RSS Feed by Calculated Risk on 8/22/2010 12:02:00 PM
Sunday, August 22, 2010
Summary for Week ending August 21st
Here is the Schedule for Week of August 22nd (always in menu bar too).
Click on graph for larger image in new window.Total housing starts were at 546 thousand (SAAR) in July, up 1.7% from the revised June rate of 537 thousand (revised down from 549 thousand). Single-family starts declined 4.2% to 432 thousand in July.
The graph shows total and single unit starts since 1968. This shows the huge collapse following the housing bubble, and that housing starts have mostly been moving sideways for over a year - with a slight up and down over the last several months due to the home buyer tax credit.
The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 13 in August. This is down slightly from 14 in July and below expectations. The record low was 8 set in January 2009, and 13 is very low ...
Note: any number under 50 indicates that more builders view sales conditions as poor than good.
This graph compares the NAHB HMI (left scale) with single family housing starts (right scale). This includes the August release for the HMI and the June data for starts (NAHB was released before starts).This shows that the HMI and single family starts mostly move generally in the same direction - although there is plenty of noise month-to-month.
Press release from the NAHB: Builder Confidence Declines In August
Builder confidence in the market for newly built, single-family homes edged down for a third consecutive month in August ... The HMI declined one point to 13, its lowest level since March of 2009.
From CoreLogic (formerly First American LoanPerformance): CoreLogic® Home Price Index Increases Decelerate in June Note: CoreLogic reports the year-over-year change.
This graph shows the national LoanPerformance data since 1976. January 2000 = 100.The index is up 1.4% over the last year, and off 28% from the peak.
CoreLogic expects prices to "moderately decline" (more negative view than last month). I expect that we will see lower prices on this index later this year and into 2011.
This data is for June and was still impacted by the tax credit. I've been expecting this index to start showing price declines in July as sales collapsed.
Note: This index is a leading indicator for new Commercial Real Estate (CRE) investment.
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.
According to the AIA, there is an "approximate nine to twelve month lag time between architecture billings and construction spending" on non-residential construction. So there will probably be further declines in CRE investment into 2011.
From the NY Fed: New York Fed Releases New Report, Web Page on Household Credit Conditions in U.S., Select States Showing Decline in Consumer Indebtedness
Here is the report: Quarterly Report on Household Debt and Credit
And some data and graphs.
Graph and text from the NY Fed. "Aggregate consumer debt continued to decline in the second quarter, continuing its trend of the previous six quarters. As of June 30, 2010, total consumer indebtedness was $11.7 trillion, a reduction of $812 billion (6.5%) from its peak level at the close of 2008Q3, and $178 billion (1.5%) below its March 31, 2010 level. ... Excluding mortgage and HELOC balances, consumer indebtedness fell 1.5% in the quarter and, after having fallen for six consecutive quarters, stands at $2.31 trillion, 8.4% below its 2008Q4 peak."From the Fed: Industrial production and Capacity Utilization
This graph shows Capacity Utilization. This series is up 9.8% from the record low set in June 2009 (the series starts in 1967). Capacity utilization at 74.8% is still far below normal - and well below the the pre-recession levels of 81.2% in November 2007.
Note: y-axis doesn't start at zero to better show the change.
The DOL reports on weekly unemployment insurance claims
This graph shows the 4-week moving average of weekly claims since January 2000.The four-week average of weekly unemployment claims increased this week by 8,000 to 482,500.
The dashed line on the graph is the current 4-week average. This is the highest level for initial claims - and also for the 4-week average - since November 2009.
Best wishes to all.
Schedule for Week of August 22nd
by Calculated Risk on 8/22/2010 09:00:00 AM
Three key housing reports and the second estimate of Q2 GDP will be the highlights this week. Existing home sales will be released on Tuesday, New Home sales on Wednesday, the MBA Q2 National Delinquency Survey on Thursday, and Q2 GDP on Friday. A busy week ...
8:30 AM ET: Chicago Fed National Activity Index (July). This is a composite index of other data.
10:30 AM: Q2 Quarterly Banking Profile from the FDIC.
Note: could be released on Tuesday.
8:15 AM: Chicago Fed President Charles Evans will speak to the Indianapolis Neighborhood Housing Partnership (Evans will be on the FOMC in 2011).
10:00 AM: Existing Home Sales for July from the National Association of Realtors (NAR). The consensus is for a decrease to 4.65 million (SAAR) in July from 5.37 million in June. Take the under! Housing economist Tom Lawler is projecting 3.95 million SAAR. In addition to sales, the level of inventory and months-of-supply will be very important (since months-of-supply impacts prices).
10:00 AM: Richmond Fed Survey of Manufacturing Activity for August. The consensus is for a decrease in the index to +11 (still expanding) from 16 last month. These regional surveys are important now since it appears manufacturing is slowing (or contracting like the Philly Fed survey showed last week).
