A glut of empty rooms and panic pricing are taking a serious toll on hotel and resort owners in the Phoenix area.
Foreclosure proceedings were initiated against seven financially squeezed properties, two of them brand new, in the first half of the year. That’s just one less than in all of 2008 and more than double the number in 2007, according to Ion Data, a Mesa real-estate research firm.
There are other signs of financial stress, too, including major liens filed against resorts that recently expanded or renovated, and big projects being put on hold, some midstream.
The worst part: Many experts say the foreclosure woes are likely in the early stages given the volume of big-ticket deals during the boom years, the severity of the hotel downturn in Greater Phoenix and few signs business will solidly rebound anytime soon.
"This is probably still the tip of the iceberg," said Robert Hayward, principal with the Phoenix hospitality consulting and research firm Warnick & Co.
Metro Phoenix, usually a magnet for vacationers and big meetings, continues to post some of the industry’s biggest declines in occupancy, average daily rate and other measures, with many at the lowest levels on record, according to Smith Travel Research.
Preliminary figures show June occupancy was about 45 percent, nearly 10 percentage points, or 17 percent, below June 2008, when occupancy was already hurting. Most are calling it an industry depression, rather than recession.
Richard Warnick of Warnick & Co. said he’d be surprised if nearly all hotels and resorts, here and across the country, weren’t in technical default on their loans, falling below required minimums on debt service coverage, for example, given the sad state of travel. That is often a precursor to more serious financial problems that prompt lenders to foreclose.
Nationally, the number of delinquent hotel loans has been climbing sharply since the recession deepened last fall. The delinquency rate jumped from 0.3 percent of so-called hotel commercial mortgage-backed securities loans in September to 2.8 percent in May, according to Realpoint data provided by real-estate
Major developing story: Matt Goldstein over at Reuters may have just broken a story that could spell doom if not [for] the entire Goldman Sachs program trading group, then at least those who deal with "low latency (microseconds) event-driven market data processing, strategy, and order submissions." Visions of swirling, gray storm clouds over Goldman’s SLP and hi-fi traders begin to form.
Back-up: This week’s NYSE Program Trading report was very odd: not only because program trading hit 48.6% of all NYSE trading, a record high at least since the NYSE has kept tabs on this data, and a datapoint which in itself was startling enough to cause some serious red flags as I jaunt from village to village in what little is left of Europe’s bison country, but what was shocking was the disappearance of the #1 mainstay of complete trading domination (i.e., Goldman Sachs) from not just the aforementioned #1 spot, but the entire complete list. In other words: Goldman went from 1st to N/A in one week.
Even more odd, this "disappearance" comes hot on the heels of what Zero Hedge reported could be potentially a major change to the way the NYSE provides its weekly program trading report. Of course, Ray over at the NYSE immediately replied to Zero Hedge that all was going to be same as always … Odd, maybe he meant that all is back to normal except the reporting of Goldman’s trades. Either way, it might very well be time for proactive readers to again contact the two employees publicly disclosed by the NYSE as lead-contacts on the issue. Readers will recall that it was these same two who were previously steadfastly assuring anyone who would listen that there would be no change at all in data reporting.
Robert Airo, Senior Vice President, NYSE Euronext at (212) 656-5663 or AleksandraRadakovic, Vice President, NYSE Regulation at (212) 656-4144
Alas, the just released weekly data proves that either theirs was a material misrepresentation of facts, or Goldman simply suddenly decided to stop transacting with the
Did someone try to steal Goldman Sachs’ secret sauce?
While most in the US were celebrating the 4th of July, a Russian immigrant living in New Jersey was being held on federal charges of stealing top-secret computer trading codes from a major New York-based financial institution—that sources say is none other than Goldman Sachs.
The allegations, if true, are big news because the codes the accused man, Sergey Aleynikov, tried to steal is the secret code to unlocking Goldman’s automated stocks and commodities trading businesses. Federal authorities allege the computer codes and related-trading files that Aleynikov uploaded to a German-based website help this major “financial institution” generate millions of dollars in profits each year.
