by Calculated Risk on 9/08/2009 11:09:00 AM

From The Times: Recession is over but stagnation may follow

Britain’s economy grew for the first time over a three-month period since May last year, the National Institute of Economic and Social Research (NIESR) said today but warned that the end of recession could turn to a period of stagnation. ...

"This is the first time our GDP indicator has been higher over a three-month average since May of 2008 and reinforces our view that the recession ended in May of this year." ... However, NIESR added: "There may well be a period of stagnation now, with output rising in some months and falling in others; the end of the recession should not be confused with a return to normal economic conditions."
emphasis added

And from Bloomberg: German Industrial Output Fell in July After June Gain

German industrial output fell in July after rising in June, suggesting the recovery from recession may be gradual.

Production declined 0.9 percent from June, when it rose a revised 0.8 percent, the Economy Ministry in Berlin said today.

by Calculated Risk on 9/08/2009 08:53:00 AM

From Manpower: Manpower Employment Outlook Survey Projects a Weak Hiring Pace for Q4 2009

"The hiring intentions of U.S. companies continue to be sluggish," said Manpower Inc. Chairman and CEO Jeff Joerres. "While there are areas within the U.S. which are showing an uptick, we have yet to see the robust hiring intentions that would indicate a full labor market recovery."

Of the more than 28,000 employers surveyed, a significant 69% expect no change in their October – December hiring plans. Twelve percent anticipate an increase in staff levels, while 14% expect a decrease in payrolls, resulting in a Net Employment Outlook of -2%. After seasonal adjustment, the Net Employment Outlook becomes -3%, the weakest in the history of the survey, which began in 1962. The final 5% of employers indicated they were undecided about their hiring intentions.

“Despite some moderating signs, such as the considerable number of employers that plan to maintain or increase staff levels, there will continue to be challenges for both job seekers and employers in the coming months,” said Jonas Prising, Manpower president of the Americas. “Hiring in the Wholesale & Retail Trade sector, for instance, is expected to be down in the fourth quarter, suggesting that employers will not be adding the quantity of holiday hires they have in the past.”
emphasis added

by Calculated Risk on 9/08/2009 12:19:00 AM

Reuters is reporting comments by State Councillor Ma Kai indicating China will continue with their stimulative policies.

"The trend of economic stabilisation is still not firm, not solidified, not balanced, and we still face many difficulties and problems," Ma [said] ... "We will maintain the consistency and stability of macroeconomic policies and fully implement and constantly improve a package of plans."

Futures are up ...

Futures from barchart.com

Bloomberg Futures.

CBOT mini-sized Dow

And the Asian markets are mostly up.

Best to all.

by Calculated Risk on 9/07/2009 09:31:00 PM

Another laugh from Jim ... "and if you get busted, you can always say you lost your mind because ..."

by Calculated Risk on 9/07/2009 05:50:00 PM

This story has it all: negative equity, Option ARM, health problems, a modification horror story and more - all with one family in Orange County.

From the O.C. Register: Family faces loss of home amid health crisis

... the Kempffs' option adjustable-rate mortgage payment skyrocketed to $4,300 a month from $2,500 last December. Seeing no way to afford the new payments, the Kempffs opted for a loan modification from their bank, IndyMac which was later purchased by OneWest from the FDIC in March.
...
The Kempffs said they were told by an IndyMac representative on the phone that they had to miss three payments before a deal could be worked out. ... For a family that had never missed payments in 14 years of being homeowners, purposely skipping payments was hard for the Kempffs, but they consented.

I'm curious about the timing in the article. IndyMac was seized by the FDIC on July 11, 2008, and was then run by the FDIC until March of 2009. Did this happen when IndyMac was being used by the FDIC to demonstrate how to modify loans? Tanta correctly predicted that the FDIC would discover that modifying loans was not easy, see: IndyMac-FDIC Mortgage Modification Plan: Still in the Real World

I wrote a snotty post at the end of August after Sheila Bair's plan for "affordability modifications" of the former IndyMac loans was announced, the burden of snot wisdom of which was my prediction that Bair was going to discover that it's a lot harder than she thinks to get successful mortgage modifications done on a wide scale in a very short period of time. However, I did express the hope that the Bair plan would prove remarkably successful and indicated my willingness to eat my words should it prove necessary.

Looks like I'll have to stick to my usual dry toast and bananas after all.

Back to the article:

A OneWest Bank spokesperson said the Kempffs didn't qualify for a loan modification because the amount they owed on their first mortgage was more than $729,750.

The unpaid amount on the Kempffs' loan is $786,802.59, short of qualifying for a modification by about $60,000.

Since the Kempffs purchased their home in 2002, they took out loans and refinanced their mortgage. The equity from those transactions enabled the Kempff family to fix their cracked pool, remedy a slipping backyard slope by putting in three retaining walls, help three children pay for college and pay for the medical bills of their youngest son who had malignant melanoma.
...
Juergen Kempff, 65, has battled leukemia and lymphoma for a decade, on and off. His bone marrow has been debilitated from his treatments, and his oncologist has given him about six months to live.
...
Desperate to stall the foreclosure process, the Kempffs declared bankruptcy.

A sympathetic borrower - a professor at the University of California, Irvine with a serious health issue - negative equity, using the home as an ATM, an Option ARM, a personal bankruptcy, miscommunication with the lender on a modification (apparently while the FDIC was running IndyMac) - and a home in the upper middle price range. This story has it all.