by Calculated Risk on 7/22/2012 10:15:00 PM

First, from the Financial Times on "open-ended QE": Bleak jobs outlook raises heat on Fed

In an interview with the Financial Times, [San Francisco Fed President John Williams] forecast that unless “further action” was taken, there would be a lack of progress in boosting the jobs market ...

He added that there would also be benefits in having an open-ended programme of QE, where the ultimate amount of purchases was not fixed in advance ... “The main benefit from my point of view is it will get the markets to stop focusing on the terminal date [when a programme of purchases ends] and also focusing on, ‘Oh, are they going to do QE3?’” he said. Instead, markets would adjust their expectation of Fed purchases as economic conditions changed.
excerpt with permission

The key releases this week are the new home sales report on Wednesday and the advance Q2 GDP report on Friday.

• On Monday, at 8:30 AM ET, the Chicago Fed is schedule to release the National Activity Index for June. This is a composite index of other data and will probably be fairly weak.

The Asian markets are red tonight, with the Nikkei down 1.3% and the Shanghai Composite down 1.1%.

From CNBC: Pre-Market Data and Bloomberg futures: the S&P future are down about 6, and the DOW futures down about 50.

Oil: WTI futures are at $91.12 (this is down from $109.77 in February, but up last week) and Brent is at $106.17 per barrel.

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

Two more questions this week for the July contest:

by Calculated Risk on 7/22/2012 08:34:00 PM

As residential investment increases, there will be positive spillover effects ... usually it is "As housing goes, so goes the economy!"

From Mike Ramsey at the WSJ: As Homes Go, So Do Pickups (ht Joe)

[I]n the past few months, more lots have been cleared for construction and [Hardwood's] phone has been ringing more frequently. So in June he went out and bought a new Chevrolet 2500 diesel truck with a backup camera and a hands-free Bluetooth phone link.

"There is a lot more steady and consistent work," said the 30-year-old Mr. Harwood, whose company Broadleaf Landscape, in Damascus, Md., does a lot of work at new homes. "I was more comfortable with buying a new truck at this point in time because of the market change."
...
In the first half of this year, sales of full-size pickups made by the Detroit Three increased 13%, to 707,175 vehicles.

Yesterday:
• Summary for Week Ending July 20th
• Schedule for Week of July 22nd

by Calculated Risk on 7/22/2012 03:03:00 PM

The Department of Transportation (DOT) reported on Friday:

Travel on all roads and streets changed by +2.3% (5.7 billion vehicle miles) for May 2012 as compared with May 2011. Travel for the month is estimated to be 258.4 billion vehicle miles.

The following graph shows the rolling 12 month total vehicle miles driven.

The rolling 12 month total is mostly moving sideways.

Click on graph for larger image.

In the early '80s, miles driven (rolling 12 months) stayed below the previous peak for 39 months.

Currently miles driven has been below the previous peak for 54 months - and still counting.

The second graph shows the year-over-year change from the same month in the previous year.

Gasoline prices peaked in April at close to $4.00 per gallon, and then started falling.

Gasoline prices were down in May to an average of $3.79 per gallon according to the EIA. Last year, prices in May averaged $3.96 per gallon, so it makes sense that miles driven are up year-over-year in May.

However, as I've mentioned before, gasoline prices is just part of the story. The lack of growth in miles driven over the last 4+ years is probably also due to the lingering effects of the great recession (high unemployment rate and lack of wage growth), the aging of the overall population (over 50 drivers drive fewer miles) and changing driving habits of young drivers.

A new report suggests that driving preferences are changing for younger drivers:

From 2001 to 2009, the average annual number of vehicle miles traveled by young people (16 to 34-year-olds) decreased from 10,300 miles to 7,900 miles per capita—a drop of 23 percent.

With all these factors, it may be years before we see a new peak in miles driven.

Yesterday:
• Summary for Week Ending July 20th
• Schedule for Week of July 22nd

by Calculated Risk on 7/22/2012 08:03:00 AM

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

Here is the unofficial problem bank list for July 20, 2012. (table is sortable by assets, state, etc.)

Changes and comments from surferdude808:

Closings and enforcement activities by the FDIC and OCC led to many changes to the Unofficial Problem Bank List. This week just about every type of change occurred except for the issuance/termination of a Prompt Corrective Action order. In all there were nine additions and 16 removals that included four failures, one voluntary liquidation, two unassisted mergers, and nine action terminations. These changes leave the list with 905 institutions with assets of $349.7 billion. A year ago, the list held 993 institutions with assets of $415.7 billion.