The platform is one of the things that apparently gives Goldman a leg-up over the competition when it comes to rapid-fire trading of stocks and commodities. Federal authorities say the platform quickly processes rapid developments in the markets and uses top secret mathematical formulas to allow the firm to make highly-profitable automated trades.
The criminal case has the potential to shed a light on the inner workings of an important profit center for Goldman and other Wall Street firms. The federal charges also raise serious questions about the safeguards Wall Street firms deploy to protect their proprietary trading systems.
The criminal case began to unfold on the evening of July 3 when Aleynikov was arrested by FBI agents at Newark Liberty Airport, after returning from Chicago. Aleynikov had just started a job with another firm in Chicago, after leaving the big firm in NY in early June. It appears the financial institution allegedly victimized by Aleynikov had alerted federal authorities that its former employee might be up to no good.
On July 4, Aleynikov was processed on a “theft of trade secrets” charge in a criminal complaint that was filed in federal court in Manhattan. As of this afternoon, he was still being held in federal custody pending posting of bail…
The bio information for Aleynikov on LinkedIn says he joined Goldman in May 2007 and was vice president for equity strategy. The bio says he was responsible for “development of a distributed real-time
Major developing story: Matt Goldstein over at Reuters may have just broken a story that could spell doom for if not the entire Goldman Sachs program trading group, then at least those who deal with “low latency (microseconds) event-driven market data processing, strategy, and order submissions.” Visions of swirling, gray storm clouds over Goldman’s SLP and hi-fi traders begin to form.
Back-up: This week’s NYSE Program Trading report was very odd: not only because program trading hit 48.6% of all NYSE trading, a record high at least since the NYSE keep tabs of this data, and a data point which in itself was startling enough to cause some serious red flags as I jaunt from village to village in what little is left of Europe’s bison country, but what was shocking was the disappearance of the #1 mainstay of complete trading domination (i.e., Goldman Sachs) from not just the aforementioned #1 spot, but the entire complete list. In other words: Goldman went from 1st to N/A in one week.
Even more odd, this “disappearance” comes hot on the heels of what Zero Hedge reported could be potentially a major change to the way the NYSE provides its weekly program trading report. Of course, Ray over at the NYSE immediately replied to Zero Hedge that all was going to be same as always … Odd, maybe he meant that all is back to normal except the reporting of Goldman’s trades. Either way, it might very well be time for proactive readers to again contact the two employees publicly disclosed by the NYSE as lead-contacts on the issue. Readers will recall that it was these same two who were previously steadfastly assuring anyone who would listen that there would be no change at all in data reporting.
Robert Airo, Senior Vice President, NYSE Euronext at (212) 656-5663 or AleksandraRadakovic, Vice President, NYSE Regulation at (212) 656-4144
Alas, the just released weekly data proves that either theirs was a material misrepresentation of facts, or Goldman simply suddenly decided to stop transacting with the NYSE, or, what would
I’ve added a few comments at the end, relying on old information, but from the content of this article, there’s been no improvement in the situation in the last 15 years. Thanks to Joe for bringing up this important topic! – Ilene
The Boston Globe’s Jeff Jacoby writes that the Steve Jobs liver transplant, and the fact that he may have put his name on the list of several states in order to ensure maximum odds of getting a liver, is a reminder of how horribly broken and dysfunctional this current system is.
What we need is a market mechanism to compensate and encourage organ donors:
No one would dream of suggesting that medical care is too vital or sacred to be treated as a commodity, or to be bought and sold like any other service. If the law prohibited any “valuable consideration’’ for healing the sick, the result would be far fewer doctors and far more sickness and death.
The result of our misguided altruism-only organ donation system is much the same: too few organs and too much death. More than 100,000 Americans are currently on the national organ waiting list. Last year, 28,000 transplants were performed, but 49,000 new patients were added to the queue. As the list grows longer, the wait grows deadlier, and the shortage of available organs grows more acute. Last year, 6,600 people died while awaiting the kidney or liver or heart that could have kept them alive. Another 18 people will die today. And another 18 tomorrow. And another 18 every day, until Congress fixes the law that causes so many valuable organs to be wasted, and so many lives to be needlessly lost.
