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


  1. Again---Common Sense.

    A raise to the rich on taxes isn't akin to dealing with the devil; nor is streamlining Social Security and Medicare. Then again, Senator Schumer likes playing both sides of the fence (ie look at his record on major issues) so there is plenty of idiot dust being smoked by all the players.

    I'm all for us driving over the cliff. If we don't nothing will really get cut--it will all be pretense as usual. We need a real shake-up...but I doubt it will come to pass.

    Queen--this is for you:

    A neighbor of mind did a similar action. Only he applied in NJ and left to buy a house in FL. He wasn't looking for work and made no effort to look for work.

    When MY husband was unemployed (back when UE only lasted six months!) he had to SHOW applying for work 3 places every week. He had to bring letters, appts, etc. to unemployment. We were paying for our health insurance out of savings. We had 3 months with no money coming in. We sold his comic book collection, his HO trains, and a bunch of other stuff. I believe we went through $30,000 in 9 months (when you figured in the amount for the insurance, etc.) and we didn't have a mortgage to pay. Just taxes, water/sewer, food, heat, and your normal bills.

    I personally know of a family of friends who are living day-to-day with the father teaching in Texas. They are barely making ends meet and Christmas is a real struggle for them. They are the UNSUNG group in our land--THE WORKING POOR. I sometimes think this group is in worse straits than the 'poor' who get all the presents, turkeys, food, etc. given to them.

    A quick thought on giving as it is the seasons where you will be swarmed with charities asking for help.

    A recent sermon really resonated on this as our minister spoke on giving to someone who appealed to the church for aid for food, toys, etc. and then the minister saw this same person shopping at the local grocery store with shrimp, steak, etc. in his cart which he paid for with food stamps. The 'human nature' came out in the minister as he admitted he wanted to grab that stuff out of the cart and scream at the guy, "Really? I mean, really? You ask for help and we give it and you do this?" He also admitted that they go into homes where the poor have 52 inch tv's and HE doesn't have one.

    It is a true struggle to try to come to terms with the very real FACT that nowhere is it written that life is FAIR. You have to overlook this type of stuff and focus only on the idea of giving or you'll go stark raving mad. I guess this is why my father taught me never to loan money as then if you see the person out and about doing things you don't approve of with money you become bitter. It is better to simply give and let go.

    I think that is a good mantra for all of us to learn. We have to 'let go'...but it sure isn't easy ;-)

    So choose whatever charity or family or group you like and donate only what you can CHEERFULLY with no strings attached give and then let go. That way, you allow yourself to enjoy the spirit of helping and can retain the true joy. I always think of that MASH episode where pompous Charles Winchester III gave that chocolate candy and threw a fit when the monk sold it to feed the children for a month. It was a great lesson to point out how we may see only a portion from our viewpoint rather than the entire large-scale picture.

  2. CLL what a great story and thank you for the link. I will look at it now. Sadly the PMs are taking their slide back down under 1700 again. I expect it could once again go down to 1635 before people buy. I cannot buy at this time. I used to have plenty of liquidity and I would be slamming it hard at this price, but now the money goes for meds and food.

  3. Maybe Deutsch doesn't know it is a felony to take this money with imprisonment and a fine. He is a real "Deutsch" bag.

  4. "Gov. Rick Scott, who has made improving Florida’s economy his signature issue, was dealt a setback Tuesday when his hand-picked jobs czar resigned Tuesday rather than face lingering questions about jobless benefits he received."

    Governor Scott is a total jerk by making it harder for the uneducated and the computer illiterate to file for UE. Deutsch by Florida law, is a felon. I'll bet he doesn't serve or pay the fine. Also by law he can never collect again.

  5. Mr. K what happened to you? Your blog stopped and you stopped commenting. I'd love to have you back as your knowledge of history is far beyond mine.

  6. And the beat goes on for the mining sector. Only one way and that is down down down.

  7. Even AAPL is taking a hit today -27 or 4.7%.

  8. If you can imagine that Walmart sold nothing but food and of the same quality as the rest of the crap that they sell, now you can imagine what a TESCO supermarket is like in the UK..effin awful. I am happy they that the lost a billion in trying to get away with the stunts that they pull here in the USA. Firk 'em!

