Bankruptcy of Borders Darkens ‘Recovery’ Story

Every time we read or hear about the supposed economic recovery, or about how the Fed has raised its “growth” target for the next quarter, we are reminded that the nation’s retail sector — like its real estate sector — remains an absolute, unmitigated, Katie-bar-the-door disaster. Yesterday it got even worse when Borders Group declared bankruptcy. This is bad news for those who love books, of course, since the firm’s megastores, which average about 25,000 square feet in size, are a great place to browse. But it is even worse news for mall operators who count Borders as a major tenant.  In the Boulder, Colorado, area where we live, there were three giant Borders stores until a few years ago, when one in the heart of the city’s shopping district closed. The space has remained vacant ever since, a drain on the owner — but also a huge dead zone on a street where retailers are struggling to survive. 

The bankruptcy will force the closing of a second megastore located at 29th Street Mall. That will be quite a blow to the developer, Maserich, since they’ve  been dealing with a few other large vacancies and the closure of several large restaurants. The Borders store there occupies two big floors on the mall’s most heavily trafficked corner, and we cannot imagine another tenant big enough to fill the space. Even if such a tenant existed, they would probably be able to find cheaper space at a soon-to-be-vacant building nearby that currently houses Ultimate Electronics, a big-box chain store that also declared bankruptcy this month.

Post-Christmas Exodus

The third Borders store in the immediate area is located in the Flatiron Mall in Broomfield, about a mile from our home and eight miles from Boulder. Although there has been no announcement yet concerning whether it will close, there is no reason to think this won’t happen eventually. While companies often emerge from bankruptcy with renewed health and vigor, it’s hard to see this happening to Borders, which, like Barnes & Noble and every other purveyor of books, is fighting for its life in competition with Amazon and digital publishers. Flatiron Mall has so far survived the loss of some big tenants, including Lord & Taylor, Hold Everything, Restoration Hardware and, most recently, Abercrombie. However, a post-Christmas exodus created even more holes, including three food-court drop-outs: McDonald’s, Richie’s Neighborhood Pizza and Panda. But Borders’ space is going to be the toughest new hole to fill if it goes dark, since the store occupies a two-story building in an outdoor section of the mall called “The Village” that has already lost two-thirds of its original tenants.

The Scary Thing Is…

What’s scariest about all of this is that the local economy is probably among the strongest in the U.S. Home prices in my suburban neighborhood are firm – only slightly off peak-levels achieved two years ago.  If the malls in this area are losing tenants in droves, then it must surely be worse in many regions of the country. And that’s why we are always dumbfounded when we see Rupert Murdoch’s recovery story du jour on the front page of the Wall Street Journal.  Whom does he think he’s fooling? Certainly not the news anchors. In case you haven’t noticed, they continue to refer to the economy as “troubled” even as The Guvvamint’s Ministry of Economic Propaganda spews “recovery” statistics that are an affront to every American struggling to stay afloat. Supposedly, and for better or worse, a little more than two-thirds of the nation’s GDP comes from consumption. If the retail sector is dying, as anyone can see it is, how can there be this steady stream of news about a recovery?   Maybe there’s been a spurious recovery on Wall Street, courtesy of its deep-pocketed benefactor, the Federal Reserve, but no one we know views the good fortune of bankers, IPO scammers and other highly compensated paper-pushers as remotely reflecting a genuine, broad-based economic recovery.

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  • Michael Blaze March 17, 2011, 5:33 pm

    One thing to keep in mind regarding Borders is that paper books have been losing ground to electronic media for quite some time. Borders didn’t reinvent it self enough to keep up with the publics changing views of how we read books. I still enjoy going to book stores, like a library to look around but tend to read all of my information online, or electronically like on websites like yours.
    MB

  • quahog March 10, 2011, 8:14 pm

    Good riddance to Borders Books . . . I now avoid Borders books. The checkout is an annoying experience. Too many questions involved for a simple small dollar cash transaction. A response of ” No” by the customer leads to even more questions.

    “No . . . I don’t want to join any club!”
    “No . . . I don’t have a zip code . . . I’m a human being!” “No . . . you’re not getting any phone number”.
    ” No. . . there isn’t an Email address”.
    ” No . . . I will not participate in any survey . . . online or otherwise.
    “No . . . I don’t want a gift receipt whatever the hell that means.

    “Tell you what I do want . . . Complete this simple cash transaction before I tell you to take this magazine and show up your arse and walk out.”

    Of course, the worker stooges look at me, the customer as if I’m some sort of nut. And they wonder why Borders books is going belly up.

    The demise of Borders books in Boston will probably help the city in the long run. That ugly sidewalk to roof glass crescent shaped monstrosity building built for Borders book at the corner of School and Washington streets can be finally demolished. There hasn’t been a reason to go into downtown Boston for many years now as worthwhile retail stores disappeared from that place long gone. Like so many other extinct retail buildings in Boston, space occupied today by Borders can be used for another parking lot for more government hacks. Face it . . . like big government, large brick n’ mortar retail stores are no longer sustainable.

    Hopefully small scale hybrid bookstores may take the place of mega McBook marts like Borders and Barnes & Noble. One might envision lots of limited square foot floor space retail shops being a combination of physically paper page books with electronic on site downloading too.

  • John Steinsvold March 5, 2011, 5:23 am

    An Alternative to Capitalism (which we need here in the USA)

    The following link takes you to an essay titled: “Home of the Brave?” which was published by the Athenaeum Library of Philosophy:

    http://evans-experientialism.freewebspace.com/steinsvold.htm

    John Steinsvold

    Perhaps in time the so-called dark ages will be thought of as including our own.
    –Georg C. Lichtenberg

  • Jim N February 17, 2011, 9:31 pm

    Great discussion. Having worked developing and building for a large retail store chain, one of the HUGE consideration of whether we would have a successful store was “what other stores are around us”, and what is the vacancy trend of a particular mall we are looking at. If even one of those answers came up negative, it was the kiss of death and we would not build a store there.

    As i considered Mario’s perspecitve that maybe things are going well, i really wanted to believe it. Then i shook my head again, and realized that many of us, who truly want things to be better (but really know better) are tempted to buy into the Media and washington propaganda machine and think…gee maybe they are right. Listen to this stuff encough then maybe we take off our “lets live in the real world ” Worldview glasses and put back on the delusionary “everything is going great” worldview glasses. Now we start looking at things that they and are thinking starts to align with the programing that we recieve everyday. Gee, my restauruant is doing better this week, GM is selling more cars this month. SO now, with the aid of our Worldview glasses, start believing the illusion.

    Come on guys. Its not where we are now….sure maybe there is a slight pull back due to MASSIVE amount of $$ injected into this economy. But where is the trend headed ? Big picture…take off the rose colored glasses given to you by the media and your own desire ( and my desire too) and look at things the way they are.

    1. Is anything going on economically really sustainable? Why should i by GM stock? Would you? Of course not.
    2. What is trend in Washington? Is the budget getting smaller? Will there be more money for real programs or will those be sacrificed to pay the interest on the budget. Is washingtons policy sustainable…in the medium term? Absolutely not. Look at the trend….not getting better
    3. What about the local and state reveunes? Are they increasing? No. So how can anyone say things are getting better?? Sure here and there….but i submit we all get rolled by the big propaganda machine. Muni bonds? Would you buy any? now or in a year?
    4. What about all the shadow accounting going on in the banks? Are they getting healthier? Nope. Trend down.
    5. What about asset values, homes? Are they beginning to gain value? Nope…trend down…What about the silly foreclosure mess and all the derivatives attached? Gives you a real sense of confidence eh? Nope. Trend is way down. Haven’t even seen all the fall out here.
    6. What about the price of food and oil? Taking a bigger chunk out of everyone’s check. Is this just speculation?
    7. What about the currency devaluation that seems to go on and on. My god, look what you could buy stuff for just 5 years ago and what it costs now. Trend getting better? Be honest…. makes do difference what currency you are considering.