The fact that we have so many people waiting for kidneys, waiting on expensive and painful dialysis, is proof of how bad the system is, since healthy people don’t need two kidneys, and since having only one kidney doesn’t increase your own odds of getting sick (kidney failure strikes both at the same time, typically).
Rather than delve into all the details of how it would work in practice, let’s just consider some common objections to organ markets, and why they’re all so
I don’t think Al Gore in his wildest dreams could have imagined how successful the “climate crisis” movement would become. It is probably safe to assume that this success is not so much the result of Gore’s charisma as it is humanity’s spiritual need to be involved in something transcendent – like saving the Earth.
After all, who wouldn’t want to Save the Earth? I certainly would. If I really believed that manmade global warming was a serious threat to life on Earth, I would be actively campaigning to ‘fix’ the problem.
But there are two practical problems with the theory of anthropogenic global warming: (1) global warming is (or at least was) likely to be a mostly natural process; and (2) even if global warming is manmade, it will be immensely difficult to avoid further warming without new energy technologies that do not currently exist.
On the first point, since the scientific evidence against global warming being anthropogenic is what most of the rest of this website is about, I won’t repeat it here. But on the second point…what if the alarmists are correct? What if humanity’s burning of fossil fuels really is causing global warming? What is the best path to follow to fix the problem?
Cap-and-Trade
The most popular solution today is carbon cap-and-trade legislation. The European Union has hands-on experience with cap-and-trade over the last couple of years, and it isn’t pretty. Over there it is called their Emissions Trading Scheme (ETS). Here in the U.S., the House of Representatives last Friday narrowly passed the Waxman-Markey bill. The Senate plans on taking up the bill as early as the fall of 2009.
Under cap-and-trade, the government institutes “caps” on how much carbon dioxide can be emitted, and then allows companies to “trade” carbon credits so that the market rewards those companies that find ways to produce less CO2. If a company ends up having more credits than they need, they can then sell those credits to other companies.
While it’s advertised as a “market-based” approach to pollution reduction, it really isn’t since the market did not freely choose cap-and-trade…it was imposed upon…
Joe Biden told "This Week" that the Obama administration "misread how bad the economy was."
He also the administration made this mistake because they just looked at the consensus forecasts at the time…and they proved to be wrong.
If the latter is true, the administration deserves the crap it has been getting. In the months leading up to Obama’s inauguration, the economy fell off a cliff. The credit markets seized up. Several major investment banks went bust. The Fed and Treasury talked of an apocalypse. Everywhere you looked, you heard one analyst after another saying the country was plunging toward another Great Depression.
If anything, the economy since the inauguration has been better than many analysts feared. So this "we didn’t get it" sounds like revisionist history to us.
More likely, in our opinon, the administration concluded that it would never get its huge spending increases passed if its projections reflected the "most likely" scenario for the economy. And so it produced the economic forecasts (growth, stress tests, jobs, etc) that have begun to destroy Obama’s credibility on this critical issue.
Regardless of the thinking behind the over-optimism, Obama has made a serious error here. Recovering from financial disasters like this usually takes years--and it likely will this time, too, regardless of what Obama does.
Above all else on the economy, Obama had to under-promise and over-deliver. By promising a relatively swift recovery, he has set himself up for failure. If the economy does recover, he’ll be fine, but if it doesn’t (which seems more likely), he will increasingly be blamed for failing to fix it. And given the singular importance of this issue to most Americans right now, it is hard to see how his presidency will survive that.
WASHINGTON (AP) — Vice President Joe Biden said the Obama administration "misread how bad the economy was" but stands by its stimulus package and believes the plan will create more jobs as the pace of its spending picks up.
Biden, in an interview airing Sunday on TV network ABC’s "This Week," said the nation’s 9.5 percent unemployment rate is "much too high."
"The figures we worked off of in January were the consensus figures and most of the blue chip
The banking industry is exceeding all expectations. The biggest players are raking in profits and planning much higher compensation so far this year, on the back of increased market share (wouldn’t you like two of your major competitors to go out of business?). And banks in general are managing to project widely a completely negative attitude towards all attempts to protect consumers.
