by Calculated Risk on 6/20/2011 08:13:00 PM

Or maybe a "no confidence" vote ...

From Bloomberg: Papandreou Faces Confidence Vote That May Decide Greece’s Fate

Greek Prime Minister George Papandreou faces a confidence vote in his government today that may determine whether Greece becomes the first euro-area country to default.
...
The debate on the confidence motion, which began on June 19, will end around midnight.

If this is tonight (June 20), it is already after midnight in Athens.

I expect a vote of confidence ... I think everyone will try to put off a default for as long as possible.

by Calculated Risk on 6/20/2011 03:45:00 PM

CR Note: Existing home sales for May will be released tomorrow and the Pending Home Sales Index on Wednesday June 29th. Hopefully the NAR will provide an update tomorrow on the timing of the benchmark revisions.

From economist Tom Lawler: Closed Home Sales Down, Pending Sales Up in May

Based on data from local realtor associations/boards/MLS, it certainly appears as if existing home sales declined on a seasonally adjusted basis in May relative to April, with sales based on the National Association of Realtors’ estimation methodology likely to come in at around a seasonally adjusted annual rate of around 4.75 - 4.80 million, down from 5.05 million in April.

The incoming data also suggest, however, that the NAR’s Pending Home Sales Index – which took a surprisingly sharply tumble in April (down 11.6% on a seasonally adjusted basis from March) – rebounded smartly in May.

Trying to “build up” a pending home sales index estimate from local data is challenging, as not all associations/boards/MLS report “new” pending sales – i.e., contracts signed in a month – to the public. Indeed, not all associations/boards/MLS even TRACK new pending sales, including many in the NAR’s existing home sales sample – and thus, of course, do not report new pending sales to the NAR. According to the NAR, the sample size for its pending home sales index is about half as large as the sample size used to estimate closed existing home sales. The NAR’s PHSI data also only goes back to 2001, making seasonal factors somewhat “imprecise.”

In looking at associations/boards/MLS/etc that DO report on new pending sales/contracts signed, however, it appears as if there was a substantial rebound in pending sales on a seasonally adjusted basis.

Below is a table showing the YOY % change in the NOT seasonally adjusted NAR PHSI compared to the YOY % change in new pending sales/contracts written reported by various associations/etc¹ that together comprised over 52,000 pending sales last month. It is NOT a sample representative of the country as a whole, though it does have data from all broad regions.

	YOY % Change, New Pending Sales, 2011 v 2010		NAR PHSI (NSA)		NAR PHSI (SA)
	NAR PHSI	Select MLS	2010	2011	2010	2011
Jan	-4.4%	1.1%	74.3	71.0	90.3	88.9
Feb	-10.5%	-3.9%	88.3	79.0	98.9	89.5
Mar	-12.9%	-9.0%	119.7	104.3	106.2	92.6
Apr	-26.8%	-24.3%	133.4	97.6	111.5	81.9
May		27.9%	89.0		78.3

¹ Areas covered include the mid-Atlantic region from MRIS, Long Island, Lehigh Valley, Massachusetts, Indianapolis, Omaha, Des Moines, North Texas, Orlando, Northeast Florida, Albuquerque, western Washington, Sacramento, South Carolina, and Hampton Roads.

The table suggests that pending sales in the sample I’m looking at did not decline as much from a year ago as did pending sales in the NAR’s sample, though the YOY declines certainly follow a similar pattern.

Last year, pending sales plunged in most of the country from April to May following the expiration of the federal home buyer tax credit. From last May’s depressed level, however, the vast bulk of associations/etc. have reported sizable gains in pending sales – sufficient to suggest a strong rebound in the pending home sales index from April.

Of course, this May had one more business day than last May, suggesting that this year’s seasonal factor will be higher than last year’s -- meaning that the YOY % change in the seasonally adjusted number will be below that of the not seasonally adjusted numbers.

