Archive - Apr 8, 2009

Yet another data point for why the administration is doing all it can to slow-down the commercial real estate collapse: San Francisco office rents have dropped 24% year over year, the biggest decline since the dot-com crash. Average rents fell to $38.80 sq/foot from $50.92 for Class A properties according to Colliers.

A research piece from Oppenheimer states that BofA needs to raise over $36 billion in equity to be in line with peers. Analyst Chris Kotowski says that due to inability to access the equity capital markets, BofA will be forced to follow in Citi's footsteps and convert preferred shares to common stock.

On the Federal Reserve's web site there is a useful search feature (link here) that provides a listing of all "Enforcement Actions" the Fed has brought against bank holding company subsidiaries, after these have failed a bank exam or need to take further action in the Fed's opinion. In essence the Fed has been running micro stress tests for 2 decades: the Fed database goes back all the way to 1989.

One of the more notable market rumors from yesterday was Porsche's attempt to raise an additional €2.5 billion on top of the €10 billion it managed to scrape together in the eleventh hour at the end of March, the failure of which would have resulted in a technical default.

One of the more notable market rumors from yesterday was Porsche's attempt to raise an additional €2.5 billion on top of the €10 billion it managed to scrape together in the eleventh hour at the end of March, the failure of which would have resulted in a technical default.

The good news: wholesale inventories at -1.5%
The bad news: wholesale inventories at -1.5%

Estimates were for a -0.7% decline. January was -0.9%. Yes, the thesis goes we need inventory clearance to buy new inventory (cap goods), however it could also mean that inventory are merely getting cleared out...period... and nothing is replacing them, strangling economic output.

Peroxide blonde and self-proclaimed "rock star" PE queen Lynn Tilton, the name of whose Patriarch Partners can only be attributed to missing M buttons on the keyboard at time of incorporation, is wheeling and dealing, even as most of her competitors are trying to figure out how to present their worthless equity in

Peroxide blonde and self-proclaimed "rock star" PE queen Lynn Tilton, the name of whose Patriarch Partners can only be attributed to missing M buttons on the keyboard at time of incorporation, is wheeling and dealing, even as most of her competitors are trying to figure out how to present their worthless equity in 1

With German trade balance numbers released this morning, it's interesting to note confirmation that contracting trade flows is extending to Europe. With exports in February dropping 300M Euro MoM and 19.5 B Euro YoY, and imports falling by even more. The biggest drops are with EU countries that are NOT Eurozone (i.e. Eastern Europe).

• You take 0, add 0 and what you got? - higher futures.

• California bracing for tax revolt (Reuters)
• Real estate industry hoping for TALF amendment as hail mary against CRE default tsunami (WSJ) [apparently they are not aware of the cramdown consequences of securitization in bankruptcy...
  

That is the result of the stress test in the just published S&P "Scenario Analysis: Standard & Poor's Expcets the Downgrade Risk To Be High For Recent-Vintage U.S. CMBS Transactions."

Here is what the rating agency had to say about the methodology and summary of their analysis: