Fed’s “Solid” Expansion Called Into Question as Big Name Retailers Stampede into Bankruptcy

by Pam Martens and Russ Martens, Wall Street on Parade It was just last Wednesday that the U.S. central bank, the Federal Reserve, released its monetary policy statement and reassured the markets that “economic activity has been expanding at a solid pace” with “strong job gains.” This cheery U.S. news came on the heels of recent action by seven foreign central banks to slash interest rates and/or pump more stimulus funds to head off an economic train wreck around the rest of the globe. The Fed statement also came on the heels of thousands of job cut announcements by companies like American Express (4,000), Schlumberger (9,000), IBM (at least 2,000), Baker Hughes (7,000), and Coca Cola (1,600 to 1,800). What’s happening among U.S. retailers is also not suggesting strong job gains. Since December, there has been a steady pace of bankruptcy filings and announcements by retailers to close all stores and liquidate as opposed to re-emerging eventually from bankruptcy and saving jobs. Last evening, the Wall Street Journal reported that Radio Shack, which employed approximately 24,000 workers as of late last year and operates more than 4,300 stores in North America, planned to file for bankruptcy, possibly as early as today. Shares of its publicly traded stock closed at 27 cents on Friday, strongly suggesting there will be serious job losses ahead at the company. In early January, Wet Seal, a familiar fashion name in upscale malls, announced it was closing 338 stores and laying off 3,700 employees. On January 15, the company filed for bankruptcy protection. The company’s stock closed at just under 3 cents on Friday. Continue Reading>>>

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