A bombshell of a week

What a bombshell of a week.

Carved out from the landscape are many thousands of jobs and businesses collapsed or on the verge of it.

Quote of the week: "Everybody is trying to figure out how to survive"

It's from Brian Bethune, economist at IHS Global Insight and makes it sound as if a Hiroshima-type bomb has devastated the land.

But he's right as it's the way many people are feeling.

People have stopped spending. Warehouses are full of goods no-one at home or abroad want or can afford or use. Manufacturing has stopped.

And the layoffs this week? Who can keep up. Ford, NEC, Cessna, Kodak, Black & Decker, Boeing Co., Pfizer, Caterpillar, Home Depot, Target Corp, Starbucks, Saks, Warner Bros, Intel. Here's a list of the 100,000 or more in the US alone.

The records keep falling. Worst January ever for the Dow, the US economy's last quarter shrunk by more than since 1982 - meaning the USeconomy shrank at the fastest pace in 26 years.

And US unemployment lines have stretched to the longest on record, a sign that the U.S. labor market continues to worsen.

(Bomb photo credit: US National Archives)

Online shopping mall takes a hit

Telecom has had a reality check.

It has decided to close its online shopping mall Ferrit.

“Ferrit has continued to grow during the past three years but the current retail environment has meant the break-even point has shifted out a number of years. The decision has now been made to refocus and resources will be directed to other areas,”

Cafes next to fall?

People with designer dogs and flash clothes don't have to worry - yet.

But others are reaching for their basics brand instant coffee instead of their usual $4+ coffee fix.

Independent research house IbisWorld says coffee, small clothing stores and car dealerships face the biggest threat of going under as a deteriorating economy leads to more job losses.

Tyre manufacturing, car retailing, international airlines and real estate are among the jobsu most at risk..\

The US is "broke"

It's not easy telling the grim truth.
There has been an outcry in some quarters over the suggestion that US is in such serious trouble, it itself is broke.
The doom message came from Peter Schiff who is president of Euro Pacific Capital and author of "The Little Book of Bull Moves in Bear Markets" in an op-ed in the Wall Street Journal.
"The bad news is that our economy is broken and there is nothing the government can do to fix it. However, the free market does have a cure: it's called a recession, and it's not fun, easy or quick. But if we put our faith in the power of government to make the pain go away, we will live with the consequences for generations."

Schiff is no fool. He had been preaching the decline in the housing market way ahead of when it happened and at a time others were predicting nothing but boomtimes ahead.

Now they are talking of the D word after job figures

Figures out today in the US are causing the dreaded D word to be used.

In December 524,000 jobs were lost.

The New York Times reported it as "reflecting a pervasive fear among employers that if they fail to shed workers quickly their companies may go under in a recession poised to become the worst since the 1930s."

And unemployment hit a 16-year-high of 7.2 percent.

One way to drive people to drink

Australia needs a lifesaver this year

Melbourne's Age paper has a grim prediction for 2009 today from the country's top economists:

A quarter of a million Australians could lose their jobs and growth will slow to a crawl - unemployment will hit 6.4 per cent by the end of this year — more than a percentage point above the official Treasury forecast — and growth will slow to 0.7 per cent.

Call that conservative!
And in the US the jobless queues are growing fast: The number of laid-off

workers drawing unemployment benefits rose to 4.5 million in late December.

This article comparing today with the Great Depression notes that during that depression, unemployment didn´t start with 25 percent. In 1929, the unemployment rate was less than five percent and in 1930, unemployment was below 10 percent. It was not until 1933 that unemployment peaked at a staggering 25 percent. The obvious conclusion is that rising unemployment is a progressive consequence of continued economic deterioration.
(Photo credit: Tourism Australia)

What happened to US confidence?

Andrew Leonard writing in today's Salon notes in taking a hard look at the 08 meltdown:
The self-satisfaction bequeathed to Americans by their victory in the Cold War and their unchallenged status as superpower has been irretrievably punctured and replaced by fear. The world seems far more fragile than it did a year ago. It baffles comprehension that so much could go so wrong so fast.

Recession causes a rush of divorces

Economic stress is adding to the usual end of year rash of couple breakups.
Says a California lawyer about the strain financial struggles can add to already rocky relationships.: "It's like throwing gas on a fire."

Driving the demand in the UK, notes the Independent, are the wives of wealthy husbands who are no longer prepared to watch their claim on a fortune eaten away by the recession.

One US "marriage expert" says it's said a 10 percent drop in property prices leads to a 5 percent increase in the divorce rate. "But the economy is so bad now that it’s making it that much more difficult for people to afford a divorce. The division of property and assets is just a nightmare."

Hollywood Heads for the Ruins

Hollywood and the entertainment industry are facing a horror movie of their own in 09.
- Studios are canning plans for big budget movies
- TV ad revenue is down
- DVD sales are down 5% in the US
- Blu-Ray sales have dropped about 5% and are not in mass market yet
- sources for film financing - like other loans- have dried up
- Movie attendances were down 5% last year

That Great Depression tale about how people went out for entertainment to escape their economic woes no longer holds true.
In this fascinating LA Times story on Hollywood's terrible plight, there is acknowledgment that as the recession drags on, it will affect moviegoing at a time when consumers are getting more of their entertainment at home with their big-screen TVs, video games and the Internet.

The Independent reports even fantasy movies are for the chop and notes as one example how -when the media was asleep- Disney quietly withdraw from producing The Voyage of the Dawn Treader, the next in the Chronicles of Narnia series of films based on the children's books by C S Lewis.

Best Sales Sign so far this recession

Media, entertainment stocks fall off the cliff

Entertainment and media stocks have done so badly this year, one longtime industry watcher says "it largely debunks the theory that these industries do well in a recession."

So let's hear no more of the argument that in a recession we're staying inside reading newspapers and watching re-runs on free to air TV.

The stock falls are bigger than most sectors as this list shows:
GateHouse, down 99.55% in this calendar year McClatchy, down 93.6% Lee Enterprises, down 97.3% Journal Register Co., down 99.58% Media General, down 92.47%

Desperate retailers try the bundle trick

The malls are back to being dead. Retailers are trying the
bundle trick - "hey buy this or that or anything and we will throw in something else for half price, quarter price.. OK still not happy? we will make the second item free - does that suit?"

Understatement of the year (and its only Jan 1) goes to The NZ Retailers Assn which says this year's challenges "are here for a little longer yet", (yeah like a couple of years of blood on the retail floor) and stating the obvious- that the fate of retailers in 2009 likely tied to the state of the global economy.

This in a country where the NZX 50 index closed an abysmal 2008 with a record 33 per cent fall for the year

Leading US right winger Fox news host Bill O'Reilly has written a column for New Years describing the economic chaos hitting many Americans "like a back alley mugger, " and adding: " What a disgrace. Wall Street hustlers gamed the system by trafficking in bad loans while Congress and the Securities and Exchange Commission looked the other way. Awful. "So, I learned a painful lesson from all that: Big Brother is not watching out for us. Orwell had it wrong. We are pretty much on our own, as the federal government simply cannot or will not protect the folks from danger. Never again will I assume the feds are looking out for me."