARO, +2.23% and Pacific Sunwear PSUN, +4.55%  also are expected to shut stores this year. The sector is battling the trend in which teens are shifting spending to electronics and other items over fashion.

Read: here are some fashion stocks to buy and to avoid in 2015.

Wet Seal CEO Ed Thomas, who returned in September after heading the company from 2007 to 2011, has admitted the company has gotten “off-track,” skewing toward a younger customer with too much basic merchandise.

Thomas has promised to return the chain to “a fast-fashion model with emphasis on fashion product” that provides “constant newness.” The company will focus on fashion assortments over basics and define its target customer as 18-24-year-old women.

But that may be too late. Wet Seal has lost money in eight of the past 10 quarters, and is expected to lose money the next two quarters, according to Retail Metrics. Its comparable sales dropped 11 of the past 13 quarters. Holiday-quarter sales are expected to slump another 9.7%, after a 14.% drop in the third quarter, Retail Metrics data showed. Cash and cash equivalents tumbled 37% to $19.1 million as of Nov. 1 from a year earlier.

Some employees on Wednesday posted signs in store windows, with the hashtag #forgetwetseal, complaining that the company didn’t give them any prior notice of the closures and they weren’t paid for unused vacation and sick time.

“It’s possible but very unlikely” it will survive, said Retail Metrics President Ken Perkins.

It will be an uphill battle, he said.


SHACK ATTACK

The only question now is whether RadioShack declares bankruptcy before Christmas or shortly thereafter. The fat lady is singing and there will be thousands of Space Available signs coming to malls near you.

RadioShack again denies defaulting on loan

By Chelsey Dulaney

Published: Dec 8, 2014 7:29 a.m. ET

RadioShack Corp. on Monday again denied that it has defaulted on a loan from its term lenders, less than a week after the struggling electronics chain initially disputed the allegations as “wrong and self-serving.”

The lenders–Salus Capital Partners and Cerberus Capital Management–a year ago provided a $250 million lifeline that helped keep RadioShack in business. They now say RadioShack RSH, +0.00% defaulted on the loan when it secured a separate credit line in October.

The default claim follows the lenders’ efforts to block RadioShack’s plan to close up to a quarter of its roughly 4,300 U.S. outlets and free up about $200 million in costs.

RadioShack on Monday said it doesn’t believe the lenders’ demand for immediate payment has any merit. The company also said that the amount of revolving loan commitments remains $535 million.

The spat is the last thing RadioShack needs as it tries to sell enough headphones, speakers and other electronic gizmos to make it through to January, when a further recapitalization is due to happen. It comes in the middle of the critical holiday selling period, when retailers generate up to a fifth of their annual revenue.

SEARS MOVES CLOSER TO BANKRUPTCY AS WALL STREET CHEERS $628 MILLION LOSS

Even as the worst run retailer in America inches ever closer to bankruptcy the Wall Street shysters and the captured MSM continue to tout this piece of shit retailer as a good investment. I looked at their income statement and balance sheet. Here are the lowlights:

  • Revenue plunged by 13% ($1.1 billion) as the company dismantles itself, selling off the only decent businesses like Lands End.
  • Gross margin declined by 1.1% as they keep cutting prices to move their Chinese produced crap.
  • They only lost $628 million versus ONLY $547 million last year in one quarter. Year to date, this fine retailer has lost $1.65 billion after nine months. They are guaranteed to lose more than $1 billion in the 4th quarter, as they spiral towards bankruptcy.
  • Their balance sheet is a disaster. They have burned through $700 million of cash in 9 months and only have $300 million left.
  • They have $2.1 BILLION of debt due within 12 months.
  • They have slashed their inventory by 28% since last year. That bodes well for 4th quarter sales.
  • They now have $4.9 BILLION of debt and $126 MILLION of equity. Sounds like a great investment.
  • They still owe their retired workers $1.3 BILLION in pension and healthcare benefits.

This company is a pathetic joke and the Wall Street shysters and their propaganda peddler cohorts in the MSM have the balls to put out a press release saying they beat expectations, so all is well. This company is experiencing a death rattle. It’s over. The fat lady is singing. They are dead retailer walking. The bankruptcy filing is already being worked on by that genius Eddie Lampert.

 

Sears loss widens, but tops Wall Street views

By Chelsey Dulaney

Published: Dec 4, 2014 6:46 a.m. ET

Sears Holdings Corp.’s loss widened in its October quarter on a 13% drop in revenue, as the one-time fixture of the U.S. retail landscape continues to dismantle itself in an attempt to shore up its finances.

