Macy's Loses $11.40 per share

Macy's revised its fiscal 2008 results to a net loss of $4.8 billion, or $11.40 a share, from a net income of $280 million, or 66 cents a share. The dramatic revision is due to a pre-tax goodwill charge of about $5.5 billion which it had previously detailed in its fourth-quarter earnings report. The department store company said the goodwill impairment estimate may be further adjusted in the first quarter. "The non-cash write-down of goodwill is expected to have no impact on the company's business, bank credit agreement or bond indentures. The primary causes for the goodwill impairments are the deterioration in the general economic environment and the resulting decline in the company's share price and market capitalization," Macy's said in a statement.

Ticking Time Bomb

From today's WSJ: Commercial real-estate loans are going sour at an accelerating pace, threatening to cause tens of billions of dollars in losses to banks already hurt by the housing downturn. The delinquency rate on about $700 billion in securitized loans backed by office buildings, hotels, stores and other investment property has more than doubled since September to 1.8% this month, according to data provided to The Wall Street Journal by Deutsche Bank AG. While that's low compared with the home-mortgage delinquency rate, it's just short of the highest rate during the last downturn early this decade.

BE to sell off substantially all of its business

BearingPoint (the former KPMG Consulting), which had submitted its required quarterly financials late for six consecutive quarters and filed for Chapter 11 bankruptcy protection on February 18, 2009, announced that it reached an agreement to sell most of its Public Services practice to Deloitte. It also signed a non-binding letter of intent to sell most of its Commercial Services practice to PricewaterhouseCoopers. For those unfamiliar with BearingPoint's business, those are the two largest of the company's three operating units. Only global services remains, and it will probably be carved up between the Big Four.

Berkshire Hathaway and General Electric lose AAA ratings

Fitch lowered Berkshire's rating and S&P lowered GE's rating (which it had held since 1956!) last week. There are only four untainted AAA ratings left: ADP, Johnson & Johnson, ExxonMobil, and Microsoft. (Pfizer's rating is on review for possible downgrade due to borrowing related to its purchase of Wyeth).

I don't think "thriving" means what they think it means

More than 24 million Americans shifted in 2008 from lives that were "thriving" to ones that were "struggling," according to a massive study by Gallup and Healthways. At the start of 2008, as the recession was beginning, slightly more people were "thriving" than "struggling." By the end of the year, after an economic meltdown that began with the subprime mortgage crisis, Americans by an overwhelming 20 percentage points were "struggling" rather than "thriving," 58%-38%. The remaining 4% were "suffering," in more dire straits.

[Source: USA Today]

World Economy Will Shrink

The World Bank predicts the global economy will shrink this year for the first time since World War II and sees trade at its lowest point in 80 years.

Edited to add a second story on the same theme:
http://www.marketwatch.com/news/story/Global-economy-shrink-2009-World/story.aspx?guid=%7BA4197684%2D5183%2D4E8C%2D8436%2D8F5E9EC99F1B%7D

Scholes Advises ‘Blow Up’ OTC Contracts

Myron Scholes said regulators need to “blow up or burn” over-the-counter derivative trading markets to help solve the financial crisis. The markets have stopped functioning and are failing to provide pricing signals, Scholes, said. Participants need a way to exit transactions and get a “fresh start.” The “solution is really to blow up or burn the OTC market, the CDSs and swaps and structured products, and let us start over. One way to do that, through the auspices of regulators or the banking commissioners, is to try to close all contracts at mid-market prices.”

[Thanks to CP for the link.]

No Gains for 43 Years

Adjusting for inflation, the Dow is basically where it was in 1966.

S&P forecasts biggest dividend cuts since 1938

Standard & Poor's said dividends paid to U.S. equity investors are likely to decline at least 22.6% this year, marking the severest drop since the 36.3% fall in 1938. Analysts expect a 3.49% dividend payout for the S&P 500 this year.