Bleak Retail Reports Continue With Sears and Best Buy

(please stop calling this depression a recovery)
NYTIMES
By ELIZABETH A. HARRIS    FEB. 27, 2014

Sears Holdings announced dismal fourth-quarter earnings on Thursday, which included a holiday season that the company’s chairman described as “tough to terrible” for Sears and many other retailers. Best Buy also released results Thursday, swinging to a profit from its previous fourth quarter.

At Sears, the net loss for the year was $1.4 billion. For the quarter, Sears lost $358 million, compared with $489 million for the year-ago quarter. Sales at American stores open at least a year dropped 7.8 percent, while comparable sales at Kmart stores fell 5.1 percent.

In an attempt to reverse its fortunes, Sears has been transforming itself from a traditional retailer to a company that focuses on members, through its Shop Your Way rewards program. This year, 69 percent of Sears full-line and Kmart sales came from Shop Your Way, up from 59 percent last year.

“Our full-year results are impacted during this transformation as we continue supporting traditional promotional programs and marketing expenditures while we invest in our Shop Your Way program and integrated retail strategy,” said the Sears chairman, Edward S. Lampert. “We have been investing hundreds of millions of dollars annually in our transformation and will continue to invest in the future of the company.”

Best Buy reported earnings of $310 million for the quarter, compared with a net loss of $461 million during the fourth quarter of last year. The company’s profits were better than analysts had expected.

Sales at American stores open for at least a year were down 1.2 percent for the quarter; during the same period last year, sales at comparable stores were up 0.9 percent.

“As we said in our holiday sales release, the fourth quarter was an environment of declining retail traffic, intense promotion, fewer holiday shopping days and severe weather,” Hubert Joly, Best Buy’s chief executive, said in a statement. “In the face of these unusual circumstances, our strategy to be price competitive and provide an improved customer experience resulted in market share gains in a weaker-than-expected consumer electronics market.”

JPMorgan admits to losing $5.8 billion this year so far

RT - Published: 13 July, 2012,

There’s bad news out of Wall Street this week after JPMorgan Chase admits that a trading goof earlier this year has helped earn the country’s biggest bank $5.8 billion in losses — nearly triple the original estimate.

JPMorgan Chase CEO Jamie Dimon tells reporters early Friday that the botched deal overseen by then-Chief Investment Officer Ina Drew is now believed to have cost the bank around $4.4 billion in the second quarter for 2012. Originally JPMorgan staffers saw the gaffe as costing them only around $2 billion, but between Friday morning’s revelation and the revisions made on its first quarter losses, the actual amount lost in 2012 for the bank stands to be around $5.8 billion, notwithstanding any further developments.

Speaking to the press early Friday, Dimon tells the media, “we don’t take it lightly,” but adds that he believes the snafu was not part of any larger screw-up.

"We're not making light of this error, but we do think it's an isolated event,” Dimon pleads.
Dimon has dismissed claims that the mix-up earlier this year will have long-lasting effects on the bank, but has also been open to admitting their faults. In a statement delivered in May, Dimon said, “We maintain our fortress balance sheet and capital strength to withstand setbacks like this, and we will learn from our mistakes and remain diligently focused on our clients, who count on us every day.”

Drew, the former CIO for the bank, resigned from that role in May after news of the gaffe made international headlines. Even after overseeing a deal that cost the company only an estimated $2 billion at the time, though, Drew’s departure from JPMorgan was accompanied by a payout expected to bring her $15 million personally by walking away.

“Despite our recent losses in the CIO, Ina’s vast contributions to our company should not be overshadowed by these events,” Dimon insisted after the resignation was made public.

In this Friday’s statement, Dimon adds, "We have put most of this problem behind us and we can now focus our full energy on what we do best.”

Marty Mosby, an analyst that follows JPMorgan for Guggenheim Securities, tells USA Today that the new developments about the trading loss doesn’t come as too big of a surprise on Wall Street. The real shocker, however, was that JPMorgan has revised is first-quarter earnings to account for a $459 million in additional losses that it is only admitting too now.

"The trading loss was right in line with what we expected," says Mosby. "And the actual report on earnings was much stronger than we expected. What we didn't expect was the restatement. It raises further uncertainty and could lead to reviews from the Securities and Exchange Commission" and other regulators.

The bank agrees that the latest development "raises questions about the integrity" of other trades made this year.

Geithner: Taxpayers to Face "Very Substantial" Losses from Fannie/Freddie

Geithner: Taxpayers Are Likely to Face "Very Substantial" Losses From Government's Takeover of Fannie and Freddie


Tim Geithner told the House Financial Services Committee today that txpayers are likely to face "very substantial" losses from the government's takeover of home mortgage giants Fannie Mae and Freddie Mac.

As Shahien Nasiripour notes:

Taxpayers have pumped more than $125 billion into the failed firms -- and on the hook for many more after the administration promised an unlimited source of funds just before Christmas to backstop their growing losses. 

And as Nasiripour points out, Geithner has absolutely no idea how to fix Fannie or Freddie.

Heck of a job, Timmy.