billddrummer

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    • Tue Jun 24th 17:22 PM | Rating: 0 0
      Commented on:
      Las Vegas House Sales Jump [Housing Tracker]
      Hi Judy,

      Additional data from the northern NV real estate community.

      As I mentioned earlier, the $1 million+ housing supply is 5 years based on current selling patterns. In the $300K-$500K range (sweet spot for move-up buyers), there's an 18 month supply of existing homes, based on YTD sales activity. This doesn't count new homes supplied through the builders still offering product in this market.

      An 18-month supply of move-up housing suggests that not many families are in the shape to move up. With 60% of closings between banks and buyers, and most of them below $300K, there are precious few homes being sold that give the sellers the wherewithal to buy a more expensive home. Sellers these days are happy to walk away without contributing cash at closing.

      Just wanted to add this tidbit to the pool of data out there.

      Thanks again for all your hard work!

      Bill
      View article »
    • Tue Jun 24th 16:45 PM | Rating: 0 0
      Commented on:
      Circuit City Needs a Management Overhaul
      I agree with you 100%.


      On Jun 23 10:43 PM Best Buy Dave wrote:

      > I worked for Circuit City for 19+ years and now for the past 3 years
      > with Best Buy. I am one of the "shipmates" who left before Admiral
      > Schoonover ejected me from his Titantic! I believe Circuit City's
      > problem began before Phil took over as the CEO. Allan McClough took
      > over from Rick Sharp. When at CC I recall Allan blamied Rick for
      > not changing CC retail model to match customer's shopping habits.
      > The last great CC CEO was Rick Sharp(who made quarterly profits)
      > now who would they replace Phil S. Blockbuster who reported negative
      > earnings this past quarter? Maybe like CompUsa, Federated, Gemco,
      > and others, CC should fly the white flag and fade away like the Sony
      > Betamax
      View article »
    • Tue Jun 24th 11:52 AM | Rating: 0 0
      Commented on:
      Las Vegas House Sales Jump [Housing Tracker]
      Hi Judy,

      Ran across this article regarding the Case/Schiller index for metro areas:

      www.bloomberg.com/apps...

      It's good to see sales finally rising in Las Vegas. But the article points to an inventory overhang despite price decreases, which will continue to restrict a true recovery.
      View article »
    • Mon Jun 23rd 17:22 PM | Rating: 0 0
      Commented on:
      Circuit City Needs a Management Overhaul
      Disgruntled shareholders have a chance to voice their concerns at the stockholders' meeting tomorrow. How I'd like to be present for that!!
      View article »
    • Mon Jun 23rd 14:29 PM | Rating: 0 0
      Commented on:
      House Price/Sales Are Affected By Wall Street [Housing Tracker]
      Hi Judy,

      Thanks for the kind words. I appreciate it.

      As far as a bottom in the CA market, it's hard to say whether affordability truly exists yet, since the affordability index in many California communities is still below 50%, and in coastal areas is still below 20% (I saw a statistic that said SF affordability was 8%). But it stands to reason that more foreclosed product entering the market will drive down sales prices. The biggest continuing risk, I think, is the amount of standing inventory still waiting to be absorbed. Until the number of sold properties starts to consistently surpass the number newly listed (whether by residents or by banks), the inventory overhang will persist. And that could take another year, if the Alt-A and neg am resets produce a 'second wave' of foreclosed properties washing ashore.

      Always a pleasure reading your compilations. Keep up the great work!

      Bill
      View article »
    • Mon Jun 23rd 13:46 PM | Rating: 0 0
      Commented on:
      More Homebuilder Incentives [Housing Tracker]
      Tom,

      Thanks for the info. I see trouble a'comin...
      View article »
    • Mon Jun 23rd 12:45 PM | Rating: 0 0
      Commented on:
      Hey Blockbuster, Still Want To Buy Circuit City?
      To michael6296,

      When BBI completes its due diligence, it will probably find that closing half the CC stores is the best way to bring the company back from the dead. I'd guess that about 50% of the existing stores underperform. If you close those, the remaining locations would be good to keep.

      Makes you wonder though--couldn't the CC management do the same thing?
      View article »
    • Mon Jun 23rd 12:41 PM | Rating: 0 0
      Commented on:
      Circuit City Needs a Management Overhaul
      Mr. Lee,

      I appreciate your penetrating analysis of CC, and the problems that are plaguing it.

      I've followed this company for over a year and a half, since I began working at BBY, and the contrasts between the companies couldn't be more telling:

      Comp same store sales at BBY rose 3.4% in the 1st quarter;

      Revenue increased because of both organic growth and new stores (CC doesn't have the resources to open stores now);

      BBY's gross margin narrowed by 20 basis points, compared to 174 basis points for CC (despite the company's assertion that 'close rates are improving, and attachments are positive');

      While net profits slipped principally because of higher interest costs (borrowings rose to finance IT and infrastructure improvements for the international division, as well as the purchase of a 50% stake in Carphone Warehouse), profits from continuing operations rose 4% compared to last year.

      BBY is clearly demonstrating the 'crisp execution' that Schoonover continues to refer to in company communications. I wonder why the board continues to accept the tailspin as a viable operating strategy.

