Oh That Depression!

Tuesday, December 14, 2010
Posted in category Depression Living

There are some interesting Depression tidbits out and about lately. Most people, by now, have heard that A&P (Great Atlantic & Pacific Tea Company) has filed for bankruptcy. But most stories don’t mention a root cause of A&P’s financial problems – empty retail space. Crain’s Detroit Business reports that the company has been paying rent “on 73 retail spaces that are no longer occupied by the grocery store — with 21 of those in metro Detroit.” Many of these are long-term leases extending past 2020. A&P has stopped paying on these leases.

As a result, a flurry of lawsuits has been filed by retail store owners who have not been paid. In addition, a retail broker hired to do work for A&P has also filed suit for not being paid.

…Also disclosed in the bankruptcy filings is that the company is involved with 90 ongoing court cases, 42 of which are in Michigan.

Meanwhile, I still smell a potential bankruptcy for the Detroit Symphony Orchestra, which continues to be on strike while it reported an $8.8M deficit for 2010. DSO management says that bankruptcy is not an option, but the two sides are so far apart while the symphony continues to frustrate its customers – like me – with notices of cancelled concerts and no progress in negotiations.

Borders also continues to teeter on the edge of bankruptcy, perhaps even liquidation.


The other item that caught my eye was an email I received from Best Buy touting its layaway plan.  Burlington Coat Factory, Hallmark, Marshall’s, Sears, and Toys R Us also offer frugal living programs for those folks who actually buy things after they have saved the cash for them.

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7 Responses to Oh That Depression!

  1. liberranter says:

    December 14th, 2010 at 7:36 pm

    Meanwhile, I still smell a potential bankruptcy for the Detroit Symphony Orchestra, which continues to be on strike while it reported an $8.8M deficit for 2010. DSO management says that bankruptcy is not an option, but the two sides are so far apart while the symphony continues to frustrate its customers – like me – with notices of canceled concerts and no progress in negotiations.

    I never cease to be amazed at the chutzpah of symphony orchestras and their management, who have taken on the attitudes and practices of Detroit’s “Big Three” auto makers when it comes to their operating model. I have not attended a symphony performance in any city in which I’ve lived for the last twenty years due to the fact that these organizations simply cannot and will not adapt to market conditions that would make them competitive as entertainment alternatives. (The Tucson Symphony Orchestra, for example, which is hardly a top-tier ensemble of world renown, charges ticket prices that appear to be comparable to what the New York Philharmonic would charge. It’s akin to the Toledo Mud Hens, a minor league baseball team, charging the same ticket prices as their parent team, the Detroit Tigers). Musicians unions and government subsidies are largely to blame. However, there is also the demographic factor that is largely ignored: there simply isn’t enough of a market in most localities to justify a professional symphony orchestra that is capable of sustaining itself as a going concern (I don’t know if this is specifically the case in Detroit or not). One solution that has emerged in some cities whose established symphony orchestras are in the same straits as the DSO is the formation of “Pops” orchestras that perform a wider variety of music and that are mostly made up of free-lance, non-unionized musicians (Philadelphia, I believe, is one city where this has successfully taken place). Concerts tend to be fewer in number than those performed by traditional symphony orchestras and are structured in accordance with actual public interest/demand for tickets. Last but not least, no public subsidies are involved.

    Pending a true market-oriented revolution in the performance of classical or contemporary orchestral music, I guess I’ll be content to listen to my CDs of the “great performances.”

  2. Karen De Coster says:

    December 14th, 2010 at 9:52 pm

    “Tucson Symphony Orchestra, for example, which is hardly a top-tier ensemble of world renown, charges ticket prices that appear to be comparable to what the New York Philharmonic would charge.” HA !! Is there a Gary (Indiana) symphony orchestra charging top tier prices?

  3. Iluvatar says:

    December 14th, 2010 at 11:50 pm

    2 things:

    Why are you guys arguing about symphony prices????????

    The more important thing is to observe the CRE re-set stage – happening RIGHT NOW!

    (CRE == Commercial Real Estate)

    Many econ blogs have been warning about this since `09!

    These guys (CRE) are going to lead the field in “re-sets” in `11 & `12.

    Defaults, Chapter 11′s, but most of all, walking away from CRE Loans will plague the banking industry over the next 2 years. Loan losses will be huge.

    Is there any wonder Copter Ben is trying to push QE2 along with a purchase of mortgage-based assets?

    He knows this tidal wave approacheth…

    Dudes!@!@!@!

    Ben already knows how well the banks are “capitalized” (not to be mistaken w/ “reserves” – capital, on a bank’s balance sheet is against their EXISTING LOANS).

