by Calculated Risk on 1/13/2011 05:32:00 PM

From Mary Ellen Podmolik at the Chicago Tribune: More banks walking away from homes, adding to housing crisis (ht, Mark, Walt, Bob)

Abandoned foreclosures are increasing as mortgage investors determine that, at sale, they can't recoup the costs of foreclosing, securing, maintaining and marketing a home, and they sometimes aren't completing foreclosure actions. The property, by then usually vacant, becomes another eyesore ...

Research ... identifies 1,896 "red flag" homes in Chicago ... that appear to have been abandoned by mortgage servicers during the foreclosure process, the Woodstock Institute found.

We've seen this before in areas with declining populations like Detroit. These are always low end homes that are worth less than the cost of foreclosing - and it leaves behind a mess for the community and the city.

by Calculated Risk on 1/13/2011 02:39:00 PM

A few more "successful" auctions. Time will tell. Also Jean-Claude Trichet made some cautious statements about inflation in Europe ... and a history and analysis of the euro from Paul Krugman.

• From the WSJ: Strong Demand at European Debt Auctions

Both Spain and Italy sold the maximum intended amounts they had planned, with Spain selling €3 billion ($3.94 billion) of a five-year bond and Italy selling €6 billion in five- and 11-year bonds.
...
Spain's Treasury sold the bonds at an average yield of 4.542%, up from 3.576% at the previous auction Nov. 4 ... Italy sold its five-year bond at a yield of 3.67%, up from 3.24% on Nov. 12, while the yield on the longer bond rose to 5.06% from 4.81%.

• From the Financial Times: Hawkish Trichet comments boost euro

“Overall, we see evidence of short-term upward pressure on overall inflation, stemming largely from global commodity prices. While this has not so far affected our assessment that price developments will remain in line with price stability over the policy-relevant horizon, very close monitoring of price developments is warranted,” [Jean-Claude Trichet, chairman of the European Central Bank] said.
excerpt with permission

• And some history from Paul Krugman in the NY Times Magazine: Can Europe Be Saved?. Krugman explains the history and the problems with the euro - and there is an interesting discussion comparing and contrasting U.S. state issues with the government issues in Europe.

by Calculated Risk on 1/13/2011 01:45:00 PM

Panel discussion on CNBC (link here)

Update: Economy to Grow 3-4% in 2011 But Hiring Still Lags: Bernanke

"We see the economy strengthening," Bernanke said during Small Business forum co-sponsored by the FDIC and CNBC. "It has looked better in the last few months. We think a 3 to 4 percent-type of growth number for 2011 seems reasonable."

"Now that's not going to reduce unemployment at the pace we'd like it to, but certainly it would be good to see the economy growing and that means more sales, more business," he added.

The Fed chairman also said the housing recovery is "a slow process."

by Calculated Risk on 1/13/2011 11:59:00 AM

From RealtyTrac: 2010 Year-End Foreclosure Report

RealtyTrac® ... today released its Year-End 2010 U.S. Foreclosure Market Report™, which shows a total of 3,825,637 foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on a record 2,871,891 U.S. properties in 2010, an increase of nearly 2 percent from 2009 and an increase of 23 percent from 2008. ...

Foreclosure filings were reported on 257,747 U.S. properties in December, a decrease of nearly 2 percent from the previous month and down 26 percent from December 2009 — the biggest annual drop in foreclosure activity since RealtyTrac began publishing its foreclosure report in January 2005 and giving December the lowest monthly total since June 2008.
...
“Total properties receiving foreclosure filings would have easily exceeded 3 million in 2010 had it not been for the fourth quarter drop in foreclosure activity — triggered primarily by the continuing controversy surrounding foreclosure documentation and procedures that prompted many major lenders to temporarily halt some foreclosure proceedings,” said James J. Saccacio, chief executive officer of RealtyTrac. “Even so, 2010 foreclosure activity still hit a record high for our report, and many of the foreclosure proceedings that were stopped in late 2010 — which we estimate may be as high as a quarter million — will likely be re-started and add to the numbers in early 2011.”

And from Jon Prior at HousingWire:

Daren Blomquist, who edits the RealtyTrac monthly reports, said the record set in 2010 will not last for long.

"We don’t think we’ve peaked yet nationwide," Blomquist told HousingWire. "We’re expecting the 2011 numbers to be slightly higher than 2010, and then start the downward trend toward 'normalcy' in 2012."

Activity slowed down in Q4, but will probably pick up again in Q1.

by Calculated Risk on 1/13/2011 09:13:00 AM

The Department of Commerce reports:

[T]otal November exports of $159.6 billion and imports of $198.0 billion resulted in a goods and services deficit of $38.3 billion, down from $38.4 billion in October, revised. November exports were $1.2 billion more than October exports of $158.4 billion. November imports were $1.1 billion more than October imports of $196.8 billion.

Click on graph for larger image.

The first graph shows the monthly U.S. exports and imports in dollars through November 2010.

Imports have been mostly flat since May, and exports have started increasing again after the mid-year slowdown.

The second graph shows the U.S. trade deficit, with and without petroleum, through November.

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 petroleum deficit increased in November as import prices continued to rise - averaging $76.81 in November. Prices will be even higher in December. The deficit with China increased to $25.634 billion from $25,517 in October. Once again oil and China deficits are essentially the entire trade deficit (or even more).

by Calculated Risk on 1/13/2011 08:30:00 AM

The DOL reports on weekly unemployment insurance claims:

In the week ending Jan. 8, the advance figure for seasonally adjusted initial claims was 445,000, an increase of 35,000 from the previous week's revised figure of 410,000. The 4-week moving average was 416,500, an increase of 5,500 from the previous week's revised average of 411,000.

Click on graph for larger image in new window.

This graph shows the 4-week moving average of weekly claims for the last 40 years. It is difficult to compare directly to the '70s and '80s because the labor force is larger now and other changes.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased this week by 5,500 to 416,500.

Although weekly claims increased sharply this week - to the highest level since October - the four week average is still much lower than a few months ago.