Every month is a cash/credit burn for hotel owners without much equity. Luckily they haven't built much the past few years or I would be worried.

Go away for days and miss a "firsts" by 3 comments when I come back.

With the recession officially over they can look forward to new happy times.. or more realistically the second dip of a double-dip recession.
A recovery fueled by Hopium is not really a recovery.
~splat

Stayed at a very large Sheraton a couple of weeks ago, and for a 31 story monster it was dead empty. The holiday inn earlier this week was apparently busy, according to reception, but I only counted about 30 cars for a 150 room hotel. There's my anecdotes for the day.

I see your bet, and raise you a Michelle Bachman

NO STRING RAISES!!!

I'm not seeing a big increase in business travel there. Wonder how the airlines are doing... oh-oh!

Okay, gotta run, l8r all.

"2 words that describe what is wrong with America
Maxine Waters."

I nominate Geithner, Frank, Dodd and a host others.

Old white insider guys that talk smooth and stab J6P in the back. Much more dangerous than Maxine Waters imo.

They're all minor players compared to Bush/Cheney.

Transfer payments from taxpayers to shareholders of mortgage insurers:

"The tax credit has spurred home buying this year, helping to stabilize the housing market. For mortgage insurers, stronger demand for houses is good news because that could help limit losses they face from delinquencies and foreclosures.

Bond insurers Ambac Financial /quotes/comstock/13!abk/quotes/nls/abk (ABK 1.13, +0.11, +10.61%) and MBIA Inc. /quotes/comstock/13!mbi/quotes/nls/mbi (MBI 4.37, +0.35, +8.68%) , which are also exposed to the housing market through guarantees they sold on mortgage-related securities, climbed 12% and 9%, respectively"

it BLOWS my mind that anyone who's followed CR for any length of time could actually think that Maxine Waters is what's wrong with America.

She's a flea compared to what's truly wrong.

poic, old biases die hard, even among the commentariat.

Reps. Waters (CA-35 and Bachmann (MN-06) provide a little levity once in a while, but they have absolutely nothing to do with what is wrong in America.

In an ironic sort of way, they're part of what is still right in America.

not to be confused with GMAC's additional need for more capital. I'm sure this will make YLSP become even more apoplectic, since I don't think anyone in Congress even contemplated bailing out Delphi, much less voted against it.

GM to Draw Down More U.S. Funds - WSJ.com
General Motors Co. by the end of the week will outline plans to draw down more U.S. government money it will use to aid Delphi Automotive LLP and also give an update on a closely watched escrow account of its bailout funds, according to several people familiar with the matter.

GM's additional borrowing will mostly be limited to Delphi's funding needs and is expected to be north of $2.5 billion, based on prior announcements.

Not a Real: Does your caps key get stuck sometimes? I had that problem once. I ordered a new keyboard. Problem fixed.

bearly wrote:

She's a symptom of what's wrong with America. We have the government we deserve. She's an embarrassment. It's no wonder we're in trouble.

Read about Ms Waters: Maxine Waters - Wikipedia, the free encyclopedia

Yahoo! the recession is over.
Economy growing but recovery could be at risk - Yahoo! Finance

Party on, Garth.

In a well-oiled business world, the sudden oversupply of human beans visa vis foreclosures and rental vacancies would be met by hotels, catering to those really down-sizing their lives, a bit larger in dimension than a prison cell.

"She's a symptom of what's wrong with America. We have the government we deserve. She's an embarrassment. It's no wonder we're in trouble."

I agree she's an embarrassment. There's no way I'd want her as my rep.

Those really in power with their backroom dealing and multi-billion trillion dollar payoffs LOVE having representatives like her around and LOVE the commentariat foaming over people like her.

Keeps the eyes away from the real issues. She's still a flea in comparison to what really ails America.

bearly wrote:

She's a symptom of what's wrong with America.

She's undoubtedly a scumbag, probably amoral, but definitely NOT one of THE smart amoral scumbag running off with the loot. This is like complaining about THOSE UNION BASTARDS ruining this great and glorious country, when trillions are being looting by only thousands of the nobility. But, the political-type 1's (PT’s in the glossary) will ALWAYS be more pissed at the other peasants than THEIR nobility. It’s not the PT #1’s fault. It’s how their brains are wired.

Peasant Fascists (PT’s #1) enjoy getting kicked in the ass by their betters. They only resent other peasants, either: not "taking their medicine (like men) from the nobility"; or the peasants not worshiping the worth nobility.

Mel wrote:

Acorn is the equivalent to a stain on a blue dress.

. . . and we know no thinking person would bother paying attention to such trivial nonsense.

