YCLOAK

Coffee drinkers in the nation’s capital can now order that tall pumpkin spice iced skim latte in sign language.

Starbucks has opened its first U.S. “signing store” to better serve hard of hearing customers. The store in Washington is just blocks from Gallaudet University, one of the nation’s oldest universities serving deaf and hard of hearing students.

Marlee Matlin, the only deaf actor to win an Academy Award, posted an Instagram video of herself ordering a drink early Tuesday. “The sign for the week is COFFEE,” she wrote.

Starbucks announced in July that it would hire 20 to 25 deaf or hard of hearing baristas to work at the store.

The store is modeled after a similar Starbucks signing store which opened in Kuala Lumpur, Malaysia in 2016.

 
…

Wall Street indexes fell in Tuesday’s volatile session, though they pared losses sharply by the closing bell as investors looked for bargains. Oil

dropped sharply on demand worries.

After falling as much as 2.3 percent in the morning, the S&P 500 gradually regained ground as the day wore on.

Oil prices plunged about 5 percent to two-month lows as the equities sell-off raised worries about demand growth and Saudi Arabia said it could supply more crude quickly if needed, easing concerns ahead of U.S. sanctions on Iran.

Benchmark U.S. Treasury prices rose, sending yields to their lowest levels in almost three weeks as declining stocks worldwide fed demand for low-risk debt.

The U.S. dollar recovered some of its early losses in the afternoon as the stock sell-off eased, but the greenback remained down against other safe-haven currencies.

On top of geopolitical worries and Nov. 6 U.S. congressional elections, Oliver Pursche, chief market strategist at Bruderman Asset Management in New York, cited an uncertain growth outlook amid a U.S.-China trade war.

“There’s the question of impact on global growth from tariffs and the ongoing trade war. [U.S.] President [Donald] Trump and [Chinese] President Xi [Jinping] have agreed to meet during the G-20 summit, but that’s post-election,” Pursche said. “It’s clear that nothing is going to happen for three to four weeks.”

But after hitting a low of 2,691.43 around 10:20 a.m. ET (1420 GMT), the S&P gradually revived, though trading was volatile.

‘Temporary correction’

“Earnings as a whole have been good. … The market doesn’t appear overly expensive. It’s setting up to be a good buying opportunity,” said Gary Bradshaw, portfolio manager of Hodges Capital Management in Dallas, adding that he bought stocks on Tuesday.

“We’ve had what we think is a temporary correction in a bull market. Typically, you’ll see two or three corrections that are 5 to 10 percent on average per year,” he said.

The Dow Jones industrial average fell 125.98 points, or 0.5 percent, to 25,191.43; the S&P 500 lost 15.19 points, or 0.55 percent, to 2,740.69; and the Nasdaq Composite dropped 31.09 points, or 0.42 percent, to 7,437.54.

Of the S&P 500’s 11 major sectors, energy was the biggest percentage decliner, last down 2.7 percent due to the tumble in oil futures.

U.S. crude fell 4.4 percent to $66.30 per barrel and Brent was last at $76.39, down 4.3 percent on the day.

Pressure mounted on Saudi Arabia over the death of journalist Jamal Khashoggi after Turkish President Recep Tayyip Erdogan said intelligence and security institutions have evidence Khashoggi’s death at a Saudi consulate in Istanbul this month was planned. He dismissed attempts by Riyadh to blame the “savage” killing on rogue operatives.

Trump had said Monday he was not satisfied with what he heard from Saudi Arabia about the death but did not want to lose investment from Riyadh.

Benchmark 10-year notes last rose 7/32 in price to yield 3.1676 percent, from 3.194 percent late on Monday.

The dollar index fell 0.09 percent, with the euro up 0.07 percent to $1.1471.

The Japanese yen strengthened 0.35 percent versus the greenback at 112.44 per dollar, while the British pound was last trading at $1.2986, up 0.19 percent on the day.

Spot gold added 0.7 percent to $1,229.90 an ounce after hitting its highest level since mid-July as investors looked for safety.
…

Foreigners sold a net 4.01 billion riyal ($1.07 billion) in Saudi stocks in the week ending Oct. 18, exchange data showed on Sunday – one of the biggest selloff since the market opened to direct foreign buying in mid-2015.

The selloff came during a week when investors were rattled by Saudi Arabia’s deteriorating relations with foreign powers following the disappearance of journalist Jamal Khashoggi.

Riyadh said on Saturday that Khashoggi died in a fight inside its Istanbul consulate, its first acknowledgment of his death after denying for two weeks that it was involved in his disappearance.

A breakdown of the data showed foreigners sold 5 billion riyals worth of stocks and bought 991.3 million worth.

The Saudi stock market is down about 4 percent since Khashoggi’s disappeared. The market had started to weaken before the incident as foreign funds slowed their buying after MSCI’s announcement in June that the kingdom will be included in its global emerging market benchmark next year.

As of Sunday, the Saudi index was up 5 percent so far this year, but down 5 percent this quarter.

($1 = 3.7518 riyals)
…

The International Monetary Fund announced Friday it had reached an agreement with Ukraine on economic policies that would unlock a new loan deal that will provide nearly $4 billion.

The new 14-month standby loan deal replaces an existing four-year financial aid package agreed in March 2015 and due to expire in five months, the IMF said in a statement.

The agreement must be approved by the IMF board, which will come later in the year after authorities in Kyiv approve a 2019 budget “consistent with IMF staff recommendations and an increase in household gas and heating tariffs,” a step the government had agreed on but never implemented.

But the deal also stresses the need for “continuing to protect low-income households.”

Ukraine Prime Minister Volodymyr Groysman had been seeking the additional financing from the Washington-based lender to help his crisis-hit nation.

Groysman on Friday announced a gas price increase of 23.5 percent to take effect November 1.

He said the “incredible efforts” of Ukrainian negotiators managed to reach a compromise with the IMF and reduce the initial demand to raise prices by 60 percent.

“If we are not able to continue cooperation with our international partners … this could lead to the country being put into default,” he said.

Ukraine has not received any money from the IMF since April 2017, when the fund released $1 billion for the cash-strapped country to repay loans. It had received less than $9 billion of the original $17.5 billion package.

Talks on economic reform measures that would satisfy IMF requirements and allow the release of further aid had been hung up for months, as the fund awaited the government’s approval of a budget, pension reform and an anti-corruption court.

A gas price hike is a sensitive issue for the cash-strapped country as its pro-Western leadership faces presidential and parliamentary elections in 2019.

The IMF said the new loan “will provide an anchor for the authorities’ economic policies during 2019.”

Building on progress under the previous financing package, the loan will “focus in particular on continuing with fiscal consolidation and reducing inflation, as well as reforms to strengthen tax administration, the financial sector and the energy sector,” the IMF said.

An IMF lifeline helped the country to recover from crises sparked by a Russian-backed war in the separatist industrial east that began in April 2014 and has claimed more than 10,000 lives.

The loss of industries in the war zone and flight of foreign investors saw the former Soviet republic’s economy shrink by 17 percent in 2014-2015.

The IMF now forecasts the economy will grow by 3.5 percent this year and 2.7 percent in 2019.

