You And I Ate At McDonald's Last Year

BB2: Watch for my "rant" coming soon about local restaurants. It ties in to this story on the flipside.

From breitbart.com:

US fast-food giant McDonald's said Monday its 2008 net profit soared 80 percent from a year, lifted by growing demand from consumers seeking low-cost meals in a deepening global recession.
Net profit for the full year totaled 4.3 billion dollars, compared with 2.3 billion in 2007, the Oak Brook, Illinois-based company said in a statement.
Excluding exceptional items, earnings per share were 3.76 dollars, widely exceeding consensus market forecasts of 3.63 dollars.
The robust annual results came despite a sharp 23 percent decline in fourth-quarter net profit to 985 million dollars, from 1.273 billion in the 2007 fourth quarter. Fourth-quarter earnings per share were 87 cents, above expectations of 83 cents.
"2008 was a strong year for McDonald's," chief executive Jim Skinner said in the statement.
"Through our strategic focus on menu choice, food quality and value, the average number of customers served per day increased to more than 58 million in 2008."
The global fast-food giant said it saw growth in comparable sales and customer counts across all segment for ever quarter, and double-digit growth in operating income for the final quarter and the year.
Global comparable sales in 2008 increased 6.9 percent. That included rises of 4.0 percent in the United States, 8.5 percent in Europe, and 9.0 percent in Asia/Pacific, Middle East and Africa, the company said.
Cost-focused companies such as McDonald's and budget retailers generally have weathered the global financial crisis better than others as consumers seek ways to stretch their dollars.

Monday Morning Madness

From foxnews.com:

Sprint - 8,000

Sprint Nextel Corp. is eliminating about 8,000 positions in the first quarter as it seeks to cut annual costs by $1.2 billion.
The nation's third-largest wireless provider said this morning it will complete the layoffs largely by March 31. About 850 of the reductions are voluntary and the company said it expected a charge of more than $300 million for severance and other costs.
The Overland Park, Kan.-based company is also suspending its 401(k) match for the year, extending a freeze on salary increases and is suspending a tuition reimbursement program.
The company has struggled since acquiring Nextel Communications Inc. in 2005 as technical problems, poor efforts to consolidate the two companies and stiff competition for feature-rich phones has led many subscribers to switch to competing services.

Home Depot (Expo) - 7,000

Home Depot said Monday that it will exit its Expo business and streamline its support functions, resulting in 7,000 job cuts. That is about 2% of the company's workforce.
The company sees a total pre-tax charge due to these actions of approximately $532 million, of which approximately $390 million will be recognized in the fourth quarter and the remaining $142 million will be recognized in 2009 and beyond.
In addition, Home Depot affirmed its 2008 forecast of a decline of 8% in sales and a 24% drop in earnings per share from continuing operations before today's announcement.

Caterpillar - 4Q Report

Heavy equipment maker Caterpillar Inc. says its fourth-quarter earnings tumbled 32%, hurt by higher operating costs and a global economic downturn that curbed demand for its products. It forecast lower sales and profits for 2009.
Caterpillar's fourth-quarter decline to $1.08 per share reflects the slowing world economy as its earth-moving machines and other equipment are used in global industries such as mining and construction. It earned $975 million, or $1.50 per share, in the year-earlier period.
Revenue rose 6% to $12.92 billion.
Analysts estimated Caterpillar would earn $1.31 per share on revenue of $12.84 billion.
Caterpillar has said it plans to lay off workers, slash executive compensation and offer buyouts to 25,000 U.S.-based employees.

