When will the real estate market make a comeback? Well, it seems that the Blackstone Group (BX) thinks it is already happening. The firm has won a bid for 588 U.S. shopping malls. The price tag? A cool $9.4 billion. In fact, the auction was heated, involving other top real estate investors like Starwood Capital.

The seller is Centro, which is based in Australia. The company has been trying to pare down its debt load since the financial crisis hit in 2008. After the sale of the assets, Centro will be left with 112 malls.

Many investors will say that the problems with the earnings report at Palm (NASDAQ: PALM) is that the company lost money and that revenue fell. That would be a naive view. The company's real trouble is that the amount it is getting per handset is falling sharply. Its newest product, the Centro, will not help because it is so inexpensive.

With the stock at $6, Palm's market cap is well below $1 billion. Its cash level has been falling and it only has about $250 million of liquid capital on its balance sheet.

Palm sold 968,000 handsets in the last quarter, up 29%. But revenue fell from $401 million to $296 million. That means that the yield-per-phone is so low that Palm may never be able to make money.

It the trend continues, Palm could be gone next year. According to Reuters, "slowing sales of older phones such as the Treo offset strong sales of its new, cheaper Centro phone."

That is a very, very bad trend.

Douglas A. McIntyre is an editor at 247wallst.com

Australia's Centro Properties Group bet big on U.S. shopping malls, financing more than $15 billion during a spending spree in 2007. Thanks to the credit crisis caused by the U.S. subprime meltdown, Centro can't refinance debt due Feb. 15 and has put itself up for sale [subscription required]. The stock lost 89% of its value in 2007, giving it the title of Australia's worst performer in the S&P/ASX 200 index.

Centro owns 810 shopping malls in Australia, New Zealand and the U.S. Potential buyers may find that a sale of the company's assets may be more valuable than buying the company itself, and Centro already indicates it may sell properties as part of its plan to restructure and pay back debt. Analysts expect Centro will have to sell assets at less than book value, especially recent U.S. purchases that have been hit hard by the real estate crisis in the U.S.

Centro could become the second Australian company lost because of the U.S. subprime crisis. RAMS Home Loans Group sold most of its holdings to Westpac Bank Group when it couldn't refinance its loans. Lenders holding Centro debt include the Royal Bank of Scotland, J.P. Morgan Chase (NYSE: JPM), BNP Paribas, Australian and New Zealand Banking Group, National Australia Bank, St. George Bank and Commonwealth Bank of Australia. Just looking at this list of lenders, you can see how global the subprime mortgage and credit crisis has become.

Looks like the first trading day of the new year will begin on a positive note as stock futures are drifting higher this morning. Economic data will be the focus during today's session with several indicators like ISM and FOMC are due out throughout the day.

On Monday, the last trading day of 2007, stocks dropped in a light volume. The Dow industrials lost 101 points, or 0.76%, the Nasdaq Composite was down 22 points, or 0.83%, and the S&P 500 declined 10 points. For the year, the Dow gained 6.4%, the S&P 500 3.5% and the Nasdaq 9.8%. As 2007 progressed it seemed that volatility in the market increased as uncertainties about U.S. economy mounted.

Today, investors will await some important economic data.

• At 10:00 a.m. EST, the Institute of Supply Management will release the manufacturing index for December. Economists are expecting the index to decline somewhat from 50.8 to 50.5 according to Briefing.com. While still holding just above 50%, thus indicating an expansion in economic activity, the reading could be the lowest in a year and yet another slower growth data point.
  
• At the same time November construction spending will be reported and is due to decrease again.
• At 2 p.m., minutes from the last meeting of the Federal Reserve's policy meeting will be released. The FOMC voted to cut interest rates by a quarter-point to 4.25% in the last meeting. What investors and economists will be looking for are clues as to what the Fed might do next meetings.