The nine additions were First Federal Savings Bank, Ottawa, IL ($408 million); Newton Federal Bank, Covington, GA ($239 million); Borrego Springs Bank, National Association, La Mesa, CA ($141 million); Clay County Savings Bank, Liberty, MO ($102 million Ticker: CCFC); Pickens Savings and Loan Association, FA, Pickens, SC ($101 million); Central Federal Savings and Loan Association of Chicago, Chicago, IL ($97 million); The First National Bank of Wellston, Wellston, OH ($95 million Ticker: MDWE); Commonwealth National Bank, Mobile, AL ($68 million); and Summit National Bank, Hulett, WY ($67 million).

The nine action terminations were Meridian Bank, National Association, Wickenburg, AZ ($886 million); Great Lakes Bank, National Association, Blue Island, Il ($626 million); First Trade Union Bank, Boston, MA ($588 million); Metro United Bank, San Diego, CA ($396 million Ticker: MCBI); Premier Bank, Dubuque, IA ($260 million); Canon National Bank, Canon City, CO ($228 million); First National Bank of Wyoming, Laramie, WY ($172 million); Heritage Bank, National Association, Phoenix, AZ ($102 million); and The Federal Savings Bank, Overland Park, KS ($75 million Ticker: KCLI).

Union Bank, Kansas City, MO ($456 million) voluntarily surrender its charter. Unassisted mergers were done by First National Bank of the Mid-Cities, Bedford, TX ($35 million) and The First State Bank of Burlingame, Burlingame, KS ($25 million).

The four failures were First Cherokee State Bank, Woodstock, GA ($223 million); Second Federal Savings and Loan Association of Chicago, Chicago, IL ($199 million); Heartland Bank, Leawood, KS ($110 million); and The Royal Palm Bank of Florida, Naples, FL ($87 million). Heartland Bank and Royal Palm Bank were affiliates and commonly owned by Mercantile Bancorp, Inc., Quincy Il. Mercantile Bancorp also owns Mercantile Bank, Quincy, Il ($510 million), which is on the Unofficial Problem Bank List that was not closed. The FDIC failed bank press releases did not indicate if any of the affiliates were closed under cross guaranty authority or why Mercantile Bank was allowed to remain open. The other failure Friday night was Georgia Trust Bank, Buford, GA, which appears to have failed not being subject to a timely issued enforcement action. Hard to believe at this stage of the crisis, especially in Georgia where 82 banks have failed, for a bank to fail without a corrective plan in place.

There were three name changes that were made this week -- First Midwest Bank, Centerville, SD; is now known as One American Bank; Community Business Bank, Sauk City, WI; is now known as Wisconsin River Bank; and Madison National Bank, Merrick, NY, is now known as First National Bank of New York.

Next week we anticipate the FDIC will release its actions through June 2012.

Earlier:
• Summary for Week Ending July 20th
• Schedule for Week of July 22nd

by Calculated Risk on 7/21/2012 08:10:00 PM

It looks like Capital One Bank made $1 million on this foreclosure.

From the O.C. Register: $8.1M oceanfront home sells as foreclosure

Located at 989 Cliff Drive on the oceanfront above Laguna Beach's Shaw's Cove, the Mission style villa sold for $8.1 million in an all cash deal ... The Cliff Drive property sold to the bank for $7,006,347 December 28, 2011.

Actress Diane Keaton bought the house in 2004 for "around $7.5 million" and sold it in 2005 for $14.5 million (nice flip!).

Capital One Bank foreclosed on the home in December 2011. There were no bidders and the house went back to the bank for just over $7 million.

Of course Capital One Bank could have bid less than they were owed at auction (maybe someone can pull up the details), but with the house selling at the asking price of $8.1 million for all cash, it appears Bank One made $1.1 million minus expenses.

Update: Any extra proceeds probably go to the borrower above what the bank was owed - I'm trying to find the state law in California. (ht Shnaps)

Update2: It appears update 1 was incorrect in California. Also apparently the first was greater than $7 million (around $7.8 million with costs), and the bank wouldn't have made any money after selling expenses. But if there was some extra, it would go to the bank in California according to several sources.

Earlier:
• Summary for Week Ending July 20th
• Schedule for Week of July 22nd