Fear Grips Nation Over Jobs Savings And Retirement & Icela​nd Bankr​upt Super​marke​t Runni​ng Out Of Food & UK Going​ Bankr​upt Bucki​ngham​ Palac​e Out Of Budge​t

[Mrs. Sharon B. Hodge]

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Fear Grips Nation Over Jobs Savings And Retirement


October 03, 2008 - With many small businesses unable to cope with the financial crisis, economists predict further job losses. Anthony Mason reports (I think the figure is bullshit... joblessness could be as high as 12%)

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Across the Country, Fear About Savings, the Job Market and Retirement
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New York Times
By LAURA M HOLSON
October 12, 2008

http://www. nytimes. com/2008/10/12/business/economy/12voices. html...

A year ago, Robert Paynter was comfortably retired and looking forward to years of refurbishing old cars and boating from his dock on Lake Norman in North Carolina.
Over a 17-year career at Wachovia, he amassed a pile of stock and options from the bank that he had assumed would be worth more than $600,000

But now the options are worthless, and he watched the value of his Wachovia shares shrink to about $15,000 before he sold all of them this week after the bank succumbed to the financial crisis and its stock fell to fire-sale prices.
The rest of his investments are in free fall

“It’s like having an out-of-body experience,” said Mr. Paynter, 61. “It’s like being in a hospital bed and watching yourself dying. Whatever the bottom is going to be, I wish it would just get there.
It’s the every day, watching the blood drain out of it, that’s hard to take”

To be sure, he has enough savings to not worry about missing any meals. But Mr. Paynter is resetting his plans for retirement, and has already canceled a trip with friends to Europe next year. “Today I’m O.K.,” he said.
“But a year ago I felt like I was in great shape”

Across the country, Americans are tallying their many losses from the relentless rout in the markets.
Financial message boards on the Internet are filled with confessions of fear — about hits to savings, job security and scuttled retirement plans

“My plan was to never work again,” wrote one person who posted a comment on Bogleheads. org, a Web site for investors who follow the long-term investing advice of John Bogle, founder of the Vanguard funds.
“But somebody called me yesterday to see if I was interested in a job, and I am thinking maybe I will go back to work”

It is not just the declines in savings that people are feeling, reflected in the shrinking balances on quarterly banking statements now arriving in mailboxes

Based on interviews around the country last week as the market continued its steep slide, many people say they are sensing losses beyond the short-term hits to their portfolios. Some feel a loss of faith in the United States and its government.
Others are lowering their sights for the kinds of lives they expect to lead in coming years

“Maybe we have to readjust our expectations,” said Nicholas Gaffney, a partner in a San Francisco public relations firm.
“No one is entitled to anything”

Mr. Gaffney describes himself as a buy-and-hold investor, and he has been sensing good opportunities of late. He has plowed more than $10,000 into his funds.
The value of his portfolio, now at several hundred thousand dollars, has dropped more than a quarter

He confesses he has been fighting with himself over how closely he should follow the market’s gyrations. One day, he checked the market on his Treo cellphone about 200 times. “I thought to myself, ‘What am I doing?’ ” he said. “I had to stop because I was driving myself crazy.
I think everything is going to be fine if people don’t panic”

That is wishful thinking at this point.
Investors have withdrawn more than $81 billion from stock mutual funds since the beginning of the year, with nearly 40 percent of that coming in the last six weeks, according to AMG Data Services, an industry research firm

Not everyone is panicking, of course.
Some are able to see the big picture or find ways to distance themselves from the crush of news about the market

“Maybe a shrink would have a field day with me,” said Beth Sparks, 40, a self-employed lawyer in Colorado Springs.
“But I have an ability to not think about it”

A week ago, Ms. Sparks reviewed her investments for the first time since January. All are down roughly 30 percent. But Ms. Sparks said she was not concerned because she and her husband did not have a lot of debt. When her husband inherited $50,000 last year, they used it to pay off their mortgage. Vacations typically mean drives to Arizona to spend time with her parents.
“I’m just happy me and my family are healthy,” she said

Peter Schade, 49, who runs his own ad design firm in Farmington Hills, Mich.
, said each day of bad news was a blow to the idea that he would ever be able to retire

“I’ve kind of resigned myself to the fact that I’m going to be working for the rest of my life,” he said

For the last few weeks, Mr. Schade said, he has been closely monitoring the news on the CNN satellite radio network in his car. “I just feel numb,” he said.
“The news is changing every half hour”

