Wednesday, November 26, 2008

Mall losing another tenant

Bankrupt jeweler leaving the mall:

The Whitehall Jewelers in Valley Plaza mall will close sometime after the holidays, said manager Nancy Viel.

The store’s entire inventory has been drastically reduced as part of a liquidation sale.
Asset recovery firms Hudson Capital Partners LLC, Great American Group LLC, Silverman Jeweler Consultants Inc. and Gordon Brothers Group LLC are overseeing a court-ordered liquidation sale of Whitehall Jewelers Holdings Inc., which operates 373 jewelry stores in 39 states.

Tuesday, November 25, 2008

Fixed rate mortgages hit 5%

Fixed rate mortgages hit 5%. This is only for conforming mortgages, not Jumbos (over $417k)

Will this spur a new round of buying?

Will this put a floor under the market?

Prices are back to 2003 levels...Is now the time to start looking again?

Monday, November 24, 2008

Local Ashley Furniture gets bankruptcy protection

More local retail pain:

The owner of the Bakersfield branch of Ashley Furniture Homestore received
Chapter 11 bankruptcy protection this month.

"If somebody orders something at Ashley, they will get that product,” he said. “We have gotten bankruptcy court orders to make sure that happens.”

Creditors named in the Nov. 10 filing include GE Commercial Finance, which is owed $940,000, documents show.

The downturn in the retail market and the tightening of the credit market prompted the filing, Mebby Van Ostrand said. She and her husband opened the Ashley store in August 2006.

Median home price now $146,500.

Their not making anymore land....Now is a good time to buy...You know, real estate only goes up...lies, lies, lies

Median home prices now at early 2003 levels:

Bakersfield homes are now selling for less than $100 a square foot, a price point not seen since early 2004, November sales analyzed by local appraiser Gary Crabtree show.

What’s more, November’s median price has so far dropped more than $14,000 from October’s number to $146,500.

Another mall retailer is going out of business, last one out turn off the lights:

Howe’s Hallmark Shop in Valley Plaza mall, a 20-year-old business, will launch a going-out-of business sale starting at 5 a.m. Friday.

It’s sad,” said owner Pat Howe. “A lot of people come to the mall specifically to see us.” The 3,800-square-foot shop will remain open through the New Year. Howe expects to close around Jan. 20.

A combination of higher rents and the slow economy made the decision unavoidable, Howe said.

Friday, November 21, 2008

2 more Friday Bank Failures (3 total today)

2 more Banks fail today (3 total):

U.S. Bank, National Association, Minneapolis, MN, acquired the banking operations, including all the deposits, of Downey Savings and Loan Association, F.A., Newport Beach, CA, and PFF Bank & Trust, Pomona, CA, in a transaction facilitated by the Federal Deposit Insurance Corporation.

The combined 213 branches of the two organizations will reopen as branches of U.S. Bank under their normal business hours, including those with Saturday hours. Depositors will automatically become depositors of U.S. Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage.

Customers of both banks should continue to use their existing branches until U.S. Bank can fully integrate the deposit records of the organizations. Over the weekend, depositors can access their money by writing checks or using ATM or debit cards.

As of September 30, 2008, Downey Savings had total assets of $12.8 billion and total deposits of $9.7 billion. PFF Bank had total assets of $3.7 billion and total deposits of $2.4 billion. Besides assuming all the deposits from the two California banks, U.S. Bank will purchase virtually all their assets. The FDIC will retain any remaining assets for later disposition.

The FDIC and U.S. Bank entered into a loss share transaction. U.S. Bank will assume the first $1.6 billion of losses on the asset pools covered under the loss share agreement, equal to the net asset position at close. The FDIC will then share in any further losses. Under the agreement, U.S. Bank will implement a loan modification program similar to the one the FDIC announced in August stemming from the failure of IndyMac Bank, F.S.B., Pasadena, CA.

Gottchalks now owned by Communist China

Crappy retailer and current tenant of our local mall, whose stock is worthless, was "purchased" by the Communist Chinese.

Gottchalks throws in the towel on America?:

West Coast department store chain Gottschalks, which has been consistently in the red, is getting a $30 million cash infusion from a company with strong ties to the Communist government of China.

