by Calculated Risk on 3/22/2011 10:08:00 AM

From the Richmond Fed: Manufacturing Activity Continues to Advance in March; Expectations Remain Upbeat

In March, the seasonally adjusted composite index of manufacturing activity — our broadest measure of manufacturing — fell five points to 20 from February's reading of 25. Among the index's components, shipments decreased six points to 23, new orders dropped seven points to finish at 20, while the jobs index held firm at 16. [above indicates expansion]
...
Hiring conditions continued to firm at Fifth District plants in March. The manufacturing employment index held steady at 16, while the average workweek measure moved down seven points to 10. In contrast, wage growth edged up one point to 19.

This was slightly below the consensus forecast of 24, but still shows solid expansion. Prices remain a concern.

• Also, the FHFA reported U.S. Monthly House Price Index Declined 0.3 Percent from December to January. This is for GSE loans and is not as closely followed as Case-Shiller or CoreLogic. According to the FHFA, house prices are at a new post-bubble low and the "January 2011 index is roughly the same as the May 2004 index level."

by Calculated Risk on 3/22/2011 09:16:00 AM

As Letterman said last night "What are we supposed to pay attention to, Libya or Japan?” (ht Brian)

We could add Yemen, Bahrain, Saudi Arabia and more to Letterman's list (maybe he should do a top ten world problems - but unfortunately it would be serious).

The 27 EU leaders meet on Thursday and Friday. In advance of that meeting, the Finance Ministers have reached agreement on the permanent bailout fund, from Reuters: EU finance ministers agree on capital, ESM loan pricing

The euro zone's permanent bailout fund, the European Stability Mechanism ... which will have an effective lending capacity of 500 billion euros, will be backed by 80 billion euros of paid-in capital and 620 billion euros of callable capital ... It will offer loans at funding costs plus 200 basis points for loans up to three years and plus another 100 basis points for loans longer than three years.

The temporary EFSF has a 300 basis points margin and a 50bp fee.

Here are the 2 year bond yields from Bloomberg for Ireland (over 10%!), Portugal, and Greece. And here are the ten year yields for Greece, Ireland, Spain, and Belgium. The focus will be on Ireland and Portugal at the meetings this week.

by Calculated Risk on 3/21/2011 11:14:00 PM

From Eric Wolff at the North County Times: Analysts see gas headed back to $4 a gallon

The average gas price may reach $4 a gallon by Thursday in San Diego County, and Riverside-San Bernardino counties won't be far behind, gasoline analysts said.

The average price Monday for a gallon of regular unleaded was $3.955 in Riverside and San Bernardino counties and $3.977 in San Diego County, according to AAA. Both prices exceeded the price of gas at this point in 2008, when gas prices peaked in June at $4.63.

California has higher gasoline prices than most of the U.S. - and San Diego is usually near the top in California - but prices are moving higher for everyone (although still below $4 per gallon for most).

Last week, Jim Hamilton had a post on consumer sentiment and gasoline prices, including a graph on prices across the country. Note: The final March Reuter's/University of Michigan's Consumer sentiment index will be released on Friday.

Earlier:
• February Existing Home Sales: 4.88 million SAAR, 8.6 months of supply
• Existing Home Inventory decreases 1.2% Year over Year
• Existing Home Sales and Inventory Graphs

by Calculated Risk on 3/21/2011 06:08:00 PM

A couple of stories ...
• From Treasury: Treasury to Begin Orderly Wind Down of Its $142 Billion Mortgage-Backed Securities Portfolio

Today, the U.S. Department of the Treasury announced that it will begin the orderly wind down of its remaining portfolio of $142 billion in agency-guaranteed mortgage-backed securities (MBS). Starting this month, Treasury plans to sell up to $10 billion in agency-guaranteed MBS per month, subject to market conditions.

“We’re continuing to wind down the emergency programs that were put in place in 2008 and 2009 to help restore market stability, and the sale of these securities is consistent with that effort,” said Mary J. Miller, Assistant Secretary for Financial Markets.

I don't think this will have much impact on mortgage rates.

• From Bloomberg: Fed Must Release Data on Emergency Bank Loans as High Court Rejects Appeal

The Federal Reserve will disclose details of emergency loans it made to banks in 2008, after the U.S. Supreme Court rejected an industry appeal that aimed to shield the records from public view.

