RSS Feed by Calculated Risk on 2/11/2015 04:54:00 PM
Wednesday, February 11, 2015
CNBC: EU and Greece Reach "Agreement in Principle"
From CNBC: EU, Greece come to agreement in principle, meetings to continue: Source
Greece has reached an agreement, in principle, with the European Union to stay in an EU bailout program, a source familiar with the matter told CNBC Wednesday.No details.
EIA: Record Oil Inventories, Gasoline Prices expected to average $2.33/gal in 2015
by Calculated Risk on 2/11/2015 01:30:00 PM
Oil prices are down today, with Brent at $55.05 per barrel, and WTI at $49.47. Note: There is less investment now, but current wells are still pumping.
Here is an excerpt from the Weekly Petroleum Status Report
U.S. crude oil refinery inputs averaged about 15.6 million barrels per day during the week ending February 6, 2015, 20,000 barrels per day more than the previous week’s average. Refineries operated at 90.0% of their operable capacity last week. ...
U.S. crude oil imports averaged 7.3 million barrels per day last week, down by 101,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged over 7.3 million barrels per day, 3.6% below the same four-week period last year. ...
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 4.9 million barrels from the previous week. At 417.9 million barrels, U.S. crude oil inventories are at the highest level for this time of year in at least the last 80 years.It is difficult to forecast oil and gasoline prices due to world events - and the response of producers to price changes, but currently the EIA expects gasoline prices to average $2.94/gal in 2015 according to the Short Term Energy Outlook released yesterday:
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• EIA forecasts that Brent crude oil prices will average $58/bbl in 2015 and $75/bbl in 2016, with 2015 and 2016 annual average West Texas Intermediate (WTI) prices expected to be $3/bbl and $4/bbl, respectively, below Brent. This price outlook is unchanged from last month's forecast. ...Right now gasoline prices are down to around $2.22 per gallon nationally according to the Gasbuddy.com.
• Driven largely by falling crude oil prices, U.S. weekly regular gasoline retail prices averaged $2.04/gallon (gal) on January 26, the lowest since April 6, 2009, before increasing to $2.19/gal on February 9. EIA expects U.S. regular gasoline retail prices, which averaged $3.36/gal in 2014, to average $2.33/gal in 2015. The average household is now expected to spend about $750 less for gasoline in 2015 compared with last year because of lower prices. The projected regular gasoline retail price increases to an average of $2.73/gal in 2016.
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The following graph is from Gasbuddy.com. Note: If you click on "show crude oil prices", the graph displays oil prices for WTI, not Brent.
| Orange County Historical Gas Price Charts Provided by GasBuddy.com |
Opinion: Did Germany Fulfill their Promises? Did Austerity in Greece Deliver?
by Calculated Risk on 2/11/2015 10:35:00 AM
Back in 2010, Greece agreed to a number of austerity measures. In general, Greece met their obligations and is currently running a primary surplus.
Greece was told by the IMF, the Germans, and other that this would turn the Greek economy around. Greece clearly needed some austerity, however many of us argued austerity alone would be a disaster for Greece, and for Europe in general.
Below are the forecasts for Greece (IMF) and the actual results (Eurostat).
Clearly austerity alone failed. Sadly European officials like German Finance minister Wolfgang Schauble have not changed their views and apologized to the Greeks.
Here is an actual quote from Schauble in 2013:
"Nobody in Europe sees this contradiction between fiscal policy consolidation and growth,” Schauble said. “We have a growth-friendly process of consolidation, and we have sustainable growth, however you want to word it.”A "growth friendly process"? "Sustainable growth"? Nonsense.
Obviously there is a contradiction between "fiscal policy consolidation and growth". And not everyone is blind to the obvious - some people in Europe see the obvious contradiction (just look at the data for Europe as a whole and Greece in particular).
It is time to stop blaming Greece (they mostly did what they were told), and start blaming the Germans and others for pushing the wrong policies. And give Greece a little relief.
| Greece: Annual GDP, Forecast and Actual1 | ||
|---|---|---|
| Year | Promised | Actual |
| 2009 | -2 | -4.4 |
| 2010 | -4 | -5.4 |
| 2011 | -2.6 | -8.9 |
| 2012 | 1.1 | -6.6 |
| 2013 | 2.1 | -3.9 |
| 2014 | 2.1 | |
| 2015 | 2.7 | |
| 1IMF Forecasts and Eurostat Actual | ||
| Greece: Annual Unemployment Rate, Forecast and Actual1 | ||
|---|---|---|
| Year | Promised | Actual |
| 2009 | 9.4 | 9.6 |
| 2010 | 11.8 | 12.7 |
| 2011 | 14.6 | 17.9 |
| 2012 | 14.8 | 24.5 |
| 2013 | 14.3 | 27.5 |
| 2014 | 14.1 | 26.82 |
| 2015 | 13.4 | |
| 1IMF Forecasts and Eurostat Actual 22014 is Q1, Q2, Q3 average | ||
MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey
by Calculated Risk on 2/11/2015 07:01:00 AM
From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey
Mortgage applications decreased 9.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 6, 2015. ...
The Refinance Index decreased 10 percent from the previous week. The seasonally adjusted Purchase Index decreased 7 percent from one week earlier.
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 3.84 percent, the highest level since January 9, 2015, from 3.79 percent, with points increasing to 0.31 from 0.29 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.
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Click on graph for larger image.The first graph shows the refinance index.
2014 was the lowest year for refinance activity since year 2000.
It looks like 2015 will see more refinance activity than in 2014, especially from FHA loans!
The second graph shows the MBA mortgage purchase index. According to the MBA, the purchase index is up 1% from a year ago.
Tuesday, February 10, 2015
FNC: Residential Property Values increased 5.0% year-over-year in December
by Calculated Risk on 2/10/2015 05:21:00 PM
In addition to Case-Shiller, and CoreLogic, I'm also watching the FNC, Zillow and several other house price indexes.
FNC released their December index data today. FNC reported that their Residential Price Index™ (RPI) indicates that U.S. residential property values increased slightly from November to December (Composite 100 index, not seasonally adjusted).
The 10 city MSA RPI declined in December, and the 20-MSA and 30-MSA RPIs increased . These indexes are not seasonally adjusted (NSA), and are for non-distressed home sales (excluding foreclosure auction sales, REO sales, and short sales).
Notes: In addition to the composite indexes, FNC presents price indexes for 30 MSAs. FNC also provides seasonally adjusted data.
The year-over-year (YoY) change was lower in December than in November, with the 100-MSA composite up 5.0% compared to December 2013. In general, for FNC, the YoY increase has been slowing since peaking in March at 9.0%.
The index is still down 19.6% from the peak in 2006.
Click on graph for larger image.
This graph shows the year-over-year change based on the FNC index (four composites) through December 2014. The FNC indexes are hedonic price indexes using a blend of sold homes and real-time appraisals.
Most of the price indexes have been showing a slowdown in price increases.
The December Case-Shiller index will be released on Tuesday, February 24th, and I expect Case-Shiller to show a further slowdown in YoY price increases.