Gottschalks Inc. (Pink Sheets: GOTT) of Fresno says it has signed a definitive agreement for up to a $30 million investment in the company by Everbright Development Overseas Ltd., which is set up as a British Virgin Islands corporation.

For the money, Everbright gets 40 million shares of Gottschalks common stock, to be issued at a price of $1.80 per share, which will amount to approximately 75 percent of the company's common stock.

Community fails

Bank failure Friday...if only it was 2005 again and everyone was a real estate mogul:

On November 21, 2008, The Community Bank, Loganville, GA was closed by the Georgia Department of Banking and Finance and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.

The FDIC has assembled useful information regarding your relationship with this institution. Besides a checking account, you may have Certificates of Deposit, a car loan, a business checking account, a commercial loan, a Social Security direct deposit, and other relationships with the institution. The FDIC has compiled the following information which should answer many of your questions.

Ca unemployment rate at a 14 year high

I sure hope the State and local governments adjust their budgets, its going to get much worse!

California Unemployment soars:

California's unemployment rate rose dramatically in October to 8.2%, its highest
level in 14 years, the U.S. Department of Labor reported this morning.

The increase from 7.7% in September was larger than the national increase in joblessness; the U.S. unemployment rate jumped four-tenths of a point, to 6.5%, in a tally reported earlier this month. California's unemployment is the third-highest in the United States, exceeded only by Michigan and Rhode Island at 9.3% each.

Seasonably adjusted unemployment rose 2.5% between October 2007 and October 2008, representing a loss of 101,300 jobs in the Golden State, the Department of Labor said.

Thursday, November 20, 2008

City and County are run by fools!

Why does the County need a new building for its retirement plan? What a waste of taxpayer money!

Taxpayer dollars down the drain:

The board of the Kern County Employees' Retirement Association approved the purchase of 1.25 acres of ground across from the Park at River Walk Wednesday for the construction of new offices.

Escrow on the land is expected to close on Dec. 2, said Dan Robinson of American Realty Advisors, who handled the transaction for KCERA.

The land cost somewhere around $800,000 said KCERA boss Ann Holdren. Efforts are underway to hire an architectual firm to design the new office and a contractor to build it.

Currently KCERA inhabits offices on the first floor of the Kern County Administrative Center on Truxtun Avenue.

No surprise on the next story, the city has been behind the curve for sometime on the coming tsunami of declining tax revenues.

City now $14 million in the hole.

Hit with declining revenue, city officials have frozen more than 100 jobs.

“But that’s not nearly enough to deal with the situation that we face,” City Manager Alan Tandy told the City Council Wednesday. The city’s sales tax has declined, and the city now expects to bring in $2.1 million less in sales tax than it budgeted for just six months ago, said Finance Director Nelson Smith.

And sinking property values have led to zero growth in property taxes, with an expected decline next year, Smith said.

The city will also stop setting aside money for its future health-care liabilities, Tandy said. But that saves the city a total of about $8 million — and the city needs to cut about $14 million.

Sunday, November 16, 2008

Now everyone wants some free money

Things are getting worse!

State of Illinois not paying its bills:

State owes $4 billion in unpaid bills

Illinois’ backlog of unpaid bills has hit a record $4 billion, and Comptroller Dan Hynes said Thursday the situation is “potentially catastrophic” if allowed to continue.

In a letter to Gov. Rod Blagojevich and state legislative leaders, Hynes said the backlog will hit $5 billion in March, and it will take his office 20 weeks to pay bills once they hit his office. Often, state agencies hold on to bills for days or weeks before handing them over to the comptroller for payment.

Already, Hynes said, his office has had to expedite payments to two vendors who threatened to cut off services to the state unless they were paid. One provides food service to a state prison, and the other supplies gasoline to state police cars.

Texas Teachers pension has lost $25 billion, since September:

AUSTIN — The Teacher Retirement System of Texas has seen about a $25 billion market value drop since Sept. 1 in the nation's widening financial meltdown, making additional benefits next year for retirees appear unlikely.

Bill Harris, the system's chief investment officer, said however that 275,000 retired teachers and beneficiaries covered by the fund shouldn't fear a change in current benefits.

"These are short-term conditions. We are a long-term fund," Harris said.

