by Calculated Risk on 12/31/2012 05:46:00 PM

Fannie Mae reported that the Single-Family Serious Delinquency rate declined in November to 3.30% from 3.35% October. The serious delinquency rate is down from 4.00% in November last year, and this is the lowest level since March 2009.

The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%.

Freddie Mac reported that the Single-Family serious delinquency rate declined in November to 3.25% from 3.31%, in October. Freddie's rate is down from 3.57% in November 2011, and this is the lowest level since August 2009. Freddie's serious delinquency rate peaked in February 2010 at 4.20%.

Note: These are mortgage loans that are "three monthly payments or more past due or in foreclosure".

Click on graph for larger image

In 2009, Fannie's serious delinquency rate increased faster than Freddie's rate. Since then, Fannie's rate has been falling faster - and now the rates are at about the same level.

Although this indicates ongoing progress, the "normal" serious delinquency rate is under 1%.  At this pace, it will take several years until the rates are back to normal.

by Calculated Risk on 12/31/2012 03:51:00 PM

From the National Restaurant Association: Restaurant Performance Index Improved in November but Remained Below 100 for Second Consecutive Month

The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 99.9 in November, up 0.5 percent from October. However, November marked the second consecutive month in which the RPI stood below 100, which signifies contraction in the index of key industry indicators.

“The November gain in the RPI was driven by improving same-store sales and customer traffic levels, both of which registered their strongest performance in three months,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “However, restaurant operators remain concerned about the direction of the overall economy, due in large part to the uncertainty around the fiscal cliff.”
...
The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 99.8 in November – up 0.6 percent from a level of 99.3 in October. Although restaurant operators reported net positive sales and traffic results in November, softness in the labor and capital spending indicators outweighed the performance, which resulted in a Current Situation Index reading below 100 for the fourth time in the last five months.

Click on graph for larger image.

The index increased to 99.9 in November, up from 99.5 in October (below 100 indicates contraction).

Restaurant spending is discretionary, so even though this is "D-list" data, I like to check it every month.

Note: It appears that the "uncertainty around the fiscal cliff" will be resolved (My initial guess is austerity will subtract around 1.5% to 2.0% from GDP in 2013 - with the largest drag coming from the increase in the payroll tax - but we still need the details).

by Calculated Risk on 12/31/2012 12:54:00 PM

From Ezra Klein:
1. Details on the deal: 39.6% tax rate for individual income over 400k/family income over $450k. AMT patched permanently.

2. Dividends and cap gains taxes at 20% of the $400k/$450k levels. PEP at $250k. Pease at $300k.

3. UI and business cuts extended through 2013. Stimulus cuts for 5 years. Medicare cuts stopped with offsets. Payroll cut expires.

4. Sequester unclear. Prez wants to offset with taxes and spending cuts. R's only want to offset with spending cuts.

Updates:
5. Estate tax set at $10m exemption but 40% rate.

6. Deal raises about $600b -- and maybe a bit more -- in taxes over 10 years. As always details can change, but that's where it is now.

From Reuters:

• Obama to speak on fiscal cliff at 1:30pm ET event: White House
• Source: Emerging "cliff" deal would raise tax on income above $400k/yr
• Source: Emerging deal would include permanent alternative minimum tax fix
• Source: Emerging deal would extend unemployment benefits for a year
• Sr. Republican aide: Tentative "cliff" deal contains no new spending cuts
• Sr. Republican aide: Majority of Sen. GOP expected to support tentative deal
• Cornyn via Twitter: GOP to meet at 2pm ET on fiscal cliff negotiations

by Calculated Risk on 12/31/2012 10:30:00 AM

From the Dallas Fed: Texas Manufacturing Activity: Slow Growth and Improved Company Outlook

Texas factory activity edged up in December, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose from 1.7 to 2.7, which is consistent with slow growth.

Most other survey measures also indicated manufacturing activity crept up in December. The capacity utilization index returned to positive territory with a reading of 1.8, implying utilization rates ticked up from last month. The shipments index jumped to 11.3 after a reading near zero last month. The new orders index, however, remained near zero, suggesting demand was flat in December.

Perceptions of broader business conditions improved markedly in December. The general business activity index emerged from negative territory, rising sharply to 6.8 as a result of a drop in the share of contacts reporting that conditions worsened. The company outlook index also turned positive, jumping 14 points to 9.2, its best reading since March.

Labor market indicators were flat in December. The employment index came in at -1, its lowest reading in over two years, with about 17 percent of employers reporting hiring and the same share noting layoffs. The hours worked index turned positive after two months in negative territory; however, at a reading of 1, it suggested hours worked barely changed.

