by Calculated Risk on 3/18/2011 11:33:00 AM

Update: Dividend announcements from JPMorgan, Wells Fargo, BB&T, BNY Mellon, US Bancorp. SunTrust announces a buyback.

From the Federal Reserve:

The Federal Reserve on Friday announced it has completed the Comprehensive Capital Analysis and Review (CCAR), its cross-institution study of the capital plans of the 19 largest U.S. bank holding companies.

As a result of the CCAR, some firms are expected to increase or restart dividend payments, buy back shares, or repay government capital. The Federal Reserve on Friday will discuss the reviews and its decisions with firms that requested a capital action. All 19 firms will receive more detailed assessments of their capital planning processes next month.

The Fed is not releasing details of these stress tests, and they will notify the 19 banks if they can start paying dividends (expect announcement pretty soon).

by Calculated Risk on 3/18/2011 08:54:00 AM

• Libya

From CNBC: Libyan Foreign Minister Declares Immediate Ceasefire

Libya declared a ceasefire in the country to protect civilians and comply with a United Nations resolution passed overnight, Libyan Foreign Minister Moussa Koussa said on Friday.

"We decided on an immediate ceasefire and on an immediate stop to all military operations," he told reporters.

From NY Times: Following U.N. Vote, France Vows Libya Action ‘Soon’

• Japan

From Reuters: Japan earthquake LIVE (an excellent site to follow events)

From NY Times: Frantic Repairs Go On at Plant as Japan Raises Severity of Crisis

From the WSJ: U.S. Drone Surveying Japan's Damaged Nuclear Complex

by Calculated Risk on 3/17/2011 08:25:00 PM

I'm still mostly focused on the U.S. economy, although I'm also following the events in Japan and the situation in Libya. And Reuters reported: "Japan has agreed with central banks of the US, Britain and Canada as well as the European Central Bank to jointly intervene in the currency market"

Earlier on U.S. Economy:
• Weekly Initial Unemployment Claims decline to 385,000
• Industrial Production, Capacity Utilization decline in February
• Core Measures show increase in Inflation
• Philly Fed Survey highest since January 1984

Here is the weekly update on hotels from HotelNewsNow.com: STR: Luxury hotels top weekly increases

Overall, the U.S. industry’s occupancy increased 6.0% to 61.1%, ADR was up 3.1% to US$100.93, and RevPAR finished the week up 9.2% to US$61.69.

Note: RevPAR: Revenue per Available Room.

Click on graph for larger image in graph gallery.

This graph shows the seasonal pattern for the hotel occupancy rate.

The occupancy rate was fairly low in January and February, but appears to be improving recently - and is now closer to the rate in 2008 than in 2010.

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

by Calculated Risk on 3/17/2011 06:43:00 PM

From the NY Times: U.N. Approves Military Action in Libya to Halt Qaddafi Attacks

The United Nations Security Council approved a measure on Thursday authorizing “all necessary measures” to protect Libyan civilians from harm at the hands of forces loyal to Colonel Muammar el-Qaddafi.

The measure allows not only a no-fly zone but effectively any measures short of a ground invasion to halt attacks that might result in civilian fatalities.

by Calculated Risk on 3/17/2011 03:40:00 PM

By request ...

White House: President Obama on Japan 3:30 PM ET

From Reuters: Japan earthquake LIVE (an excellent site to follow events)

From Reuters: Japan nuclear situation reasonably stable: IAEA

The situation at Japan's Fukushima Daiichi nuclear power plant was serious but "reasonably stable" Thursday with no major worsening since the day before, a senior U.N. nuclear watchdog official said.

"It hasn't got worse, which is positive," Graham Andrew of the International Atomic Energy Agency (IAEA) said. "The situation remains very serious but there has been no significant worsening since yesterday."

But Andrew, a senior aide to IAEA Director General Yukiya Amano, cautioned at a news conference: "It is still possible that it could get worse."

From the IAEA:

Japanese authorities have informed the IAEA that engineers were able to lay an external grid power line cable to unit 2. The operation was completed at 08:30 UTC.

They plan to reconnect power to unit 2 once the spraying of water on the unit 3 reactor building is completed.

From the WSJ: Japan Claims Modest Gains in Bid to Cool Nuclear Plant

From the NY Times: Danger of Spent Fuel Outweighs Reactor Threat

From Chicago Breaking Business: Radiation on O’Hare flights deemed no threat

NHK World English TV stream

Earlier on U.S. Economy:
• Weekly Initial Unemployment Claims decline to 385,000
• Industrial Production, Capacity Utilization decline in February
• Philly Fed Survey highest since January 1984

Best wishes to all.

by Calculated Risk on 3/17/2011 01:19:00 PM

Earlier today the BLS reported:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent in February on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.1 percent before seasonal adjustment.
...
The index for all items less food and energy rose 0.2 percent in February, the same increase as in January, with most of its major components posting increases. The shelter index rose 0.1 percent in February, with rent and owners' equivalent rent both also rising 0.1 percent.

The Cleveland Fed released the median CPI and the trimmed-mean CPI this morning:

According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.2% (2.4% annualized rate) in February. The 16% trimmed-mean Consumer Price Index increased 0.3% (3.8% annualized rate) during the month.

