You might have heard on the news about Aloha Airlines shutting down operations in Hawaii after 50+ years of service.

Maybe you didn’t care because you fly American or United to the Islands from the mainland.

But airlines like Aloha did more than just fly passengers from the mainland or between islands. Like all the airlines, Aloha also carried cargo and mail on its planes. And, in fact, the company flew six flights a day of just cargo to the various Hawaiian Islands.

When the company went under, it wanted to continue its cargo business but GMAC Financing refused to give the company money to allow it to continue.

Suddenly, some of the islands that relied on Aloha’s cargo services for medical supplies, food, and mail, were without any way to get supplies.

As of two days ago from the Business Journal:

Neighbor Island businesses are scrambling to find alternatives to shipping goods now that Aloha Airlines Cargo has shut down.

Aloha dominated the interisland cargo business, flying about 85 percent of the cargo between Oahu and Kauai, Maui and the Big Island. As of Tuesday, none of its competitors had committed to trying to fill the gap.

Aloha’s biggest customer, Love’s Bakery of Honolulu, resorted to sending its baked goods on Delta Airlines to Los Angeles, then loading the goods aboard direct Delta flights to the Neighbor Islands.

While state leaders said they were exploring options, no one had a plan.

Someone WILL step in to fill the void- but it will take time.

Love’s Bakery said, for now, it’s eating the costs of flying its bread through LAX on a 16 hour journey to the other islands. So the bread is flying Delta to Los Angeles and then flying to the other islands that Delta flies direct. The company said it wasn’t going to disappoint customers after being in business since 1851. (Now THAT’S customer service.)

But if someone doesn’t act fast, how long can the company keep paying those costs to ship its bread?

Hawaii’s Congressman has called on the Governor to declare a state of emergency so military aircraft can be used to transport the cargo. Governor Linda Lingle rejected that proposition. From the Biz Journal:

“We are particularly focused on ensuring that critical supplies relating to health and safety continue to be transported uninterrupted,” Lingle said in a statement. “At this time, there is no indication that any critical supplies are not being shipped and delivered in a timely manner.”

Lingle, a Republican, also said she has rejected U.S. Rep. Neil Abercombie’s request that she declare an emergency or disaster, enabling the use of military aircraft to ship goods. Abercrombie is a Democrat who represents Honolulu.

“While I appreciate his concern, I have no plans to request an emergency declaration, and I believe his alerting the Secretary of Defense, Secretary of the Army, Secretary of the Air Force, TRANSCOM, USARPAC and PACAF is an overreaction,” Lingle said.

Aloha Airlines isn’t the only airline in trouble. What if United, American and Delta stopped flying to the cities on the mainland that aren’t profitable? Maybe there won’t be flights to parts of Nebraska anymore. Say bye-bye to most of the Dakotas. Maybe you won’t be able to fly into parts of Kansas or Utah.

But more than just the passengers, how does the freight get there?

Keep an eye on Hawaii. The longer the cargo isn’t running there, the more stresses on the economy. This isn’t the last we’ve heard of this.

And all because of one little ole airline.

I’m exhausted from watching all the earnings come in this week. Over 800 companies have reported this week.

Overarching theme:

Business is good as long as you have international exposure.

Also, the industrials have done far better than expected. This “recession” is only in the finanacials and the consumer. Manufacturing is humming along- especially if they sell overseas.

Several of the chemical company CEOs said that they aren’t seeing any slowdown in business at all. That is telling.

Of course, our economy is such a service driven economy, even if manufacturing is doing well it doesn’t mean the economy isn’t in the dumps.

The service sector is 90% of the economy. Despite all of the publicity given to Ohio and Pennsylvania and vanishing jobs- manufacturing is only 10% of the economy now.

The problem with the financials being in a crisis is that they are tightening credit on ALL businesses, including manufacturing. Its not going to help our economy to have loans called in, or lack of lending- especially to small businesses which are the bedrock of our economy.

Will the small businessman be able to get $50,000 from her local bank?

There is always the credit card option (to borrow for the business at the mega-high rates and/or play the credit card game of introductory rates etc.) but even that is being pulled in by lenders.