Following the announcement, debt rating agency Standard and Poor’s affirmed the country’s credit score at “B-” with a stable outlook.

“We expect the new arrangement will aid Ukraine’s efforts to cover sizable external debt obligations maturing next year, and also help to anchor macroeconomic policies through the 2019 presidential and parliamentary elections,” S&P said in a statement.

The IMF loan is also likely to unlock credit from other international donors, the ratings agency said.
…

A women-to-women investment fund is coming to Britain next month to boost financing for female-owned businesses, its founder said Thursday, as efforts grow to close the gender investing gap.

SheEO has lent more than $2 million to 32 female social entrepreneurs in the United States, Canada and New Zealand to grow their businesses since 2015 in an attempt to address a global gender investment gap.

“Most of the people writing checks and investing are men,” founder Vicki Saunders told the Thomson Reuters Foundation. “SheEO wants to fund female innovators with great ideas to create stronger communities and a better world.”

Support for female entrepreneurs

It is the latest venture to support female entrepreneurs around the world, who often face more obstacles than men, including a lack of access to finance, business networks, international markets and role models.

Three out of 10 U.S. businesses are owned by women but they only receive $1 in investment for every $23 that goes to male-led businesses, the Senate Small Business and Entrepreneurship Committee found in 2014.

A Goldman Sachs-World Bank Group partnership to provide capital to women entrepreneurs in emerging markets reached $1 billion in investments in May.

How it works

SheEO brings together 500 women each year who contribute $1,100 each, which they pool and lend, interest-free, to five women-led businesses of their choice.

The loans are paid back over five years and then loaned out again, creating a perpetual fund that SheEO hopes will grow to $1 billion, with 1 million investors supporting 10,000 women-led ventures.

More than 300 women in Britain wrote to SheEO asking it to launch there, Saunders said ahead of a visit to London where she hopes that 500 female investors will come on board.

Workplace gender equality is in the spotlight in Britain, where just 6 percent of the biggest publicly listed companies are headed by women and pay disparities were revealed at major institutions last year.

Twenty One Toys founder Ilana Ben-Ari, one of the first to get SheEO funding in 2015, said it changed her business, enabling her to push ahead with production and hire staff to help with a stressful workload. Her revenue has now doubled.

“It was easy to get my foot in the door and have a meeting but it was near impossible to have a serious conversation about my business,” she said, describing her efforts to get financing from venture capitalists. “Halfway through that meeting you find out — this isn’t a meeting, this is a date.”
…

U.S. stocks fell more than 1 percent on Thursday as the European Commission issued a warning regarding Italy’s budget and concerns mounted about the possibility of strained relations between the United States and

Saudi Arabia.

S&P 500 technology stocks fell more than 2 percent, as did the tech-heavy Nasdaq.

Wall Street’s major indexes pared early losses in morning trading but reversed course to fall further as European markets closed. Italian bond yields jumped after the European Commission deemed the country’s 2019 budget draft to be in breach of EU rules.

U.S. stocks declined further after U.S. Treasury Secretary Steven Mnuchin pulled out of an investor conference in Saudi Arabia as the White House awaited the outcome of investigations into the disappearance of Saudi journalist Jamal Khashoggi.

“It’s a function of a lot of things coalescing into a concern,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Pittsburgh. “The market continues to struggle in the aftermath of the bigger drawdown a week ago.”

Mnuchin’s decision sparked worries of potential strain in U.S.-Saudi relations, especially if Saudi leaders were found to have been involved in Khashoggi’s disappearance. Investors raised concern that if Saudi Arabia were sanctioned, it could restrict oil supply, prompting a rise in energy prices.

Shares of military contractors such as Lockheed Martin Corp. and Raytheon Co. also fell on concerns that U.S. lawmakers may block arms deals with Saudi Arabia.

U.S. stocks had opened lower as weak earnings reports from companies such as Cessna business jet maker Textron Inc. and equipment rental company United Rentals Inc. raised concerns about the impact of tariffs, climbing borrowing costs and rising wages on corporate profits.

Textron shares fell 10.8 percent and United Rentals shares sank 14.7 percent, while Sealed Air Corp. shares slid 8.7 percent after the packaging company cut its full-year profit outlook because of higher raw material and freight costs.

Worries about rising interest rates following Wednesday’s release of the Federal Open Market Committee’s minutes from its September meeting also pressured U.S. stocks.

“The market is coming to grips with the reality that the Fed may make financial conditions a little tighter than they originally thought,” said Paul Zemsky, chief investment officer of multi-asset strategies and solutions at Voya Investment Management in New York.

The Dow Jones industrial average fell 417.17 points, or 1.62 percent, to 25,289.51; the S&P 500 lost 47.59 points, or 1.69 percent, to 2,761.62; and the Nasdaq composite dropped 168.31 points, or 2.2 percent, to 7,474.39.

Among the few bright spots was Philip Morris International Inc., which rose 3.4 percent after the Marlboro cigarette maker topped analysts’ estimates for quarterly profit and sales.

Declining issues outnumbered advancing ones on the NYSE by a

3.72-to-1 ratio; on Nasdaq, a 3.43-to-1 ratio favored decliners.
…

Several major Russian companies are exploring ways to do deals abroad without using dollars, spurred on by a U.S. threat to broaden sanctions that have impeded access of some Russian firms to the international banking system.

The Kremlin has been pushing companies to conduct more deals using other currencies to reduce reliance on the dollar.

Russian Alrosa, the world’s biggest producer of rough diamonds in carat terms, said it had completed a pilot deal with a Chinese client using yuan in the summer and another non-dollar transaction with an Indian client.

Other companies working on similar transactions include energy firm Surgutneftegaz, agricultural company Rusagro and miner Norilsk Nickel.

Russia’s central bank said this week the amount of non-dollar dealings was growing, with the share of rouble settlements in the Russia-China and Russia-India goods trade now between 10 and 20 percent.

The share was higher in the service industry, it added.

But there are limits to how much business can be shifted.

Major companies still rely heavily on dollar deals and most of Russia’s foreign earnings come from oil sales priced in dollars.

In addition, foreign banks with major U.S. activities may still be wary of business with any entity under U.S. sanctions even if transactions are not in dollars, bankers say.

The United States and its allies imposed sanctions on Russia in 2014 over Moscow’s annexation of Crimea. Washington said in August more measures could follow, after accusing Moscow of using a nerve agent against a former Russian agent and his daughter in Britain.

The new steps, which could be announced in November, may target dollar dealings, U.S. lawmakers have said.

Speed helps

One challenge facing companies dealing in the rouble is the Russian currency’s volatility. Between April 6 and 11, after Washington imposed sanctions on Russian billionaire Oleg Deripaska and some of his companies, the rouble lost almost 13 percent of its value against the dollar.

Alrosa said it avoided the fluctuation risk by completing the Chinese deal in a day. U.S. dollar deals tend to take longer due to associated compliance checks required.

“An increase in the speed of operations is an advantage in such an operation,” the company said in an emailed statement.

Alrosa did not give a value for its China and India deals but said the Chinese buyer had bought a lot at its auction of diamonds of 10.8 carats or larger in Hong Kong. Alrosa data indicates that its lots are on average worth about $100,000.