    These are some of the minor issues that are getting in the way of anyone trying to be bullish in this system. I am really quite a positve guy, always optimistic, but in regards to the future of the current global economic system, i have to look at reality. I want to put on those rose colored glasses issued to me (free of charge) from MSNBC. But when i take them off to go to bed, i have to live in reality.

    Obviously it depends on where you are as you observe a situation. If you have lots of money in the bank, you can say all is well. but the 20% of unemployed folks (and still growing by the way…that would be #9) would certainly have another perspective. So i part in this nice discussion is to challenge all to look at the reality of the current global system and make your determination from that. Where will be all be in 5 years will it get better from here or worse?

    On a positve note though, a reset is in progress (unless it is interrupted by some black swan event) and that is certainly painfull. But i am seeing encouraging signs, mostly on the grass roots level. People are trying new things, forging local alliances, and living wiser. Perhaps we will be having parallel economic systems and that will be part of a new norm. It doesn’t include all the wall street BS.

    Best to all…Jim

    • mario cavolo February 18, 2011, 4:30 am

      Great comments Jim and also with regard to RWD’s reply to me further up. It is impossible to disagree with the broader idea that there are reasons to be furious at the socio-economic state of the society. While my “positive” comments were intended only in the context of asssets/income/comfort/lifestyle for people who do have such, RWD well points out that the societal degradation, the loss of freedoms, the rules, the laws, the restrictions, the rising police state, the crypto-fascism, as RWD puts it, the rise of socialist policies, taking away the opportunities for the average citizen, etc….the putting up of barriers to entry even if you want to protest the system!! (read Naomi Wolf’s Give Me Liberty), etc….

      Sorry I have to then repeat myself once again; the collective “we” are NOT in decline. It is statistically true that the socioeconomic structure is becoming more like two separate worlds, clearly both in China and in America, and to some degree in other regions too. Someone above said they would NOT buy GM stock, oh well then they are ignoring perhaps how many cars GM is selling outside of America.

      I could easily say that yes if the global/Asia rise led by China decelerates, then oh man, oh man the entire system is certainly in jeopardy. Meanwhile, its just a separate part that is on the decline.

      Then, we face the argument that without the couple trillion of stimulus we would be in trouble and that when the stimulus “ends” we will be in trouble are of course valid in many ways. So let’s say that does happen and results in a disastrous 50% deflation event over the course of a few months. It starts when China decelerates, then the U.S. bond market implodes as yields soar, then a series of other nasty events across the global economic landscape including the USD and EURO plunging 30-40%.

      Ok then what? 1. The rich people will be 40% less rich than they were, but they will still be fine because 40% less than a million is still $600,000 last time I checked. The lower/middle income folks are the ones who will be suffering even more but guess what? They will swallow it and adjust their lifestyles and live the “Asian” way. They will move in together to save money, they will liquidate, they will sell their 2nd vehicles and finally stop spending on stuff they don’t truly need beyond a basic roof over their head and food, state aid and taxes will soar of course. Lots of debts and bonds will default of course. Again, that’s all reflected in the 30-40% devalued currencies relative to current levels. And then what? Then those WITH money, the John Templeton’s of this world, including the Chinese, will swoop in with all their cash and start buying up all the bargains and the cycle will begin again. I don’t know, is that a reasonable sense of how it can unfold in the coming years? What key parts did I leave out?

      Cheers all, Mario

    • Cam Fitzgerald February 18, 2011, 10:41 am

      Your last paragraph said it all Jim. There really are signs of hope. We are all learning to adjust and I am also noticing that more and more individuals are taking personal initiatives to make their own lives better in any way they can.

    • Steve February 19, 2011, 7:37 am

      Mario, you left out the “belief” that Americans have that they are free. Old school Americans have a tendency to rebell. It takes more than one generation to pass before the acceptance of tyranny settles in. The little rebellion by the democrats in Wisconson is nothing compared to what a pissed off American is capable of. Pray the corporate enfranchisees stay in delusion. Otherwise I suggest you read the statements of the Japanese military after they bombed Pearl Harbor. If you don’t want to do the work, just rent the movies Tora Tora Tora, and Pearl Harbor. You will not have to watch very much.

      Best bet. Use whatever means black opps has to create anger at firearms so the government will move to disarm. Propaganda has done a pretty good job so far as 60% of the population today refuses their obligation under United States Statute I.

  • Andrea February 17, 2011, 5:39 pm

    Erin: College towns, perhaps, except those like mine with its large state university that doubles the town’s population August through May.
    Now? Hiring at that large state school is frozen, the housing market in town is absolutely flat, houses are sitting on the market an average of 175 days–and the university was caught by record state debt, but is still trying to expand to another , MAJOR metro area nearby. So the school’s little hometown is glutted with
    student rentals that aren’t selling either. No resources from around the country moving in here. Whatever’s moving at all is moving out!

  • Robert February 17, 2011, 5:23 pm

    “that’s why we are always dumbfounded when we see Rupert Murdoch’s recovery story du jour on the front page of the Wall Street Journal. Whom does he think he’s fooling? Certainly not the news anchors. In case you haven’t noticed, they continue to refer to the economy as “troubled” even as The Guvvamint’s Ministry of Economic Propaganda spews “recovery” statistics that are an affront to every American struggling to stay afloat.”

    -This very morning on CNBS, the “argument du jour” between Rick “Stay out of my business” Santelli, and Steve “The government is smarter than the population” Liesman was about this very topic.

    The panel was questioning why businesses are not hiring, and why there would be such uncertainty out there when the Fed, BLS, and everyone in the MSM assures us that reality is not what it seems to be.

    Liesman even went so far as to declare (and I can’t make this stuff up):

    “There has never been a better time for business in America than right now…”

    Ummm…. except that there are no willing customers, and therefore, no revenue stream. Those seem like important little details, right Steve?

    The uncertainty out there is ENTIRELY based in the fact that the power structure is not telling the populace the correct story. The uncertainty is stemming from mistrust.

    When someone is telling you something that does not align with your own observation and analysis, which direction is your trust going to be biased?

    I can’t stand how stupid these elitists think that “average” people are.

    • Steve February 17, 2011, 5:38 pm

      Robert, unfortunately – JUST how stupid the people are is revealed via their belief in false Liberty. The People are broke, 450,000.00 in debt the second they are born. Now way to pay off the debt because it cost more to pay the debt than there are tallies to extinguish.

      The People were Free, now are enfranchised. I believe the word delusional is appropriate.

    • Robert February 17, 2011, 8:53 pm

      Steve-

      I don’t know if it is mass stupidity, or simply mass ignorance…. but I certainly agree with you on the delusional point of view.

      I know plenty of people who possess the necessary IQ to understand the white/black relationship between true liberty and corporate enfrachisement, but they do not yet suffer enough to be personally impacted by it. They are, very much, like cattle… born within the fence, and never willing to venture beyond.

