RSS Feed by Calculated Risk on 1/14/2012 04:03:00 PM
Saturday, January 14, 2012
Schedule for Week of Jan 15th
Earlier:
• Summary for Week Ending January 13th
There are three key housing reports that will be released this week: January homebuilder confidence on Wednesday, December housing starts on Thursday, and December existing home sales on Friday.
For manufacturing, the January NY Fed (Empire state) and Philly Fed surveys, and the December Industrial Production and Capacity Utilization report will be released this week.
On prices, the December Producer Price index (PPI) will be released Wednesday, and CPI will be released on Thursday.
All US markets will be closed in observance of Martin Luther King, Jr. Day.
8:30 AM ET: NY Fed Empire Manufacturing Survey for January. The consensus is for a reading of +10.5, up from +9.53 in December (above zero is expansion).
7:00 AM: The Mortgage Bankers Association (MBA) will release the mortgage purchase applications index. This index was especially weak last year, although this doesn't include cash buyers.
8:30 AM: Producer Price Index for December. The consensus is for a 0.1% increase in producer prices (0.1% increase in core).
9:15 AM ET: The Fed will release Industrial Production and Capacity Utilization for December. This shows industrial production since 1967. Industrial production decreased in November to 94.8.
The consensus is for a 0.5% increase in Industrial Production in December, and for Capacity Utilization to increase to 78.1% (from 77.8%).
10 AM ET: The January NAHB homebuilder survey. The consensus is for a reading of 21, unchanged from December. Any number below 50 indicates that more builders view sales conditions as poor than good. This index has been below 25 for four years.
During the day: The AIA's Architecture Billings Index for December (a leading indicator for commercial real estate).
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for a decrease to 383,000 from 399,000 last week.
8:30 AM: Consumer Price Index for December. The consensus is a 0.1% increase in prices. The consensus for core CPI is also an increase of 0.1%.
8:30 AM: Housing Starts for December. After collapsing following the housing bubble, single family housing starts have been moving sideways for almost three years. However multi-family starts increased in 2011.
The consensus is for a slight decrease in total housing starts to 680,000 (SAAR) from 685,000 (SAAR) in November.
10:00 AM: Philly Fed Survey for December. The consensus is for a reading of 11.0, up from 6.8 last month (above zero indicates expansion).
10:00 AM: Existing Home Sales for December from the National Association of Realtors (NAR). The consensus is for sales of 4.6 million on seasonally adjusted annual rate basis.
Economist Tom Lawler estimates the NAR will report sales of 4.64 million, up about 5% from November’s pace. He also expects the NAR to report inventory declined to around 2.44 million, down 5.4% from November and down 19.2% from last December. This would put months-of-supply at around 6.3 months (lowest since early 2006), and would put listed inventory at the lowest level since early-2005.
During the day: The current "troika" discussions with Greece are set to conclude.
Summary for Week ending January 13th
by Calculated Risk on 1/14/2012 08:15:00 AM
The economic data last week was mostly disappointing. Retail sales for December were weak, the November trade deficit was larger than expected, and initial weekly unemployment claims increased sharply. The good news was consumer sentiment and small business confidence increased.
This data suggests the US economy grew in Q4, but at a slightly slower pace than previously expected. As an example, Goldman Sachs lowered their Q4 GDP estimate to 3.2%, and Merrill Lynch lowered their Q4 estimate to 3.0% from 3.3%.
Here is a summary in graphs:
• Retail Sales increased 0.1% in December
On a monthly basis, retail sales were up 0.1% from November to December (seasonally adjusted, after revisions), and sales were up 6.5% from December 2010. Sales for November were revised up from a 0.2% increase to 0.4%. Retail sales excluding autos decreased 0.2% in December.
Click on graph for larger image.
This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).
Retail sales are up 20.4% from the bottom, and now 5.9% above the pre-recession peak (not inflation adjusted)
This was well below the consensus forecast for retail sales of a 0.4% increase in December, and a 0.4% increase ex-auto.
• Trade Deficit increased in November to $47.8 Billion
The Department of Commerce reports:
[T]otal November exports of $177.8 billion and imports of $225.6 billion resulted in a goods and services deficit of $47.8 billion, up from $43.3 billion in October, revised. November exports were $1.5 billion less than October exports of $179.4 billion. November imports were $2.9 billion more than October imports of $222.6 billion.
