by Calculated Risk on 11/30/2009 03:55:00 PM

From CNBC: Dubai World to Restructure About $26 Billion of Debt

Dubai World said it would try to restructure about $26 billion of debt, far less than the nearly $60 billion in total liabilities that the Dubai government's investment arm had as of August.
...
"Creditors need to take part of the responsibility for their decision to lend to the companies," said Abdulrahman al-Saleh, director general of Dubai's Department of Finance.

Hmmm ... that statement could apply to mortgage lenders in the U.S. too.

by Calculated Risk on 11/30/2009 01:20:00 PM

Click on graph for larger image in new window.

Unfortunately the data for this index only goes back to 2002.

Note: Any reading below 100 shows contraction for this index. The index is a year-over-year index, so the headline index might be slow to recognize a pickup in business, but the underlying details suggests ongoing weakness.

From the National Restaurant Association (NRA): Restaurant Industry Outlook Improved Somewhat In October as Restaurant Performance Index Posted First Gain in Three Months

[T]he National Restaurant Association’s ... Restaurant Performance Index (RPI) ... stood at 98.0 in October, up 0.5 percent from its September level. However, the RPI still remained below 100 for the 24th consecutive month, which signifies contraction in the index of key industry indicators.

“Although restaurant operators continue to report soft same-store sales and customer traffic levels, they are somewhat more optimistic about improving conditions in the months ahead,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “Restaurant operators reported a positive six-month economic outlook for the fourth consecutive month, and the proportion planning for capital expenditures rose five percentage points.”
...
The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 96.5 in October – up 0.4 percent from September and its first improvement in three months. However, October still represented the 26th consecutive month below 100, which signifies contraction in the current situation indicators.

Restaurant operators reported negative same-store sales for the 17th consecutive month in October, with the overall results similar to the September performance. ...

Customer traffic also remained soft in October, with operators reporting net negative traffic for the 26th consecutive month. ...

Although sales and traffic levels remained soft, operators reported a modest uptick in capital spending activity.
emphasis added

by Calculated Risk on 11/30/2009 11:20:00 AM

From the U.S. Treasury: Obama Administration Kicks Off Mortgage Modification Conversion Drive

The U.S. Department of the Treasury and Department of Housing and Urban Development (HUD) today kick off a nationwide campaign to help borrowers who are currently in the trial phase of their modified mortgages under the Obama Administration's Home Affordable Modification Program (HAMP) convert to permanent modifications. ... Roughly 375,000 of the borrowers who have begun trial modifications since the start of the program are scheduled to convert to permanent modifications by the end of the year. Through the efforts being announced today, Treasury and HUD will implement new outreach tools and borrower resources to help convert as many trial modifications as possible to permanent ones.

"We are encouraged by the pace at which trial modifications are now being made to provide immediate savings to struggling homeowners," said the new Chief of Treasury's Homeownership Preservation Office (HPO), Phyllis Caldwell. "We now must refocus our efforts on the conversion phase to ensure that borrowers and servicers know what their responsibilities are in converting trial modifications to permanent ones." In her new role, Caldwell will lead HPO's conversion drive efforts.

The new push includes "operational metrics to hold servicers accountable for their performance, which will soon be reported publicly" and "Servicers failing to meet performance obligations ... will be subject to consequences which could include monetary penalties and sanctions".

With 375,000 borrowers eligible for permanent modifications by the end of the year, we would expect a minimum of 190,000 permanent modifictions through December - and a 50% conversion rate would be considered very poor. Many of these permanent modifications will probably fail over time too.

by Calculated Risk on 11/30/2009 09:46:00 AM

From MarketWatch: CNov. Chicago PMI rises to 56.1%, a 15-month high

The business activity index rose to 56.1% in November from 54.2% in October. ... The employment index rose to 41.9% from 38.3% ...

Readings above 50% indicate expansion, and below 50% indicate contraction, so this suggests business activity is increasing, but employment is still declining.

This index is for both manufacturing and service activity in the Chicago region. In general the Chicago area is considered representative of the mix of manufacturing and non-manufacturing business activity in the nation.

The national ISM manufacturing index will be released tomorrow, and the ISM non-manufacturing index on Thursday.

by Calculated Risk on 11/30/2009 08:39:00 AM

From The Times: Investors face huge losses as Dubai abandons debt company

The Government of Dubai said today that it will not stand behind its wholly-owned subsidiary Dubai World, prompting fears that the company’s creditors could lose billions of dollars.

Today's comment, from Abdulrahman al-Saleh, the director general of Dubai’s Department of Finance, effectively confirms that country does not have enough money to repay Dubai World’s $60 billion of liabilities. ...

From the Financial Times: Dubai official confirms no guarantee

From MarketWatch: Dubai World debt not backed by government:official