Mr.
Schade said he and others in the Detroit area were accustomed to weathering downturns in the economy

“It doesn’t make it any easier, but we’ve sort of fortified ourselves,” he said. In many ways, he said, the rest of the county is just now starting to feel what Detroit has been going through for years, giving people here a head start in coping. “Detroit was the canary in the mine for this.
We started this at least three years ago”

Tom Drooger, 56, of Grand Haven, Mich.
, is president of a chapter of BetterInvesting, an investment club affiliated with the National Association of Investors Corporation

Usually, Mr. Drooger is the type to study stocks closely and track the market’s movement throughout the day. By Friday, he was no longer even paying attention.
He has decided to stop watching the market news on CNBC for now and instead puts on easy-listening music

“There’s nothing you can do about it after a while,” he said

He compared the financial crisis to a house on fire and said he was merely waiting until the flames die down

“Once the fire’s out, you go in and do the repairs,” he explained. “To start to try to move things around until the market wrings itself out is pointless.
I’m just sitting on the sidelines, leaving everything where it’s at”

College students are watching from the sidelines, too, since they typically are more concerned about jobs at this stage of their lives than the nest eggs

Matthew Ehrlich, 23, a second-year law student at Wayne State University in Detroit, is worried about whether the economy will improve before he graduates in 2010

“If things don’t get better in the next two years, I’m going to have a real tough time,” he said.
“My hope is that I can just ride it out until the financial markets get back on track”

Mr.
Ehrlich is still debating what type of law to specialize in and said this crisis might ultimately influence his decision

“The way things are going, bankruptcy law seems to be pretty hot,” he said

Beyond the personal toll to their savings, some people said they were concerned about what the financial crisis said about the United States

“All I can tell you is it is a lack of faith in America,” said Pat Emard, 65, of Aptos, Calif., who now worries she may have to go back to work. “People have lost faith in our government.
I don’t know what happens now”

That sense of uncertainty is also troubling to Renee Snow, 73, a retired teacher who taught in the Chicago public schools for 38 years

Born during the Depression, Ms. Snow said it was in her DNA to save, save, save. Over her career as a teacher, she did just that, and Ms. Snow, now a widow, lives off her teachers’ pension and income from her tax-exempt savings plan.
She says she has always put her money in insured products when she could

“I never watch the stock market, and now I’m watching it every day,” she said

She has money socked away in savings accounts in different banks but recently began researching whether her banks were solid

The economy is a frequent topic of conversation among friends at the Jane Addams Senior Caucus, an organization in Chicago where she volunteers as a board member

Over the last couple of weeks, a general malaise has taken over, Ms. Snow said. “It’s very hard to have much faith in what the government is doing when they change it every day,” she said.
“As you read more and more about how we got into this situation, you have less and less faith of how we’re going to get out of it”

She has an ominous feeling about the future, she said. “You don’t go through life thinking the bank I do business with could go belly up tomorrow,” she said.
“This is a new feeling people are living with”

Nick Bunkley and Crystal Yednak contributed reporting. Icela​nd Bankr​upt Super​marke​t Runni​ng Out Of Food

This may just happen to US in a very near future




October 14, 2008 - Russia helps Iceland to overcome the crisis - Iceland has asked Russia for a loan of around €4 billion to stabilise the country's financial system The talks on the loan are due to start in Moscow on Tuesday


Icelanders in Reykjavik protesting the government's handling of the financial crisis on Oct 8, 2008 The slogan on the shirt worn by the man at right reads "Your bank does not care about you

October 9, 2008 - Iceland is all but officially bankrupt

October 9, 2008 - UK Gordon Brown to sue Iceland over near £1bn of ...


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Icelandic Shoppers Splurge as Currency Woes Reduce Food Imports
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Bloomber
Oct 13, 2008

http://www. bloomberg. com/apps/news?pid=20601087&sid=aVFtDRGwc...