      The real challenge is that those few of us who are wide-awake can not voluntarily remove ourselves from the “voluntary” system of enfranchisement. We were incarcerated (or coralled if you prefer to maintain the cattle analogy) by our parent’s ignorance.

      Ron Paul is the only person on Capital Hill who seems to grasp that true liberty is only the end product of personal choice.

      I like what Doug Casey wrote- This world would get by just fine with only 2 laws:

      1) Do what you say you will do (ie- abide by the binding nature of contractual agreement)

      2) Don’t aggress against other people or their property.

  • John Jay February 17, 2011, 4:28 pm

    Every economic recovery I have experienced since the oil shock days of the seventies has excluded more citizens each time, and was fueled by rising debt and the bubble du jour.
    The recovery is probably in full swing for the the shrinking pool of the well off and public employees.
    But the debt pyramid can’t be built much higher I fear, and after the College education bubble bursts ( 14 million or more college students ) and the bond bubble bursts, we are fresh out of bubbles.
    I don’t know how Borders et al lasted this long, I only bought books off their bargain tables myself, the rest of their stock was always overpriced.
    Much better selection at the local used book store which, alas, has also gone out of business.
    The trend is always your friend, so we all know what the future holds for the USA.
    Just a matter of time now.

  • Tech-trac February 17, 2011, 4:25 pm

    Does the current inverse relationship give out a ‘whiff of deflation’ in the economy? temhttp://stockcharts.com/h-sc/ui?s=$RLX:$SPX&p=D&yr=2&mn=6&dy=0&id=p24286061942porarilly?

  • Pete Giovine February 17, 2011, 3:57 pm

    Sweet Tomatoes in Scottsdale. Excellent restaurant.
    Cheap too. If they went out of biz, economy would be dead.

    Pete

  • DG February 17, 2011, 2:58 pm

    Malls to Halls

    Our local schools are in need of replacement. Massive retail space already built, only a few years old, vacant.

    Nah…..lets float some more funny money, hire our contractor buddy, and make a bad situation worse.

    Or do nothing and wait for the asbestos to force the issue.

    • Dave February 17, 2011, 7:17 pm

      In NYC this is not an issue. We close schools and announced yesterday a 6000 teacher layoff, first since 1970’s.

    • Steve February 19, 2011, 12:41 am

      Public schools produce trash product not able to compete, and unable to understand the obligation to contract Constitution. Good start in New York.

      Oh ! And it is YOUR job PARENT to educate you child. Guess why we are in trouble and a nanny state.

  • A. Rand Fan February 17, 2011, 10:24 am

    They built a Fresh & Easy in my neighborhood here in Sacramento over 2 years ago. I am still waiting for the grand opening. But I am encouraged that maybe this year it will happen with the optimistic vibes I’m getting from Mario and Cam. Yet, when out to dinner at a Mimi’s Cafe on Valentine’s Day, there was no waiting. OK, maybe that wasn’t such a good example. Anyway it sure seems to me we’re still in a state of decline. And it’s really apparent here in the no longer “Golden” State.

    • mario cavolo February 17, 2011, 1:56 pm

      Hi ARD,

      As your comments indicate, its so important not to generalize because depending the particular POV, the observables are a genuine mixed bag of good ‘n evil. Over the months of observing, researching, commentary in anything I might write, I feel there’s been a real necessity to be more careful than ever about broadstrokes; good ‘n evil, rich ‘n poor seem more and more obviously existing right next to each other, yet the dynamics of the relationships are shifting tremendously; better for the ones in good shape and worse for the ones in bad shape. That’s scary.

      I confess my bullish realistic “observations”, but if someone says I’m a cheery, bullish guy, whoa whoa that definitely is another example of too much generalizing. I see hell just as crystal clear.

      Cheers, Mario

    • Steve February 17, 2011, 5:32 pm

      Mario, I believe you continue to describe the new “caste” society in the U.S.. One must be careful to examine the social need to spend, which now appears to be credit once again.

    • mario cavolo February 17, 2011, 7:09 pm

      Hi ARD,

      As a matter of engaging, enjoyable discussion, definitely not criticism, this is exactly the kind of statement I am talking about;

      “Anyway it sure seems to me we’re still in a state of decline.”

      Who exactly is in a state of decline? I have suggested that it is a group of around 100 million lower/middle income U.S. citizens; their lives are getting harder not easier with less and less opportunity to move forward in their lives. The rest however are in no way shape or form in a state of decline; in fact they are richer and happier and more secure than ever. So I mean to say it very clearly and objectives; both statements are equivocally true.

      Steve pointed out the developing “caste” system. U.S. and China are becoming more and more the same if you compare the two socio-economic landscapes with lower/middle income folks facing a widening socio-economic wealth gap. In every way, political, social, legal; it is harder to get to the other side today than ever before in the United States. In China this wealth gap is also widening with 900 million people living basic lives in small towns and the countryside farm communities. However in China compared to the U.S. economic cycle, opportunity and growth are rising not declining, so in that regard the two countries are different.

      Tell the upper middle income and rich folks, tell the corporations with biz humming along, businesses large and small with their fingers in the rise of Asia led by China and other global rising markets, and trillions in cash; tell them that “we” are in a state of decline? No can do.

      Indeed yes yes yes the middle class American dream is gone gone gone; across the globe, the world’s major countries are forming two class socialist quasi-capitalism policy driven socio-economic structures; implications massive.

      Cheers, Mario

    • redwilldanaher February 17, 2011, 8:40 pm

      “The rest however are in no way shape or form in a state of decline; in fact they are richer and happier and more secure than ever. ” – I’M IN COMPLETE DISAGREEMENT WITH YOU ON THIS ONE MARIO.

      There’s never been a more artificial/fraud-based foundation for their “riches” and “happiness” to rest upon than the one that exists now. Unless you define “security” in the same way that Big Brother computes simple math equations I have no idea how you can make this claim. The Police State is closer than ever. The currency as a joke, by a joke and for the jokers along with the companion “cat out of the bag” effect on it are raging, look at gold and silver and the calls to end USD hegemony. Alternative media is surging as a result and even today in Wisconsin a few zombies have stirred. The oblivious within the mirage you see is at great risk.

      “Tell the upper middle income and rich folks, tell the corporations with biz humming along, businesses large and small with their fingers in the rise of Asia led by China and other global rising markets, and trillions in cash; tell them that “we” are in a state of decline? No can do.”

      God loves an optimist but again I have to point out that you appear to be looking past the acceleration of crypto-fascism and our new and improved kleptogarchy campaigning.

      We’re in a great state of decline. We’re practically begging these types to save us by further enslaving us to ease momentary pain that they seem to have intentionally caused to profit from it.

      I’ll pass. I’d rather go down with the ship but I’m stupid that way.

  • Erin February 17, 2011, 6:44 am

    College towns generally do hold up very well in recessions with all things being equal because of the other resources from around the country moving in on a continuous basis which really helps to support the local businesses and such. It’s kind of like a year round tourist town with a purpose.
    While seeing people lose jobs and businesses shutting down is never a good thing, that cleansing process of debt liquidation is one of the most important parts of a healthy functioning economy. That money leaving Borders will flow into a more viable and efficient system within that sector. Innovation and efficiency! Isn’t that a beautiful thing?
    It is stories like this that make me think how wrong my job is with the government. Twenty six years (so far) in a workplace which breeds complete ineptness. There could not possibly be an entity in the United States which is more worthless than us trying to run as a business. But hey, It pays well and when they shut one department down and downsize, we just create a new inane entity that will pretty much do the same thing. The only thing that really stays constant are the wall clocks from like 1965…They are everywhere!

