More IMF Dollar Death Propoganda

End of the US Dollar as a reserve currency? Where is the outrage that this is being peddled by Geithner, IMF, Bernanke, etc.? Where is the outrage that the federal reserve's policy is promoting this! The end of the US Dollar as a reserve currency is a death of the dollar, the loss of 50% of its value MINIMUM and the relegation of the middle and lower classes to 3rd world poverty. Put down the twinkies and pick up a book!!

IMF Chief Suggests Look at New Reserve Currency

WASHINGTON — The chief of the International Monetary Fund said Friday that the organization should reorient itself to better detect systemic risks to the global economy and quickly step in with emergency loans when financial crises emerge.

The I.M.F. leader, Dominique Strauss-Kahn, also floated the idea of creating a global reserve currency that could serve as an alternative to the dollar.

After a speech at the I.M.F. headquarters, Mr. Strauss-Kahn said in response to a question about the fiscal crisis in Greece that the fund would be “happy to help if asked” but that the European Union appeared able to resolve the crisis on its own.

“The Europeans, especially the members of the euro zone, want to try to deal with the problems themselves,” Mr. Strauss-Kahn, a former French finance minister, said. “I perfectly respect this.”

The I.M.F. has collaborated with the European Union and the European Central Bank in recent days, sending experts to Athens, but the Europeans have taken the lead on demanding that the Greek government impose cuts in public spending and other austerity measures.

In his speech, Mr. Strauss-Kahn called for a “renewed vision” for the I.M.F., which was part of the global financial architecture created in Bretton Woods, N.H., in 1944, but which faced grave questions about its relevance and survival by the time Mr. Strauss-Kahn took over in 2007.

The global financial crisis quickly turned things around. Coffers at the fund, which has 186 member nations, grew to $850 billion in the last year, an amount that Mr. Strauss-Kahn described as “sufficient to meet demand in the coming period.”

He called for the fund to improve its tools for financial surveillance and to “construct a global risk map” of nascent systemic risks. And while noting that the Federal Reserve and other central banks provided liquidity swaps during the worst of the crisis, he said that the I.M.F. should explore options like short-term credit lines for extending emergency lending in future crises.

He said the fund planned to triple its lending in low-income countries and to waive interest on loans to poor countries until 2012.

Mr. Strauss-Kahn also said it would be “intellectually healthy to explore” the creation of a new global reserve currency.

The governor of China’s central bank made a similar proposal in March 2009, arguing that “special drawing rights” — baskets of currencies issued by the I.M.F. and made up of the euro, yen, pound and dollar that have served as reserve assets — would be more stable and viable than the dollar. China’s huge holdings of dollar reserves in the form of Treasury securities have become a concern for officials on both sides of the Pacific.

Mr. Strauss-Kahn said that a new reserve currency could limit dependence on the policies and conditions of a single, though dominant, country.Few economists say they believe that the dollar’s status as the dominant foreign exchange reserve will change anytime soon. Mr. Strauss-Kahn said that while the fund might be called upon to provide a globally issued reserve asset some day, “that day has not yet come.”

Kenneth S. Rogoff, a Harvard professor and a former chief economist at the I.M.F., said the idea had been a “perennial big-think question” for decades but remained mostly hypothetical. “At the end of the day, you can’t have a currency without a fiscal policy underlying it,” he said in an interview.

Asked for a response to the remarks, the Treasury Department pointed to its most recent semiannual foreign exchange report, released in October. That report said that “as long as the United States maintains sound macroeconomic policies and deep, liquid, and open financial markets, the dollar will continue to be the major reserve currency.”

Blockbuster Ghosted

Who in the world would bat an eye at the headline Blockbuster closing 500 more stores. What were you expecting! Aha, I mean this is laughable. It's over, it's done, it's through - the existing retail environment is as bloated, outdated and educated in the wrong areas as the world economy and American consumer. IT MAKES ME SICK!

Blockbuster Closing 500 More Locations, Conservative

MSN reports that, following a broad quarterly loss, video and game rental company Blockbuster will close 500 more stores this year. The first round will consist of 150 closures in April, with more to come later in the year, rounding off a total of between 500 and 545.

According to MSN, Blockbuster Wednesday posted a net loss of $435 million, or $2.24 per share, worse than the loss of $359.8 million, or $1.89 per share, a year ago. The company also has a debt of $963.9 million and has announced an agreement with Rothschild, which will help restructure that debt.