This graph shows the monthly U.S. exports and imports in dollars through November 2011.Exports decreased and imports increased in November. Imports had been mostly moving sideways for the past six months (seasonally adjusted). Exports are well above the pre-recession peak and up 10% compared to November 2010; imports are up about 13% compared to November 2010.
The trade deficit was above the consensus forecast of $45.0 billion.
• Weekly Initial Unemployment Claims increased to 399,000
The following graph shows the 4-week moving average of weekly claims since January 2000.
The DOL reports:In the week ending January 7, the advance figure for seasonally adjusted initial claims was 399,000, an increase of 24,000 from the previous week's revised figure of 375,000. The 4-week moving average was 381,750, an increase of 7,750 from the previous week's revised average of 374,000.The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased this week to 381,750.
The 4-week moving average is still well below 400,000.
• Consumer Sentiment increases in January
The preliminary January Reuters / University of Michigan consumer sentiment index increased to 74.0, up from the December reading of 69.9.Most of the recent sharp decline was event due to the debt ceiling debate, and sentiment has rebounded as expected. Now it is all about jobs, wages - and gasoline prices.
Sentiment is still fairly weak, although above the consensus forecast of 71.5.
• BLS: Job Openings "unchanged" in November
This graph shows job openings (yellow line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS. Jobs openings declined slightly in November, but the number of job openings (yellow) has generally been trending up, and are up about 7% year-over-year compared to November 2010.
Quits increased in November, and have mostly been trending up - and quits are now up about 12% year-over-year. These are voluntary separations and more quits might indicate some improvement in the labor market. (see light blue columns at bottom of graph for trend for "quits").
• CoreLogic: House Price Index declined 1.4% in November
From CoreLogic: CoreLogic® November Home Price Index Shows Fourth Consecutive Monthly Decline
This graph shows the national CoreLogic HPI data since 1976. January 2000 = 100.The index was down 1.4% in November, and is down 4.3% over the last year.
The index is off 32.8% from the peak - and up just 1.2% from the March 2011 low.
Some of this decrease is seasonal (the CoreLogic index is NSA). Month-to-month prices changes will probably remain negative through March 2012 and it is likely that there will be new post-bubble low for this index in the next month or two.
• NFIB: Small Business Optimism Index increased in December
From the National Federation of Independent Business (NFIB): Small Business Confidence Inches Upward: While Economic Winter Continues, It Appears to be Getting Warmer This graph shows the small business optimism index since 1986. The index increased to 93.8 in December from 92.0 in November. This is the fourth increase in a row after declining for six consecutive months.
• Reis: Regional Mall Vacancy Rate declines slightly
From the WSJ: For Malls, Occupancy Firms Up
Malls in the top 80 U.S. markets posted an average vacancy rate of 9.2% in the quarter, down from the 11-year high of 9.4% in the third quarter, according to Reis, which began tracking [regional] mall data in 2000. ... vacancy [for strip malls] remained at 11% ...The vacancy rate for regional malls is just below the record set last quarter, and the vacancy rate for strip malls is just below the record set in 1990. It is still very ugly for malls ... but the good news is new construction is at very low levels.
Retail landlords also have been helped by a virtual shutdown in new store construction, meaning they face less competition for tenants. Only 4.5 million square feet of shopping-center space opened in 2010, the lowest figure in 31 years, according to Reis. Last year was slightly higher, with only 4.9 million square feet being delivered.
• Other Economic Stories ...
• Ceridian-UCLA: Diesel Fuel index increased 0.2% in December
• RealtyTrac: Bank seizures of homes fell to four year low in 2011 due to process issues
• Fed's Beige Book: Economic activity increased at "modest to moderate" pace
• Fiscal Policy: Kind of a Drag
Record Home Sales in Las Vegas in 2011
by Calculated Risk on 1/14/2012 12:19:00 AM
From the Las Vegas Review-Journal: Las Vegas home sales set record
A total of 48,186 single-family homes and condos were sold in Las Vegas last year, topping the previous record of 46,879 set in 2009, the Greater Las Vegas Association of Realtors reported ... Roughly half of all sales were cash-only transactions, while 46.8 percent were real estate-owned, or bank-owned properties returning to the market after foreclosure. Another 26.6 percent were short sales, or lender-approved sales for less than the principal mortgage balance.