This was above (edit) expectations of a reading of 1.0 for the general business activity index.

Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:

Click on graph for larger image.

The New York and Philly Fed surveys are averaged together (dashed green, through December), and five Fed surveys are averaged (blue, through December) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through November (right axis).

This is the first positive reading for the average of the five Fed surveys since May.

The ISM index for December will be released Wednesday, Jan 1st, and these surveys suggest another weak reading - but probably indicating expansion (above 50).

by Calculated Risk on 12/31/2012 09:14:00 AM

According to this report, income taxes would only increase on earnings over $450,000, and the estate tax would be at the GOP requested level. Still no deal.

From the WaPo: Biden, McConnell continue ‘cliff’ talks as clock winds down

Vice President Biden and Senate Minority Leader Mitch McConnell (R-Ky.) continued urgent talks Monday over a deal to avoid the “fiscal cliff” after Democrats offered several significant concessions on taxes, including a proposal to raise rates only on earnings over $450,000 a year.

With a New Year’s Eve deadline hours away, Democrats abandoned their earlier demand to raise tax rates on household income over $250,000 a year.
...
Democrats also relented on the politically sensitive issue of the estate tax, according to a detailed account of the Democratic offer obtained by The Washington Post. They promised instead to hold a vote in the Senate that would guarantee that taxes on inherited estates remain at their current low levels, a key GOP demand.
...
McConnell was holding out to set the income threshold for tax increases even higher, at $550,000, according to people close to the talks in both parties.

Payroll taxes are going up under all proposals.

by Calculated Risk on 12/30/2012 08:52:00 PM

As expected - no progress on the "fiscal cliff".   From the WaPo: Senate negotiators search for deal to avoid the ‘fiscal cliff’

Still no deal.

There were signs of renewed effort in the talks to resolve the “fiscal cliff” crisis late Sunday afternoon. For one thing, direct talks had begun between Senate Minority Leader Mitch McConnell (R-Ky.) and Vice President Biden. Republicans exiting a mid-afternoon caucus meeting said that McConnell had excused himself to take a call from the vice president.

Those two Washington veterans have become the capital’s unofficial closers, hammering out the agreement that resolved a fight over tax cuts in late 2010, and the debt-ceiling crisis in August 2011.

But their task could could prove far more difficult this time around.

Update: Most market to close as normal, fixed income will close early. Happy New Year to all!

Monday economic release:
• At 10:30 AM, the Dallas Fed Manufacturing Survey for December will be released. This is the last of the regional surveys for December. The consensus is an increase to 1.0 from -2.8 in November (above zero is expansion).

Weekend:
• Summary for Week Ending Dec 28th
• Schedule for Week of Dec 30th

The Asian markets are mostly red tonight; the Shanghai Composite index is up, and the Hang Seng down.

From CNBC: Pre-Market Data and Bloomberg futures: the S&P futures are down 8 and DOW futures are down 68.

Oil prices have moved up a recently withWTI futures at $90.65 per barrel and Brent at $110.41 per barrel. Gasoline prices have also increased a little recently.

by Calculated Risk on 12/30/2012 05:03:00 PM

According to housingtracker, median asking prices were up 2.5% year-over-year in December. We can't read too much into this increase because these are just asking prices, and median prices can be distorted by the mix. As an example, the median asking price might have increased just because there are fewer low priced foreclosures listed for sale.

Note: The Trulia asking price index is adjusted for both mix and seasonality, but the housingtracker data is just the median, the 25th percentile and 75th percentile - and is impacted by both changes in the mix and seasonality.

But with those caveats, here is a graph of asking prices compared to the year-over-year change in the Case-Shiller composite 20 index.

Click on graph for larger image.

The Case-Shiller index is in red.  The Case-Shiller Composite 20 index was up 4.3% year-over-year in October, and will probably be up close to 6% in 2012.

The brief period in 2010 with a year-over-year increase in the repeat sales index was related to the housing tax credit.

Also note that the 25th percentile took the biggest hit (that was probably the flood of low end foreclosures on the market).

Now the year-over-year change in median asking prices has been positive for thirteen consecutive months. We have to be careful about the mix (fewer foreclosures on the market), but this suggests year-over-year selling prices will stay positive.

On seasonality, asking prices peaked in June and are down about 4% over the last six months.   I expect this measure of asking prices to start increasing seasonally in February, and to stay positive year-over-year.

