Bankruptcies, Bailouts, and Meltdowns...Oh My!

Ok here we go. I have been trying my best just to give insight as to what is happening in the overall economy in hopes of helping people, primarily Black People, not just to survive but thrive in the most serious Economic Crisis since the Great Depression.

To some the not so great news has irritated some people in some forums and groups. One person said, "Brother you now have a black president and that supercedes every thing else. If you are fortunate".  There were similar statements in other places, but I will not go into all of that.

I fully support Barack Obama, but that does not erase the reality that millions of our people are facing layoffs and foreclosures and some are barely able to feed their families.

Millions of our people who have worked for 20-30 years in hopes of having a comfortable retirement, just witnessed their 401k's go to zero

It is not my intent to irritate or diminish any accomplishments that have occurred recently, but my God, it is the height naiveté to ignore all of the facts that play a role in our lives and the lives of our children.

So with that of my chest let's deal with some facts.

Unemployment just soared to its highest level in 14 years ...Consumer confidence just hit its lowest level in 15 long years.

The retailers were just handed the blackest "Black October" since 1969. Nordstrom, Saks Fifth Avenue, Tiffany, Lowes, Target and many other retailers have all issued some of the most disturbing earnings warnings in history.

Kohl's sales slumped 11% in October. Macy's sales fell 7.9%. At Nordstrom, sales plunged more than 15%. At Saks Fifth Avenue and Gap, sales plummeted 16% and 17%, respectively. Neiman Marcus sales cratered a staggering 28%.

Now the cash-strapped retailers are slashing prices to the bone just to survive. American Eagle, Ann Taylor, Chico's, Soma, Gap, Victoria's Secret, Bath & Body Works, Talbots, J. Jill and many others are offering such deep discounts, all before their own holiday sales season begins.

You may have heard that Mervyn's is liquidating its entire inventory at 149 stores that they are closing. The now-bankrupt Circuit City is closing 155 stores. Linens ‘n Things, Steve & Barry's and many other chains are also closing hundreds of stores nation-wide.

And now to make matters worse, earlier in the week, Moody's warned that - because consumer spending has now stalled - 14% of ALL major U.S. companies are on the verge of BANKRUPTCY. That's the greatest number of firms in danger since Moody's began keeping records!

Maybe you know the secret to the success of most retail chains. Most big retail chains expect to make their greatest profits during the holiday season. Some actually lose millions of dollars all year long, counting on holiday spending to push them into the black at the end of the year.

But this year, with consumers pinching their pennies and on a buyer's strike, it doesn't look like that's going to happen.

This week, the CEOs of GM, Ford and Chrysler told the Senate Banking Committee that they are weeks away from triggering what may well be the greatest economic cataclysm of our lifetimes.

According to GM chief Rick Wagoner, the U.S. automakers now stand on the edge of a "financial chasm." GM is bleeding red ink: They lost $4.2 billion in July, August and September.

They are asking for a $25 billion dollar bailout and it is clear that there is no assurance Washington will throw good money after bad. Remember, they just authorized $25 billion a few weeks ago.

Many analysts believe that the Big Three may be destined for collapse no matter what Washington does - especially if the global economy continues to crumble in 2009.

Finally, yesterday was a historic day for the market. The Standard & Poor's 500 Index plunged by 6.7% to 752.44. The bear market low of October 2002 was 768.63.

What does that mean? It means every penny of profit an investor earned that was bought at the lowest point six years ago has been wiped off the map. Gone! Vanished!

The markets are in a meltdown.

These are the facts and if we are to have a decent quality of life in the future we must prepare to move our families and ourselves forward.