by Calculated Risk on 1/17/2012 03:21:00 PM

The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container).

Although containers tell us nothing about value, container traffic does give us an idea of the volume of goods being exported and imported - and possible hints about the trade report for November. LA area ports handle about 40% of the nation's container port traffic.

To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average.

Click on graph for larger image.

On a rolling 12 month basis, inbound traffic is up 0.2% from November, and outbound traffic is up 0.1%.

On a rolling 12 month basis, outbound traffic is moving "sideways" for the last couple of months, and it appears inbound traffic has halted the recent decline.

The 2nd graph is the monthly data (with a strong seasonal pattern for imports).

For the month of December, loaded inbound traffic was up 2% compared to December 2010, and loaded outbound traffic was up 1% compared to December 2010.

Exports have been increasing, although the rate of increase has slowed.

Imports have been somewhat soft - this is the first month with a year-over-year increase since May 2011.

All current trade graphs

by Calculated Risk on 1/17/2012 01:35:00 PM

This report is only for Southern California, but it contains useful information for analyzing the housing market. Over half the sales in SoCal were distressed in December (foreclosures and short sales), over one quarter of the sales were to absentee owners (usually investors), and new home sales were at a record low in December. Note: DataQuick reports new home sales at closing and the Census Bureau reports when contracts are signed - so this is for contracts signed last six months ago.

From DataQuick: Southland December Home Sales, Prices Fall Short of a Year Earlier

Southern California home sales surged last month from November – as they normally do – amid relatively strong activity under $300,000 and a record share of sales to “absentee” buyers, mainly investors. ... A total of 19,247 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in December. That was up 14.0 percent from 16,884 in November but down 1.4 percent from 19,528 in December 2010, according to San Diego-based DataQuick.
...
While December sales of existing (not new) houses and condos combined fell 0.5 percent from a year earlier, sales of newly built homes fell 12.0 percent year-over-year, to the lowest level on record for a December.

“Last year ended much the way it began, with pitifully low new-home sales, record investor activity, drum-tight credit, and lots of potential buyers and sellers just sitting tight,” said John Walsh, DataQuick president.
...
Distressed property sales accounted for 52.5 percent of the Southland resale market last month, up from 51.2 percent in November but down from 53.8 percent a year earlier. Nearly one out of three homes resold last month was a foreclosure, while about one in five was a “short sale.”
...
Absentee buyers, mainly investors and vacation-home buyers, purchased a record 26.4 percent of the Southland homes sold in December, paying a median $200,000. ... The December absentee figure was up from 25.1 percent in November and up from 23.4 percent a year earlier.

The National Association of Realtors (NAR) will report December existing home sales on Friday. The consensus is for sales of 4.6 million on seasonally adjusted annual rate basis.

Economist Tom Lawler estimates the NAR will report sales of 4.64 million, up about 5% from November’s pace. He also expects the NAR to report inventory declined to around 2.44 million, down 5.4% from November and down 19.2% from last December. This would put months-of-supply at around 6.3 months (lowest since early 2006), and would put listed inventory at the lowest level since early-2005.

by Calculated Risk on 1/17/2012 12:05:00 PM

As we've discussed, there are several possible channels of contagion from the European financial crisis. The most obvious is the trade channel. The recession in Europe appears to already be negatively impacting U.S. exports. The most recent trade report showed exports to eurozone countries declined 6.9% in November. Although Europe is a major U.S. trading partner, exports only make up a small portion of U.S. GDP, and the drag from lower exports will be minimal.

A more significant channel would be tightening of U.S. credit conditions in response to the European crisis. I will look closely at the Fed’s January Senior Loan Officer Opinion Survey on Bank Lending Practices that will be released at the end of the month. The October survey showed “considerable” tightening on lending to European banks, and some tightening to European firms, but the survey showed no significant additional tightening in the U.S.

Since the most significant channel will probably be credit stress, here are a few indicators of credit stress:

• The three month LIBOR has decreased:

Data from the British Bankers' Association showed the three-month dollar London Interbank Offered Rate, or Libor, was fixed at 0.56230%, down from 0.56490% Monday. ... The spread between the three-month dollar Libor and overnight index swaps, a barometer of market stress, was unchanged at 48 basis points.

The three-month LIBOR rate peaked during the crisis at 4.81875% on Oct 10, 2008. This increased last year, but has mostly been sideways since then.

• The TED spread is at 0.537. The TED spread is the difference between the three month T-bill and the LIBOR interest rate. This peaked in December at 0.581 and has declined slightly since then. The 5 year graph shows that recent increase in comparison to the U.S. financial crisis in 2008.

Here is a screen shot of the TED spread from Bloomberg.

Click on graph for larger image.

The peak was 4.63 on Oct 10, 2008. A normal spread is around 0.5.

• The A2P2 spread as at 0.39. This spread is mostly moving sideways, and is far below the peak of the financial crisis of 5.86.

This is the spread between high and low quality 30 day nonfinancial commercial paper. Right now high quality 30 day nonfinancial paper is yielding close to zero.

• The two year swap spread screen shot from Bloomberg. This spread has declined to 34.3.

This spread peaked at near 165 in early October 2008.

So far there hasn't been much spillover to the U.S.

by Calculated Risk on 1/17/2012 08:39:00 AM

From the NY Fed: Empire State Manufacturing Survey

The Empire State Manufacturing Survey indicates that manufacturing activity expanded in New York State in January. The general business conditions index climbed five points to 13.5. The new orders index rose eight points to 13.7 and the shipments index inched up to 21.7. ... Future indexes conveyed a high degree of optimism about the six-month outlook, with the future general business conditions index rising nine points to 54.9, its highest level since January 2011.

On employment:

Employment indexes were positive and higher, pointing to higher employment levels [12.1 up from 2.3] and a longer average workweek [6.6 up from -2.3]. ... On a series of supplementary survey questions, 51 percent of respondents indicated that they expect their workforces to increase over the next six to twelve months, while just 9 percent predicted declines in the total number of workers—results noticeably more positive than in the June 2011 survey.

This was slightly above the consensus forecast of a reading of 10.5 (above 0 is expansion). The future indexes and employment readings were especially encouraging.

Weekend:
• Summary for Week Ending January 13th
• Schedule for Week of Jan 15th

by Calculated Risk on 1/16/2012 10:03:00 PM

From the MarketWatch: China fourth-quarter GDP up 8.9%

The country's GDP in the October to December period rose 8.9% from the year-ago quarter, weaker than the 9.1% expansion recorded in the three months to Sept. 30, but faster than the 8.6% growth tipped in a Dow Jones Newswires poll of economists. Other monthly economic indicators also beat expectations, with December retail sales climbing 18.1% from a year-earlier, while industrial output during the month rose 12.8%.

The Asian markets are green tonight. The Nikkei is up about 0.6%, and the Hang Seng is up 1.5%. The Seoul Composite is up 1.3%.

From CNBC: Pre-Market Data and Bloomberg futures: the S&P 500 futures are up about 4 and Dow futures are up 40.

Oil: WTI futures are up to $99.90 and Brent is up to $111.80 per barrel.

Yesterday:
• Summary for Week Ending January 13th
• Schedule for Week of Jan 15th