Alrosa said the banker for its Chinese deal was Shanghai office of VTB, Russia’s second-largest bank. An industry source, asking not to be named, said Russia’s biggest bank lender Sberbank worked on the Indian deal.

VTB and Sberbank declined to comment.

The Chinese client settled its purchase in yuan, which VTB converted into roubles and transferred to Alrosa.

“We carried out the transaction itself in one day, in several hours,” Alrosa said, adding that on this occasion the currency move was in the client’s favor.

No currency hedging was required because of the speed of the deal, the company said, but the client had to open an account in VTB’s branch in Shanghai to complete the transaction.

Alrosa said it was also considering settlement for future deals in Hong Kong dollars, adding that other Chinese clients had shown interest in non-dollar transactions.

Non-dollar limits

But there are limits on how much of Alrosa’s business can switch to other currencies. China accounts for just 4 percent of its sales, while India accounts for 17 percent.

Among initiatives by other Russian firms, Surgutneftegaz has been pushing buyers to agree to pay for oil in euros instead of dollars, Reuters reported in September.

Russian farming conglomerate Rusagro told Reuters that some of its trading operations were in yuan and said this would increase with the expansion of business with China.

Russian nickel and palladium producer Norilsk Nickel said it was discussing the option of rouble payments with foreign customers which have rouble revenue, although it said it had not secured deals under those terms.
…

Hundreds of taxis on Thursday drove at a snail’s pace across the Polish capital Warsaw in protest at the ride-sharing app Uber and other unlicenced competitors.

Other cab drivers gathered in front of the justice ministry to call for legislation to regulate the industry.

Traditional cab operators argue that the Uber app and others like it represent unfair competition because their drivers can dodge the rules and restrictions that regulate professionals.

“There are 12,500 legal taxis in Warsaw and around 8,000 to 9,000 unregistered working for Uber, Taxify and a couple dozen other similar app-based operators,” said Jaroslaw Iglikowski, head of the Warsaw Taxi Drivers union.

“The app-based operators are taking around 30-35 percent of our overall business and up to 70 percent of night-time fares, especially on weekends,” he told AFP.

The protesting cab drivers claim in a petition they gave the justice minister that the country is losing more than 700 million zloty (160 million euros, $190 million) annually in unpaid taxes because of Uber and others like it.

The taxis dispersed in the early afternoon before rush hour, as the drivers had promised they would not cause traffic problems for city residents.

Uber has become one of Silicon Valley’s biggest venture-funded startups and has expanded its ride-sharing services to dozens of countries.

It does not employ drivers or own vehicles, but instead relies on private contractors using their own cars, allowing them to run their own business.

The app claims it is a service provider, connecting passengers with these freelance drivers directly and cheaply.

But critics and competitors around the globe say this allows it to flout costly regulations such as stringent licensing requirements for taxi drivers, who undergo hundreds of hours of training.

 

 

 
…

U.S. Treasury Secretary Steve Mnuchin has pulled out of an investment conference next week in Saudi Arabia, as Riyadh continues to face questions about its involvement in the disappearance and alleged killing of a U.S.-based Saudi journalist in Turkey.

Mnuchin made the announcement Thursday on Twitter, following numerous Western corporate chiefs who have dropped out of the three-day gathering that starts Tuesday in Riyadh.

As reports from Turkey have mounted alleging Saudi agents tortured, killed and dismembered Jamal Khashoggi two weeks ago inside Riyadh’s consulate in Istanbul, the chief executives announced they will not be attending the Future Investment Initiative conference.

Saudi Arabia has denied killing Khashoggi, a critic of the country’s de facto leader, Crown Prince Mohammed bin Salman.

Khashoggi wrote about Saudi Arabia in columns for The Washington Post.

Saudi Arabia says it says it will disclose the results of its investigation into his disappearance.

The investment conference is being organized by Saudi Arabia’s mammoth sovereign wealth fund and was being billed as a showcase for economic reforms advanced by Salman as he attempts to diversify the kingdom’s economy, for decades focused on its role as the world’s leading oil exporter.

The gathering had been dubbed “Davos in the Desert,” after the annual meeting of world economic leaders in Switzerland.

 

 

International Monetary Fund managing director Christine Lagarde said she is skipping the conference. JP Morgan chief executive Jamie Dimon and the heads of two top U.S. investment firms — BlackRock and Blackstone — have dropped out of the gathering. Top executives at the Ford auto manufacturing company and the MasterCard credit company have said the won’t be going, while the Google internet search engine company said that the head of its cloud computing business also would not be at the event.

The chiefs of European bankers BNP Paribas, Credit Suisse, HSBC, Standard Chartered and Societe Generale also rescinded acceptances to the conference.

 

 
…

In the late 1960s, while fledgling new retailers Walmart, Kohl’s, Kmart and Target were hard at work establishing a foothold in the hearts, minds and wallets of the American consumer, the nation’s dominant retailer was busy building the world’s tallest building.

In pouring its funds and focus into Chicago’s Sears Tower, America’s original super-store may have unwittingly become the architect of its own long, slow and painful demise.

“Walmart, the strongest of all those four, wasn’t anywhere near where Sears was for a couple of decades,” says James Schrager, professor of entrepreneurship and strategy at the University of Chicago’s Booth School of Business. “So, if Sears was on top of things, even in the early 80s, they could have been Target or a better version of Kmart, they could have been any of that. But they sat on their hands and built their tower in 1969 instead.”

It’s been a precipitous fall for the one-time retail powerhouse, which this week filed for bankruptcy after years of losses.

Established 123 years ago, Sears was literally the place where America shopped, as its tagline boasted.

Sears had everything from clothing and toys, to tools and appliances. It even sold housing kits. Thousands of Sears homes still stand across America today. For decades, American families eagerly awaited the delivery of the retailer’s several-inches thick mail order catalogues.

The secret to Sears’ success was being able to stay ahead of the market, according to Schrager.

From small stores in small towns, to big stores in downtowns in the 1920s; to a thriving catalogue business for smaller outposts, the main way America shopped right through to the 1950s and 60s; and then the switch to anchor stores in shopping malls through the late 1970s, Sears was always on the move, changing with the times.

But then the retailer seemed to stop evolving.

While the Walmarts and Targets of the world recognized the value of moving away from shopping centers and opening massive spaces in strip malls where customers could park right in front of the store, Sears stayed at the mall.

The competition also developed individual identities and expertise. Target became known for its upscale, fashion-oriented approach, Walmart for superior logistics in smaller towns, and Kohl’s had fashion-only soft goods, says Schrager.

Meanwhile, Sears seemed to lose its focus.

“Sears slowly lost track of its retail business by being fascinated with other things,” Schrager says. “In 1969, they began to build the tallest building in the world, that took a lot of time away from the business. They bought a stock brokerage company, which they had no business doing. They bought a real estate company, which they had no business doing. They developed a wonderful credit card called Discover, which has nothing to do with retailing.”

And along the way, the type of people at the top, the people making the business decisions, changed.

“Merchants are the lifeline of the business and Sears allowed them to wither,” Schrager says. “How do we know that? Because, after a while, Sears wasn’t getting a merchant to run the business. They were getting a financier or a marketer or someone other than a dirty-fingernails merchant who spent their life trying to beat the merchant down the street.”