Lets hope the financial crisis is being contained so that the second half of 2008 isn’t a roller coaster ride for businesses.

We need manufacturing to stay strong. With the weak dollar, it’s all we’ve got at the moment.

For your stock investing, you might want to start looking at some of the old industrial companies like Crane (CR) or Caterpillar (CAT) who aren’t seeing a slowdown in business outside of North America.

The world is still open for business.

Hugo Chavez, President of Venezuela, has already “nationalized” several of the oil facilities in the country that were owned and operated by the likes of ConocoPhillips, ExxonMobil and Total.

Now, several months later, he’s at it again. This time it’s the cement makers. Because, after all, if only the government owned the cement companies, there would be more cheap homes built.

Right?

From the Wall Street Journal:

Venezuela said it will take majority stakes in the local units of Cemex SAB, Lafarge SA and Holcim Ltd. as it divulges the first details of a nationalization plan that will affect the world’s biggest cement producers.

The nationalization, announced last week, is designed to deflect criticism that the socialist government of Hugo Chávez isn’t delivering on its promises of new housing and other infrastructure projects, experts said.

“The Venezuelan state will take control of these companies. We told them all three will be subject to this [nationalization] measure,” Oil Minister Rafael Ramirez said on state television.

The plan announced by Mr. Ramirez mirrors Venezuela’s nationalization of the oil industry. Venezuela will purchase at least 60% of the local units of foreign cement companies operating in Venezuela.

No details were available on how much Venezuela intends to pay for the stakes — and how the cement companies will respond to any future offers.

In a statement Monday, Mexico-based Cemex expressed its willingness “to engage in a dialogue with the authorities to find a mutually satisfactory solution,” adding that the company was “confident that it has the support of authorities to guarantee the safety of its personnel and the integrity of its facilities” during negotiations.

Officials at the Venezuelan units of France’s Lafarge and Swiss-based Holcim didn’t return calls seeking comment.

If the nationalization of the oil companies are any indication, the cement companies will get pennies on the dollar for their “investment” in the country.

And what for Venezuela?

According to the Journal, since nationalizing the oil sector, oil production is actually down. Is anyone surprised? Did Chavez really think he could kick out highly skilled engineers and other oil personnel from, say, Exxon, and run the facilities as productively?

Of course not.

Less oil out of the ground means less money, in the long run, for Venezuela.

And so it will be the same with the cement manufacturers as well.

But it begs a bigger question: who will want to put ANY money into Venezuela now? Why would you open a factory there?

You wouldn’t.

International businesses are going to start taking a long look at Venezuela’s neighbors for expansion- including Columbia - which is booming. If the US trade agreement passes with Columbia- Bogota or Medellin might be the next place to be in Central America.

You heard it here first.

Did you go shopping this holiday weekend? I did. Apparently a lot of people did.

I was down on the Mag Mile in Chicago during a March snow storm (driving winds, heavy snow/ice.) It didn’t deter hundreds of people from hanging out at the Apple Store on Michigan Avenue.

The wait to check out was about 10 minutes.

I thought I was in a twilight zone episode (given the snow outside and the lines) and that it was really Christmas and not Easter.

Nope.

There really were 20 people waiting to buy iPods, iPhones, computers and assorted other gadgets.

I thought we were in a recession? You couldn’t tell by that store.

But maybe it’s not a good indicator of the economy, given the location of the store (the most heavily touristed street in Chicago) and that I did hear some accents among the customers (foreign tourists stocking up on things to take home at a 50% discount.)

But it wasn’t all accents overheard in the line.

Barron’s acknowledged the trend in an article this week on Best Buy. It started the article off with a few antecdotes of young men (in their early 20s) who rushed to the store to buy flat screen tvs and other video gadgets and games with their tax refunds.

That’s the American way!

What will they do with their stimulus checks? Hopefully buy more tvs!

The lure of the gadget is strong.

Conversely, I was also in some women’s clothing stores over the weekend and it was pretty much dead in those stores. One told me that the entire store was 25% off as soon as I walked in- even though there was no sign posted.

It’s mixed signals out there.

But the gadget realm seemed alive and well to me over the weekend.