SPF is trying to sell hundreds of millions of dollars of its stock to shareholders and an investment fund. It is trying to sell those shares at $3.05 while representing its bookvalue is around $10 per share. [more]
In looking at the market or government statistics everything seems fine. Things seem to be chugging along. [more]
Wages falling for many. [more]
"I think this is probably more serious than anything in our lifetime," he says. In short, his feeling is that the United States and Britain are facing a recession of a scale greater than the early-1990s, greater even than the 1970s.
"I think the dislocations will be greater because you also have the implications of the house price decline, which you didn't have in the 1970s - so you had stagflation and transfer of purchasing power to the oil producing countries, but here you also have the housing crisis in addition to that." [more]
Inflation seemingly out of control. [more]
Consumers are supporting $7 Trillion more in debt than a few years ago. [more]
Some commentary on today's commentary off of Dow Jones: [more]
SPF annouced that they are raising more cash than many expected they needed. In previous posts, I stated they needed at least $500 million. The number that was announced was right about there. [more]
From the legal filing today(commentary in italics)........ [more]
MP Fund will buy $381 million of new preferred stock convertible into 125 million shares at $3.05 per share. [more]
FELLOW CAPS-I DON'T MAKE THIS STUFF UP!!!!!! [more]
I have been accused and chastised on a number of issues this weekend. Take the following quotes from Bellard and use then as a learning lesson. [more]
Yesterday, I drove north on Highways 5, 99 and 70 into that Yuba County growth frontier that offered such a great relief valve earlier this decade for people with jobs in Sacramento who couldn't afford to buy houses in Sacramento.
It had been a few years since I've seen the place - especially those giant master-planned communities of Edgewater and Plumas Lake that rose off the flat lands almost overnight. I am telling you: it is hard to overstate what a fall they have taken.
I knew sales have been slowing for a couple of years up there as it became cheaper to live in Lincoln or elsewhere near Highway 65 and to skip the commute. Now, gasoline is so expensive - $4.19 yesterday at the Shell station on the exit ramp to Olivehurst's Edgewater - that people have to think hard and long about buying up there and driving 40 or 50 miles south every day.
What did I see? Obviously there are the thousands of houses built during the boom to start with. It's amazing how many people have moved up there. Thousands. You have to see it to believe it. Yuba County dreamed a big dream and everybody came.
But it was the abrupt end of it all that really got my attention. I don't think I saw more than 20 houses being built all day - and most of those were at a D.R. Horton project in Plumas Lake that I am sure they are trying to be done with and move on.
Mostly, it was acres and acres of dead subdivisions that just jumped out at a driver touring this part of the state. In so many places the streets and sidewalks are in, the utility wires are sticking out of the ground, the street signs are up - and it's nothing but weeds almost as far as you can see.
It's also the houses still awaiting buyers: In Edgewater: A street of 20 houses built by Roseville's JMC Homes with only one house occupied.
In Plumas Lake: a Ryland Homes subdivision called Thoroughbred Acres. Five lovely models and nothing else. Behind it a pile of Ryland flags and poles. I walked up to read the writing on the flags and a jackrabbit ran off. Down Arboga Road, another subdivision by Lakemont Homes. Even the models had dead lawns. [more]
As many of you know SPF has been my whipping boy of homebuilder stocks. The reason is that I believe its management has been the most negligent of all public homebuilders and potentially flat out misled shareholders about the current business conditions and outlook. [more]
My earlier prediction was 10% umemployment by the end of summer.....we have already exceeded that number in a number of counties in CA and the situation is gettng much worse daily. [more]
INFLATION, WHAT F...ING INFLATION WE STUPID AMERICANS???? [more]
Excepts from SPF's 10Q: [more]
May 22 (Bloomberg) -- As nighttime temperatures plunged in Birmingham, Alabama, last October, Dora Bonner had a choice: either pay the gas bill so she could heat the home she shares with four grandchildren, or send the Birmingham Water Works a $250 check for her water and sewer bill. [more]
"The way the economy is going, it's just amazing the people that are becoming homeless. It's hit the middle class." [more]
Let's get a few points out of the way. First, there is no one more important to the CAPs blogs than FloridaBuilder. Second, the reason I put his name in the title is I get AT LEAST twice as many hits and a few more recommendations. Third, my posts are not primarily for popularity but to simply make people think and not to necessarily agree with my position as socratic debate tends to lead to reasoned results. Finally, FloridaBuilder and I are conducting a friendly competition, so my pimping posts are intended to be no different than if we were playing poker and I was trying to throw him off his game or bluffing my brilliant hand. [more]
"Imminent" recession may cost NYC 59,400 jobs: study
Target reported earnings this quarter of $0.74 vs. $0.75 last year. It beat analysts estimates by a bit but this point will probably be missed: [more]
Banks Keep $35 Billion Markdown Off Income Statements (Update1)
By Yalman Onaran [more]
