Survive the recession? Do I Look Like I'm Madoff Money?

Folks, times sure have gotten tough, economically speaking. There's no point in splitting hairs here (it'd take too long to find one on this cue ball of mine anyway!), so I'm just going to give it to you straight: We're in a recession. A deep one. Deeper than Dolly Parton's cleavage. Deeper than a poetry reading at the bottom of the ocean. I'm telling you, we're so deep in this recession, I just watched the dollar fall below a dinosaur fossil.

One still buried underground!



The onion, "America's finest news source", is a spoof online news provider, but probably one of the wittiest and most well written news sources out there. Roger Dudek is one of their most creative and entertaining writers.

Yes, loyal readers, the stock market's been sinking faster than a skydiving Titanic and, surprise, surprise, your old pal Roger's going down with the ship.

Yes, I've gotten into quite a spat with Mr. Jones—Mr. Dow Jones—and boy does he hit below the belt. Don't even ask me how my 401-Not-So-OK is doing!

More like I got 401-KO'd! The stock market. Now there's a laugh. If you ask me, they should call that place the Woodstock market.

Why? Because anyone who wants to get in is probably high. On drugs! I didn't even know I had money in the darn thing until it was already gone. See, my brother-in-law John manages all my money. He's an accountant. Whenever I see him, I always say, "John, there are only two things accountants are good at: fixing numbers." Gets him every time.

What gets me is all this bailout nonsense. Whole thing's an inch shy of robbery, if you ask me.

After all, I don't need the government taking money out of my wallet and deciding how to spend it…. That's my wife's job!

And speaking of Rosemary, can someone tell me what happened to women in the workplace? I thought the whole point of the women's lib movement was to get wives out of the kitchen so they could start bringing home the bacon. (Sorry, ladies—the low-fat turkey bacon.)

These days, our household sure could use another breadwinner. Heck, I'd settle for an extra muffinwinner—or even just a packet of crackers! With all the money we're spending on therapy bills and expensive miniature urns, I've got former presidents leaving my wallet like it's the White House on Inauguration Day! Yikes!

The hilarious rant continues at this link provided here:

The story was originally written by Roger Dudek

PNC Financial Services to eliminate 5,800 jobs

PNC Financial Services Group (NYSE: PNC), the new owner of National City Corp., said it plans to cut 5,800 jobs over the next two years as it reported a big fourth-quarter loss stemming from increased credit provisions and costs associated with the National City acquisition.



Just how many of the job cuts will be from the ranks of former employees of the Cleveland institution may never be known. PNC spokesman Fred Solomon said the bank intends to report on the job cuts “quarterly and business-wide” and will not specify how many job reductions involve former National City workers.

PNC did say about 500 job cuts would come from branch divestitures in western Pennsylvania. National City previously announced plans to cut 4,000 jobs when it was a stand-alone institution. The vast majority of those cuts likely would not have come from its Cleveland headquarters, but an overlap in job duties with administrative employees of PNC probably will change which jobs are lost.

PNC said it expected to save $1.2 billion annually with the cuts, which represent nearly 10% of PNC’s work force of 59,595 employees.

The Pittsburgh-based bank reported a fourth-quarter loss of $248 million, or 77 cents per share, compared with a profit of $178 million, or 52 cents per share, in the fourth quarter of 2007. Revenue rose 3% to $1.68 billion.

The latest fourth quarter included a $990 million credit loss provision, with $504 million related to the National City acquisition. PNC completed the purchase of National City Dec. 31.



PNC to re-enter mortgage business
Besides announcing the job actions, PNC said it also plans to re-enter the mortgage business, something it had only undertaken in a joint venture with Wells Fargo.

Mr. Solomon said he did not know how much of that business would be done by former National City mortgage employees. However, PNC chief executive James Rohr said in a conference call with securities analysts that the former CEO of PNC Mortgage had been re-hired to join the company and that PNC has a team in place that is reviewing long-term strategies for the business.

The former National City has been doing a lot of refinancing work, he said.

PNC chief financial officer Rick Johnson said he expected the National City acquisition to be accretive to earnings by the end of 2009. He attributed that belief in part to National City selling off $5 billion in loans since PNC did its due diligence on the bank last August. National City also took a $1.8 billion charge-off.

Regarding the integration of the two banks, Mr. Rohr said decisions about systems are nearly complete. Branch conversion will begin toward the end of the year, and some redundant branches in southwest Ohio and western Pennsylvania then will be eliminated.



Mr. Rohr said he did not expect National City’s footprint in slower-growth markets to quell PNC’s growth. Business in Chicago, Indiana, St. Louis, Kentucky and Cincinnati is going strong, he said.