... new-home sales plummeted from nearly 39,000 in 2006 to fewer than 4,000 in 2011, the lowest level since Home Builders Research began tracking the market in 1988.
Click on graph for larger image.This graph shows the sales per year. The are more sales now than during the peak of the bubble! However new home sales are at record lows because of all the vacant housing units and distressed sales.
Also - as the article mentions - prices are still falling. According to Case-Shiller, prices in Las Vegas have fallen about 14% since June 2009, so those people who bought in 2009 have lost money (although many paid cash, so they don't have "negative equity").
Friday, January 13, 2012
Mortgage Settlement Update
by Calculated Risk on 1/13/2012 07:43:00 PM
From Bloomberg: Attorneys General Discuss Mortgage Probes as Bank Talks Drag On
About a dozen state attorneys general met this week to discuss their mortgage investigations and how they might work together as settlement talks with banks over foreclosures drag on, three people familiar with the matter said.This is new:
The group, which met in Washington, included New York Attorney General Eric Schneiderman, California's Kamala Harris and Martha Coakley of Massachusetts ...
Over the weekend, the Justice Department contacted four smaller mortgage servicers, including U.S. Bancorp, PNC Financial Services Group Inc. and HSBC Finance Corp., with the goal of including them in any future settlement agreement. The overture was a first step meant to get reaction from the smaller banks.More on the meeting from the Financial Times: State prosecutors confer over US mortgages probes. It doesn't sound like a deal is close.
Europe Update
by Calculated Risk on 1/13/2012 04:54:00 PM
As was widely rumored, Standard & Poor's lowered its long-term sovereign credit rating on France to AA+ and Spain to A.
From CNBC: S&P Downgrades Credit Ratings on Nine Euro Zone Nations, Including France, Spain, Italy, Portugal and Austria
The Greek debt talks are more important. From Bloomberg: Greece Creditors Break Off Debt Talks
Greece’s creditor banks broke off talks after failing to agree with the government about how much money investors will lose by swapping their bonds, increasing the risk of the euro-area’s first sovereign default.A few of key dates this month:
Proposals by a committee representing financial firms haven’t produced a “constructive consolidated response by all parties,” the Washington-based Institute of International Finance said in a statement today. Talks with Greece and the official sector are “paused for reflection on the benefits of a voluntary approach,” the group said.
Jan 20th: The "troika" discussions with Greece are set to conclude.
Jan 24th: EU finance ministers meet in Brussels.
Jan 30th: European Union leaders meet in Brussels on crisis.
Meanwhile the Italian 10 year yield is up to 6.64%, and the Spanish 10 year yield is up to 5.22%.
Ceridian-UCLA: Diesel Fuel index increased 0.2% in December
by Calculated Risk on 1/13/2012 01:49:00 PM
This is the UCLA Anderson Forecast and Ceridian Corporation index using real-time diesel fuel consumption data: Pulse of Commerce Index Increased 0.2 Percent in December
The Ceridian-UCLA Pulse of Commerce Index® (PCI®), issued today by the UCLA Anderson School of Management and Ceridian Corporation, rose 0.2 percent in December following the 0.1 percent increase in November and the 1.1 percent increase in October.
Although December’s news is positive, the combined effect of the three consecutive positive months was not enough to offset the weakness of trucking last summer and the PCI in December 2011 is 1.2 percent below its June 2011 level.
...
Based on the latest PCI data, the forecast for December Industrial Production is a 0.29 percent increase when the government estimate is released on January 18.
Click on graph for larger image.This graph shows the index since January 2000.
This index declined sharply in late summer and has only partially rebounded over the last three months. Mostly this index moved sideways in 2011 (down 0.7% from December 2010).
Note: This index does appear to track Industrial Production over time (with plenty of noise).
Financial Times: France and Austria face Downgrades, Greek Debt talks "collapse"
by Calculated Risk on 1/13/2012 11:39:00 AM
From the Financial Times: Eurozone nations face S&P downgrade
Eurozone governments are bracing ... after Standard & Poor’s, the rating agency, told them it would downgrade two of the eurozone’s six triple A nations.From the Financial Times: Greek debt restructuring talks collapse
One official told the Financial Times that France and Austria were due to be downgraded but this was not confirmed ...
excerpt with permission
Talks over Greece’s debt restructuring collapsed on Friday ... makes it more likely Athens will become the first government of a developed country in more than 60 years to suffer a full-scale default on its debt.