Cities of Philadelphia, Atlanta and Phoenix begging for free money:
WASHINGTON (AP) - Three big city mayors asked the federal government Friday to use a portion of the $700 billion financial bailout to assist struggling cities.

The mayors sought help with their pension costs, infrastructure investment and cash-flow problems stemming from the global financial crisis.

The mayors—Michael Nutter of Philadelphia, Shirley Franklin of Atlanta and Phil Gordon of Phoenix—made their request in a letter to Treasury Secretary Henry Paulson.

Nutter said cities are facing an economic crisis not seen since the Depression and need help just like financial institutions.

"I want to make sure that cities and metro areas are at the table, that their voices are being heard, that our challenges and problems are well understood, so that we can get relief," Nutter said.

San Jose has tin cup out:
As cities around the United States start to scramble for a share of the $700 billion federal bailout package, San Jose Mayor Chuck Reed said Friday that he's working with leaders of other large California cities to make sure they're not left behind.

The stimulus package Congress passed last month wasn't designed to dole out money to governments, so it's far from clear whether San Jose will get a piece. But with $1.6 billion in unfunded retiree health care obligations, plus $500 million worth of local and regional road work to be done and $750 million in federal help sought to bring BART to the South Bay, Reed noted the city has a full slate of needs.

There are numerous other links/stories of Insurance companies, Home Builders, Retailers, Governmental entities, Auto companies, etc... All asking for something for nothing. What a sad country!

Friday, November 14, 2008

Carl Cole, Suncal and some rumors

Former Principal and realtor Carl Cole strikes out:

Real estate agent Carl Cole’s bid to keep his license was denied Thursday by the California Department of Real Estate.

But Cole can seek relief through the courts, department spokesman Tom Pool said Friday afternoon.

Cole now has about a month to file an appeal with the state Superior Court.

“We’re really on another 30-day clock,” Pool said.

Attempts to reach Cole and his attorney Glenn Kottcamp Friday afternoon were unsuccessful.

Suncal is run by morons( I know you guys visit, so nothing personal):

4,000-home SunCal development in Castaic and three other projects were placed in involuntary bankruptcy by the Irvine developer Wednesday, bringing a total 15 SunCal developments into federal bankruptcy court.

Wednesday’s four filings were classified as involuntary because lender Lehman Brothers hadn’t consented, said Joe Aguirre, spokesman for SunCal Cos.

Lehman has arranged funding for all 15 sites, including Bakersfield’s McAllister Ranch.

Rumor Mill - Latest rumor is Castle and Cooke is laying off a lot of employees. Maybe they will start lowering the price of their homes?

Tuesday, November 11, 2008

California finances in bad shape!

California is $28 billion in the hole:

California’s budget woes, which project the current budget is running more than $11 billion in the red, could be seen as the good old day if nothing changes, warns the nonpartisan Legislative Analyst’s Office on Tuesday.

California’s struggling economy signals a major reduction in expected revenues and when combined with rising state expenses, the state will need $27.8 billion in budget solutions over the next 20 months, says the LAO.

“The state’s revenue collapse is so dramatic and the underlying economic factors are
so weak that we forecast huge budget shortfalls through 2013‑14 absent corrective action,” it says. “From 2010‑11 through 2013‑14, we project annual shortfalls that are consistently in the range of $22 billion.”

The LAO says it is imperative that the Legislature attack the budget problem ggressively, making permanent improvements to the state’s fiscal outlook.

“If the state has any hope of developing a fiscally responsible 2009‑10 budget, it must begin acting now,” it says.

Valley Plaza Mall owner on the verge of collapse

Valley Plaza & GGP:

Valley Plaza is located approximately 110 miles north of Los Angeles, in Bakersfield, the gateway to northern, southern and eastern California. Valley Plaza is the preferred shopping destination of residents of central California with a trade area expanding an average of 28 miles in each direction.

Mall Owner Is Warning of Default

Ailing mall owner General Growth Properties Inc. warned Monday in a government
filing that its failure to refinance or extend $1 billion in debt due this month could trigger default on billions of dollars in debt and its ability to continue operations would be in "substantial doubt."General Growth has $900 million in debt coming due Nov. 28 on two luxury malls on the Las Vegas strip. It has another $58 million in bonds due on Dec. 1.

