by Calculated Risk on 11/25/2013 01:01:00 PM

Note: The automakers will report November vehicle sales on December 3rd.

Here are a few forecasts:

From WardsAuto: Forecast Calls for Post-Shutdown Bounce

U.S. automakers should sell 1.21 million light vehicles in November, according to a new WardsAuto forecast.
...
The forecast sales volume (over 26 days) would represent ... equate to a 15.9 million-unit SAAR.

From JD Power: Consumer Demand for New Vehicles Picks Up in November

In November, U.S. new-vehicle sales are likely to reach 1.2 million units ... based on an auto sales forecast update from J.D. Power and strategic partner LMC Automotive.

The average sales pace in November is expected to translate to a 16.1 million-unit seasonally adjusted annual rate, or SAAR, which would ... outpace the 15.2 million-unit SAAR in October, 2013.

From Edmunds.com: November Auto Sales Set the Tone for Final Stretch of 2013, Forecasts Edmunds.com

Edmunds.com ... forecasts that 1,196,663 new cars and trucks will be sold in the U.S. in November for an estimated Seasonally Adjusted Annual Rate (SAAR) of 15.7 million.

"Any economic uncertainty that car shoppers might have felt in October seems to be a distant memory by now," says Edmunds.com Senior Analyst Jessica Caldwell. "Car buyers are already taking advantage of advertised holiday deals, and as we plow deeper into the holiday season, the table is set for 2013 to finish on a very strong note."

It appears sales in November will be significantly above the government slowdown pace of 15.154 million in October 2013.

by Calculated Risk on 11/25/2013 11:08:00 AM

Notes: I follow several house price indexes (Case-Shiller, CoreLogic, LPS, Zillow, FHFA, FNC and more). The timing of different house prices indexes can be a little confusing. LPS uses the current month closings only (not a three month average like Case-Shiller or a weighted average like CoreLogic), excludes short sales and REOs, and is not seasonally adjusted.

From LPS: LPS Home Price Index Report: September Transactions, U.S. Home Prices Up 0.2 Percent for the Month; Up 9.0 Percent Year-Over-Year

Lender Processing Services ... today released its latest LPS Home Price Index (HPI) report, based on September 2013 residential real estate transactions. The LPS HPI combines the company’s extensive property and loan-level databases to produce a repeat sales analysis of home prices as of their transaction dates every month for each of more than 18,500 U.S. ZIP codes. The LPS HPI represents the price of non-distressed sales by taking into account price discounts for REO and short sales.

The LPS HPI is off 14.1% from the peak in June 2006. Note: The press release has data for the 20 largest states, and 40 MSAs. Prices declined slightly in seven of the 20 largest states in September. LPS shows prices off 44.5% from the peak in Las Vegas, off 37.8% in Orlando, and 35.7% off from the peak in Riverside-San Bernardino, CA (Inland Empire). Prices were at new peaks in Austin, Dallas, Houston and San Antonio.

Note: Case-Shiller for September will be released tomorrow.

by Calculated Risk on 11/25/2013 10:00:00 AM

From the NAR: October Pending Home Sales Down Again, but Expected to Level Out

The Pending Home Sales Index, a forward-looking indicator based on contract signings, slipped 0.6 percent to 102.1 in October from an upwardly revised 102.7 in September, and is 1.6 percent below October 2012 when it was 103.8. The index is at the lowest level since December 2012 when it was 101.3; the data reflect contracts but not closings.
...
[Lawrence Yun, NAR chief economist said:]“The government shutdown in the first half of last month sidelined some potential buyers. In a survey, 17 percent of Realtors® reported delays in October, mostly from waiting for IRS income verification for mortgage approval,” he said.

The PHSI in the Northeast rose 2.8 percent to 85.8 in October, and is 8.1 percent above a year ago. In the Midwest the index increased 1.2 percent to 104.1 in October, and is 3.2 percent higher than October 2012. Pending home sales in the South slipped 0.8 percent to an index of 114.5 in October, and are 1.5 percent below a year ago. The index in the West fell 4.1 percent in October to 93.3, and is 12.1 percent lower than October 2012.
emphasis added

Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in November and December.

by Calculated Risk on 11/24/2013 07:49:00 PM

On oil from the WSJ: Iran Accord Likely to Push Oil Prices Down

Oil prices are likely to drop, analysts said, as the nuclear accord between Iran and six world powers potentially paves the way for more crude oil to reach the global market.
...
Brent crude futures ended Friday at $111.05 a barrel, the highest since Oct. 11, in part because a deal with Iran looked remote at the time the market closed.
...
"There's about a million barrels of oil a day that could be very quickly returned to the global market," said Jason Schenker, economist and president at Prestige Economics, LLC.

Iran exported 1.5 million barrels a day in 2012, down from 2.5 million barrels a day in 2011, according to the Energy Information Administration.

