by Calculated Risk on 7/22/2011 06:10:00 PM

Olympian fail
Momentum reversed collapse
Sisyphean task
by Soylent Green is People
From the FDIC: American Momentum Bank, Tampa, Florida, Acquires All the Deposits of Two Florida Banks: Southshore Community Bank, Apollo Beach and LandMark Bank of Florida, Sarasota

As of March 31, 2011, Southshore Community Bank had approximately $46.3 million in total assets and $45.3 million in total deposits; and LandMark Bank of Florida had total assets of $275.0 million and total deposits of $246.7 million. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) for Southshore Community Bank will be $8.3 million and for LandMark Bank of Florida, $34.4 million. ... The closings are the 56th and 57th FDIC-insured institutions to fail in the nation so far this year and the eighth and ninth in Florida.

Friday is here!

by Calculated Risk on 7/22/2011 04:27:00 PM

The current number of excess vacant housing units is a key piece of data for the housing market. Unfortunately available data is inconsistent.

Economist Tom Lawler has been arguing that many analysts are overestimating the vacant supply by using the HVS - and Lawler has been using the 2010 Census data to make his case. See: The “Excess Supply of Housing” War and Census 2010 Demographic Profile: Highlights, Excess Housing Supply Estimate, and Comparison to HVS

Lawler has also pointed out the most commonly used data for the homeownership rate appears incorrect. The Census Bureau agrees: Census Bureau on Homeownership Rate: We've got “Some 'Splainin' to Do”

Today Goldman Sachs lowered their estimate of the excess supply.

While the decennial census data are from the largest sample, we do not believe it is appropriate to ignore the other sources. ...

With the 2010 Census results in hand, we would now say that excess vacancies in the housing market are 1.5 to 3.5 million units—a wide range, reflecting discrepancies in the available data.

Clearly though, the census results suggest the risks to our previous estimate of 3.5 million units are to the downside. ... [A]t the current rate of housing production and with household growth of one million per year, it would take 5.1 years to clear 3.5 million units of excess inventory, but only 2.2 years to clear 1.5 million units of excess inventory.

A range of 2.2 years to 5.1 years to clear the excess inventory? We need better data!

Lawler thinks the excess supply is closer to the low end of that range.

Note: The Census Bureau is looking at the various data sources now, and is expected to provide analysis on the differences soon.

by Calculated Risk on 7/22/2011 02:29:00 PM

Freddie Mac reported this week: 30-Year Fixed-Rate Mortgage Ticks Up To 4.52 Percent

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), which shows mortgage rates changing little over the previous week following mixed economic and housing data. The 30-year fixed average 4.52 percent and the 15-year fixed averaged 3.66 percent.

To put this into perspective, here is a long term graph of 30 year mortgage rate in the Freddie Mac survey:

Click on graph for larger image in graph gallery.

The Freddie Mac survey started in 1971. Mortgage rates are currently near the low for the last 40 years (mortgage rates close to this range in the '50s).

The monthly low was 4.23% in October 2010.

The second graphs shows refinance activity and mortgage rates:

This graph shows the MBA's refinance index (monthly average) and the the 30 year fixed rate mortgage interest rate from the Freddie Mac Primary Mortgage Market Survey®.

It takes lower and lower rates to get people to refi (at least lower than recent purchase rates).

With 30 year mortgage rates still about 0.3 percentage points above the lows of last October, mortgage refinance activity has only picked up a little recently.

by Calculated Risk on 7/22/2011 10:00:00 AM

From the BLS: Regional and State Employment and Unemployment Summary

Regional and state unemployment rates were little changed in June. Twenty-eight states and the District of Columbia registered unemployment rate increases, 8 states recorded rate decreases, and 14 states had no rate change, the U.S. Bureau of Labor Statistics reported today.
...
Nevada continued to register the highest unemployment rate among the states, 12.4 percent in June. California had the next highest rate, 11.8 percent. North Dakota reported the lowest jobless rate, 3.2 percent, followed by Nebraska, 4.1 percent ...

Nevada recorded the largest jobless rate decrease from June 2010 (-2.5 percentage points). Two other states had rate decreases of at least 2.0 percentage points--Michigan (-2.1 points) and Indiana (-2.0 points). Eleven additional states had smaller but also statistically significant decreases over the year. The remaining 36 states and the District of Columbia registered unemployment rates that were not appreciably different from those of a year earlier.

The following graph shows the current unemployment rate for each state (red), and the max during the recession (blue). If there is no blue (only Louisiana in May), the state is currently at the maximum during the recession.

Click on graph for larger image in graph gallery.

The states are ranked by the highest current unemployment rate.

Nevada saw the most improvement year-over-year in June, but still has the highest state unemployment rate.

Two states and D.C. are still at the recession maximum (no improvement): Arkansas and Montana. The fact that 36 states and the District of Columbia have seen little or no improvement over the last year is a reminder that the unemployment crisis is ongoing.

by Calculated Risk on 7/22/2011 08:49:00 AM

Here it is - no surprise. From Bloomberg: Fitch Ratings Says Greece Faces ’Restricted Default’ After New Debt Pact

Yields have fallen sharply this morning ...

The Greek 2 year yield is down to 25.7% (was above 39%).

The Portuguese 2 year yield is down to 14.9% (was above 20%)

The Irish 2 year yield is down to 14.7% (was above 23%).

The Italian 2 year yield is down to 3.6%. And the Spanish 2 year yield is down to 3.7%.

Here are the links for bond yields for several countries (source: Bloomberg):

Greece	2 Year	5 Year	10 Year
Portugal	2 Year	5 Year	10 Year
Ireland	2 Year	5 Year	10 Year
Spain	2 Year	5 Year	10 Year
Italy	2 Year	5 Year	10 Year
Belgium	2 Year	5 Year	10 Year
France	2 Year	5 Year	10 Year
Germany	2 Year	5 Year	10 Year