This from Today’s Financial News:

They are falling like dominoes these days. Without help from Uncle Sam, many of the nation’s top businesses do not stand a chance. They are taking investors with them.

When Circuit City ( filed Chapter 11 bankruptcy in November, investors believed there was an opportunity to restructure. They thought if they could find temporary protection from their creditors, holiday sales just might bring their company back from the brink of total collapse.

It didn’t happen.

Holiday sales across the board turned out to be as dismal as expected and today, Circuit City is paying the price. It is liquidating its assets and disappearing for good.

A short circuit blows the fuse

After negotiations between two potential buyers, creditors and what was once the second-largest specialty electronics retailer in the country failed, 30,000 employees are left without a job and four liquidation companies are charged with unloading the company’s inventory and assets spread throughout the 567 stores that remain open. The company already announced closures of nearly 160 of its outlets.

The New Year is just over two weeks old and the list of companies that will not see the year through is growing longer by the day. Earlier this week,  and Gottschalk’s entered bankruptcy protection.

Who is next is anybody’s guess.

I would keep a close eye on Bon-Ton Stores (NASDAQ:BNT). Since its headquarters is about four miles from my front door, I will let you share my front-row seat. Another company to watch is Borders (NYSE:BGP). Its debt load is starting to shake the company’s foundation. A lot of analysts are wondering how long it can take the stress.

What does this all mean? How are investors to react?

In the short-term, not a whole lot. You would have had to been living in an underground bunker to have not seen these headlines coming. The long-term outlook is where the big money will be made.

Over the last five years, “Big Box” retailers have been popping up one after the other, sometimes within a few miles of one another. In my home town, for instance, a new Best Buy (NYSE:BBY) was literally built right behind a Circuit City store, which was right beside an older family-owned electronics shop.

What this mean (or exemplifies, really) is the fundamental rules of economics and business are still at work, no matter how hard Washington tries to eradicate them. The strongest will pounce on the weaklings and dominate the marketplace.

Mother Economy will take care of business

A bubbly economy may have allowed the weak to thrive for a few years, but when things got tough, their lack of strength became obvious and now they are dropping one after the other.

For the companies that survive, today’s news is fantastic. Imagine what power Best Buy will have with one of its major competitors out of its way. Sure, the next few quarters are going to reek of decaying corpses as Circuit City’s inventory floods the market, but after that, I would love to see the competitor that can knock Best Buy off of its leadership perch. There is nobody in sight.

No matter how hard we try to force the rules of economics in our favor, Mother Economy always wins. She told us months ago things were getting too big. Instead of forcing consolidation ourselves, we waited until the economy did it the natural and most painful way. Now we are paying the price.

The situation will get better and the pendulum will swing in the opposite direction. They always do. When it happens, the survivors of this retail death march will be sitting atop a big pile of profits. Make sure you are one of them.

Source: Mother Economy wins: Another one bites the dust

• Borders Group, Inc. (BGP) ousted its Chief Executive George Jones and replaced him with outsider Ron Marshall, a Wildridge Capital Management executive whose primary experience is turning around ailing companies, Reuters reported. George had been Borders’ CEO for the past three years.

• The New York Times Co. (NYT) opened its front page to advertisers, a controversial move within journalism circles but also one that follows rivals the Wall Street Journal and USA Today. The ad space is two-and-half inches high and runs across the bottom of the page, Reuters reported.

• Apple Inc. (AAPL) investors and fanatics breathed a sigh of relief when Steve Jobs said in a letter that his much rumored weight loss is likely due to a hormone imbalance and that he would remain as chief executive, CNNMoney.com reported. Apple’s stock responded accordingly, moving 4.22% on a day the tech sector was mum.

• On Jan. 16, the United Kingdom said it will lift the temporary short-selling ban on 34 of its financial companies, Bloomberg reported. The ban was introduced in September because short selling was believed to be the cause for market instability.

• Former eBay Inc. (EBAY) chief executive Meg Whitman – one of the people mentioned by John McCain in his presidential campaign as a possible nominee for a cabinet post – might run for political office in California, The Associated Press reported. Whitman resigned from board December 31 for personal reasons. Whitman resigned from the boards of The Procter & Gamble Co. (PG), eBay and Dreamworks Animation SKD (DWA) all as of December 31.

• Light, sweet crude for February delivery yesterday (Monday) rose $2.47 cents to settle at $48.81 a barrel on the New York Mercantile Exchange, as Israeli forces seized control of high-rise buildings and attacked houses in the Gaza Strip.

• Russia yesterday (Monday) reduced gas flows to Europe via Ukraine by one-sixth, a measure intended to stop its neighbor siphoning off fuel, Reuters reported. Russia cut off gas supplies to Ukraine on New Year’s day but several countries in southern and eastern Europe have reported new falls in gas supplies from Russia. About 80% of Europe’s gas supply passes through Ukraine.

Source: Global Investing Roundups Tuesday, January 6th, 2009

• U.S. factory orders increased 1.1% in April, an unexpected gain that was boosted by the high cost of gas and other petroleum products, the Commerce Department announced yesterday (Tuesday). Economists had expected a smaller gain of just 0.1% after an upwardly revised 1.5% gain in March, MarketWatch reported.

• Borders Group Inc. (BGP) announced yesterday (Tuesday) it would reduce 20% of its corporate positions in an ongoing effort to cut costs. The No. 2 U.S. bookseller will eliminate 156 positions at its Ann Arbor, Mich. Headquarters and 118 corporate positions at other locations, Reuters reported. The reductions represent less than 1% of Borders total staff.

