by Calculated Risk on 4/15/2012 09:44:00 AM

Long term readers will remember the quote about "neutron loans" from mortgage banker Lou Barnes in 2007:

“All of the old-timers knew that subprime mortgages were what we called neutron loans — they killed the people and left the houses,” said Louis S. Barnes, 58, a partner at Boulder West, a mortgage banking firm in Lafayette, Colo.

Here is what Lou Barnes wrote on Friday on housing in Boulder, Colorado:

"What would the turn look like, if really underway? My own back yard has turned in just the last 60 days. The Front Range of Colorado never had a housing bubble: we danced with the Technology Fairy 1999-2001, afterward built too many houses, and made too many stupid loans, but all of that was over by 2004 when we led the nation in foreclosures. Long time ago. We have the 6th-lowest level of mortgage delinquency of any state in the US. Our rental vacancy rate spiked to 12%, now below 5% for the first time since '99 (0% in Boulder!). Rents are moving up quickly. State population in the last dozen years has risen from 4.1 million to 5 million, and we're short of land to build (you could drop Rhode Island in here and never find it, but we are maniacs for "open space" reservations). Building permits have been off 85% since '07. Unemployment is down to 7%-ish. Our listed inventory of homes evaporated by 40% since last year. Buyers have lost their fear, the only problem finding something to show them.

Does your local market look like that? Mister housing-has-bottomed? Eh?

As perfect as our set-up, are prices rising? In rich, government- and tech-payrolled, land-starved Boulder County, yes. At last. Enough to unlock sellers? Ummmm... later.

Two philosophers have remarked incisively on speed. Stephen Hawking: "Time is what keeps everything from happening at once." Then, Satchel Paige's description of Cool Papa Bell: "He was so fast he could flip off the light switch and be in bed before the room got dark. One time he hit a line drive right past my ear. I turned around and saw the ball hit his ass just as he slid into second."

Housing is the polar opposite of Cool Papa Bell.

Here in Colorado, the 1980s were tougher than this patch, and in Boulder we had all the same, lovely conditions as above by the spring of 1990, and the first, timid price increases in nine years. It then took 18 months for prices to begin to rise on the far side of town. Bottom is one thing, better another, recovery something else entirely.

Yes, my local market looks like that.

As Barnes notes, a bottom for prices is one thing, a recovery in prices "something else entirely" - and I doubt prices will rise significantly any time soon. However, in more and more areas, it appears prices have bottomed, and buyers have "lost their fear".

by Calculated Risk on 4/14/2012 08:27:00 PM

The causes of the Great Recession were similar to the Great Depression - as opposed to most post war recessions that were caused by Fed tightening to slow inflation - and I'm frequently asked if we could compare the percent job losses during the two periods. Unfortunately there is very little data for the Great Depression.

Back in February I posted a graph based on some rough annual data.

On Friday, Treasury released a slide deck titled Financial Crisis Response In Charts. One of the charts shows the percentage jobs lost in the current recession compared to the Great Depression.

Click on graph for larger image.

This graph compares the job losses from the start of the employment recession, in percentage terms for the Great Depression, the 2007 recession, and the average for several recent recession following financial crisis.

Although the 2007 recession is much worse than any other post-war recession, the employment impact was much less than during the Depression. Note the second dip during the Depression - that was in 1937 and the result of austerity measures.

Earlier:
• Summary for Week Ending April 13th
• Schedule for Week of April 15th

by Calculated Risk on 4/14/2012 04:40:00 PM

This is an unofficial list of Problem Banks compiled only from public sources.

Here is the unofficial problem bank list for April 13, 2012. (table is sortable by assets, state, etc.)

Changes and comments from surferdude808:

We thought there was a chance for the OCC to release its actions through mid-March but we will have to wait until next week for that press release. As a result, it was quiet week for the Unofficial Problem Bank List with no failures, three removals, and one addition. These changes leave the list at 944 institutions with assets of $375.3 billion. A year-ago, the list held 978 institutions with assets of $429.4 billion. The three removals are for action termination and include Los Alamos National Bank, Los Alamos, NM ($1.5 billion); Empire National Bank, Islandia, NY ($340 million Ticker: EMPK); and Mountain Pacific Bank, Everett, WA ($118 million). The addition was Parke Bank, Sewell, NJ ($790 million Ticker: PKBK).

Earlier:
• Summary for Week Ending April 13th

by Calculated Risk on 4/14/2012 01:05:00 PM

Earlier:
• Summary for Week Ending April 13th

There are three key housing reports that will be released this week: April homebuilder confidence on Monday, March housing starts on Tuesday, and March existing home sales on Thursday.

Another key report is March retail sales. For manufacturing, the April NY Fed (Empire state) and Philly Fed surveys, and the March Industrial Production and Capacity Utilization report will be released this week.

The AIA's Architecture Billings Index for March will also be released on Wednesday.

All week: 2012 Spring Meetings of the International Monetary Fund and the World Bank Group in Washington, D.C.

----- Monday, Apr 16th -----
8:30 AM: Retail Sales for March.

This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline). Retail sales are up 22.6% from the bottom, and now 7.8% above the pre-recession peak (not inflation adjusted).

The consensus is for retail sales to increase 0.3% in March, and for retail sales ex-autos to increase 0.6%.

8:30 AM ET: NY Fed Empire Manufacturing Survey for April. The consensus is for a reading of 18.0, down from 20.2 in March (above zero is expansion).