      As you said, all the talk about the turnaround is just that--talk. The good news (if there is any) is that the loss was less than the company predicted when it released its FYE 2008 report. Then, the loss was estimated at $185 million. So you could spin it to say that "well, we lost less money than we thought we were going to, so that's proof our turnaround plan is working."

      NOT!!!!!!!!!!!!!
      View article »
    • Mon Jun 23rd 12:16 PM | Rating: 0 0
      Commented on:
      More Homebuilder Incentives [Housing Tracker]
      I'd like to know what the minimum credit score is for that Las Vegas program. Probably 700+. Also, what other qualifications are required (reserves, debt ratios etc.).

      As far as appraisers adjusting values, I agree with Tom Lindmark that the base price of the property plus upgrades is more than likely what appraisers are using, and whatever concessions are being offered are excluded from the appraised valuation.
      View article »
    • Mon Jun 23rd 11:55 AM | Rating: 0 0
      Commented on:
      Small Builders Are Coming Back [Housing Tracker]
      Hi Judy,

      I think the small builder has a place to fill voids where the publicly traded companies have pulled back. The biggest limitation on smaller builders is capitalization and access to construction and development financing. With banks under scrutiny to limit exposure in construction, it's more difficult than ever for smaller builders to get financing for new projects, particularly for raw land loans.

      But there is demand for affordable housing, however one defines it. Affordable in San Diego apparently is $400,000.
      View article »
    • Fri Jun 20th 19:28 PM | Rating: 0 0
      Commented on:
      U.S. Seeing More Inflation Than Anyone: See Whirlpool For Proof
      To bearfund,

      Correct me if I'm wrong, but LUV has reported cumulative operating profits of $2.5 billion (!) over the past three years. True, their hedging activities in 2007 boosted net income by $300 million, but the operating side of the business was solid. Now, it's true that profits have slipped this year because of higher operating costs (salaries, fuel, landing fees), but the airline is still profitable on an operating basis. Unlike everyone else. And their load factors are still among the highest in the industry.

      Just wanted to bring that out.
      View article »
    • Fri Jun 20th 19:18 PM | Rating: 0 0
      Commented on:
      Mail Delivery as Economic Bellwether
      To iThinkBig,

      Please spell-check your posts. I'm going to assume you have some valid points, but the poor spelling prevented me from seeing them.
      View article »
    • Fri Jun 20th 19:07 PM | Rating: 0 0
      Commented on:
      Strong Global Push Means GM Likely to Succeed in the Long Run
      If you call a company that can still issue 8.25% preferred stock "well-capitalized... while its debt is rated junk then I'll park my 30 mpg Kia and buy a 12 mpg pickup.

      GM is a classic example of a cancer patient that has had surgery, radiation, chemotherapy and medication, yet still has cancer. Now the doctors just need to make sure the patient is comfortable until he's dead.
      View article »
    • Fri Jun 20th 19:00 PM | Rating: 0 0
      Commented on:
      Costco, Wal-Mart Lead a Consumer Revolution
      I see patterns similar to the article's premise as well. But one thing that's ignored (unless I missed it) is that food and fuel sales may be driving as much as 60% of the revenue growth at Costco, while merchandise sales slip. Instead of a trend toward discount shopping, it may just be consumer reaction to inflation in food and energy. COST has good prices on food (if you have a place to store it) and good prices on fuel (usually among the lowest in town). So if you have a Costco card, just pull up to the pump and save a few bucks on gas, then go inside and buy that half a steer you've always needed 'just in case.'

      Wal-mart has a similar phenomenon attached to it. The company is the largest grocer in the U.S. If people feel that they can save money on food there, then they'll shop there at the expense of the Whole Foods, Safeways and Save-Marts of the world. (I shop at a grocer cheaper than WMT, but I have to bag my own food.)

      In my opinion, it's merely consumer response to inflationary pressures on basic commodities. It has very little to do with a fundamental shift in buying patterns. I believe that WMT will have a hard time retaining the customers who shop there now out of necessity. When the recession ends and incomes rise again, those people will return to their former habits.
      View article »
    • Fri Jun 20th 12:48 PM | Rating: 0 0
      Commented on:
      Whole Foods Market: Like Starbucks, Hit by Slowing Economy, Increased Competition
      Before writing off WFMI, I'd like to relate something the company did intelligently in Northern NV.

      Originally, WFMI was going to open its first store in Reno in a space vacated by a consumer electronics store. (Reno had a Wild Oats less than a mile from this location.) When the merger was announced, WFMI cancelled the first lease commitment, leased another space closer to the existing Wild Oats store, retained all the employees, and opened their new store.

      From a purely observational standpoint, the move made sense on several levels: Since the new location was closer to the existing store, regular clientele didn't have to relearn a route to the store. By keeping existing employees, WFMI promoted consistency and continuity with the community. And the new location is better (visibility, traffic count) than either the old Wild Oats store or the initial WFMI space.

      I don't know whether the company is any good, but 24x earnings seems expensive to me. Having said that, I don't think that there will be revenue erosion from the merger in Reno because of the way WFMI went about absorbing the Wild Oats store here.

      Whether that strategy has been applied elsewhere is anyone's guess. But from management's statements, it sounds like this situation was the exception, not the rule.
      View article »
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