Have a good day, folks.

energyecon wrote:

You clowns are playing the role designated for you perfectly...

Hmmm.......cranky today Which clowns?

Mel-I disagree-Acorn is a story-the funding kicks back in november first..it was a 30 day moratorium...not a permanent cut of funds....we were put to sleep again with instant gratification but failed to read the gray between the black and white..

Terry wrote:

I see BFF is almost upon us. Anyone seeing FDIC types hanging out around Salt Lake yet - word is the CIT debt swap failed and a visit to Ch 11 is next in line.

And the $4.5 billion new credit line?

some investor guy wrote:

I expect to see more and more of the trend from a hotel I stayed at a couple of weeks ago. Several of the employees were living there. In a mid level hotel in a fairly out of the way place, this can be a pretty good deal for all. The employees get a nearly zero commute. Not sure how the employees' rooms are accounted for or taxed.

Many hotels are closing whole floors, so they can cut back on cleaning staff. One in Seattle I was at a few week back only opened the restaurant for breakfast, and it was a buffett - previously they had the restaurant open all day with menu service.

And Acorn is equal to Iraqistan how? To the trillions of funny money looted? Come on--minnows are not sharks.

mel- I'm not comparing in cents and both issues make no sense....

Cinco-X wrote:

Check this out-

well, cinco... good luck getting any in the ignoramus class to dig into anything like that. math is hard, remember?

Eric wrote:

Moonshot

I still think anybody who plays in equities in either direction is absolutely nuts. The silly unsustainable trends in GDP(consumer spending soaring vs. personal income tanking, residential RE nonsense) and high jobless claims leave me very content holding Treasuries that yield literally double what stocks do.

Go your merry way, SPX, for you go without me...

[dons DOW 10k hat and rose-colored glasses. Turns on generator in basement in preparation for Maria B plugging in nighstand cowboy]

On a previous thread topic, but why post to a thread, here is the first half of my analysis of the GDP numbers. It is pretty extensive. I will put up the second part as soon as it is posted over at Zacks (tood long for a cut and paste, the two parts together run about 3300 words)

GDP Notes - In Depth

Did anyone get runover by the market u-turn today? If this continues, we don't need no good news on the economy nor jobs. We can live on government handouts derived from their revenues from asset inflation and record bank profits .ROLOL

"Did anyone get runover by the market u-turn today?"

My lonely 3 shorts still left tend to follow the 3 very small steps forward, 1 GIGANTIC step backwards method.

Ask the man in the mirror...

"Did anyone get runover by the market u-turn today?"

My stocks are heading in all directions at once. My options did a nice job yesterday and would have helped if we'd been down today.

NOTaREALmerican (profile) wrote (in reply to...) on Thu, 10/29/2009 - 9:49 am
t r orwell wrote:We can live on government handouts derived from their revenues from asset inflation and record bank profits
That's what the debate at Naked Capitalism was about a few days ago. Basically, if the rest of the world really doesn't "mind", perhaps we CAN just printing an extra 1T bucks-a-year forever.

the continued gaming of America's dysfunctional economic system dependent on increasing debt, faux GDP growth, ponzi schemes and bubbles is really quite laughable because it's simply not sustainable

"I wonder if there has ever been a society so badly deluded as ours"....James Howard Kunstler

Dirk van Dijk wrote:

I would put Leiberman, Bauchus, Baccus, Bachman, Steve King, Jim Imhoff and Jim DeMint much higher on my list of what is wrong with America than any of those folks.

I'd say that, until the peasant PT 1's & 2's can overcome their cognitive-dissidence about THEIR favorite nobility, the peasants will be caught in this "YOUR nobility is scum" debate. Which, IS what the common owners of both parties want.

km4 wrote:

dysfunctional economic system

Caused by a dysfunctional political system. The economic system is actually functioning perfectly.

Froom Dirk's Blog...

The real star of Fixed investment, though, came on the residential side, which rose 23.4%. This is the first increase in almost four years, and follows declines of 23.3% in the 2Q and 38.2% in the 1Q.

BUT, from Briefing.com's analysis:
•Further, the first-time homebuyers tax break has benefited not only the construction firms, who have ended their decline in manufacturing new homes, but also realtors through increased income/fees. The jump in realtor expenses accounted for a full third of the increase in the residential investment component.

The FTHB credit boost in used home sales the last quarter added 0.2% to GDP in realtors' fees alone.

*higher on my list of what is wrong with America than any of those folks. *

I nominate Juvenal Delinquent.

