Retailers See Modest January Uptick
- Feb 05, 2010
February 5, 2010
By Dees Stribling, Contributing Editor
Retailers did reasonably well in January, with retail same-store sales up 3.3 percent compared with the same month a year earlier, according to a Thomson Reuters’ survey of 29 major chain stores. Then again, things would have to be amazingly bad not to see improvement compared with the early days of 2009, when many consumers seemed certain that the sky had fallen.
The consultancy Retail Forward likewise reported a 3.3 percent increase year-over-year in January same-store sales in the 32 major retailers it tracks. “The recovery should continue on an uneven path as shoppers slowly resume spending that was postponed or reduced during the recession as a precaution,” predicted Retail Forward senior economist Frank Badillo in a statement.
According to a January survey of 4,000 U.S. household shoppers by Retail Forward, about a third of the respondents feel worse about their incomes–many more than a year ago–while a quarter feel better, a lot fewer than a year ago. Sentiment regarding job security hasn’t changed much over the year, however; roughly a quarter of the respondents are still feeling the heat of lousy job security.
Bum CMBS Hits All-Time High
As investment vehicles, CMBS are still relatively young, but have nevertheless had time for a dramatic reversal of fortune. New York-based Trepp L.L.C., which tracks problematic CRE, helped quantify just how far the market has fallen by reporting this week that as of January, 30-day delinquencies among CMBS-associated loans stand at 6.49 percent–a record high.
Naturally, different property types are seeing different CMBS delinquency rates. Unsurprisingly, hotels are fairing the worst at 15.3 percent delinquent, followed by multifamily at 9.71 percent delinquent.
Retail properties associated with CMBS are 5.69 percent delinquent, while industrial stands at 4.54 percent delinquent. Remarkably, considering the job market, office properties are doing best of all the property types at only 3.9 percent delinquent.
State Street Slapped With Penalty Over Subprime Mess
State Street Corp. has agreed to pay more than $310 million in penalties and restitution to settle charges by the Securities and Exchange Commission that the company forgot to mention to some investors that one of its funds had morphed from an “enhanced cash” position in 2002 to chock-full of residential subprime mortgage-backed securities and derivatives by 2007. The new payment will come on top of about $350 million that the bank has already agreed to pay to settle various private claims.
Actually, State Street did tell some investors–but not others–that the fund was loaded with trash assets. Those lucky few got out of Dodge before the subprime meltdown made the other investors realize too late what they really held: a lot of illiquid toxic assets.
The settlement will be divvied up among about 270 previous State Street investors. As part of the deal, State Street neither admits nor denies that it did anything legally untoward.
Wall Street took a dive on Thursday, purportedly worried about eurozone debt or some other financial abstraction. The Dow Jones Industrial Average headed below 10,000 for the first time this year, losing 268.37 points, or 2.61 percent. The S&P 500 dropped 3.11 percent and the Nasdaq gave ground in the form of a 2.99 percent loss.