Global Recession & Retail Apocalypse News and Discussions

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McColl's appoints administrators but Asda co-owners expected to agree rescue##
Friday 6 May 2022

McColl's, the convenience retailer, has collapsed but the co-owners of Asda are expected to agree a deal with administrators that would rescue the bulk of the company.

Sky's City editor Mark Kleinman, who had reported earlier on Friday that Morrisons was among interested parties, said the Issa brothers' EG Group was now waiting in the wings and a deal could be concluded later in the day.

McColl's said it took the decision to appoint PwC as administrator after its lenders objected to the potential outcome of a sale for them.

The company has 1,400 stores and employs 16,000 staff but it is hoped that a sale out of administration would preserve the vast majority of its workforce and store estate.
https://news.sky.com/story/mccolls-appo ... e-12606659
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Time_Traveller wrote: Fri May 06, 2022 12:28 pm McColl's appoints administrators but Asda co-owners expected to agree rescue##
Friday 6 May 2022

McColl's, the convenience retailer, has collapsed but the co-owners of Asda are expected to agree a deal with administrators that would rescue the bulk of the company.

Sky's City editor Mark Kleinman, who had reported earlier on Friday that Morrisons was among interested parties, said the Issa brothers' EG Group was now waiting in the wings and a deal could be concluded later in the day.

McColl's said it took the decision to appoint PwC as administrator after its lenders objected to the potential outcome of a sale for them.

The company has 1,400 stores and employs 16,000 staff but it is hoped that a sale out of administration would preserve the vast majority of its workforce and store estate.
https://news.sky.com/story/mccolls-appo ... e-12606659

Morrisons triumphs after weekend shootout for control of McColl’s
1 hour ago

Sky News can reveal that the supermarket giant saw off eleventh-hour competition from EG Group, the petrol station operator, with an offer that will see McColl's stores and workforce preserved in their entirety.

The deal will be structured as a pre-pack administration, meaning Morrisons will buy McColl's immediately after it enters insolvency proceedings overseen by PricewaterhouseCoopers (PwC).

On Friday, Morrisons said it believed there was no reason for the corner shop empire to be declared insolvent, but the pace of events over the weekend, with McColl's teetering on the brink of collapse, left PwC with no time to finalise a solvent transaction, according to an insider close to the firm.
https://www.msn.com/en-gb/money/compani ... ar-AAX3PVM
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Re: Global Recession & Retail Apocalypse News and Discussions

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Ukraine war: World Bank boss warns over global recession

By Annabelle Liang
Business reporter

2 hours ago

The head of the World Bank has warned that Russia's invasion of Ukraine could cause a global recession as the price of food, energy and fertiliser jump.

David Malpass told a US business event on Wednesday that it is difficult to "see how we avoid a recession".

He also said that a series of coronavirus lockdowns in China is adding to concerns about a slowdown.

His comments are the latest warning over the rising risk that the world economy may be set to contract.

"As we look at the global GDP... it's hard right now to see how we avoid a recession," Mr Malpass said, without giving a specific forecast. "The idea of energy prices doubling is enough to trigger a recession by itself," he added.

https://www.bbc.co.uk/news/business-61575387
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‘The economy is going to collapse,’ says Wall Street veteran Novogratz. ‘We are going to go into a really fast recession.’

Last Updated: June 16, 2022 at 6:29 a.m. ET

Veteran investor and bitcoin bull Michael Novogratz doesn’t have a rosy outlook on the economy, which he described as headed for a substantial downturn, with the likelihood of a “fast recession” on the horizon.

“The economy is going to collapse,” Novogratz told MarketWatch. “We are going to go into a really fast recession, and you can see that in lots of ways,” he said, in a Wednesday interview before the Federal Reserve decided to undertake its biggest interest-rate hike in nearly three decades.

“Housing is starting to roll over,” he said. “Inventories have exploded.”

“There are layoffs in multiple industries, and the Fed is stuck,” he said, with a position of having to “hike [interest rates] until inflation rolls over.”

Central-bank policy makers agreed to deliver an unusual 0.75-percentage-point rate increase, concluding a closely watched two-day policy meeting with a move that would push the Fed’s benchmark federal-funds rate rising to a range between 1.5% and 1.75% as it steps up the effort to quell an inflation rate that is hovering around a 40-year high.

https://www.marketwatch.com/story/the-e ... 1655328960
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Post by caltrek »

^^^The only fair way to get out of this mess before it becomes worse would probably involve:
  • Raising taxes on the superrich so as to balance the budget and reduce inflationary pressures caused by deficit spending.
  • Another round of stimulus checks to help those most desperately affected by inflation. By stimulating aggregate demand, this would actually help sustain a full level of employment, which would also help generate the income needed to pay for the stimulus checks.
  • Keeping interest rates high for the moment, or even raising them further if the other measures spelled out above are implemented
More long term, we need to break up the monopolies and oligopolies to ensure that competition works to keep prices in line.