• In a bid to lure new customers to purchase reloadable cards, Starbucks Corp. (SBUX) will offer free AT&T Inc. (T) wi-fi service to patrons who buy a minimum $5 on a reusable Starbucks Card. “Customers have let us know they want to be recognized for choosing Starbucks,” Brad Stevens, vice president of customer relationships, told USA Today. Particularly, he says, at a time when “budgets are tight.”

• Annual inflation in Kenya soared 31.5% higher in May, Bloomberg reported, citing the country’s National Bureau of Statistics reported yesterday (Tuesday). May’s numbers are even steeper than April, when soaring food prices pushed inflation up 26.6%.

• Chevron Corp.’s (CVX) vice chairman told Bloomberg that the company will spend up to $5 billion in African oil projects – including nearly $5 billion for a gas-to-diesel conversion plant in the Niger Delta – to boost production and help accommodate global demand. “The world is saying it needs it,” said Peter Robertson.

• Staples Inc. (SPLS) yesterday (Tuesday) raised its hostile bid for Dutch office supplies distributor Corporate Express NV (ADR: CXP) to $2.6 billion. Rather than accepting two previous overtures from Staples, Corporate Express last month struck a surprise deal to buy a French competitor, Lyreco SAS, which would create an international competitor to Staples, the Associated Press reported. Lyreco may be entitled to a $46.8 million break-up fee if Corporate Express shareholders pursue the Staples deal.

• Lehman Brothers Holdings Inc. (LEH), set to report its first quarterly loss since going public, is considering raising billions of dollars in fresh capital to help shore up its balance sheet, the Wall Street Journal reported. The exact amount isn’t known, but analysts estimate it is likely to be between $3 billion and $4 billion. Lehman will probably reveal the details of the plan with its quarterly results, due the week of June 16.

• Oil prices fell sharply yesterday (Tuesday), at times slipping more than $3 a barrel on the New York Mercantile Exchange. The drop came after Federal Reserve Chairman Ben S. Bernanke indicated that more interest rate cuts are unlikely. His comments sent the dollar higher and raised questions about oil’s ability to reach new highs in the short term.

Source: Global Investing Roundups Wednesday, June 4th, 2008

• The World Trade Organization (WTO) has published a new draft of plans for a global trade deal that will be discussed the next time world trade ministers meet, BBC News reported. Although the plan doesn’t change existing tariff or subsidy cuts, it does offer some compromises and clarifies some key “sticking points.” Negotiators hope to have a deal closed by the end of the year.

• Battered by increasing steel costs and dampened consumer demand due to high gas prices, Ford Motor Co. (F) announced yesterday (Thursday) that it would not be able to meet Chief Executive Officer Alan Mulally’s goal of returning to profitability by 2009, Bloomberg News reported. North American vehicle production will be cut throughout the rest of this year due to “the rapidly changing business environment in the [United States],” a company statement read.

• First-time jobless claims fell 9,000 to 365,000, from a revised 374,000 the previous week, the Labor Department announced yesterday (Thursday), Bloomberg News reported. The decline was unexpected and indicates that companies are responding to the current U.S. economic slowdown by curtailing hiring, while trying to maintain current employees.

• Hong Kong’s Hang Seng index hit a one-month closing low yesterday (Thursday) in reaction to the declines in the U.S. markets. Oil firms Sinopec Shanghai Petrochemical Co. (ADR: SHI) and PetroChina Co. Ltd. (ADR: PTR) also weighed on the index. “Weak U.S. stocks and Beijing’s denial on an imminent deregulation of oil product prices hurt market sentiment,” Kenny Tang, associate director at Tung Tai Securities, told Reuters.

• Bookseller Barnes & Noble Inc. (BKS) yesterday (Thursday) reported a loss of $2.2 million, or 4 cents per share, for its fiscal first quarter ended May 3, compared with a loss of $1.67 million, or 3 cents per share, for the same period in the prior year, Reuters reported. Barnes & Noble reduced its full-year outlook based on the difficult economic environment and announced it would consider “the feasibility of a transaction” with rival Borders Group Inc. (BGP).

• The American Petroleum Institute, the trade group for major oil and natural gas companies, spent nearly $1.3 million in the first quarter to lobby on fuel economy standards, appropriations bills, and other issues, the Associated Pressreported. The API also lobbied on various pieces of legislation dealing with oil taxes and fees, renewable fuel standards, climate change, offshore drilling and more, according to the form posted online April 21 by the House clerk’s office.

• Bill Miller, portfolio manager at Legg Mason Capital Management, has not signed on to the Yahoo! Inc. (YHOO) investor coup being led by Carl Icahn. However, in an interview at a New York conference Wednesday, Miller, whose fund controls a 5.4% stake in Yahoo, said he wants Microsoft Corp. (MSFT) to reopen talks to buy Yahoo outright and not simply forge a joint venture. “It is a strategic imperative for Microsoft to change its position,” Miller told Reuters after speaking at the hedge fund conference.

• The International Energy Agency announced yesterday (Thursday) that it is studying depletion rates at about 400 oil fields in its first-ever study of world oil supply. The Paris-based group said the study, to be released in November, was prompted by concern about the volatility of world oil markets and uncertainty about supply levels.

• The spinal-products unit of medical-device maker Medtronic Inc. (MDT) will pay $75 million to settle accusations that it defrauded Medicare by telling doctors to bill in-hospital stay – even when a cheaper outpatient visit would have done the job, The New York Times and The Associated Press both reported. Originally, the accusations had been leveled against Kyphon Inc., which Medtronic spent $4.2 billion to buy in November.

Source: Global Investing Roundups: Friday, May 23rd, 2008