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Dear Mr. Berko:

Dear D.L.:

I’ve begun to notice a new feeling among people working at banks, department stores and restaurants and folks employed in the service industry. They’ve almost become friendly. I said “almost” because it’s been so long since a store clerk has been friendly I’ve forgotten what it’s like. I spoke with a customer service representative at Bank of America Corp. headquarters and heard care in his voice. I spoke with the order desk at Charles Schwab, and the lad there made me feel as if my call was meaningful to him.

Watch for these changes. People are becoming nice again, perhaps because the excessive hubris of the past dozen years has boomeranged, and the chickens have come home to roost. Perhaps people are becoming nice again because most of us are sailing on the same boat with shipmates who have been gored by the same Wall Street bull and the same Washington ox. Perhaps folks are becoming nice again because they realize the economy is in a recession that’s going to get a lot deeper, and they’re concerned about keeping their jobs, their homes, health insurance and food on the table. Perhaps people are becoming nicer because our common-sense genes now prevail over our consumption genes and we realize that conspicuous consumption and convenience technology have never contributed to the quality of our lives.

It may have taken the collapse of Wall Street, the implosion of the mortgage markets and the decimation of our banking system to bring us back to being good neighbors again. In the coming years, as the economy contracts, businesses will close, restaurants will go under, traffic will be lighter, retailers will shorten hours, personal incomes will fall and demand for goods and services will decline. But the successful retailers will be those who are consumer-oriented, who give personal service and personal commitment, who demonstrate real appreciation for your business and who want you to be pleased enough to recommend their establishment to a friend.

But all of this excludes a big-box retailer like Circuit City Stores Inc. (CC-35 cents), which is antithetical to all of the above. Management believes that customer commitment ends with the sale and that customer service is for wimps. However, I think fewer consumers are making big-ticket purchases for entertainment centers, 6-foot television sets and fancy high-tech electronics.

I think management’s decision to open 50 new stores in fiscal 2008-2009 ranks up there as one of the dumbest decisions in American corporate history since the production of the Edsel. Moreover, CC’s cash position has crashed some 70 percent, and I can’t fathom a single compelling reason to be optimistic. That said: I’d not sell your 3,000 shares.

The company has less than $60 million in debt and a book value of a few pfennigs over $5. This company is worth more dead than alive. Pray that acting CEO James Marcum pulls the plug now rather than continue building up losses that will erase book value. CC, in my opinion, is doomed.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@adelphia.net. © Copley News Service