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This was reported on Bloomberg television by Eileen Brennan.
A&P Said to Consider Filing for Bankruptcy Protection
By Lauren Coleman-Lochner, Jeffrey McCracken and Jeff St.Onge
December 10, 2010, 10:15 AM ET
Great Atlantic & Pacific Tea Co., the once-dominant grocery-store chain founded in 1859, may file for bankruptcy in the coming days to restructure debt, two people with knowledge of the matter said.
A filing to reorganize under court protection may come as soon as this weekend, said the people, who declined to be identified because the matter is private. A&P hired law firm Kirkland & Ellis LLP to represent it in negotiations with creditors and in any Chapter 11 proceeding, the people said.
Lauren La Bruno, an A&P spokeswoman, didn’t immediately return an email and a call seeking comment.
The Montvale, New Jersey-based grocer has struggled to cope with mounting competition from discounters such as Target Corp. and Wal-Mart Stores Inc., which are offering more fresh food to attract customers. A&P, which operated almost 16,000 stores in the 1930s, now runs about 400 locations under its namesake banner as well as SuperFresh and Food Emporium. In 2007, it bought the Pathmark Stores supermarket chain for $678 million.
The grocer in October said sales in the quarter ended Sept. 11 fell 7.1 percent to $1.9 billion and its net loss almost doubled to $153.7 million in that period. A&P had $94 million in cash and short-term investments as of Sept. 11, a 63 percent decline from $252 million as of the end of February.
The company had about $1.5 billion in net debt as of September. It had an $876 million net loss on $8.8 billion in 2009 sales, its third straight annual shortfall.
‘Illiquid’
A&P “may be illiquid at some point in the near term,” Standard & Poor’s said in July, issuing a downgrade of the company’s corporate credit rating to CCC.
Chief Executive Officer Sam Martin was hired in July to help lead a turnaround, replacing Ron Marshall, who had held the job for about six months. Martin has said then that A&P is examining its business in an effort to improve results.
The company announced a $89.8 million sale-leaseback of six stores last month. In August, A&P said it will close 25 stores in five states as part of its turnaround plan.
Classic dissembling in the ancillary markets it appears, to try and make the dollar and equities look better by comparison.
It will work until it does not, then geysers here, and a deluge in financial instruments.
The Fed and Treasury appear to be attempting to blow a bubble in US equities. Considering that it has little underpinning it, on a significant event it could fold rather handily. Still, better to stay out of their way while they try to print their cronies way to prosperity while beggaring the many, and of course, their bondholders.
These sorts of wide swings in sovereign debt can be extraordinarily profitable for the trading desks of the banks and hedge funds, especially if the boss has the ear of the Treasury and the Fed. But they play hell with planning and execution in the real economy.
Che Cosa Ora? What Now
The boys threw a threat on the table today, as Larry Summers, ombudsman for the pigmen, predicted that if the Congress did not pass the President's deal with the Republicans the US economy would suffer a double dip.
I thought it was a rather neat trick how Obama took an obstructionist Republican minority and cut a deal with them, thereby placing the onus on his own party and holding their feet to the fire with some particularly high-handed moralisms and snippy rhetoric on top. No Clinton he who called the Republican bluff and let them shut down the government. Wall Street shill or nincompoop, hard to decide.
Wall Street financials rallied into the close as AIG filed a recapitalization plan to pay back the huge amounts of capital it borrowed from the Treasury and Fed to pay Goldman and its ilk the full amounts of their leveraged bets.
And then Bloomberg TV cut away and spent the next twenty minutes talking about the imperative to cut 'entitlements' like Social Security and Medicare.
See the commentary provided today on the Gold intraday futures chart here.
"You cannot find a bank safe deposit box in Germany because every single one has already been taken and stuffed with gold and silver. It is like an underground Switzerland within our borders. People have terrible memories of 1948 and 1923 when they lost their savings." … Professor Wilhelm Hankel, Frankfurt University, The Telegraph, November 25, 2010
I am just thankful that Goldman and its Wall Street cronies did not have to take any losses or suffer cutbacks or austerity because of their dealings with AIG, thanks to the timely actions of their friends at Treasury and the NY Fed.
American International Group, Inc.
Wednesday December 8, 2010, 3:52 pm
NEW YORK--(BUSINESS WIRE)-- American International Group, Inc. (AIG) announced it had filed a Form 8-K earlier today announcing the signing of the Master Transaction Agreement among ALICO Holdings LLC, AIA Aurora LLC, the Federal Reserve Bank of New York, the United States Department of the Treasury, the AIG Credit Facility Trust and AIG, regarding a series of integrated transactions to recapitalize AIG, for which trading on the New York Stock Exchange was briefly interrupted.
Regarding the filing of the Master Agreement, AIG issued the following statement:
"Our filing today that we have signed the definitive recapitalization agreement with the government marks an important step forward in our progress toward completely repaying taxpayers. We remain committed to executing the steps and meeting all conditions in the agreement as soon as possible."
There is an ebb and flow to all markets. While the primary trend is in place these intraday fluctuations are of most concern to speculators and traders with a very short term focus. That is natural.
But there are also those hedge funds and trading desks that seek to spread either panic or euphoria, to promote short term trend changes and churn the market for easy but too often illicit gains through price and information manipulation. This is what I euphemistically call the 'technical trade.' And unfortunately sometimes these trade manipulators are very large and influential with the exchanges, the regulators, and even the politicians. Corruption is corrosive of society and must be contained.
Transparency, position limits, leverage constraints, and trading rules such as the uptick and curbs on frequency and tape painting help to maintain legitimate price discovery and efficient capital allocation. Secrecy, back room insider deals, and self regulation are the allies of corruption.
As was shown in the Congressional investigations following the Crash of 1929, quite a few of the analysts and financial news people covering the Street were implicated by the cancelled checks in the suitcase of a Mr. A. Newton Plummer, who delivered payments from the pools and large trading syndicates to manage perceptions as it were among the thought leaders and purveyors of information to the public. Nowadays checks are out of favor and information, sinecures, and grants are the currency among the white collar criminals.
There are few such investigations today, perhaps because that net is likely to catch quite a few fish larger than red faced analysts, economists, and news people, and some even who may have had a held a long and auspicious tenure in important positions of trust, public and private. Mr. Madoff is not a lone outlier unfortunately. And too often the 'CEO defense' of benign non-involvement or an admission of simple error, plausible deniability as it were, and a self-effacing apology are enough to cover and excuse heinous acts of false stewardship and even betrayal.
After all, we sophisticates no longer believe in the capacity for evil among 'people like us,' but rather in the natural goodness of ourselves and of course others. And so we can suspend common sense and even rational skepticism can be turned against the truth while things are falling down all around us. There is historical precendent for the big lie and a self-destructive loyalty to its bitter end.
For those with the intermediate view one sells strength and buys weakness as indicated on the trend charts. And so this is what I do in one of my accounts with a more intermediate to short term focus.
Those portfolios with the long view do nothing but ride the trend and reap the reward, selling when the fundamental conditions that provoked the bull market no longer remain in place.
To clarify some questions I received, I do not forecast 1455 as a 'top.' It is the minimum measuring objective for the cup and handle formation that will likely be met as long as the financial markets do not undergo a liquidity panic selloff. I would like to reiterate my view that gold and silver will continue to rally while the fundamentals remain unchanged. I do not think 2800 is unlikely but there are too many exogenous variables and no active chart formation to justify a forecast higher than 1455 at this time. But the top trend line on the chart below certainly points the way.
Surely the financial crisis is over and the Banks will cease their threats and demands.