Except for relying on the Fed, the other steps involve a willingness on the part of Congress to implement these measures. Republicans, and maverick Democrats like Manchin, will make sure that does not happen. They will then blame Biden for failing to keep inflation in check and likely gain in strength as a result of their recalcitrance. I am not sure when the U.S. public is going to ever collectively learn to stop rewarding bad behavior.

Edit: Since this is about global recession, I think these same sort of measures are going to need to be taken by other countries as well. The exact mix of such measures will depend upon local conditions. Reducing tariffs while shifting the tax burden to the super-rich can also help bring inflation down, again depending upon local conditions.

An overall reduction in military spending would also help, at least in regards to inflation. A resolution of the current conflict in the Ukraine would help in that regard, including within the economy of Russia and its allies. Of course, given the damage already sustained by their military, I don't see Russia under their current leadership doing much to reduce their military expenditures.
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Re: Global Recession & Retail Apocalypse News and Discussions

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caltrek wrote: Thu Jun 16, 2022 4:01 pm [...] Raising taxes on the superrich so as to balance the budget and reduce inflationary pressures

[...] shifting the tax burden to the super-rich
Yeah, but making the hyper-rich pay even a scintilla more in tax is apparently "s0cIaLiSt" and "unamerican". True patriots believe in freedumb and smaller guv'mint. They don't want radical, extremist, Leftist policies, like taking an extra 1% from billionaires, as that would "destroy the economy" (apparently).

caltrek wrote: Thu Jun 16, 2022 4:01 pm
An overall reduction in military spending would also help, at least in regards to inflation.
Many countries have recently announced major increases in military spending. :(
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Cineworld Group reportedly preparing for bankruptcy amid 'weaker than expected' audience numbers
15:18, 19 AUG 2022

Cineworld Group PLC is preparing to file for bankruptcy amid financial troubles, according to the Wall Street Journal.

The cinema chain, which has branches in Newcastle city centre, Boldon in South Tyneside and Dalton Park in County Durham, this week warned that audience numbers have been weaker than anticipated, and predict that figures will remain low until November amid 'limited' film releases.

The world's second largest cinema business - trailing 211 sites behind AMC - revealed earlier this week that it was 'assessing options to shore up its finances'.

Wales Online reports that Cineworld has allegedly engaged with Kirkland and Ellis lawyers, as well as consultants from Alix Partners to advise on bankruptcy proceedings. The WSJ say that the group is looking towards Chapter 11 bankruptcy in the USA, as well as complete insolvency in the United Kindgom.

The group, which also owns the popular Picturehouse chain in the UK, as well as Regal Cinemas in the United States, has pinned hopes on releases like Top Gun: Maverick, and The Batman and Thor: Love And Thunder to assist in its financial recovery following the global impact of the coronavirus pandemic. However, in a statement, the firm said: "Despite a gradual recovery of demand since reopening in April 2021, recent admission levels have been below expectations.
https://www.chroniclelive.co.uk/news/uk ... s-24803405
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Re: Global Recession & Retail Apocalypse News and Discussions

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Cineworld stops sale of UK and US operations amid debt restructuring
2 hrs ago

Troubled cinema chain Cineworld has said it will raise 2.26 billion US dollars (£1.8 billion) in new funding as part of a plan to exit bankruptcy and terminate a planned sale of its US, UK and Irish businesses.

The debt-ridden group, which runs around 750 sites globally, filed for bankruptcy protection in the US last year.

It has now said it will restructure its roughly five billion dollar debt pile in order to emerge from the Chapter 11 bankruptcy during the first half of 2023.

The financial restructuring will involve lenders providing around 1.46 billion dollars (£1.2 billion) in new credit, as well as 800 million dollars (£651 million) of equity to the lenders.

Earlier this year, Cineworld, which also owns the Picturehouse chain in the UK, launched a process to find a potential buyer.
https://www.greatbritishlife.co.uk/news ... ructuring/
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The White House says stocks could plunge 45%

Congress now has a little over a week to raise the national borrowing limit before the US could potentially default on its obligations, which could include missing payments on some of its $31 trillion mountain of debt. Experts have warned that such an event would be a catastrophe for markets and the economy. Stocks could crash 45%, the White House Council of Economic Advisers estimated, rivaling the crash seen around the 2008 recession.
https://markets.businessinsider.com/new ... thy-2023-5
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