Oct 13 2008 (Bloomberg) -- After a four-year spending spree, Icelanders are flooding the supermarkets one last time, stocking up on food as the collapse of the banking system threatens to cut the island off from imports

We have had crazy days for a week now,'' said Johannes Smari Oluffsson, manager of the Bonus discount grocery store in Reykjavik's main shopping center.
Sales have doubled''

Bonus, a nationwide chain, has stock at its warehouse for about two weeks.
After that, the shelves will start emptying unless it can get access to foreign currency, the 22-year-old manager said, standing in a walk-in fridge filled with meat products, among the few goods on sale produced locally

Iceland's foreign currency market has seized up after the three largest banks collapsed and the government abandoned an attempt to peg the exchange rate. Many banks won't trade the krona and suppliers from abroad are demanding payment in advance.
The government has asked banks to prioritize foreign currency transactions for essentials such as food, drugs and oil

The crisis is already hitting clothing retailers.
A short walk from Bonus in the capital's Kringlan shopping center, Ragnhildur Anna Jonsdottir, 38, owner of the Next Plc clothing store, said she can't get any foreign currency to pay for incoming shipments and, even if she could, the exchange rate would be prohibitively high

We aren't getting new shipments in, as we normally do once a week,'' Jonsdottir said.
This is the third week that we haven't had any shipments''

Bankrupt

Iceland's 320,000 inhabitants have enjoyed four years of economic growth in excess of 4 percent as banks and businesses expanded abroad, buying up companies from brokerages to West Ham United soccer club.
Now, the three biggest banks, Kaupthing Bank hf, Landsbanki Island hf and Glitnir Bank hf have collapsed under the weight of about $61 billion in debts, 12 times the size of the economy, according to data compiled by Bloomberg

The central bank, or Sedlabanki, ditched its attempt to peg the krona to a basket of currencies on Oct. 9, after just two days, citing insufficient support'' in the market.
Nordea Bank AB, the biggest Scandinavian lender, said the same day that the krona hadn't been traded on the spot market, while the last quoted price was 340 per euro, compared with 122 a month ago

There is absolutely no currency in the country today to import,'' said Andres Magnusson, chief executive officer of the Icelandic Federation of Trade and Services in Reykjavik.
The only way we can solve this problem is to get the IMF into the country''

Imports Dependency

The International Monetary Fund sent a delegation to the island last week. Prime Minister Geir Haarde said on Oct. 9 his country may ask it for money after failing to get the response that we felt that we should be able to get'' from European governments and central banks. The state will also start talks with Russia over a possible 4 billion-euro ($5.
5 billion) loan

Iceland's rugged, treeless terrain, a barren stretch of volcanic rock, geysers and moss, means the country imports most food, other than meat, fish and dairy products

Magnusson said last week that one of Iceland's largest supermarket chains was unable to get any foreign currency to make purchases abroad and another retailer's electronic payment didn't go through.
Iceland will begin to see shortages of regular goods'' by the end of the week if nothing changes, he said

We are struggling to make the economy survive from hour to hour,'' Magnusson said.
There is an enormous amount of capital that wants to get out of the country''

Sedlabanki told lenders on Oct.
10 that residents who want foreign currency should first prove they need the money for traveling by providing documentation for their trip

Essential Goods

Wholesalers are demanding that importers pay before any goods are shipped, said Knutur Signarsson, head of the Reykjavik-based Federation of Icelandic Trade.
Under normal circumstances, wholesalers abroad would extend credit for 30 to 90 days, he said

Many of them ask us to pay cash before they send the goods to Iceland,'' Signarsson said.
Because of the situation, Iceland has become a country that no one trusts any longer''

Bogi Thor Siguroddsson, owner of Johan Roenning, an import and retail business which has about 7 billion krona ($71 million) in annual sales, says he's instructed his purchasing managers to only import the core goods, including light bulbs, lamps and electrical cables, they need to serve their customers

It's enough to have the credit crisis,'' he said. Then you have the currency crash.
Unfortunately, we have shown that we can't handle it ourselves''

Food Inflation

Icelanders, whose per capita gross domestic product is the fifth highest in the world, according to the United Nations 2007/2008 Human Development Index, will have to tighten their belts

Shoppers are paying more for the goods they do get.
The cost of fruits and vegetables, nearly all of which are imported, have gone up about 50 percent in recent months, said Steinunn Kristinsdottir, a 33-year-old Reykjavik resident who was leaving the Bonus store with her cart full

This situation really has been a bit troubling for people,'' she said.
They don't know what's going to happen''

To contact the reporter on this story: Chad Thomas in Reykjavik, Iceland, via the Helsinki newsroom at [e-mail]

Last Updated: October 13, 2008 01:47 EDT UK Going​ Bankr​upt Bucki​ngham​ Palac​e Out Of Budge​t

Wow Buckingham Palace will run out of budget in 3 years


October 13, 2008 - The UK is heavily reliant on its financial sector, and the financial crisis has been affecting its people more than other Europeans.
Even the Queen is feeling the crunch and is forced to practice strict economy.