by Calculated Risk on 3/03/2009 08:32:00 PM

From Reuters: U.S. office furniture orders, shipments plunge in January

U.S. office furniture orders and shipments fell about 25 percent in January, reflecting the biggest year-over-year percentage declines since the 2001-02 recession, a trade group said.

The Business and Institutional Furniture Manufacturers Association said January orders fell 25 percent to $565 million and shipments fell 26 percent to $630 million.

BIFMA also lowered its 2009 forecast for orders to a decline of 26.5 percent, compared with its prior estimate of a drop of 11.6 percent.

Click on graph for larger image in new window.

This graph shows the actual consumption of office furniture in the U.S. (including imports) and the Business and Institutional Furniture Manufacturers Association forecast for 2009.

The slump in the office market - with rapidly rising office vacancies - is having a secondary impact on office suppliers. This is similar to what happened to the home furnishing bust over the last few years because of the bursting of the housing bubble. Based on this forecast, the U.S. office furniture market will probably be back to the 1994 to 1995 level.

by Calculated Risk on 3/03/2009 05:25:00 PM

From David Evans at Bloomberg: Hidden Pension Fiasco May Foment Another $1 Trillion Bailout (ht James & Bob)

Public pension funds across the U.S. are hiding the size of a crisis that’s been looming for years. Retirement plans play accounting games with numbers, giving the illusion that the funds are healthy.
...
The misleading numbers posted by retirement fund administrators help mask this reality: Public pensions in the U.S. had total liabilities of $2.9 trillion as of Dec. 16, according to the Center for Retirement Research at Boston College. Their total assets are about 30 percent less than that, at $2 trillion.

With stock market losses this year, public pensions in the U.S. are now underfunded by more than $1 trillion.

Evans points out that many pension plans have been funded based on optimistic projections of future investment returns. He gives several examples including:

The nation’s largest public pension fund, California Public Employees’ Retirement System, has been reporting an expected rate of return of 7.75 percent for the past eight years, and 8 percent before that, according to Calpers spokesman Clark McKinley.

Its annual return during the decade from Dec. 31, 1998, to Dec. 31, 2008, has been 3.32 percent, and last year, when markets tanked, it lost 27 percent.

There is much more in the article.

Note: Back in 2007 Evans wrote a great article on a Florida state run investment pool investing in SIVs.

by Calculated Risk on 3/03/2009 03:49:00 PM

The S&P 500 closed below 700 today at 696 and change. We are back to 1996 prices ...

Click on photo for larger image in new window. Photo credit: lama Reader lama just took this picture at the wildlife zoo in Phoenix. Lama suggests that "Black Swine" might be more in keeping with the Mortgage Pig theme!

Click on graph for larger image in new window.

By popular demand I've extend this graph back to 1990.

The low in 1996 was 598.48.

The second graph is from Doug Short of dshort.com (financial planner): "Four Bad Bears". (If not updated right way, Doug should update in a few minutes)



The 2nd worst bear market in the U.S. in 100 years.

Note that the Great Depression crash is based on the DOW; the three others are for the S&P 500.

by Calculated Risk on 3/03/2009 01:52:00 PM

Headline from MarketWatch: GM U.S. February sales down 53% to 126,170 units

Also from MarketWatch: Toyota U.S. sales down 39.8% to 109,583 units in February

Last month GM reported U.S. sales fell 48.9% compared to January 2008, so the numbers are still getting worse.

by Calculated Risk on 3/03/2009 01:05:00 PM

From the Journal of Commerce: Idle Box Fleet Reaches 1.35M TEUs (hat tip Vincent)

Idled ocean container capacity on March 2 reached a record 1.35 million TEUs with 453 ships without work as carriers continue to axe services in the face of collapsing cargo volumes and tumbling freight rates across all trade routes.

The jobless figure, up from 392 vessels of 1.1 million TEUs two weeks ago, is equivalent to 10.7 percent of the world cellular container ship fleet in capacity terms, according to AXS-Alphaliner, the Paris-based consultant.

This is the highest unemployment rate in the history of container shipping and is three times the 3.5 percent jobless figure in the depth of the 2002 bear market.

From the American Trucking Association: ATA Truck Tonnage Index Rose 3 Percent in January

Click on graph for larger image in new window.

The American Trucking Associations’ advanced seasonally adjusted For-Hire Truck Tonnage Index climbed 3 percent in January 2009, marking only the second month-to-month increase in the last seven months. Still, the gain did little to erase the revised 7.8 percent contraction in December 2008. In January, the seasonally adjusted tonnage index equaled just 104.7 (2000 = 100), its second-lowest level since October 2002. ...

Compared with January 2008, the index declined 10.8 percent, which was slightly better than December’s 12.5 percent year-over-year drop.

ATA Chief Economist Bob Costello said that there was no reason to get excited about January’s 3 percent month-to-month improvement. “Tonnage will not fall every month, and just because it rises every now and then doesn’t mean the economy is on the mend,” Costello said. “Furthermore, tonnage is contracting significantly on a year-over-year basis, which is highlighting the current weakness in the freight environment.”