From the GGP 10-Q on the economy:

Deteriorating economic conditions will have an adverse affect on our revenues and available cash, and may also impair our ability to sell our properties. General and retail economic conditions continue to weaken, and we expect this weakness to continue and worsen in 2009 as the economy enters a recessionary or near recessionary period. Consumer spending recently declined for the first time in 17 years, the unemployment rate is expected to rise, consumer confidence has decreased dramatically and the stock market remains extremely volatile. Given these expected economic conditions, we believe there is a significantly increased risk that the sales of stores operating in our centers will decrease, negatively affecting their ability to make minimum rent payments and increasing the risk of tenant bankruptcies. In addition to the direct adverse effect of tenant failures to pay minimum rents and tenant bankruptcies on our operations, these events also negatively affect our ability to attract and maintain minimum rent levels for new tenants. These circumstances negatively affect our revenues and available cash, and also reduce the value of our properties, reducing the likelihood that we would be able to sell such properties, on attractive terms or at all.

Saturday, November 08, 2008

Fresno is feeling the pain too

Idle development:

Some of the streets are in, but there isn't much else at Tierra Vista, an idle 44-lot subdivision in Dinuba that is a casualty of Estate Financial Inc.'s downfall. The Paso Robles company is in bankruptcy, and its principals have been arrested.

Mother and son Karen Roxanna Guth, 65, and Joshua Morris Yaguda, 40, both of Paso Robles, were charged with 26 felony violations of the California Corporations code, including selling securities to investors using false statements and failing to apply investor money to specifically designated property. The charges capped a six-month investigation.

The San Luis Obispo County District Attorney's Office also filed an enhancement alleging excessive taking of money totaling at least $3.2 million. That could add four years to any prison sentence, said Daniel Hilford, assistant district attorney.

The company issued more than 544 loans totaling $318 million and reportedly had about 2,700 investors, many of them living along the Central Coast and in Southern California. About 100 loans are in foreclosure, and the rest are in default, according to bankruptcy trustees.

The implosion of Estate Financial is being felt from Madera to Bakersfield. The company issued more than $15 million in loans using San Joaquin Valley real estate as collateral. Much of the money was used to acquire land and lots and prepare them for development.

Plant Closure:

About 115 workers at a Fresno container plant are expected to lose their jobs over the next 12 months in a "phased-down closure," officials said Thursday.

Missouri-based Smurfit-Stone Container Corp. is shutting down its cardboard manufacturing plant at 2525 S. Sunland Ave., in the Calwa neighborhood, as part of a consolidation of its regional operations, said Tim Rowden, a company spokesman.

The Calwa plant produces corrugated cardboard sheets used to make boxes. Earlier this year, Smurfit-Stone purchased a 90% interest in Calpine Corrugated, which operates another plant, one that makes boxes, less than five miles away in Malaga.

Yard sales:
It's a good half hour before sunrise as Annie Rini sifts through piles of clothing and stacks of dishes spread on tables outside a northwest Fresno home.

It's the first of more than a dozen garage sales Rini will hit before 11 a.m. on a crisp fall Saturday. She doesn't do it just for fun.

"This is so out of necessity," said Rini, who paid $2 for a ceramic platter and an orange Tupperware bowl with lid.

Like Rini, more and more people are shopping at garage sales to save money in a bad economy. And more people are putting their belongings up for sale for gas money or to pay bills

And their college football team should start playing high school teams:
Fresno State knew Nevada was bringing its pistol. Too bad the Bulldogs don't own a bulletproof vest.

Nevada packed its pistol offense and the nation's second-ranked running game into Bulldog Stadium on Friday night and proceeded to blast holes in Fresno State's defense as the Bulldogs lost 41-28 in front of 33,207 fans and a nationwide television audience on ESPN2.

The Wolf Pack racked up 600 yards of total offense, including 472 on the ground.

Friday, November 07, 2008

Down goes Security,,,Down goes Security

Two on one Friday:

Security Pacific Bank, Los Angeles, California, was closed today by the Commissioner of the California Department of Financial Institutions, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Pacific Western Bank, Las Angeles, California, to assume all of the deposits of Security Pacific.

The four branches of Security Pacific will reopen on Monday as branches of Pacific Western. Depositors of the failed bank will automatically become depositors of Pacific Western. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers of both banks should continue to use their existing branches until Pacific Western can fully integrate the deposit records of Security Pacific.

