by Calculated Risk on 4/16/2009 08:13:00 AM

From the WSJ: Mall Titan Enters Chapter 11

Mall owner General Growth Properties Inc. sought bankruptcy protection early Thursday in one of the largest real-estate failures in U.S. history ...

The bankruptcy will have far-reaching implications for the mall industry, including putting pressure on already declining property values of U.S. malls ...

The Mall is Flattened ...

by Calculated Risk on 4/16/2009 12:58:00 AM

From MarketWatch: China's economy expands 6.1% in first quarter

Gross domestic product expanded 6.1% in the first quarter from a year earlier, after expanding 6.8% in the fourth quarter, government data showed Thursday.
...
The Chinese government said Thursday that recent economic data showed "positive changes with better performance than expected."

A spokesman for the National Bureau of Statistics in a statement Thursday cited improvement in agriculture and a steady increase in industrial production, despite falling profits.

However, the bureau also warned that problems remain, including a fall in demand for Chinese exports, reduced government revenue and increased difficulties on employment.

"The national economy is confronted with the pressure of slowdown," the spokesman said.

China reports GDP growth on a year-over-year basis, so this is the growth from Q1 2008 (as opposed to quarterly growth annualized like in the U.S.). Since growth was fairly robust early last year, this suggest GDP is probably slightly positive in the most recent quarter.

by Calculated Risk on 4/15/2009 09:43:00 PM

From CNNMoney: Obama launches mortgage rescue plan

The Treasury Department announced Wednesday the first six participants to sign up for President Obama's plan. They include three of the nation's largest banks: JPMorgan Chase (JPM, Fortune 500), which will get up to $3.6 billion in subsidy and incentive payments; Wells Fargo (WFC, Fortune 500), $2.9 billion; and Citigroup (C, Fortune 500), $2 billion. The others are GMAC Mortgage, $633 million; Saxon Mortgage Services, $407 million; and Select Portfolio Servicing, $376 million.
...
The modification plan calls for the servicer to reduce interest rates so that the monthly obligation is no more than 38% of a borrower's pre-tax income, and then the government would kick in money to bring payments down to 31% of income. Servicers can also reduce the loan balance to achieve these affordability levels. The government will share in the cost, up to the amount the servicer would have received if it had reduced the interest rates.

Only loans where the cost of the foreclosure would be higher than the cost of modification would qualify. Also, Treasury will not provide subsidies to reduce rates to levels below 2%.

This is the Making Home Affordable plan.

by Calculated Risk on 4/15/2009 05:46:00 PM

From Zach Fox at the North County Times: Mortgage defaults hit new high, spread to upscale neighborhoods

Mortgage delinquencies hit a new high in March ... according to a report released Tuesday.

The report also showed that notices of default, the first step in the foreclosure process, have spiked in the region's tonier neighborhoods ---- places that, until now, have avoided the mass foreclosures elsewhere ---- while appearing to have reached a plateau in lower-end regions, which have already been hammered.

In fact, areas such as Valley Center and Rancho Bernardo shot up to be among the leaders in North County for most foreclosure notices per 1,000 houses.
...
Default notices shot to new highs in areas of Carlsbad, Rancho Bernardo and Rancho Penasquitos. On the other hand, notices in foreclosure-prone neighborhoods such as Oceanside and Escondido were below peaks reached earlier.

In fact, one region of Rancho Bernardo saw more default notices in March per 1,000 homes than Oceanside's 92057 ZIP code ---- the most foreclosure-prone neighborhood in North County over the last two years.

Defaults: Movin' on up!

by Calculated Risk on 4/15/2009 04:01:00 PM

From Zero Hedge blog:

Some very ugly credit card charge-off data just out from Capital One. The February annualized rate of 8.06% has spiked by over 1% month-over-month to the current 9.33%, a very troubling deterioration ...

Allow me to add a graph ...

Click on graph for larger image in new window.

This graph shows the COF annualized credit card charge-off rate since January 2005.

Notice the spike in 2005 associated with a surge in bankruptcy filings ahead of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA).

Credit card charge-offs in March (annualized) were almost as high as the peak in 2005 (9.33% in March compared to 9.75% in October 2005)

And a market graph too from Doug Short of dshort.com (financial planner): "Four Bad Bears".

This is the 2nd worst S&P 500 / DOW 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.