7:00 AM: The Mortgage Bankers Association (MBA) will release the mortgage purchase applications index. This index declined sharply following the expiration of the tax credit, and the index has only recovered slightly over the last few weeks - suggesting reported home sales in July and August will be very weak.
8:30 AM: Durable Goods Orders for July from the Census Bureau. The consensus is for a 2.5% increase in durable good orders.
10:00 AM: New Home Sales for July from the Census Bureau. The consensus is for a slight increase in sales to 340K (SAAR) in July from 330K in June. New Home Sales already collapsed in May since sales are counted when contracts are signed - whereas existing home sales will collapse in July (counted when sales are closed).
10:00 AM: 10:00 FHFA House Price Index for June. This is based on GSE repeat sales and is no longer as closely followed as Case-Shiller (or CoreLogic).
Note: Aug. 26-28th Kansas City Fed Economic Symposium at Jackson Hole, WY
8:30 AM: The initial weekly unemployment claims report will be released. Consensus is for a slight decrease to 495K from 500K last week. The increase in weekly claims is very concerning, and the 4-week average will probably be at the highest level since last November.
10:00 AM: MBA's Q2 2010 National Delinquency Survey (NDS). This is key report of mortgage delinquencies. I'll also report on the conference call Thursday AM.
11:00 AM: Kansas City Fed regional Manufacturing Survey for August. The index was at 14 in July.
8:30 AM: Q2 GDP (second release). In the advance release, the BEA reported real GDP increased at a 2.4% annualized rate in Q2. However subsequent economic releases for construction spending, inventory and trade all suggest downward revisions in the second release. The consensus is for a downward revision to 1.3% real annualized growth.
9:55 AM: Reuter's/University of Michigan's Consumer sentiment index (final for August).
10:00 AM: Fed Chairman Ben Bernanke will speak at the Jackson Hole Economic Symposium in Wyoming. The speech is titled "The Economic Outlook and the Federal Reserve's Policy Response".
After 4:00 PM: The FDIC will probably have another busy Friday afternoon ...
Saturday, August 21, 2010
Unemployment Rate continues to Rise in Greece
by Calculated Risk on 8/21/2010 09:47:00 PM
From Nick Skrekas at the WSJ: Jobs Crisis Grows As Greece Falters
Greece's gross domestic product contracted by 3.5% in the second quarter from a year earlier ... sending unemployment rates to above 12% of the work force ...And the 10-year Greece-to-German bond spread has continued to widen, hitting 848 bps on Friday - the highest level since the 963 bps during the May crisis.
The International Monetary Fund predicts the jobless rate will reach 14.8% by 2012. But some labor experts fear that before long, one in five Greek workers could be without jobs.
Note: The unemployment rate in Ireland is at 13.7% and rising ...
Unofficial Problem Bank List increases to 817 institutions
by Calculated Risk on 8/21/2010 06:12:00 PM
Note: this is an unofficial list of Problem Banks compiled only from public sources.
Here is the unofficial problem bank list for August 20, 2010.
Changes and comments from surferdude808:
Failures and the OCC disclosure of its recent actions contributed to many changes in the Unofficial Problem Bank List this week. After 12 additions and 8 removals this week the Unofficial Problem Bank List stands at 817 institutions with aggregate assets of $415.9 billion.Note: The FDIC Q2 2010 Quarterly Banking Profile will be released this coming week.
The eight failures this week – ShoreBank ($2.3 billion), Los Padres Bank ($902 million Ticker: HWFG), Butte Community Bank ($523 million Ticker: CVLL), Sonoma Valley Bank ($363 million Ticker: SBNK), Pacific State Bank ($323 million Ticker: PSBC), Independent National Bank ($163 million Ticker: IBFL), Community National Bank at Bartow ($75 million), and Imperial Savings and Loan Association ($10 million) were removed.
There were 12 additions this week including Southern First Bank, National Association, Greenville, SC ($742 million Ticker: SFST); First National Bank South Dakota, Yankton, SD ($405 million Ticker: FINN); The Peoples National Bank, Easley, SC ($341 million Ticker: PBCE); and United Fidelity Bank, fsb, Evansville, IN ($214 million Ticker: FDLB).
Other changes include Prompt Corrective Action Orders issued by the Federal Reserve against First Banking Center ($869 million Ticker: FBCI) and by the OTS against Security Savings Bank, F.S.B. ($536 million).
CEO: No need to invest right now
by Calculated Risk on 8/21/2010 12:49:00 PM
The above quote is from an article by Neil Irwin in the WaPo: With consumers slow to spend, businesses are slow to hire
There is no reason to invest when there is excess capacity in most industries (and excess supply in housing). This excess capacity or lack of demand - and therefore lack of new investment - is a key reason why the recovery is sluggish.
