Walmart Losing Streak Continues, Anti-Union Store Closing Illegal in Canada

wal-mart-protest-690x388New Orleans     There can’t be much joy these days in Bentonville, Arkansas, home of Walmart and its buddies.  The litany of woes just keeps piling up.  Five consecutive quarters of reduced financial returns has to lead the list.  In the land of the 1% you can just about get away with murder if you’re making enough money, but now that the emperor is increasingly walking down the superstore aisles naked, and people are starting to notice.

Bribery in Mexico and accusations of the same in India and China have cost Walmart almost a billion in legal fees and whatnot to try and cleanup for example.  The financial press, normally so soft and bullish about the company, pointedly noticed recently the number of high level big whoops that had exited from the company and the board, many with big footprints on their rear ends, no matter how many press releases to the contrary.  Even the Chinese government has jumped them for the quality of their food in its stores after years of patty cake treatment.

Adding to this litany of woes is a long overdue slap down up north as the Supreme Court of Canada ruled that the company was dead wrong in closing its store in Quebec and despite all of its protestations, the Court was clear that the Jonquiere store was closed in 2005 because the workers had successfully organized a union with the United Food and Commercial Workers (UFCW).  The court in a 5-2 decision upheld an earlier arbitrator’s decision saying essentially the same thing.  The store had been organized in 2004 and when contract negotiations ended in an impasse, the company closed the store claiming insufficient returns.  The court has now returned the case to the arbitrator to determine the amount of back pay owed to the 200 workers put on the street.

Will the company learn something from all of this?  I doubt it.  They told the Wall Street Journal that they were reviewing their options.  What’s to review?  They just lost at the highest court level in Canada, so they have nowhere else to run and hide.  Unfortunately, this is Walmart, so their strategy will be more delay.  They are a decade out from the time they shut the store down.  I would bet they will also try to appeal the arbitrator’s back pay award once it is determined, and try to buy another couple of years to plead for court review of that as well.  While the UFCW argues that Walmart is learning a lesson that might inspire more workers in Canada to take a shot at organizing the company, the company is trying to send the message that sure, “take your best shot,” and then look at the lengths we will go to before you see a single looney after maybe fifteen years.

Nonetheless, the clock finally seems to be ticking on this anti-union, anything goes behemoth.  When they were expanding around the US and the globe, Wall Street could tolerate anything.  Now that their returns are slackening and their fast dealing is unraveling the brand, it could be that even their anti-union mischief is finally running out of time as well.

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Little Change on Foreclosure Modifications but Subprime Loans are Back

mortgagedeniedNew Orleans        In the US we are seven years out from the Great Recession, depending on how you count the pain and mark the scars.  Homeowners have lost their homes through 7 million foreclosures in that period.  More than 9 million homeowners are still underwater, owing more than the value of their homes now, with the banks, like vultures, still knocking on their doors even while they pay billions in penalties for their bad, which is to say criminal, misbehavior.

Meanwhile Jacob Lew, the new Treasury Secretary, amid notices that his predecessor, the Wall Street flunky, Timothy Geithner, even admitted he wished he had done a little bit more about millions of Americans that lost their homes, announced an update on the billions approved for foreclosure modifications.   Seems that of the $38 billion set aside to help these desperate homeowners there’s still $24 billion left unspent after all of these years.  I don’t want to go all Tea Party on this, but the answer to the riddle about when was the last government funded program that was unable to spent over 60% of its money in over 5 years when millions are suffering is any program to help homeowners controlled by banks pretending to help their victims.  Oh, and what was Lew’s pronouncement.  Well, damn, he’ll extend the program another year until 2016 and make a couple of small changes, none of which include finally allowing what everyone agrees is the only solution, being principal reduction.

And, if you want to buy to buy a home now and are on the wrong side of the 1%, getting a loan has been “forget about it!”   Credit evaporated a long time ago and given the setbacks in the jobs market and the general economy we could almost count the number of people with perfect credit on one hand.  Working with families for whom the dream of unblemished credit is less likely to ever be experienced than an all-expenses paid visit to Shangri-La or the chance of winning the lottery, subprime loans opened the door to home ownership at the price of a couple of extra points of interest until you could refinance and prove out.  In fact, one of the biggest obstacles to rebuilding New Orleans after Katrina and the dawn of the recession was the disappearance of a subprime loan market that could have significantly helped repopulate whole areas of the city where people were still short $20 to $40000 and with damaged credit couldn’t fill the gap.

News that there might be a return of the subprime market is something I see as a good thing.  The fact that some of the companies making the return are headquartered in Calabasas, California, the Los Angeles suburb that was the Mecca of Countrywide Mortgage, also means that some of those hotshots might be trying to sneak back through a crack in the windows as well.  But, as I used to say in one negotiating session after another during those days, our members needed these loans, we just didn’t need the predatory abuses by the brokers and many of the companies paying bonuses for loans more fiction than fact and more about coercion than credit.  The demand is real.  According to the Times,

More than 12.5 million people who might have qualified for a home loan before the crash have been shut out of the market, Mark Zandi, the chief economist for Moody’s Analytics, estimates. Members of minority groups have especially suffered; blacks and Hispanics are rejected by mortgage lenders far more often than whites.

Has Treasury made note of any of this?  Are we doing anything to help lower income, working families, especially African-American and Hispanic borrowers to recover the huge losses of citizen wealth in the recession.  Oh, no way!

As one of the newly minted subprimers says,

 “If you’re self-employed, you’re hosed…If you just started a job, you’re hosed. If you get a bonus, you’re hosed. Just got a severance payment? Can’t count that. I don’t have to do a lot to be a lender. I just have to be normal.” Banks have forgotten that loans are collateralized by the home itself, he said.   Some employees of conventional banks might agree. Barry Boston, for example, recently left one of those banks for a job at Athas, frustrated by having to turn down so many perfectly fine borrowers and because of the endless paperwork involved in closing a loan. “I couldn’t stand it anymore,” he said. “The wind had been completely sucked out of my sails.”

When bankers are even disgusted with banks, how can even the head of the Treasury Department miss the memo that things have to change, and now!

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