Edward Lampert, Sears’ most recent CEO and majority shareholder, is a hedge fund billionaire. He took over in 2013 and expressed hopes of turning the company around.

Although Sears just filed for bankruptcy protection this week, Schrager believes the final death blow for the retailer occurred back in the early 1990s.

That’s when previous company executives decided to sell off the profitable parts of the business, while keeping the failing stores. In 1993, Sears shed the Discover credit card, its real estate company Coldwell Banker, and its Dean Witter Reynolds stock brokerage. Allstate, its insurance company, followed in 1995.

“There’s nothing left. Retail walks by you,” Schrager says. “You can’t stand still, and Sears has been standing still since 1969. That’s a very long time. The world has evolved two of three times since then…it’s over.”

While one-time competitors like Walmart, Target and Kohl’s continue to change and thrive, Kmart, which is now operated by Sears Holdings, is also in financial trouble because, Schrager says, it too failed to change with the times.

As for the one-time king of the pack, the next time consumers get excited about buying something at Sears could be when the bankruptcy court rules that the place where America once shopped must itself now be broken apart and sold off for the best possible price.
…

The Trump administration has again declined to label China a currency manipulator, but says it is keeping China and five other nations on a watch list.

“Of particular concern are China’s lack of currency transparency and the recent weakness in its currency,” U.S. Treasury Secretary Steven Mnuchin said in his biannual report to Congress.

“Those pose major challenges to achieving fairer and more balanced trade and we will continue to monitor and review China’s currency practices, including thorough ongoing discussions with the People’s Bank of China,” he said.

Mnuchin said China — along with Germany, India, Japan, South Korea and Switzerland — would be placed on a list of countries whose currency practices require what the report calls “close attention.”

Governments manipulate currency by keeping the exchange rates artificially low to make its goods and services cheaper on the world market. 

But that puts trading partners and others at a disadvantage. President Donald Trump promised throughout the campaign to label China a currency manipulator once he got into office, but so far he has declined to do so.

Instead, Trump has imposed tariffs on billions of dollars’ worth of Chinese imports to address what he says are unfair trade practices and the trade deficit.
…

Jubilant customers stood in long lines for hours then lit up and celebrated on sidewalks Wednesday as Canada became the world’s largest legal marijuana marketplace.

In Toronto, people smoked joints as soon as they rolled out of bed in a big “wake and bake” celebration. In Alberta, a government website that sells pot crashed when too many people tried to place orders.

And in Montreal, Graeme Campbell welcomed the day he could easily buy all the pot he wanted. 

“It’s hard to find people to sell to me because I look like a cop,” the clean-cut, 43-year-old computer programmer said outside a newly opened pot store.

He and his friend Alex Lacrosse were smoking a joint when two police officers walked by. “I passed you a joint right in front of them and they didn’t even bat an eye,” Lacrosse told his friend.

Festivities erupted throughout the nation as Canada became the largest country on the planet with legal marijuana sales. At least 111 pot shops were expected to open Wednesday across the nation of 37 million people, with many more to come, according to an Associated Press survey of the provinces. Uruguay was the first country to legalize marijuana.

Ian Power was first in line at a store in St. John’s, but didn’t plan to smoke the one gram he bought after midnight.

“I am going to frame it and hang it on my wall,” the 46-year-old Power said. “I’m going to save it forever.”

Tom Clarke, an illegal pot dealer for three decades, opened a pot store in Portugal Cove, Newfoundland, and made his first sale to his dad. He was cheered by the crowd waiting in line.

“This is awesome. I’ve been waiting my whole life for this,” Clarke said. “I am so happy to be living in Canada right now instead of south of the border.”

Promise of pardons

The start of legal sales wasn’t the only good news for pot aficionados: Canada said it intends to pardon everyone with convictions for possessing up to 30 grams of marijuana, the newly legal threshold.

“I don’t need to be a criminal anymore, and that’s a great feeling,” Canadian singer Ashley MacIsaac said outside a government-run shop in Nova Scotia. “And my new dealer is the prime minister!”

Medical marijuana has been legal since 2001 in Canada, and Prime Minister Justin Trudeau’s government has spent the past two years working toward legalizing recreational pot to better reflect society’s changing opinion about marijuana and bring black-market operators into a regulated system.

Corey Stone and a friend got to one of the 12 stores that opened in Quebec at 3:45 a.m. to be among the first to buy pot. Hundreds later lined up.

“It’s a once-in-a-lifetime thing — you’re never ever going to be one of the first people able to buy legal recreational cannabis in Canada ever again,” said Stone, a 32-year restaurant and bar manager.

Shop in stores, online

The stores have a sterile look, like a modern clinic, with a security desk to check identification. The products are displayed in plastic or cardboard packages behind counters. Buyers can’t touch or smell the products before they buy. A small team of employees answer questions but don’t make recommendations.

“It’s a candy store, I like the experience,” said Vincent Desjardins, a 20-year-old-student who plans to apply for a job at the Montreal shop.

Canadians can also order marijuana products through websites run by provinces or private retailers and have it delivered to their home by mail.

At 12:07 a.m., the Alberta Liquor and Gaming Commission tweeted: “You like us! Our website is experiencing some heavy traffic. We are working hard to get it up and running.”

Alberta and Quebec have set the minimum age for purchase at 18, while other provinces have made it 19.

No stores will open in Ontario, which includes Toronto. The nation’s most populous province is working on its regulations and doesn’t expect stores to operate until spring.

A patchwork of regulations has spread in Canada as each province takes its own approach within the framework established by the federal government. Some provinces have government-run stores, others allow private retailers, and some have both.

Canada’s national approach allows unfettered banking for the pot industry, inter-province shipments of cannabis and billions of dollars in investment — a sharp contrast with prohibitions in the United States, where nine states have legalized recreational sales of pot and more than 30 have approved medical marijuana.

Bruce Linton, CEO of marijuana producer and retailer Canopy Growth, claims he made the first sale in Canada — less than a second after midnight in Newfoundland.

“It was extremely emotional,” he said. “Several people who work for us have been working on this for their entire adult life and several of them were in tears.”

Linton is proud that Canada is now at the forefront of the burgeoning industry.

“The last time Canada was this far ahead in anything, Alexander Graham Bell made a phone call,” said Linton, whose company recently received an investment of $4 billion from Constellation Brands, whose holdings include Corona beer and Robert Mondavi wines.
…

Electric auto brand Tesla Inc. said it signed an agreement Wednesday to secure land in Shanghai for its first factory outside the United States, pushing ahead with development despite mounting U.S.-Chinese trade tensions.

Tesla, based on Palo Alto, California, announced plans for the Shanghai factory in July after the Chinese government said it would end restrictions on full foreign ownership of electric vehicle makers to speed up industry development.

Those plans have gone ahead despite tariff hikes by Washington and Beijing on billions of dollars of each other’s goods in a dispute over Chinese technology policy. U.S. imports targeted by Beijing’s penalties include electric cars.

China is the biggest global electric vehicle market and Tesla’s second-largest after the United States.