Monday:
• At 10:00 AM ET, the Pending Home Sales Index for October. The consensus is for a 1.1% increase in the index.

• At 10:30 AM ET, the Dallas Fed Manufacturing Survey for November. The consensus is a reading of 5.0, up from 3.6 in October (above zero is expansion).

Weekend:
• Schedule for Week of November 24th

• Housing Starts and Permits

The Nikkei is up about 0.8%.

From CNBC: Pre-Market Data and Bloomberg futures: the S&P futures are 5 and DOW futures are up 50 (fair value).

Oil prices are down with WTI futures at $94.01 per barrel and Brent at $108.65 per barrel.

Below is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices have increased recently to $3.26 per gallon.  If you click on "show crude oil prices", the graph displays oil prices for WTI, not Brent; gasoline prices in most of the U.S. are impacted more by Brent prices.

Orange County Historical Gas Price Charts Provided by GasBuddy.com

by Calculated Risk on 11/24/2013 01:29:00 PM

The Census Bureau has announced that the housing starts releases for September and October will be delayed until December 18th, but that housing permits for September and October will be released this coming Tuesday.

The good news is housing starts and permits mostly move together. "Housing starts" are an estimate for the entire country, and "permits" are only for areas requiring building permits.  From the Census Bureau:

Housing starts and completions estimates cover the entire United States, not just areas requiring building permits. The number of housing units built in non-permit areas is about 2.5 percent of the total. Nearly all are single-family houses. (Note that the number of jurisdictions (or "places") requiring building permits increases over time as non-permit places become permit-issuing. The Census Bureau's universe of permit offices was increased in 2005 from 19,000 to 20,000 places.)

Click on graph for larger image.

The first graph shows total housing starts and permits since January 2008.

Over time, more areas have required permits, and now permits and starts mostly move together.

The second graph shows total and single unit permits since 1960.  This is the graph I'll post on Tuesday when permits are released.

This shows the huge collapse following the housing bubble, and that housing permits have been generally increasing after moving sideways for about two years and a half years.

Since housing starts will be delayed, there will be an extra focus on permits on Tuesday - especially since some of the homebuilders have posted weak results recently.

by Calculated Risk on 11/24/2013 10:06:00 AM

The Census Bureau has delayed the release of housing starts again. They will release permit data for September and October this week (on Tuesday), but housing start data for September and October will be released on December 18th.

From the Census Bureau: Census Bureau to Postpone Release of Some New Residential Construction Information

Due to the recent lapse in federal funding, the U.S. Census Bureau today announced revisions to the release date for the September and October New Residential Construction indicator's housing starts and housing completions statistics. Originally scheduled for release on October 17 and November 19 respectively, these dates had been previously revised to November 26, 2013.

The Census Bureau's monthly New Residential Construction indicator includes statistics on building permits, housing starts and housing completions. On November 26 at 8:30 a.m., the Census Bureau will release estimates of housing units authorized by building permits in September and October. However, the release of new housing unit starts and housing unit completions will now be released on December 18, 2013.

The lapse in federal funding affected the data collection schedule for the Survey of Construction, which is the source of data on new housing unit starts and housing unit completions. Accurate data collection for September and October could not be completed in time for the November 26 release. As a result, the December 18 release will include data on housing units started and completed in September, October and November 2013.

by Calculated Risk on 11/23/2013 01:03:00 PM

This will be a short, but busy week. The key reports this week are housing permits for both September and October, and Case-Shiller house prices.

For manufacturing, the Dallas and Richmond Fed November surveys will be released this week.

----- Monday, November 25th -----
10:00 AM ET: Pending Home Sales Index for October. The consensus is for a 1.1% increase in the index.

10:30 AM: Dallas Fed Manufacturing Survey for November.  The consensus is a reading of 5.0, up from 3.6 in October (above zero is expansion).

----- Tuesday, November 26th-----
8:30 AM: Housing Permits for September and October. Housing starts have been delayed until December 18th.

9:00 AM: FHFA House Price Index for September 2013. This was original a GSE only repeat sales, however there is also an expanded index. The consensus is for a 0.4% increase.

9:00 AM: S&P/Case-Shiller House Price Index for September. Although this is the September report, it is really a 3 month average of July, August and September.

This graph shows the nominal seasonally adjusted Composite 10 and Composite 20 indexes through July 2012 (the Composite 20 was started in January 2000).

The consensus is for a 13.1% year-over-year increase in the Composite 20 index (NSA) for August. The Zillow forecast is for the Composite 20 to increase 13.2% year-over-year, and for prices to increase 0.8% month-to-month seasonally adjusted.

10:00 AM: Conference Board's consumer confidence index for November. The consensus is for the index to increase to 72.9 from 71.2.

10:00 AM: Richmond Fed Survey of Manufacturing Activity for November.  The consensus is a reading of 4, up from 1 in October (above zero is expansion).

----- Wednesday, November 27th -----
7:00 AM: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for claims to increase to 330 thousand from 323 thousand last week.