Over the weekend, depositors of Security Pacific can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

Down goes Franklin... Down goes Franklin

Friday Bank Faliure:

I. Introduction
On November 7, 2008, Franklin Bank, SSB, Houston, TX was closed by the Texas Department of Savings and Mortgage Lending and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.
The FDIC has assembled useful information regarding your relationship with this institution. Besides a checking account, you may have Certificates of Deposit, a car loan, a business checking account, a commercial loan, a Social Security direct deposit, and other relationships with the institution. The FDIC has compiled the following information which should answer many of your questions.

II. Press Release
The FDIC has issued a press release (PR-113-2008) about the institution's closure. If you represent a media outlet and would like information about the closure, please contact David Barr at 703-622-4790 (Closing Weekend) or 202-898-6992 (Thereafter).

Thursday, November 06, 2008

Mall losing a tenant

Another horrible retail concept is coming to an end, which means our local mall is going to lose a tenant.

Liby Lu is closing:

Retailer Saks Inc. said Wednesday it’s closing all of its Club Libby Lu specialty stores that cater to girls in the 4-to-12 age range.

In a press release, the company cited lack of profitability for the closings ... Birmingham, Ala.-based Saks (NYSE: SKS) has 78 Club Libby Lu stores in malls across America and 20 stores located in former Saks Department Store Group stores, the company said.

Saks expects to close all of its Club Libby Lu retail units by the end of the first fiscal quarter in 2009.

During the fiscal year ending Feb. 2, Club Libby Lu generated revenue of $60 million. The retail units and brand employs 1,700 associates nationwide -- all of whom will be offered severance packages.

Wednesday, November 05, 2008

$144 million cash “dividend" and Supreme Bean

Suncal update:

McAllister Ranch’s bankruptcy trustee has cast a critical eye on the relationship between Lehman Brothers Inc. and SunCal Co., court filings show —
especially the $144 million cash “dividend” the companies received from a development loan that later defaulted.

The trustee has requested an emergency order to force the Lehman affiliate in charge of $18 million left in a development fund to pay for basic upkeep of McAllister Ranch — southwest Bakersfield’s unfinished 6,000-home development — and two related properties in Riverside County.

The emergency motion filed Tuesday by the Chapter 11 trustee, Alfred H.
Siegel, also said Lehman’s status as first-priority lienholder “may be disputed,” mostly due to emerging details about the $144 million dividend.

A Lehman affiliate got $116 million of the dividend, the motion says.

The document also asserts the original $235 million development loan arranged by Lehman defaulted because the dividend payment made the development affiliate —owned by both Lehman and SunCal — unable to pay its bills.

“One fact is certain,” Siegel’s motion says. “If the $144 million had not been disbursed ... there would have been sufficient cash” to pay the developer’s debts.

Numerous construction companies, some based in Bakersfield, are owed about $46 million by SunCal for work done at McAllister Ranch and the Riverside sites.

Supreme Bean busted:
The new owner of now-defunct Supreme Bean, Bakersfield’s chain of eight drive-through coffee stands, has filed for liquidation bankruptcy.

San Joaquin Bank and early October numbers (not pretty)

Recall my post from April 2008 where I questioned the loan loss reserves at San Joaquin Bank. Well, it looks like I was correct.

San Joaquin Bank record first ever loss:

Bakersfield-based San Joaquin Bancorp was forced to record its first quarterly loss in almost a quarter century Tuesday after creating a cushion for itself in case of construction loan defaults among local homebuilders.

The company’s stock price fell $2, or 10.53 percent, to close at $17, its lowest
price in almost five years.

San Joaquin Bank's stock is now down 64% from its all time high.

Median Home price for October is now $165,000:

Bakersfield’s median price for existing homes fell 35 percent in October compared to the previous year, according to the Preliminary Crabtree Report released Monday.

October’s median price was $165,000. A year earlier, the number stood at $254,500.
Last month’s number was also a $10,000 drop from September’s price.

Looking ahead, Crabtree expects prices to drop further.

The median listing price is currently $157,900, he wrote, less than October’s median sales price.

If you look at the previous Crabtree predictions, even from a few months ago, he was still saying we hit bottom...looks like he is finally capitulating.