by Calculated Risk on 1/04/2015 09:53:00 AM

Here is another graph on framing lumber prices. Early in 2013 lumber prices came close to the housing bubble highs.

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 didn't fall 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 Dec 19th (via NAHB), and 2) CME framing futures.

Right now Random Lengths prices are down about 2% from a year ago, and CME futures are down 9% year-over-year. Mostly prices have moved sideways for the last 18 months.

by Calculated Risk on 1/03/2015 11:29:00 AM

The key report this week is the December employment report on Friday.

Other key reports include December vehicle sales on Monday, the December ISM non-manufacturing index on Tuesday, and the November Trade Deficit on Wednesday.

Also, Reis will release their quarterly surveys of rents and vacancy rates for offices, apartments and malls.

----- Monday, January 5th -----
Early: Reis Q4 2014 Office Survey of rents and vacancy rates.

All day: Light vehicle sales for December. The consensus is for light vehicle sales to decrease to 16.9 million SAAR in December from 17.1 million in November (Seasonally Adjusted Annual Rate).

This graph shows light vehicle sales since the BEA started keeping data in 1967. The dashed line is the November sales rate.

----- Tuesday, January 6th -----
Early: Reis Q4 2014 Apartment Survey of rents and vacancy rates.

10:00 AM: Manufacturers' Shipments, Inventories and Orders (Factory Orders) for November. The consensus is for a 0.2 decrease in November orders.

10:00 AM: ISM non-Manufacturing Index for December. The consensus is for a reading of 58.2, down from 59.3 in November. Note: Above 50 indicates expansion.

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

8:15 AM: The ADP Employment Report for December. This report is for private payrolls only (no government). The consensus is for 223,000 payroll jobs added in December, up from 207,000 in November.

8:30 AM: Trade Balance report for November from the Census Bureau.

This graph shows the U.S. trade deficit, with and without petroleum, through October. The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

The consensus is for the U.S. trade deficit to be at $42.0 billion in November from $43.4 billion in October.

Early: Reis Q4 2014 Mall Survey of rents and vacancy rates.

2:00 PM: FOMC Minutes for Meeting of December 16-17, 2014

----- Thursday, January 8th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for claims to increase to 300 thousand from 298 thousand.

Early: Trulia Price Rent Monitors for December. This is the index from Trulia that uses asking house prices adjusted both for the mix of homes listed for sale and for seasonal factors.

3:00 PM: Consumer Credit for November from the Federal Reserve.  The consensus is for credit to increase $15.0 billion.

----- Friday, January 9th -----
8:30 AM: Employment Report for December. The consensus is for an increase of 240,000 non-farm payroll jobs added in December, down from the 321,000 non-farm payroll jobs added in November.

The consensus is for the unemployment rate to decline to 5.7% in December from 5.8% the previous month.

This graph shows the year-over-year change in total non-farm employment since 1968.

In November, the year-over-year change was 2.73 million jobs, and that should increase further in December.  Barring a huge downside surprise in the December report, 2014 will be the best year since the '90s for both total nonfarm and private sector employment growth.

As always, a key will be the change in real wages - and as the unemployment rate falls, wage growth should eventually start to pickup.

10:00 AM: Monthly Wholesale Trade: Sales and Inventories for November. The consensus is for a 0.3% increase in inventories.

by Calculated Risk on 1/02/2015 09:28:00 PM

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

Here is the unofficial problem bank list for Jan 2, 2015.

Changes and comments from surferdude808:

This past Monday, the FDIC released an update on its enforcement action activities through November 2014. The release contributed to several changes to the Unofficial Problem Bank List this week. After three removals and two additions, the list holds 400 institutions with assets of $124.8 billion. A year ago, the list held 618 institutions with assets of $205.6 billion.

The FDIC terminated actions against Legacy Bank of Florida, Boca Raton, FL ($275 million); First Home Bank, Seminole, FL ($76 million); and Bank of Wrightsville, Wrightsville, GA ($52 million).

The FDIC issued actions against The Elkhart State Bank, Elkhart, TX ($53 million) and State Bank of Burnettsville, Burnettsville, IN ($49 million).

Next week likely will be slow in terms of changes to the list.

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 400.

by Calculated Risk on 1/02/2015 06:25:00 PM

A funny quote today from Gluskin Sheff economist David Rosenberg via CNBC: Rosenberg: Perma-bears on the 'lunatic fringe'

"There are segments of the perma-bear community that literally live their lives on the lunatic fringe," Rosenberg wrote ... "This is heavier than religion, the tea party or Red Sox Nation for that matter. To these fanatics, if the market rallies, it is due to some unholy alliance somewhere, and if the market dives, it is a case of good triumphing over evil."

He mentions being attacked by the lunatic fringe. I can relate - the perma-bears thought I was one of their own until I wrote "Looking for the Sun" in early 2009 (my first slightly positive post in four years of blogging).  After that post (first of many more positive posts) I was inundated with angry emails. Oh well ...

As an aside, the market is up about 55% since Rosenberg turned more positive in June 2012.

by Calculated Risk on 1/02/2015 01:57:00 PM

From HotelNewsNow.com: STR: US results for week ending 27 December

The U.S. hotel industry recorded mostly positive results in the three key performance measurements during the week of 21-27 December 2014, according to data from STR, Inc.

In year-over-year measurements, the industry’s occupancy was flat at 44.4 percent. Average daily rate increased 1.5 percent to finish the week at US$110.71. Revenue per available room for the week was up 1.5 percent to finish at US$49.18.
emphasis added

Note: ADR: Average Daily Rate, RevPAR: Revenue per Available Room.

The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

Hotels are now in the slow period of the year.

Click on graph for larger image.

The red line is for 2014, blue is the median, and black is for 2009 - the worst year since the Great Depression for hotels.  Purple is for 2000.

The 4-week average of the occupancy rate is solidly above the median for 2000-2007, and since mid-June, the occupancy rate has been a little higher than for the same period in 2000.

With the strong finish, the occupancy rate in 2014 was about the same as in 2000!

Data Source: Smith Travel Research, Courtesy of HotelNewsNow.com