8:30 AM: Durable Goods Orders for October from the Census Bureau. The consensus is for a 2.0% decrease in durable goods orders.

8:30 AM ET: Chicago Fed National Activity Index for October.

9:45 AM: Chicago Purchasing Managers Index for November. The consensus is for a decrease to 60.5, down from 65.9 in October.

9:55 AM: Reuter's/University of Michigan's Consumer sentiment index (final for November). The consensus is for a reading of 73.3, up from the preliminary reading of 72.0, and up from the October reading of 73.2.

10:00 AM: Conference Board Leading Indicators for October. The consensus is for a 0.1% increase in this index.

----- Thursday, November 28th -----
All US markets will be closed in observance of the Thanksgiving Day Holiday.

----- Friday, November 29th -----
US markets will close at 2:00 PM ET following the Thanksgiving Day Holiday. The NYSE will close at 1:00 PM ET.

by Calculated Risk on 11/23/2013 10:00:00 AM

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

Here is the unofficial problem bank list for November 22, 2013.

Changes and comments from surferdude808:

Another quiet week for the Unofficial Problem Bank List as there was only removal. The OCC terminated the action against Lafayette Savings Bank, FSB, Lafayette, IN ($355 million Ticker: LSBI). After removal, the list holds 654 institutions with assets of $222.8 billion. A year ago, the list held 857 institutions with assets of $329.2 billion. We thought the FDIC would release industry results and the Official Problem Bank List totals for the third quarter, but perhaps that will happen next week along with the FDIC's enforcement action activity through October.

According to SNL Securities, Capitol Bancorp was able to sell its controlling interest in Bank of Maumee, Maumee, OH ($28 million) to Princeton Capital LLC (Princeton Capital completes buy of majority stake in Bank of Maumee). The FDIC issued a cross-guaranty waiver/tolling agreement in 2011 to facilitate the transaction that was set to expire this past Tuesday, November 19, 2013. There are reports of potential buyers other than previously identified Talmer Bancorp, Inc. surfacing that are interested in acquiring some of the remaining banks controlled by Capitol Bancorp.

by Calculated Risk on 11/22/2013 07:28:00 PM

From the WSJ: Weak October Sales Have Home Builders Fretting About Spring

A monthly survey of builders across the U.S. by John Burns Real Estate Consulting, a housing research and advisory firm, has found that respondents’ sales of new homes declined by 8% in October from the September level and by 6% from a year earlier. Last month’s result marked the second consecutive month in which the survey yielded a year-over-year decline in sales volumes, the first dips since early 2011.
...
“October was basically a crummy month for a lot of builders,” said Jody Kahn, a senior vice president at Irvine, Calif.-based Burns. “Their frustration is about the government shutdown and how it probably trumped any seasonal (sales) lift that builders were hoping to see. Most did not have very good sales.”
...
“I think this (slowdown) is a good wakeup call for the industry,” Mr. [Scott Laurie, chief executive of The Olson Co] said. “You can’t just raise prices 2% a month. That doesn’t work. What works is affordability.”

New home sales have been weak for a few months. Part of the reason is that builders have been raising prices significantly, and in October the government shut down probably hurt sales too.  Still 2013 has seen a solid increase in new home sales over 2012, and I'm pretty confident new home sales will continue to increase in 2014.

by Calculated Risk on 11/22/2013 04:00:00 PM

The Department of Transportation (DOT) reported:

◦ Travel on all roads and streets changed by 1.5% (3.7 billion vehicle miles) for September 2013 as compared with September 2012.

◦ Travel for the month is estimated to be 241.7 billion vehicle miles.

◦ Cumulative Travel for 2013 changed by 0.4% (9.8 billion vehicle miles).

The following graph shows the rolling 12 month total vehicle miles driven.

The rolling 12 month total is still mostly moving sideways but has started to increase a little recently.


Click on graph for larger image.

In the early '80s, miles driven (rolling 12 months) stayed below the previous peak for 39 months.

Currently miles driven has been below the previous peak for 70 months - almost 6 years - and still counting.  Currently miles driven (rolling 12 months) are about 2.5% below the previous peak.

The second graph shows the year-over-year change from the same month in the previous year.

Gasoline prices were down in September compared to September 2012. In September 2013, gasoline averaged of $3.60 per gallon according to the EIA. In 2012, prices in September averaged $3.91 per gallon.  (In 2012 there were refinery issues in September).

Gasoline prices were down sharply year-over-year in October, so I expect miles driven to be up in October too.  

As we've discussed, gasoline prices are just part of the story.  The lack of growth in miles driven over the last 6 years is probably also due to the lingering effects of the great recession (high unemployment rate and lack of wage growth), the aging of the overall population (over 55 drivers drive fewer miles) and changing driving habits of young drivers.

With all these factors, it might take a few more years before we see a new peak in miles driven.