    • Dave February 17, 2011, 7:26 am

      Was in Harvard Square last weekend and can vouch, business is doing well, new ones opening, new $$$ being spent. When I was younger working for high tech companies, I would frown on those working in mundane gov’t jobs. Now, on disability and Medicare, at least you’ll retire with a pension and great health benefits. As opposed to the high tech worker who only has their 401K, if that.

      As for those inept gov’t agencies, I can assure you, from my end user perspective, HHS/Medicare is very well run and their online website to manage your benefits and research healthcare options is pretty good. Too bad it’s beyond most senior citizen’s ability to use and navigate. No end user gets over on Medicare. Of course, the $$ costs of Medicare is another story. A recent order for Type B diabetes supplies (blood test strips, lancets, meter battery, test solution) was about $1000 full Medicare cost by the supplier, I paid $85. Of course, you could buy those $1000 items for about $600 at Walmart.

      A note to anyone who may have parents on Medicare and deal with the doughnut hole, where you pay out of pocket for drugs once you reach $2800 drug costs until about $4500 catatrophic coverage. I found a workaround. Enroll in a highly discounted generic drug program at CVS, Walmart, Target, Walgreen’s, Rite Aid, etc. Buying generics that way means the full cost of the drug bypasses your Medicare $2800 limit and you pay almost same co-pay. Only use your Medicare prescription plan for brand-name only drugs whose cost must be deducted. So a drug like Byetta, which full cost is $300/month, can stay under the donut hole longer.

    • Cam Fitzgerald February 17, 2011, 7:55 am

      Agreed Erin. Let them go. Nature hates a void does it not? In the place of Borders will be some new smaller and friendlier outlets that are staffed and owned by locals and actually build the local economy versus draining it of its resources.

      This is a good thing. Goodbye Borders, hello growth.

      &&&&&&

      Cam, you and several others who have posted on this topic seem to be overlooking the real estate tsunami that is likely to result from the closing of a 570-store chain (500 of which are megastores). My point was that, at the margin, the loss of Borders as a tenant is going to push hundreds of malls that much closer to bankruptcy. Meanwhile, “newer and small outlets” — unless you’re talking about weekend flea markets and produce stands — will never fill all of the vacant space. RA

    • Erin February 17, 2011, 8:23 am

      Dave,
      We are talking about two different things…You say…”I can assure you, from my end user perspective, HHS/Medicare is very well run and their online website to manage your benefits and research healthcare options is pretty good.”
      I am glad that your experiences on the user end have been good…But the business side is another story. There is no disputing the facts that medicare is broke and inefficient like all government programs in general. Medicare is nothing more than a giant ponzi scheme like all the others. Government cannot and never will be able to operate as a business because there are no real checks and balances and there will never be a productive exchange of goods which is necessary in the real business world……Period!

    • Dave February 17, 2011, 9:51 am

      When I worked in high tech, some of my customers were gov’t, military besides most NYC financial. I know how slow and methodical the US gov’t can be in developing RFPs, considering bids, comparing vendor offerings, testing, feedback, choosing finalists, etc. compared to fast Wall St. decision makers. Gov’t wasn’t a good vertical to have for making quarterly sales quota. But then again, you are still employed after 26 years while those I worked with at Drexel, Bear Stearns, Hutton, Lehman, etc. are somewhere out there.

    • Robert February 17, 2011, 6:41 pm

      “That money leaving Borders will flow into a more viable and efficient system within that sector. Innovation and efficiency! Isn’t that a beautiful thing?”

      Sure is, except for one thing:

      Via the Internet, content is getting cheaper and cheaper. Call it the “tech deflation” effect.

      Just as cell phones (and computers) get more and more powerful, while getting less and less expensive, so too the “products” of people’s thoughts (both fiction and non-fiction) are easier to compose, publish, and share in today’s world.

      So, where is that money going to go?

      Hmmm… everyplace else, I’d reckon, especially when you compound it with the all the “new” money that the Fed/Treasury debt machine is spinning like they were Rumpelstiltskin….

      The future is bright- people will no longer have to work, because they will be able to borrow unlimited cash for zero interest, and buy whatever they want with it, and yet prices will never suffer any ill effects…

      I may just start charging my federal taxes on my Mastercard.

    • Robert February 17, 2011, 6:53 pm

      Another point regarding the tech effect-

      technologically based improvements in workflow mgt (like Dave’s online Medicare example above) yield HIGHER net unemployment, because one programmer and one database analyst can usually translate a people-centric workflow into a system-centric workflow pretty quickly, and once they do, that system is now doing (for much less money) what you formerly had real people doing in a much less efficient (and therefore much more expensive) fashion.

      This efficiency should be met be declining prices for services… so ask yourself WHY are prices increasing instead?

      Rumpelstiltskin…. 🙂

    • Cam Fitzgerald February 18, 2011, 10:24 am

      Apologies Rick, my remarks were not a criticism of your article even if they came off sounding that way.

      My objection is with the big-box chain store model and the risks that it brings to the economy as a whole. I do not see this style of business as a positive during times of economic instability and fundamental change. It is just not flexible.

      The problem (as I see it) is that when too much is invested in a single management idea and if that model fails for any reason at all then the results can be catastrophic (as we are now seeing).

      Big box retailing has achieved its zenith. Part of the problem is that too much control is invested in too few hands while corporatism results in the lowering of average incomes and removing local control.

      That also suggests to us that flexibility in the business process can sometimes be sacrificed as a “one size fits all” model is carried to its extreme across a wide variety of markets. We can readily see that this does not work. We witness it every time a major chain fails. Why should borders experience be any different?

      We need to therefore expect that there will be major casualties from time to time when any industry is dominated by only two or three major brands.

      From that perspective, book selling is no different than banking or insurance. Risk grows systemically as a small number of companies attempt to monopolize and control all the major aspects of the industry they lead. In the case of bookselling this ranges from printing and distribution to sales and marketing (and everything in between including coffee and dougnut sales).

      I understand and appreciate that there will be a painful adjustment any time one of these big-box retailers fail and I should not have been so flippant with my remarks however I do not see it as necessarily a bad thing to reverse a process that created too much business concentration in the first place.

      People will continue to buy books. We know that. The loss of a major retailer will ultimately open up the market to new entrants in the field and this goes well beyond flea markets and second hand shops.

      Meanwhile, some of the malls themselves may become casualties too but this is also a function of risk that should have been considered by those companies when they let premises to anchor tenants whose futures were already uncertain.

      Sometimes smaller really is better. This applies to malls exactly as it does to the warehouse style of selling that sought to undercut all the regional competitors in order to monopolize the business they were in on the national and sometimes even the international stage.

      Borders did an outstanding job of sucking the air out of almost all the small vendors and driving them out of business in the pursuit of its mega retailing philosophy. They did too good a job. Now everyone will suffer as they close but that is not a reason to feel bad for their passing.

      By virtue of their size and influence, they have until now crushed the possibility of new entrants and fresh entrepreneurial potential arriving on the scene. And that, in my opinion, is something that is badly missing these days as far as the consumer is concerned.

      Choice is usually better for an economy and small enterprises offer more flexibility not only to withstand economic shocks but also to change as rapidly as the times do.

      That is why I will not mourn the passing of that company.

