Economy Watch: Americans Grumpy about Economy, Federal Budget
Few Americans think the country is going in the right direction economically; Wal-Mart tries a grocery-delivery service; and Bank of America gets dismissed from an MBS lawsuit.
By Dees Stribling, Contributing Editor
Consumer confidence might have shown a small uptick during the last month according to some surveys, but ask consumers a different question–is the economy going in the right direction?–and a different answer emerges. At least, that’s what a New York Times/CBS News poll found late last week: Only 26 percent of Americans think the “country is headed in the right direction,” while 70 percent would say that the country’s going you-know-where in a handbasket (which is the gist, if not quite the wording, of the poll).
A separate McClatchy-Marist poll found recently that 69 percent of Americans thought that the U.S. debt ceiling should not be raised. The pollsters did not, however, ask how the respondents thought that such a move would magically force the government toward a path of financial rectitude, or how they would feel about the government delaying certain payments (such as Social Security) to avoid the United States defaulting on its debt for the first time in history, with unknown consequences.
Other McClatchy-Marist polling showed that, with the exception of higher taxes on incomes of more than $250,000 a year, respondents don’t really have much appetite for cutting entitlement spending in the form of Medicare of Medicaid. A vast majority of Democrats opposed cuts to the programs (92 percent), but so did a sizable majority of Republicans (73 percent) and Independents (75 percent). Curiously, most self-identified members of the Tea Party movement (70 percent) also were against cuts to the two Great Society programs.
Wal-Mart tests online grocery sales
On Saturday Wal-Mart Stores Inc. started testing a service it calls Wal-Mart to Go, its version of Peapod that will allow shoppers to order a selection of food online and have it delivered. Though not exactly breaking new ground–a number of such operations exist besides Peapod, such as Safeway’s version; Fresh Direct; and Amazon Fresh–it’s always news when the world’s largest retailer makes a foray into something new, especially involving its grocery operations.
That’s because Wal-Mart is far and away the largest grocer in the United States, with a 33 percent market share, according to recent estimates by Janney Capital Markets. Kroger is its closest competitor, but it’s really no contest, seeing as Kroger commands only a 9 percent market share among grocers.
The Wal-Mart to Go test involves shipping groceries from the company’s San Jose, Calif. store, putting the orders in tote bags and delivering them in company-owned, temperature-controlled trucks within a pre-defined delivery area. Delivery charges start at $5.
B of A spits the hook in Countrywide MBS suit
Late last week, U.S. District Judge Mariana Pfaelzer granted Bank of America’s request to dismiss the bank from a lawsuit brought by investors who bought mortgage-backed securities from Countrywide Financial Corp., which Bank of America acquired in 2008. The bank successfully argued that it can’t be held responsible for Countrywide’s MBS shenanigans in disregarding its own guidelines for originating mortgages.
The investors, mainly pension funds, filed suit early last year on behalf of buyers of 427 separate offerings of MBS totaling about $352 billion, and asserted that Countrywide made false or misleading statements in its public offerings. Maybe so, but the judge found that the acquisition by Bank of America didn’t create a de facto merger giving rise to successor liability.
The markets were closed for the Good Friday holiday last Friday.