'Cause he'd like the notoriety.

poic wrote:

[dons DOW 10k hat and rose-colored glasses. Turns on generator in basement in preparation for Maria B plugging in nighstand cowboy]

And here I'd thought I'd be clever and make a not-so-subtle nightstand cowboy reference to see if you were still reading the thread.

I don't get CNBC in the office (and my speakers are broken so I can't even stream it if it was available), but I can only imagine the zoo-like noises that would be emanating from that station today.

Dirk van Dijk wrote:

On a previous thread topic, but why post to a thread, here is the first half of my analysis of the GDP numbers. It is pretty extensive. I will put up the second part as soon as it is posted over at Zacks (tood long for a cut and paste, the two parts together run about 3300 words)

To quote you:

It is important to note that during the recession consumer spending declined far less than did overall GDP, especially in the first quarter, so the consumer was becoming a much bigger part of the overall economy. This is not healthy over the long run, but at this point I think people are happy to get some growth wherever we can find it.

I think that's incredibly bad news. It means imbalances are worsening not just domestically but globally, and investment in China in overcapacity is running apace. This is the exact opposite of what many had hoped for as a silver lining: deleveraging of the U.S. economy(nope, the opposite), and a transition of consumption from the U.S. to the developing world(again, the opposite).

Combined with the data on personal income and job losses, I can only find unsustainable long-term trends here.

Mook wrote:

That's just nuts. One-point-seven billion hotel room-nights a year available in America? Massive industry overcapacity any way you slice it.

A few days ago we had a fun discussion on the morality of sending discoloured edible beans from North America halfway around the world to starving people in Africa.

What about the morality of having a couple billion empty beds when millions sleep on the streets every night, right here in North America?

Not that I want some dirty homeless person sleeping in the hotel bed before I rent the room. Ewww.

The jump in realtor expenses accounted for a full third of the increase in the residential investment component.

This hurts my head. How are realtor expenses considered investment and not a service? ie, how does money paid to them have something other than a negative ROI? Hell, my bet is that ROI is close to -90%. It sure as hell is not compounding with a positive percentage.

I dunno, JP, those LS400's don't buy themselves!

While headline personal income may look OK, when we subtract government social benefit payments from that number the Year Over Year change is continued deterioration (from the Bureau of Economic Analysis National Income and Product Accounts Table 2.1)
energyecon: Continued Deterioration in Personal Income - Govt Social Benefits
edit: this has, umm... shall we say negative implications for the sustainbility of the 3.5% GDP print

Here is part 2 of my write up where I focus on the contributions to growth rather than on the percentage inccreases/decreases

Contributions to GDP Growth

OT, but for those who might be interested:
Technology Review: The Future of Energy: A Two-Part Webcast Series Sponsored by Shell

energyecon wrote:

energyecon: Continued Deterioration in Personal Income - Govt Social Benefits

Wow. Amazing!

" The jump in realtor expenses accounted for a full third of the increase in the residential investment component

I know this is an accounting thing, but realtor commissions are not an investment, they are an expense. "

What would we do if 5M people who tell you "buy now or forever miss the boat" went BK?

It's investing in convincing people to lose money in real-estate. Seems good to me.

/snark

energy, scary chart...thanks

energycon,

I assume the y-axis is in billions? Label your axes!

"I went home for lunch today and watched some CNBC whilst I was eating. The talkingheads on there were falling over themselves talking about the GDP numbers and how the stimulus plan had brought us this prosperity."

By us I think they meant the Wall-Street crowd. Since that's the crowd they move in it all makes sense from their perspective.

Talking bobble-heads is more appropriate.

NotaRealmerican, reminds me of years back when a college friend and I were out on a double date with 2 stewardii. He periodically stopped the car and took out a 5 gallon tank of water from the trunk to pour into his leaking radiator. His date asked what he was doin. He told her while workin on his Phd thesis in physics he discovered how to run a car on water. She believed him for a few days. He is winding up his career now as a professor of English at a major Florida university. Still loves to bullshit

poic wrote:

What would we do if 5M people who tell you "buy now or forever miss the boat" went BK?

We would wait for them to get jobs that add something more to the real economy.

Oh wait. That works much better in a healthy economy, when there are more jobs.

Still, it seems like 1/3 fewer realtors would be a net positive. You could still find one if you really wanted one, and the rest would be doing something else.

poic wrote:

I'm glad my mother is British. I've got a 40 year leg up on the coming zomibification over the rest of you pikers.

Take your bleedin' queen mum and shove her Victorian lace where Maggie Thatcher's sun... eh, who cares anymore. We're all redundancies now. Teach me how to take "tea", my comrade.

cheesed out with a note under the chart (and a hat tip!)