Tesla joins global automakers including General Motors Co., Volkswagen AG and Nissan Motor Corp. that are pouring billions of dollars into manufacturing electric vehicles in China.

Local production would eliminate risks from tariffs and other import controls. It would help Tesla develop parts suppliers to support after service and make its vehicles more appealing to mainstream Chinese buyers.

Tesla said it signed a “land transfer agreement” on a 210-acre (84-hectare) site in the Lingang district in southeastern Shanghai.

That is “an important milestone for what will be our next advanced, sustainably developed manufacturing site,” Tesla’s vice president of worldwide sales, Robin Ren, said in a statement.

Shanghai is a center of China’s auto industry and home to state-owned Shanghai Automotive Industries Corp., the main local manufacturer for GM and VW.

Tesla said earlier that production in Shanghai would begin two to three years after construction of the factory begins and eventually increase to 500,000 vehicles annually.

Tesla has yet to give a price tag but the Shanghai government said it would be the biggest foreign investment there to date. The company said in its second-quarter investor letter that construction is expected to begin within the next few quarters, with significant investment coming next year. Much of the cost will be funded with “local debt” the letter said.

Tesla’s $5 billion Nevada battery factory was financed with help from a $1.6 billion investment by battery maker Panasonic Corp.

Analysts expect Tesla to report a loss of about $200 million for the three months ending Sept. 30 following the previous quarter’s $742.7 million loss. Its CEO Elon Musk said in a Sept. 30 letter to U.S. securities regulators that the company is “very close to achieving profitability.”

Tesla’s estimated sales in China of under 15,000 vehicles in 2017 gave it a market share of less than 3 percent.

The company faces competition from Chinese brands including BYD Auto and BAIC Group that already sell tens of thousands of hybrid and pure-electric sedans and SUVs annually.

Until now, foreign automakers that wanted to manufacture in China were required to work through state-owned partners. Foreign brands balked at bringing electric vehicle technology into China to avoid having to share it with potential future competitors.

The first of the new electric models being developed by global automakers to hit the market, Nissan’s Sylphy Zero Emission, began rolling off a production line in southern China in August.

Lower-priced electric models from GM, Volkswagen and other global brands are due to hit the market starting this year, well before Tesla is up and running in Shanghai.
…

Western corporate chiefs are continuing to pull out of an investment conference in Saudi Arabia next week, distancing themselves from questions about Riyadh’s involvement in the disappearance and alleged killing of a U.S.-based Saudi journalist in Turkey.

At first, many of the business leaders reserved judgment on what happened to the missing journalist, Jamal Khashoggi. But as reports from Turkey have mounted alleging that Saudi agents tortured, killed and dismembered Khashoggi two weeks ago inside the country’s consulate in Istanbul, the chief executives have announced in recent days they will not be attending the three-day Future Investment Initiative conference in Riyadh starting Tuesday.

Saudi Arabia has denied killing Khashoggi, a critic of the country’s de facto leader, Crown Prince Mohammed bin Salman, in columns he wrote for The Washington Post. It says it will disclose the results of its investigation into his disappearance.

The conference is being organized by Saudi Arabia’s mammoth sovereign wealth fund and was being billed as a showcase for economic reforms advanced by the crown prince as he attempts to diversify the kingdom’s economy, for decades focused on its role as the world’s leading oil exporter. The gathering had been dubbed “Davos in the Desert,” after the annual meeting of world economic leaders in Switzerland.

JP Morgan chief executive Jamie Dimon and the heads of two top U.S. investment firms — BlackRock and Blackstone — have dropped out of the conference. Top executives at the Ford auto manufacturing company and the MasterCard credit company have said they won’t be going, while the Google internet search engine company said Tuesday that the head of its cloud computing business also would not be at the event.

The chiefs of European bankers BNP Paribas, Credit Suisse, HSBC, Standard Chartered and Societe Generale also rescinded acceptances to the conference.

U.S. President Donald Trump, who says Saudi Arabia should not be judged guilty in the incident while its investigation is being conducted, said Treasury Secretary Steven Mnuchin will decide by Friday whether to attend.
…

An Uber driver in New York City kidnapped a woman who fell asleep in his vehicle, groped her in the back seat and then left her on the side of a highway in Connecticut, federal authorities said Tuesday.

Harbir Parmar, 24, of Queens was charged in U.S. District Court with kidnapping. It wasn’t immediately clear whether he had an attorney.

The FBI said in court papers that Parmar picked the woman up in Manhattan at 11:30 p.m. on Feb. 21 for a trip to her home in White Plains, New York, about an hour away. The woman fell asleep, authorities said, and Parmar changed her destination to an address in Boston, Massachusetts.

The woman woke up to find the driver “with his hand under her shirt touching the top of her breast,” according to a criminal complaint unsealed Tuesday.

The woman reached for her phone, the complaint said, but Parmar took it from her and continued driving. She asked the driver to take her to the police station but the Parmar refused, the complaint said.

Parmar eventually left the woman on the side of Interstate 95 in Branford, Connecticut, about an hour’s drive east of her home. The complaint said the woman memorized Parmar’s license plate and called a cab from a nearby convenience store.

The woman later learned that Uber had charged her more than $1,000 for a trip from New York to Massachusetts.

Federal authorities and New York police condemned Parmar’s behavior as reprehensible.

“No one — man or woman — should fear such an attack when they simply hire a car service,” U.S. Attorney Geoffrey Berman said in a statement.

Uber said it blocked Parmar from using the app when the alleged kidnapping occurred.

“What’s been reported is horrible and something no person should go through. As soon as we became aware, we immediately removed this individual’s access to the platform. We have fully cooperated with law enforcement and will continue to support their investigation,” the company said in a statement.

The company’s CEO, Dara Khosrowshahi, said over the summer that he hoped to make Uber the “safest transportation platform on the planet,” after enduring years of criticism that it wasn’t doing enough to screen drivers. That included adding a new feature to the app that is supposed to alert both passengers and drivers if a car makes an unplanned stop.

The state of Colorado fined Uber $8.9 million last year for allowing people with criminal records to work as drivers. New York City requires ride-hailing service drivers to go through a licensing process similar to the one it has for traditional limo and car service drivers.

Federal authorities also charged Parmar with wire fraud, accusing him of overcharging Uber riders by inputting false information about their destinations.

The complaint said he also reported “false information” about cleaning fees that he charged to Uber riders on at least three occasions, including the woman he allegedly groped and left on the side of the road.
…

The White House has announced plans to negotiate separate trade deals with Britain, the European Union and Japan.

“We are committed to concluding these negotiations with timely and substantive results for American workers, farmers, ranchers and businesses,” U.S. Trade Representative Robert Lighthizer said Tuesday.

He added that the White House wanted to “address both tariff and non-tariff barriers and to achieve fairer and more balanced trade.”

As required by law, Lighthizer sent three separate letters to Congress announcing the intention to open trade talks.

He wrote that the negotiations with Britain would begin “as soon as it’s ready” after Britain’s expected exit from the European Union on March 29.

Lighthizer called the economic partnership between the U.S. and EU the “largest and most complex”in the world, noting the U.S. has a $151 billion trade deficit with the EU

Writing about Japan, Lighthizer said it is “an important but still often underperforming market for U.S. exporters of goods,” noting that Washington also has a large trade deficit with Tokyo.

