by Calculated Risk on 6/19/2009 08:58:00 AM

From CNBC: 'Too Big to Fail' Doctrine Must End: FDIC's Bair

“Clearly, there has been moral hazard and lack of market discipline fed by the 'too big to fail' doctrine, and this in turn has been fed by the lack of resolution mechanism that really works for very large financial organizations and this has been a central focus of ours,” [Sheila Bair, chairman of the Federal Deposit Insurance Corp] said in an interview on CNBC.
...
“[Obama’s regulation is] a good opening to the process,” said Bair. “I commend the President for getting personally involved in this and taking leadership and putting his own considerable influence behind the efforts…We’re still analyzing the whitepaper and want to work with the administration and Congress constructively on this.”
...
“[The FDIC] is guaranteeing over $6 trillion right now,” she said. “The FDIC has tremendous exposure to the system so we would like a real say on systemic risk issues. [Reform overhaul] is an institutional issue, not a turf issue or a personality issue.”

"Still analyzing the whitepaper"?

by Calculated Risk on 6/18/2009 09:30:00 PM

From Reuters: Housing Sales Lackluster This Spring: Coldwell (ht Annie)

Jim Gillespie, president and chief executive of Coldwell Banker Real Estate, in an interview with Reuters, said sales were only modest during the spring, with demand overwhelmingly dominated by first-time home buyers and investors.

"The more important 'move-up' buyers were absent and that is not encouraging," said Gillespie ..."They are key to a U.S. housing market recovery,"

With lenders as sellers in a large percentage of sales, it is no surprise there are few move-up buyers. This will impact the mid-to-high end for some time.

The article also mentions a proposal for a new $15,000 tax credit.

by Calculated Risk on 6/18/2009 07:49:00 PM

From DataQuick: Uptick in Bay Area home sales and median price

The median price paid for a Bay Area home jumped in May as more expensive homes started to sell again. The overall number of homes sold increased for the ninth month in a row, a real estate information service reported.

The median price [increase] ... was due to a small but noticeable increase in sales of homes financed with home loans for more than $417,000, commonly called “jumbo” mortgages. They accounted for 25.5 percent of the Bay Area’s home sales last month, the highest since 25.8 percent last October. Two years ago it was more than 60 percent. The presence of those high-end sales in the statistics pulled the May median up.

Sales of $800,000-plus existing single-family houses rose to 13.2 percent of all house resales last month, up from 9.8 percent in April and the highest since they were 14.8 percent of sales last October. Sales of sub-$400,000 existing houses dropped to 57.5 percent of May sales, down from 62.2 percent in April and the lowest since 56.5 percent in November.

[CR: Be careful with the median price, it is distorted by the change in mix.]

... A total of 7,447 new and resale houses and condos sold in the nine-county Bay Area last month. That was up 4.3 percent from 7,139 in April and up 19.8 percent from 6,216 in May 2008.

The May 2008 sales were the lowest in DataQuick’s statistics, which go back to 1988. May sales have averaged 9,881 and peaked in May 2004 at 13,567 sales.
...
Last month 42.1 percent of all homes resold in the Bay Area had been foreclosed on in the prior 12 months, down from 46.4 percent in April and the lowest since the figure was 41.6 percent last September. A year ago the percentage was 27.7 percent, while the peak was 52.0 percent this February. By county, foreclosure resales ranged last month from 7.7 percent of all resales in San Francisco to 65.1 percent in Solano.

... Foreclosure activity is off its recent peak but remains high by historical standards ...

by Calculated Risk on 6/18/2009 05:49:00 PM

No news yet on the June 18th deadline, but if you want to see some dumping ...

Corus faces a June 18 deadline from the Office of the Comptroller of the Currency to boost its capital levels or risk being put into conservatorship or receivership.

Robert J. Glickman, the former CEO of Corus Bankshares Inc., ran the bank for 35 years before stepping down in April. Now he is selling like crazy.

SC 13D/A SEC Filing June 9th:

On June 3, 2009 ... Robert Glickman disposed of 111,074 shares of Common Stock which he owned directly. On June 4, 2009, Robert Glickman disposed of 800,248 shares of Common Stock beneficially owned by him. On June 5, 2009, Robert Glickman disposed of 485,178 shares of Common Stock beneficially owned by him. On June 8, 2009, Robert Glickman disposed of 16,653 shares of Common Stock beneficially owned by him. ... The shares disposed of by Robert Glickman on June 3, 2009, June 4, 2009, June 5, 2009 and June 8, 2009 represent approximately 2.6% of the total issued and outstanding shares of the Company

SC 13D/A SEC Filing June 12th:

On June 9, 2009, Robert Glickman disposed of 14,126 shares of Common Stock beneficially owned by him. .... On June 10, 2009, Robert Glickman disposed of 391,879 shares of Common Stock beneficially owned by him. ... On June 11, 2009, Robert Glickman disposed of 752,714 shares of Common Stock beneficially owned by him. ... On June 12, 2009, Robert Glickman disposed of 970,123 shares of Common Stock beneficially owned by him.

The shares disposed of by Robert Glickman on June 9, 2009, June 10, 2009, June 11, 2009 and June 12, 2009 represent approximately 4.0% of the total issued and outstanding shares of the Company

SC 13D/A SEC Filing June 17th:

On June 15, 2009, Robert Glickman disposed of 390,498 shares of Common Stock beneficially owned by him. ... On June 16, 2009, Robert Glickman disposed of 334,691 shares of Common Stock beneficially owned by him. ...

