Chase to Invest in California Retail Branches

The equity markets seemed to be headed for positive territory on Tuesday, or at least they did in the morning, but slumped in the afternoon. In the end, the Dow Jones index was down a minuscule 25.41 points for the day, or 0.3 percent. The S&P 500 nudged up slightly for the day, 0.18 percent, and the Nasdaq likewise exhibited a small gain of 0.5 percent. In a refreshing bit of real estate news, J.P. Morgan Chase, which swallowed Washington Mutual and its many, many retail branches last year, has said that it’s going to spend a fair amount of money–$375 million–to rebrand and refurbish 708 branches in California, as well as open 30 more. It’s not a philanthropic gesture, of course. Chase is betting that the economy will eventually turn around, and it wants to be all over the place in California when it does. Singapore-based data provider Eurekahedge Pte. is reporting that hedge funds lost $350 billion worldwide in 2008, with the vast majority of the losses, about 90 percent, coming during the ill-starred fourth quarter. The Eurekahedge Hedge Fund Index, which tracks more than 2,000 funds, lost 12.3 percent last year. The money-market fund that “broke the buck” last fall in the early days of the Panic of 2008, and which added considerable fuel to the panic, is in more hot water. The Commonwealth of Massachusetts has accused Reserve Management Co. of lying about the safety of its funds. According to an administrative complaint against filed by the commonwealth’s Secretary of State, William Galvin, the fund mislead customers about the potential for losses, even though the fund held unsecured Lehman Brothers debt. Federal securities regulators are expected to file a similar civil complaint against Reserve, but that hasn’t happened yet. Only last week, Marcus Schrenker was just an obscure Indiana financial industry businessman up to his eyeballs in legal trouble. Now his 15 minutes of fame have arrived after he allegedly did a variation on the D. B. Cooper maneuver by parachuting out of an airplane in a vain attempt to fake his own death. So far he’s still on the lam, and but for the bad luck of the plane crashing on land instead of in the Gulf of Mexico, he might have gotten away with it. Could it be that other, less obscure financial cheats (say, Bernie Madoff) are slapping their foreheads and thinking, “Why didn’t I think of that?” At the National Retail Federation’s 98th Annual Convention & Expo this week in New York, Wal-Mart president and CEO Lee Scott ruminated on what, if any, lasting impression the recession will have on consumer shopping habits. Lee, who is retiring at the end of this month, said the change on consumer mindsets could be distinct and lasting. Such a change, if it proves to be the case, would have serious implications for the volume and directly of retail real estate development, even after the economy recovers. Lee said that he isn’t convinced that “you’re going to have the same immediate desire to go back to consumption and debt,” even when the economy finally turns better. “A lot of young people have learned what it’s like when you’re living on the edge and the bad times come. Their appetite is now towards more about living things differently.” One of Lee’s practices as head of Wal-Mart has been to meet with groups of about 50 ordinary shoppers on a monthly basis. During recent meetings, he said, he has noticed that some of them have given up certain non-essentials, such as dining out or going to the movies. “Every one of them had given up something and they were talking about how good they felt about doing that,” he said.