The results, however, came in above Wall Street’s expectations.

In recent years, Eddie Lampert, Sears’s chairman and chief executive, has sought to refocus the retailers operations, spinning off business lines like Lands’ End and assets like a big stake in Sears Canada to the company’s shareholders. Sears has recently turned to a spate of financing moves that leaned heavily on Mr. Lampert’s hedge fund in an effort to raise much-needed cash.

The efforts came as Sears worked to reassure vendors that have been rattled by its financial performance ahead of the holiday season, when retailers typically spend heavily securing inventory for the key selling season. Euler Hermès Group SA, which insures suppliers against nonpayment from retailers, told policyholders that it would cancel coverage on Sears, and vendor finance providers have tightened terms, vendors have said.

Sears said Thursday that it has raised $2.2 billion this year, in part from a loan from Mr. Lampert’s hedge fund and the sale of some of the company’s stake in Sears Canada. In November, Sears said it was also weighing whether to spin off up to 300 of its 712 company-owned stores into a separate entity in which Sears shareholders would be entitled to buy stakes.

As of Nov. 1, Sears had cash balances of $326 million, down from $384 million in domestic-only cash balances a year earlier. Sears said its domestic inventory was down $1.1 billion as of Nov. 1 from a year earlier, excluding the Lands’ End business, driven in part by improved productivity and store closures.

For the quarter ended Nov. 1, Sears posted a loss of $548 million, or $5.15 a share, compared with a loss of $534 million, or $5.03 a share a year earlier. Excluding costs of closing stores, certain tax matters and other items, the company’s adjusted per-share loss was $2.71.

Revenue fell 12.9% to $7.21 billion.

Analysts polled by Thomson Reuters had recently expected a loss of $3.31 a share on revenue of $6.88 billion. Sears had said last month that its top and bottom lines in the quarter were little changed from a year ago.

Gross margin slipped to 22.2% from 23.3% a year earlier, while total expenses fell 12%.

Overall, same-store sales fell 0.1% at domestic stores during the quarter. Sears said its Sears full-line domestic same-store sales fell 0.7%, but noted they would have grown 1% excluding the impact of consumer electronics. The company’s Kmart stores posted a 0.5% uptick in same-store sales, led by strength in apparel and outdoor living items.

BREAD, CIRCUSES & BOMBS – DECLINE OF THE AMERICAN EMPIRE – PART TWO

In Part One of this article I discussed the similarities between the Roman Empire and the American Empire at a high level. In this article I’ll delve into some specific similarities and rhymes between the fall of the Roman Empire and our modern day empire of debt, decay and decline. I’ll address our expansive level of bread and circuses and how defects in our human nature lead to people willingly sacrificing their liberty for promises of safety and security. All empires decline due to the same human failings and ours is no exception. If anything, ours will be far more spectacular and rapid due to our extreme level of hubris, arrogance, willful ignorance and warlike preference for dealing with foreign powers.

It seems there were a few visionary thinkers in the late 1950s who foresaw the dire course our former Republic was setting. Their writings were a prophecy and a warning. There was still time to change course and avoid the pitfalls that led to the Roman Empire collapse. In Brave New World Revisited, Aldous Huxley warned against allowing a few amoral men using propaganda, scientific advancements, technology, brainwashing, and economics to control and manipulate a willfully ignorant populace into a dystopian dictatorship. The Soviet and Chinese dictatorships of the late 1950s are long gone, but Huxley foresaw how modern propaganda techniques would be used by the state to drown the masses in a sea of triviality, irrelevance, and consumerism.

“In their propaganda today’s dictators rely for the most part on repetition, suppression and rationaliza­tion — the repetition of catchwords which they wish to be accepted as true, the suppression of facts which they wish to be ignored, the arousal and rationaliza­tion of passions which may be used in the interests of the Party or the State. As the art and science of manip­ulation come to be better understood, the dictators of the future will doubtless learn to combine these tech­niques with the non-stop distractions which, in the West, are now threatening to drown in a sea of irrele­vance the rational propaganda essential to the mainten­ance of individual liberty and the survival of demo­cratic institutions.”

Another man of vision was President Dwight D. Eisenhower. As someone who understood the military industrial complex and the world of politics and power, he knew the danger of allowing the arms industry to dictate the foreign policy of the country. Maintaining a military empire bankrupted Rome and it is bankrupting the American empire. Eisenhower’s warning was unheeded.

“We have been compelled to create a permanent armaments industry of vast proportions. Added to this, three and a half million men and women are directly engaged in the defense establishment. We annually spend on military security more than the net income of all United States corporations. This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence — economic, political, even spiritual — is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. The prospect of domination of the nation’s scholars by Federal employment, project allocations, and the power of money is ever present and is gravely to be regarded.”