  • mario cavolo February 17, 2011, 6:42 am

    Just some anecdotal-type observations building on Martin’s “books from a store?” quip, I must weigh in with my similarly previous comments that only “part” of America is in trouble while the rest is just dandy…even delusionally yet genuinely so.

    First of all bookstores going out of biz in today’s world is no different than buggy whips in the 1930’s and VCR’s in the 80’s. Bookstores are being replaced by the new means of digital access and distribution of “books” and related reading materials; the new Amazon Kindle is amazing; I can ‘t regard such a phenomenon as the end of traditional bookstores a particularly meaningful economic indicator, though it surely is worthy of a culture/lifestyle/values discussion.

    Second; our time visiting now here in Scottsdale, Arizona reveals a mixed economy at worst; 10 year favorite restaurants here in town like Flo’s Chinese and Sweet Tomatoes seem to be packed with business seven days a week. I pick those two as representative of the group of similar businesses who are obviously doing well. So once again, there are enough rich/well off Americans out there. Another inside secret bellwether?; my own family’s restaurants just had their first “over 4k” Friday since last year, with business obviously picking up the past months compared to last year yes still below pre-crisis levels, but rising is rising isn’t it? Customers are lower/middle and upper/middle income family pizza eatery lovers.

    Spending my past week in LA, I observe similar, a mixed economy where the lower/middle income strata are struggling but plenty of other folks, the “richer than ever rich ones” out and about, spending and enjoying. And by the way, I doubt so many of those folks are stock market investors.

    While I don’t discount the U.S.’s pervasive systemic debt and bank rot and self-serving, impotent leadership and corruption at the core, which create uncertainty, there is also no denying my approach that one must divide the U.S. into parts and analyze the parts separately. Overall, if the lower/middle income folks are doing worse (which they are) but the rich are richer and better than ever (which they are) then hey that ain’t bad and onward goes the bull for awhile longer and even any downside will be corrective only. One must understand how the larger global Asia/China/India driven economic rise means the U.S. will be playing a smaller and smaller relative part, yet it is still a mighty influence today. U.S. exports ARE on the rise. U.S. manufacturing sector was reported 4.8 trillion, that’s chump change? Many, many U.S. corporations are humming along and also sitting on trillions in uncommitted cash. Why, because this time IS different, this time there is a global economic rise elsewhere that is a true supporting factor. Even considering other factors, these are the recipe for a crash?…i think not. Where is the black swan event which will send everything reeling? That is the true danger and the if/when of it all tumbling down together will most likely occur by ways and means we least expect.

    Cheers all, Mario

    • Cam Fitzgerald February 17, 2011, 7:49 am

      I feel bullish too Mario.

      Guess I have changed sides now. I don’t really want to let on because it is like some kind of a dirty secret but you made a few very good points. Auto sales and manufacturing are up too. I actually do see some green shoots and they are not just hallucinations anymore.

      Worse, I expect quite a bit of positive activity in the markets and plenty of good upside potential. Have I gone crazy finally?

      As far as Borders is concerned…what took so long? I might have guessed they would be gone by now already. Do you recall how over a year ago on this very site where we cast lots about what companies were expected to survive and which might fail?

      Bookstores, especially the big box variety were just a huge target waiting to be taken down. Technology has killed them and since we love techno-junk, laptops and screen readers then lets not shed any real tears (I love books by the way,…. the real ones you can hold in your hands).

      I also recognize that change is happening all around us and that cost considerations of printed materials when combined with advances in computing power were going to be a death-nail in the coffin of the big book sellers.

      But why are we crying anyway? It was not so long ago that all the screaming matches were over the fact that big-box book retailers were destroying the very fabric of America’s small family business interests and society itself.

      Has everyone forgottten “You’ve got Mail”

      Think way back to Meg Ryan and Tom Hanks of Fox Books (Borders) and try to recall the story of the “The Shop Around the Corner”. So good.

    • Dave February 17, 2011, 9:25 am

      If you mean Sweet Tomatoes, the chain restaurant, it’s a buffet, all you can eat, soup, salad bar, dessert, drinks, of course it should be packed, especially for lunch, when it’s about $6-7/person. Ask for the no charge blue plastic cup which means water only not the clear plastic cup for fountain soda or iced tea which they charge extra for. No one seems to monitor if you fill the blue with non-water beverages.

    • Dave February 17, 2011, 9:44 am

      Rick, they are only closing 200 stores for now per their list I posted above. It includes their RE contact for more info. Apple is one candidate that could fill some of those spaces. Microsoft has plans to open stores but doubt they could fill a large store with cloud stuff. Shake Shack is expanding out of NYC and can fill some of those spaces after they open Miami South Beach. Barnes & Noble is closing their multi 5 story Lincoln Center NYC store due to high rent and Century 21, a local grown clothes discounter is taking over the space. Their stores are heavily trafficked and more revenue will be generated vs. B&N.

      &&&&&&

      All 570 stores will eventually close, since Borders’ business model is no longer viable. If they aggressively attempt to remedy this, it willl only pressure Barnes & Noble into bankruptcy. Regarding Apple, their stores are not even a third the size of a Borders megastore. And Microsoft? They are headed for the same fate as GM, with nothing to sell but the Office Suite, some video games and a PC operating system that is bound for obsolescence. (Windows 8, anyone?) You could be right about Century 21 though, since any vendor that aggressively anticipates a continuing decline in the U.S. standard of living will only flourish. RA

    • Steve February 17, 2011, 5:25 pm

      Everyone seems to be missing the fact that the “spending” is being done on credit cards again. The masses are taking on debt because of the ‘need to spend’ in order to feel good.

    • Robert February 17, 2011, 5:59 pm

      Mario and Cam-

      I respectfully submit that what you are both seeing is the 1973 effect. This is not growth- it is the after-effects of inflationary policy. People are simply arbitraging their remaining cash against future price increase and interest rate expectations.

      1) Mario’s observation about people eating out- I see the same thing, but very few of the people I see eating out these days look like they are independently wealthy. They look more like they are looking for something to feel good about, so they are splurging on dinner.

      2) Cam’s auto sales observation- true, I see an awful lot of new Chevy Camaros around town. I also see a lot of used car inventory- in fact- I see more USED cars on most dealer lots than I see new cars.

      The rich have always gotten richer as a result of the poor spending all they have. Well today, we need a lot more poor people spending a lot more if the rich are to get any richer, so you can expect the population of poor to ratchet up in the coming years, big time.

      The question you must both ask yourself is: Where do today’s increases in consumption lead us to tomorrow? Another question for both of you to think about- What is happening with real incomes?

      Forget corporate profits, and forget money supply- who out there is feeling the wealth effect of increasing REAL incomes? I know that NONE of my neighbors are (that is assuming I take them at their word.)

    • redwilldanaher February 17, 2011, 8:17 pm

      These anecdotes are manifestations of the Stockholm syndrome IMO. The Manipulation Matrix agents have “restored order” and some of its psychologically whipped inhabitants celebrate and welcome even more of the same. It’s an invisible cage but it is still there and its now even more fortified. While we’re still in their ant farm, there are clearly some that are willing to resign themselves to that fact because they can grab a few good eats at restaurant occasionally and buy things that they’ll re-list on craigslist the following month. For that and other niceties they’re willing to live out the balance of their lives in exponentially creeping crypto-fascism or worse. The anecdotes that I’d point to would focus on the PSYOPS having apparently worked and just how disgusted and depressed we should all be as a result of this being the case instead of celebrating the perpetuation of what distills down to pure evil. I could list dozens of pages of what was once referred to as “fraud” or “disgraceful conduct” that have produced the results that these snapshots are capturing. Unfortunately I haven’t the time and out of respect for Rick’s forum I wouldn’t be so bold as to drop that much on the board without first seeking his approval. Having stated that, I’ll drink a toast to the “bullishness” and the “recovery” this evening. Never has so much malevolence masquerading as monetary/fiscal/psychological lighter fluid ever pleased so many. Please forgive me as I apologize for not possessing Jose Ferrer’s eloquence in delivery.

