Circuit City Takes Leave (Response)

Yet again, current events in this topic have prevailed. Not two days before researching this topic, I was informed by my parents of Circuit City’s filing of a Chapter 11 Bankruptcy. Unfortunately, this article offers yet more bad news and even more dire predictions of what is to become of the American economy. It really is quite frightening that a company of such large scale, (No. 2 in the nation for electronics) and one with both online and store front sale opportunities should be coming to such a chapter in the story of their existence. However, it does pose the question of whether this bankruptcy was caused by a lack of management by the company or a lack of customers. Circuit City claims that their failure is the result of increasing competition from stores such as Best Buy and Wal-Mart. However, a more in-depth look into the company’s records reveal such strategic decisions as the firing of 3,000 high paid employees and replacing them with lower paid employees. This brings to light the possibility that such this company’s crisis is more deeply rooted in lack customer satisfaction. As I delve deeper and deeper into this economic crisis, I have begun to see just how well an American company’s success can mirror the success or failure of the American population. Indeed, the best fit for the reason for Circuit City’s failure seems to be a simple lack of customers. In this economy, people are being more frugal with their money. As a result, a store that specializes in products that are more for personal pleasure, such as televisions and personal computers, is much more likely to feel the burden of a bad economy than say, an oil company. It will be very interesting to see where this story goes. Circuit City seems to think that they can stay on their feet, despite the potential losses that are almost certain to be suffered this holiday season. It does seem very unlikely that this electronics giant will be able to pull through this unfazed. With trust now being transferred from Circuit City into the arms of seemingly more stable companies like Best Buy, Circuit City is sure to take a hit this holiday season. Who wants to buy a $2,000 television when it is not guaranteed that the company will last as long as their warranty? As more companies close their doors, it seems that America is about to face an almost complete reform of retail stores. Both Best Buy and Wal-Mart are in tough times, suffering from a severe lack of customers willing to purchase expensive goods. If companies such as these are to close their doors in the future, what is to become of the once glorious American mall? As unprofitable as these times seem, it may indeed bring rise to many new companies, looking to replace the large giants that are falling almost everyday. And these companies will be small and flexible enough to dodge the falling debris, bring in a new customer base, and tough it out for the long run.

Circuit City to stay open in bankruptcy

Circuit City is the No. 2 electronics outlet in the US after Best Buy

Filed for bankruptcy “Chapter 11” on Monday

Hopes to be able to stock shelves in time for holidays

Will close 155 stores

Has 566 operating stores currently

Plans to cut about 17% of it’s 40,000 domestic workers
Is reviewing how best to deal with lack of shoppers in such a bad economy
Will keep rest of stores open through bankruptcy proceedings
“Chapter 11 is no a closing or liquidation. We remain committed to doing a better job of taking care of our guests, and making it easier to shop at Circuit City.” said in an email to CNN
Is seeking approval from bankruptcy court to continue with services such as returns and warranties.
The store will still accept credit cards for purchases
Even though such precautions are being taken, it is thought that the uncertainty of the store’s future will make customers wary of shopping there
Competition by Best Buy and Wal-Mart are thought to be a major threat to the store’s future.
The November-December period can account for 50% of a stores annual profit
Last year, Circuit City decided to fire more than 3,000 of it’s highest paid staff.
The staff was replaced by lower paid workers.
This was thought to be a “strategic blunder” in Circuit City’s behalf
Circuit City has negotiated a commitment for a $1.1 billion credit line to add to it’s curect working capital
This credit line will give Circuit City immediate liquidity while it resorts it’s resources to reorganizing the company and keeping current employees paid.
Circuit City plans to strengthen their balance sheets and restructure their entire company through the support that the Chapter 11 filing offers.

Our Crashing Economy

It seems almost too convenient that a topic such as this should occur on the day of which I am writing this article. This event has definitely proven the stability of this topic to be on going for the next several months. However, the article from which I took notes also proved the complexity of my topic. This crash is certainly not as simple as it might seem. Many people have taken this crash as an indicator of how the American economy will react to an Obama-Biden administration. This kind of most probably false reaction and indeed assumption that the election of Obama is the reason for such a decline is an indicator of the connection the president has the stability of our free market. Part of this I Search paper will follow just how the new president does when it comes to rebuilding the economy. This is the first step in the data acquisition of that section of my I Search. Facts though, point to Cisco Systems as a key contributer of the crash. I find this incredibly interesting that even though a decline such as this one, (10% over two days) had one core catalyst, no seems to be able to pinpoint it. This article and the event of which is was reporting also helps bring to light the severe turbulence of our economy. I thought that it was very interesting that a sharp decline such as this one follows the best economic run-up in 34 years. It certainly proves the sheer ability of our economy to be so volatile. This article also reveals the sometimes peculiar aspect of speculation and the role it plays in our economy. Indeed, many things such as the price of fuel can be influenced heavily by speculation. This article and event provides proof to the influence of speculation in our market. Overall, I was very pleased to find such a great source of information. This is certainly a website that I will be returning to. It provided a wide view of the issues it discussed and did not seem to lean in one direction or another when it came to discussing politics.

