A Stern Glance

Manufacturers Shipments Inventories and Orders jumped in May by the largest amount in nearly a year, further evidence that the nosedive in manufacturing is nearing an end.

The Commerce Department reported today that total orders rose 1.2 percent in May, better than the 0.8 percent increase that economists had expected. The April performance was revised slightly lower to a gain of 0.5 percent, from 0.7 percent.

The May increase was the best showing since a 2.1 percent rise last June. The back-to-back increases in April and May were the first consecutive gains in nearly a year.

The Department of Labor reported today that employers cut a larger-than-expected 467,000 jobs in June, driving the unemployment rate up to a 26-year high of 9.5 percent, or 14.7 million unemployed last month. If laid-off workers who have given up looking for new jobs or have settled for part-time work are included, the unemployment rate would have been 16.5 percent in June, the highest on records dating to 1994. Economic recovery is clearly not around the corner.

The report showed that even as the recession flashes signs of easing, companies likely will want to keep a lid on costs and be wary of hiring until they feel certain the economy is on a solid ground. Large job cuts have continued this week. Newspaper publisher Gannett Co. said it plans to cut 1,400 jobs in the next few weeks, about 3 percent of the work force, as it faces a prolonged slump in advertising revenue. Farm machinery company Deere & Co. said 800 salaried employees, or 3 percent of its salaried work force, took a voluntary buyout offer.

Payroll employment declines continued to be widespread among the major industries.  In June, there were large decreases in manufacturing, construction, and professional and business services.  Together, these three sectors have accounted for nearly three-quarters of the jobs lost since the recession began. Continue Reading »

Construction spending fell more than expected in May, a sign the problems facing the nation’s builders are far from over.

The Commerce Department reported today that construction spending dropped 0.9 percent in May, nearly double the 0.5 percent drop that economists expected. Adding to the signs of weakness, activity in the past two months was revised lower.

Construction rose 0.6 percent in April, lower than the 0.8 percent originally reported. A March increase of 0.4 percent was replaced with a decline of the same amount. That left the April gain as the only increase in the past eight months.

On June 25, 2009, Vestin Realty Mortgage II, Inc. (Nasdaq: VRTB) entered into a letter agreement with Taberna Capital Management, LLC (Taberna) providing a mechanism for the potential retirement of Vestin II’s outstanding trust preferred securities. Under the letter agreement, upon execution of a custodial agreement, we will deposit $5 million for the purchase of replacement securities to be tendered in exchange for outstanding trust preferred securities. In addition, within sixty days after the first $5 million is paid, Vestin may in its discretion deposit up to $13,125,000 in additional cash for the purchase of additional replacement securities… Replacement securities will be tendered in exchange for trust preferred securities at a ratio which provides for a discount of 50% from the face amount of the trust preferred securities. If the company elects to purchase the full $18,125,000 of replacement securities, then such securities will be tendered in exchange for $36,250,000 of trust preferred securities. Vestin agreed to make a nonrefundable payment of $362,500 to Taberna to cover its costs related to the waiver and exchange arrangement.

Community Bancorp (NASDAQ: CBON – News), the holding company for Community Bank of Nevada and Community Bank of Arizona, today announced that it received notice from the NASDAQ Stock Market on June 25, 2009 that its plan to regain compliance with the continued listing requirements under NASDAQ Listing Rule 5250(c)(1) (“Rule”) had been accepted. As a result, NASDAQ granted an exception to enable the Company to regain compliance with the Rule. While the Company anticipates filing the delinquent Form 10K and Form 10Q as soon as possible, the terms of the exception require the Company to file both the Form 10K for 2008 and Form 10Q for the quarter ended March 31, 2009 on or before October 12, 2009.

As discussed in prior press releases, certain financial analysis remains in process regarding the classification and valuation of certain assets at December 31, 2008 which, in turn, could impact the results for March 31, 2009.