    • mario cavolo February 18, 2011, 3:11 am

      Hi Robert and thanks for your comments! I’m trying to dial in the facts. On the point about income you bring up. The statistics are infuriating in that they point out that the “haves” have plenty of income. Its the “have nots” who don’t and this point keeps leading me back to the same conclusion to try to refute. I mean I’m happy to refute it myself too if I could find the research and stats to do so, but I’m not inclined to commit that level of time and energy to do so.

      Its easy for me to agree with the criticisms and the anger at the problems in the system, but I also think too many people here on the board are having trouble swallowing the reality that for folks who don’t have such problems, er um, well they don’t have such problems and the problems of the lower/middle income decline isn’t their concern.

      Cheers, Mario

    • Cam Fitzgerald February 18, 2011, 9:30 am

      Maybe I am getting delusional Red. I think I already said I feel guilty about it. If I didn’t then I will add that now.

      What I will be watching for next is to see if some exchanges like the Dow, the TSX and others break above the highs pre credit crisis.

      The thing is, I think that they will. Just instincts. And perhaps then that will confirm the recovery is totally engineered and technical analysis will therefore continue to struggle in futility as it attempts to understand numbers that have become meaningless in the face of concerted efforts to reflate the system and rebuild confidence where none should exist.

      We will have our answers soon enough based on the current trendline. But if the Dow breaks above the prior highs then lookout. The whole game will have changed.

      Just my 2 cents.

    • Robert February 18, 2011, 5:54 pm

      Cam and Mario (part II):

      Interesting observations, and yes, I agree that many out there are enjoying an upward sloping standard of living (myself included), and yes Cam, I share your opinion that anyone who is in that camp should be prudent about how publicly they expose their financial security.

      I guess the moral dilemma for me is: should we feel any guilt for the ones who have been shown the path, yet refuse to walk it for fear of the fact that “beyond here there be dragons”…?

      Like I said earlier- I know that in my immediate circle of influence the majority of people are feeling pressure, and, as is normal in times of pressure, they are focusing 100% of their energy on how to generate additional income.

      And Cam- regarding your observation of the Dow and SPX breaking to new highs and changing the game- the only counter argument I can think of is that the rise of the past 2 years, when expressed in trade volumes or insider buying to selling ratio, looks like nothing more than the product of POMO infused cash feeding the HFT bots.

      In 2009, the catch phrase was “cash waiting on the sidelines” – well, where has that cash gone?

      I find it very telling that on days when volume and available liquidity rises, prices crater. Indicates to me that the holders (the big banks) are just looking for a jubilant crowd to sell into. Ditto the Fed with the Treasury market. The Russians and Chinese are trending down in their US Treasury purchases, and the Fed is stepping in to buy. How does this play out when it is time for the Fed to begin unwinding it’s ZIRP? Tells me that the Fed will not have to sell too many bonds to achieve the necessary yield hikes.

      Everyone is looking at food prices and fearing inflation- does anyone realize that the Fed and the banks hold enough shares to sell the dow right back down to 6500 if they wanted to? The price to volume trend works both ways- if prices can rise on limited volumes, then they can plummet on similar volume as well.

      If the Fed wants to swing perception back to deflation, then the equity and commodity markets are the first place they will strike, IMO.

      Does it not make sense that the Fed would want to counter it’s bond sales with increasing equity market volatility?

      Just last month we were reading about JPM cornering the LBMA copper inventory, and now we are looking at record copper prices- it’s 2008 all over again, only this time oil isn’t the target, everything else is.

      I will have no part of that racket (excuse me, I mean market)

      The gold to dow ratio tells me all I need to know about where to keep my capital, and the Gold to Gold producers ratio (which heavily favors bullion) tells me where to invest.

    • redwilldanaher February 18, 2011, 6:21 pm

      “Its easy for me to agree with the criticisms and the anger at the problems in the system, but I also think too many people here on the board are having trouble swallowing the reality that for folks who don’t have such problems, er um, well they don’t have such problems and the problems of the lower/middle income decline isn’t their concern.”

      Mario, I can’t speak for any forum participant but myself, my problem remains that this is entirely based on fraud and malfeasance and to look past that is short-sighted and dangerous IMO. BTW, At some point you may have to care about the hundreds of millions of “have nots” when the proverbial “final straw” is placed upon them. I guess I have an overdeveloped sense of fair play and justice. Matt Taibbi is one of the few left that’s raising the right questions in Rolling Stone of all places. Raising the 800lb question that too many people seem to be looking past. Just more proof that the PSYOPS have and continue to work wonders. Here’s a question for you Mario: Would you loan your money to the disgracefully-insolvent fraud that the USA has become at ZIRP given real inflation in the things we need, the true debt that this farce faces, with literally countless better places to put your money? Yet T Auctions are “oversubscribed”. Hmmm, doesn’t the Ponzi concern you? Do you like “banking” on the Ponzi? Your view of the USA is predicated on the continuation of what is a child’s distraction: “playing make pretend”. Criminal and civil laws along with economic laws have been suspended by a criminal cabal. If you want to look past, hey, your entitled. This market volatility has been a good thing for me and I’ll leave it at that. But I’ll never delude myself into thinking its even 1% organic anymore. If you haven’t seen it, go check out the “Club Silencio” scene from Mulholland Drive because that’s what you’re banking on. For me life is about more than money and I’m not going to sit idle while sociopaths of all kinds accomplish their goals because my business is doing well as a result. There isn’t an auburn haired beauty and a pot o gold waiting for us at the end of this CGI rainbow.

      http://www.rollingstone.com/politics/news/why-isnt-wall-street-in-jail-20110216?page=1

      If anyone cares to address the corruption.

      Cam, I hear you. I’ve mentioned it several times that nothing can surprise me and I even mentioned new highs. These evil thugs are capable of anything and they have control of nearly everything so how hard is it for them to pull off? I just go along with what I see as it unfolds and stay on top of what the backdrop is so I can avoid the catastrophes. I’ve noticed certain patterns that put me on alert and thus I don’t worry too much as the parabolic insanity plays out on the upside. As can clearly be seen, many are willing to go along for the ride and remain blissfully ignorant. At some point I’ll go on guard and I think that point is getting a little closer but not for the ultimate “big whoosh”. I have to see “them” fully accumulate certain things first before I believe the big whoosh moment is upon us. The internationalists will all get together after accumulation has been completed and they’ll fix a time to pull the drain plug to profit on the slush downward. That’s how they do it and apparently how its always been done.

      Look, we have a centrally planned stock market. The PPT, it was decided about 2 years ago, wasn’t exclusively a defensive operation. PSYOPS were initiated and they haven’t take their foot off the gas since. It’s clear that the government/bankster mafia has been rigging the stock market: Pathetic volume ( no new/real net buying, and no corrections = total artificiality) and yes I understand that HFT has exaggerated things somewhat. While these developments are actually “good ones” for me on the one hand, they literally leave me with a sick feeling inside because it’s a constant reminder that the Matrix has been fully repaired, improved and expanded. Yes, I’d rather face harder times that were legitimate than more manufactured insanity, corruptions and lies. As I note elsewhere, I’m stupid that way. With this as the case I’ll seek to peacefully extricate my family and state from from the Matrix with the means I have at my disposal. I was raised to respect and admire my country, our citizens and government. All now leave me feeling ill.