The justices today left intact a court order that gives the Fed five days to release the records, sought by Bloomberg News’s parent company, Bloomberg LP

There was probably heavy borrowing by - shock - Citi, BofA and most other big banks. This ruling is for discount window lending, and the Dodd-Frank bill required the Fed to disclose this information with a two year lag - so I'm not sure why the Fed objected. The Fed has already released data on the emergency Credit and Liquidity Facilities. There were no surprises. I support transparency, but I doubt there will be any surprises with the discount window data either.

by Calculated Risk on 3/21/2011 02:50:00 PM

Earlier:
• February Existing Home Sales: 4.88 million SAAR, 8.6 months of supply
• Existing Home Inventory decreases 1.2% Year over Year
• Existing Home Sales and Inventory Graphs

The Census Bureau has released data for 42 states so far. These states account for about 83% of the U.S. housing stock based on the 2000 and 1990 Census data. Here is a table of the data released so far - total housing units, Occupied and Vacant - for each state, plus the vacancy rate for 2010, 2000 and 1990. The data is sortable by column.

Here is a spreadsheet of the 2010, 2000 and 1990 for those who want to look at the data.

Once all of the data is released, I'll post some more analysis. This data is useful in estimating the number of excess vacant units, the absorption rate by state, demolitions and more.

The following table shows the increase in percentage points in the vacancy rate by state. This table compares to the 2000 Census and also an average of the 1990 and 2000 Census. (sorted by highest percentage point increase from 2000). The data for the remaining 8 states and D.C. will be released by April 1st.

The "excess units" uses the change in vacancy rate times the total number of housing units.

Some states like Vermont always have a high vacancy rate because of the number of summer homes (the Census is an estimate as of April 1, 2010), so it is important to compare to previous Census vacancy rates.

We can also calculate an absorption rate (not included) by using the increase in occupied units between 2000 and 2010 - as an example, even though Nevada saw the largest increase in vacancy rate, it is a faster growing state than say Ohio - so the excess housing units may be absorbed quicker (of course Nevada also has the highest percentage of borrowers with negative equity - another problem!)

Change from:	2000 Census		Average 2000 and 1990
	Change Vacancy Rate in Percentage Points	Excess Units	Change in Percentage Points	Excess Units
Nevada	5.1%	59,338	4.6%	53,996
Florida	4.2%	380,887	2.9%	263,512
Georgia	3.9%	160,129	3.0%	121,064
Ohio	3.2%	162,506	3.4%	176,515
Arizona	3.1%	89,502	1.0%	27,463
Wisconsin	2.9%	77,083	2.4%	61,696
Tennessee	2.9%	80,489	2.8%	79,932
Minnesota	2.8%	65,900	1.5%	35,579
Indiana	2.8%	76,999	2.6%	72,745
Delaware	2.7%	11,135	1.9%	7,666
Illinois	2.7%	141,182	2.3%	121,780
Colorado	2.6%	56,688	0.1%	2,420
Mississippi	2.5%	32,221	2.6%	33,107
North Carolina	2.3%	101,068	2.6%	110,489
Missouri	2.3%	62,267	2.0%	52,948
Vermont	2.2%	7,208	0.2%	640
California	2.2%	305,515	1.6%	213,702
Idaho	2.2%	14,781	1.4%	9,089
New Jersey	2.1%	75,520	1.3%	45,243
Virginia	2.1%	71,336	1.6%	52,278
Montana	2.1%	10,072	1.0%	4,886
Washington	1.9%	54,065	1.6%	46,283
Iowa	1.8%	24,589	1.7%	23,357
Connecticut	1.8%	26,300	1.4%	20,652
Arkansas	1.7%	22,950	1.8%	24,071
Alabama	1.7%	37,409	2.6%	56,385
Louisiana	1.7%	33,304	0.5%	10,753
Maryland	1.7%	40,080	1.7%	41,387
Nebraska	1.7%	13,385	1.2%	9,391
Utah	1.7%	16,215	0.9%	9,086
Kentucky	1.6%	30,786	2.0%	37,740
Kansas	1.6%	19,395	0.9%	11,564
Texas	1.2%	119,793	-0.8%	-80,526
Oregon	1.2%	19,385	1.5%	24,654
South Dakota	1.1%	4,090	0.5%	1,867
Oklahoma	0.9%	14,776	-0.6%	-9,198
Pennsylvania	0.8%	47,067	0.9%	48,483
Alaska	0.8%	2,592	-1.0%	-3,080
North Dakota	0.2%	657	-0.6%	-1,890
Hawaii	-0.1%	-469	1.8%	9,499
Wyoming	-0.2%	-393	-1.9%	-4,956
New Mexico	-0.9%	-8,495	-1.4%	-12,962
District of Columbia	NA	NA	NA	NA
Maine	NA	NA	NA	NA
Massachusetts	NA	NA	NA	NA
Michigan	NA	NA	NA	NA
New Hampshire	NA	NA	NA	NA
New York	NA	NA	NA	NA
Rhode Island	NA	NA	NA	NA
South Carolina	NA	NA	NA	NA
West Virginia	NA	NA	NA	NA