“Those are very different markets than what you would think of as National City,” he said, referring to the bank’s Cleveland core. “They went outside their footprint and did a lot of consumer loans that make up a large part of their impaired portfolio.”

Going forward, Mr. Rohr said, all loans must have two signatures — including that of a risk management officer — to be approved.

By ARIELLE KASS AND SCOTT SUTTELL

8:42 am, February 3, 2009

Mall-Oleums..

Remember when Malls were the place to go and for a while people avoided them because they were too crowded!

Can you recall when the walkways of malls were filled with Bustling Kiosks and shiny model cars?

Those days of successful franchises filling the spaces is long gone and malls are soon to Ghost Malls.



For the last 20 years, the American consumer has carried the burden of the world on its broad shoulders. A heavy yoke, to be sure, but one that steroids made lighter; the steroid of choice for American consumers was debt. Home equity loans, cash-out refinancing, credit-card debt, and auto loans. It’s been a wild ride, but the it's over. The pseudo-wealth created over the last 20 years has begun to unwind, and will increase in speed in 2009.

A permanent psychological change has since occurred. American consumers have lost $30 trillion in value from their homes and investments in the last few years. No amount of fiscal stimulation will reverse this trauma, and the consumer’s subsequent retrenching will be felt from Des Moines to Shanghai. Consumer spending has accounted for 72% of GDP; it will revert to at least the long-term mean of 65%.



David Rosenberg, the brilliant Merrill Lynch economist, describes it thus:

"This is an epic event - the end of a 20-year secular credit expansion that went absolutely parabolic from 2001-2007.Before the US economy can truly begin to expand again, the savings rate must rise to pre-bubble levels of 8%, that the US housing stocks must fall to below 8 months' supply, and that the household interest coverage ratio must fall from 14% to 10.5%. It's important to note what sort of surgery that is going to require.

"We will probably have to eliminate $2 trillion of household debt to get there, this will happen either through debt being written off, as major financial institutions continue to do, or for consumers themselves to shrink their own balance sheets.”

There are at least 1.1 million retail stores in the US, according to the Census Bureau. There are approximately 1,100 malls, not counting thousands of strip centers. These numbers will be considerably lower by 2011.



According to the ICSC, about 150,000 stores will shut down in 2009, in addition to the 150,000 that closed in 2008 and the 135,000 in 2007. Normally, 110,000 to 125,000 new stores open per year. At least 700,000 retail jobs will be lost; some major retailers that have closed or will close include: Circuit City (728 stores); Linens N Things (500 stores); Bombay Company (384 stores); Sharper Image (184 stores); Foot Locker (140 stores); Pacific Sunwear (153). Other large retailers are closing underperforming stores and scaling back expansions plans.

By 2011, at least 15% of the existing retail base will have gone to retail heaven. With the amount of vacant stores likely to reach in excess of 200,000 and vacancy rates for new malls already at 28%, there will be no need for new construction for many years.

Most of the retailers that are closing lease their locations from mall developers like General Growth Properties (GGP), Simon Property Group (SPG), Pennsylvania REIT (PEI) and Vornado Realty Trust (VNO). These developers will be hit by a quadruple whammy in 2009.
General Growth Properties added $4 billion of debt in the last 3 years, and is now teetering on the brink of bankruptcy. Simon Properties, which owns or operates 320 malls, added $3 billion of debt in the same period. Many smaller developers will be in even direr straits.

Many developers borrowed heavily to finance massive mall expansion. The term of these loans were generally 5 to 7 years. According to real-estate expert Andy Miller, the commercial collapse will be more rapid than the residential collapse:

“[You] may have 10 properties in a commercial pool that ultimately works its way into CDOs. Those loans are huge. You may have a shopping center loan in there for $25 million and an office building loan for $30 million dollars. As a result, if you have a default on just one of those loans, you can effectually wipe out all of the subordinate tranches.

“And that is why when you see the problems begin to appear on the commercial front, it's going to be a much quicker sort of devolution than we saw on the residential side. In the commercial world, most of the financing that happened outside of the apartment business was done by conduits, and there are no more conduits left, and conduits were doing the stupidest loans you could find.

"They were doing an advertised 80% loan-to-value, which was usually more closely aligned to a 100% loan-to-value. They were dealing with no coverage. They were all non-recourse loans. Many of them were interest-only loans. Those loans are now gone. You can't refinance them, and if you could, the terms would be onerous.”

FOR THE FULL ARTICLE...
Please visit... http://www.minyanville.com/articles/SHLD-jcp-spg-m-retail-Malls/index/a/20708

Nine Questions to Ask a Commercial Lender

Nine Questions to Ask a Commercial Lender

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Circuit City waives the white flag!

