by Calculated Risk on 5/25/2010 04:00:00 PM

The euro recovered to 1.23 dollars and I had to put away my Dow 10K hat ...

The S&P 500 actually finished up slightly.

Click on graph for larger image in new window.

This 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 5/25/2010 11:40:00 AM

S&P/Case-Shiller also released the Q1 2010 National Index this morning.

By request, here is a graph that shows the national index in both nominal and real terms (adjusted with CPI less shelter).

Click on graph for larger image in new window.

In nominal terms (blue), the National Index declined 1.3% in Q1, and is 2.1% off the recent bottom in Q1 2009.

Note: Case-Shiller reported the national index declined 3.2% in Q1 (Not Seasonally Adjusted, NSA) - however I'm using the SA data.

In real terms (red), the National Index declined 1.9% in Q1, and is now at the lowest level since Q4 2000.

by Calculated Risk on 5/25/2010 09:00:00 AM

IMPORTANT: These graphs are Seasonally Adjusted (SA). S&P has cautioned that the seasonal adjustment is probably being distorted by irregular factors. These distortions could include distressed sales and the various government programs.

S&P/Case-Shiller released the monthly Home Price Indices for March (actually a 3 month average), and the Q1 2010 National Index.

The monthly data includes prices for 20 individual cities, and two composite indices (10 cities and 20 cities).

From S&P: The First Quarter of 2010 Indicates Some Weakening in Home Prices

Data through March 2009, released today by Standard & Poor’s for its S&P/Case-Shiller Home Price Indices ... show that the U.S. National Home Price Index fell 3.2% in the first quarter of 2010, but remains above its year-earlier level. In March, 13 of the 20 MSAs covered by S&P/Case-Shiller Home Price Indices and both monthly composites were down although the two composites and 10 MSAs showed year-over-year gains.

Housing prices rebounded from crisis lows, but recently have seen renewed weakness as tax incentives are ending and foreclosures are climbing.

Click on graph for larger image in new window.

The first graph shows the nominal not seasonally adjusted Composite 10 and Composite 20 indices (the Composite 20 was started in January 2000).

The Composite 10 index is off 29.8% from the peak, and up slightly in March (SA).

The Composite 20 index is off 29.3% from the peak, and down slightly in March (SA).

The second graph shows the Year over year change in both indices.

The Composite 10 is up 3.2% compared to March 2009.

The Composite 20 is up 2.4% compared to March 2009.

This is the second month with YoY price increases in a row.

The third graph shows the price declines from the peak for each city included in S&P/Case-Shiller indices.

Prices decreased (SA) in 11 of the 20 Case-Shiller cities in March (SA).

Prices in Las Vegas are off 56% from the peak, and prices in Dallas only off 5.8% from the peak.

Case Shiller is reporting on the NSA data (13 cities down), and I'm using the SA data. I'm not sure why Case-Shiller is saying prices are weakening because the tax incentive is ending. This is Q1 and March 2010 data - and the tax incentive pulled forward demand and probably supported prices. Just wait until later this year ...

by Calculated Risk on 5/25/2010 08:12:00 AM

From the NY Times: Concerns Over North Korea Shake Markets and Euro

From the WSJ: Europe's Banks Hit by Rising Loan Costs

On Monday, the London interbank offered rate, or Libor—the rate at which banks lend money to each other, and thus a vital sign of their mutual trust—rose to its highest level for the three-month dollar rate since last July. While the current Libor, at just above 0.5%, is far below the sky-high levels of 4.81875% reached at the height of the financial crisis in 2008, it is still a significant jump from 0.25% as recently as March.

But Libor's jump is more pronounced at European banks. On Monday, German state-controlled lender WestLB AG said it cost 0.565% to borrow dollars for three months, up from 0.38% a month earlier. U.S.

The three month Libor has moved even higher, and is now at 0.54.

The TED spread is up to 38.61 (from 34.47). This is the difference between the interbank rate for three month loans and the three month Treasury. The peak was 463 on Oct 10th -the spread is still low, but has been steadily rising.

The European markets are off sharply. The German DAX off 2.76%, the FTSE 100 off 2.5%.

From CNBC: Pre-Market Data shows the S&P 500 off about 25 or over 2.0%. Dow futures are off almost 200 points.

The Euro is down to 1.22 dollars.

by Calculated Risk on 5/24/2010 11:56:00 PM

The U.S. futures are off tonight:

From CNBC: Pre-Market Data shows the S&P 500 off about 19 or almost 2.0%. Dow futures are off about 150 points.

Get your Dow 10K hats ready ... I've heard the Libor is "going nutty" (no link).

CBOT mini-sized Dow

And the Asian markets are off about 2% ... and a graph of the Asian markets.

The Euro is back down to 1.23 dollars. Some other sources for exchange rates and NetDania.

And a couple of stories ...

From Micheal Pettis at Bloomberg: China Falls Victim to Greek Deficit Contagion

And from the Financial Times: Obama adviser calls for new ‘mini-stimulus’

The Obama administration made a strong plea to Congress on Monday to grit its teeth and pass a new set of spending measures ... in order to help dig the economy “out of a deep valley”. ... Lawrence Summers ... urged Congress to pass up to $200bn (£138.9bn) in spending measures ... last year’s $787bn stimulus is wearing off.
except with permission

Could be an interesting day ...

Best to all.