by Calculated Risk on 10/21/2009 11:47:00 AM

From the BLS: Regional and State Employment and Unemployment Summary

Twenty-three states and the District of Columbia recorded over-the-month unemployment rate increases, 19 states registered rate decreases, and 8 states had no rate change, the U.S. Bureau of Labor Statistics reported today. Over the year, jobless rates increased in all 50 states and the District of Columbia.
...
In September, nonfarm payroll employment decreased in 43 states and the District of Columbia and increased in 7 states.
...
Michigan again recorded the highest unemployment rate among the states, 15.3 percent, in September. The states with the next highest rates were Nevada, 13.3 percent; Rhode Island, 13.0 percent; and California, 12.2 percent. The rates in Nevada and Rhode Island set new series highs. Florida, at 11.0 percent, also posted a series high.
emphasis added

Click on graph for larger image in new window.

This graph shows the high and low unemployment rates for each state (and D.C.) since 1976. The red bar is the current unemployment rate (sorted by the current unemployment rate).

Fourteen states and D.C. now have double digit unemployment rates.

New Jersey, Indiana, and Missouri are all close.

Three states are at record unemployment rates: Rhode Island, Nevada, and Florida. Several others - like California, Delaware, North Carolina and Georgia - are close.

by Calculated Risk on 10/21/2009 09:11:00 AM

From Reuters: U.S. architecture billings up in September-AIA

... The Architecture Billings Index was up 1.4 points at 43.1, matching July's level, according to the American Institute of Architects.

The index has remained below 50, indicating contraction in demand for design services, since January 2008.
...
A measure of inquiries for new projects, however, rose to 59.1, its highest in two years -- "an encouraging sign," said AIA Chief Economist Kermit Baker.

"Some larger stimulus-funded building activity should be coming online over the next several months, partially offsetting the steep decline in private commercial construction," Baker said.

Click on graph for larger image in new window.

This graph shows the Architecture Billings Index since 1996. The index has remained below 50, indicating falling demand, since January 2008.

Note: Nonresidential construction includes commercial and industrial facilities like hotels and office buildings, as well as schools, hospitals and other institutions.

Historically there is an "approximate nine to twelve month lag time between architecture billings and construction spending" on commercial real estate (CRE). This suggests further dramatic declines in CRE investment through most of 2010, if not longer.

by Calculated Risk on 10/21/2009 08:56:00 AM

The MBA reports: Mortgage Applications Decrease

The Market Composite Index, a measure of mortgage loan application volume, decreased 13.7 percent on a seasonally adjusted basis from one week earlier. ...

The Refinance Index, also adjusted for the holiday, decreased 16.8 percent from the previous week and the seasonally adjusted Purchase Index decreased 7.6 percent from one week earlier.
...
The average contract interest rate for 30-year fixed-rate mortgages increased to 5.07 percent from 5.02 percent, with points increasing to 1.13 from 1.11 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

Click on graph for larger image in new window.

This graph shows the MBA Purchase Index and four week moving average since 2002.

The Purchase index declined to 268.8, and the 4-week moving average declined to 284.

Note: The increase in 2007 was due to the method used to construct the index: a combination of lender failures, and borrowers filing multiple applications pushed up the index in 2007, even though activity was actually declining.

by Calculated Risk on 10/20/2009 10:18:00 PM

A couple of interesting articles and a daily summary ...

From MarketWatch: Treasury to introduce program to help small banks

The ABA and other bank lobby groups for small banks are seeking to have Treasury develop a program to provide TARP funds to small stressed banks -- those with less than $5 billion in assets -- on the cusp of a default that haven't received TARP funds.

And I thought everyone agreed that the FDIC closing small failing banks - albeit slowly - was an example of how bank problems should be resolved. Now we have "Too small to fail"?

Philly Fed Chairman Charles Plosser, in a speech tonight, questioned the effectiveness of many of the recent Fed actions: Sound Monetary Policy for Good Times and Bad

As the crisis unfolded and problems arose in different parts of the financial system, the Fed responded by trying to increase liquidity in several markets through special lending programs. These programs may have had some stabilizing effects on markets and may have lowered some spreads. Yet, without defining in advance a systematic and consistent approach to such lending, these programs also raised uncertainty — in this case, about who would or would not have access to the various facilities. This was illustrated when the Term Asset-Backed Securities Loan Facility (or TALF) was announced. Many market participants lobbied for expanding the categories of securities eligible for the program. Did these multiple lending programs keep lenders on the sidelines waiting to see which asset classes the Fed would support and which it would not? Did this delay the healing of the financial markets?

Bank of England Governor Mervyn King criticized the lack of reform and 'too big to fail'. Here is the text of King's speech. Or see The Telegraph and The Times for excerpts.

Housing Starts were flat in September. And I also posted a short comment on why the focus should be on housing starts (and new home sales), and not existing home sales - and why (briefly) I think a V-shaped recovery is not going to happen: Housing and the Economy

I posted some HAMP Modification Documents and some discussion of a trial modification. Note: Reposted documents with all personal information removed.

There was much more discussion of the first-time home buyer tax credit today. The White House expects to announce a decision in the next couple of weeks.

DataQuick reported that California Mortgage Defaults Trended Down in Q3 . This will be a record year for default notices, and DataQuick also noted that defaults are moving up into higher priced areas.

Note: I recently changed the page layout. It now has the last 5 posts, and then short excerpts and links to previous posts.

by Calculated Risk on 10/20/2009 07:16:00 PM

A quote from Bank of England Governor Mervyn King in the Telegraph: Mervyn King: bank bail-outs created 'biggest moral hazard in history' (ht Jonathan)

"It is in our collective interest to reduce the dependence of so many households and businesses on so few institutions that engage in so many risky activities. The case for a serious review of how the banking industry is structured and regulated is strong. ... The belief that appropriate regulation can ensure that speculative activities do not result in failures is a delusion. ... It is hard to see how the existence of institutions that are 'too important to fail' is consistent with their being in the private sector."

More from The Times: Mervyn King calls for banks to split as public finances take record hit

“What does seem impractical, however, are the current arrangements. Anyone who proposed giving government guarantees to retail depositors and other creditors, and then suggested that such funding could be used to finance highly risky and speculative activities, would be thought rather unworldly. But that is where we now are.

“It is important that banks in receipt of public support are not encouraged to try to earn their way out of that support by resuming the very activities that got them into trouble in the first place.”
...
“To paraphrase a great wartime leader, never in the field of financial endeavour has so much money been owed by so few to so many. And, one might add, so far with little real reform.”