    • redwilldanaher February 18, 2011, 6:31 pm

      Forgot, conduct a search to locate what this rally is really all about and you’ll find some interesting information regarding the ABSOLUTE NECESSITY to achieve new highs and then it becomes clear why “they” don’t care if it is transparently artificial. Why wouldn’t they care? Because THEY HAVE TO ACHIEVE NEW HIGHS or else. If you really have to do something, you do it regardless of the consequences and the unmaskings. Why though? Why is it this way? Because the OTC derivatives blow up would have wiped out the world if the market wasn’t marked up HUGE. AGAIN, I haven’t access to all the data or the “proof” but give it a think. Once we see even slivers of what the insiders know then the ILLOGICAL becomes perfectly LOGICAL despite being evil to the core. Think of hundreds of billions in annuities alone that are based on ever-rising markets. I’ll leave it at that.

    • Cam Fitzgerald February 18, 2011, 9:25 pm

      .
      Wow. You guys are seriously blowing my mind today.

      So many good ideas and great observations. We are really in the thick of it all now though are we not? All that is rotten is exposed and open to scrutiny these days.

      What remains now for each of us is individual choices about how we will play our money from here forward and on that point I side with cynicism and do not doubt for a moment that markets will break above the old highs.

      Like you said Red, they have too. They must.

      The moment of truth will be here soon enough. I just sense it is coming. I do not want to be surprised one way or another. Another major down-leg or serious correction is simply not an option if recovery is the real agenda. That event would kill investor confidence altogether and send us directly into the dreaded deflation we have feared all along.

      Manufactured, contrived or real…there will almost certainly be a positive outcome that will baffle every person who is now busy proving all the good reasons that such an outcome is totally impossible.

    • Steve February 19, 2011, 12:37 am

      One question. Have the Laws of Nature broken ?, Or, does anyone care?

  • Benjamin February 17, 2011, 6:22 am

    In my area, prior to electronic media, there were two decent sized bookstores, which were Crown Books and Kroch’s and Brentano’s, both centrally located at River Oaks Mall, in Calument City, IL. They served the local towns and townships (easily over 150k) of NW Indiana’s most populated areas, as well as those of the far south Chicago suburbs. Other than that, it was the local libraries or the here-and-there/there-and-gone used bookstores.

    So I have to wonder why a city like Boulder, population ~95,000, needed 75,000 square feet from Borders alone. Too, Boulder is fairly typical these days, in that regard. It’s a lot like other places, such as Home Depot, Walmart, Lowes, Walgreens, CVS…

    A few years back, my parents, among six others, were offered something like three times the “market value” for thier homes because Walgreens wanted to build a new store there. Thing was, the building kitty-corner to these homes was fairly new, recently rennovated, one of many nearby locations that were more than adequate, and had a much better flow with traffic (as opposed to the other side of the street). Why they “needed” to tear it down and rebuild it where six homes were (one less than five years old, at that), I didn’t figure out until long after the housing bust. They were boosting or maintaining property values in exchange for other “benefits” (maybe tax shelters/credits). That is the only explanation for obvious malinvestment like that.

    Since this hasn’t been officially admitted to, no… We’re nowhere near a recovery. Absolutely not!

    • Rick Ackerman February 17, 2011, 8:52 am

      The build-it-and-they-will-come mentality behind the big-box explosion in the last 20 years is truly perplexing. Boulder had one of the best hardware stores on the planet in McGuckin’s, but that didn’t stop Home Depot from putting up a megastore just two blocks away. And on Pearl Street, Ozo is about to open a very large coffee house within a block of three others, all independents. Starbucks is three blocks to the east.

    • Benjamin February 17, 2011, 11:07 am

      I hear ya, Rick. Strange indeed. But I remembered something else…

      I’ve seen this all over America, as made quite a few JIT deliveries to such places under construction. What on earth was their big hurry? I mean, for these orders, my company charged _alot_. Well, one day, since the construction company owner was there, I decided to ask. They needed it ASAP because he was up to his neck in such projects! That also explained why, on many occasions, the material was coming from nearly 1,000 miles away (sometimes much more). They were very good at depleting local and regional resource, I guess.

      Anyway, for those who see a most brilliant creative-destructive process taking place here…

      Um, how is that? The malinvestment is on a massive scale. Think about all the fuel and energy wasted on making these buildings (or unoccupied houses, for that matter) that have no good use whatsoever, even if they are still open. If nothing else, the fiasco has left energy prices high. Stuff like that doesn’t just correct. The internet (and I agree wholeheartedly) has the stores beat, but when they go under in order to pay the piper, who’s going to be online selling things?

      We’re not done, and it isn’t going to be pretty. And one thing I don’t look forward to is, when I next need some DecoArt paints, I’ll have to order them from Hobby Lobby… In Bangkok. Yipee. I could order them direct from Kentucky, but unless there’s a Kentucky province in China, it ain’t gonna be from just 200 miles south of me.

      Get it? The U.S. is going to be closed out of the global economy. The portable energy is going to stop flowing in. Egypt and other places want and need it, and can make better economical use of it by keeping it close. That means rationing. And rationing means no FedEx deliveries from Kentucky, ANYWHERE until we recover from the debt implosion enough to begin building up our domestic energy production.

    • Radek February 17, 2011, 5:55 pm

      Benjamin, Rick:

      I don’t find the “build-it-and-they-will-come” mentality at all perplexing or strange. It is simply a product of the environment. Here’s how I see it:

      A rich man decides he wants to be vastly richer by creating and expanding Home Depot across the planet, knowing that each store will generate him and his Board of Directors a ton of profit. So, naturally, the more stores that are open, the more profit the business will generate. The level they are operating at is in the multi-millions, so they know that as long as the business is profitable for, say, a decade, then who cares what happens afterwards? They will all have their millions by then and can safely pack up and live like kings elsewhere, while the peons and vultures clean up the corporation’s mess, post-collapse.

      Moral of the story: if you’re not on the Board of Directors, you’re just another expendable resource.

      What we really should be saying is: It’s a shame that our greed for immediate profits easily overcomes our desire for building a healthy, sustainable business for the long term.

    • warren February 21, 2011, 7:01 pm

      Why Boulder? Boulder probably used to have a lot of disposable income, or unaccounted for cash. Now that it is depleted from the pockets of the many, there are not enough wealthy folks to support all the big box stores, the servile multitudes cannot borrow any more, and there goes the cash flow. The bbox stores knew this was going to happen and they are not hurting because they were given concessions to open, and are protected when they shut down. It’s only the employees who will suffer.
      I heard that Lowe’s is now following their brethren and opening a new store in Alberta Can. where the people are still spending borrowed money like drunken sailors. The store will open and then close (at some point) under the same circumstances and the rich get richer. Same old same old. Eccl 1:9

  • DonF February 17, 2011, 6:10 am

    I reckon it’s impossible to just mark up prices to survive when prices have already gone higher than the buyer is able to pay. Lucky for us Americans, we are getting lessons on how to react to this organized crime syndicate that we call a government. I don’t mean to imply that everything in Tunisia and Egypt is going to be all rainbows and unicorns from now on, just because taking to the streets has caused their chief dictators to leave with their loot. IMHO Egypt’s military was/is a MAJOR benefactor of America’s criminal largess, and it may still be following the orders of our very own organized gov-criminals’. America’s gov-criminals like dictatorships and absolutely adore MILITARY dictatorships. But, I digress.

