Rick Newman
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An Obama Growth Industry: Financial Regulation
Continue reading… 0 CommentsIt wasn't part of the stimulus package, but President Obama's financial reform could turn out to rank among Washington's biggest job-creation programs.
One contributing factor in the financial meltdown has been a patchwork regulatory system with wide gaps exploited by companies like AIG, Countrywide Financial, and many of Wall Street's biggest firms. Hardly anybody thinks the system is too small. In fact, it's a sprawling regulatory regime with at least eight federal agencies, plus bank, insurance, and securities regulators in most of the 50 states and industry groups set up to police their own members. In terms of bureaucracy, oversight of the financial system rivals that of Big Pharma, the auto industry, and other heavily regulated parts of the economy.
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America's Most Profitable Malls
Continue reading… 160 CommentsEverybody knows that American shoppers have cut back their spending, driving some retailers—and even some malls—out of business. But commerce hasn't ground to a complete halt, and Americans are still spending on some things. Somewhere.
[Slideshow: America's Most Profitable Malls]
Using data from Green Street Advisors, an investment research firm in Newport Beach, Calif., that specializes in publicly owned real estate companies, U.S. News identified malls in which the retail economy is relatively healthy. While bargain shopping is obviously popular, the nation's most profitable shopping centers generally don't rely on discounters. Instead, they tend to feature chains with a strong brand identity, like Nordstrom, Abercrombie & Fitch, Apple, and Anthropologie. Since it's all about real estate, location is vital: The best malls tend to be in densely populated areas or tourist hotspots. And it sure helps if local residents are affluent.
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America's Most Endangered Malls
Continue reading… 169 CommentsBirmingham's Century Plaza mall was a consumer mecca when it opened in 1971, drawing shoppers from outlying suburbs and even from other states. Over the years, however, people moved outward from central Birmingham, and new shopping centers sprouted around them. Sales at Century Plaza declined. Three of the mall's four big "anchor" tenants eventually left, and smaller retailers followed. By 2008, Century Plaza was a shadowy hulk with more shuttered stores than open ones. Then the last anchor tenant, Sears, announced it was leaving. The mall finally closed for good in early June.
[Slideshow: America's Most Endangered Malls]
Malls have a natural lifespan, as population centers shift, architecture evolves, and shopping habits change. But a sharp recession is clearly accelerating the demise of vulnerable retailers—and some of the shopping centers they inhabit. Plunging sales are one obvious reason. Many retailers are also saddled with heavy debt taken on in recent years to fund aggressive growth. And the credit crunch has made cash scarce for firms that need it most.
Those tough conditions have already driven retailers like Circuit City, Linens 'N Things, and Steve & Barry's out of business. Other chains are closing stores and slashing costs as they fight to survive. General Growth Properties, a Chicago firm that operates more than 200 malls—and owns the remnants of Century Plaza—declared bankruptcy in April and is working on a restructuring plan.
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How To Tell When a Mall Is In Trouble
Continue reading… 124 CommentsIt's a tumultuous time for retailers—and the malls they inhabit. With anxious consumers hoarding cash, several major retail chains have bitten the dust, and others may follow. Some malls are likely to go out of business as well. To gauge the damage, U.S. News asked Steve Sterrett, chief financial officer of Simon Property Group, the nation's biggest mall operator, about the retail economy, prospects for a recovery, and the signs of a troubled mall. Excerpts:
How has the recession directly affected your business?
At the end of the day, we own the real estate. As long as we own the best anchored real estate, we're a step away from the economic impact on the retailer.
[See America's most endangered malls | Slideshow ]
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Why Congress Asks Bernanke Bogus Questions
Continue reading… 4 CommentsOur esteemed Congress seems determined to make rapacious bankers look good.
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Why Low Earners Relax More
Continue reading… 12 CommentsIf extra schooling seems like a lot of effort, get used to it—the smarter you are, the more hours you're likely to work.
It's obvious that there's a big pay gap between people who have more education and people who have less: Doctors and engineers with advanced degrees earn a lot more than high-school grads working blue-collar jobs. It turns out there's also a growing "leisure gap" between more- and less-educated Americans: The more schooling, the less time devoted to leisure.
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Who Would Lose Under Obama’s Financial Reforms
Continue reading… 22 CommentsPresident Obama’s ambitious overhaul of the financial regulatory system would create a new layer of consumer protections, expand the Washington regulatory establishment and change the way America’s banks do business. The goal is to provide more stability to the financial system, which would benefit most Americans. But such abrupt change would also cause some casualties. Here’s who stands to lose under Obama’s reforms:
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Who Would Win Under Obama’s Financial Reforms
Continue reading… 24 CommentsThe man doesn’t think small. If President Barack Obama’s proposed overhaul of the financial regulatory system gets through Congress, it will be a virtual reboot of some of the most engrained government agencies. The plan would rearrange the duties of Federal Reserve, the Treausury Dept., and many other Washington fiefdoms. It would extend federal oversight to hedge funds and a whole new basket of financial products, and change the way Americans use mortgages and credit cards. Here’s who some of the biggest winners will be if the plan goes into effect:
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How to Get Hired After You’ve Been Fired
Continue reading… 3 CommentsIt's a buyer's market for talent these days—and a few firms are actually hiring. But with so many applicants competing for so few jobs, it's more important than ever to differentiate yourself from everybody else in line. To figure out what companies want—and how they view applicants who have been laid off—I spoke with Bob Damon, president for North America at executive recruiter Korn/Ferry International. Excerpts:
Is there a stigma associated with getting laid off? Or does that include so many people that it's now considered a mainstream experience? I don't think there's a stigma associated with being let go, but it depends on the nature of why somebody ends up on the beach. If it's because of a merger of two companies, I think people understand that. You can see through a merger and tell that some good people end up out there. If a company goes Chapter 11, that's not necessarily a black mark on an executive, either. The individual manager doesn't necessarily bear responsibility for what happened to his company. And there's still a shortage of leadership across all companies.
