by Calculated Risk on 8/10/2014 07:58:00 PM

Joe Weisenthal at Business Insider does a great job of tying together some of my recent posts on demographics (Thanks Joe!): The Analyst Who Nailed The Housing Crash Is Quietly Revealing The Next Big Thing.

Weisenthal concludes with some very interesting analysis from Matt Busigin:

And while we're talking about housing, we should also take just a minute to talk about inflation. Matt Busigin wrote a great piece last year, talking about the non-monetary causes of inflation, and how demographics is a much bigger driver of inflation than people realize. Many of the same factors discussed above could contribute to higher inflation, as a younger workforce moves into its first homes and first cars, and has real buying power for the first time.

Monday:
• At 3:15 AM ET, Speech by Fed Vice Chairman Stanley Fischer, The Great Recession: Moving Ahead, At the Swedish Ministry of Finance Conference: The Great Recession – Moving Ahead, Stockholm, Sweden

Weekend:
• Schedule for Week of Aug 10th

From CNBC: Pre-Market Data and Bloomberg futures: the S&P futures are flat and DOW futures are up 12 (fair value).

Oil prices were down slightly over the last week with WTI futures at $97.67 per barrel and Brent at $104.91 per barrel.  A year ago, WTI was at $104, and Brent was at $109 - so prices are down a little year-over-year.

Below is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are around $3.47 per gallon (down about a dime from a year ago).  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

by Calculated Risk on 8/10/2014 02:33:00 PM

Here is another graph on framing lumber prices. Early in 2013 lumber prices came close to the housing bubble highs. Then prices declined over 25% from the highs by mid-year 2013.

The price increases in early 2013 were due to a surge in demand (more housing starts) and supply constraints (framing lumber suppliers were working to bring more capacity online).

Prices didn't increase as much early in 2014 (more supply, smaller "surge" in demand), however prices haven't fallen as sharply either.

Click on graph for larger image in graph gallery.

This graph shows two measures of lumber prices: 1) Framing Lumber from Random Lengths through last week (via NAHB), and 2) CME framing futures.

Right now Random Lengths prices are up about 8% from a year ago, and CME futures are up about 7% year-over-year.

by Calculated Risk on 8/09/2014 01:01:00 PM

The key report this week is July retail sales on Wednesday.

For manufacturing, the July Industrial Production and Capacity Utilization report, and the August NY Fed (Empire State) survey, will be released this week. 

For prices, PPI will be released on Friday.

Also the NY Fed Q2 Report on Household Debt and Credit will be released on Thursday.

----- Monday, August 11th -----
3:15 AM ET: Speech by Fed Vice Chairman Stanley Fischer, The Great Recession: Moving Ahead, At the Swedish Ministry of Finance Conference: The Great Recession – Moving Ahead, Stockholm, Sweden

----- Tuesday, August 12th -----
7:30 AM ET: NFIB Small Business Optimism Index for July.

10:00 AM: Job Openings and Labor Turnover Survey for June from the BLS.

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

In May, the number of job openings (yellow) were up 19% year-over-year compared to May 2013, and Quits were up 15% year-over-year.

2:00 PM ET: The Monthly Treasury Budget Statement for July. Note: The CBO's estimate is the deficit through July in fiscal 2014 was $462 billion, compared to $607 billion for the same period in fiscal 2013.

----- Wednesday, August 13th -----
7:00 AM: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM ET: Retail sales for July will be released.

This graph shows retail sales since 1992 through June 2014. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline). On a monthly basis, retail sales increased 0.2% from May to June (seasonally adjusted), and sales were up 4.3% from June 2013.

The consensus is for retail sales to increase 0.2% in July, and to increase 0.4% ex-autos.

10:00 AM: Manufacturing and Trade: Inventories and Sales (business inventories) report for June.  The consensus is for a 0.4% increase in inventories.

----- Thursday, August 14th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for claims to increase to 295 thousand from 289 thousand.

11:00 AM: The Q2 2014 Quarterly Report on Household Debt and Credit will be released by the Federal Reserve Bank of New York.

----- Friday, August 15th -----
8:30 AM: NY Fed Empire Manufacturing Survey for August. The consensus is for a reading of 20.0, down from 25.6 in July (above zero is expansion).

8:30 AM: The Producer Price Index for July from the BLS. The consensus is for a 0.1% increase in prices.

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

This graph shows industrial production since 1967.

The consensus is for a 0.3% increase in Industrial Production, and for Capacity Utilization to increase to 79.2%.

9:55 AM: Reuter's/University of Michigan's Consumer sentiment index (preliminary for August). The consensus is for a reading of 82.3, up from 81.8 in July.

by Calculated Risk on 8/09/2014 08:15:00 AM

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

Here is the unofficial problem bank list for Aug 8, 2014.

Changes and comments from surferdude808:

Two removals lowered the number of institutions on the Unofficial Problem Bank List to 449. Assets declined by $3.0 billion to $142.7 billion. A year earlier, the list held 723 institutions with assets of $255 billion. Enforcement actions were terminated against MetaBank, Storm Lake, IA ($1.9 billion Ticker: CASH) and First American Bank, Fort Dodge, IA ($1.1 billion). Next Friday, we anticipate the OCC to provide an update on its enforcement action activities.

CR Note: The first unofficial problem bank list was published in August 2009 with 389 institutions. The list peaked at 1,002 institutions on June 10, 2011, and is now down to 449.

by Calculated Risk on 8/08/2014 06:43:00 PM

Several years ago I started following the Sacramento market to look for changes in the mix of houses sold (equity, REOs, and short sales).  For a long time, not much changed. But over the last 2+ years we've seen some significant changes with a dramatic shift from foreclosures (REO: lender Real Estate Owned) to short sales, and the percentage of total distressed sales declining sharply.

This data suggests healing in the Sacramento market and other distressed markets are showing similar improvement.  Note: The Sacramento Association of REALTORS® started breaking out REOs in May 2008, and short sales in June 2009.

In July 2014, 12.3% of all resales were distressed sales. This was down from 13.3% last month, and down from 23.1% in July 2013. This is the post-bubble low.

The percentage of REOs was at 6.2%, and the percentage of short sales was 6.1%.

Here are the statistics for July.

Click on graph for larger image.

This graph shows the percent of REO sales, short sales and conventional sales.

There has been a sharp increase in conventional sales that started in 2012 (blue) as the percentage of distressed sales declined sharply.

Active Listing Inventory for single family homes increased 68.0% year-over-year in July. 

Cash buyers accounted for 20.9% of all sales, down from 25.5% in July 2013, but up from 19.8% last month (frequently investors).  This has been trending down, and it appears investors are becoming much less of a factor in Sacramento.

Total sales were down 4.5% from July 2013, but conventional equity sales were up 8.9% compared to the same month last year. This is exactly what we expect to see in an improving distressed market - flat or even declining overall sales as distressed sales decline, and conventional sales increasing.

Summary: Distressed sales down sharply (at post bubble low), Cash buyers down significantly, normal equity sales up 8.9% year-over-year, and inventory up significantly.  So price increases should slow, and builders will slow too (with more inventory), and we might see lower land prices in some of these areas. 

As I've noted before, we are seeing a similar pattern in other distressed areas.