by Calculated Risk on 4/29/2010 09:05:00 PM

Three followup stories ...

From Alana Semuels at the LA Times: '99ers' dread future without jobless benefits

In California, state officials estimate there are nearly 100,000 people who are still looking for work but can no longer draw an unemployment check. Federal labor officials could not provide a number nationally, but private-sector experts say it could easily top 1 million.

What is certain is that, as the jobless rate remains stubbornly high, more Americans will have to face the challenge of making ends meet without a monthly check.

"People are going off a cliff and we're not really doing anything about it," said Andrew Stettner, deputy director of the National Employment Law Project.

From Eric Dash at the NY Times: Puerto Rican Lenders Face Their Own Crisis

At least three of Puerto Rico’s banks — Eurobank, R-G Premier Bank and Westernbank — are operating under cease-and-desist orders from regulators ...

Now that the deadline has come and gone, regulators have been working on a confidential plan to auction off the lenders ... It is known as Project Themis ... the efforts could cost the F.D.I.C. insurance fund as much as $5 billion, some analysts estimate.

And from Susan Pulliam and Evan Perez at the WSJ: Criminal Probe Looks Into Goldman Trading . No real details, but earlier the NY Post reported that Goldman "may soon settle its [civil] fraud case".

And Q1 2010 GDP will be released in the morning. Consensus is for 3.4% annualized real GDP growth, but the details will be important.

by Calculated Risk on 4/29/2010 05:44:00 PM

From the Financial Times: Greece agrees €24bn austerity package

Greece has agreed the outline of a €24bn austerity package, including a three-year wage freeze for public sector workers, in return for a multibillion-euro loan from the eurozone and the International Monetary Fund ...
except with permission

The final details are still being worked out, but apparently the value-added tax (VAT) will be increased, public sector workers will lose their two large bonuses, and the retirement age will be increased significantly among other measures. This is intended to reduce the budget deficit by 10+ percentage points over 3 years.

From the NY Times: Europe Moves Swiftly on Greek Rescue Plan

European leaders raced on Thursday to complete their part of a long-delayed financial rescue package for Greece, hoping to head off a chain reaction against other heavily indebted European nations that could turn into a financial meltdown across the continent.

People have been comparing Greece to Lehman, but maybe a better comparison would be to Morgan Stanley (the bank everyone thought was next before TARP). This might be the beginning of the European sovereign TARP.

by Calculated Risk on 4/29/2010 03:23:00 PM

From Bloomberg: More Than a Million in U.S. May Lose Jobless Benefits (ht Chris)

[Lawmakers] are quietly drawing the line at 99 weeks of aid, a mark that hundreds of thousands of Americans have already reached. In coming months, the number of those who will receive their final government check is projected to top 1 million.
...
Interviews with state officials found that in New York, 57,000 people have received their last check. In Florida, 130,000 are no longer eligible as are about 30,000 Ohioans.

According to the BLS, a record 6.5 million workers have been unemployed for 27 weeks or more. The article notes a study by the Pew Fiscal Analysis Initiative that shows 3.4 million workers have been unemployed for more than a year.

Not all states have 99 weeks of benefits, but some workers are starting to exhaust all of their benefits.

The job market better pickup soon ...

by Calculated Risk on 4/29/2010 12:08:00 PM

From HotelNewsNow.com: STR: Occupancy buoys chain scales' weekly results

Overall, the industry’s occupancy increased 2.4 percent to 60.7 percent, average daily rate dropped 2.4 percent to US$98.16, and RevPAR ended virtually flat with a 0.1-percent decrease to US$59.55.

The following graph shows the occupancy rate by week and the 52 week rolling average since 2000.

Click on graph for larger image in new window.

Notes: the scale doesn't start at zero to better show the change.

The graph shows the distinct seasonal pattern for the occupancy rate; higher in the summer because of leisure/vacation travel, and lower on certain holidays.

The occupancy rate is running slightly above 2009 - the worst year since the Depression - but still well below the normal level of close to 65% for this week.

Data Source: Smith Travel Research, Courtesy of HotelNewsNow.com

by Calculated Risk on 4/29/2010 09:40:00 AM

Note: This is a composite index based on a number of economic releases.

From the Chicago Fed: Index shows economic activity improved in March

Led by improvements in production- and employment-related indicators, the Chicago Fed National Activity Index increased to –0.07 in March, up from –0.44 in February. Three of the four broad categories of indicators that make up the index made positive contributions in March, while the consumption and housing category made the lone negative contribution.

The index’s three-month moving average, CFNAI-MA3, increased to –0.18 in March from –0.31 in February. March’s CFNAI-MA3 suggests that growth in national economic activity, while still below average, continues to improve.

Click on table for larger image in new window.

This graph shows the Chicago Fed National Activity Index (three month moving average) since 1967. According to the Chicago Fed:

A zero value for the index indicates that the national economy is expanding at its historical trend rate of growth; negative values indicate below-average growth; and positive values indicate above-average growth.

We are now about 9 months into the recovery, and growth by most indicators is still below trend.