Wednesday, December 5, 2012

British retailer gives up on U.S. supermarkets

I'd say that the Greatest Worldwide Depression moves on. I noticed yesterday when I went to pick up my Dad in a quaint little town of Winter Park that the main drag called Park Avenue sure had a lot of empty storefronts. This is where the rich (much like Rodeo Drive) went shopping. QB

LONDON (CNNMoney) -- The Fresh & Easy chain has been put up for sale, as U.K. retail powerhouse Tesco admitted defeat in its attempt to take on established supermarkets in the United States.
Tesco launched Fresh & Easy in California in 2007, hoping its chain of smaller stores would draw customers away from large Wal-Mart (WMT,Fortune 500) or Safeway (SWYFortune 500)supermarkets.
But Tesco (TSCDF)underestimated the reluctance of shoppers to change their buying habits, and has been forced to retreat after five years of losses and a total investment of about $1.6 billion.
Fresh & Easy CEO Tim Mason, who has been with Tesco for 30 years, will leave the company.
"It is now clear that Fresh & Easy will not deliver acceptable shareholder returns on an appropriate time frame in its current form," Tesco said in a statement.
Boutique investment bank Greenhill will conduct a strategic review of the U.S. business. All options are being considered.
"In recent months, we have had a number of approaches from parties interested in acquiring either all or part of Fresh & Easy, or in partnering with us to develop the Fresh & Easy business," the company said.
The results of the review will be announced along with full-year financial figures in April.
Fresh & Easy's woes have added to the problems Tesco faces in the U.K and other international markets. Third-quarter sales at stores open a year or more fell company-wide by 1.3%, as depressed consumer spending in the U.K. and Europe outweighed an improvement in Asia. Tesco's share of the U.K. market is also declining.
This cannot be good for Boeing. Didn't the French also try to make a plane too big for their britches? Ah Yes, we all remember the Airbus A380. How much money went down that rathole? QB
Boeing 787 Dreamliner hit by mechanical issues, prompts fleet-wide FAA investigation
A United Boeing 787 Dreamliner was forced to perform an emergency landing yesterday following reports of electrical problems onboard. According to The Aviation Herald, the flight was diverted to New Orleans after the crew raised concerns over the electrical equipment bay, but no problems were found by fire crews once the plane was safely on the ground.
The emergency landing came on the same day that the Federal Aviation Administrationordered mandatory inspections of Boeing 787s following word of fuel line issues. Two international airlines, All Nippon Airways and Japan Airlines, reported fuel leaks during flights of their own Dreamliners despite thorough inspections. The fuel line issues have now been fixed by both airlines, and a spokesperson for Boeing has confirmed withBloomberg that the electrical problems were unrelated.
While the technical issues are a cause for concern, the state-of-the-art Dreamliner only recently went into service in the United States. United Airlines currently has two Boeing 787s in service on domestic routes, with the airline having put in orders for 50 planes. The aircraft is still extremely rare overall too  Boeing has only delivered 33 as of October, with All Nippon Airways accounting for 16 by itself. Still, the latest problems are another blow for Boeing, who delivered the initial Dreamliner orders three and a half years late due to the more complex materials and construction methods used in building the plane.

A Good Deal Will Raise Tax Rates, Fix Entitlements

There’s still time to come to an agreement to prevent the more than $600 billion in federal spending cuts and tax increases scheduled to take effect in January while also raising the debt limit, but both sides will need to get out of the boxes they have put themselves in.
Peter Orszag

About Peter R Orszag»

Peter R. Orszag, vice chairman of corporate and investment banking at Citigroup and an adjunct senior fellow at ... MORE
Let’s start with the Republicans. Their adamant opposition to an increase in marginal tax rates for anyone, anywhere, has two problems. First, as I explained in last week’s column, raising huge amounts of revenue by reducing tax expenditures gets harder to do as the details become clear. The only practical way to hit a reasonable revenue target is to have some increase in marginal rates.
The second problem is that hard-and-fast principles can look increasingly ridiculous when taken, by opponents, to their logical extremes. Imagine some clever but Machiavellian Democrat (Senator Charles Schumer of New York comes to mind) proposing that the top marginal tax rate be increased to 35.5 percent, from 35 percent, for people with income above $5 million. Would the Republicans really blow up a deal over an almost undetectable increase on a tiny number of extremely high-income taxpayers? That would be political suicide. On the other hand, if the Republicans accept this increase, then they don’t have a principle anymore.

Waning Support