The New York Times today ran a story that contained some disturbing economic news and puts a lot of the problems we're facing in terms those like me, who are not versed in all the nuances of how an economy works, into perspective. The story involved all the well known stores that have filed for bankruptcy, chiefly because they are selling items consumers can no longer afford because a larger share of their income is going to pay for gasoline and food. Some of the names on the list shocked me--Sharper Image and Levitz. The story forecast that Linens 'n' Things will file for bankruptcy before this week is out.
Other stores are drastically curtailing operations. Foot Locker plans to close 140 stores, Ann Taylor 117 and Zales jewelers 100.
What's worse, the changes in the bankruptcy laws enacted in 2005 will make it more difficult for many of these companies to survive. The Times quoted Sally Henry, a lawyer with a firm specializing in bankruptcy and the author of several books on the subject as saying “It’s no longer reorganization or even liquidation for these companies. In many cases, it’s evaporation.”