by Calculated Risk on 9/12/2011 07:37:00 PM

Note: I checked the BEA data (table Table 2.4.5U. Personal Consumption Expenditures by Type of Product), and the BEA shows U.S. consumers spent $377 billion in 2008 on "Gasoline and other motor fuel", and are on pace to spend $393 billion this year. So the headline number might be too high - also, as a percent of GDP, gasoline expenditures will be lower this year than in 2008.

From Ronald White at the LA Times: U.S. motorists may spend a record $491 billion for gasoline this year

Fuel prices have been high this year because of expensive oil and increased exports of gasoline and diesel to other countries. Gasoline prices may decline for a few weeks after the switch to winter blends, which are less costly to produce than summer blends. But gas price woes won't go away, experts said.

"The 30 days between now and mid-October will be the most hospitable days in the country for dropping prices," said Tom Kloza, chief oil analyst for the Oil Price Information Service. "But then the drumbeats will start about fears of a second Arab Spring [of political unrest]. Demand outside of Europe and the U.S. continues to rise. By spring, Americans will be wrestling with $4 gasoline in a lot of markets."
...
Both the U.S. and California averages were well short of the all-time highs set in 2008 of $4.114 and $4.588, respectively. But overall, drivers have shelled out more for fuel this year than in 2008 because prices rose faster this time and have stayed high longer.

The 2008 average U.S. price was about $3.25 a gallon, said Kloza, who came up with the estimate of $491 billion in gasoline costs for 2011. This year, Kloza said, the average price is about $3.66 a gallon.

by Calculated Risk on 9/12/2011 04:16:00 PM

Europe was the focus again today with no U.S. economic releases. This will be a busy week for economic data, especially later in the week:
• Schedule for Week of Sept 11th


Click on graph for larger image in new window.

The first graph shows the S&P 500 since 1990 (this excludes dividends).

The dashed line is the closing price today. The S&P 500 was first at this level in July 1998; over 13 years ago.

The second graph (click on graph for larger image) from Doug Short shows the wild market swings over the last few weeks.

by Calculated Risk on 9/12/2011 12:00:00 PM

Back in early 2009, I wrote a couple of posts arguing there would be an increase in auto sales - Vehicle Sales (Jan 2009) and Looking for the Sun (Feb 2009). Here is an update to the U.S. fleet turnover graph.

This graph shows the total number of registered vehicles in the U.S. divided by the sales rate through August 2011 - and gives a turnover ratio for the U.S. fleet (this doesn't tell you the age or the composition of the fleet, registered vehicles estimated).

The wild swings in 2009 were due to the "cash for clunkers" program, and the increase in the ratio this summer was due to the supply chain issues related to the tsunami in Japan.

Click on graph for larger image in graph gallery.

The estimated ratio for August was just over 20 years - still very high, but well below the peak of 26 years.

The turnover ratio will probably decline to 15 or so eventually.

The second graph shows light vehicle sales since the BEA started keeping data in 1967. The dashed line is current estimated sales rate.

The current sales rate is still near the bottom of the '90/'91 recession - when there were fewer registered drivers and a smaller population.

Light vehicle sales were at a 12.12 million seasonally adjusted annual rate (SAAR) in August. To bring the turnover ratio down to more normal levels, unit sales will have to rise to 14 or 15 million SAAR.

Of course cars are lasting longer - note the general uptrend in the first graph - so the turnover ratio probably will not decline to the previous level. Also this says nothing about the composition of the fleet (perhaps smaller cars). But I do expect vehicle sales to continue to increase over the next few years.

by Calculated Risk on 9/12/2011 08:42:00 AM

The Greek 2 year yield is at 64.3%. The Greek 1 year yield is at 112%. Ouch.

The Portuguese 2 year yield is up to 16.2% (after falling below 12% in August). Also the Irish 2 year yield is at 9.5%.

The European markets are down with the DAX off almost 4%, and the FTSE 100 off close to 3%.

Here are the links for bond yields for several countries (source: Bloomberg):

Greece	2 Year	5 Year	10 Year
Portugal	2 Year	5 Year	10 Year
Ireland	2 Year	5 Year	10 Year
Spain	2 Year	5 Year	10 Year
Italy	2 Year	5 Year	10 Year
Belgium	2 Year	5 Year	10 Year
France	2 Year	5 Year	10 Year
Germany	2 Year	5 Year	10 Year

by Calculated Risk on 9/11/2011 10:30:00 PM

Once again the focus is on Europe ...
• From the NY Times: Investors Brace as Europe Crisis Flares Up Again

Despite repeated pledges by Chancellor Angela Merkel to keep Europe together, the cacophony of dissent within Germany has been rising. That is creating fresh doubt — justified or not — about the nation’s commitment to the euro.

• From the WSJ: Woes at French Banks Signal a Broader Crisis

Moody's Investors Service Inc. is expected to cut the ratings of BNP Paribas SA, Société Générale SA and Crédit Agricole SA because of the banks' holdings of Greek government debt ... Political brinksmanship over Greece, coupled with the darkening economic outlook across the Continent, has fueled a selloff in European bank shares in recent weeks

• From the LA Times: Greece unveils more austerity measures

Under intense pressure from international lenders, Greece on Sunday announced a new set of austerity measures to meet deficit reduction targets ... The measures, which include a two-year property tax, are intended to make up for revenue shortfalls that come to about $3 billion this year alone.

