by Calculated Risk on 7/09/2010 11:22:00 AM

From HotelNewsNow.com: STR: US results for week ending 3 July 2010

In year-over-year measurements, the industry’s occupancy increased 10.0 percent to 63.4 percent. Average daily rate rose 1.3 percent to US$96.65. Revenue per available room jumped 11.5 percent to US$61.32.

The following graph shows the four week moving average for the occupancy rate by week for 2008, 2009 and 2010 (and a median for 2000 through 2007).

Click on graph for larger image in new window.

Notes: the scale doesn't start at zero to better show the change.

On a 4-week basis, occupancy is up 7.5% compared to last year (the worst year since the Great Depression) and 4.1% below the median for 2000 through 2007.

This as close to "normal" as the occupancy rate has been all year.

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

by Calculated Risk on 7/09/2010 09:02:00 AM

From Sharon Bernstein at the LA Times: Jobs outlook for small businesses may be getting bleaker

Intuit Inc., which provides payroll services for small employers, says the nation's tiniest companies had fewer new hires last month than any time since October.
...
To calculate its estimate of national hiring, Intuit uses payroll information from its 56,000 small-business customers. The company defines small businesses as those with fewer than 20 employees.

Intuit's data show that small businesses hired just 18,000 additional workers last month. That's still positive territory, but it's less than a third of the 60,000 that were added in February, when it seemed that an employment recovery was imminent. Additional hiring dropped steadily during the spring, to 40,000 in April and 32,000 in May. Another payroll company, Automatic Data Processing Inc., painted an even gloomier picture, saying that small businesses lost 1,000 jobs nationwide in June.

According to surveys by the National Federation of Independent Business (NFIB), the problem isn't lack of financing or government regulation - the problem is a "shortage of customers".

NFIB chief economist Bill Dunkelberg recently said: “What small businesses need are customers, giving them a reason to hire and make capital expenditures and borrow to support those activities.”

by Calculated Risk on 7/08/2010 11:54:00 PM

From David Streitfeld at the NY Times: Biggest Defaulters on Mortgages Are the Rich

More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.

By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.
...
The CoreLogic data measures serious delinquencies, which means the borrower has missed at least three payments in a row.

Were these borrowers really "rich"? Or did they just buy more home than they could really afford?

The "movin' on up" theme for distressed properties is something we've been discussing for some time. We're all subprime now!

Obviously more distressed sales will put downward pressure on prices in these areas.

by Calculated Risk on 7/08/2010 10:56:00 PM

For a little light reading: Zoltan Pozsar, Tobias Adrian, Adam Ashcraft and Hayley Boesky (now at BofA) of the NY Fed have written a new Staff Report: Shadow Banking

From the authors:

Our monograph “Shadow Banking” documents the origins, evolution and economic role of the shadow banking system. Its aim is to aid regulators and policymakers globally to reform, regulate and supervise the process of securitized credit intermediation in a market-based financial system.

It is hard to summarize this paper, but here are a couple of excerpts:

At the eve of the financial crisis, the volume of credit intermediated by the shadow banking system was close to $20 trillion, or nearly twice as large as the volume of credit intermediated by the traditional banking system at roughly $11 trillion.
...
Some segments of the shadow banking system have emerged through various channels of arbitrage with limited economic value ...

by Calculated Risk on 7/08/2010 06:51:00 PM

The Federal Reserve reports:

Consumer credit decreased at an annual rate of 4-1/2 percent in May 2010. Revolving credit decreased at an annual rate of 10-1/2 percent, and nonrevolving credit decreased at an annual rate of 1-1/2 percent.

Click on graph for larger image in new window.

This graph shows the year-over-year (YoY) change in consumer credit. Consumer credit is off 3.9% over the last 12 months.

Revolving credit (credit card debt) is off 14.9% from the peak. Non-revolving debt (auto, furniture, and other loans) is off 1.5% from the peak. Note: Consumer credit does not include real estate debt.

Still working down the debt ... also the previously reported slight increase in April was revised to a $14.9 billion decrease in credit.