2008-07-02marketwatch.com

Starbucks has admitted it was stung by the subprime mortgage mess in California and Florida, states that make up almost a third of the company's U.S. retail revenue...



Comments:

homerebound at 04:51 2008-07-03 said:
now retail companies are admitting that their entire business model was based on housing appreciation and the availability of cheap easy credit? I mean, this is coming from a company that sells coffee with an average per item sale of somewhere in the $3 range. There is something seriously wrong with this picture.

Here is the sad and disturbing part. They were right! I mean, they were not right to think it would last forever, but they were right to peg consumer disposable income to housing appretiation up until now.

This disaster is not over folks! I propose to rename this disaster from "credit crisis" to "consumer disposable income crisis". That is the real issue, is it not? Permalink

loansurgeon at 05:41 2008-07-03 said:
I must agree! I am sorry but I do not feel that their poor business decision to expand their locations to one on every corner should be blamed on the Mortgage Mess. I know of 2 starbucks literally across the street from each other???

They need to go look in the mirror and chalk this up to poor business on their part. I guess we need to blame the gas crisis on the Mortgage Mess too?

The gas crunch has had more effects on things than anything. Yes, we have a disaster in the mortgage industry right now but look at some of the things that have compounded this situation:

1. Credit card companies double their min payment requirements

2. Gas prices have doubled

3. Gas prices have caused groceries to rise substantially

4. Gas prices have caused most retail to increase prices

5. Gas has put the auto industry to a screaching halt

6. Gas prices have caused people to walk away from their big trucks/SUVs

7. The auto industry has laid off large percentage of workers due to lack of sales which are caused by gas prices.

I could keep going but I think you all get the idea.

Now, we need to step back at look at what is going on here. Our friends overseas saw the Mortgage Crisis hit and basically have chose to hit us where it hurts harder while we are down. I call this Economic Terrorism. They finally have figured out they don't need to bomb our financial district they will just raise prices until everyone starts turning on each other. I am sure a lot of you have seen people stressed, yelling and blaming others for their problems. Crime is on the rise and will continue.

Think about it, Economic Terrorism. Permalink

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