by Calculated Risk on 9/11/2009 04:09:00 PM

While we wait for the FDIC ...

From Grant McCool at Reuters: U.S. probes AIG executives-law enforcement source

U.S. investigators are probing the former head of American International Group Inc's Financial Products unit, Joseph Cassano, and other executives for securities fraud, a law enforcement source familiar with the case said on Friday.

The source said that a grand jury may be impaneled this month in New York to consider potential charges that executives failed to disclose the value of toxic assets to the bailed-out insurance company's outside accountants and shareholders.

And, coincidentally, the S&P 500 is at about the same level as on 9/11 - eight years ago.

Click on graph for larger image in new window.

The first graph shows the S&P 500 since 1990.

The dashed line is the closing price today.

The S&P 500 is up 54% from the bottom (366 points), and still off 33% from the peak (522 points below the max).

The S&P 500 first hit this level in February 1998; over 11 years ago.

The second graph is from Doug Short - Instead of comparing the markets from the peak (See: the Four Bad Bears), Doug Short matched up the market bottoms for four crashes (with an interim bottom for the Great Depression).

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

by Calculated Risk on 9/11/2009 02:00:00 PM

Bando: Someone who lives in an abandoned home.

Here are photos of the property.

From the LA Times: Wells Fargo exec used Malibu Colony home lost by Madoff-duped couple, neighbors say

Bernard L. Madoff's massive fraud stunned some of the wealthy denizens of Malibu Colony, especially when a couple devastated by the scheme surrendered their oceanfront home to Wells Fargo Bank.

But some neighbors say the real shocker came when they saw one of the bank's top executives spending weekends in the $12-million beach house and hosting eye-catching parties there. What's more, Wells Fargo spurned offers to show the property to prospective buyers, a real estate agent said.

Contrast this to the following Reuters story: Eviction patrol heats up on U.S. foreclosures (ht Ken)

[D]eputies enforcing home evictions in Anaheim find mold, backed-up plumbing, marijuana crops, abandoned grandparents and the occasional suicide.
...
One common task these days is serving eviction notices to people who have done nothing wrong -- who rent properties that have fallen into foreclosure, or are repossessed to recover unpaid debts.

"They are shocked and surprised," [Orange County Sheriff's Deputy Ramona Figueroa] said as she went on her rounds. "And here I am giving them a five-day notice and they explain that just five days earlier the homeowner was at the home collecting rent."

With 17,000 homes going into foreclosure in this Southern California county in the first half of 2009, Figueroa has found her caseload in the last year getting heavier and harder to bear.

by Calculated Risk on 9/11/2009 12:25:00 PM

Note: Last year Labor Day was a week earlier (Sept 1st in 2008, Sept 7th this year) and that made the comparison last week more difficult, and the comparison easier this week.

From HotelNewsNow.com: STR weekly numbers show improvement in easy comp week

With the Labor Day holiday weekend falling a week later than 2008, the year-over-year comparisons for the week ending 5 September 2009 were not as harsh as usual,according to Smith Travel Research.

Overall the U.S. hotel industry’s occupancy fell 1.4 percent to end the week at 53.4 percent, ADR dropped 8.6 percent to US$92.20, and RevPAR decreased 9.9 percent to finish at US$49.28.

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 7.1% from the same period in 2008.

The average daily rate is down 8.6%, and RevPAR is off 9.9% from the same week last year.

Earlier this year business travel was off much more than leisure travel. So it was expected that the summer months would not be as weak as earlier in the year. The next few weeks will be the real test for business travel, and for the hotel industry.

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

by Calculated Risk on 9/11/2009 10:01:00 AM

From MarketWatch: Consumer sentiment improves in early Sept, UMich

Consumer sentiment improved sharply in early September, according to media reports on Friday of the Reuters/University of Michigan index. The consumer sentiment index rose to 70.2 from 65.7 in August.

Although this is being reported as a "sharp increase" and above expectations, sentiment is still low - and this is just a rebound to the June levels.

Click on graph for larger image in new window.

Consumer sentiment is a coincident indicator - it tells you what you pretty much already know.

This graph shows consumer sentiment and the unemployment rate. There are other factors impacting sentiment too - like gasoline prices - but until the unemployment rate starts to decline, consumer sentiment will probably stay fairly low.

by Calculated Risk on 9/11/2009 09:08:00 AM

Press Release: FedEx Corp. First Quarter Earnings to Exceed Guidance

FedEx expects ... a continued modest recovery in the global economy. ...

“Despite some encouraging signs in the global economy, it is difficult to predict the timing and pace of any economic recovery. Revenue per shipment declined year over year in each of our transportation segments, as fuel surcharges declined significantly and we continue to face a very competitive pricing environment combined with significant overcapacity in the LTL freight market.” ... said Alan B. Graf, Jr., FedEx Corp. chief financial officer.
emphasis added

UPS and FedEx are usually good indicators for the economy. The increase in earnings (compared to guidance) was due to international volumes and cost cutting, not domestic volumes.

Still no signs of green shoots in the U.S.