When I was researching the similarities between the fall of the Roman Empire and our American Empire fall in progress, I stumbled across an essay written in 1956 by Ben Moreell called Of Bread and Circuses  

Toxic Bread, iGadgets, Circuses, & Zoloft

“The evil was not in bread and circuses, per se, but in the willingness of the people to sell their rights as free men for full bellies and the excitement of the games which would serve to distract them from the other human hungers which bread and circuses can never appease. The moral decay of the people was not caused by the doles and the games. These merely provided a measure of their degradation. Things that were originally good had become perverted and, as Shakespeare reminds us, ‘Lilies that fester smell far worse than weeds.'”Ben Moreell – 1956 – Of Bread and Circuses

There is nothing inherently evil about food, iPhones, professional sports, television, computers, music or medicine. Human beings need food to sustain them, entertainment to provide relaxation and diversion from their daily labors, and medicine to alleviate illness and prolong their lives. Only when the people allow themselves to be lured into servitude by malevolent purveyors of bread and circuses does the perversion of seemingly harmless things begin to fester and overwhelm a nation with the fetid stench of decay and decadence. The moral degeneration of the American populace, like the Roman people before them, happened slowly over time as they sold their liberty, freedom, and self-respect for full bellies, an endless array of modern day distractions, and promises from their highly educated rulers they would be taken care of and protected from all threats to their well-being, whether foreign, domestic, physical, mental, or social.

It did not happen all at once. It happened gradually over time. We allowed the weaker facets of our human nature to succumb to the pleasurable promises of a minority of power seeking manipulative men who always attempt to control and influence the majority because they believe they are wiser and deserving of riches, glory and supremacy. The greediest, most arrogant, ambitious and well educated amongst us tend to rise to the top in all societies. As Ben Franklin stated, only a virtuous people can keep sociopaths from gaining control of our political, economic and financial systems and perverting a republic built upon a foundation of free markets, liberty, and self-sufficiency.

“Only a virtuous people are capable of freedom. As nations become more corrupt and vicious, they have more need of masters.”Benjamin Franklin

Historian Tacitus noted, as Rome became more and more corrupt, the number of laws grew rapidly. The Roman aristocracy, through corruption and thievery achieved lofty status in Roman society. Senators and wealthy knights engaged in extensive practices of conspicuous consumption, creating palatial town houses and monumental “art villas” to demonstrate their high rank in society. The peasants sank into poverty, while being satiated with bread and circuses. And it was all done legally, just as it is being done legally today by our beloved aristocracy and their minions.

“The more corrupt the state, the more numerous the laws.” – Tacitus – The Annals of Imperial Rome

Has the proliferation of laws, rules, and regulations over the last century made us freer, safer and less corrupt?

The virtue of the American people has dissipated rapidly over the last century through their willful ignorance, laziness, apathy, vanity, greed and covetousness, while the true ruling power has consciously and intelligently manipulated the masses without them being aware they were being molded, controlled, dominated and influenced by Ivy League educated men of no conscious, empathy, or sense of decency. The paragraph below, written in 1928 by Edward Bernays, reveals the true nature of our “democracy” and our real masters:

“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. …We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society. …In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons…who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind.” – Edward Bernays – Propaganda

Bernays and his disciples believed the American citizenry nothing more than a herd of irrational animals that needed to be led by enlightened despots like him and other highly educated wealthy men who knew what was best in a democratic society. The term propaganda developed negative connotations after some Germans used it so effectively during the 1930s, so modern American despots changed the term to public relations. It’s all about the message. As media tools have become more technologically advanced and the study of human psychology perfected, the members of the invisible government have achieved their goal of governing, molding, and pulling the wires that control the public mind in a way that enriches them and their benefactors while satisfying the base needs of the masses and keeping them distracted with trivialities, technological wonders, and a myriad of bogeyman threats. These men have contempt for the common man. They have contempt for the U.S. Constitution. They have contempt for free markets. And they have control of our country.

Needs, Wants & Desires

The concept of bread and circuses ties closely to Maslow’s Hierarchy of Needs theory. The ruling class realizes the masses must be kept fed, clothed and housed or revolution would ensue. The human needs documented by Maslow were satisfied or not satisfied by humans prior to the 20th century. Once the ruling class gained control of the monetary system through their jurisdiction over the Federal Reserve and the fiscal system through their manipulation of taxes and spending, they were able to bribe the masses with their own money. The rise of the welfare state has not reduced poverty or boosted the standard of living of the poor. It has enslaved tens of millions at the basic human needs level. Once those in power had successfully bribed the masses with bread (SNAP), shelter (subsidized housing), subsistence (unemployment compensation & welfare), security (Social Security) and safety (Medicare, Medicaid), it was only necessary to keep them distracted with circuses to efficiently teach them to love their servitude.