"While we believe the future is bright, the next 12 to 18 months will remain challenging as we balance the secular decline of a single channel with the ascension of emerging channels, such as vending and digital," Blockbuster CEO Jim Keyes said in a statement.

Blockbuster announced the closure of over 250 stores in January. Last year the company closed 374 U.S. stores.

Detroit Goes Baghdad

Long known for its war-zone like neighborhoods, Detroit is taking on the complexion of a bombed out, conquered land where the infrastructure has disappeared and residents are being forced to relocate.

What would the next major economic meltdown do to other major metropolitan areas?

Detroit Mayor Bing Emphasizes Need to Shrink City

Detroit --Mayor Dave Bing said Wednesday he "absolutely" intends to relocate residents from desolate neighborhoods and is bracing for inevitable legal challenges when he unveils his downsizing plan.

In his strongest statements about shrinking the city since taking office, Bing told WJR-760 AM the city is using internal and external data to decide "winners and losers." The city plans to save some neighborhoods and encourage residents to move from others, he said.

"If we don't do it, you know this whole city is going to go down. I'm hopeful people will understand that," Bing said. "If we can incentivize some of those folks that are in those desolate areas, they can get a better situation."

"If they stay where they are I absolutely cannot give them all the services they require."

He said there's no timeline, price tag or estimate on the number of people who would have to be moved, but said federal funding would be needed. Bing said he plans to focus on the neighborhoods in which Detroit Public Schools plans to build schools with $500.5 million in bonds voters approved last year.

"You can't support every neighborhood," Bing told WJR's Frank Beckmann. "You can't support every community across this city. Those communities that are stable, we can't allow them to go down the tubes. That's not a good business decision from my vantage point."

Bing acknowledged it won't be "an easy conversation." And he's already facing opposition from activists such as Ron Scott, who said he is "adamantly opposed" and believes the business community is pushing Bing to get cheap access to large tracts of the city.

"Sounds like reservations to me, it sounds like telling people to move," Scott said. "The citizens of the city of Detroit who built this city, the working class, didn't create this situation. You are diminishing the constitutional options people have by contending you have a crisis."

Bing's staff is using its own data and a survey released last weekend by Data Driven Detroit. The block-by-block study of the 139 square-mile city showed that roughly one in three parcels are vacant lots or abandoned homes. The mayor's staff didn't elaborate on Bing's comments to WJR beyond a statement saying, "the mayor will utilize data from several sources including city departments, Data Driven Detroit, as well resident input, to prepare a viable land use plan."

Steven Ogden, executive director of Next Detroit Neighborhood Initiative, is using the group's data to come up with a plan for which neighborhoods his nonprofit should target in the next several years with time and money. He submitted a proposal to the Bing administration within the past several days on what areas he wants to partner with the city to target.

Ogden said he supports Bing's direction, saying it's the only way the city can survive, but acknowledges it goes against past practice of the city putting money where the need is greatest or spreading funds equally city-wide.

"It's about where to invest the least amount of money to get the greatest impact," Ogden said. "We can't afford to lose another resident."

Detroit's population has shrunk to roughly 900,000 from 1.85 million in 1950.

John Mogk, a Wayne State law school professor, said Bing's on the right track but will face four major challenges: political support; money; creating a bureaucracy to administer the project and legal challenges.

Among the court challenges he sees ahead include the legality of cutting off city services to particular neighborhoods and using eminent domain to relocate residents. In 2006, voters approved a prohibition on government's ability to take property for economic development.

"It's a huge challenge," Mogk said. "No other city in terms of Detroit's scale ... has yet to face up to what it needs to do and has accomplished it."

"Detroit is really venturing into a new frontier."

Pound On Shaky Ground

Like rats from a sinking ship the masses will be pushing, shoving, kicking and biting to get to a raft or anything that floats. Keep you and yours safe and protected.