Market Takes Two Day Plummet

A warning from Cisco Systems of declining demand and a weak month of October was issued early Wednesday.
As a result, the US stock market has fallen around 10% over the past several days.
The market has fallen 440 points on Thursday and 500 points on Wednesday.
These crashes took place in the last several minutes of trading.
This is the worst decline over a two day period since the October 1987 crash.
A decline was expected due to the large run-up experienced last week.
The run up experienced last week was the best seen in 34 years.
This decline has largely been linked to the election of President Barack Obama despite evidence proving the decline’s link to Cisco’s reports.
This drop has been a day ahead of the October employment report, which is a key indicator to the status of the economy.
The amount of people reaping unemployment benefits has reached a 25 year peak.
It is believed that Thursday’s fall is due to speculation of the report to be released Friday.
Many theories point to the major source of such a plummet being speculation both on employment rates and financial securities within companies.

The Economy- iSearch

Retrospectively, I find it interesting that when I select three seemingly random topics that all interest me, all three happen to be strongly connected through the common thread of the ever present dollar. To me, that reveals a subconscious thought process that I posses, one that is forever thinking economically and financially. Each of the reviews I received about my possible topic choices were all not only conflicting, but also quite vague. They failed to offer any concrete advice as to which one would be the best candidate. So, I set out on my own, thinking about my own personal interests and reviewing which of the three would provide the best, most continuous flow of interesting information. Finally, I decided upon one. The one that is affecting every US citizen and many more abroad. From the lowest class to the wealthiest, from the floor scrubbers to the CEOs and from the forward thinkers to the naive, the current state of the US and world economy is a topic that provides a gold mine of an opportunity to a curious and motivated researcher such as myself.

Having been raised in a family whose prosperity and future is directly linked to the economy, I have attained an addiction to business and money. My mother, a stock broker, and my father, a business owner, have provided a home that has consumed my upbringing in business. So, it would make sense that the topic that provides the most personal interest would be that which provides an in-depth look into the massive and complicated engine that drives the US economy. This topic will give me an opportunity to delve into the specifics of our economy, and our stock market. I will be able to bring to the surface on my own, just how and why our economy is in such a crisis and track just where it is headed. In doing this, I will also be able to answer many of the questions I have always had about the influence and workings of the once mighty American dollar.

This is a topic that is so current and so important that it is some how garnering more media attention than Alaskan governors. The information available on this topic was, and will be for quite sometime, extremely current, and present in vast quantities. Indeed, the daily stock market report is usable information. Moving past the givens though, the news reports and newspaper articles released daily combined with articles in literary releases such as The Week and The New Yorker will provide massive amounts of information. Finding information less than two weeks old will be no problem, indeed much of it could be delivered to me through RSS feeds. It would seem then that this project would be a piece a cake. With so much information, how could it possibly be a challenge to research such a topic?

Ironically, the massive challenge this topic poses is the amount and type of information available. This is a topic that is interpreted, not reported, by our trusted new sources. There is no line that determines whether our economy is good or bad, there is no scale to which we can put our dollar and determine just how good it is. We tend to leave those kinds of decisions up to professionals. Professionals who seem to specialize not agreeing. Therefor, the challenge of this topic lies in the task of attaining and sorting through the information available, determining what to trust and what to disregard. Almost all the information I have researched and attained so far can be determined from hundreds of different views. The complexity of our economy combined with the vast amounts of conflicting information available for it will provide a thought provoking and very challenging research topic.

Personally, I can’t wait to get started on this topic. This is a time in the story of the United States that will probably never be seen again, at least not in my lifetime. I am itching to utilize such a time to take an in-depth look into the how’s and why’s of our current economic crisis. This is a topic that I know receives a resounding yes to all of the criteria required. This topic is evolving everyday. The stock market is unpredictable from one hours to the next and it seems that everyday there is the announcement of another merging. The complexity of our economy will provide and extremely challenging task of interpreting information. However, I know that I can face the challenge of this topic due to my personal interest.