The Daily Soak - May 31

HousingBath Proven Safe, Effective As Contraceptive

Newsweek takes a closer look at the slumping earnings of neonatal care company, Pediatrix Medical Group, and surmises America is in the midst of a Baby Bust. After five straight years of rising birth rates, 2008 has been a real disappointment for Pediatrix meaning, in very technical terms, baby-makin' activity probably started tapering off last summer. Pediatrix CEO Roger Medel confirms, "Our results are being affected by lower neonatal volume, which is related to a lower rate of growth of births at our hospitals throughout this year." Florida is one of five states that accounts for 50% of Pediatrix's revenue and the state flagship, Florida Hospital Orlando, reported a 14% decline in the number of newborns this April compared to April 2007.


Miami Beach Artecity Project Seeks Loan Extension

Citing delays caused by a change in general contractors, the developers of the Artecity project on Miami Beach are requesting an extension on their $60.3 million construction loan. The lender, Chicago-based Corus Bank, already sent a default letter to the developer, Artecity Park. The project seeks to transform an entire city block in-what the Artecity website describes as-"an up and coming area" of South Beach. The 61-room hotel has been completed; however, the 141 condo and townhouse units are still under construction. Incredibly, Corus Bank has over $1.7 billion in outstanding loans to condo projects in South Florida. While Corus executives have been purchasing hundreds of thousands of shares of their own stock in recent weeks, many on Wall Street believe the bank will ultimately fail.


HousingBath Creates "Dirt Bond" Default Bonanza

Dirt bonds are the bonds that municipalities issue in order to finance the infrastructure for new housing developments. 30 of these bond issues have defaulted this year nationwide to the tune of over $700 million, and half of the defaults are located in Florida and California. Zeroing in on the 10 Florida defaults, Bloomberg points to the Monterra development in Cooper City which sold $50 million in special assessment bonds in 2006. More dirt bond defaults are expected this year thanks to the subprime crisis and the rising price of oil. The latter is making "exurbs" like Monterra less and less desirable given the longer commutes to major downtown areas.