Bank of America CEO, Directors; JP Morgan Chase Director: Now Is Time To Buy

From bloomberg.com:

Bank of America Corp., the biggest U.S. lender by assets, gained 31 percent in New York trading after Chief Executive Officer Kenneth Lewis and five directors bought more than 500,000 shares for at least $3 million.
Lewis bought 200,000 shares of the bank at prices ranging from $5.98 to $6.06 yesterday, while director Robert Tillman also bought 200,000 shares for $5.77 to $5.78, according to a filing today. Temple Sloan Jr., lead director of the Charlotte, North Carolina-based bank, bought 41,800 shares. Buyers also included William Barnet III, Jacquelyn Ward and John Collins.
Purchases by insiders typically are seen as a vote of confidence, and the filing helped Bank of America stock regain some of the ground lost this week. Jamie Dimon, CEO of JPMorgan Chase & Co., also bought 500,000 shares of his bank valued at $11.5 million, according to a separate filing. Lewis bought his stake as the bank prepared to dismiss about 1,000 people, part of a reduction that may ultimately affect 35,000 jobs.

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Is Your Neighborhood Ugly Because of Foreclosed Homes? Help Is On The Way.

From bakersfield.com:

Bakersfield will get $9 million in federal funds to help shore up distressed neighborhoods and get people into foreclosed homes.

The city will work with real estate lenders and banks to get the money to qualifying home buyers, said Rhonda Barnhard, the city’s assistant economic development director.
It could also be used to purchase and demolish burned-out and abandoned homes that are dragging neighborhoods down, she said.
The money, which will probably arrive in March, is a product of legislation passed in Congress last summer, Barnhard said.
“If we can stabilize a neighborhood or two it certainly would be a big help,” Barnhard said.
The city plans to roll out details of how it will spend the money, along with a marketing plan, in a month or so, she said.

Don't Plan To Do Anything With Your CA Tax Refund

From My Way News:

Calif. tax refunds to be delayed starting Feb. 1

SACRAMENTO, Calif. (AP) - California's controller says he will begin a 30-day delay on tax refunds and other payments starting Feb. 1 because the state is running out of money.
Controller John Chiang said Friday he must delay $3.7 billion in payments next month because lawmakers have failed to address California's growing deficit.
With a $41.6 billion shortfall over the next year-and-a-half, the state is on the brink of issuing IOUs.
Chiang says his office must continue education and debt payments but will defer money for tax refunds, student aid, social services and mental health programs.
A severe drop in revenue has left the state's main bank account depleted. The state had been relying on borrowing from special funds and Wall Street investors; those options are no longer available.

$20B More for Bank of America

BB2: Two weeks after acquiring Merrill Lynch. And they haven't even taken over Countrywide yet!

From International Herald Tribune:

Kenneth Lewis gambled on bold acquisitions to build Bank of America into the nation's largest bank.
But the need for fresh government support to grapple with the newly revealed losses at Merrill Lynch, the brokerage firm he snapped up in a rapid-fire arrangement at the height of the financial crisis in September, raises questions about whether the bank has gone a deal too far.
Two weeks after closing its purchase of Merrill Lynch at the urging of U.S. regulators, the government cemented a deal at midnight Thursday to supply Bank of America with a fresh $20 billion capital injection and absorb as much as $98.2 billion in losses on toxic assets, according to people involved in the transaction.
The bank had been pressing the government for help after it was surprised to learn that Merrill would be taking a fourth-quarter write-down of $15 billion to $20 billion, according to two people who have been briefed on the situation, in addition to Bank of America's rising consumer loan losses.
The second lifeline brings the government's total stake in Bank of America to $45 billion and makes it the bank's largest shareholder, with a stake of about 6 percent.

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Uncircuit City

BB2: Fun fact. According to bakersfield.com, our Circuit City is (was) the number 1 store! Bummer.
From breitbart.com:

Bankrupt Circuit City Stores Inc., the nation's second-biggest consumer electronics retailer, said Friday it failed to find a buyer and will liquidate its 567 U.S. stores. The closures could send another 30,000 people into the ranks of the unemployed.
"This is the only possible path for our company," James A. Marcum, acting chief executive, 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.
The liquidation of Circuit City is the latest fallout from the worst holiday shopping season in four decases. People have slashed their spending since the financial meltdown in September as they worry about their job security and declining retirement funds.