“A really efficient totalitarian state would be one in which the all-powerful executive of political bosses and their army of managers control a population of slaves who do not have to be coerced, because they love their servitude.” – Aldous Huxley – Brave New World

abraham-maslows-hierarchy-of-needs1.preview.jpg

The invisible governing authorities don’t want the masses to actually satisfy their psychological and self-fulfillment needs. The last thing they want is an educated, aware, critical thinking, independent, courageous, self-reliant, civic minded populace questioning the motivations of their keepers. This is where the corporate fascists who control the mass media propaganda machine and the sickcare industrial complex have combined forces to create a painless concentration camp of prisoners enjoying their servitude and happy to sacrifice their liberty for perceived safety. An uneducated, obese, sickly, depressed, overly-medicated populace is not a threat to the ruling class. They have been conditioned and pharmacologically sedated to such an extent the governing class feels indestructible, displaying arrogance and hubris in dangerous doses.

“There will be in the next generation or so a pharmacological method of making people love their servitude and producing dictatorship without tears, so to speak, producing a kind of painless concentration camp for entire societies so that people will in fact have their liberties taken away from them but will rather enjoy it.” – Aldous Huxley

The concept of voluntary servitude has been a constant theme across the ages as most people want to be led, told what to do, and will not question or contest those in authority. Liberty and freedom require effort, sacrifice, honor and a people with a strong moral character. The Roman people succumbed to tyranny by abandoning their liberty to despots for a full belly and grand spectacles. The American people have succumbed to modern day banker, billionaire and politician oligarchs for a belly full of toxic corporate processed food, cable HDTV with 600 stations, iGadgets, a never ending supply of cheap Chinese produced crap at big box retail stores, Facebook, Twitter, 24 hour drive thru Dunkin Donuts joints, and an endless array of professional sporting events, all paid for with an infinite supply of cheap consumer debt from the Wall Street fraud machine. We live in a warfare/welfare surveillance state built on a foundation of debt, consumerism, and delusion, with no tears. We’ve learned to love our servitude.

French philosopher Etienne de La Boetie captured the degradation of the once noble Roman people five centuries ago, and his words ring true today as the American people have foolishly relinquished their liberty to a corporate aristocracy that has bankrupted the nation, debased the currency, pillaged the middle class and set in motion an irreversible decline of the empire.

“Plays, farces, spectacles, gladiators, strange beasts, medals, pictures, and other such opiates, these were for ancient peoples the bait toward slavery, the price of their liberty, the instruments of tyranny. By these practices and enticements the ancient dictators so successfully lulled their subjects under the yoke, that the stupefied peoples, fascinated by the pastimes and vain pleasures flashed before their eyes, learned subservience as naively, but not so creditably, as little children learn to read by looking at bright picture books. Roman tyrants invented a further refinement. They often provided the city wards with feasts to cajole the rabble, always more readily tempted by the pleasure of eating than by anything else.

The most intelligent and understanding amongst them would not have quit his soup bowl to recover the liberty of the Republic of Plato. Tyrants would distribute largess, a bushel of wheat, a gallon of wine, and a sesterce: and then everybody would shamelessly cry, ‘Long live the King!’ The fools did not realize that they were merely recovering a portion of their own property, and that their ruler could not have given them what they were receiving without having first taken it from them.” – Etienne de La Boétie – Discourse on Voluntary Servitude – 1548

We are fools to not realize the governing authorities who benevolently distribute bread and entitlements to the masses have already taken the money at gunpoint from the people, while syphoning off their cut, favoring their courtesans and taking away our liberties and freedoms. H.L. Mencken, who could match de La Boetie in contempt for the ignorant masses and corrupt politicians, understood our democracy was destined for the trash heap of history.

Democracy is a pathetic belief in the collective wisdom of individual ignorance. No one in this world, so far as I know—and I have researched the records for years, and employed agents to help me—has ever lost money by underestimating the intelligence of the great masses of the plain people. Nor has anyone ever lost public office thereby.” – H.L. Mencken – Notes on Democracy

In Part Three of this article I will address how the creation of the Federal Reserve has led to a century of currency debasement, mindless consumption and endless warfare, while impoverishing the masses and setting in motion the dynamics of empire collapse.