The top Democrat on the Senate Finance Committee, Oregon’s Ron Wyden, cautioned the administration against making what he called “quick, partial deals.” 

“The administration must take the time to tackle trade barriers comprehensively, including using this opportunity to set a high bar in areas like labor rights, environmental protection and digital trade,” he said.

President Donald Trump imposed tariffs on European steel and aluminum exports earlier this year and has threatened more tariffs on cars as a reaction to what he said were unfair deals that put the U.S. at a disadvantage.
…

Major U.S. stock markets made strong gains Tuesday as strong earnings reports encouraged investors.

The Dow Jones industrial average gained 547.87 points, or 2.2 percent, to close at 25,798.42. The Standard & Poor’s 500 rose 59.13 points, or 2.2 percent, to 2,809.92 with all 11 sectors finishing higher. The Nasdaq composite, home to many tech stocks, jumped 214.75 points, or 2.9 percent, to 7,645.49.

New U.S. economic data showing gains in job openings and industrial production also helped buoy prices.

Tuesday’s Dow gain marked a sharp turnaround from some recent trading sessions, when worries about rising interest rates sent stock market indexes down steeply.

Those concerns also pushed down the value of European stocks, but the major indexes in France, Germany and Britain also posted gains Tuesday. 

 
…

U.S. employers posted the most jobs in two decades in August, and hiring also reached a record high, fresh evidence that companies are desperate to staff up amid solid economic growth.

Job openings rose a slight 0.8 percent to 7.14 million, the highest on records dating back to December 2000, the Labor Department said Tuesday. That is also far more than the 6.2 million of people who were unemployed that month.

The number of available jobs has swamped the number of unemployed for five straight months. Hiring has been solid, which has pushed down the unemployment rate to a nearly five-decade low of 3.7 percent. Strong demand for workers when so few are out of work.

President Donald Trump celebrated the report on Twitter, tweeting: “Incredible number just out… Astonishing! It’s all working!” Trump added that the stock market was “up big” and referenced “Strong Profits.”

Yet so far, pay raises have been modest. Average hourly earnings rose 2.8 percent in September compared with a year earlier. That’s much higher than several years ago, but below the roughly 4 percent gain that is typical when unemployment is so low.

It’s a sharp turnaround from the Great Recession and its aftermath. In 2009, there were as many as six unemployed workers for each available job. Now, that number has fallen below one.

Employers hired roughly 5.8 million people in August, the report showed. That is also the most on record, but that increase partly reflects population growth. The percentage of the workforce that found jobs in August ticked up to 3.9 percent from 3.8 percent in July. That matched an 11-year high first reached in May.

Job openings rose in August in professional and business services, which include mostly higher-paying positions in engineering, accounting and architecture, as well as temporary help. Postings in that category have jumped 27 percent from a year ago.

Construction firms are also desperate for workers, posting 298,000 open jobs. That’s nearly 39 percent more than a year ago. Job openings also increased in finance and insurance and health care.

Openings fell in August from the previous month in manufacturing, retail, and slipped slightly in hotels and restaurants.
…

Concerns about debt diplomacy on China’s expansive infrastructure megaproject — the Belt and Road — have become an increasing source of debate from Asia to Africa and the Middle East. In recent weeks, more than $30 billion in projects have been scrapped and other loans and investments are under review.

 

Public opposition is also testing the resolve of ruling authorities from Hanoi to Lusaka, the capital of Zambia, as concerns about Chinese investment build.

In late August, Malaysia’s newly elected Prime Minister Mahathir Mohamad canceled more than $20 billion in Belt and Road projects for railway and pipelines, and Pakistan lopped another $2 billion off plans for a railway following a decision late last year to cancel a $14 billion dam project, citing financial concerns. Nepal canceled its dam project last month and Sierra Leone announced last week that it was dropping an airport project over debt concerns.

 

In some countries such as Vietnam, it is just the idea of Chinese investment — against the backdrop of the Belt and Road — that has led to push back.

Following public protests, Vietnam recently decided to postpone plans for several special economic zones.

 

Several Belt and Road projects have seen setbacks in countries where debt concerns have coincided with political elections and a change of power — be it Pakistan, Malaysia or the Maldives, says economist Christopher Balding.

 

“The people in these countries are very worried about the level of debt that these countries are taking on in regard to China and I think that is very important to note,” Balding said. “It’s not just anti-China people that are driving this, but that there is a lot of concern on the ground in the countries about that.”

 

China says there are no political strings attached to its investments and loans. It also argues it is providing funding in places others will not. But Beijing’s takeover of a port in Sri Lanka last year and the sheer volume of Chinese investments along the Belt and Road project have done little to ease those concerns.

 

String of ports

 

Late last year, according to the New York Times, China agreed to forgive Sri Lanka’s debt in exchange for a 99-year lease of Hambanthota Port and 15,000 acres of surrounding land.

The government of Sri Lanka denies it divested land to a Chinese company, but the deal has convinced some that China is setting up debt traps to then take over the infrastructure that Chinese state-run companies build.

 

Hambanthota is one of 42 ports where China has participated in construction and operations, with more on the horizon.

In 2021, China will take over operation of one of Israel’s largest ports in Haifa. Beijing is also being eyed as a possible candidate for the development of Chabahar port in Iran, which is near the Iran-Pakistan border.

The port proposal remains in limbo, however, due to U.S. sanctions. And that’s not the only obstacle, according to David Kelly, research director at the Beijing-based group China Policy.

“It’s in the driest and most remote part of Iran,” Kelly said. “It looks like a real loser commercially, unless it handles a lot of oil.”

Analysts say the Middle East, with its oil money and deep pockets, is less at risk for debt traps.

 

However, the port that is most likely to follow in Sri Lanka’s footsteps is Djibouti, a strategically important country on the Horn of Africa, where China recently established its first overseas military base.

According to official figures, Djibouti’s debt is more than 88 percent of the GDP and China owns $1.4 billion of that. That kind of debt overhang could lead to the same type of concessionary agreements as in Sri Lanka, analysts note.

 

Debt traps

 

A report released earlier this year by Washington, D.C.-based Center for Global Development said 23 of the 68 countries where China is investing for Belt and Road projects are at high risk of debt distress. Another eight, including Djibouti, are vulnerable to debt distress linked to future projects.

 

China argues its investments are aimed at boosting trade and commerce and giving developing countries a leg up.

 

China Policy’s Kelly says places where the debt situation is more critical are countries such as land-locked and poverty-stricken Zambia. There, concerns are causing a very public push for the government to disclose the full burden of Chinese debt.

 

“The upset and upheaval in Zambia recently, where you’ve got African civil society coming out and making this case,” Kelly said, “That is always going to be more significant where you have the local people, making a local case.”

 

BRI indigestion

 

Oh Ei Sun, a senior fellow with the Singapore Institute of International Affairs, says cancellations and changes are what he calls Belt and Road indigestion.

Concerns about debt traps and debt diplomacy will not have an impact on China going forward, he says, but stops, starts and cancellations will continue.