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Mortgage Rate Relief Might Not Last Long

From reuters.com:

By Julie Haviv - Analysis
NEW YORK (Reuters) - Massive efforts by the Federal Reserve to bring down mortgage rates have so far been a success, but homeowners had better act fast because analysts say record low rates could be gone as soon as this summer.
Thirty-year mortgage rates dropped to a low of 5.01 percent this week -- their lowest since 1971 -- after the Federal Reserve unveiled a plan in late November to buy as much as $500 billion of securities backed by Fannie Mae (FNM.P), Freddie Mac (FRE.P) and Ginnie Mae.
They could touch as low as 4.50 percent, but the cheap loans will not last long, mortgage experts warned.
"The downward trend we have seen in mortgage rates will not last beyond the first half of this year," said Celia Chen, senior director of housing economics at Moody's Economy.com in West Chester, Pennsylvania.
"By then, the Federal Reserve's program will have run its course and other issues will move to the forefront that could push mortgage rates higher," she said.
The Fed has also embarked on a program to buy up to $100 billion in unsecured debt of Fannie Mae, Freddie Mac and the Federal Home Loan Banks in a move also aimed at lowering interest rates on mortgages.
The prospect of affordable home financing has provided a glimmer of hope for the U.S. economy with the housing market in the worst downturn since the Great Depression.
But if mortgage rates rise, they will further paralyze a housing market already beset by plunging home prices, an unwieldy supply of homes for sale, tighter lending standards by risk-shy banks and surging foreclosures.
Even if the Fed extends its mortgage bond buying program past the summer, its other efforts to flood financial markets with cash will work against low rates.
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Black Angus Bankrupt

BB2: Haven't eaten there in a long time. Guess it's time to go back.

From bloomberg.com:

Black Angus Steakhouse Operator Files Bankruptcy

By Bob Van Voris
Jan. 15 (Bloomberg) -- ARG Enterprises Inc., the operator of 69 Black Angus Steakhouse restaurants in seven states in the western U.S., sought bankruptcy protection and said it is seeking a buyer.
Closely held ARG, with headquarters in Los Altos, California, said in today’s Chapter 11 filing in U.S. Bankruptcy Court in Wilmington, Delaware, that it has between $100 million and $500 million in both assets and debts.
“The debtors’ restaurants primarily are located in some of the areas hardest hit by the mortgage crisis, causing consumers in those markets to cut back on discretionary spending,” Lisa Poulin, ARG’s chief restructuring officer, said in a statement filed with the bankruptcy court.

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Obama's $350 Billion To Go To Housing Crisis

From foxnews.com:

WASHINGTON — President-elect Barack Obama would spend the remaining $350 billion of a financial bailout fund on expanded lending and reduced foreclosures and would not use the money to help other industries, lawmakers said Wednesday after discussions with Obama emissaries.
The Senate was set to vote Thursday on whether to release the money. Lawmakers insisted that Obama advisers put their assurances in writing before the vote.
Seeking to secure votes from wary members of both parties, Obama aides fanned out across the Capitol on Wednesday. Their lobbying effort culminated in a closed door meeting between Senate Republicans and top Obama economic adviser Larry Summers and incoming White House chief of staff, Rahm Emanuel.
The private guarantees went further than what Obama's team has been willing to discuss publicly about his plans for the second half of the $700 billion Troubled Asset Relief Program.
Obama has asked Congress for the money and has been trying to overcome misgivings from lawmakers over how the Bush administration spent the first half of the fund.
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Forget the Marketplace! More Commercial Projects Under Proposal

From bakersfield.com:

Marketplace Seeks OK To Change Signs

BB2: Who cares. Read the rest of the article.

