Wednesday, December 21, 2022

IS JOE BIDEN DESTROYING THE ECONOMY AS FAST AS HE DID AMERICA'S BORDERS? - AND IS WALL STREET REAPING THE BENEFITS OF BIDENOMICS? - U.S. existing home sales fall for 10th straight month in worst stretch since 1999

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25 Retailers And Restaurant Chains That Filed For Bankruptcy As All Hell Is Breaking Loose



Massive loads of debt, changing consumer habits, supply chain problems, and declining profits all combined to create a lethal cocktail of bankruptcies and store closures that affected many retailers and restaurants across the U.S. in recent years. When governments started to introduce pandemic shutdowns in 2020, hundreds of thousands of companies were already struggling with slower foot traffic, weak cash flow, and gigantic piles of real estate debt. The temporary closures only set off a crisis that was already in motion, and the uncertainty brought on by the new downturn sent many businesses over the edge. While about 10,000 retail stores closed since November 2019, more than 110,000 restaurants have been lost over that same period. For instance, over 400 Wendy’s locations have been sold in a 2021 bankruptcy deal. Since last year, over 130 Wendy’s restaurants have been closed all over the nation as its parent company struggles to renegotiate its $1 billion debt load. The survival of many underperforming locations is still on the line. With Wendy’s reporting a 10% profit loss in the last quarter, and its shares plummeting 26% since the start of the year, we soon may have to say goodbye to this beloved chain. Given that Pizza Hut is operated by the same parent company as Wendy’s, NPC International, the famous pizza chin may be doomed to a similar fate. Over the past twelve months, more than 300 Pizza Hut locations have been shuttered. Executives noted during the court filing that the restaurant “had already been losing money before the pandemic, but its advent accelerated the folding”. As one industry rises another goes down. With the rapid growth of e-commerce and food delivery services, many retail stores and restaurant locations are becoming redundant. Keeping a store open not only requires a reliable customer base but also good financial health to afford rampant real estate costs and rising wages. That's why these days companies are preferring to shut down their brick-and-mortar operations altogether and focus on relaunching their brands on online platforms to reduce costs and optimize profits. That may even save some popular brands that have been with us for decades. But at the same time, this also means that our shopping malls and city streets are likely to get even emptier, and that some of our beloved local stores where we've created wonderful memories may cease to exist before we even notice it. Unfortunately, that's the path the retail and food industry seems to be headed. In a matter of months, U.S. consumers saw many of their favorite stores close doors and never reopen. Businesses are still coping with one of the most turbulent economic environments since 2008, and the survival of many of them is still on the line. With a new economic recession on the horizon, we're likely to see many more storefronts go dark in 2023. But today, we compiled 25 retail companies and restaurant chains that already filed for bankruptcy over the past couple of years and are now either battling to keep their remaining locations open or finally saying their last goodbyes. For more info, find us on: https://www.epiceconomist.com/

U.S. existing home sales fall for 10th straight month in worst stretch since 1999

WASHINGTON (Reuters) - U.S. existing home sales slumped to a 2-1/2 year low in November as the housing market continued to be squeezed by higher mortgage rates.

Existing home sales plunged 7.7% to a seasonally adjusted annual rate of 4.09 million units last month, the lowest level since May 2020, the National Association of Realtors said on Wednesday. Outside the plunge during the first wave of the COVID-19 pandemic in the spring of 2020, this was the lowest level since November 2010.

Sales have now declined for 10 straight months, the longest such stretch since 1999. They dropped in all four regions in November. Economists polled by Reuters had forecast home sales would drop to a rate of 4.20 million units.

House resales, which account for a big chunk of U.S. home sales, tumbled 35.4% on a year-on-year basis in November.

The Federal Reserve's fastest interest rate-hiking cycle since the 1980s has had the most impact on housing. The U.S. central bank is seeking to slow unacceptably high inflation by bringing down demand for everything from housing to labor.

Reports this week showed confidence among homebuilders dropping for a record 12th straight month in December, while single-family homebuilding and permits tumbled to a 2-1/2-year low in November.

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A "For Rent, For Sale" sign is seen outside of a home in Washington, U.S., July 7, 2022. REUTERS/Sarah Silbiger

The average rate on a 30-year fixed-rate mortgage surged to above 7% a few months ago, the highest since 2002, according to data from mortgage finance agency Freddie Mac. Though the rate has since retreated to 6.31% last week, it is double what it was that time a year ago.

The housing market boomed early in the pandemic as Americans sought bigger properties to accommodate home offices, driving up prices beyond the reach of many. Even with demand down, supply remains tight, keeping home prices elevated, though the pace of increases is slowing.

The median existing house price increased 3.5% from a year earlier to $370,700 in November. It was still the highest house price for any November and prices remain about 37% above their pre-pandemic level.

There were 1.14 million previously owned homes on the market, up 2.7% from a year ago. At November's sales pace, it would take 3.3 months to exhaust the current inventory of existing homes, up from 2.1 months a year ago. A four-to-seven-month supply is viewed as a healthy balance between supply and demand.

"In essence, the residential real estate market was frozen in November, resembling the sales activity seen during the COVID-19 economic lockdowns in 2020," NAR Chief Economist Lawrence Yun said.

Properties typically remained on the market for 24 days last month, up from 21 days in October. Sixty-one percent of homes sold in November were on the market for less than a month.

First-time buyers accounted for 28% of sales, up from 26% a year ago. All-cash sales made up 26% of transactions compared to 24% a year ago.

(Reporting by Lucia Mutikani; Editing by Paul Simao)


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