Archive - Feb 3, 2009 - Story

Gotta love anything to do with foreclosure transactions. One third of all 2008 transactions involved borrowers forced out by banks.

healthy market

- some not so happy news updates:

According to Mark Hanson, Managing Director of Field Check Group there is a 21 month "shadow inventory" supply of inventory in California.

According to RealtyTrak 66% of all foreclosures have not made it out in workout yet.

The market rumor this morning is that Landry's Restaurants, which is about 5x levered, and whose market cap has recently dropped to an almost all time low of $100 million, is trying to raise a new $270 million of 2.5 year notes. The B/Caa1 rated company is seeking gullible mutual fund managers who will find the 14% coupon and 20% yield (88 cent issue price) attractive. Kinda reminds us of Movie Gallery which, with the help of Goldman Sachs, raised about a billion last spring and defaulted before they even paid one coupon.

First it was Jeffrey Gendell, now it is Michael Zimmerman, whose Prentice Capital Management lost 88% in 2008. Formerly a SAC golden boy, Zimmerman traded retail and consumer with Stevie for 5 years before launching independently in 2005. The 38 year old, who like Gendell thought that the market can never go down, had been trading stocks and bonds, and had about a third of its assets in highly illiquid securities.

• UPS Freezes Salaries and Suspends 401(k) match on biggest volume drop in decade (PR)
• Credit Suisse cutting bonuses by 55% (Bloomberg)
• Fitch is starting to sniff for a general obligation California downgrade (MarketWatch)
• $4.8
  

• 20 million jobs lost in China from downturn to date - this is actually a very big deal (FT)
• FDIC running out of cash, asks tripling of Treasury credit line to $100 billion (Reuters)
• UBS alienates all current brokers with ridiculous new hire bonuses (

Granted this topic deserves a much more extensive analysis and I hope to readdress it in the near future (but in the mean time welcome any thoughts), today Morgan Stanley is out with a note that brings up relevant good points.

In other tax evading news (just kidding) Eric Holder won the Senate vote to be U.S. Attorney General with a 75-21 total vote. While nobody has found any irregularities with Eric's 1040 forms (yet), he has had his share of notoriety for pardoning fugitive financier Marc Rich when he was deputy AG under Bill Clinton.