By MICHAEL FELBERBAUM and VINNEE TONG, AP Business Writers



Circuit City Stores Inc., the nation's second-biggest consumer electronics retailer, said Friday it had run out of options and will be forced to liquidate its 567 U.S. stores. The closures could send another 30,000 people into the ranks of the unemployed.

"This is the only possible path for our company," James A. Marcum, acting chief executive, said in a statement. "We are extremely disappointed by this outcome."

The company had been seeking a buyer or a deal to refinance its debt, but the hobbled credit market and consumer worries proved insurmountable. And bleak holiday sales results further weakened even the stronger retailers.

Circuit City said in court papers it has appointed Great American Group LLC, Hudson Capital Partners LLC, SB Capital Group LLC and Tiger Capital Group LLC as liquidators.

"Regrettably for the more than 30,000 employees of Circuit City and our loyal customers, we were unable to reach an agreement with our creditors and lenders," Marcum said.

Shareholders are likely to receive nothing, as is typical in bankruptcy cases. It was unclear what would happen to the company's 765 retail stores and dealer outlets in Canada.

Circuit City filed for Chapter 11 bankruptcy protection in November as vendors started to restrict the flow of merchandise ahead of the busy holiday shopping season.

It had been exploring strategic alternatives since May, when it opened its books to Blockbuster Inc. The Dallas-based movie-rental chain made a takeover bid of more than $1 billion with plans to create a 9,300-store chain to sell electronic gadgets and rent movies and games. Blockbuster withdrew the bid in July because of market conditions.

Circuit City, which said it had $3.4 billion in assets and $2.32 billion in liabilities as of Aug. 31, said in its initial filings that it planned to emerge from court protection in the first half of this year.

Under court protection, Circuit City has broken 150 leases at locations where it no longer operates stores. The company already closed 155 stores in the U.S. in November and December.

U.S. Bankruptcy Judge Kevin Huennekens had given the company permission to liquidate if a buyout was not achieved.

The liquidation is the latest big blow to the nation's malls, which have suffered from a rise in vacancies as a slew of chains from Mervyns LLC to Linens 'N Things have liquidated. But analysts say that the demise of Circuit City, whose stores range in size from 20,000 to 25,000 square feet, will hurt the fortunes of mall operators even more.


"It will bring to market a glut of big box spaces across the country," said John Bemis, head of Jones Lang LaSalle Inc.'s retail leasing team. "It will have one of the largest impacts on big box real estate across the country."
___
AP Retail Writer Anne D'Innocenzio contributed to this report.

Interest Rates for Commercial / Residential Real Estate

Type Rate
30 yr fixed mtg 5.81%
30 yr fixed jumbo mtg 7.29%
30 yr FHA mtg 6.10%
20 yr fixed mtg 5.68%
15 yr fixed mtg 5.53%
15 yr fixed jumbo mtg 6.45%
10 yr fixed mtg 5.34%
3/1 ARM 5.81%
3/1 ARM (interest only) 5.73%
5/1 ARM 5.90%
5/1 ARM (interest only) 5.87%
5/1 jumbo ARM (int only 6.18%
7/1 ARM 6.15%
10/1 ARM 6.54%

Eatery Coming To Highland Square

Eatery Coming To Highland Square
11/17/2008

The former Two Amigo's will soon turn into a reasonably priced wine bar and kitchen, under a new owner and new name.

David Haynes, a professional chef from California, is considering an Italian name for his rustic, chic eatery he's envisioned for the last 17 years. "The driver for the back of the house will be a wood-fired oven (for pizza) and the driver for the front of the house will be a very dynamic bar, large selections of wines by the glass, handcrafted cocktails, all things made in house," says Haynes.

He's looking at all items being under $20 and hopes to have it up and running by late 2009. "We really want to be a part of this neighborhood," Haynes explains. "That's what drew me first and foremost to the building originally." Plans also include outdoor seating and a new side entryway.

In October, Cleveland developer Gint Strautnieks purchased the Two Amigo's and Dodi's buildings at a sheriff's auction for $423,000.

Strautnieks and Haynes are excited about the new development

The "restaurant" will be like nothing in NorthEast Ohio, Strautnieks says, and the focus will be in food and service.
Both Haynes and Strautnieks plan to keep, and restore, the buildings to their original 1920's era.

All of the windows will be replaced and be more energy efficient. There will be big windows on the street so customers can see what's going on outside and passersby can see inside.

It's still unclear what will happen to the former Dodi's space, but there is a lot of interest. All Strautnieks could says was that clients are looking at the space and how it may be used "will make people happy."

Strautnieks is looking forward to starting the project, which is in the architectural stage now, "we're not waiting for the economy to change, we want to get moving."

Haynes is a California Culinary Academy of San Francisco graduate of the Le Cordon Bleu program.