Jim Rogers: British Pound Could Collapse In Weeks

Jim Rogers, Chairman of Rogers Holdings, has once again made a bold prediction and that is the British Pound could quite possibly collapse within the coming weeks.
Jim Rogers, co-founder of the Quantum Fund and founder of the Rogers Commodities Index, was quoted in a recent press release that the United Kingdom Pound is on the brink of utter collapse, which could happen within the coming weeks and there is nothing governments can do about it.
Rogers, making statements prior to delivering a keynote speech at next month’s Global Trading Day seminar in Westminster, believes the collapse of the Pound could foreshadow a global economic disintegration before the end of the year. The last few months of increases in the markets have been a “false bounce” and occurred due to government interference in the market and throwing everything at it except for the kitchen sink.
“But it can’t last. We’ve been applying temporary sticking plasters, not long-term cures. Later this year we’ll see the start of the real recession, with more Lehman-scale disasters and a fallout which won’t stop until the underlying malaise is genuinely cured,” said Rogers.
The author of “Hot Commodities” believes the beginning of the collapse of the UK will start with the Pound, adding that the Pound has devalued against all other currencies and is a “basket case,” which will put Great Britain in a bad position when the “shakedown” occurs.
“It sounds like a lot of doom and gloom. But it doesn’t have to be. With foreknowledge, experience, advice and skill, even the steepest downward slide can be turned to advantage. Recession can be just as much a source of wealth as growth.”

The problem with Greece

Technical difficulties

I can't figure out how to get blogger to stop cutting the video in half so here is a link to the last video.

The Murder of Mahmoud Al Mahbouh

I wanted to present this without comment but realize that not everyone may know the context; for the background on this video click here.

Breaking Point

Simon Out of Control

After the Mills and the Prime Outlets acquisitions, Simon Property Group is at it again bidding on the General Growth Portfolio. Simon's reckless spending spree is reminiscent of the bender Federated Department Stores went on after picking up May Department Stores, Marshall Field's and others.

The problem is that Simon, like Federated, will be forced to take on massive amounts of debt through the acquisition...the same debt that is putting General Growth under. In 2004 GGP purchased Rouse for $12 billion - a portfolio with a focus in the Baltimore area...a first year unlevered cap rate of aproximately 5.0%.

The right play here is to forget taking on an entire portfolio which has some real gems and some real duds. What Simon should be doing is making off market bids on General Growth's best assets including Water Tower Place, Oakbrook, White Marsh and the Ala Moana center in Hawaii in the form of cash. Leverage is a REIT's worst nightmare these days...particularly in the next few years.

Simon Bids on General Growth

Simon Property Group Inc., the nation's largest mall operator, offered to buy rival General Growth Properties Inc. for more than $10 billion in a deal that would give shareholders, who are typically left empty-handed in bankruptcy reorganization, $9 a share.

The Indianapolis-based company said it sent an offer letter to General Growth CEO Adam Metz on Feb. 8 and a follow-up letter to the board of directors Tuesday, but has yet to receive a response. About $9 billion of the bid is in cash.The unsolicited bid sets the stage for a takeover battle as Chicago-based General Growth prepares its plan to reorganize the company and raise capital needed to emerge from bankruptcy this year. General Growth filed the biggest real estate bankruptcy reorganization in U.S. history in April after an acquisition spree left the shopping center company saddled with $27 billion in debt.

"We just saw the first move in what will be a very interesting chess match," said Jim Sullivan, managing director of Green Street Advisors, an independent research firm in Newport Beach, Calif., that tracks real estate investment trusts.

Simon's bid comes after overtures from Brookfield Asset Management Inc. In the past year, the Toronto-based real estate firm has bought almost $1 billion in unsecured debt in General Growth, positioning it to have a say in the reorganization's outcome, according to a Wall Street Journal report. Brookfield spokesman Denis Couture declined to comment.

It had been anticipated for months that Simon would make a run at part or all of General Growth, the second-largest mall operator in the U.S.

Combining the two entities would create a national shopping center behemoth with about 600 properties, one that would hold sway over setting retail rents for major chain stores such as Gap and Pottery Barn.

Simon Property's share of the shopping mall arena would almost double, to 17.4 percent from 9.4 percent if its bid to acquire General Growth succeeds, according to IBIS World. Simon also would gain access to a host of high-performing gems, including Ala Moana Center in Honolulu and the Grand Canal Shoppes at The Venetian in Las Vegas, where sales per square foot are estimated to be more than $1,000, more than double that of a healthy mall.

General Growth has interests in more than 200 shopping centers, including Water Tower Place in Chicago, Oakbrook Center in Oak Brook and Northbrook Court in Northbrook.

Among Simon Properties' 382 properties are Chicago Premium Outlets in Aurora and Gurnee Mills in Gurnee.

Hedge-fund investor William Ackman, head of Pershing Square Capital Management LP, said in December that General Growth's shares could be worth $23 to $43 a share, according to Bloomberg News. Pershing Square has a 25 percent economic interest in General Growth, including a 7.5 percent equity stake.

