by Calculated Risk on 8/13/2009 01:51:00 PM

From HotelNewsNow.com: STR reports US performance for week ending 8 August 2009

In year-over-year measurements, the industry’s occupancy fell 7.5 percent to end the week at 65.9 percent. Average daily rate dropped 9.7 percent to finish the week at US$97.32. Revenue per available room for the week decreased 16.5 percent to finish at US$64.10.

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 7.3% from the same period in 2008.

The average daily rate is down 9.7%, and RevPAR is off 16.5% from the same week last year.

Comments: This is a multi-year slump. Although the occupancy rate was off 7.5 percent compared to last year, the occupancy rate is off about 11 percent compared to the same week in 2007.

As I noted last week, the end of July and beginning of August is the peak leisure travel period. The peak occupancy rate for 2009 was probably three weeks ago at 67%.

And that is far below normal ... and it is all downhill from here for the rest of the year.

Note: Graph doesn't start at zero to better show the change.

Business travel is off much more than leisure travel, so the summer months are not as weak as other times of the year. September will be the real test for business travel.

Meanwhile supply is still growing at about 3% this year, see here:

STR projects that at the end of 2009, supply will be up 3.0 percent, demand will be down 5.5 percent, occupancy will decline 8.4 percent, average daily rate will drop 9.7 percent, and revenue per available room will be down 17.1 percent.

Data Source: Smith Travel Research, Courtesy of HotelNewsNow.com

by Calculated Risk on 8/13/2009 11:31:00 AM

From Reuters: Bank of America sues Colonial for $1 bln in loans, cash

Bank of America Corp sued Colonial BancGroup Inc for more than $1 billion in loans and cash ... Bank of America, which was the collateral agent for certain loans of Ocala Funding LLC, said Colonial refused to return more than $1 billion of loans and cash which it held as a custodian, agent and bailee. Ocala Funding was a commercial paper vehicle sponsored by Taylor, Bean & Whitaker Mortgage Corp (TBW)....

Bank of America sought an emergency injunctive relief in a complaint filed with a U.S. federal court in Florida on Wednesday. ... The case is In re : Bank of America National Association vs Colonial Bank and John Doe, U.S. District Court, Southern District of Florida, Miami Division 1:09-cv-22384-AJ.

It appears the FDIC is doing a little housekeeping (SEC 8-K filing):

Colonial Bank ... received notice on August 10, 2009 from the Federal Deposit Insurance Corporation ... directing CBG Florida REIT Corp., an indirect subsidiary of the Bank, to exchange all outstanding shares of its Fixed-to-Floating Rate Perpetual Non-cumulative Preferred Stock, Class A, Series A ... for an equal amount of Fixed-to-Floating Rate Perpetual Non-cumulative Preferred Stock, Series A of BancGroup

Colonial appears to be in tatters, and my guess is the FDIC will seize the bank, before they find a buyer for the assets, and operate the bank as conservator. (like with IndyMac last year).

by Calculated Risk on 8/13/2009 10:09:00 AM

From RealtyTrac:

RealtyTrac ... today released its July 2009 U.S. Foreclosure Market Report™, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 360,149 U.S. properties during the month, an increase of nearly 7 percent from the previous month and an increase of 32 percent from July 2008. The report also shows that one in every 355 U.S. housing units received a foreclosure filing in July.

“July marks the third time in the last five months where we’ve seen a new record set for foreclosure activity,” noted James J. Saccacio, chief executive officer of RealtyTrac. “Despite continued efforts by the federal government and state governments to patch together a safety net for distressed homeowners, we’re seeing significant growth in both the initial notices of default and in the bank repossessions.”

Something to remember: questions have been raised before about the RealtyTrac numbers (see Foreclosure numbers don’t add up), and RealtyTrac has only been tracking these numbers since 2005. For California, I use the DataQuick numbers for NOD activity (released quarterly), and available since the early '90s - but that is just one state.

by Calculated Risk on 8/13/2009 08:31:00 AM

On a monthly basis, retail sales decreased 0.1% from June to July (seasonally adjusted), and sales are off 8.3% from July 2008 (retail ex food services decreased 9.3%).

The following graph shows the year-over-year change in nominal and real retail sales since 1993.

Click on graph for larger image in new window.

To calculate the real change, the monthly PCE price index from the BEA was used (July PCE prices were estimated as the average increase over the previous 3 months).

Real retail sales declined by 8.4% on a YoY basis.

The second graph shows real retail sales (adjusted with PCE) since 1992. This is monthly retail sales, seasonally adjusted.

NOTE: The graph doesn't start at zero to better show the change.

This shows that retail sales fell off a cliff in late 2008, and may have bottomed - but at a much lower level.

Here is the Census Bureau report:

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for July, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $342.3 billion, a decrease of 0.1 percent (±0.5%)* from the previous month and 8.3 percent (±0.7%) below July 2008. Total sales for the May through July 2009 period were down 9.0 percent (±0.5%) from the same period a year ago. The May to June 2009 percent change was revised from +0.6 percent (±0.5%) to +0.8 percent (±0.2%).

Maybe the cliff diving is over, but retail sales are still at the bottom of the cliff ...

by Calculated Risk on 8/13/2009 08:30:00 AM

The DOL reports weekly unemployment insurance claims increased to 558,000:

In the week ending Aug. 8, the advance figure for seasonally adjusted initial claims was 558,000, an increase of 4,000 from the previous week's revised figure of 554,000. The 4-week moving average was 565,000, an increase of 8,500 from the previous week's revised average of 556,500.
...
The advance number for seasonally adjusted insured unemployment during the week ending Aug. 1 was 6,202,000, a decrease of 141,000 from the preceding week's revised level of 6,343,000.

Click on graph for larger image in new window.

This graph shows the 4-week moving average of weekly claims since 1971.

The four-week average of weekly unemployment claims increased this week by 8,500 to 565,000, and is now 93,750 below the peak of 18 weeks ago. It appears that initial weekly claims have peaked for this cycle.

The number is still very high (at 558,000), indicating significant weakness in the job market. The four-week average of initial weekly claims will probably have to fall below 400,000 before the total employment stops falling.

The DOL report shows seasonally adjusted insured unemployment at 6.2 million, down from a peak of about 6.9 million. This raises the question of how many unemployed workers have exhausted their regular unemployment benefits (Note: most are still receiving extended benefits, although this is about to change).

The monthly BLS report provides data on workers unemployed for 27 or more weeks, and here is a repeat of that graph ...

The blue line is the number of workers unemployed for 27 weeks or more. The red line is the same data as a percent of the civilian workforce.

According to the BLS, there are almost 5.0 million workers who have been unemployed for more than 26 weeks (and still want a job). This is 3.2% of the civilian workforce.

It is more difficult to calculate the number of workers who have exhausted their extended claims, but that number is expected to rise sharply over the next few months.