by Calculated Risk on 11/30/2008 09:41:00 PM

UPDATE Dec 15, 2008: Please see Tanta: In Memoriam for photos, remembrances, links to Tanta's writing, Tanta's charities and stories about her.

My dear friend and co-blogger Doris “Tanta” Dungey passed away early this morning. I would like to express my deepest condolences to her family and friends. Photo: Tanta in 2004 (from her sister Cathy).

From David Streitfeld at the NY Times: Doris Dungey, Prescient Finance Blogger, Dies at 47

The blogger Tanta, an influential voice on the mortgage collapse, died Sunday morning in Columbus, Ohio.

Tanta, who wrote for Calculated Risk, a finance and economics blog, was a pseudonym for Doris Dungey, 47, who until recently had lived in Upper Marlboro, Md. The cause of death was ovarian cancer, her sister, Cathy Stickelmaier, said.
...
Tanta used her extensive knowledge of the loan industry to comment, castigate and above all instruct. Her fans ranged from the Nobel laureate Paul Krugman, an Op-Ed columnist for The New York Times who cited her in his blog, to analysts at the Federal Reserve, who cited her in a paper on “Understanding the Securitization of Subprime Mortgage Credit.”

She wrote under a pseudonym because she hoped some day to go back to work in the mortgage industry, and the increasing renown of Tanta in that world might have precluded that. Tanta was Ms. Dungey’s longtime family nickname, Ms. Stickelmaier said.

From CR to Tanta’s many readers, fans and internet friends: Tanta enjoyed writing for you, chatting with many of you in the comments, and corresponding with you via email. She told me several times over the last few months how much she enjoyed discussing current events with you.

Tanta worked as a mortgage banker for 20 years, and we started chatting in early 2005 about the housing bubble and the changes in lending practices. In 2006, Tanta was diagnosed with late stage cancer, and she took an extended medical leave while undergoing treatment. At that time I approached her about writing for this blog, and she declined for a simple reason – her prognosis was grim and she didn’t expect to live very long. To her surprise, after aggressive treatment, her health started to improve and she accepted my invitation. When she chose an email address, it reflected her surprise: tanta_vive ... Tanta Lives!

Armed with a literary background and extensive knowledge of the mortgage industry, Tanta wrote about current events with deep insight and wit. Here is the introduction to one of her posts in 2006: Let Slip the Dogs of Hell

I still haven’t gotten over the fact that there’s a “capital management” group out there having named itself “Cerberus”. Those of you who were not asleep in Miss Buttkicker’s Intro to Western Civ will recognize Cerberus; the rest of you may have picked up the mythological fix from its reprise as “Fluffy” in the first Harry Potter novel. Wherever you get your culture, Cerberus is the three-headed dog who guards the gates of Hell. It takes three heads to do that of course, because it’s never clear, in theology or finance, whether the idea is to keep the righteous from falling into the pit or the demons from escaping out of it (the third head is busy meeting with the regulators).

Tanta wrote a number of posts detailing the inner workings of the mortgage industry. These posts covered a wide range of topics, from mortgage servicing, to everything you want to know about mortgage backed securities (MBS), to reverse mortgages. She called these posts “The Compleat UberNerd” and in typical fashion she noted:

An “UberNerd” is someone who is compelled to understand how things work in grim detail, even if the things in question are tedious in the extreme …”

Tanta liked to ferret out the details. She was inquisitive and had a passion for getting the story right. Sometimes she wouldn’t post for a few days, not because she wasn’t feeling well, but because she was reading through volumes of court rulings, or industry data, to get the facts correct. She respected her readers, and people noticed.

Felix Salmon at Condé Nast Portfolio.com, wrote on Nov 7, 2007 wrote:

“Tanta is one of the best financial writers in the world, and explains complex ideas with wit and great clarity."

Paul Krugman at the NY Times complemented Tanta several times, recently writing:

“The great thing about this age of blogs is the way people who really know something about a subject can quickly weigh in, without being filtered through Authority.”

Even researchers at the Federal Reserve referenced Tanta’s work: From Adam Ashcraft and Til Schuermann: Understanding the Securitization of Subprime Mortgage Credit, credit on page 13:

Several point raised in this section were first raised in a 20 February 2007 post on the blog http://calculatedrisk.blogspot.com/ entitled “Mortgage Servicing for Ubernerds.”