    Retailers are finding out that even competition for the food dollar is very strong, for luxuries like books? Forget it! What is it now…over 40% of Americans are on food stamps! Borders does not take food stamps. Of course we all know that the food stamp program is administered entirely by the J.P.Morgue. The wealth transfer begun by the Cartel in 1913 has another 59% to go to completion. We will all be amazed at how quickly it will accelerate to that point.

    We were warned about this. Over and over and over we were warned. I just read enough of Thomas Dilorenzo’s book, Hamilton’s Curse, to make me sick to my stomach. Good people just cannot imagine the evil that flows like a mighty unstoppable river from our evil politicians. And really, who among us still harbors the illusion that voting will take the evil away? We voters are finessed at every election. As soon as the election is over, the winner goes to the dark side. ALL the other elected and appointed members of our gov-criminals give Ron Paul a bad name! There is a very good reason why we had a bloody war with England. We could not vote the king out! Even in my little town, a majority of elected councilmen go to the dark side, that is, against the people who elected them, whenever faced with a choice. We are naive. We consistently vote for the best liar. Only power hungry sociopaths win the vote. Why? Real people are so angry when they do run for office that no one wants to vote for them. We will only vote for the smiling mask of the sociopath liar. We are propaganded, divided and conquered.

    How can we fight? We are still under the War and Emergency Powers Acts and Executive orders which BEGAN in 1917! ! ! “Under the powers delegated by these statutes, the President may: seize property; organize and control the means of production; seize commodities; assign military forces abroad; institute martial law; seize and control all transportation and communication; regulate the operation of private enterprise; restrict travel; and, in a plethora of particular ways, control the lives of all American citizens.” From: http://www.barefootsworld.net/war_ep.html which reproduces Senate Report 93-549.

    Executive orders usurp power from the people. Hamilton’s dream is our curse. WE are living in a dictatorship! And…it’s benevolence is running out. Our dictatorship/syndicate of gov-criminals is running out of our money. They are “appropriating” (stealing) our wealth as fast as they can. We can no longer support Borders and many, many other businesses. See http://www.dailyjobcuts.com/

    Please tell me for whom to vote to change this back to our constitution. Please prove to me that we can non-violently get back to being a great country, a respected country, a land of opportunity.

    We are the frogs in the pot, slowly being brought to a boil. If you scream, you will be labeled unpatriotic, a terrorist. You will be disappeared and suicided, extraordinarily renditioned, soylent greened. We can no longer afford Borders and many, many others. Soon our neighborhood market will either be gone or have empty shelves. We just may be inflationed to poverty, to a death by starvation, as in so many other third world countries.

    If you smile and tell me this is America, land of opportunity, yes we can! I will vote for you! Because, like you, I still BELIEVE! (sarc)

    • Steve February 17, 2011, 5:16 pm

      Thanks for the dash of reality. Yet, I wager nobody cares. Give me beer. Give me sports.

    • Robert February 17, 2011, 5:31 pm

      “over 40% of Americans are on food stamps! Borders does not take food stamps. ”

      Just about sums it up, eh…?

      Thanks Don. Sage wisdom.

    • redwilldanaher February 17, 2011, 8:53 pm

      Great post DonF!!! People that read past what you wrote do so at great risk.

      I am helping out a group that I joined in my state this Saturday. I’m taking my 2 sons with me to Charleston, SC to get the word out about one possible solution: peaceful secession. We’re counting on the unjustified stereotyping that’s been cemented over the past 150 years to elicit the “good riddance racist rednecks” response from the hundreds of millions of inculcates of Hollywood land aka the USSA. I’m not sure where you live but nullification and secession can’t be the worst things we can attempt…

    • Halle February 18, 2011, 2:16 am

      ‘Executive orders usurp power from the people. ‘

      Executive orders apply to people in the executive branch. I don’t work for the executive branch agencies, so executive orders don’t apply to me.

    • mario cavolo February 18, 2011, 3:04 am

      Hi Don! Great comments!! Just want to correct your stat typo…its not “…over 40% of Americans are on food stamps…” Its around 43 million and counting which is closer to 17%.

    • bill February 18, 2011, 2:39 pm

      Ron Paul is the guy to vote for but the MSM will not let him win (just like last time). He knows what to do to put us on the road to real recovery. It is not the easy path but at this point saving the country is not going to be easy, however it is still possible.
      It is unlikely though that people will realize that oscillating between R and D is not the way and it looks like we are going to have to go through whatever it is we are going to have to go through before the country either lives or dies.

  • Edward February 17, 2011, 5:12 am

    The store in the pic is in downtown Boston…but not for much longer.

    • Dave February 17, 2011, 5:43 am

      The downtown Boston store is great and spared! Boylston St getting axed though. Other Colorado stores closing.

      The Borders hit list http://msnbcmedia.msn.com/i/MSNBC/Sections/Business/___EDIT/ReorganizationClosureList.pdf

      Rick, this is more an issue of changing technology forcing the change. Borders didn’t handle the move to the web well. Many of the stores, and Barnes & Nobles, have become libraries, where people hang out, use free wireless, read the magazines and drink lattes.

    • Benjamin February 17, 2011, 6:26 am

      “Many of the stores, and Barnes & Nobles, have become libraries, where people hang out, use free wireless, read the magazines and drink lattes.”

      Buying books is oddly absent from that list…

  • VegasBob February 17, 2011, 5:10 am

    What is keeping the economy afloat is $2.2 trillion of Bernokio’s money-printing and Federal Government deficits that exceed 10% of GDP.

    At some point we are going to have 2.2 trillion inflation chickens coming home to roost because Bernokio cannot withdraw this liquidity without causing economic collapse.

    When the Federal credit card is finally declined, then we are going to experience a Depression of the magnitude of the 1930s, and perhaps even worse.

    It is not a question of if. It is a question of when.

    • bozzy February 17, 2011, 9:41 am

      Vegas man,

      Crisp and delightful – your comments are like a great apero. Dark topic, incisive commentary.

    • warren February 21, 2011, 6:30 pm

      Bob, dude, you’re absolutely right but, don’t be afraid to say that it will be, most definitely, worse than the depression of the 30’s. The numbers involved in both dollars and, more importantly, people are many times larger than 80 yrs ago.

  • Martin Snell February 17, 2011, 3:50 am

    1. Books from a store … how yesterday!

    2. Of course there is a recovery. How can there not be. $5 billion a day in deficit spending (equal to 5 times WalMart’s daily sales) keeps a lot of things afloat. Add in ultra low rates and you have every prop available in full deployment.

    To me the interesting thing about the budget discussions is that there may suddenly be a realization that fixing the mess won’t be that easy (I know we know, but I’m talking Joe Public, or even Wall Street analysts). Cut government expenditures and watch retail really tank. Raise taxes and watch retail really tank. Raise rates and watch retail tank. Because of the speed at which debt is accumulating there is no way that the economy can grow fast enough to offset the cuts. The simple process of itemizing cuts (and seeing how little difference they make) makes the scale of the problem crystal clear (if you are paying attention that is).

    So I’m still waiting for that Wile-e-coyote moment. We finally might be getting close.