Tweaks to signage at The Marketplace and a handful of maps will go before the Bakersfield Planning Commission Thursday night.
Center owner Donahue Schriber would like to make signage more consistent with the city’s sign ordinance. The company isn’t proposing changes to the dimensions of “monument” or pylon signs. But it would like to have more flexibility so tenants can tailor their signs to meet their needs.
The commission will also consider:
A map for proposed commercial development on 19 acres on the south side of Brimhall Road, about a quarter-mile west of Coffee Road. JP/CP Development Inc. is the applicant.
A map for a 5-acre patch of commercial development on the north side of Harris Road, about a half-mile west of Gosford Road. Silver Oaks LLC is the applicant.
A map that would add four parcels on a lot at 2410 O St. Loma Vista Real Estate Holdings is the applicant and is requesting annexation into the city.

BB2: South side of Brimhall west of Coffee is between the Chevron and the medical office campus. North side of Harris west of Gosford would be west of the Sam's Club and east of the Lennar community Tradewinds "East."

Bank of America Bailout Bounce

BB2: After receiving a $25 billion bailout, Bank of America is expecting to only make $3 to $6 billion in profits for the fourth quarter. So, in other words, $19 to $22 billion was PURE LOSS!

From International Herald Tribune:

Bank of America May Receive More Bailout Money

The U.S. Treasury Department is moving to provide Bank of America billions of dollars in additional aid as the bank struggles with mounting losses at Merrill Lynch, which it recently acquired, a person briefed on the talks said Wednesday.
It would be the second bank after Citigroup to receive an additional lifeline from the government.
U.S. regulators and executives at Bank of America, which has already received $25 billion from the Troubled Asset Relief Program, have grown increasingly concerned at greater-than-expected losses in the fourth quarter at Merrill, said the person, who spoke on condition of anonymity because he was not authorized to disclose the information. The move to help shore up Bank of America comes on the heels of greater U.S. government intervention in Citigroup. After pumping more than $45 billion in Treasury money onto its balance sheet, the government has put pressure on the bank to dismantle the troubled empire in an effort to stem losses and curb capital injections.
While Bank of America was viewed not that long ago as a pillar of strength in the banking sector, it has seen its stock plummet as investors worry that it has acquired companies with their own set of financial baggage.
Besides the Merrill acquisition, which closed at the beginning of 2009, Bank of America also acquired troubled mortgage lender Countrywide last year.

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$5 Citi

From CNBC:

Shares of Citigroup are taking another run below $5, a critical point that could trigger mutual funds and pension plans to dump the company.
Most institutional investors—pension funds, endowments and the like—are prohibited from owning stock worth less than $5.
Citi stock is a staple of many such funds and could be battered even further should they decide to jettison the stock if it remains below that crucial level.

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Target Valley Plaza

From Steven Mayer, Bakersfield Californian staff blogger:

We reported last week in The Californian that construction work on a planned Target store at Valley Plaza Mall has come to a screeching halt, sparking demands from several contractors for millions of dollars for work that has gone unpaid.
The $7.8 million project was set to replace the now-demolished Robinsons-May store with a new, 147,000 square-foot Target center.
According to a lawsuit filed in Kern County, the work has been on hold since late November -- and inquiring minds want to know WHY and HOW LONG it will be stalled.
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Gottschalbankrupt

"Going nowhere but down."

From bakersfield.com:

It’s done: Gottschalks Inc. filed for bankruptcy Wednesday.
And, court filings show, the chain is looking to sell itself — fast.
On the surface, it’s a reorganization case — Chapter 11 — but court documents show everything up to a liquidation sale is on the table.
No matter how you slice it, Gottschalks as we know it is over.
“It’s gone,” said Howard Davidowitz, a New York-based retail consultant and investment banker who heads Davidowitz & Associates Inc.
Even a bankruptcy financing deal with GE Capital means little, Davidowitz said.
“All it does is give them time to sell off pieces of themselves and liquidate the rest,” he said.
Mervyns, the recently liquidated retail chain, also had so-called “debtor in possession” financing, he said.
“Gottschalks is going nowhere but down,” Davidowitz said. “Nobody will buy them. Somebody might buy pieces of them. But nobody is going to buy the whole chain and keep operating department stores.”
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