Yesterday:
• Summary for Week Ending Dec 28th
• Schedule for Week of Dec 30th

by Calculated Risk on 12/30/2012 11:30:00 AM

From the WaPo (updated): Senators trade proposals into night to avoid ‘fiscal cliff’ (ht black dog)

Reid and McConnell have set a deadline of about 3 p.m. on Sunday for cinching a deal. That’s when they’re planning to convene caucus meetings of their respective members in separate rooms just off the Senate floor. At that point, the leaders will brief their rank and file on whether there has been significant progress and will determine whether there is enough support to press ahead with a proposal.
...
If all goes according to plan, the leaders would roll out the legislation Sunday night and hold a vote by at least midday Monday, giving the House the rest of New Year’s Eve to consider the measure.

According to the article, the sticking points are taxes for high income earners and "how to tax inherited estates".

Note: This type of "deadline" is just a target, and there probably won't be an update until later in the day.

by Calculated Risk on 12/29/2012 08:44:00 PM

Not much ... from the WaPo: Senators trade proposals into night to avoid ‘fiscal cliff’

Senate negotiators labored late into Saturday over a last-ditch plan to avert the “fiscal cliff,” struggling to resolve key differences over how many wealthy households should face higher income taxes in the new year and how to tax inherited estates.
...
As nightfall approached, top Democratic and Republican aides continued shuttling paperwork with the latest proposals back and forth between the two leaders’ offices, less than 50 steps apart.
...
If all goes according to plan, the leaders would roll out the legislation Sunday night and hold a vote by at least midday Monday, giving the House the rest of New Year’s Eve to consider the measure.

Earlier:
• Summary for Week Ending Dec 28th
• Schedule for Week of Dec 30th

by Calculated Risk on 12/29/2012 05:13:00 PM

This is an unofficial list of Problem Banks compiled only from public sources.

Here is the unofficial problem bank list for Dec 28, 2012.

Changes and comments from surferdude808:

The FDIC released its enforcement action activity for November 2012 this week. As a result, seven banks were removed and four banks were added. The changes leave the Unofficial Problem Bank List with 838 institutions with assets of $313.1 billion. A year ago, the list held 970 institutions with assets of $391.2 billion. For the month, the list count declined by 18 and assets fell $13.3 billion. The count decline of 18 matches the highest amount recorded back in April 2012.

The FDIC terminated actions against County Bank, Rehoboth Beach, DE ($341 million); Citizens State Bank - Midwest, Cavalier, ND ($109 million); Prime Alliance Bank, Woods Cross, UT ($104 million); Holbrook Co-operative Bank, Holbrook, MA ($94 million); and Security State Bank of Lewiston, Lewiston, MN ($66 million). The other removals were Hastings State Bank, Hastings, NE, ($136 million) and Hull Federal Savings Bank, Baltimore, MD ($25 million) as they found merger partners.

The following four banks joined the list -- Lake Area Bank, Lindstrom, MN ($276 million); The Peoples Bank, Chestertown, MD ($247 million); WestSide Bank, Hiram, GA ($134 million); and First State Bank of Miami, Texas, Miami, TX ($50 million). The FDIC issued a Prompt Corrective Action order against Covenant Bank, Chicago, IL ($60 million).

After the passage of the fourth quarter, it is time for a refresh of the transition matrix. As seen in the table, there have been a total of 1,606 institutions with assets of $808.9 billion that have appeared on the list. Removals have totaled 768 institutions or nearly 48 percent of the total. Failures continue to be the leading removal cause as 347 institutions with assets of $290.4 billion have failed since appearing on the list. Removals from unassisted mergers and voluntary liquidations total 129 institutions. While there has been an acceleration in action terminations in 2012, the pace has slowed down some during the fourth quarter. In all, actions have been terminated against 292 institutions with assets of $129.6 billion, with 40 terminations occurring in this quarter.

Unofficial Problem Bank List
Change Summary
		Number of Institutions	Assets ($Thousands)
Start (8/7/2009)		389	276,313,429
Subtractions
	Action Terminated	97	(27,057,010)
	Unassisted Merger	26	(4,191,282)
	Voluntary Liquidation	2	(4,855,164)
	Failures	148	(182,228,947)
	Asset Change		(15,385,341)
Still on List at 12/28/2012		116	42,595,685
Additions		722	270,521,747
End (12/28/2012)		838	313,117,432
Intraperiod Deletions1
	Action Terminated	195	102,513,931
	Unassisted Merger	94	49,619,506
	Voluntary Liquidation	7	1,760,816
	Failures	199	108,189,630
	Total	495	262,083,883
1Institution not on 8/7/2009 or 12/28/2012 list but appeared on a weekly list.

Earlier:
• Summary for Week Ending Dec 28th
• Schedule for Week of Dec 30th