This is a dangerous combination for the industry, yet it is not being handled well. Just look at the current strategy of the American Bankers’ Association.
Edward L. Yingling is justifiably proud of his organization’s postion as one of the country’s most powerful lobbies.
His testimony to Congress on the potential new Consumer Financial Protection Agency plainly shows where his group stands. The most revealing quote, highlighted in the ABA’s own press release, reads:
“It is now widely understood that the current economic situation originated primarily in the largely unregulated non-bank sector,” he said. “Banks watched as mortgage brokers and others made loans to consumers that a good banker just would not make and they now face the prospect of another burdensome layer of regulation aimed primarily at their less-regulated or unregulated competitors. It is simply unfair to inflict another burden on these banks that had nothing to do with the problems that were created.”
The premise here is false. If major banks had really not been involved in the mortgage fiasco, we would not have had to roughly double our national debt-to-GDP in order to save the US and world economy.
Within the banking community, and presumably within the ABA’s membership, there is serious tension. The small banks feel – overall with some justification – that the essence of the recent problem was not about them. But they can’t bring themselves to suggest publicly that the economic and political power of the largest banks should be curtailed.
Small banks have always had clout in the American political system, particularly when they work through the Senate. But we have not always had our current kind of crisis. The executives of these banks lived comfortably in the 1950s and 1960s; their kind of banking was boring, stable, and nicely remunerated.
It is the changing nature and power of the largest financial institutions – banks of various kinds – that has damaged our…
As corporations pour stock on the investing public at a record pace the beneficiaries of this dilution are the underwriters. The conspiracy theorists and Goldman Sachs lovers are going to hate this fact. Oppenheimer is expecting record levels of secondary underwriting this quarter after mass dilutions. Expect the I-banks to once again benefit from the public’s dilution and losses….
July 2 (Bloomberg) — “Equity underwriting returned in spades” during the second quarter and lifted earnings at U.S. investment banks, according to Chris Kotowski, an analyst at Oppenheimer & Co.
The CHART OF THE DAY shows U.S. underwriting amounted to $122.6 billion, a ninefold surge from the first quarter, by his estimate. The total was more than double the quarterly average since 2005, based on data from Dealogic that Kotowski cited today in a report.
Revenue from investment-banking fees probably climbed about 20 percent from the first quarter because of the pickup in stock sales, the report said. Bond underwriting was relatively stable after fees more than doubled in the first quarter, he added.
“Investors should skew their financial holdings toward investment banks,” he wrote. Returns on equity, a profitability gauge, are likely to return to normal much sooner at these firms than at most commercial banks, he added… [continue here].
Some of our German readers may be laboring under the impression that following the €110 billion first Greek bailout agreed upon and executed in May 2010, the second Greek bailout would cost a "mere" €130 billion. Alas we have new for you - as of this morning, the formal cost of rescuing Greece for the adjusted adjusted adjusted second time has just risen to €145 billion, €175 billion, a whopping €210 billion, bringing the total explicit cost of all Greek bailout funds to date (and many more in sto...
The $OEXA200R (the percentage of S&P 100 stocks above their 200 DMA) is a technical indicator available on StockCharts.com that can be used to forecast conservative entry and exit points for the stock market.
The OEXA is used to find the "sweet spot" time period in the market when you have the best chance of making money. See Is This the Best Stock Market Indicator Ever? for a discussion of this technical tool.
The chart below is current through the February 3rd close.
After a major S&P correction, the conditions for safe re-entry into the market are when:
a) $OEXA200R rises above 65%. And two of the following three...
Imagine you are asked to sign a document but three pages were missing. Further imagine the documents you were asked to sign were written in English but you only speak Greek. Would you sign?
That is exactly the predicament Greek officials were placed in by the Troika. Here is the story sent to me by Demetri Kofinas at Capital Account.
Hello Mish
George Karatzaferis leader of LOAS political party gave a speech today addressing why he refused to sign this latest agreement. In his speech, he said that he a...