Ackman had lobbied for General Growth to enter Chapter 11 bankruptcy reorganization last year, betting that the equity would survive. He joined General Growth's board last summer.

Under bankruptcy law, stockholders are at the end of the line to get paid. And there is rarely money left over after the higher-ranking banks and bondholders receive their share.

"The reason it is rare is that companies usually don't go into bankruptcy unless they can't pay their creditors," said James Shein, a professor of management and strategy at Northwestern University's Kellogg School of Management.

General Growth found itself in bankruptcy court, in large measure, because billions of dollars of loans were up for renegotiation when the banking crisis was in full swing and liquidity came to a screeching stop, Shein said. Even so, he predicted that given the complicated bankruptcy proceedings, shareholders still could get shortchanged.

Under the terms of Simon's bid, $7 billion of the offer would be used to repay in full all unsecured creditors, along with some bondholders and lenders.

Shareholders, for their part, would receive $6 a share in cash and $3 a share in certain General Growth assets that include undeveloped land earmarked for residential development in Las Vegas. Simon said it is willing to consider offering General Growth shareholders common stock in Simon in lieu of the cash portion.

The official committee of General Growth's unsecured creditors has advised Simon that they support the offer.

"Simon is in the unique position of being able to offer General Growth creditors and shareholders full, fair and immediate value," David Simon, chairman and CEO of Simon Property, said in a press release.

General Growth declined to comment beyond a letter sent to Simon Property on Tuesday, which was made public after the market closed.

The letter said General Growth is considering a sale of the entire company, a stand-alone restructuring with institutional equity capital and other "possible business combinations."

Walgreens Buys Duane Reade

If you have ever been to Manhattan, you have probably noticed a Duane Reade on every corner with Starbucks level market penetration. Walgreens, already active in the market with one of the best pharmacy locations in the world in times square will now completely dominate the pharmacy and convenience goods sector.

This is a very strong long term move as the fortune 50 company has locked in 257 long term leases at set rental rates. As inflation comes down the pike in the next several years the demand for convenience goods will not wane, however, the prices will skyrocket...building in some long term potential for higher profits.

Walgreen To Buy Duane Reade Chain for $618 Million

NEW YORK (Reuters) - Walgreen Co (WAG.N) will buy Duane Reade for $618 million in cash, catapulting the largest U.S. drugstore operator into the top spot in the New York City area.

Deals

Duane Reade is owned by private equity firm Oak Hill Capital Partners LP and operates 257 drugstores in the New York metropolitan area. Its sales totaled $1.8 billion last year and it has the highest sales per square foot in the U.S. industry, according to Walgreen.

"We like their footprint, how it matches up with us," Walgreen Chief Executive Greg Wasson said of Duane Reade in a Reuters interview. "(It) gives us a leading presence in Manhattan as well as supplements what we have in the boroughs in New York."

The deal also includes the assumption of $457 million in debt. Oak Hill Capital Partners took Duane Reade private in July 2004 in a transaction valued at about $700 million, also including debt.

Duane Reade will continue to operate under its brand name and Walgreen expects to retain the employees at its stores, pharmacies and distribution centers.

Walgreen operates 70 stores in the New York area, including a multi-floor outlet in Times Square across the street from a Duane Reade store.

It expects the Duane Reade acquisition to dampen its earnings in the first 12 months after closing, expected by August 31, and then add to earnings in the years following. It sees potential savings of $120 million to $130 million in the third year after closing.

Duane Reade opened in 1960, named after its first location near New York's City Hall on Broadway, between Duane and Reade streets. The company began to overhaul its stores in the last two years to update its decor and add walk-in health services.

Walgreen said these strategies complemented its own efforts to better tailor its drugstores to local markets.

Peter J. Solomon Co. was financial adviser to Walgreen and Wachtell, Lipton, Rosen & Katz served as legal counsel. Goldman Sachs & Co and Bank of America Merrill Lynch were co-financial advisers to Oak Hill and Duane Reade, with Paul, Weiss, Rifkind, Wharton & Garrison providing legal counsel.

Walgreen shares were down 38 cents at $33.60 in premarket trading.

Inverted Reality

Images formed on the retina are inverted, yet when processed through the brain are upright - why? With two different retinas, why do humans not see two different images instead of one unified vision? The answer, according to science, is because the brain has been trained since childhood to work this way.

Like the world around us, the world economy is upside down - even if we can't all see it that way. We have been conditioned through faulty economic teachings to recognize fiat currency as a store of value and the manipulation of its supply as a real tool to keep macro economies upright.

