by Calculated Risk on 3/01/2011 09:03:00 AM

Note: At 10 AM, the ISM Manufacturing Index for February and Construction Spending for January will be released. Also Fed Chairman Bernanke provides the Semiannual Monetary Policy Report to the Congress (Senate testimony).

From Ted Nesi at wpri.com: Governor Chafee has a house he’d like to sell you

[Gov. Lincoln Chafee] and his wife, Stephanie, listed their seven-bedroom, three-and-a-half-bathroom house on Providence’s East Side last week for $889,000.

The Chafees purchased the house for $939,000 in 2006 ...

So he is asking $50,000 less than he paid. Case-Shiller doesn't track Providence, but house prices have fallen about 15% in Boston and 22% in New York - and prices have probably fallen at least 10% in Providence. So I wouldn't be surprised to see a price reduction.

by Calculated Risk on 2/28/2011 10:17:00 PM

From Lauren Beale at the LA Times: Cash-only home sales rise in California

All-cash buyers grabbed a record 30.9% share of the Golden State's houses and condos in January ... Cash activity has been brisk for months in foreclosure-ridden areas such as Riverside and San Bernardino. But now, the cash buyer has become a major player in Southern California's most expensive communities, where cash deals account for as much as two-thirds of home sales.
...
In the Southland's $1-million-and-up market, 29.2% of buyers paid cash last year — the highest percentage since 1994, DataQuick statistics show. For homes selling for $5 million and up, 62.2% paid cash.

At the low end it is probably mostly investors. The high end has always had a fairly high percentage of cash buyers, but this is very high. The good news is these buyers will never have negative equity (unless they take out a mortgage).

The large percentage of cash buyers is part of the reason that the MBA purchase index has not been tracking home sales very closely (it also appears that the NAR has been overstating sales).

by Calculated Risk on 2/28/2011 05:23:00 PM

By request ...
• From the NY Times: Libya Wages Counterattack Against Rebels on 3 Fronts

Colonel Muammar el-Qaddafi’s forces struck back on three fronts on Monday, using fighter jets, special forces units and regular army troops in an escalation of hostilities that brought Libya closer to civil war.

The attacks by the colonel’s troops on an oil refinery in central Libya and on cities on either side of the country ... showed that despite defections by the military, the government still possessed powerful assets, including fighter pilots willing to bomb Libyan cities.

• From the NY Times: U.S. Readies Military Options on Libya

• From the Telegraph: West ready to use force against Col Gaddafi amid chemical weapon fears

The Prime Minister disclosed that he would not rule out “the use of military assets” as Britain “must not tolerate this regime using military forces against its own people”. Britain and America are also thought to be considering arming rebel forces in Libya.
...
Mr Cameron told MPs that Britain and its allies were considering using fighter jets to impose a no-fly zone over Libya

• From al Jazeera: Live Blog - Libya March 1

by Calculated Risk on 2/28/2011 02:08:00 PM

This is one of several industry specific indexes I track each month.

Click on graph for larger image in graph gallery.

The index declined to 100.2 in January, barely indicating expansion.

More "Blame it on the snow!"

Unfortunately the data for this index only goes back to 2002.

From the National Restaurant Association: Restaurant Performance Index Declined in January Amid Weather-Dampened Sales and Traffic Levels

The National Restaurant Association’s Restaurant Performance Index (RPI) – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 100.2 in January, down 0.8 percent from its December level. Despite the decline, January marked the fourth time in the last five months that the RPI stood above 100, which signifies expansion in the index of key industry indicators.
...
Due in large part to extreme weather conditions in some parts of the country, sales levels were dampened in January. Thirty-nine percent of restaurant operators reported a same-store sales gain between January 2010 and January 2011, down from 48 percent of operators who reported higher same-store sales in December.
...
Restaurant operators also reported a net decline in customer traffic levels in January.
...
For the fourth consecutive month, restaurant operators reported a positive outlook for staffing gains in the months ahead.

by Calculated Risk on 2/28/2011 11:31:00 AM

From the Dallas Fed: Texas Manufacturing Activity Picks Up

Texas factory activity increased in February, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose to 10 following a reading near zero in January.
...
Labor market indicators continued to reflect more hiring, a longer workweek and rising labor costs. The employment index came in at a reading of 11, up from 9 last month. The hours worked index was unchanged at 4, while the wages and benefits index fell from 15 to 9.
...
Prices continued to climb in February. The raw materials price index edged up from 62 to 63, with 64 percent of firms noting an increase in input costs compared with only 1 percent noting a decrease.

This is the last of the regional Fed surveys for February. The regional surveys provide a hint about the ISM manufacturing index, as the following graph shows.

Click on graph for larger image in graph gallery.

The New York and Philly Fed surveys are averaged together (dashed green, through February), and averaged five Fed surveys (blue, through February) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through January (right axis).

The ISM index for February will released tomorrow, Mar 1st. The consensus is for a slight decrease to 60.5 from the strong 60.8 in January.

The regional surveys suggest the ISM manufacturing index will be around 60 (strong expansion). The 60.8 reading in January was the highest level since May 2004, and any reading above 61.4 would be the highest since 1983.

by Calculated Risk on 2/28/2011 10:00:00 AM

• From the Chicago Business Barometer™ Grew: The overall index increased to 71.2 from 68.8 in January. This was above consensus expectations of 68.0. Note: any number above 50 shows expansion.

"EMPLOYMENT continued to show expansion;". The employment index decreased to a still strong 59.8 from 64.1.

"NEW ORDERS nudged upward, still at the highest level since December 1983;". The new orders index increased to 75.9 from 75.7.

This was another strong report.

• From the NAR: Pending Home Sales Decline in January

The Pending Home Sales Index,* a forward-looking indicator, declined 2.8 percent to 88.9 based on contracts signed in January from a downwardly revised 91.5 in December [revised down sharply from 93.7]. The index is 1.5 percent below the 90.3 level in January 2010 when a tax credit stimulus was in place. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.

This suggests existing home sales in February and March will be somewhat lower than in January.