by Calculated Risk on 6/01/2010 08:51:00 AM

The euro is at a four year low this morning at 1.2174 dollars

From Eurostat: Euro area unemployment rate at 10.1%

The euro area1 (EA16) seasonally-adjusted unemployment rate was 10.1% in April 2010, compared with 10.0% in March. It was 9.2% in April 2009. The EU271 unemployment rate was 9.7% in April 2010, unchanged compared with March. It was 8.7% in April 2009.

Eurostat estimates that 23.311 million men and women in the EU27, of whom 15.860 million were in the euro area, were unemployed in April 2010.

Among the Member States, the lowest unemployment rates were recorded in the Netherlands (4.1%) and Austria (4.9%), and the highest rates in Latvia (22.5%), Spain (19.7%) and Estonia (19.0% in the first quarter of 2010).

Compared with a year ago, one Member State recorded a fall in the unemployment rate and twenty-six an increase. The fall was observed in Germany (7.6% to 7.1%), and the smallest increases in Luxembourg (5.3% to 5.4%) and Malta (6.9% to 7.0%). The highest increases were registered in Estonia (11.0% to 19.0% between the first quarters of 2009 and 2010), Latvia (15.4% to 22.5%) and Lithuania (11.2% to 17.4% between the first quarters of 2009 and 2010).

by Calculated Risk on 6/01/2010 12:55:00 AM

Click on cartoon for larger image in new window. Cartoon from Eric G. Lewis www.EricGLewis.com (site coming soon)

From Bloomberg: Commodities’ Biggest Drop Since Lehman Bear Signal

The Journal of Commerce commodity index that includes steel, cattle hides, tallow and burlap plunged 57 percent in May, two years after a decline that foreshadowed the worst recession in half a century. The index of 18 industrial materials declined the most since October 2008 as Europe’s debt crisis widened and China took steps to curb growth.

From the WSJ: Steel Prices Under Pressure

From the WSJ: China Bites Into Commodities Reserves

The Dow Jones-UBS Commodity Index last week dropped to its lowest level since July, before recouping some of its losses. The index is down 9.9% this year.

In April, China posted a significant drop in imports for some commodities, leaving many analysts wondering whether China's appetite for commodities has abated.

The euro is down to 1.226 dollars.

The Asian markets are off tonight about 0.5% to 1%.

The futures are off somewhat (Dow off 47).

by Calculated Risk on 5/31/2010 10:09:00 PM

From David Streitfeld at the NY Times: Owners Stop Paying Mortgages, and Stop Fretting. A few excerpts:

Foreclosure procedures have been initiated against 1.7 million of the nation’s households.
...
The average borrower in foreclosure has been delinquent for 438 days before actually being evicted, up from 251 days in January 2008, according to LPS Applied Analytics.
...
More than 650,000 households had not paid in 18 months, LPS calculated earlier this year. With 19 percent of those homes, the lender had not even begun to take action to repossess the property ...

Streitfeld provides a few examples. One lady said "The longer I’m in foreclosure, the better."

This isn't for everyone. Streitfeld quotes Kyle Lundstedt, managing director of Lender Processing Service’s analytics group:

“These people are playing a dangerous game. There are processes in many states to go after folks who have substantial assets postforeclosure.”

by Calculated Risk on 5/31/2010 08:54:00 PM

Note: Here is the Weekly Summary and a Look Ahead (it will be a busy week).

From Mickey Meese at the NY Times: Fading Summer Jobs

State and local governments, traditionally among the biggest seasonal employers, are knee-deep in budget woes, and the stimulus money that helped cushion some government job programs last summer is running out. Private employers are also reluctant to hire until the economy shows more solid signs of recovery.

So expect fewer lifeguards on duty at public beaches this summer in California, fewer workers at some Massachusetts state parks and camping grounds and taller grass outside state buildings in Kentucky.

Click on graph for large image.

For summer jobs, this will probably be the worst year since the Great Depression.

This graph shows the unemployment rate for workers 16 to 24 years old (from the BLS), and the headline unemployment rate (blue). The unemployment rate hit a record 19.6% in April for this group.

This probably ties into the recent NY Times article on overwhelming student debt. When I was in college, I was able to find summer jobs that helped me pay my way through college (of course I walked 10 miles through the snow and all that too). Times have really changed ...

by Calculated Risk on 5/31/2010 04:02:00 PM

The ECB released the twice yearly Finanical Stability Review report today. Here are couple of articles about the report:

From the Financial Times: ECB warns of ‘hazardous contagion’

The eurozone’s financial sector and economy are facing “hazardous contagion” effects from the region’s debt crisis, according to the European Central Bank ... Taking into account writedowns already reported and loan loss provisions, some €90bn of writedowns have yet to feed through, it said. For 2011, it expected banks would have to make additional loan-loss provisions of about €105.
except with permission

There is also a video discussion with Martin Wolf and Richard Haass, president of the Council on Foreign Relations.

From the NY Times: Europe’s Banks at Risk From Slower Growth, Report Says

... the E.C.B. expressed particular concern about banks’ need to refinance some €800 billion, or $980 billion, in long-term debt by the end of 2012. Borrowing costs could rise as the banks compete with governments in the bond market “making it challenging to roll over a sizeable amount of maturing bonds by the end of 2012,” the report said.