Fed Plans to Wind Down $2.2 Trillion Stake

By Dale McFeatters
Scripps Howard News Service

The Federal Reserve Board faces a delicate task. Having pumped $2.2 trillion into the economy to fight the recession, it must start pulling that money back. It would have to sop up over half of that liquidity to get back to pre-recession levels.

The problem: Do it too quickly and the Fed might cut off or curtail the recovery. Wait too long and risk setting off a punishing round of inflation.

Ben Bernanke, as Fed chairmen typically do, gave only vague hints as to how he would accomplish that. In testimony never delivered to Congress because of this week's blizzard but released anyway, it was clear that whatever the central bank does, interest rates are going up.

He might begin by gently raising the Fed-regulated federal funds rate, currently near zero. That's the rate banks charge each other on overnight loans. Or he might make use of another tool, the excess reserves rate, now at 0.25 percent.

Raising that rate is an incentive for banks to park excess funds with the Fed rather than lend the money back out again. Unspoken is that giving banks a safe and profitable haven for their extra cash would dissuade them from making risky investments and perhaps launching another asset bubble.

To reassure Wall Street, Bernanke said rates will remain ``exceptionally low" and the inevitable move to tighten credit would come only ``after an extended period." Even those anodyne statements rattled the markets to a 20-point loss.

The ultimate goal is that over time, he said, the Fed's balance sheet ``will shrink toward more historically normal levels and that most or all of its securities holdings will be Treasury securities."

Ultimately, this will show up in higher rates on credit cards, consumer loans and, to some extent, mortgages. But this has an upside. Americans have terribly low savings rates, which is not good. The rates on savings accounts and certificates of deposits would go up as well.

If the government thinks Americans should save more, it should make it worthwhile for them to do so.

Kansas City Fed Chief: "Without pre-emptive action, the US risks its next crisis"

The first car of the roller coaster is starting to fall off the next dip

Fed Dissenter Warns of Financial Risks From Escalating US Debt

By Alan Rappeport in Washington

Published: February 17 2010 02:00 | Last updated: February 17 2010 02:00

The US must fix its growing debt problems or risk a new financial crisis, Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, warned yesterday, adding a mounting deficit could spur inflation.

Mr Hoenig said that rising debt was infringing on the central bank's ability to fulfil its goals of maintaining price stability and long-term economic growth. "Stunning" deficit projections were putting political pressure on the Fed to keep interest rates low, infringing on its independence at the risk of inflation, he said.

"Without pre-emptive action, the US risks its next crisis," Mr Hoenig said in a speech at the Pew-Peterson Commission on Budget Reform.

He was the only Fed member who dissented at last month's meeting against language indicating that interest rates should remain near zero for an "extended period".

Yesterday he said that the worst option for the US was a scenario where the government "knocks on the central bank's door" and asks it to print more money. Instead, the administration must find ways to cut spending and generate revenue. He called for a "reallocation of resources" and noted that the process would be painful and politically inconvenient.

The US budget deficit is projected to be $8,000bn (€5,800bn, £5,000bn) in the next decade. Barack Obama, US president, recently lifted the government's borrowing authority to $14,300bn.

If the Fed succumbed to pressure to increase the money supply, Mr Hoenig said, inflation would lead to a loss of confidence in the dollar and in the economy. Meanwhile, a potential stalemate between the fiscal and monetary authorities that govern the economy could allow growing imbalances to go unchecked, thus raising the costs of borrowing and of capital for the US.

The hawkish Kansas Fed president also warned against "dire" consequences of the central bank prolonging its holdings of mortgage-backed securities, which it purchased in an effort to prop up the US housing market.

Mr Hoenig painted a picture of a slippery slope, where a less independent Federal Reserve was asked to find ways to support other ailing sectors, such as agriculture.

The Federal Reserve is purchasing $1,250bn in MBS through March. Mr Hoenig said that it must shrink its balance sheet as quickly as possible while being careful and systematic.

Being pulled into the political framework has complicated the Fed's job, which Mr Hoenig said should remain focused on the Fed funds rate and price stability.

Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.

South China Mall

The world's largest mall has only seven tenants...and is 99% vacant. Mall of Misfortune highlights in depth what went wrong.

Commercial Real Estate - The Real Deal

The numbers shared with the public are GROSSLY deflated. In Washington, D.C. - the most stable office market in the United States and perhaps the world (for now)a major portfolio comprising several million square feet is back in the hands of the lender(s).