Over the last 12 months, core CPI has increased 1.1%, median CPI has increased 1.0%, and trimmed-mean CPI increased 2.1%.

Note: The Cleveland Fed has a discussion of a number of measures of inflation: Measuring Inflation

Click on graph for larger image in graph gallery.

This graph shows these three measure of inflation on a year-over-year basis.

These measures all show that year-over-year inflation is still low, but increasing lately.

Also, all three increased in February at a higher annualized rate: core CPI increased at an annualized rate of 2.4%, median CPI 2.4% annualized, and trimmed-mean CPI increased 3.8% annualized. This is the second consecutive month with the annualized rate for these three key measures at or above the Fed's inflation target. With the slack in the system, I have been expecting these core measures to stay below 2% this year.

Note: You can see the median CPI details for February here.

by Calculated Risk on 3/17/2011 10:17:00 AM

From the Philly Fed: March 2011 Business Outlook Survey

The survey's broadest measure of manufacturing conditions, the diffusion index of current activity, increased from 35.9 in February to 43.4 this month. This is the highest reading since January 1984. The demand for manufactured goods is showing continued strength: The new orders index increased 17 points this month, the sixth consecutive monthly increase.
...
Firms' responses continue to indicate overall improved labor market conditions. The current employment index fell back 5 points [to 18.2], but for the seventh consecutive month, the percentage of firms reporting an increase in employment (25 percent) is higher than the percentage reporting a decline (7 percent). Over twice as many firms reported a longer workweek (25 percent) than reported a shorter one (12 percent).

That is mostly good news. This was well above the consensus of 35.9.
The concern remains the pickup in both prices paid and received:

Firms continue to report price increases for inputs as well as their own manufactured goods. The prices paid index declined 3 points this month but has still increased 51 points over the past six months. ... Thirty-two percent of firms reported higher prices of their own goods this month, compared with 29 percent in February.

Click on graph for larger image in graph gallery.

Here is a graph comparing the regional Fed surveys and the ISM manufacturing index. The dashed green line is an average of the NY Fed (Empire State) and Philly Fed surveys through March. The ISM and total Fed surveys are through February.

This early reading suggests the ISM index will be in the 60s again this month. Another very strong report.

by Calculated Risk on 3/17/2011 09:15:00 AM

From the Fed: Industrial production and Capacity Utilization

Industrial production declined 0.1 percent in February after having risen 0.3 percent in January; output in January was previously estimated to have edged down 0.1 percent. Manufacturing output increased 0.4 percent in February, and the gain in January was revised up to 0.9 percent. Outside of manufacturing, the output of mines rose 0.8 percent in February, which more than reversed its decline in January. However, the output of utilities fell 4.5 percent--the drop reflected unseasonably warm weather in February, which reduced the demand for heating after two months of unseasonably cold temperatures. At 95.5 percent of its 2007 average, total industrial production was 5.6 percent above its year-earlier level. The capacity utilization rate for total industry edged down 0.1 percentage point to 76.3 percent, a rate 4.2 percentage points below its average from 1972 to 2010.

Click on graph for larger image in graph gallery.

This graph shows Capacity Utilization. This series is up 8.1 percentage points from the record low set in June 2009 (the series starts in 1967).

Capacity utilization at 76.3% is still far below normal - and well below the pre-recession levels of 81.2% in November 2007.

Note: y-axis doesn't start at zero to better show the change.

The second graph shows industrial production since 1967.

Industrial production decreased in February to 95.5, however January was revised up from 95.1 to 95.6. The decline was due to warmer weather in February (less production at utilities) and the upward revision to the January data.

Production is still 5.2% below the pre-recession levels at the end of 2007.

The consensus was for a 0.6% increase in Industrial Production in February, and an increase to 76.5% (from 76.1%) for Capacity Utilization. Even including the January revisions, this was still below consensus.

by Calculated Risk on 3/17/2011 08:30:00 AM

The DOL reports on weekly unemployment insurance claims:

In the week ending March 12, the advance figure for seasonally adjusted initial claims was 385,000, a decrease of 16,000 from the previous week's revised figure of 401,000. The 4-week moving average was 386,250, a decrease of 7,000 from the previous week's revised average of 393,250.

Click on graph for larger image in graph gallery.

This graph shows the 4-week moving average of weekly claims for the last 40 years. The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased this week by 7,000 to 386,250.

This is the 3rd consecutive week with the 4-week average below the 400,000 level, and although there is nothing magical about 400,000, this is a positive step for the labor market. Unfortunately the recent JOLTS data indicated that hiring hasn't picked up significantly yet, even as layoffs and discharges have slowed.

by Calculated Risk on 3/16/2011 09:02:00 PM

Here is a live video feed.

Two CH-47 helicopters are rotating dumping water. UPDATE: Four drops were completed - now suspended. Water cannons are next.

Also from HNK: Water to be sprayed to cool down No 4 reactor

A Tokyo police unit is set to use water spray vehicles to cool down the No. 4 reactor at the disaster-stricken Fukushima Daiichi nuclear power plant.

The police say it will begin the ground operation to spray water from outside the reactor on Thursday morning.

Earlier:
Housing Starts decrease sharply in February