by Calculated Risk on 9/29/2011 10:00:00 AM

• From the BLS: Current Employment Statistics Preliminary Benchmark Announcement

In accordance with usual practice, the Bureau of Labor Statistics (BLS) is announcing the preliminary estimate of the upcoming annual benchmark revision to the establishment survey employment series. The final benchmark revision will be issued on February 3, 2012, with the publication of the January 2012 Employment Situation news release.

Each year, the Current Employment Statistics (CES) survey employment estimates are benchmarked to comprehensive counts of employment for the month of March. These counts are derived from state unemployment insurance (UI) tax records that nearly all employers are required to file. ... The preliminary estimate of the benchmark revision indicates an upward adjustment to March 2011 total nonfarm employment of 192,000 (0.1 percent).

Usually the final benchmark revision is pretty close to the preliminary revision.

• The BEA reported that GDP increased at a 1.3% real annual rate in Q2 (third estimate), revised up from the previously reported 1.0% increase. It was still a weak quarter, but the internals were positive: the contributions from consumption and trade were revised up, and the contribution from "change in private inventories" was revised down.

• From the NAR: Pending Home Sales Decline in August

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, declined 1.2 percent to 88.6 in August from 89.7 in July but is 7.7 percent above August 2010 when it stood at 82.3. The data reflects contracts but not closings.

• From Bloomberg: German Parliament Backs Euro Rescue Fund

The lower house of parliament passed the measure with 523 votes in favor and 85 against, granting the fund powers to buy bonds in secondary markets, enable bank recapitalizations and offer precautionary credit lines.

A key point: German Chancellor Merkel's ruling coalition party backed the bill.

by Calculated Risk on 9/29/2011 08:30:00 AM

The DOL reports:

In the week ending September 24, the advance figure for seasonally adjusted initial claims was 391,000, a decrease of 37,000 from the previous week's revised figure of 428,000. The 4-week moving average was 417,000, a decrease of 5,250 from the previous week's revised average of 422,250.

The following graph shows the 4-week moving average of weekly claims since January 2000 (there is a longer term graph in graph gallery).

Click on graph for larger image in graph gallery.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims declined this week to 417,000.

This is the lowest level for weekly claims since early April, although the 4-week average is still elevated.

by Calculated Risk on 9/28/2011 09:31:00 PM

From Treasury: Second Quarter Mortgage Loan Fraud Suspicious Activity Persists

The Financial Crimes Enforcement Network (FinCEN) today reported in its Second Quarter 2011 Analysis of mortgage loan fraud suspicious activity reports (MLF SARs) that financial institutions filed 29,558 MLF SARs in the second quarter of 2011 up from 15,727 MLF SARs reported in the same quarter of 2010.

A large majority of the MLF SARs examined in the second quarter involved mortgages closed during the height of the real estate bubble. The upward spike in second quarter MLF SAR numbers is directly attributable to mortgage repurchase demands and special filings generated by several institutions. For instance, FinCEN noted that 81 percent of the MLF SARs filed during the quarter involved suspicious activities that occurred before 2008; 63 percent involved suspicious activities that occurred four or more years ago.

"We're continuing to see a large number of SARs filed on activity that occurred more than two years ago, an indication that financial institutions are uncovering fraud as they sift through defaulted mortgages," said FinCEN Director James H. Freis, Jr.

The most common mortgage loan fraud suspicious activity was the misrepresentation of income, occupancy, debts, or assets (about 30%). Some of the more current frauds are related to debt elimination and short sale fraud (unfortunately attempted short sale fraud is very common).

FinCEN has some Mortgage Fraud SAR Datasets breaking down the data by state, MSA and county. California was #1 in Q2 (Nevada or Florida have usually been #1). San Jose-Sunnyvale-Santa Clara, CA was the #1 MSA.

And in a related story from the AP: Santa Rosa Hells Angels leaders indicted on loan fraud. This involved a mortgage broker and false statement of income and assets to buy marijuana "grow houses". Oh my ...

by Calculated Risk on 9/28/2011 05:31:00 PM

From economist Tom Lawler:

It is difficult to “work up” an estimate of the NAR’s Pending Home Sales Index from local Realtor associations/boards/MLS, for several reasons. First, many of these A/B/M’s don’t release “new” pending sales data (that is, data on contracts signed in a month). Indeed, many don’t track such data at all, and as a result the NAR’s PHSI is based on a sample size about half as large as that used to estimate closed existing home sales. And second, some publicly-released A/B/M reports are run early in the month, and have preliminary pending sales that are often revised by a lot in subsequent months.

As such, my estimate of the NAR’s PHSI is subject to far more uncertainty than are my estimates for closed existing home sales.

Based on the data I do have, however, I estimate that the NAR’s August Pending Home Sales Index will probably come in about 3.5% higher than the July PHSI on a seasonally adjusted basis. While, as always, reported YOY gains vary massively across various A/B/M’s, almost all showed YOY gains and many – including but not limited to several in the Midwest – showed hefty YOY increases. Of course, July’s PHSI on a seasonally adjusted basis was 9% higher than last August’s, and this August had one more business day than last August. As such, a national YOY gain in unadjusted pending sales for August of close to 12% would produce a flat seasonally adjusted reading versus July.

In looking at various regional reports, only a handful showed YOY declines (including a few but not even close to all Florida markets), several showed modest single-digit gains (including several in the Northeast), but quite a few showed YOY gains of 20% or more (and a few by a LOT more).

A 3.5% gain would be well above the “consensus” forecast of a moderate decline.

CR Note: The NAR is scheduled to release Pending Home sales for August tomorrow (Thursday) at 10 AM ET. The consensus is for a 2% decrease in the index.

by Calculated Risk on 9/28/2011 03:54:00 PM

From the WSJ: Euro-Zone Bailout Plan Progresses

The euro zone is on track to expand its bailout fund ... But the debate ... has already moved on to two thornier issues: a more radical increase in the scope of bailouts, and possible debt restructuring for Greece.

Greece's failure to close its budget shortfall is prompting some European governments, led by Germany, to push for a re-examination of the international bailout program for Athens ... In return, Germany is under pressure to agree to "leverage" the euro-zone bailout fund ...

And a roundup of events from the Financial Times: Rolling blog: the eurozone crisis

• José Manual Barroso, president of the European Commission, gave his annual State of the Union address ... in which he insisted Greece would remain a member of the euro, and formally approved proposals for a tax on financial transactions ...
• The European Commission confirmed that the troika would return to Athens on Thursday ... and said an additional ‘eurogroup meeting’ (where European finance ministers meet up) would be held in October to “consider the disbursement of the next tranche” of bailout money
• Finland voted to approve expanding the powers of the [EFSF]
• German inflation hit a 3-year high
• French president Nicolas Sarkozy pledged to [reduce the French] budget deficit to 3 per cent of gross domestic product in 2013

The Greek 2 year yield is at 70%. The Greek 1 year yield is at 131%.

The Portuguese 2 year yield is up to 18% and the Irish 2 year yield was down sharply to 7.6%. 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