Well, this is the Year over Year Change - let me go back and recheck - actually, I will recreate the dang thing from the quarterly data as a cross check...now you got me going lol

Something about the PCE deflator for GDP bugs me. It's for a rather different basket of goods than PCE. For example, there is no deflator component for taxes or interest.

I am also concerned that the employer match of social security contributions is counted as income, and then social security benefit payments are also counted as income.

Is your friend George Castanza? Were the stewardii blonde? Did his bullshit lead to a score? You shouldn't post only half a story--this isn't about finance.

Not that I want some dirty homeless person sleeping in the hotel bed before I rent the room. Ewww.

Would it be okay if they just pitched their tent in the room instead?

oh wow, was I ever off in guessing the BEA's preliminary estimate of Q3 GDP, but so far I am right that the rally is back on post-report.
Where will the revisions be?

follow along w/ Contribution to % change of GDP, QoQ change, Absolute GDP in chained 2005 $)

I think the estimation errors boil down to 2 things.
1. Price estimation. Applies to everything from retail clothing, to imported oil. They only have 30 days to get the preliminary report out so they just grab the WTI price of oil and estimate from that. Thanks to hedging, refineries have paid no where near the Q3 oil prices. If you look at oil in storage, it peaked around July (?), after which the price took off once the refineries were demonstrably cutting back their receipt of deliveries. Since that time retail gasoline prices stopped tracking the spot price of oil
2. Inventory estimation. This one is the result of price estimate x inventory unit estimate. So if they're both wrong, it's going to be a huge swing. I think the BEA is dead wrong in their inventory estimates. Instead of a big build in inventory (+23.4% QoQ) -- something that is not borne out by payrolls, capacity utilization, surveys, or company reports -- it is likely to be a decline that ranks between Q1 (-38.2%) or Q2 (-23.3%). This error is probably largely attributable to their auto sector estimates. C4C quite clearly came out of inventory, they didn't have the chance to ramp up production ahead of time. Inventory building added 0.94% to GDP, vs. Q1 -2.36% GDP and Q2 -1.42% GDP. If there was indeed that kind of inventory build while jobs were being shed, that would be apocalyptic for unemployment forecasts. Fortunately the BEA is just slower than me

C, Personal Consumption Expenditure = +2.36% of GDP, reason:
. . 22.3% increase in Motor Vehicles & Parts (+1.43% GDP)
. . 13.8% increase in Nondurable Goods
I, Gross Private Domestic Investment = +1.22% of GDP, reason:
. . 77.1% increase in Single Family Homes (+3.28% GDP)
X, Net Exports of Goods and Services = -0.53% of GDP, reason:
. . 21.4% increase in exports of goods, 20% increase in imports of goods,
G, Government Consumption Expenditures and Gross Investment = +2.3% of GDP, reason:
. . 7.9% increase in Federal (+2.98% GDP),
. . 8.4% increase in National Defense (+2.16% GDP)

some investor guy wrote:

I am also concerned that the employer match of social security contributions is counted as income, and then social security benefit payments are also counted as income.

Anything to cook the numbers. Is there a hedonic adjustment for Viagra?

rich wrote:

Would it be okay if they just pitched their tent in the room instead?

Yes, that would be acceptable. But no cooking in the rooms, at least not over an open fire.

black dog wrote:

Just about everyone on business tv - the 'journalists', guests and politicians have one thing in common

Not just business TV actually. MSM disconnected from the peasant class decades ago. Which is why the peasants knee-jerk, but correct - imo, reaction to "news" is that it has a liberal bias. The peasants have been complaining for years that the nobility is primarily "liberal", which is correct - as "liberal" generally means (includes being) "not provincial, worldly, open to outside ideas".

The top 5% have been running things for awhile. Media hasn't represented "the interests" of the peasant class for years. Which, of course, has good and bad effects.

noob goldberg wrote:

But no cooking in the rooms, at least not over an open fire.

You are less concerns about seeing the homeless men pitch tents and more concerned about burning down excess CRE? Why?

crazyv wrote:

As long as the sheep get distracted by irrelevant stuff they will get fleeced.

Just in time for winter too!

yagij wrote:

You are less concerns about seeing the homeless men pitch tents and more concerned about burning down excess CRE?

I don't want my room to smell like charred squirrel. If it does, I want to be the one responsible.

I think if a homeless person took a shower and put on some of your clothes you might mistake him as either an equal or a cross dresser.

The government should pass out vouchers to homeless people to solve this problem. Stimulus, homeless people sheltered in good, private rooms, commercial real estate values raised, and GDP can go up next quarter.

Am I an economist? No, but I did stay in a Holiday Inn Express last night.

Doesn't seem like it would be that much of a mistake, in either case.

