RSS Feed by Calculated Risk on 6/04/2009 03:09:00 PM
Thursday, June 04, 2009
Report: SEC to Charge Angelo Mozilo with Insider Trading
Headline from the WSJ: The SEC is expected to approve civil fraud charges against former Countrywide executives as soon as today.
From CNBC: SEC to Charge Ex-Countrywide CEO: Sources
The SEC will charge Angelo Mozilo, former chairman and CEO of Countrywide Financial, with insider trading, according to people familiar with the situation.
The SEC will also charge the company's former chief operating officer, David Sambol, and former financial chief, Eric Sieracki, with securities fraud for failing to disclose the firm's relaxed lending standards in its 2006 annual report.
The charges, which are expected to be announced by the SEC later today, will not be accompanied by any criminal indictments.
Hotel Occupancy Rate Falls to 51.6%
by Calculated Risk on 6/04/2009 12:24:00 PM
Note: some of the decline in occupancy rate is seasonal, and the rate should increase during the Summer months - especially since leisure travel has not declined as much as business travel and Summer has a higher mix of vacation travel (see: Hotels: "By the numbers" )
From HotelNewsNow.com: STR reports US performance for week ending 30 May 2009
In year-over-year measurements, the industry’s occupancy fell 10.2 percent to end the week at 51.6 percent. Average daily rate dropped 9.6 percent to finish the week at US$93.00. Revenue per available room [RevPAR] for the week decreased 18.9 percent to finish at US$47.96.
Click on graph for larger image in new window.This graph shows the YoY change in the occupancy rate (3 week trailing average).
The three week average is off 11.4% from the same period in 2008.
The average daily rate is down 9.6%, so RevPAR is off 18.9% from the same week last year.
Report: Investors Seeking to Buy Assets of Corus
by Calculated Risk on 6/04/2009 09:53:00 AM
From Bloomberg: Corus Bankshares Said to Draw Interest From Colony, Related
... Colony Capital LLC and ... Related Cos. have indicated they may seek to buy the assets of Corus Bankshares Inc. ...From the Corus 10-Q in May:
Corus ... hired Bank of America Corp. to solicit capital this month or sell the entire firm to avoid being shuttered ... Investors may offer to buy the lender while it’s still in business or to purchase its assets out of receivership, said the people, who requested anonymity because the process isn’t public.
...
Federal regulators found that Corus was undercapitalized and may place the bank into receivership if it fails to satisfy capital requirements, according to the May filing. Its nonperforming assets more than quadrupled to $2.5 billion as of March 31, the filing showed. It had reserves of $338.6 million and reported a first-quarter loss of $285 million.
emphasis added
In its report dated April 6, 2009, our independent registered public accounting firm stated that our net losses raise substantial doubts about our ability to continue as a going concern. Our ability to continue as a going concern is in doubt as a result of the continued deterioration of our loan portfolio and is subject to our ability to service our existing loans in a manner that will return the Company to profitability or, in the alternative, identify and consummate a strategic transaction, including the potential sale of the Company.This is similar to BankUnited, except we don't have a date. Something to watch for tomorrow.
...
The Bank may be subject to a federal conservatorship or receivership if it cannot comply with the OCC Order, the Prompt Corrective Action requirements, or if its condition continues to deteriorate.
Unemployment Claims: 621 Thousand
by Calculated Risk on 6/04/2009 08:35:00 AM
The DOL reports on weekly unemployment insurance claims:
In the week ending May 30, the advance figure for seasonally adjusted initial claims was 621,000, a decrease of 4,000 from the previous week's revised figure of 625,000. The 4-week moving average was 631,250, an increase of 4,000 from the previous week's revised average of 627,250.
...
The advance number for seasonally adjusted insured unemployment during the week ending May 23 was 6,735,000, a decrease of 15,000 from the preceding week's revised level of 6,750,000.
Click on graph for larger image in new window.This graph shows weekly claims and continued claims since 1971.
Continued claims declined slightly to 6.73 million after increasing for 19 consecutive weeks. This is 5.0% of covered employment.
Note: continued claims peaked at 5.4% of covered employment in 1982 and 7.0% in 1975. So this isn't a record as a percent of covered employment.
The four-week average of weekly unemployment claims increased this week by 4,000, and is now 27,500 below the peak of 7 weeks ago. There is a reasonable chance that claims have peaked for this cycle, but it is still too early to be sure, and if so, continued claims should peak soon.
The level of initial claims (over 621 thousand) is still very high, indicating significant weakness in the job market.
In other employment news, the Monster Employment Index declined slightly in May:
The Monster Employment Index edged two points lower in May, as U.S. online recruitment activity eased slightly following a seasonal rise in April. Year-over-year, the Index was down 29 percent, a slight improvement from the previous month, indicating the rate of slowdown in the labor market may have stabilized.