Tanta was also extremely funny. She introduced the Muddled Metaphor Index (MMI) and Excel Art featuring the Mortgage Pig, and she was the originator of a number of phrases in use today, like “We’re all subprime now!”

This is a very sad day and I know many of you are in shock. Tanta was our teacher. She generously shared her knowledge with all of us. I doubt she knew how many lives she touched; her insights, spirit and passion lives on in her writings – and in all of you.

Tanta Vive!

by Calculated Risk on 11/30/2008 05:49:00 PM

From MarketWatch: Trump Entertainment to miss interest payment

Trump Entertainment Resorts will have to skip a $53.1 million interest payment scheduled for Monday on its 8.5% senior secured notes due 2015 in order to maintain sufficient liquidity.

The casino operator has a 30 day grace period to make the payment. Not the best of times for casinos ...

by Calculated Risk on 11/30/2008 02:59:00 PM

Some anecdotes from the Financial Times: Black Friday sales suggest longer stay in red (hat tip Mark)

[B]y FAO Schwarz, the queue stretched half way along the toy store. “Usually it’s all the way around the block,” said Ariel, manning a stand selling fluorescent paintings of nearby landmarks, who estimated his own sales were down 70 per cent.
...
The thin crowds allowed tourists to take photographs of each other posing in front of Tiffany & Co’s fir-lined windows and Bergdorf Goodman’s display of boxing polar bears without the inconvenience of having to wait for other shoppers to pass. Tiffany’s main floor was unusually calm.

Janet Hoffman, managing partner at Accenture’s North American retail consultancy, said that initial reports from around the country suggested that shoppers were focusing on basic items rather than luxuries, and were hunting out discounts.

And from Reuters: US holiday sales view still weak after weekend rush (hat tip Joshua)

[A]n early rush to stores was ... not likely to change a weak outlook for the season, analysts said on Sunday.

Early results from the Black Friday weekend, which begins one day after U.S. Thanksgiving, showed that sales grew both in stores and online.
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[Richard Hastings, a consumer strategist with Global Hunter Securities LLC] still expects total retail sales over the holiday period of November, December and January to fall 6 percent to 8 percent from last year.

by Calculated Risk on 11/30/2008 01:58:00 PM

This is a pretty optimistic take from the National Retail Federation: NRF Survey Finds Black Friday Gets Holiday Season Off to Energetic Start

Though the holiday season is far from over, retailers across the country are breathing a collective sigh of relief after shoppers headed to stores and websites in droves over the weekend. According to the National Retail Federation's 2008 Black Friday Weekend survey, conducted by BIGresearch, more than 172 million shoppers visited stores and websites over Black Friday weekend, up from 147 million shoppers last year.*

Shoppers spent an average of $372.57 this weekend*, up 7.2 percent over last year’s $347.55. Total spending reached an estimated $41.0 billion.

"Pent-up demand on electronics and clothing, plus unparalleled bargains on this season’s hottest items helped drive shopping all weekend," said NRF President and CEO Tracy Mullin. " Holiday sales are not expected to continue at this brisk pace, but it is encouraging that Americans seem excited to go shopping again."

Friday was clearly the busiest day of the weekend with 73.6 million people hitting stores and websites for doorbuster sales. Though traffic did subside after Friday, retailers were also buoyed by two-day sales as 56.9 million people shopped on Saturday, up from 48.3 million last year, while another 26.2 million people planned to shop on Sunday. Thanksgiving Day also continues to increase in importance as the number of people who shopped on Thursday was up 48 percent over last year (16.2 million people vs. 10.9 million people).
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Bargains appeared to be so good that people have more of a jumpstart on shopping. According to the findings, Americans have completed more slightly shopping than they had one year ago (39.3% vs. 36.4%), indicating that traffic and sales over the next several weeks will moderate.