 

Oh says China’s model of development — build infrastructure and the economy will grow — may have worked at home, but it doesn’t always fit along the Belt and Road.

 

“In many of these Belt and Road initiative countries, if you lay out the infrastructure, it doesn’t automatically mean that trade and investment will take place,” Oh said, “Some of these projects will have to be more attuned to the local requirements of particular countries.”
…

The U.S. government’s budget deficit hit $779 billion in the fiscal year that ended Sept. 30, while spending increased and tax revenues remained nearly flat, the Treasury said Monday.

It was the biggest deficit since 2012, and $113 billion more than the figure a year ago. The 2018 deficit amounted to 3.9 percent of the country’s more than $18 trillion annual economy, up from 3.5 percent last year.

The government’s deficit spending boosted the country’s long-term debt figure to more than $21 trillion, forcing the government to pay an extra $65 billion last year in interest on money the government has had to borrow to run its programs.

In all, government spending rose by $127 billion last year, while tax collections increased by $14 billion.

The Treasury said the annual deficit rose partly because corporate tax collections dropped by $76 billion after Congress approved cuts in tax rates for both businesses and individuals that were supported by President Donald Trump.

Mick Mulvaney, the government’s budget director, said the country’s “booming economy will create increased government revenues — an important step toward long-term fiscal sustainability. But this fiscal picture is a blunt warning to Congress of the dire consequences of irresponsible and unnecessary spending.”
…

Zimbabwe’s government says the country is emerging from a recent economic meltdown that saw shops run out of goods and motorists spend long hours in lines at gas stations. Economists say Zimbabwe’s crisis is not over, as people have no confidence in the currency or in President Emmerson Mnangagwa’s government.

For weeks now, there have been long and winding queues at most fuel stations in Zimbabwe, as the precious liquid has been in short supply. Lameck Mauriri is one of those now tired of the situation.

“We are really striving but things are tough to everyone,” said Mauriri. “I do not know how those in rural areas, how they are surviving, especially if in Harare it is like this. We are sleeping in fuel queues. There is not fuel, there is no bread, there is no drink. There is no everything. No cash, no jobs.”

For a decade, the country has been without an official currency and relied on U.S. dollars, the British pound and South African rand to conduct transactions. In the past three years, however, all three currencies have been hard to find, paralyzing the economy.

The introduction of bond notes — a currency Zimbabwe started printing two years ago to ease the situation — has not helped.

The bond notes were supposed to trade at par with the U.S. dollar; but, on the black market, a dollar now is now equal to close to three bond notes.

Prosper Chitambara, an economist of the Labor and Economic Development Research Institute of Zimbabwe says the bond notes are partly to blame for the price increases and shortages in the country.

“What is lacking in the economy, in the market is confidence. There is a distrust of the formal economic system,” said Chitambara. “The bond notes have definitely contributed a great deal to the current economic situation, a fallacy economic situation. What they have done is for example to increase money supply in the economy. And that money supply is not actually backed by significant productivity in the economy. That actually gives rise to general of inflationary pressures.”

He said the government’s recent introduction of a 2 percent tax on all electronic transactions pushed prices even higher and caused some shops to close.

Ndabaningi Nick Mangwana, Zimbabwe’s secretary in the Ministry of Information and Publicity, says the situation in the country is normal and there is no need for alarm.

“There is no shortage to oil itself, there is no challenge in terms of production of all these essential services,” said Mangwana. “That is why they are there if you go. There were a few people who panicked, closed a couple of shops, but those opened within hours. There was fake news and people panicked, but it is all under control.”

That is not exactly what seems to be the case on the ground. Some shops remain closed and prices continue rising. Long fuel lines remain the order of the day. 
…

The United States still aims to cut Iran’s oil sales to zero and does not expect restored oil sanctions against Tehran to have a negative impact on a market that is well-supplied and balanced, a senior U.S. official said on Monday.

U.S. special envoy for Iran, Brian Hook, was talking to reporters after a visit to India, a major importer of Iranian oil, and talks with officials from France, Britain and Germany before the start of a new round of U.S. sanctions on Nov. 4.

The three European countries have been trying to save the 2015 nuclear deal between Tehran and multiple global powers since U.S. President Trump announced in May that the United States would withdraw from the pact.

In a conference call from Luxembourg, where Hook was meeting European officials, he said that Iran uses oil revenue to support and fund terrorist proxies throughout the Middle East and that the U.S. goal is for countries to cut Iranian oil imports to zero as quickly as possible.

“We are working with countries that are reducing their imports to ensure that this happens,” he said.

Hook declined to answer questions on possible waivers on sanctions for countries that are reducing their imports but said the U.S. is confident that energy markets will remain stable.

“We are seeing a well-supplied and balanced oil market right now. We should focus on these fundamentals and not be distracted by the emotional and unbalanced claims coming from Tehran.”

Iran, OPEC’s third-largest producer, has repeatedly said that its oil exports cannot be reduced to zero because of high demand in the market.

Washington, meanwhile, plans to continue coordinating with oil producers and maintain U.S. supply.

“Our crude oil production increased by 1.65 million barrels in August compared to one year ago and that is expected to continue rising by as much as 1 million barrels a day within the next year,” he said.

Hook also said that European efforts to create a special purpose vehicle for trade with Tehran would find no demand because more than 100 foreign firms have indicated that they would be leaving the country.
…

More Americans are moving to smaller cities in search of a better quality of life.

They’re leaving places like Los Angeles, Chicago and New York for mid-sized cities such as Phoenix and Las Vegas, according to an analysis of data from the U.S. Census Bureau.

A huge draw for these second-tier cities is that the cost of housing consumes a much smaller chunk of people’s salaries. According to the U.S. Census Bureau, more than half of the people who move do so for housing-related reasons. They’re looking for a new or better home, cheaper housing, or to buy a home rather than rent.

It costs about $4,100 a month to rent a place in Manhattan. That’s almost two-thirds of New York City’s median household income of $83,500. Buying a home is even more out of reach. The average cost of a home in the area is $1.1 million.

More than half a million people left the New York boroughs of Manhattan, the Bronx, Brooklyn, and Queens over a five-year period between 2012 and 2017.

In Los Angeles, the metropolitan county with the largest outbound net domestic migration, rent costs about $2,100 a month — about 38 percent of average income. Houses cost around $630,000, almost 10 times the average annual salary of $66,000.

LA County lost about 381,000 people over a five-year period.

According to the report, the cost of living can be a lot less expensive in the Phoenix area, which welcomed more net domestic newcomers over the past five years — 221,000 people — than any other part of the country.

The average household income in Phoenix is about $63,000, rent is about $1,100 a month, and the median price of a house is $280,000 — that’s $350,000 less than in the LA metropolitan area.

In the Las Vegas area, the rent ($1,000) will only consume 21 percent of the average salary ($57,000) and purchasing a house would set a buyer back about $273,000.

 

The analysis found that housing is about two times cheaper in the top markets that attracted people than in the areas that are losing the most in terms of population.

Chicago appears to be an exception. People are leaving the Windy City to get away from high taxes. Property taxes are higher there than almost anywhere else in the United States.

