by Anonymous on 9/10/2008 08:24:00 AM

This headline in the WSJ caught my eye this morning. "Retailers Reprogram Workers In Efficiency Push." Do tell:

LANGHORNE, Pa. -- Retailers have a new tool to turn up the heat on their salespeople: computer programs that dictate which employees should work when, and for how long. . . .

AnnTaylor calls its system the Ann Taylor Labor Allocation System -- Atlas for short. It was developed by RedPrairie Corp., a retail-operations software firm based in Waukesha, Wisc. "We liken the system to an airplane dashboard with 100 different switches and levers and knobs," said AnnTaylor's Mr. Knaul. "When we launched that, we messed with five of them." Giving the system a nickname, Atlas, he said, "was important because it gave a personality to the system, so [employees] hate the system and not us."

But maybe Mr. Knaul should worry a bit more about what those other 95 switches and knobs do:

Mr. Knaul said the new system exceeded the company's targets for converting more browsers into buyers. He said that AnnTaylor hopes to refine the system, possibly with features that rank employees based on skills other than their sales proficiency, such as how well they operate cash registers.

Another option, Mr. Knaul added, was to begin using the system to more efficiently schedule managers.

I haven't been in an Ann Taylor store in several years. Last time I wandered into one, about 75% of the clothing was one of three shades of the same bright pink that every other retailer was loading up on, all slacks and trousers had the same super-low-rise waists that I don't wear, and anything I might have worn to work, like simple linen skirts or blouses, were dry-clean-only, which isn't my idea of what "business casual" dressing is all about. Either that, or the only sizes on the rack were fours or twelves. I didn't notice anyone having problems operating the cash registers, but then again I didn't get that far, given that if I want badly-fitting clothes in a ubiquitous color and style I can get them cheaper than Ann Taylor's prices. But I can certainly see why that chain needs aggressive salespeople to push the merchandise.

by Calculated Risk on 9/10/2008 07:53:00 AM

Here is the Lehman Press Release.

The conference call number is 800-369-1721 (domestic) or 517-308-9232 (international) at least ten minutes prior to the start of the conference call. The pass code for all callers is 7561430.

The conference call will also be accessible through the “Shareholders” section of the Firm’s Web site under the subcategory “Events and Presentations.” See here.

I'll post some remarks (plus see the comments).

Fuld: "significant deterioration" in 2nd quarter in credit markets.

Fuld: "final stages" of selling majority interest in IMD.

Fuld: "remain committed" to all alternatives.

Project 34% price drop on houses (stress case), compared to 18% decline in house prices so far (pretty quick, I think this is correct).

Reader Brian comments: "Alt-A is real mess. 18% DQ rate at this point, bound to get worse, is a horror show....Of course they are financing the REI spinoff, so there is no risk reduction unless REI can attract external funding"

by Calculated Risk on 9/10/2008 07:30:00 AM

Lehman cuts dividend, to sell majority stake in Neuberger, Spin-off CRE assets, report $3.9 Billion loss.

From Lehman: LEHMAN BROTHERS ANNOUNCES PRELIMINARY THIRD QUARTER RESULTS AND STRATEGIC RESTRUCTURING Excerpts:

Spin-off to Lehman Brothers’ Shareholders of Vast Majority of the Firm’s Commercial Real Estate Assets into a New, Separate Public Company
o Leaves Firm with Limited Commercial Real Estate Exposure
o Shareholders Retain Upside in Commercial Real Estate Portfolio
o Expected to be Completed in First Quarter of Fiscal 2009

Intention to Sell a Majority Interest in Investment Management Division
o Auction Process Highlights Value of Investment Management Business
o Expected to Result in Tangible Book Value Benefit of More Than $3.0 Billion
o Lehman Brothers Expects to Maintain the Majority of the Pre-Tax Income of the Investment Management Division
o Ongoing Strategic Relationship Maintained with Lehman Brothers

Much more in press release.

by Calculated Risk on 9/09/2008 11:38:00 PM

The WSJ has some updated statistics on malls in this article: Mall Glut to Clog Market for Years

Developers have built one billion square feet of retail space in the 54 largest U.S. markets since the start of 2000, 25% more than what they built during the same period of the 1990s, according to Property & Portfolio Research Inc. of Boston. U.S. retail space now amounts to 38 square feet for every person in those 54 markets, up from 29 square feet in 1983, the firm says.
...
David Simon, chairman and chief executive of Simon Property Group Inc., the largest U.S. mall owner with 323 malls, sees "a decade of little new development" and a shakeout. "There were a lot of projects that shouldn't have been built" in recent years, he said.

