by Calculated Risk on 5/31/2020 05:50:00 PM

The US is now conducting around 400,000 tests per day, and that might be enough to allow test-and-trace in some areas. Based on the experience of other countries, the percent positive needs to be well under 5% to really push down new infections, so the US might need to double the number of tests per day again.

According to Dr. Jha of Harvard's Global Health Institute, the US might need more than 900,000 tests per day .

There were 441,448 test results reported over the last 24 hours.

Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 5.4% (red line).

For the status of contact tracing by state, check out testandtrace.com.

by Calculated Risk on 5/31/2020 10:38:00 AM

The FDIC's official problem bank list is comprised of banks with a CAMELS rating of 4 or 5, and the list is not made public (just the number of banks and assets every quarter). Note: Bank CAMELS ratings are also not made public.

CAMELS is the FDIC rating system, and stands for Capital adequacy, Asset quality, Management, Earnings, Liquidity and Sensitivity to market risk. The scale is from 1 to 5, with 1 being the strongest.

As a substitute for the CAMELS ratings, surferdude808 is using publicly announced formal enforcement actions, and also media reports and company announcements that suggest to us an enforcement action is likely, to compile a list of possible problem banks in the public interest.

DISCLAIMER: This is an unofficial list, the information is from public sources and while deemed to be reliable is not guaranteed. No warranty or representation, expressed or implied, is made as to the accuracy of the information contained herein and same is subject to errors and omissions. This is not intended as investment advice. Please contact CR with any errors.

Here is the unofficial problem bank list for May 2020.

Here are the monthly changes and a few comments from surferdude808:

Update on the Unofficial Problem Bank List for May 2020. During the month, the list increased by one to 65 banks after two removals and three additions. Aggregate assets were little changed at $48.5 billion from last month. A year ago, the list held 73 institutions with assets of $54.6 billion.

Actions were terminated against Sevier County Bank, Sevierville, TN ($332 million) and Nantahala Bank & Trust Company, Franklin, NC ($157 million). Florida Capital Bank, National Association, Jacksonville, FL ($496 million); Bank of Louisiana, New Orleans, LA ($78 million); and State Bank of Nauvoo, Nauvoo, IL ($33 million). The order against the Bank of Louisiana does have a certain entertainment value, should you have time on your hands you may want to give it a read. Normally by this time after a calendar quarter-end, banks would have filed updated financials and the FDIC would have provided an update on the Official Problem Bank list, but 30 days was added to the financial filing deadline because of the COVID-19 pandemic. Look for that update in next month’s comment.

by Calculated Risk on 5/30/2020 06:31:00 PM

The US is now conducting around 400,000 tests per day, and that might be enough to allow test-and-trace in some areas. Based on the experience of other countries, the percent positive needs to be well under 5% to really push down new infections, so the US might need to double the number of tests per day again.

According to Dr. Jha of Harvard's Global Health Institute, the US might need more than 900,000 tests per day .

There were 395,928 test results reported over the last 24 hours.

Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 5.8% (red line).

by Calculated Risk on 5/30/2020 02:40:00 PM

From the Las Vegas Visitor Authority: April 2020 Las Vegas Visitor Statistics

With global travel restrictions and stay‐at‐home orders in place due to the COVID‐19 pandemic, Las Vegas visitation in April was a small fraction of normal levels (107k visitors), limited to est. stays with friends or relatives and/or those in non‐gaming properties that remained open for essential transient lodging.

No measurable convention attendance occurred during the month.

With the vast majority of the destination's hotel rooms temporarily unavailable to book, occupancy was 1.7% while the average day rates (ADR) among those properties that were open came in at approximately $60.

Here is the data from the Las Vegas Convention and Visitors Authority.

Click on graph for larger image.

The blue and red bars are monthly visitor traffic (left scale) for 2019 and 2020.   The dashed blue and orange lines are convention attendance (right scale). 

Convention traffic in April was down 100% compared to April 2019.

And visitor traffic was down 97% YoY.

The numbers for May will be very low too.

by Calculated Risk on 5/30/2020 08:11:00 AM

The key report scheduled for this week is the May employment report.

Other key reports include the May ISM Manufacturing and non-manufacturing surveys, May Vehicle Sales and the Trade Deficit for April.

----- Monday, June 1st -----
10:00 AM: ISM Manufacturing Index for May. The consensus is for the ISM to be at 43.0, up from 41.5 in April.

Here is a long term graph of the ISM manufacturing index.

The employment index was at 27.5% in April, and the new orders index was at 27.1%.

10:00 AM: Construction Spending for April. The consensus is for a 6.0% decrease in construction spending.

----- Tuesday, June 2nd -----
All day: Light vehicle sales for May. The consensus is for light vehicle sales to be 10.8 million SAAR in May, up from 8.6 million in April (Seasonally Adjusted Annual Rate).

This graph shows light vehicle sales since the BEA started keeping data in 1967. The dashed line is the sales rate for last month (lowest in 50 years).

10:00 AM: Corelogic House Price index for April.