"Though retailers should be encouraged by strong traffic and sales over the weekend, consumers are still being cautious," said Phil Rist, Executive Vice President, Strategic Initiatives, BIGresearch. "Weekend shoppers indicated that they are still sticking to a budget and thinking carefully before making any holiday purchases."
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NRF continues to project that holiday sales will rise 2.2 percent this year to $470.4 billion.
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*Spending data includes Thursday, Friday, Saturday and projected spending for Sunday.

by Calculated Risk on 11/30/2008 11:37:00 AM

From MarketWatch: Black Friday sales chalk up 3% gain from last year

Strong discounts brought U.S. consumers to the stores on "Black Friday" ... with estimated sales rising 3% from last year, according to industry analyst ShopperTrak RCT Corp.
...
"While this is an encouraging start for retailers, there's no guarantee these deep discounts will continue after Black Friday weekend, which could slow spending," said Bill Martin, co-founder of privately-held ShopperTrak.

"Additionally, consumers have just 27 days to shop this year as opposed to 32 in 2007, which may catch some procrastinating consumers off guard, leading to lower sales levels," he said.

Key points:

Although sales were up slightly, this was due to some heavy discounting (that might not continue).

this will be a short shopping season.

by Calculated Risk on 11/29/2008 09:17:00 PM

Just returned from Joshua Tree (awesome trip)....

From the LA Times: Black Friday shoppers spend -- with caution

Holiday sales grew 2.4% to $460.2 billion last year compared with the previous year, according to the National Retail Federation. Many retail experts are now saying that if this season's sales figures are comparable, it will be a good year.

And although thousands of shoppers hit the stores across Southern California, industry experts worried it still wasn't enough to save Christmas.

"I don't think the holiday has a chance at all. No way," said Marshal Cohen, chief industry analyst at market research firm NPD Group. "This year, that spirit is gone."

Desperate for a strong day of sales, retailers took no chances and opened their stores earlier, slashed prices even further and offered discounts on entire purchases.

"Everything seems like it's 50% off or 2 for 1, or they're running specials until noon," said Jackie Fernandez, a retail partner at accounting firm Deloitte & Touche, who was at Glendale Galleria to survey the action. "It's just endless."

From the WSJ: Shoppers Hit Stores but Mood Is Subdued

Black Friday's impact has been muddled this year by a month-long blitz of early promotions by retailers hit by shoppers' penny-pinching tendencies amid the economic downturn.

The early number are always a little confusing, but this is a short buying season, and retailers are discounting heavily, so I expect the numbers to be dismal.

by Calculated Risk on 11/29/2008 08:22:00 AM

I've written several times about Temecula as an example of exurbia in California.

Look at Temecula on this map. San Diego is far to the south - living in Escondido is a tough enough commute to work in San Diego. And Orange County is an even more difficult drive to the west.

Note: you can move the map around to see the relationship of Temecula to San Diego, Riverside and Orange County.

My earlier posts focused on housing in Temecula, but one of the key industries in exurbia has been ... what else ... construction. So not only are a large percentage of the homes in foreclosure, but commercial real estate is getting hit especially hard.

From the North County Times: Report sees rising office vacancies in 2009

The Grub & Ellis/BRE Commercial report said the space glut will really take hold in the Temecula Valley area, which has had an especially heavy emphasis on real estate-related office tenants.

At the peak of the market, around 2006, 45 percent of Temecula Valley office tenants were escrow, real estate, mortgage and title companies, said Mark Esbensen, a Grubb & Ellis managing director who helped prepare the report. Much of that space is now being vacated.
emphasis added

by Calculated Risk on 11/28/2008 09:27:00 PM

And for some reason, a little U2 from The Joshua Tree:

by Calculated Risk on 11/28/2008 04:30:00 PM

I'm lost in the middle of the Mojave desert (not really lost - just hiking) - so I might lose my connection. Here is the site to check for bank failures.

The FDIC main page.

And the Failed Bank List.

Since the FDIC closed three banks last week, my guess is there will be no closures this week.

by Calculated Risk on 11/28/2008 10:35:00 AM

From the WSJ: More Risks in Store for Retailers

Friday could be black for retailers in more ways than one. Traditionally it is the day that retailers start to break even for the year. This time it could be the moment when some accept reality and start making plans to scale back.

For those that do, there is a serious concern: exposure to long store leases.
...
In strong markets, leases can be sold to new occupants. When replacement tenants are scarce, however, landlords often extract a hefty fee to break a lease.

This is definitely not a strong market - and trying to downsize could be costly for some retailers. Between a rock and a hard place ... maybe Black Friday will bail them out.