Yancey,

The amount of wage income was down, but various Federal benefits were up. The report also said people were saving less.

crazyv wrote:

savings rate is up

The savings rate isn't up; it blipped up a couple months and everyone's parroting that one data point. It's 3.3% now, and that's net of the large government transfers. From wages and salaries it's almost certainly negative again.

U.S. GDP rises 3.5% as stimulus kicks in - MarketWatch

What you're missing, though, is large governmental transfers in the forms of stimulus, unemployment insurance, massively increased payouts from SocSec, etc.

Would someone inform Nancy Pelosi that Halloween is Saturday and she can remove that mask.

Oh wait?

crazyv wrote:

Is it really the impact of people not making their mortgage payments and using that for spending

I don't know either. The peasants I work with (so, these are working peasants) haven't shown any noticeable cutbacks in "life-style". I'm just not seeing any signs of the "new frugality" that everybody else is seeing amongst individuals (but, yes, restaurants & stores seem emptier, a bit).

I think there might be more fat (un-recorded savings) than the "economist" know about. Which is now being spent.

I'm going to pay to download "Eat a Peach" which does not help the economy as much as you people do. No human clerk, truck, or CRE will be involved.

hard to believe that people who are collecting unemployment are not earning less money than the were before they were unemployed , same as those going on SS. So yes it is better than what it would have been before the transfer payments but even with that the aggregate income has to be down.

yagij wrote:

Local salvage yard is enjoying a high probability of going into BK over C4C. He is behind in his payments for the scrapped cars to local dealerships (~30k for 1 alone) and is sitting on tons of scrap metal that is getting pennies/tonnage.

The salvage year guy needs to focus on selling into the spare parts business. I have been looking for parts for months and can't find what I'm looking for. If the salvage yards would even bother to post their inventory on the web or something...

Basel Too wrote:

hope no one got too greedy with FAZ...

I wish I had gotten greedy with some mining stocks. Still kicking myself after this morning's moonshot.

it was an auto dealer bail out pure and simple- some of those guys are well connected to individual members of Congress. The dealers got sell 2009 cars at full price rather than a discount. The rest including the buyers got screwed. Come April 15th unless Congress changes the law (always a possibility) they will have to pay taxes on the payment plus they will have bought a car that they could have got probably at the same price if they had waited a couple of months.

we got time to do it but holding it? dont know got to have very green,just got too

NMHC Quarterly Apartment Survey: Occupancy Continues to Decline, but Pace Slows

energyecon wrote:

energyecon: Yep, its that bad

Hmmmm. Maybe a bunker isn't such a bad idea....

crazyv wrote:

they could have got probably at the same price if they had waited a couple of months.

Probably a 2010, for less.

sm_landlord wrote:

They were the last big miner with hedges, and were getting punished for it.

I know, but to remove them when gold is at its highest historical level ever? Can they start rapidly hedging again once the price starts falling? I guess I don't understand precisely how the hedging book works in gold mining.

Mike,

No, just that the government transfer payments are filling a huge hole...as long as they can be sustained. We leave the determnation of that period of sustainability as an exercise for the reader...
edit: in Q3 2009, top line personal income was ~$12 billion, and govt social benefit payments ~$2.1 billion

noob goldberg wrote:

Can they start rapidly hedging again once the price starts falling?

The market is pretty active. I can't imagine that they would have too much trouble finding a counterparty.

yagij wrote:

I think they just expected to gut the car for the secondary market and sell the scrap to China. Now, no one is repairing their cars and China isn't buying scrap.

I'm trying to replace some parts and can't find them anywhere. Wheels, electric seat motors, etc.

When good men do nothing, evil triumphs

I had family survive--there were no Germans--Austrians --that didn't know the truth by 1940--none. They were very happy to steal Jews' property and to round them up for capture. Remember, after the war, they didn't give this loot back for some 25 years. Also, all Europeans realized what, and why it was going on. The death of Jews was not the reason for any country to go to war--but the elimination of them was still a goal after the war. Hence, the survivors were sent packing to Israel--without money or acceptance--and refused permission to return to their former property. History gets revised--and distorted--I believe the people with numbers on their arms. Final rant--no air force deemed it prudent to bomb the rail lines leading to the "camps." The fucking pigs went along with the slaughter.

RE: salvage yard problems.

The capacity of systems evolves to match demand. Anything else would be "inefficient." Economic systems have very high inertia. Any rapid change in the demand is going to stress the system, possibly to the breaking point.

Congress often mandates step or impulse-function changes in demand, with either ignorance or the expectation that systems are elastic enough to respond.

It shouldn't be surprising when they can't.