by Calculated Risk on 3/11/2011 09:18:00 PM

The Financial Times is reporting: Eurozone debt deal struck

The heads of the eurozone’s 17 governments came to an unexpected deal on short-term measures to lower borrowing costs of struggling peripheral economies, agreeing to give more financial backing to the bloc’s €440bn rescue fund and lowering the interest rates on Greece’s bail-out loans.
excerpt with permission

According to the Financial Times, the EFSF will be allowed to intervene in the primary bond market - and the term for the Greek loans will be extended to 7.5 years. However there will be no interest rate cut for Ireland.

Earlier today:
• Retail Sales increased 1.0% in February.
• Consumer Sentiment declined sharply in March.
• BLS: Job Openings decline in January, Low Labor Turnover.

by Calculated Risk on 3/11/2011 06:59:00 PM

From the FDIC: The Pauls Valley National Bank, Pauls Valley, Oklahoma, Assumes All of the Deposits of The First National Bank of Davis, Davis, Oklahoma

As of December 31, 2010, The First National Bank of Davis had approximately $90.2 million in total assets and $68.3 million in total deposits. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $26.5 million. ... The First National Bank of Davis is the 24th FDIC-insured institution to fail in the nation this year, and the second in Oklahoma.

The FDIC is back at work.

Update: And #25 ...

From the FDIC: Seaway Bank and Trust Company, Chicago, Illinois Assumes All of the Deposits of Legacy Bank, Milwaukee, Wisconsin

As of December 31, 2010, Legacy Bank had approximately $190.4 million in total assets and $183.3 million in total deposits. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $43.5 million. ... Legacy Bank is the 25th FDIC-insured institution to fail in the nation this year, and the third in Wisconsin.

by Calculated Risk on 3/11/2011 05:15:00 PM

I've been following the Sacramento market to see the change in mix (conventional, REOs, short sales) in a distressed area. The Sacramento Association of REALTORS® started breaking out REOs in May 2008, and short sales in June 2009. Here are the statistics.

Click on graph for larger image in graph gallery.

This graph shows the percent of REO, short sales and conventional sales. There is a seasonal pattern for conventional sales (strong in the spring and summer), and distressed sales happen all year - so the percentage of distressed sales increases every winter. The tax credits might have also boosted conventional sales in 2009 and early 2010.

Note: Prior to June 2009, it is unclear if short sales were included as REO or as "conventional" - or some of both.

In February 2011, 71.2% of all resales (single family homes and condos) were distressed sales. This is the 2nd highest level of distressed sales since Sacramento started breaking out short sales - last month was the highest. And this is the highest level of REO since July 2009.

Also one-third of all homes were sold for cash, up from 31.3% last month.

A high level of distressed sales suggests falling prices, and this data from Sacramento suggests further price declines in February. The CoreLogic House Price index hit a new post-bubble low in January, and my guess is the Case-Shiller index will fall to a post-bubble low when the January data is released on March 29th.

by Calculated Risk on 3/11/2011 02:39:00 PM

From Bloomberg: Portugal 5-Year Yield at Euro-Era Record on Bailout Speculation

When asked whether his country was preparing to request a bailout, Finance Minister Fernando Teixeira Dos Santos said European leaders must understand the “seriousness” of the region’s debt crisis.
...
The minister’s comments “might indicate that financial support for Portugal will be discussed at the weekend,” said Michael Leister, a fixed-income analyst at WestLB AG in Dusseldorf, Germany. “Yields show that the market is concerned, and is waiting for something,” he said.

Here are the 2 year, 5 year and 10 year Portuguese bond yields from Bloomberg. The 5 year yield is up to almost 8%, the 2 year yield is at 6.5%, up from 4.5% earlier this week.

Meanwhile, Greek Prime Minister George Papandreou and Irish Prime Minister Enda Kenny are apparently asking for better terms.

Note: The Greek ten year yield is at 12.8%. The Irish ten year yield is 9.6%. Here are the Ten Year yields for Spain, and Belgium.

by Calculated Risk on 3/11/2011 11:41:00 AM

From the BLS: Job Openings and Labor Turnover Summary

There were 2.8 million job openings on the last business day of
January 2011, the U.S. Bureau of Labor Statistics reported today. The
job openings rate (2.1 percent), hires rate (2.8 percent), and total
separations rate (2.7 percent) were little changed over the month.

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

Unfortunately this is a new series and only started in December 2000.

Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. This report is for January, the most recent employment report was for February.

Click on graph for larger image in graphics gallery.

Notice that hires (purple) and total separations (red and blue columns stacked) are pretty close each month. When the purple line is above the two stacked columns, the economy is adding net jobs - when it is below the columns, the economy is losing jobs.

In January, about 3.555 million people lost (or left) their jobs, and 3.712 million were hired (this is the labor turnover in the economy) adding 157 thousand total jobs.

In general job openings (yellow) has been trending up - and are up 15% from January 2010 - although openings have declined over the last two months.

The overall turnover remains low with a record low number of "quits" in January. There has been little pickup in hiring over the last 18 months - just a decline in "quits" and total separations.

by Calculated Risk on 3/11/2011 09:55:00 AM

The preliminary March Reuters / University of Michigan consumer sentiment index declined to 68.2 from 77.5 in February, the lowest level since October 2010.

Click on graph for larger image in graphic gallery.

This was well below the consensus forecast of 76.5.

In general consumer sentiment is a coincident indicator and is usually impacted by employment (and the unemployment rate) and gasoline prices.

My initial guess is this decline was because of higher gasoline prices.