Update: The NY Times has a mall article too: A Squeeze on Retailers Leaves Holes at Malls

Some 6,500 chain stores are expected to close this year, the largest number since 2001, according to the International Council of Shopping Centers, a trade group.

Not only are there too many new projects being built, but vacancy rates are rising. Reuters reported for Q2: US retail property 2nd-qtr worst in 30 yrs - report

Strip malls ... saw average vacancies spike 0.5 percentage points to 8.2 percent, a level unseen since 1995 ...

Click on image for larger graph in new window.

This graph shows the strip mall vacancy rate since Q2 2007. Note that the graph doesn't start at zero to better show the change.

Too many new projects and rising vacancies rates suggests new mall construction will decline sharply. This is one of the three areas of new construction of Commercial Real Estate (CRE) were I expect a significant decline in investment over the next several quarters; there are investment in Malls, Hotels, and Office space.

by Calculated Risk on 9/09/2008 10:45:00 PM

Here is the Lehman Press Release.

The news will be released at 7:30 AM, the conference call is at 8 AM ET. You can listen to the call on the web here. I'll be awake (hopefully!) and blogging:

Lehman Brothers Holdings Inc. (NYSE: LEH) will announce its expected third quarter fiscal 2008 results as well as key strategic initiatives for the Firm on Wednesday, September 10, 2008 in a press release that will be issued at approximately 7:30 a.m. The press release will also be available on the Firm’s Web site, http://www.lehman.com.

A conference call to discuss the Firm’s expected financial results, outlook and strategy will be held at 8:00 a.m. ET that day. The call will be open to the public.

Members of the public who would like to access the conference call should dial 800-369-1721 (domestic) or 517-308-9232 (international) at least ten minutes prior to the start of the conference call. The pass code for all callers is 7561430. The conference call will also be accessible through the “Shareholders” section of the Firm’s Web site under the subcategory “Events and Presentations.” For those unable to listen to the live broadcast, a replay will be available on the Firm’s Web site or by dialing 800-337-5613 (domestic) or 402-220-9646 (international). The replay will be available approximately one hour after the event and will remain available on the Lehman Brothers Web site and by phone until 11:59 p.m. ET on September 17, 2008.
emphasis added

by Calculated Risk on 9/09/2008 07:01:00 PM

From MarketWatch: Lehman to report expected results Wednesday 7:30 am ET

Update: From TheStreet.com: Lehman in Free Fall as Default Fears Mount(hat tip JP)

Richard Bove, an analyst at Ladenburg Thalmann, predicted that the government would broker a private investment in or takeover of Lehman or one of its businesses overnight before the market opened on Wednesday.

Darn, I have to get to bed early tonight!

by Calculated Risk on 9/09/2008 06:27:00 PM

From MarketWatch: S&P cuts WaMu's outlook to negative from stable

Standard & Poor's Ratings Services late Tuesday ... lowered the outlook on Washington Mutual ... to negative from stable. ... "The outlook revision reflects the increasingly challenging housing and mortgage markets and their impact on WaMu's core mortgage franchise,"

What a surprise!

by Calculated Risk on 9/09/2008 04:50:00 PM

This is an hour show with guests: NY Times Floyd Norris, PIMCO's Mohamed El-Erian, NY Times Gretchen Morgenson and New York University Professor Nouriel Roubini. (hat tip Michael)

by Calculated Risk on 9/09/2008 04:38:00 PM

From Reuters: Goldman says still willing counterparty to Lehman

"Goldman is a willing counterparty to Lehman across all our businesses," a spokesman told Reuters.

That inspires confidence ...

by Calculated Risk on 9/09/2008 04:03:00 PM

The NYMEX is showing Light Sweet Crude closed at $102.16 per barrel today.

Bloomberg is showing the dated Brent Spot price at $98.52 per barrel.

Barchart.com is showing ICE Brent Crude Oil for Oct at $99.37 per barrel.

Whatever price you use, oil prices have fallen by almost one third since the peak in July.

So far so good on oil prices.

Note: My comment "so far so good" was referring to the impact of oil prices on the economy. I've been pointing out for sometime that if we are to avoid a severe recession, we probably needed oil price to fall sharply. My prediction earlier this year for oil prices to decline in the 2nd half of 2008 was based on demand destruction, lower subsidies in certain Asian countries, weaker demand growth in China, and a few other reasons.

Whether this will be enough to keep the recession mild to moderate (in terms of unemployment staying below 8%), we still don't know - but it will definitely help. And this will also help with inflation too - and keep the Fed from raising rates.