Top 5 RisersStockRatingAnalysisICABUYThe projected value for Empresas ICA is still rising quickly even though past earnings have already improved significantly.XBUYThe projected value for US Steel is still rising quickly even though past earnings have already improved significantly.FEICBUYProjected value continues to rise for FEI while long term increases in earnings growth are also becoming more widely expected.ASBCBUYMany analysts are expecting higher than previously expected long term growth from Associated Bancorp, and its near-term earnings outlook is also improving....
The following are the M&A deals, rumors and chatter circulating on Wall Street for Friday February 10, 2012:
Actuant Acquires Jeyco Pty
The Deal: Actuant (NYSE: ATU) announced Friday that it has acquired Jeyco Pty Ltd (“Jeyco”). Headquartered near Perth, Australia, Jeyco designs and provides specialized mooring, rigging and towing systems and services to the offshore oil & gas industry in Australia and other international markets. Additionally, its highly engineered products are used in a variety of applications for other markets including cyclone mooring and marine, defense and mining tow systems. Jeyco generates annual revenues of approximately $20 million.
Actuant shares closed at $27.33 Friday, a loss of 0.18% on average volume.
A little flurry of buying in the closing 5 minutes tacked on 2 S&P points and took the major indexes off the lows. Only the Russell 2000 finished with a greater than 1% loss (1.4%) as it has been relatively weak versus the senior indexes for the past few sessions. While today was the "worst day of the year" – it was quite a low bar as the previous biggest loss on the S&P 500 was -0.57%.
The S&P 500 held well above the 10 day moving average (didn't even really touch it) and did not even attempt to fill the gap from last Friday's employment report. The teflon market rolls on for now. Specul...
Greece was “saved” for less than 24 hours but now major ETFs around the world skid into the weekend on Greek fears
After wangling for a week or more, Greek took their new deal to the European Ministers meeting, only to have it promptly rejected and so as we go into the weekend, major global markets and ETFs have again hit the skids on Greece.
After two years of wangling, the European zone is demanding yet more and deeper cuts for Greece to qualify for the next round of bailout loans that will keep the country from going bankrupt on March 20th.
Major European and United States ETF responded negatively to the new developments:
To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...
Reminder: OpTrader is available to chat with Members, comments are found below each post.
This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).
We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options.
Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.
To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here
Here is a quick update of past trades and our current position.
AA Money
No trade this week as we wait for AA to settle. Phil remarked last week that AA seemed overvalued. In the meantime, it looks like we might have to roll our Feb 9 calls. Good thing we sold only 5 of them against our position.
Last week P&L - 310.00
We lost ground last week, but we still have 11 months to sell premium!
FAS Money
Very good week for FAS Money as we benefited from the large amount of premium sold the previous week. We covered most of the shorts in advance of the Fed speech, but sold another set of options on Wednesday after the speech - 2 FAS calls that expired worthless on Friday, 2 FAS put that we are still holding and 2 FAZ put that we bought back for a profit on Friday. A late stick comparable to last week's almost gave us problems at the end of the day though!
Last week P&L - $4277.00
IWM Money
A decent week in this virtual portfo...
Reminder: Pharmboy is available to chat with Members, comments are found below each post.
Finding new and exciting Biotech companies that target novel mechanisms is like trying to find a needle in a haystack. Sure there are many companies working on cutting edge science, but investing in those companies to reap the rewards of their work is a very dangerous game. More often than not, companies fail because the mechanism does not pan out, the compound(s) do not have pharmacokinetics (get into the body or last very long in the body), or an adverse event happens that knocks years off a development timeline. In addition, the stock can be manipulated by market makers so investors don't know which way is up. I approach investing in biotechs as a long term prospect. I continue to like our current portfolio of biotech companies (join in chat for many of those plays), and we continually add/subtract shares and sell/buy options on ...
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If anything, the economy since the inauguration has been better than many analysts feared. So this "we didn’t get it" sounds like revisionist history to us. 
The banking industry is exceeding all expectations. The biggest players are 
German
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
(
