Mar 17, 2008

Bear Stearns And The Fed

The question is can the Fed keep these banks afloat till after the election.

Last week BS was forced to close two of their funds that were leveraged 32 : 1. The current trend was to issue very short-term low-interest notes to pay for their higher interest debt that they had purchased, allowing them too subsequently book the difference in the interest rates as profit. When the market for these short-term notes dried up they lost their ability to redeem the ones that were coming due, creating a devastating margin call. This was the game that most of the investment banks were using to build their bottom lines over the last five years.

The next headache happens when the Fed is forced to react to inflation and raise interest rates to the point where these guys can no longer cover the cost of the longer term debt, which they are holding, with lower-rate short term money. Each time the Fed cuts rates, the game keeps going. It has only been a little over two years when the Fed started raising rates and the “biggies” started having troubles, this will happen again and again as long as the Fed feeds the cycle and prevents the unwinding of these debt instruments.

Mar 4, 2008

JCPenney’s American Living The Ultimate American Sham

JCPenny is flooding the airwaves and other marketing medium with their new line called “AmericanLiving”. The new brand is being manufactured by Polo Ralph Lauren Corp and will be Penny’s feature line for all clothing groups; men’s, woman’s, kid’s, young adult’s and home furnishings. The brand will carry a 15% higher price point than their other lines.

The label itself shows incredible contempt for the American worker by having the bald eagle toting an American Flag then proudly claiming “US Quality Brand”. JCPenny has even used this emblem on the front of shirts, sweaters and even on shoes. In doing so they are exploiting the nationalistic pride we have in America to sell foreign made products. If they would have used American manufacturers I would whole heartedly support the line.

We visited a JCPenny’s store yesterday and when checking the lables we found the following: “Made in Jordan”, “Made in China”, “Made in Vietnam”, “Made in Taiwan”, “Made in Philippines”, “Made in Honduras”, “Made in Macau”.

The closest we get to the US was “Made in Northern Mariana Islands (US)”
View their commercials. DO NOT BUY From JCPenny and be sure to tell them that you will boycott their stores until they start selling American Pride by selling American products.

The Great Exploitation Of The American Worker

JCPenny is using Americana to sell their new line called “AmericanLiving”. With pictures of kids on tractors, seniors enjoying the American way of life, families on vacation, marching bands and young ballerinas they are shamelessly trying to use the pride we have in America to sell foreign products.

Just view their commercials and then try to find a label that says “Made in America”. Boycott JCPenny and let them know what you think. E-Mail link.

Hillary's News

From A LA Times Blog TOP OF THE TICKET Hillary’s held a rally in Texas that had “seating” room only. Clinton spokesperson said: "These accommodations should in no way be taken as a comment on the quality of our media coverage." (But if you’re not careful next time it will be the Ladies Room)

Sharper Image Gift Cards - The New Collectors Item

My intent was to lambast the mean corporations that cheated their customers out of a few bucks by refusing to redeem the gift cards they had sold them and turning them into collector items. As it turns out a gift card is “loan” to the company to be repaid in merchandise at a future date. So if you have a gift card the company is not allowed to “repay” your loan until the court decides who gets what. But then I have never heard of a bankruptcy proceeding where the customers who were cheated were also represented.

We need a change in the bankruptcy law that puts employees and customers before other financial creditors.

As it turns out the
Sharper Image story is interesting. Wikipedia takes a good look at the company along with some links to background stories. The building of this brand started in 1977 and their growth was based on adult gadgetry, soon after the Ionic Breeze hit the store shelves it dominated their product line. That same product turned out to contaminate the environment with the very agent that it was designed to remove; ozone. Law suits ensued and the Ionic Breeze was discontinued. With the loss of their numeral uno product to drive traffic to their stores a steady decline in customer counts and sales was initiated.

Journalists familiar with the company have estimated that they will shutter about halve of their stores. But at the time of the bankruptcy they only had $700,000 in cash, without significant additional funding they just don’t have the bucks to close only halve. They will be forced to do an over-night skedaddle leaving customers, employees and vendors on the hook.