    (A Bank’s balance sheet is upside-down vs. the household sheet – a loan is an ASSET, while a deposit is a LIABILITY – that’s how bank’s do their (dual-entry accounting books – when & ONLY WHEN they report everything on their sheet – but then we’re talking of off-book accounting and the release of their needing to “mark – to – market” of their assets! – HAH!).

    Surf IS UP fellas! Get your wet suit and game face on!

    Please investigate these econ sites:

    http://globaleconomicanalysis.blogspot.com/

    -or-

    http://pragcap.com/

    Bon Soir!

  4. liberranter says:

    December 15th, 2010 at 1:27 am

    HA !! Is there a Gary (Indiana) symphony orchestra charging top tier prices?

    I wouldn’t be surprised if there is. I also wouldn’t be surprised to find that it’s in the same state of fiscal collapse as most of the other major orchestras in the country.

  5. Jeannie Queenie says:

    December 15th, 2010 at 1:38 am

    As the paradigm continues to change, it will be interesting to see what happens to the arts. One can only hope and pray that cities and states keep their paws off of the arts. Artists do not need governments to ply their wares…..never did, never will.

    Libberanter makes some good points here….many cities charge astronomical prices to attend concerts as they do in Boston, but then the musicians make out quite fine, thank you. Once firmly ensconced in an entity like the BOSTON POPS, they have a fairly smooth future along with playing/traveling to other cities and a good retirement after 30 years with the symphony. Right now, the Holiday Pops of Boston offers single tickets ranging from $33 -$125 a seat. Those figures tell me that tickets have about doubled in the 20 years I have been in New England. When I first moved here I was a season ticket holder of the BSO for 3 years. I couldn’t afford the ‘good’ seats, so got a break on the ‘jump seats’ in the 2nd balcony where 1/4 the view was cut off, but hey, you are there to listen to music, not watch a play, so it was no problem with me.But like with many things, in time it gets to be old, and I often found myself tired on that Friday night when I was supposed to be at a concert but to tired to enjoy it. I would hop the train into town, stand in front of the BSO for not even five minutes and sell my ticket in no time…didn’t want to lose the money, so worth the ride into town to sell it. Karen, there is no GARY IN orchestra..the closest is Muncie, IN with their North West Indiana Symphony. Their tickets appear to be not as pricey as Boston’s with these figures here…Pick 4 Shows
    Platinum – $240

    Gold – $160

    Silver – $120

    Bronze – $80

    Student – $40
    Apparently, you pick the 4 shows that go with the price that fits your pocket book, meaning you take whatever seats go with the gold/silver/bronze, etc. Still with those prices, I’d be putting my money into 99.9% silver and listening to all the music I want right in the comfort of my home. The real silver will be music to my ears when some morning we wake up to the news that we can now use our currency as toilet paper or maybe even plaster our walls with it as they did in the depression. Who knows, I just might do an artwork with those fiat useless dollars we use everyday, thanks to the feds, who recently took to the printing presses yet again to make more monopoly money to keep the illusion alive.

  6. Iluvatar says:

    December 15th, 2010 at 11:17 pm

    @ JQ:

    I am SO “Happy” that the concert is @ home for me…

    Just got Return to Forver’s rendition of their tour in 2008 on DVD, then a work colleague gave (for borrowing) TransAtlantic’s “Whirld Tour” from last year – gonna kick `em on back & enjoy (after the chores are done – rats!!!).

  7. Alex says:

    December 20th, 2010 at 9:18 pm

    The flagship Borders store in downtown Chicago is closing next week. They claim the other stores will stay open. If the flagship store can’t turn a profit on the so-called “Magnificent Mile,” I really don’t see how the other stores, situated in bohemian neighborhoods populated by too many young people with too little money in their pockets, will survive for long.

    Borders buying out Barnes and Noble only makes sense to a little degree. Barnes and Noble has had a foothold in the college textbook market for a few years now, moreso than Amazon and comparable to eFollett, and runs the bookstores for many universities around the country, crossbranding their corporate name with that of the host school. A merged Borders/Barnes would still have to downsize and shed storefronts and jobs, I believe.

    As for the return of The Layaway (cue Isley Brothers song, http://www.youtube.com/watch?v=GI9j2vVf008), that can only be a good thing. Being the same generation as you, Karen, I think whiny millenial types could use a lesson in learning to delay gratification and put financial “skin in the game” for something you want, just like many families prior to the Clinton administration (and expansion of cheap credit and credit cards) used to do. Just about everything in customer service and economics I needed to know as a teenager, I learned from working at K-Mart in the layaway section!

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