  9. Unlike making a new toaster, a brand-new airliner like the Boeing 787 is an amazingly complex work, and there are likely bugs to be worked out, despite years of testing.

    Let's not be too quick to judge the 787, as it has not been flying commercially for very long, yet.

    For some perspective, AND for those with a short memory, there were also issues with the 737's, 747's, 757's, 767's, and 777's for the first few years these were in the air. And these airliners are still flying today!

  10. P.S. Airbus builds over-complex crap, but then again so does Ford.

  11. "Let's not be too quick to judge the 787" I agree Mammoth, but I will fly on them after they get the bugs out. Boeing is a top notch company and not like Airbus A380 (If I am not mistaken) was a joint venture between Germany and France. We've see how well the Eurozone is going now. I can just see German engineers telling the French they got it all wrong.

    WMW thanks for enlightening us on the TESCO issue. I won't buy or even walk into a Walmart.

  12. What me worry? - Hope you are doing well, and not worrying.

    cl - well said.

    I personally trust no airliner company. Heck, I don't even trust myself. But overall, I would pick an AMerican airliner as being safer, only because of the legal challenges they face - if it crashes, they get sued, big time. I'm not sure about Europe. Airbus seems to have a good safety record, but I'm not sure I trust French engineers, and the stories I have read about their 'fly-by-wire' controls (one crashed last year due to electronics issues) don't inspire confidence. I probably wouldn't buy a French car either. Wine, OK.

  13. I guess I should state I would buy French tires from Michelin, they make the best snow tires sold in Canada.

    I hate flying these days, due to the airport security delays, so you probably won't see me at the airport anyway.

    I guess I would have to fly to get to a lot of desirable destinations, so I will have to suck it up and do it, one of these days.

  14. I'd say Obummer is doing some brilliant political maneuvering, he is backing the Republicans into a corner they won't escape easily from.

    Setting them up to take the blame for AMerica going over the cliff is working, I don't see anyone blaming Obama.

    Today I heard him on the radio sounding oh so reasonable and confident he could reach a deal soon if only the Republicans could see reason, and it probably sounded good to most of the public. Except R voters of course.

    The sad part about all this is even diving off the cliff won;t be enough to right the US fiscal ship, and anything less is just a cosmetic can kick.


    Karl tears Peter Orszag a new one, and I would say he is correct.

    I would say he, err, lacks some credibility, to be polite, as he was "director of the Congressional Budget Office from January 2007 to November 2008" when GWB was busy blowing up the Budget with COngress help, of course. Nothing compared to the Obama spending, but still.

    He may be " praised by lawmakers from both parties as an objective analyst" but in Washington that does not mean much, only that he is somewhat less clueless than most.


    Rosie on US restaurants, since we were talking about Darden yesterday. And his usual great analysis of the macro situation and what it means.

    " may be more appropriate to be looking at what is happening on Main Street rather than Washington. Looking ahead, it is going to be more about the economy, and taking it a step further, at times like these, it is important to understand where the real economic power resides, and that is with the people..."

    Americans will get to make shared sacrifices, whether they want to, or not. Let's just say the implications are, err, disinflationary.

  17. My son has been placed on the Being777-300er plane ( Cathay based in Hong Kong) He said this always happens with the first series of any new aircraft! it happened with 747, 737 etc...bugs! It will be will be pilot error that will bring down the dreamliner if you look at the odds of mechanical failure! That or a combo of pilot/mechanical...but it usually is human error.

    I would not worry at all about travelling on it! :)

  18. ...and despite the start-up bugs - the Boeing 777 has been flying since the mid-1990's and one has yet to experience a catastrophic crash.

    So the odds are your son will be a-o.k., Shaza. And so will the new 787 Dreamliner!

  19. Here is my final word based on conversations with Shaza in the past. I would rather fly on a Boeing jet of any size rather than any other. However unless the government subsidizes flights based on income (and I don't want them to do that) I will never travel again. Maybe I can learn how to astral travel. One lyric in a Moody Blues song was "thinking is the best way to travel."

  20. P.S. Airbus builds over-complex crap, but then again so does Ford.
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