Next, the Retirement Bubble

POLITICIANS ARE IRRITATING UNDER THE BEST of circumstances, but they are downright dangerous some of the time. How can they profess to have been shocked or surprised by the collapse of the real-estate bubble?

There was nothing secret about the dangerous direction that mortgage lending was taking a few years ago. It was a topic discussed widely in the financial press from all perspectives, including those who hit the nail right on the head. It wasn't just Nouriel Roubini, Peter Schiff and others who were ignored. Even someone as respected as Robert Shiller could get little more than passing notice when he published the second edition of Irrational Exuberance in 2005. In it, he spelled out the dangers for the real-estate market in the same clear terms that he had used earlier, when warning of the stock-market bubble.Full Story

U.S. credit card defaults rise

NEW YORK (Reuters) - U.S. credit card defaults rose to record highs in May, with a steep deterioration of Bank of America Corp's lending portfolio, in another sign that consumers remain under severe stress.

Delinquency rates -- an indicator of future credit losses -- fell across the industry, but analysts said the decline was due to a seasonal trend, as consumers used tax refunds to pay back debts, and they expect delinquencies to go up again in coming months.

"I find it hard to believe that it is really a trend. You need to see stabilization in unemployment before you see anything else," said Chris Brendler, an analyst at Stifel Nicolaus. "It is too early to see some kind of improvement."

Bank of America Corp -- the largest U.S. bank -- said its default rate, those loans the company does not expect to be paid back, soared to 12.50 percent in May from 10.47 percent in April.Full Story

Extended Stay Chain Files for Bankruptcy

By Bob Van Voris and David M. Levitt

June 15 (Bloomberg) -- Extended Stay Hotels, the operator of mid-priced hotels acquired at the peak of the commercial real estate market for $8 billion, filed for bankruptcy protection as the recession cut corporate and leisure travel.

The Spartanburg, South Carolina-based chain, with more than 680 properties in 44 states, collapsed two years after Lightstone Group LLC bought the company with $7.4 billion in financing. The company said it had $7.1 billion in assets and $7.6 billion in debt at the end of last year, according to papers filed today in U.S. Bankruptcy Court in New York.

Lightstone bought the chain from Blackstone Group LP in April 2007 in its first purchase in the lodging business. Since then, prices have declined nationwide. The U.S. hotel industry is enduring its “weakest year on record,” according to PKF Hospitality Research, a research firm based in Atlanta. U.S. hotel occupancy fell 14 percent in the week ended June 6 from a year earlier and average daily room rates declined 11 percent to $95.90, according to data from Smith Travel Service. Full Story