by Calculated Risk on 3/04/2009 06:48:00 AM

"We have not yet seen a pick-up in activity at our communities other than ordinary seasonal increases for this time of year."
Robert I. Toll, chairman and chief executive officer, March 4, 2009

Press Release: Toll Brothers Reports 1st Qtr 2009 Results

Toll Brothers ... today reported a FY 2009 first quarter net loss of $88.9 million ... which included pre-tax write-downs totaling $156.6 million.
...
Joel H. Rassman, chief financial officer, stated: "Given the numerous uncertainties related to sales paces, sales prices, mortgage markets, cancellations, market direction and the potential for and size of future impairments, it is particularly difficult in the current climate to provide guidance for the rest of FY 2009. As a result, we will not provide earnings guidance at this time."
...
FY 2009's first-quarter cancellation rate (current-quarter cancellations divided by current-quarter signed contracts) was 37.1% ...

Toll's normal cancellation rate is about 7%.

In summary: More losses. More write-downs. More cancellations. No guidance. No pick-up in activity.

by Calculated Risk on 3/03/2009 09:30:00 PM

Click on graph for larger image in new window.

Reader Nate suggests the S&P 500 is just tracing out the Mortgage Pig™. (ht Nate and IF)

* IF suggested the post title.

Mortgage Pig™ says: "In UR Poolz Killin your convexity."


For those interested, here are few sources for futures and the foreign markets.

Bloomberg Futures.

CBOT mini-sized Dow

CME Globex Flash Quotes

Futures from barchart.com

And the Asian markets.

And a graph of the Asian markets.

Best to all.

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.