by Calculated Risk on 4/01/2013 10:07:00 AM

The ISM manufacturing index indicated expansion in March. The PMI was at 51.3% in March, down from 54.2% in February. The employment index was at 54.2%, up from 52.6%, and the new orders index was at 51.4%, down from 57.8% in February.

From the Institute for Supply Management: March 2013 Manufacturing ISM Report On Business®

Economic activity in the manufacturing sector expanded in March for the fourth consecutive month, and the overall economy grew for the 46th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. "The PMI™ registered 51.3 percent, a decrease of 2.9 percentage points from February's reading of 54.2 percent, indicating expansion in manufacturing for the fourth consecutive month, but at a slower rate. Both the New Orders and Production Indexes reflected growth in March compared to February, albeit at slower rates, registering 51.4 and 52.2 percent, respectively. The Employment Index registered 54.2, an increase of 1.6 percentage points compared to February's reading of 52.6 percent. The Prices Index decreased 7 percentage points to 54.5, and the list of commodities up in price reflected far fewer items than in February. In addition, the Backlog of Orders, Exports and Imports Indexes all grew in March."

Click on graph for larger image.

Here is a long term graph of the ISM manufacturing index.

This was below expectations of 54.0% and suggests manufacturing expanded at a slower pace in March.

by Calculated Risk on 3/31/2013 09:27:00 PM

I'm frequently asked if the recent improvement in the economic data might be a seasonal glitch. Not according the analysts at Nomura (who first noticed it): Diminishing seasonal bias

We first alerted clients to a pattern of "seasonal bias" in the data in October 2011 and followed closely its implication for financial markets. At that time, we warned of a curious pattern that emerged after the financial crisis in which stronger-than-expected data late in the year and early in the next suggested a relatively robust recovery only to disappoint when the data turned softer in the late spring and summer. We further noted that –notwithstanding the effect of specific events – shortcomings in the methods used to seasonally adjust time-series data appeared to have contributed to that pattern.

While the bias appears to have impacted market perceptions on the underlying momentum of the economy since 2009, it is important to recognize that seasonal bias has lessened over time and, moreover, has become largely immaterial.
emphasis in research note

If the data weakens in Q2, it will probably be because of the sequestration budget cuts and not some "shortcoming" in the seasonal adjustment method.

Monday economic releases:
• At 10:00 AM ET, the ISM Manufacturing Index for March will be released. The consensus is for PMI to decrease to 54.0%. (above 50 is expansion).

• Also at 10:00 AM, Construction Spending for February. The consensus is for a 1.1% increase in construction spending.

Weekend:
• Summary for Week Ending March 29th
• Schedule for Week of March 31st

The Asian markets opened red tonight with the Nikkei down almost 1.0%.

From CNBC: Pre-Market Data and Bloomberg futures: the S&P futures are down 3 and Dow futures are down 22 (fair value).

Oil prices are down slightly with WTI futures at $97.04 per barrel and Brent at $109.95 per barrel.

by Calculated Risk on 3/31/2013 07:10:00 PM

From the NY Times: As Banks in Cyprus Falter, Other Tax Havens Step In

“We are aware of the economic problems facing Cyprus at the moment,” read one such message from a law firm in Malta, also a euro zone member. “We would like to propose an avenue of action for your consideration: offering corporate relocation to Malta,” continued the business pitch, trumpeting Malta’s low taxes and “flexible yet robust regime” for financial services.

Similar unsolicited offers have originated in well-known havens like Switzerland, Luxembourg and the Cayman Islands, as well as in a host of other locations, including Dubai and Singapore. ...

Particularly successful at luring Russians, Cyprus has built up a large infrastructure of lawyers, accountants and other professionals schooled in the arts of tax avoidance. Its corporate registry now has 320,000 registered companies, a staggering number for a country with only 860,000 people. Most are shells set up for foreign companies and wealthy individuals seeking to avoid taxes.

Meet the new tax haven, same as the old tax haven!

by Calculated Risk on 3/31/2013 10:59:00 AM

From the USA Today: Pain at the pump: Have gas prices peaked for 2013?

After surging nearly 60 cents a gallon from late December to a recent peak of $3.79 on Feb. 27, prices have fallen for 25 of the past 29 days. Nationally, regular grade gas averages $3.64 a gallon -- 28 cents below year-ago levels.