A major European bank has also taken back another portfolio in the central business district of more than half a million square feet and expects a significant write off.

The losses above are in the hundreds of millions of dollars, perhaps more than a billion.

In Northern Virginia along the Dulles toll road there are more than 50 empty office buildings - many of which were constructed in the past several years.

These are but examples that are part of a larger problem - multiple times worse in other parts of the country.


Elizabeth Warren Warns About Commercial Real Estate Crisis, 'Downward Spiral For Small Business, Local Banks

Even as the economy shows signs of recovery, a government watchdog is warning that another financial crisis is coming round the bend -- and that the Treasury Department and financial regulators are not prepared to deal with it.

"There is a commercial real estate crisis on the horizon, and there are no easy solutions to the risks commercial real estate may pose to the financial system and the public," says a report issued Thursday by the Congressional Oversight Panel, the bailout watchdog led by Harvard Law professor and middle-class advocate Elizabeth Warren.

"The Panel is concerned that until Treasury and bank supervisors take coordinated action to address forthrightly and transparently the state of the commercial real estate markets -- and the potential impact that a breakdown in those markets could have on local communities, small businesses, and individuals -- the financial crisis will not end."

Over the next five years, about $1.4 trillion in commercial real estate loans will reach the end of their terms and require new financing. Nearly half are "underwater," meaning the borrower owes more than the property is worth. Commercial property values have fallen more than 40 percent nationally since their 2007 peak. Vacancy rates are up and rents are down, further driving down the value of these properties.

When the reckoning comes, it could threaten everyone from banks and pension funds to renters and small businesses -- and small banks could be particularly vulnerable.

Warren warned against government inaction.

"When commercial properties fail, the result is a downward spiral of economic contraction; job losses; deteriorating store fronts, office buildings and apartments; and the failure of the banks serving those communities," she said. "These are the same small banks that provide loans to the small businesses that create jobs and boost productivity. If hundreds more community banks go under the effect could be to dump sand in the gears of our economic recovery.

Timber - Beware of Falling Retailers

Zale Corp. is on its last legs and is but the tip of the zombie retail iceberg. With 1,900 stores and 5-10 employees per store conservatively there are some major unemployment shocks coming down the pike.

Zale Corp. Hires Investment Advisory Firm

Dallas--Long-struggling jewelry chain Zale Corp., which saw double-digit sales declines over the holiday season, has hired an independent investment banking advisory firm to help it determine strategic options.

The company issued a brief statement Tuesday evening announcing that it had hired Peter J. Solomon Co., a New York-based firm that works closely with the retail industry, "to advise the company in identifying and analyzing alternatives to maximize its financial flexibility."

So what will that mean for its future? Industry analyst Ken Gassman said among the likely alternatives for Zale is that it could sell off pieces of its business--news reports have named the Piercing Pagoda and the company's Canadian operations as likely candidates for a sale. It might also form a strategic combination, perhaps with an Indian company, or take the company--which is now publicly traded--private with venture capitalists or with another company that already has a large stake in the jewelry industry.

Gassman said he doesn't think the chain is going to file for bankruptcy at this point in time.

"I'm not seeing a Chapter 11," he said.

Rumors have swirled for weeks about Zale hiring an advisory firm after repeated struggles with its sales performance. Its same-store sales dropped 12 percent in November and December, yet another setback in a critical season for jewelry retailers.

By comparison, competitor Sterling Jewelers, operator of Kay Jewelers and Jared the Galleria of Jewelers, saw same-store holiday sales climb nearly 8 percent.

Almost immediately after the discrepancy between the two rival chains' sales became public, Zale Chief Executive Officer Neal Goldberg and two other top executives resigned: William Acevedo, chief stores officer, and Mary Kwan, chief merchandising officer. Company President Theo Killion is serving in the additional role of interim CEO.

The company's financial footing made headlines again last week when The Wall Street Journal reported that Zale had taken the unusual measure of asking its diamond merchants and other vendors if they would purchase some of its inventory--including goods that they did not manufacture--in exchange for cash and the promise of future orders from Zale. Vendors who spoke to the Journal said they were hesitant to agree to such a deal.

Zale Corp. operates approximately 1,900 retail locations throughout the United States, Canada and Puerto Rico, as well as online.

MSNBC Shocker

If You STILL Don't Get It...

If people choose to keep their heads in the sand there is no helping them. Learning the hard way how to be financially responsible is back with a vengeance.