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Bush claims economy on track to recovery - 30,000 Circuit City employees disagree
"Too_Many_Tools" wrote in message ... Poor old George...delusional to the end...kids...being a conservative will do this to you. Don't let your parents vote Republican if you love them. Americans living under bridges agree. TMT Bush claims economy on track to recovery By TOM RAUM, Associated Press Writer Tom Raum, Associated Press Writer 37 mins ago WASHINGTON – President George W. Bush said Friday that while the current economic crisis has sent shock waves around the world, he believes steps taken by his administration have "laid the groundwork for a return to economic growth and job creation" early in the administration of President-elect Barack Obama. "The American economy has consistently proven its strength and resilience" Bush wrote in his final economic report to the nation. He said this resilience has continued despite multiple blows to the economy. Bush's statement came at the beginning of the annual report of the White House Council of Economic Advisers. Those advisers predicted "a strong economic recovery early in the term of the next administration." Bush said that a combination of factors rose to "threaten the entire financial system and generated a shock so large that its effects have been felt throughout the global economy." "Under ordinary circumstances, it would be preferable to allow the free market to take its course and correct over time," he said. But, Bush added, the potential financial damage to households and businesses was so severe that "unprecedented government response was the only responsible policy option." "A measure of stability has returned to the financial system," Bush said. He warned that "temporary government programs" established to deal with the crisis "must remain temporary and be unwound in an orderly manner as soon as conditions warrant." In the underlying economic report, Bush's economic advisers said that while the economy had in fact proven itself " remarkably resilient" over Bush's two-term presidency, there is a "risk that recent events may overshadow the many positive developments of the past eight years." The advisers suggested that the economic downturn, reflected in the half-percentage-point contraction in the gross domestic product in the final quarter of 2008, will likely continue in the first half of 2009. The White House panel noted that "most market forecasts" suggested a recovery beginning in the second half of 2009 "that will gain momentum in 2010 and beyond." Looking ahead, the president's economic advisers said the global financial crisis presents several remaining challenges for the U.S. government: the need to modernize financial regulation, unwind temporary programs, and develop a long-term solution for dealing with mortgage giants Fannie Mae and Freddie Mac, now essentially under control of the government. And Bush's advisers didn't miss an opportunity to put in a final political plug for the president's unfinished agenda, just five days before he leaves office. "There remains considerable opportunity to strengthen our economic position by eliminating the uncertainty surrounding tax relief that is scheduled to expire." It was a pitch to make permanent the Bush tax cuts that expire at the end of next year. ========== Circuit City to liquidate remaining US stores By MICHAEL FELBERBAUM and VINNEE TONG, AP Business Writers Michael Felberbaum And Vinnee Tong, Ap Business Writers 1 min ago Bankrupt Circuit City Stores Inc., unable to work out a sale of the company, said Friday it will go out of business — closing its 567 U.S. stores and cutting 30,000 jobs. The nation's second-biggest consumer electronics retailer is the latest casualty of an unprecedented pullback in consumer spending that has driven other brands such as KB Toys, Mervyns LLC and Linens 'N Things into bankruptcy. Experts believe there will be more to come. "This is the only possible path for our company," Circuit City's acting Chief Executive James A. Marcum said in a statement. "We are extremely disappointed by this outcome." The company had been seeking a buyer or a deal to refinance its debt, but the hobbled credit market and consumer worries proved insurmountable. Negotiations for an acquisition went past midnight on Thursday, a Circuit City lawyer said in court. Two buyers — Mexican billionaire Ricardo Salinas Pliego, who controls a chain of electronics stores in Latin America, and the Golden Gate Capital private equity firm — had been looking to buy the company in a shrunken form, with either 350 stores or as few as 180 stores. But the company couldn't secure the necessary financing or support from vendors. Employees were being notified Friday that they would lose their jobs and, if a judge gives final approval to the liquidation, stores would begin the closing process as early as Saturday. "Regrettably for the more than 30,000 employees of Circuit City and our loyal customers, we were unable to reach an agreement with our creditors and lenders," Marcum said. Shareholders are likely to receive nothing, as is typical in bankruptcy cases. Circuit City said in court papers it has appointed Great American Group LLC, Hudson Capital Partners LLC, SB Capital Group LLC and Tiger Capital Group LLC as liquidators. They provide for 70.5 percent return on merchandise. It was unclear what would happen to the company's 765 retail stores and dealer outlets in Canada. Circuit City lawyer Gregg Galardi of Skadden, Arps, Slate, Meagher & Flom LLP told a judge there are still bids for the Canadian business. "Very, very sad," said Alan L. Wurtzel, the son of company founder Samuel S. Wurtzel, and the chief executive from 1972 to 1986, board chairman from 1986 to 1994 and vice chairman until 2001. "I feel particularly badly for the people are employed or until recently were employed." Wurtzel has previously said Circuit City didn't take the threat of rival Best Buy Co. seriously enough and, at some points, were too focused on making a profit in the short term instead of building long- term value. Credit Suisse analyst Gary Balter told investors that Circuit City's demise will help Best Buy cement its position as the market leader. "Losing Circuit (City) and what had previously been an $11 billion business, in addition to share gains from other smaller outlets, should help to partially offset weaker consumer spending as well as further secure Best Buy's position as the leader in the space," he said. The liquidation of Circuit City follows the worst holiday shopping season in four decades. People have slashed their spending since the financial meltdown in September as they worry about their job security and declining retirement funds. KB Toys filed for bankruptcy in December and is liquidating stores. Department store chains Goody's Family Clothing and Gottschalks Inc. both filed for bankruptcy this week — Goody's plans to liquidate, while Gottschalks hopes to reorganize. Industry experts expect more bad news in the coming months as spending likely will deteriorate further. The Circuit City move will also hurt the nation's malls, which have suffered from the rise in vacancies as other chains have liquidated. But analysts say that the demise of Circuit City, whose stores range in size from 20,000 to 25,000 square feet, will hurt the fortunes of mall operators even more. "It will bring to market a glut of big box spaces across the country," said John Bemis, head of Jones Lang LaSalle Inc.'s retail leasing team. "It will have one of the largest impacts on big box real estate across the country." Circuit City filed for Chapter 11 in November as vendors started to restrict the flow of merchandise ahead of the busy holiday shopping season. It had been exploring its options since May, when it opened its books to Blockbuster Inc. The Dallas-based movie-rental chain made a takeover bid of more than $1 billion with plans to create a chain to sell electronic gadgets and rent movies and games. Blockbuster withdrew the bid in July. Circuit City, which said it had $3.4 billion in assets and $2.32 billion in liabilities as of Aug. 31, said in its initial filings that it planned to emerge from court protection in the first half of this year. Under court protection, it broke 150 leases at locations where it no longer operates stores and closed 155 stores in the U.S. in November and December. But it also got permission from U.S. Bankruptcy Judge Kevin Huennekens to liquidate if the company could not find a buyer. ___ AP Retail Writer Anne D'Innocenzio contributed to this report. |
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