It is not as though the places that are losing people are suffering due to the exodus. Eight of the 10 counties with the biggest net population losses are still growing overall because of births and immigration.
…

Sears has filed for Chapter 11 bankruptcy protection, buckling under its massive debt load and staggering losses. 

Sears once dominated the American retail landscape. But the big question is whether the shrunken version of itself can be viable or will it be forced to go out of business, closing the final chapter for an iconic name that originated more than a century ago.

Holdings will also close 142 unprofitable stores near the end of the year. Liquidation sales at these stores are expected to begin shortly. This is in addition to the previously announced closure of 46 unprofitable stores that is expected to be completed by November 2018.

The company, which started out as a mail order catalog in the 1880s, has been on a slow march toward extinction as it lagged far behind its peers and has incurred massive losses over the years. The operator of Sears and Kmart stores joins a growing list of retailers that have filed for bankruptcy or liquidated in the last few years amid a fiercely competitive climate. Some like Payless ShoeSource have had success emerging from reorganization in bankruptcy court but plenty of others haven’t, like Toys R Us and Bon-Ton Stores Inc. Both retailers were forced to shutter their operations this year soon after a Chapter 11 filing. 

“This is a company that in the 1950s stood like a colossus over the American retail landscape,” said Craig Johnson, president of Customer Growth Partners, a retail consultancy. “Hopefully, a smaller new Sears will be healthier.”

Given its sheer size, Sears’ bankruptcy filing will have wide ripple effects on everything from already ailing landlords to its tens of thousands of workers. 

Edward S. Lampert has stepped down from his role as CEO of the company, effective immediately. He will remain chairman of the board. The company’s board has created an Office of the CEO, which will be responsible for managing day-to-day operations during this process.

The filing, which is happening ahead of the crucial holiday shopping season, comes after rescue efforts engineered by Lampert have kept it outside of bankruptcy court – until now. 

Lampert, the largest shareholder, has been loaning out his own money for years and has put together deals to prop up the company, which in turn has benefited his own ESL hedge fund.

Last year, Sears sold its famous Craftsman brand to Stanley Black & Decker Inc., following its earlier moves to spin off pieces of its Sears Hometown and Outlet division and Lands’ End.

In recent weeks, Lampert has been pushing for a debt restructuring and offering to buy some of Sears’ key assets like Kenmore through his hedge fund as a $134 million debt repayment comes due on Monday. Lampert personally owns 31 percent of the company’s shares. His hedge fund has an 18.5 percent stake, according to FactSet.

“It is all well and good to undertake financial engineering, but the company is in the business of retailing and without a clear retail plan, the firm simply has no reason to exist,” said Neil Saunders, managing director of GlobalData Retail, in a recent analyst note.

Sears’ stock has fallen from about $6 over the past year to below the minimum $1 level that Nasdaq stocks are required to trade in order to remain on the stock index. In April 2007, shares were trading at around $141. The company, which once had 350,000 workers, has seen its workforce shrink to fewer than 90,000 people as of earlier this year.

The company has racked up $6.26 billion in losses, excluding one-time events, since its last annual profit in 2010, according to Ken Perkins, who heads the research firm Retail Metrics LLC. It’s had 11 years of straight annual drops in revenue. In its last fiscal year, it generated $16.7 billion in sales, down from more than $50 billion in 2008.

As of May, it had fewer than 900 stores, down from about 1,000 at the end of last year. The number of stores peaked in 2012 at 4,000, including its Sears Canada division that was later spun off.

In a March 2017 government filing, Sears said there was “substantial doubt” it would be able to keep its doors open – but insisted its turnaround efforts would mitigate that risk. 

But its losses continued into this year. In the fiscal second quarter ended Aug. 4, net losses in the quarter swelled to $508 million, or $4.68 per share, compared with a loss of $250 million, or $2.33 cents per share in the same quarter a year ago. 

Such financial woes contrast with the promise that Lampert made when he combined Sears and Kmart in 2005, two years after he helped bring Kmart out of bankruptcy. Back then, it operated 2,200 stores in total.

Lampert pledged to return Sears to greatness by leveraging its best-known brands and its vast holdings of land, and more recently planned to entice customers with a loyalty program. But it struggled to get more people through the doors or to shop online. 

Jennifer Roberts, 36 of Dayton, Ohio, had been a long-time fan of Sears and has fond memories of shopping there for clothes as a child. But in recent years, she’s been disappointed by the lack of customer service and outdated stores. 

“My mom had always bought her appliances from Sears. That’s where my dad got his tools,” she said. “But they don’t care about their customers anymore.” 

She said a refrigerator her mother bought at Sears broke after two years and it still hasn’t been fixed for almost a month with no help from the retailer. 

“If they don’t value a customer, then they don’t need my money,” said Roberts, who voiced her complaints on Sears’ Facebook page. 

Sales at the company’s established locations tumbled nearly 4 percent during its fiscal second quarter. Still, that was an improvement from the same period a year ago when it fell 11.5 percent. Total revenue dropped 30 percent in the most recent quarter, hurt by continued store closings. 

The bleak figures are an outlier to chains like Walmart, Target, Best Buy and Macy’s, which have been enjoying stronger sales as they benefit from a robust economy and efforts to make the shopping experience more inviting by investing heavily on remodeling and de-cluttering their stores.

For decades, Sears was king of the American shopping landscape. Sears, Roebuck and Co.’s iconic catalog featured items from bicycles to sewing machines to houses, and could generate excitement throughout a household when it arrived. The company began opening retail locations in 1925 and expanded swiftly in suburban malls from the 1950s to 1970s. But the onset of discounters like Walmart created challenges for Sears that have only grown. Sears faced even more competition from online sellers and appliance retailers like Lowe’s and Home Depot. Its stores became an albatross.

Store shelves have been left bare as many vendors have demanded more stringent payment terms, says Mark Cohen, a professor of retailing at Columbia University and a former Sears executive.

Meanwhile, Sears workers are nervous about what kind of severance they’ll receive if their store closes.

John Germann, 46, works full-time and makes $14 per hour as the lead worker unloading merchandise from trucks at the Chicago Ridge, Illinois store, which has been drastically reducing its staff since he started nine years ago. Germann now has only 11 people on his team, compared with about 30 a few years ago. 

“We’re doing the job of two to three people. It’s not safe,” he said. “We’re lifting treadmills and refrigerators.”

Real estate experts believe that Sears’ move to further shutter stores as part of its restructuring would be a mixed blessing for landlords. For the healthy malls, landlords would welcome a Sears departure, allowing them to cut up the space and fill it with several smaller successful stores that combined would bring in higher revenue. 

But for the struggling malls, Cohen says it will be a “death knell” since it will be harder for them to bring in new tenants. Many of these malls already have had difficulty filling in the void from J.C. Penney and Macy’s closures. 

Saunders of GlobalData Retail spared no criticism of Sears in his analyst note, listing failing after failing of the company.

“The problem in Sears case is that it is a poor retailer,” he wrote. “Put bluntly, it has failed on every facet of retailing from assortment to service to merchandise to basic shop keeping standards. Under benign conditions, this would be problematic enough but in today’s hyper-competitive retail environment it is a recipe for failure on a grand scale.” 
…