• From the WSJ: French Minister: Won't Lend To Greece If Efforts Insufficient

"The [bailout] plan has two aspects; aid to Greece with the guarantees, but also a Greek recovery plan. They have a privatization program, a spending-cut program, a program for taxing revenues. Greece must make efforts, otherwise we won't lend to them," [French budget minister and government spokeswoman Valerie Pecresse] said in an interview

The Asian markets are red tonight with the Nikkei down 2%.

From CNBC: Pre-Market Data and Bloomberg futures: the S&P 500 is down about 12 points, and Dow futures are down about 100 points.

Oil: WTI futures are down to $86 and Brent is down under $112.

Yesterday:
• Schedule for Week of Sept 11th
• Summary for Week ending September 9th

by Calculated Risk on 9/11/2011 03:22:00 PM

I've been following the Sacramento market to see the change in mix over time (conventional, REOs, and short sales) in a distressed area. The Sacramento Association of REALTORS® started breaking out REOs in May 2008, and short sales in June 2009.

As I've written before: "I'm not sure what I'm looking for, but I'll know it when I see it!" (hopefully) At some point, the number (and percent) of distressed sales should start to decline without market distortions.

The percent of distressed sales in Sacramento increased in August compared to July. In August 2011, 62% of all resales (single family homes and condos) were distressed sales. This is up from 61.3% in July, and down from 64.0% in August 2010.

Here are the statistics.

Click on graph for larger image in graph gallery.

This graph shows the percent of REO, short sales and conventional sales. There is a seasonal pattern for conventional sales (strong in the spring and summer), and distressed sales happen all year - so the percentage of distressed sales decreases every summer and the increases in the fall and winter.

Total sales were up 14.8% over August 2010 (sales fell last July after the tax credit expired, so a year-over-year increase was expected). Sales were up 11% compared to August 2009.

Active Listing Inventory is down 22.6% from last August - we are seeing a sharp decline in inventory in many areas - something to watch. Once the foreclosure delays end, this data might be helpful in determining when the market is improving.

Yesterday:
• Schedule for Week of Sept 11th
• Summary for Week ending September 9th

by Calculated Risk on 9/11/2011 12:20:00 PM

From Reuters: Greece opts for property levy to boost budget revenue

Greece on Sunday announced a new tax on real estate ... "It is a special levy on property which will be collected through electricity bills," Finance Minister Evangelos Venizelos [said].

The tax is €4 per square meter (about $0.50 per sq. feet). The government is projecting this levy will make up for the revenue shortfall due to the sharper than expected contraction in the Greek economy.

The Greek 2 year yield is at 57%. The Portuguese 2 year yield is up to 15.7% (after falling below 12% in August). Also the Irish 2 year yield is at 9.3% (below 8% in August).

The next few weeks are "make or break" for the next Greek bailout.

Yesterday:
• Schedule for Week of Sept 11th
• Summary for Week ending September 9th

by Calculated Risk on 9/11/2011 09:35:00 AM

I remember where I was – and everything I did on 9/11. Mostly I remember the overwhelming sense of shock and sadness, and the discussions of the events of that day with family and friends.

I wish everyone the best.

by Calculated Risk on 9/10/2011 08:51:00 PM

Note: this is an unofficial list of Problem Banks compiled only from public sources.

Here is the unofficial problem bank list for Sept 9, 2011.

Changes and comments from surferdude808:

As anticipated, it was a quiet week for changes to the Unofficial Problem Bank List. This week, there were two removals and one addition, which leaves the list with 986 institutions and assets of $402.7 billion. A year ago, there were 849 institutions with assets of $415.3 billion.

The removals were the failed The First National Bank of Florida, Milton, FL ($297 million) and Clarkston State Bank, Clarkston, MI ($111 million Ticker: HRTB), which had its actions terminated by the FDIC. The addition is Community Pride Bank, Isanti, MN ($92 million), which has been subject to a Consent Order by the State of Minnesota and not the FDIC since May 2010. This action just came to light when the Federal Reserve issued a Written Agreement against the bank's parent holding company.

Next week, we anticipate the OCC will release its actions through mid-August, which should contribute to more changes to the list.

Earlier:
• Schedule for Week of Sept 11th
• Summary for Week ending September 9th

by Calculated Risk on 9/10/2011 06:25:00 PM

There was a rumor on Friday that Greece would default this weekend. That seems very unlikely, although Greece is running out of time. Also there are quite a few protests going on in Greece today.

• From the Financial Times: Greece vows to avoid default at all cost

[Prime Minister] George Papandreou has vowed to fully implement reforms ... so that Greece will be able to avoid default and remain a member of the eurozone. ... ”We’re travelling on an uphill road during an international storm … but our first priority is to save the country from bankruptcy.”
...
He also [said] several struggling Greek banks ... would be nationalised ...
excerpt with permission

• From the WSJ: Greek Leader Vows To Press Changes

Prime Minister George Papandreou vowed Saturday that the country would meet its budget targets and press ahead with difficult reforms, even as thousands demonstrated against those reforms on the streets of Greece's second largest city.
...
"Even if the recession this year is appreciably bigger than the original forecasts…Greece will meet its fiscal targets doing all it has to do," Mr. Papandreou said.

• On France from Reuters: French banks braced for credit-rating downgrade-sources

France's top banks are bracing themselves for a likely credit rating downgrade from Moody's ... Several sources said on Saturday that BNP Paribas , Societe Generale and Credit Agricole were expecting an "imminent" decision from the ratings agency, which first put them under review for possible downgrade on June 15.

Earlier:
• Schedule for Week of Sept 11th
• Summary for Week ending September 9th