by Calculated Risk on 5/11/2010 09:17:00 PM

From Jon Stewart at the Daily Show: A Nightmare on Wall Street

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
A Nightmare on Wall Street
www.thedailyshow.com

by Calculated Risk on 5/11/2010 05:17:00 PM

The Sacramento Association of REALTORS® is breaking out monthly resales by equity sales (conventional resales), and distressed sales (Short sales and REO sales), and I'm following this series as an example to see mix changes in a distressed area.

Click on graph for larger image in new window.

Here is the April data.

The Sacramento Association started breaking out REO sales in 2008, but they have only broken out short sales since June 2009 - so we almost have one year of data.

In April, 63% of all resales (single family homes and condos) were distressed sales.

Note: This data is not seasonally adjusted, although the decrease in sales in April is a little surprising because of the tax credit.

The second graph shows the percent of REO, short sales and conventional sales. The percent of short sales is near the high set in December and will probably continue to increase later this year (2010 is the year of the short sale!).

The percent of REOs has been generally declining (seasonally there are a larger percentage of REOs in the winter).

Also total sales in April were off 9.1% compared to April 2009; the eleventh month in a row with declining YoY sales - even with the tax credit buying this year!

On financing, over 58 percent were either all cash (27.2%) or FHA loans (30.9%), suggesting most of the activity in distressed former bubble areas like Sacramento is first time home buyers using government-insured FHA loans, and investors paying cash.

by Calculated Risk on 5/11/2010 03:16:00 PM

Testimony from SEC Chairman Mary Schapiro before the House Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises: Severe Market Disruption on May 6, 2010

This is an overview of what happened, what didn't happen (fat finger, unusual trading in Proctor & Gamble) and possible action to be taken (single stock trading curbs). On changes:

[W]e must consider the various types of “time out” mechanisms that can help maintain a fair and orderly market, both for the broad market and for individual stocks.

For example, we must ask whether the general, market-wide circuit breaker provisions that currently are on the books (none of which were triggered on May 6) need to be revised. I note that a vitally important element of the market-wide circuit breakers is that they apply across all stock and options trading venues and all venues for trading equity security-related futures, because markets for all equity security-related products are closely linked.

I believe that we also must consider the various types of time out mechanisms that can be applied to individual stocks. Although the prices of many stocks on May 6 declined in proportion with the broader market decline that occurred in securities and futures index products, the prices of many other individual stocks declined much, much more (before snapping back largely to the prices at which they were trading prior to the precipitous decline). At this point, the root cause of the sudden disappearance of liquidity in many stocks is unclear. ...

In addition to time out mechanisms, we will consider any other steps that potentially could prevent or help minimize the harm that occurred on May 6. These include: (1) exchange-level erroneous order filters; (2) “collars” on the prices at which market orders or aggressively priced limit orders can be executed; (3) limitations on the size of market orders or aggressively priced limit orders; and (4) eliminating the practice of displaying stub quotes that were never intended to be executed.

by Calculated Risk on 5/11/2010 01:23:00 PM

From the NY Times: Senate Backs One-Time Audit of Fed’s Bailout Role

The Senate on Tuesday voted unanimously to require a one-time audit of the Federal Reserve’s emergency actions during and after the 2008 financial crisis as part of broad legislation overhauling the nation’s financial regulatory system.

This is a one time audit (as opposed to the house bill), and would also require the Fed to release a list by Dec 1, 2010 of all of the institutions that received emergency assistance during the financial crisis.

by Calculated Risk on 5/11/2010 10:00:00 AM

From the BLS: Job Openings and Labor Turnover Summary

There were 2.7 million job openings on the last business day of March 2010, the U.S. Bureau of Labor Statistics reported today. The job openings rate was unchanged over the month at 2.0 percent. The hires rate (3.3 percent) was little changed, and the separations rate (3.1 percent) was unchanged in March.

Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. The CES (Current Employment Statistics, payroll survey) is for positions, the CPS (Current Population Survey, commonly called the household survey) is for people.

The following graph shows job openings (purple), hires (blue), Total separations (include layoffs, discharges and quits) (red) and Layoff, Discharges and other (yellow) from the JOLTS.

Unfortunately this is a new series and only started in December 2000.

Click on graph for larger image in new window.

Notice that hires (blue) and separations (red) are pretty close each month. This is the level of turnover each month. Right now about 4 million people lose their jobs each month, and a little over 4 million are hired (this is the labor turnover in the economy).

When the hires (blue line) is above total separations (as in March), the economy is adding net jobs, when the blue line is below total separations, the economy is losing net jobs.

According to the JOLTS report, there were 4.242 million hires in March (SA), and 4.016 million total separations, or 226 thousand net jobs gained. The comparable CES report showed a gain of 230 thousand jobs in March (after revision).

Layoffs and discharges have declined sharply from early 2009 - and that is a good sign.

Hiring picked up in March, although the number of job openings is still very low, as is the turnover rate.