----- Wednesday, June 3rd -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:15 AM: The ADP Employment Report for May. This report is for private payrolls only (no government). The consensus is for 9,000,000 payroll jobs lost in May, up from 20,236,000 lost in April.

10:00 AM: the ISM non-Manufacturing Index for May.   The consensus is for a reading of 44.0, up from 41.8.

----- Thursday, June 4th -----
8:30 AM: Trade Balance report for April from the Census Bureau.

This graph shows the U.S. trade deficit, with and without petroleum, through the most recent report. 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.

The consensus is the trade deficit to be $44.3 billion.  The U.S. trade deficit was at $44.4 Billion the previous month.

8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for a 1.900 million initial claims, down from 2.123 million the previous week.

----- Friday, June 5th -----
8:30 AM: Employment Report for May.   The consensus is for 8,250,000 jobs lost, and for the unemployment rate to increase to 19.7%.

There were 20,500,000 jobs lost in April, and the unemployment rate was at 14.7%.

This graph shows the job losses from the start of the employment recession, in percentage terms.

The current employment recession is by far the worst recession since WWII in percentage terms, and the worst in terms of the unemployment rate.

by Calculated Risk on 5/29/2020 05:38:00 PM

In late April, Dr. Fauci said the US might be able to test 400,000 to 600,000 people per day sometime in May, and testing is in that range. There might be enough to allow test-and-trace in some areas.

However, the US might need more than 900,000 tests per day according to Dr. Jha of Harvard's Global Health Institute.

There were 492,276 test results reported over the last 24 hours.

Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 4.6% (red line). The US probably needs enough tests to keep  the percentage positive well below 5%. (probably much lower based on testing in New Zealand).

by Calculated Risk on 5/29/2020 04:14:00 PM

Fannie Mae reported that the Single-Family Serious Delinquency increased to 0.70% in April, from 0.66% in March. The serious delinquency rate is down from 0.72% in April 2019.

IMPORTANT: These are mortgage loans that are "three monthly payments or more past due or in foreclosure".  So it will take three months for the impact of COVID-19 to show up in this series.

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

Click on graph for larger image

By vintage, for loans made in 2004 or earlier (2% of portfolio), 2.64% are seriously delinquent (up from 2.48% in March). For loans made in 2005 through 2008 (3% of portfolio), 4.41% are seriously delinquent (up from 4.11%), For recent loans, originated in 2009 through 2018 (95% of portfolio), only 0.38% are seriously delinquent (up from 0.35%). So Fannie is still working through a few poor performing loans from the bubble years.

With COVID-19, this rate will increase significantly in a few months (it takes time since these are mortgages three months or more past due).

Note: Freddie Mac reported earlier.

by Calculated Risk on 5/29/2020 11:44:00 AM

Important: GDP is reported at a seasonally adjusted annual rate (SAAR). So a 40% Q2 decline is around 9% decline from Q1 (SA).

From Merrill Lynch:

Better than expected capex data edged up 2Q GDP tracking to -39.7% qoq saar. [May 29 estimate]
emphasis added

From the NY Fed Nowcasting Report

The New York Fed Staff Nowcast stands at -35.5% for 2020:Q2. [May 29 estimate]

And from the Altanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2020 is -51.2 percent on May 29, down from -40.4 percent on May 28. [May 29 estimate]

by Calculated Risk on 5/29/2020 10:02:00 AM

In the Personal Income & Outlays report for April, the BEA noted that "Personal income increased $1.97 trillion (10.5 percent) in April". This was due to a large increase in transfer payment.

Transfer payments increased by $3 trillion in April. Unemployment insurance increased from $70 billion in March, to $430 billion in April. And "Other" (mostly the CARES Act) increased by $2,600 billion in April.

Without the increase in transfer payments, Personal Income in April would have declined by about  6%.

A key measure of the health of the economy (Used by NBER in recession dating) is Real Personal Income less Transfer payments.

Click on graph for larger image.

This graph shows real personal income less transfer payments since 1990.

This measure of economic activity decreased 2.8% in March, compared to February, and another 6.3% in April (compared to March).

by Calculated Risk on 5/29/2020 09:25:00 AM

Note: Both Black Knight and the MBA (Mortgage Bankers Association) are putting out weekly estimates of mortgages in forbearance.

From Black Knight: Mortgage Forbearance Volumes Flatten, Total Roughly Steady at 4.76M

The latest data from the McDash Flash Forbearance Tracker shows that forbearance volumes have essentially flattened, and in fact new inflows have slowed to a relative trickle.

While the leveling off of active forbearance volumes is welcome news, the focus of industry participants – especially servicers and mortgage investors – is already shifting from pipeline growth to pipeline management.
...
As of May 26, 4.76 million homeowners are in forbearance plans, with a net increase of just 7,000 new forbearance plans since last week. That’s in comparison to a 325,000 net increase in the first week of May, and 1.4 million in the first week of April.

CR Note: This is 9.0% of all mortgages.  The delinquency rate in April increased sharply to 6.45%, but it would have been much higher if so many borrowers in forbearance hadn't made their mortgage payments (unpaid loans in forbearance are counted as delinquent in the survey).