by Calculated Risk on 7/30/2009 07:52:00 PM

From the Detroit Free Press: Cash-for-clunkers program to be suspended (ht Basel Too)

The U.S. government will suspend the popular cash-for-clunkers program after less than four days in business, telling Congress that the plan would burn through its $950-million budget by midnight, several sources told the Free Press. ... auto dealers may have already arranged the sale of more than the 250,000 vehicles that federal officials expected the plan to generate.

Sources tell me (no link) that showroom traffic jumped by about 33% at auto dealers over the last week to about the levels of last September. See the following graph:

Click on graph for larger image in new window.

This graph shows the historical light vehicle sales (seasonally adjusted annual rate) from the BEA (blue) and an estimate for June (red, light vehicle sales of 9.69 million SAAR from AutoData Corp).

Light vehicle sales last September (before the collapse in October) were at a 12.46 million SAAR. Of course this is just one week of July at that sales rate ... and the program is now suspended. But that means July sales will probably be over 10 million SAAR for the first time this year.

by Calculated Risk on 7/30/2009 04:45:00 PM

The DOL report this morning showed seasonally adjusted insured unemployment at 6.2 million, down from a peak of about 6.9 million. This raises the question (and frequent emails) of how many unemployed workers have exhausted their regular unemployment benefits (Note: most are still receiving extended benefits).

The monthly BLS report provides data on workers unemployed for 27 or more weeks, and those workers have exhausted their regular unemployment benefits (and maybe even the extended benefits). So here is a graph ...

Click on graph for larger image in new window.

The blue line is the number of workers unemployed for 27 weeks or more. The red line is the same data as a percent of the civilian workforce.

According to the BLS, there are almost 4.4 million workers who have been unemployed for more than 26 weeks (and still want a job). This is 2.8% of the civilian workforce.

Notice the peak happens after a recession ends, and the of long term unemployed peaked about 18 months after the end of the last two recessions (because of the jobless recovery). This suggests that even if the current recession officially ended this month, the number of long term unemployed would probably continue to rise through the end of 2010.

by Calculated Risk on 7/30/2009 04:00:00 PM

Keeping with the recent theme of an end of market day mishmash ... first from the Daily Show (link here if embedded video loads slow)

And from the News-press.com: Downtown Fort Myers condo has 32 stories, and one lonely tale

Victor Vangelakos lives in a luxury condominium tower on the Caloosahatchee River. He never has to worry about the neighbors making too much noise.

There are no neighbors.

Click on graph for larger image in new window.

The first graph shows the S&P 500 since 1990.

The dashed line is the closing price today.

The S&P 500 is up 45.8% from the bottom (310 points), and still off 37% from the peak (578 points below the max).

The S&P 500 first hit this level in Feb 1998; over 11 years ago.

The second graph is from Doug Short of dshort.com (financial planner): "Four Bad Bears".

Note that the Great Depression crash is based on the DOW; the three others are for the S&P 500.

by Calculated Risk on 7/30/2009 03:26:00 PM

Hope Now released the Q2 Mortgage Loss Mitigation Statistics today.

Most of the data concerns modifications, but here are couple of graphs on delinquencies and foreclosures.

Click on graph for larger image in new window.

There are now more than 3 million mortgage loans 60+ delinquent based on the Hope Now statistics. This covers approximately 85% of the total industry.

There are far more prime loans delinquent than subprime, although a much higher percentage of subprime (18.4%) vs prime (4.24%).

The second graph shows foreclosure starts and completions.

Foreclosure starts are above 250 thousand per month, and completions close to 100 thousand per month. There is a lag between start and completion, and a number of loans cure or are modified - but it does appear completions will increase in the 2nd half of 2009 based on the surge in starts at the beginning of the year.

Just some data for everyone ...

by Calculated Risk on 7/30/2009 01:51:00 PM

From the WSJ: GSEs Unlikely to Repay U.S. in Full

... "My view is that some assets in the senior preferred will have to be left behind as they come out of conservatorship," Federal Housing Finance Agency Director James B. Lockhart said Thursday in response to a question at a panel discussion in Washington. "That will mean that some of the losses will never be repaid."

The Treasury has agreed to pump $200 billion into each company in order to keep them solvent. In exchange, the government receives senior preferred stock that pays a 10% dividend. So far, it has injected $85 billion in total into the companies, but Lockhart said that figure was likely to rise in the coming months.

Fannie and Freddie together own or guarantee $5.4 trillion in mortgages. ...

Mr. Lockhart said Fannie and Freddie would likely see their reserves continue to decline next year, but could return to strong profits in two to three years.

I'm shocked!