by Calculated Risk on 9/30/2011 06:31:00 PM

From the LA Times: California breaks from 50-state probe into mortgage lenders

California Atty. Gen. Kamala Harris will no longer take part in a national foreclosure probe of some of the nation's biggest banks, which are accused of pervasive misconduct in dealing with troubled homeowners.

Harris removed herself from talks by a coalition of state attorneys general and federal agencies investigating abusive foreclosure practices because the nation's five largest mortgage servicers were not offering California homeowners relief commensurate to what people in the state had suffered, Harris told the Times on Friday.

The big banks were also demanding to be granted overly broad immunity from legal claims that could potentially derail further investigations into Wall Street's role in the mortgage meltdown, Harris said.

“It has been a process of negotiating and sitting at a table in good faith but ultimately I have decided that we have to go our own course and take an independent path and that decision is because we need to bring relief to Californians that is equal to the pain California experienced and what is being negotiated now is insufficient," Harris [said]

This is a major blow to the settlement talks.

by Calculated Risk on 9/30/2011 04:21:00 PM

Fannie Mae reported that the Single-Family Serious Delinquency rate declined to 4.03% in August. This is down from 4.08% in July, and down from 4.75% in August of 2010. The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%.

Freddie Mac reported that the Single-Family serious delinquency rate declined to 3.49% in August from 3.51% in July. This is down from 3.83% in August 2010. Freddie's serious delinquency rate peaked in February 2010 at 4.20%.

These are loans that are "three monthly payments or more past due or in foreclosure".

Click on graph for larger image in graph gallery.

Some of the rapid increase in 2009 was probably because of foreclosure moratoriums, and also because loans in trial mods were considered delinquent until the modifications were made permanent.

The serious delinquency rate has been falling as Fannie and Freddie work through the backlog of delinquent loans. The normal serious delinquency rate is under 1%, and at this pace of decline, the delinquency rate will be back to "normal" in four or five years!

by Calculated Risk on 9/30/2011 01:49:00 PM

Note: This is one of the industry specific measures that I follow. I only post this every few weeks or so.

From HotelNewsNow.com: STR: US hotel results week ending 24 September

In year-over-year comparisons for the week, occupancy rose 4.1 percent to 66.8 percent, average daily rate increased 4.0 percent to US$107.24, and revenue per available room finished the week up 8.3 percent to US$71.65.

Note: ADR: Average Daily Rate, RevPAR: Revenue per Available Room.

The following graph shows the seasonal pattern for the hotel occupancy rate using a four week average for the occupancy rate.

Click on graph for larger image in graph gallery.

We are now headed into the fall business travel season. The 4-week average of the occupancy rate will increase again seasonally. For the month of September, the 4 week average of the hotel occupancy rate has been back to the pre-recession median level.

Even though the occupancy rate has recovered, ADR and RevPAR are still about 3% lower than before the recession for the comparable week.

The second graph shows the 4-week average of the occupancy rate as a percent of the median since 2000. Note: Since this is a percent of the median, the number can be above 100%.

This shows the decline in the occupancy rate during and following the 2001 recession. The sharp decline in 2001 was related to 9/11, and the sharp increase towards the end of 2005 was due to Hurricane Katrina.

The occupancy rate really fell off a cliff in 2008, and has slowly recovered back to the median.

Data Source: Smith Travel Research, Courtesy of HotelNewsNow.com

by Calculated Risk on 9/30/2011 12:06:00 PM

From the National Restaurant Association: Restaurant Performance Index Fell to Lowest Level in 13 Months Amid Growing Operator Uncertainty

Dampened by softer sales and traffic levels and continued uncertainty among restaurant operators, the National Restaurant Association’s Restaurant Performance Index (RPI) declined for the second consecutive month in August. The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 99.4 in August, down 0.3 percent from July. In addition, August marked the second consecutive month that the RPI stood below 100, the level above which signifies expansion in the index of key industry indicators.

“The August decline in the Restaurant Performance Index resulted from softening of both current situation and expectations indicators, as well as Hurricane Irene,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “Although restaurant operators reported net positive same-store sales results in August, their six-month outlook for both sales growth and the economy continued to deteriorate.”
...
Although restaurant operators reported net positive same-store sales in August, the overall results were softer than recent months. ... Meanwhile, restaurant operators reported a net decline in customer traffic for the first time in three months.

Click on graph for larger image in graph gallery.

The index declined to 99.4 in August (below 100 indicates contraction).

Unfortunately the data for this index only goes back to 2002.

Note: August was an especially weak economic month following the debt ceiling debate, and it will be interesting to see if these indicators show some rebound in September and October.

by Calculated Risk on 9/30/2011 09:55:00 AM

• First on the Chicago PMI Chicago Business Barometer™ Rebounded: The overall index increased to 60.4 from 56.5 in August. This was above consensus expectations of 55.4. Note: any number above 50 shows expansion. The employment index increased to 60.6 from 52.1. "EMPLOYMENT expanded to highest level in 4 months". The new orders index increased to 65.3 from 56.9. "NEW ORDERS erased net declines accumulated since April"

• The final September Reuters / University of Michigan consumer sentiment index increased to 59.4 from 55.7 in August.


Click on graph for larger image in graphic gallery.

In general consumer sentiment is a coincident indicator and is usually impacted by employment (and the unemployment rate) and gasoline prices. In August, sentiment was probably negatively impacted by the debt ceiling debate.

Note: It usually takes 2 to 4 months to bounce back from an event driven decline in sentiment (if the August decline was event driven) - and any bounce back from the debt ceiling debate would be to an already weak reading.

This was still very weak, but above the consensus forecast of 57.8.