Still, after allowing for changing seasonal factors the incoming data suggest that the May pending home sales index on a seasonally adjusted basis is likely to show a double-digit gain from April’s level.

by Calculated Risk on 6/20/2011 11:30:00 AM

This data is for April and gasoline prices were at the highest level of the year at end of April and in early May - so the YoY decline might be less in June.

Note: WTI future oil prices are down to $92.53 per barrel (down from $113.39 on April 29th), and Brent Crude is at $112.04 per barrel (down from $126.64). Gasoline prices are off over 30 cents per gallon from the recent peak.

The Department of Transportation (DOT) reported that vehicle miles driven in April were down 2.4% compared to April 2010:

Travel on all roads and streets changed by -2.4% (-6.1 billion vehicle miles) for April 2011 as compared with April 2010. Travel for the month is estimated to be 250.5 billion vehicle miles.

Cumulative Travel for 2011 changed by -0.8% (-7.1 billion vehicle miles). The Cumulative estimate for the year is 939.2 billion vehicle miles of travel.

Click on graph for larger image in graph gallery.

This graph shows the rolling 12 month total vehicle miles driven.

Note: in the early '80s, miles driven (rolling 12 months) stayed below the previous peak for 39 months. Currently miles driven has been below the previous peak for 41 months - so this is a new record for longest period below the previous peak - and still counting!

The second graph shows the year-over-year change from the same month in the previous year. So far the current decline is not as a severe as in 2008.

With the decline in oil and gasoline prices, the YoY decline in miles driven will probably not be as large in June.

by Calculated Risk on 6/20/2011 08:40:00 AM

From the NY Times: Deal on Lifeline to Avert Greek Bankruptcy Is Postponed

Europe’s finance ministers unexpectedly put off approval early Monday of the next installment of aid to debt-laden Greece, delaying the decision until July and demanding that the Greek Parliament first approve spending cuts and financial reforms ... Athens needs the next payout of 12 billion euros from its existing 110 billion euro bailout package by mid-July in order to remain solvent.

From the WSJ: Finance Ministers Struggle With Long-Term Fix, but Get Closer on Short-Term Cash

Greece will run out of cash in the middle of next month unless funds earmarked under last year's bailout are released. Unwilling to let that happen, finance ministers are likely to approve disbursement of €8.7 billion; the International Monetary Fund, which is also contributing to the bailout, would likely agree to pay out €3.3 billion in the coming weeks.
...
In the early hours of Monday morning, [finance ministers] released a statement saying they would decide on the "main parameters" of a new bailout package in July. The statement said the new bailout would include "informal and voluntary" arrangements with creditors that would produce a "substantial reduction" in the amount of new funding necessary—but without casting Greece into default.

The Greek 2 year yield is at 28.4%. The ten year yields are up to 17.4%.

Weekend:
• Summary for Week Ending June 17th
• Schedule for Week of June 19th
• FOMC Meeting Preview

by Calculated Risk on 6/19/2011 07:03:00 PM

Here is a story about some farmers who sold land to home builders during the bubble - and are now buying back land at a fraction of the price ...

From Mary Ellen Podmolik at the Chicago Tribune: Shrewd investments enable farmers to live off the land they sold, then bought

... the [Baltz] brothers stood ... on 246 acres that, at their peak, sold for $65,000 an acre and in 2005 were annexed by the village and zoned for more than 400 single-family detached homes.

The Baltz brothers paid $3.6 million, or about $14,500 an acre, for land that already has subdivision utilities brought to the property line. This year, though, the only thing rising out of the dirt will be the corn that Bob Baltz planted last month.

And another example (not buying back the same land - but similar):

Bob Dhuse, whose family has been farming southwest of Chicago since the 1850s, decided to split up the family's Kendall County land seven years ago, selling 90 acres for $34,000 to a housing developer.

... last fall he paid $12,000 to $15,000 an acre for land on the west side of Joliet that was to be a project of Neumann Homes, which, like competitors Kimball Hill, Kirk Corp. and Pasquinelli, all went bankrupt.

Nice timing!

Earlier:
• Summary for Week Ending June 17th
• Schedule for Week of June 19th
• FOMC Meeting Preview