by Calculated Risk on 9/12/2011 04:16:00 PM

Europe was the focus again today with no U.S. economic releases. This will be a busy week for economic data, especially later in the week:
• Schedule for Week of Sept 11th


Click on graph for larger image in new window.

The first graph shows the S&P 500 since 1990 (this excludes dividends).

The dashed line is the closing price today. The S&P 500 was first at this level in July 1998; over 13 years ago.

The second graph (click on graph for larger image) from Doug Short shows the wild market swings over the last few weeks.

by Calculated Risk on 9/12/2011 12:00:00 PM

Back in early 2009, I wrote a couple of posts arguing there would be an increase in auto sales - Vehicle Sales (Jan 2009) and Looking for the Sun (Feb 2009). Here is an update to the U.S. fleet turnover graph.

This graph shows the total number of registered vehicles in the U.S. divided by the sales rate through August 2011 - and gives a turnover ratio for the U.S. fleet (this doesn't tell you the age or the composition of the fleet, registered vehicles estimated).

The wild swings in 2009 were due to the "cash for clunkers" program, and the increase in the ratio this summer was due to the supply chain issues related to the tsunami in Japan.

Click on graph for larger image in graph gallery.

The estimated ratio for August was just over 20 years - still very high, but well below the peak of 26 years.

The turnover ratio will probably decline to 15 or so eventually.

The second graph shows light vehicle sales since the BEA started keeping data in 1967. The dashed line is current estimated sales rate.

The current sales rate is still near the bottom of the '90/'91 recession - when there were fewer registered drivers and a smaller population.

Light vehicle sales were at a 12.12 million seasonally adjusted annual rate (SAAR) in August. To bring the turnover ratio down to more normal levels, unit sales will have to rise to 14 or 15 million SAAR.

Of course cars are lasting longer - note the general uptrend in the first graph - so the turnover ratio probably will not decline to the previous level. Also this says nothing about the composition of the fleet (perhaps smaller cars). But I do expect vehicle sales to continue to increase over the next few years.

by Calculated Risk on 9/12/2011 08:42:00 AM

The Greek 2 year yield is at 64.3%. The Greek 1 year yield is at 112%. Ouch.

The Portuguese 2 year yield is up to 16.2% (after falling below 12% in August). Also the Irish 2 year yield is at 9.5%.

The European markets are down with the DAX off almost 4%, and the FTSE 100 off close to 3%.

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

by Calculated Risk on 9/11/2011 10:30:00 PM

Once again the focus is on Europe ...
• From the NY Times: Investors Brace as Europe Crisis Flares Up Again

Despite repeated pledges by Chancellor Angela Merkel to keep Europe together, the cacophony of dissent within Germany has been rising. That is creating fresh doubt — justified or not — about the nation’s commitment to the euro.

• From the WSJ: Woes at French Banks Signal a Broader Crisis

Moody's Investors Service Inc. is expected to cut the ratings of BNP Paribas SA, Société Générale SA and Crédit Agricole SA because of the banks' holdings of Greek government debt ... Political brinksmanship over Greece, coupled with the darkening economic outlook across the Continent, has fueled a selloff in European bank shares in recent weeks

• From the LA Times: Greece unveils more austerity measures

Under intense pressure from international lenders, Greece on Sunday announced a new set of austerity measures to meet deficit reduction targets ... The measures, which include a two-year property tax, are intended to make up for revenue shortfalls that come to about $3 billion this year alone.

• From the WSJ: French Minister: Won't Lend To Greece If Efforts Insufficient

"The [bailout] plan has two aspects; aid to Greece with the guarantees, but also a Greek recovery plan. They have a privatization program, a spending-cut program, a program for taxing revenues. Greece must make efforts, otherwise we won't lend to them," [French budget minister and government spokeswoman Valerie Pecresse] said in an interview

The Asian markets are red tonight with the Nikkei down 2%.

From CNBC: Pre-Market Data and Bloomberg futures: the S&P 500 is down about 12 points, and Dow futures are down about 100 points.

Oil: WTI futures are down to $86 and Brent is down under $112.

Yesterday:
• Schedule for Week of Sept 11th
• Summary for Week ending September 9th

by Calculated Risk on 9/11/2011 03:22:00 PM

I've been following the Sacramento market to see the change in mix over time (conventional, REOs, and short sales) in a distressed area. The Sacramento Association of REALTORS® started breaking out REOs in May 2008, and short sales in June 2009.

As I've written before: "I'm not sure what I'm looking for, but I'll know it when I see it!" (hopefully) At some point, the number (and percent) of distressed sales should start to decline without market distortions.

The percent of distressed sales in Sacramento increased in August compared to July. In August 2011, 62% of all resales (single family homes and condos) were distressed sales. This is up from 61.3% in July, and down from 64.0% in August 2010.

Here are the statistics.

Click on graph for larger image in graph gallery.

This graph shows the percent of REO, short sales and conventional sales. There is a seasonal pattern for conventional sales (strong in the spring and summer), and distressed sales happen all year - so the percentage of distressed sales decreases every summer and the increases in the fall and winter.

Total sales were up 14.8% over August 2010 (sales fell last July after the tax credit expired, so a year-over-year increase was expected). Sales were up 11% compared to August 2009.

Active Listing Inventory is down 22.6% from last August - we are seeing a sharp decline in inventory in many areas - something to watch. Once the foreclosure delays end, this data might be helpful in determining when the market is improving.

Yesterday:
• Schedule for Week of Sept 11th
• Summary for Week ending September 9th