The shares disposed of by Robert Glickman on June 15, 2009 and June 16, 2009 represent approximately 1.4% of the total issued and outstanding shares of the Company

by Calculated Risk on 6/18/2009 05:00:00 PM

Sorry to bother everyone with this issue.

Starting Tuesday, Google / Blogger erroneously started inserting a redirect warning for visitors of my old blogspot address, instead of redirecting the old blogspot URL to the new URL. This is a sytem wide problem, impacting many blogs using the redirect feature from blogspot.

Blogger engineers are working on the problem.

For Firefox users, you will see a redirect warning. Safari and Internet Explorer users are told the site no longer exists.

In my case this means Google-Blogger is not correctly redirecting:
http://calculatedrisk.blogspot.com/
to my new URL:
http://www.calculatedriskblog.com/

This is a problem for anyone who bookmarked the old URL, or is coming in on a link from another site (with the old URL).

To avoid this problem, you can change your bookmark to http://www.calculatedriskblog.com/

I apologize for the inconvenience - thanks for visiting - hopefully this will be fixed soon.

by Calculated Risk on 6/18/2009 03:41:00 PM

This is the first same month year-over-year increase in miles driven (April 2009 compared to the April 2008) since November 2007.

Of course gasoline prices have increased sharply since April. The EIA reports that gasoline prices have increased from about $2.10 per gallon in April, to $2.70 per gallon in June - and that will probably impact miles driven.

The Dept of Transportation reports on U.S. Traffic Volume Trends:

Travel on all roads and streets changed by +0.6% (1.4 billion vehicle miles) for April 2009 as compared with April 2008. Travel for the month is estimated to be 249.5 billion vehicle miles.

Cumulative Travel for 2009 changed by -1.1% (-10.0 billion vehicle miles).

Click on graph for larger image in new window.

The first graph shows the annual change in the rolling 12 month average of U.S. vehicles miles driven. Note: the rolling 12 month average is used to remove noise and seasonality.

By this measure, vehicle miles driven are off 3.1% Year-over-year (YoY); the decline in miles driven was worse than during the early '70s and 1979-1980 oil crisis.

Note that rolling miles driven has a built in lag, and miles driven was larger in April 2009 than April 2008.

The second graph shows the comparison of month to the same month in the previous year as reported by the DOT.

As the DOT noted, miles driven in April 2009 were 0.6% greater than in April 2008.

This is the first same month year-over-year increase since November 2007.

Year-over-year miles driven started to decline in December 2007, and really fell off a cliff in March 2008. This makes for an easier comparison for April 2009.

by Calculated Risk on 6/18/2009 03:00:00 PM

Some mid-day amusement ...

This was funny ... I never posted on this, because it was pretty clear there wasn't any real story. Maybe the post should be titled: "How some blogs were snookered!"

But a false bottom in a suitcase?

From Dow Jones: US Says Seized 'Treasury Bonds' Are Not The Real Thing

A cache of what appeared to be around $135 billion of U.S. bonds seized at the Italian-Swiss border is, in fact, worthless, a Treasury Department spokesman said.

Two alleged Japanese citizens were stopped by Italian authorities June 4 trying to cross into Switzerland with the supposed bonds, hidden in the false bottom of a suitcase, the authorities said.

by Calculated Risk on 6/18/2009 01:20:00 PM

Note: some readers might notice the occupancy rate has risen to 61% - but that is just seasonal. The hotel occupancy rate is usually the highest during the peak vacation months of June, July and August.

From HotelNewsNow.com: STR posts US results for 7-13 June 2009

In year-over-year measurements, the industry’s occupancy fell 10.1 percent to end the week at 61.0 percent. Average daily rate dropped 9.4 percent to finish the week at US$96.61. Revenue per available room for the week decreased 18.6 percent to finish at US$58.96.

Click on graph for larger image in new window.

This graph shows the YoY change in the occupancy rate (3 week trailing average).

The three week average is off 11.6% from the same period in 2008.

The average daily rate is down 9.4%, so RevPAR is off 18.6% from the same week last year.

Data Source: Smith Travel Research, Courtesy of HotelNewsNow.com

by Calculated Risk on 6/18/2009 01:01:00 PM

In a post yesterday, I misread the BLS methodology on calculating Owners' Equivalent Rent.

For a discussion from the BLS of rent measures see: How the CPI measures price change of Owners’ equivalent rent of primary residence (OER) and Rent of primary residence (Rent)

The survey question referenced in the above post is for weighting, not price changes.

The price relative for OER is calculated by sampling non rent-controlled renters every six months. These average rents are divided by the sample six months earlier - and converted to a monthly change (by taking to the 1/6th power).

From the BLS document above: "The first step is standardizing the collected (market) rents, putting them on a monthly basis, and adjusting them for a number of circumstances that should not affect the CPI."

To be clear - the BLS is using market rents, not the opinion of homeowners to calculated OER.

I apologize for any confusion.

by Calculated Risk on 6/18/2009 12:20:00 PM

The Nelson A. Rockefeller Institute of Government report on state income taxes is now available on their website: April Is the Cruelest Month

Yesterday I posted a couple of graphs based on the report.

Reader Ann suggested the following graph ...

This shows the change in personal income taxes multiplied by the percent personal income tax of total state taxes in 2008.

This adjusted the decline in personal income taxes by the relative importance of the tax.

As an example, personal income taxes make up 68.5% of the revenue in Oregon and 55.9% in New York. A decline in personal income tax revenue is more important for those states than Arizona (25.3% of the revenue).