by Calculated Risk on 11/30/2011 09:45:00 PM

The post title is from a post Michael Pettis wrote last year: Beijing’s stop-and-go measures. It looks like China is back to pushing on the gas pedal ...

From the NY Times: China, in Surprising Shift, Takes Steps to Spur Bank Lending

China’s central bank, in a surprise move on Wednesday, shifted its economic focus from fighting inflation to stimulating growth by freeing the nation’s commercial banks to lend more money.
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For more than a year, the Chinese central bank tried to squeeze the country’s banking system in hopes of restraining inflation. Its action on Wednesday’s indicated that China’s government feared the country’s growth engine was starting to falter.

From Reuters: China Factory Sector Shrinks First Time in Nearly 3 Years

China's factory sector shrank in November for the first time in nearly three years, an official purchasing managers' index (PMI) showed on Thursday, underlining the central bank's move to cut bank reserve requirements to shore up the economy.

The Asian markets are all green tonight. The Nikkei is up about 2%, the Hang Seng is up 5.4%.

by Calculated Risk on 11/30/2011 05:27:00 PM

Fannie Mae reported that the Single-Family Serious Delinquency rate was unchanged at 4.00% in October. This is down from 4.52% in October 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 increased to 3.54% in October, up from 3.51% in September. This is down from 3.82% in October 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

Tracking this on a monthly basis this is kind of like watching grass grow, but the serious delinquency rates are generally falling - but only falling slowly. The reason for the slow decline is most likely the backlog of homes in the foreclosure process.

The "normal" serious delinquency rate is under 1%, and at this pace of decline, the delinquency rate will not be back to "normal" for a number of years.

All current mortgage delinquency graphs

by Calculated Risk on 11/30/2011 02:00:00 PM

Fed's Beige Book:

Overall economic activity increased at a slow to moderate pace since the previous report across all Federal Reserve Districts except St. Louis, which reported a decline in economic activity.
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District reports indicated that consumer spending increased modestly, on balance, during the reporting period.
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Hiring was generally subdued, but some firms with open positions reported difficulty finding qualified applicants.

And on real estate:

Overall residential real estate activity increased, but conditions were varied across Districts. Philadelphia, Richmond, Minneapolis, Kansas City, and Dallas noted increased activity. New York, Boston, Cleveland, and San Francisco reported flat activity at relatively low levels. Atlanta and St. Louis indicated decreased sales. Residential construction remained sluggish. Single-family home construction remained weak, while multifamily construction picked up in New York, Philadelphia, Cleveland, Chicago, and Minneapolis. San Francisco remained "anemic," while St. Louis and Kansas City reported decreased activity.

Commercial real estate markets remained sluggish across most of the nation. Boston, New York, Chicago, Minneapolis, and San Francisco indicated roughly unchanged activity. Atlanta and Kansas City noted slight improvement. Philadelphia and Dallas indicated mixed activity. However, Richmond and St. Louis noted that vacancy rates increased. Commercial construction was somewhat mixed.

This was based on data gathered on or before November 18th. More sluggish growth ...

by Calculated Risk on 11/30/2011 11:31:00 AM

From the National Restaurant Association: Restaurant Performance Index Essentially Unchanged in October, Balanced by Softer Current Conditions and Stronger Future Optimism

The National Restaurant Association’s Restaurant Performance Index (RPI) – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 100.0 in October, essentially unchanged from September’s level of 100.1. October’s steady RPI level was the result of softer sales and customer traffic being offset by a more optimistic outlook among restaurant operators.

“Although sales results were somewhat softer in October, restaurant operators reported net positive same-store sales for the fifth consecutive month,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “In addition, each of the four forward-looking indicators improved in October, which pushed the Expectations Index to its highest level in four months.”
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Restaurant operators reported positive same-store sales for the fifth consecutive month in October, although results were somewhat softer than September’s performance. ... Restaurant operators also reported softer customer traffic levels in October.

Click on graph for larger image.

The index decreased to 100.0 in October (above 100 indicates expansion).

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

Restaurant spending is discretionary and is impacted by the overall economy. Right now this is moving sideways ...
All current retail related graphs

by Calculated Risk on 11/30/2011 10:00:00 AM

• Chicago PMI: The overall index increased to 62.6 in November from 58.4 in October. This was above consensus expectations of 58.5.

From the Chicago ISM Chicago Business Barometer™ Rebounded:

The Chicago Purchasing Managers reported the CHICAGO BUSINESS BAROMETER rebounded to a 7-month high in November and marked the 26th month of expansion.

The employment index decreased to 56.9 from 62.3. "EMPLOYMENT reversed half of its gains since August"

The new orders index increased to 70.2 from 61.3. "NEW ORDERS expanded to an 8-month high and PRODUCTION expanded to a 7-month high"

Note: any number above 50 shows expansion.

• From the NAR: Pending Home Sales Jump in October

The Pending Home Sales Index, a forward-looking indicator based on contract signings, surged 10.4 percent to 93.3 in October from 84.5 in September and is 9.2 percent above October 2010 when it stood at 85.5. The data reflects contracts but not closings.
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The PHSI in the Northeast surged 17.7 percent to 71.3 in October and is 3.4 percent above October 2010. In the Midwest the index jumped 24.1 percent to 88.7 in October and remains 13.2 percent above a year ago. Pending home sales in the South rose 8.6 percent in October to an index of 99.5 and are 9.7 percent higher than October 2010. In the West the index slipped 0.3 percent to 105.5 in October but is 8.1 percent above a year ago.