Equity offering, sale, debt offering, the rumors about SPF keep flying. They have even convinced FloridaBuilder to Green Thumb when I am betting on BK. What a knob I must be!!!!!!! [more]
As our horses, FB's WCI and Alstry's SPF, approach the finish line, FB gains new confidence as he just green thumbed SPF!!! Based on FB's history, I should just go out on the track right now and shoot my horse. [more]
Most builders have close out sales, not SPF. [more]
Aborbtion rate is the number of houses a builder sells per community. [more]
When May's sales at WalMart are flat after the government sends rebate checks and when many of the products(food and fuel) it sells are up 20%, 30% and more......SOMETHING IS SERIOUSLY WRONG!!! [more]
For less than the price of a decent used car, you can buy a home in Atlanta today. [more]
If HOV is forced to raise capital at 11 1/2% immediately following a $150 million dollar equity offering and its rating is Baa, how will SPF raise money with the downgrade tonight by S&P to CCC. [more]
After hours HOV reveals the following: [more]
Today, HOV announced that it is commencing with a Private Placement to raise $600 million dollars to be secured by substantially all of the assets of the company. The only assets that will have priority over this will be any debt to the revolver bankers. Do you think the bankers would let anyone get above them? [more]
From HOV's May 5th Press Release just before they sold millions of shares to the public: [more]
Anyone who has ever been in a hurricane knows that second half, after the calm of the eye has passed, is the time when the storm causes the most damage. [more]
America is a bunch of concentric systems that need to operate in order to allow our country to function properly. If these system's fail, America fails. I will slowly identify these systems out over the next few weeks and reveal their import on our society. [more]
When people buy condos, they expect their monthly fees will cover many of the responsibilities that they would otherwise have as single-family homeowners, like cutting the grass and paying the water bills. Now many find themselves nagging each other in the hallways to pay their assessments and adding special fees while haggling over chores. In Miami, Chicago and San Diego, condo owners are adjusting to the economic woes, sometimes by mowing themselves and working shifts for building security — all while lamenting their lost community. [more]
In the past few weeks, I have read a bunch of stories how home sales rebounded in April. Today, we find out why.....foreclosures up 65% from all ready high levels. In CA, foreclosures accounted for 3/4 of all sales in April!!!!!! [more]
At the worst of The Great Depression, the housing market was never as bad as it is today. [more]
Going into the home stretch....Alstry SPF is gaining some serious ground on WCI. Alstry has pulled within seven lengths with only a short distance to go. Can Alstry pull of the impossible? FloridaBuilder has never been wrong on his BK calls. Alstry has no contacts to give him that extra boost. Can sheer determination beat out brains, beauty and brawn?
Its still a long shot but do you believe in miracles?
Right now SPF represents to shareholders and investors that its book value is about $13 per share. Approx $2.9BB in assets and $2.1 BB in liabilities. If you believe that number I have a suspension bridge I can sell you in any desert in the world. [more]
First , I must precede this post with saying that I have the upmost respect for FloridaBuilder. I think his presence on CAPS is a huge addition and without a doubt one of its most important players. [more]
Here is the headline tonight: [more]
“Hundreds of families have lost their homes to foreclosure since the beginning of last year, and in a sign of more to come, at least 1 out of every 16 households has received default notices.” [more]
First we had bankrupcies increase about 50% in April. Then we had the largest city in CA to ever vote to file BK. Now this: [more]
Gov. Phil Bredesen said Wednesday that state tax collections have been "deteriorating dramatically" in recent months, and it will be necessary to make another $468 million in budget cuts.
He said that will necessitate cutting 5 percent of state jobs - or 2,011.
Gov. Bredesen said he hopes to have the cuts made on a voluntary basis - with cash payouts used as a retirement incentive.
At a news conference in Nashville, he said April tax collections showed the largest drop since records began to be kept in 1961.
He said the first quarter was the third worst on record, and the second quarter "is certainly shaping up to be worse than that." [more]
From FloridaBuilder's Blog Today: [more]
Sometimes when I read the headlines or watch CNBC I think how stupid must the editors think we are? [more]
From MarketWatch in February: [more]
From today's earnings report: [more]
GET READY FOR THE MUNICIPAL DEFAULTS!!!!!!!! [more]
FloridaBuilder and I have a bet on which homebuilder will declare bankruptcy first. My choice is SPF...which was green thumbed by FB when I made my choice and his is WCI. [more]
First Marblehead Cuts Work Force In Half [more]
Has anyone noticed layoffs are now being announced as a percentage of total workforce????? [more]
We are getting closer to 10% unemployment every day!!!! 15% may not be too far off. [more]
States depend on sales and income taxes for about two-thirds of their revenue, according to the National Conference of State Legislatures. [more]
Last update: 8:09 a.m. EDT May 2, 2008 [more]
This is a theory I developed a couple of years ago. Basically a contraction in the economy to a core or center. By the time we are done, the American Economy could shrink by as much as 50%. Something we have never seen in our history and its effects will be very profound. [more]