Lead negotiators for Greek bondholders said the latest offer made by Athens “has not produced a constructive consolidated response from all parties”– a clear reference to International Monetary Fund conclusions that bondholder losses must be increased significantly or a second Greek bail-out would have to be bigger than the agreed €130bn.excerpt with permission
Consumer Sentiment increases in January
by Calculated Risk on 1/13/2012 09:55:00 AM
The preliminary January Reuters / University of Michigan consumer sentiment index increased to 74.0, up from the December reading of 69.9.
Click on graph for larger image.
Most of the recent sharp decline was event due to the debt ceiling debate, and sentiment has rebounded as expected. Now it is all about jobs, wages - and gasoline prices.
Sentiment is still fairly weak, although above the consensus forecast of 71.5.
Trade Deficit increased in November to $47.8 Billion
by Calculated Risk on 1/13/2012 08:48:00 AM
The Department of Commerce reports:
[T]otal November exports of $177.8 billion and imports of $225.6 billion resulted in a goods and services deficit of $47.8 billion, up from $43.3 billion in October, revised. November exports were $1.5 billion less than October exports of $179.4 billion. November imports were $2.9 billion more than October imports of $222.6 billion.The trade deficit was above the consensus forecast of $45.0 billion.
The first graph shows the monthly U.S. exports and imports in dollars through November 2011.
Click on graph for larger image.Exports decreased and imports increased in November. Imports had been mostly moving sideways for the past six months (seasonally adjusted). Exports are well above the pre-recession peak and up 10% compared to November 2010; imports are up about 13% compared to November 2010.
The second graph shows the U.S. trade deficit, with and without petroleum, through November.
The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.Oil averaged $102.50 per barrel in November. The trade deficit with China declined slightly to $27 billion.
Exports to eurozone countries declined 6.9% in November. And the trade deficit with the European Union widened to $9.7 billion from $7.2 billion in November 2010.
Thursday, January 12, 2012
Foreclosures and Short Sale percentages for a few areas
by Calculated Risk on 1/12/2012 09:45:00 PM
CR Note: There are only a few areas where the MLS breaks down monthly sales by foreclosure, short sales and conventional (non-distressed) sale. I've been tracking the Sacramento market to watch for changes in the mix over time. (here was my post earlier this week: Distressed House Sales using Sacramento Data)
Economist Tom Lawler sent me the following today for a few other areas:
"The below table is based on reports from local realtor associations/boards based on MLS data, which may not be fully and completely accurate (heh, heh!)
Note that (1) for most of the areas, the distressed share of sales is down from last December, though in many cases it remains quite elevated; and (2) the short-sales share of sales increased in all areas – in some cases by quite a bit – while the foreclosure-sales share fell in all areas, in a few cases by a boatload, especially Phoenix."
| Short Sales Share | Foreclosure Sales Share | Total "Distressed" Share | ||||
|---|---|---|---|---|---|---|
| Dec-10 | Dec-11 | Dec-10 | Dec-11 | Dec-10 | Dec-11 | |
| Las Vegas | 25.3% | 26.6% | 49.8% | 46.0% | 75.1% | 72.6% |
| Reno | 30.0% | 35.0% | 39.0% | 34.0% | 69.0% | 69.0% |
| Phoenix | 21.3% | 32.2% | 48.3% | 27.6% | 69.6% | 59.8% |
| Sacramento | 22.6% | 30.2% | 44.4% | 33.9% | 67.0% | 64.1% |
| Minneapolis | 12.7% | 14.6% | 41.7% | 34.6% | 54.4% | 49.2% |
| Mid-Atlantic (MRIS) | 11.3% | 14.3% | 23.7% | 15.4% | 35.0% | 29.7% |
CR Note: The table is a percentage of total sales.
Short sales are up in all areas, and foreclosures are down. It appears that the total percent of distressed sales is declining too - although this could be related to the foreclosure process issues. At some point, the number and percent of distressed sales should start to decline significantly.