The month-long drop has come at a time when gasoline prices typically climb, prompting some industry forecasters to rethink early 2013 estimates of $4 a gallon or higher by the peak summer driving season.

Patrick DeHaan, senior petroleum analyst for price tracker GasBuddy.com, now expects average prices to peak at $3.64 to $3.69, versus the $3.95 he predicted in January.

The following graph shows the recent decrease in gasoline prices. Gasoline prices have been on a roller coaster over the last year.

Note: If you click on "show crude oil prices", the graph displays oil prices for WTI, not Brent; gasoline prices in most of the U.S. are impacted more by Brent prices.

Orange County Historical Gas Price Charts Provided by GasBuddy.com

Yesterday:
• Summary for Week Ending March 29th
• Schedule for Week of March 31st

by Calculated Risk on 3/30/2013 07:14:00 PM

Here is the unofficial problem bank list for Mar 29, 2013.

Changes and comments from surferdude808:

As anticipated, the FDIC released its enforcement action activity through February 2013 this week, which led to several changes to the Unofficial Problem Bank List. For the week, there were eight removals and two additions leaving the list at 791 institutions with assets of $290.0 billion. A year ago, the list held 948 institutions with assets of $377.6 billion. For the month of March 2013, the list shrank by a net 18 institutions and assets fell by $12.8 billion. It is the third time over the past year the list has experienced a monthly net decline of 18 institutions.

Enforcement actions were terminated against Intervest National Bank, New York, NY ($1.7 billion Ticker: IBCA); Citizens Bank and Trust Company, Chillicothe, MO ($824 million); First American International Bank, Brooklyn, NY ($527 million); American Gateway Bank, Baton Rouge, LA ($404 million); Greer State Bank, Greer, SC ($360 million Ticker: GRBS); The State Bank, Fenton, MI ($308 million Ticker: FETM); The Harbor Bank of Maryland, Baltimore, MD ($249 million Ticker: HRBK); and East Dubuque Savings Bank, Dubuque, IA ($158 million).

Added this week were Marathon Savings Bank, Wausau, WI ($180 million) and Trust Company Bank, Mason, TN ($34 million). Trust Company Bank entered the list in an unusual manner through a Prompt Corrective Action order. Normally, an institution will first receive an enforcement action such as a Consent Order or Written Agreement that seeks corrective action for many operational areas. In contrast, a Prompt Corrective Action order solely addresses capital inadequacy. This is only the eleventh institution out of more than 1,600 to enter the list in this unusual manner.

The other change to the list this week is the FDIC issuing a Prompt Corrective Action order against Bank of Wausau, Wausau, WI ($53 million).

The Treasury recently released its monthly update to Congress on the Troubled Asset Relief Program (TARP) for February 2013. Treasury reported that 113 banking companies failed to make their required TARP dividend payment on February 15th. There are 85 institutions or their parent holding companies on the Unofficial Problem Bank List that failed to make the February 15th dividend payment (see spreadsheet). Within this group, 54 institutions have missed 10 or more quarterly dividend payments. There are 13 banks that did not make the February 15th dividend payment, but have been released from a formal enforcement action. Interestingly, the enforcement action terminations this week against Intervest National Bank, New York, NY ($4.6 million in non-current dividends); Greer State Bank, Greer, SC ($1.2 million in non-current dividends); and The Harbor Bank of Maryland, Baltimore, MD ($935 thousand in non-current dividends) occurred although the companies were unable to make the February 15th required dividend payment. While TARP was supposed to only flow to healthy banks, there are two banks that missed the latest payment that were under an enforcement action before receipt of TARP. Metropolitan National Bank, Little Rock, AR, which has missed 14 payments in a cumulative amount of $4.8 million, was under a Formal Agreement on May 28, 2008 but did not receive TARP until January 30, 2009. OneUnited Bank, Boston, MA, which has missed 16 payments in an amount of $2.4 million, has been operating under a Cease & Desist order since October 27, 2008 but received TARP on December 19, 2008. Many readers may recall OneUnited Bank because of the House Ethics Committee investigation of Representative Maxine Water’s ties to the bank (see, Ethics panel set to clear Rep. Maxine Waters).

Earlier:
• Summary for Week Ending March 29th
• Schedule for Week of March 31st