[On the hunt for a new job? Use our new search tool to help you find the best place to work.]
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4 Ways to Tell When a Real Recovery Has Begun
Continue reading… 57 CommentsYou could conclude just about anything from the daily cavalcade of economic statistics. Some suggest an imminent recovery. Others seem to foretell years of gloom. The bent of the expert interpreting the latest news—bull, bear, Obama-basher, Wall Street-hater—has as much to do with the outlook as the numbers themselves.
For the foreseeable future, there will be an aggressive hunt for two economic recoveries. One is the technical improvement in economic indicators that signals the economy is growing again. That's the one economists care about, which is why they scour the numbers on retail sales, business inventories, purchasing manager sentiment, subatomic inflation, the mood in Shanghai, and anything else that could help pinpoint the exact inflection point for a turnaround.
The other recovery, the one that most consumers are waiting for, is the one in which companies stop firing and start hiring, banks return to normal lending, and families stop worrying about jobs and income. And that turnaround—the consumer recovery—is likely to take much longer to materialize than the technical recovery.
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Restaurants on the Ropes
Continue reading… 145 CommentsWhen Americans get stressed out, one thing they do is eat. But apparently not enough.
The dismal economy has punished retailers, with companies like Circuit City and Linens ’n Things going extinct and dozens of others losing money. Now it’s hitting their cousins in the restaurant industry, too. The Bennigan’s and Steak & Ale chains were early casualties, going belly up last summer. This year, with Americans cutting back on spending, sales at restaurants could fall by 10 percent or more. Analysts don’t expect widespread closures, but some chains are likely to close unprofitable outlets, cut back on service, and look for other ways to reduce costs.
As in retail, companies that help people save money will weather the storm better than others. Chains like McDonald’s, Pizza Hut, and Olive Garden, which offer ample portions at value prices, should do OK and maybe even pick up market share. It helps if they’ve been run conservatively, with low borrowing costs and cash held for a rainy day.
[See who stands to gain from the General Motors bankruptcy.]
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What Else Rush Limbaugh Should Boycott
Continue reading… 35 CommentsIf Rush Limbaugh wants to properly protest the Obama bailouts, he’ll have to boycott a lot more than General Motors.
Limbaugh and some other conservative pundits have suggested that Americans should refuse to buy cars from “Government Motors,” as a way to express their outrage at President Obama’s interference in our free-market economy. “Be it General Motors, be it Chrysler -- whatever else Obama ends up controlling and running -- the American people are not going to want it to succeed,” Limbaugh said on his radio show recently. He also cited a poll claiming that nearly one-quarter of Americans support a boycott of GM.
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How TARP Paybacks Expose the Weakest Banks
Continue reading… 6 CommentsThe government has finally acknowledged something it wanted to keep secret six months ago: Which banks are in the worst financial health.
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Why the Economic Recovery Won't Feel Like One
Continue reading… 16 CommentsThe recession is dividing America into economists, and everybody else.
The economists are the ones probing for "green shoots" (the most overused cliché of 2009) in all those economic reports that make the headlines. For the most part, what they're seeing is bad news that's less bad than it was a few months ago. An economic recovery has to start somewhere, and before things start to get better, they have to stop getting worse. The data watchers are getting excited because many of the indicators that were collapsing not long ago—like home sales, credit availability, consumer spending, and overall economic growth—aren't collapsing anymore. They're just...declining.
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Why You’re Going to Save More, Like It Or Not
Continue reading… 11 CommentsCongratulations, America: You’re learning how to be thrifty after all.
Now, for the sake of the economy, would you please cut it out?
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What China Gets From Bailing Out Hummer
Continue reading… 23 CommentsNobody saw this one coming: An obscure Chinese company that doesn’t even build cars buys a troubled but iconic division from General Motors. Hummer, made famous by American G.I.s, Arnold Schwarzenegger and oversized U.S. consumers, will now be run by a construction-equipment company located 1,200 miles southwest of Bejing (and 8,000 miles from Detroit). It’s tempting to laugh it off as globalization run amuck.
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The Overwrought GM Eulogies
Continue reading… 34 CommentsEnd of an era. Fallen titan. Epic decline. Death of an American icon.
If you haven’t gotten the message by now, let me spell it out: The General Motors bankruptcy is a national buzzkill that officially signals the end of the glory days. The world no longer admires our products--or us. We’re a has-been nation. The party’s over, and there aren’t going to be any more parties.
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How GM Gets Its Groove Back
Continue reading… 7 CommentsWith General Motors in bankruptcy, an army of lawyers will battle over the best way to dispose of the assets of the “old GM.” But an even more important job is keeping the “new GM”—the smaller, healthier company expected to emerge from bankruptcy—in business.
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Who Will Gain From the GM Bankruptcy
Continue reading… 236 CommentsThe huge General Motors bankruptcy is the best of several bad options for America’s biggest automaker. By allowing the company to shed debt, unload its weakest assets and rapidly streamline, the Chapter 11 filing allows GM to stay in business, become competitive once again and someday return to profitability.
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How To Tell If You Should Buy an American Car
Continue reading… 28 CommentsAmerica's bankrupt automakers have an unusual pitchman: President Obama. "If you are considering buying a car, I hope it will be an American car," Obama said earlier this year. That might sound patriotic, but Obama has an ulterior motive. The government now owns a big chunk of General Motors and Chrysler, so it wants to make sure the struggling automakers move the metal.