10:00 AM: Manufacturing and Trade: Inventories and Sales for February (Business inventories). The consensus is for 0.6% increase in inventories.

10:00 AM: The April NAHB homebuilder survey. The consensus is for a reading of 29, up slightly from 28 in March. Although this index has been increasing lately, any number below 50 still indicates that more builders view sales conditions as poor than good.

----- Tuesday, Apr 17th -----
8:30 AM: Housing Starts for March.

This shows the huge collapse following the housing bubble, and that total housing starts have been increasing a little lately after mostly moving sideways for about two years and a half years. Housing starts might have been boosted by the favorable weather lately.

The consensus is for total housing starts to increase slightly to 700,000 (SAAR) in March from 698,000 in February.

9:15 AM ET: The Fed will release Industrial Production and Capacity Utilization for March.

This shows industrial production since 1967.

The consensus is for a 0.3% increase in Industrial Production in March, and for Capacity Utilization to decrease to 78.6% (from 78.7%).

----- Wednesday, Apr 18th -----
7:00 AM: The Mortgage Bankers Association (MBA) will release the mortgage purchase applications index. This index has been weak this year, although this does not include all the cash buyers.

During the day: The AIA's Architecture Billings Index for March (a leading indicator for commercial real estate).

----- Thursday, Apr 19th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for claims to decrease to 365,000 after increasing to 380,000 last week.

10:00 AM: Existing Home Sales for March from the National Association of Realtors (NAR).

The consensus is for sales of 4.62 million on seasonally adjusted annual rate basis.

A key will be inventory and months-of-supply.

10:00 AM: Philly Fed Survey for April. The consensus is for a reading of 12.0, down from 12.5 last month (above zero indicates expansion).

10:00 AM: Conference Board Leading Indicators for March. The consensus is for a 0.2% increase in this index.

----- Friday, Apr 20th -----
10:00 AM: Regional and State Employment and Unemployment (Monthly) for March 2012

by Calculated Risk on 4/14/2012 08:05:00 AM

It was a light week for U.S. economic data. The trade deficit was smaller than expected, suggesting some upward revisions to Q1 GDP forecasts (the advance report for Q1 GDP will be released in two weeks on April 27th).

Other data disappointed a little. Initial weekly unemployment claims increased to 380,000, consumer sentiment dipped, and the NFIB small business survey declined slightly. After several months of stronger-than-expected data, the data flow is now coming in mostly at or below expectations.

In other news, recent Fed comments suggest QE3 is likely only if the economy falters. And overseas, the yield on Spanish bonds increased sharply with the 10 year almost up to 6%. Here comes another round of Euro worries – and elections.

There will be several housing reports released next week (builder confidence, housing starts and existing home sales), and we will see if there is any pickup in activity.

Here is a summary in graphs:

• Trade Deficit declined in February to $46 Billion

Click on graph for larger image.

The Department of Commerce reported:
"[T]otal February exports of $181.2 billion and imports of $227.2 billion resulted in a goods and services deficit of $46.0 billion, down from $52.5 billion in January, revised. February exports were $0.2 billion more than January exports of $180.9 billion. February imports were $6.3 billion less than January imports of $233.4 billion".

The trade deficit was well below the consensus forecast of $51.7 billion.

Oil averaged $103.63 per barrel in February, down slightly from January. The decline in imports was a combination of less petroleum imports and less imports from China.

Exports to the European Union were $22.5 billion in February, up from $20.0 billion in February 2011.

• Key Measures of Inflation in March

This graph shows the year-over-year change for four key measures of inflation. On a year-over-year basis, the median CPI rose 2.4%, the trimmed-mean CPI rose 2.4%, and core CPI rose 2.3%. Core PCE is for February and increased 1.9% year-over-year.

These measures show inflation on a year-over-year basis is mostly still above the Fed's 2% target.

• Weekly Initial Unemployment Claims increased to 380,000

This graph shows the 4-week moving average of weekly claims since January 2000.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased to 368,500.

The 4-week moving average has been moving sideways at this level for about two months.

All current Employment Graphs
• BLS: Job Openings increased slightly in February

The following graph shows job openings (yellow line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

Jobs openings increased slightly in February, and the number of job openings (yellow) has generally been trending up, and are up about 16% year-over-year compared to February 2011.

Quits increased in February, and quits are now up about 9% year-over-year and quits are now at the highest level since 2008. These are voluntary separations and more quits might indicate some improvement in the labor market. (see light blue columns at bottom of graph for trend for "quits").

• NFIB: Small Business Optimism Index declined in March

This graph shows the small business optimism index since 1986. The index declined to 92.5 in March from 94.3 in February. This is slightly above the 91.9 reported in March 2011.

This index remains low - probably due to a combination of sluggish growth, and the high concentration of real estate related companies in the index. And the single most important problem remains "poor sales".

• Consumer Sentiment declines slightly in April to 75.7

The preliminary Reuters / University of Michigan consumer sentiment index for April declined slightly to 75.7, down from the final March reading of 76.2.

This was below the consensus forecast of 76.2. Overall sentiment is still fairly weak - probably due to a combination of the high unemployment rate, high gasoline prices and sluggish economy - however sentiment has rebounded from the decline last summer and is up from 69.8 in April 2011.

• Other Economic Stories ...
• LPS: House Price Index declined 0.9% in January
• US mortgage and foreclosure law
• Labor Force Participation Rate Projection Update
• Fed's Beige Book: Economic activity increased at "modest to moderate" pace, Residential real estate "activity improved"