by Calculated Risk on 11/23/2013 01:03:00 PM

This will be a short, but busy week. The key reports this week are housing permits for both September and October, and Case-Shiller house prices.

For manufacturing, the Dallas and Richmond Fed November surveys will be released this week.

----- Monday, November 25th -----
10:00 AM ET: Pending Home Sales Index for October. The consensus is for a 1.1% increase in the index.

10:30 AM: Dallas Fed Manufacturing Survey for November.  The consensus is a reading of 5.0, up from 3.6 in October (above zero is expansion).

----- Tuesday, November 26th-----
8:30 AM: Housing Permits for September and October. Housing starts have been delayed until December 18th.

9:00 AM: FHFA House Price Index for September 2013. This was original a GSE only repeat sales, however there is also an expanded index. The consensus is for a 0.4% increase.

9:00 AM: S&P/Case-Shiller House Price Index for September. Although this is the September report, it is really a 3 month average of July, August and September.

This graph shows the nominal seasonally adjusted Composite 10 and Composite 20 indexes through July 2012 (the Composite 20 was started in January 2000).

The consensus is for a 13.1% year-over-year increase in the Composite 20 index (NSA) for August. The Zillow forecast is for the Composite 20 to increase 13.2% year-over-year, and for prices to increase 0.8% month-to-month seasonally adjusted.

10:00 AM: Conference Board's consumer confidence index for November. The consensus is for the index to increase to 72.9 from 71.2.

10:00 AM: Richmond Fed Survey of Manufacturing Activity for November.  The consensus is a reading of 4, up from 1 in October (above zero is expansion).

----- Wednesday, November 27th -----
7:00 AM: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for claims to increase to 330 thousand from 323 thousand last week.

8:30 AM: Durable Goods Orders for October from the Census Bureau. The consensus is for a 2.0% decrease in durable goods orders.

8:30 AM ET: Chicago Fed National Activity Index for October.

9:45 AM: Chicago Purchasing Managers Index for November. The consensus is for a decrease to 60.5, down from 65.9 in October.

9:55 AM: Reuter's/University of Michigan's Consumer sentiment index (final for November). The consensus is for a reading of 73.3, up from the preliminary reading of 72.0, and up from the October reading of 73.2.

10:00 AM: Conference Board Leading Indicators for October. The consensus is for a 0.1% increase in this index.

----- Thursday, November 28th -----
All US markets will be closed in observance of the Thanksgiving Day Holiday.

----- Friday, November 29th -----
US markets will close at 2:00 PM ET following the Thanksgiving Day Holiday. The NYSE will close at 1:00 PM ET.

by Calculated Risk on 11/23/2013 10:00:00 AM

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

Here is the unofficial problem bank list for November 22, 2013.

Changes and comments from surferdude808:

Another quiet week for the Unofficial Problem Bank List as there was only removal. The OCC terminated the action against Lafayette Savings Bank, FSB, Lafayette, IN ($355 million Ticker: LSBI). After removal, the list holds 654 institutions with assets of $222.8 billion. A year ago, the list held 857 institutions with assets of $329.2 billion. We thought the FDIC would release industry results and the Official Problem Bank List totals for the third quarter, but perhaps that will happen next week along with the FDIC's enforcement action activity through October.

According to SNL Securities, Capitol Bancorp was able to sell its controlling interest in Bank of Maumee, Maumee, OH ($28 million) to Princeton Capital LLC (Princeton Capital completes buy of majority stake in Bank of Maumee). The FDIC issued a cross-guaranty waiver/tolling agreement in 2011 to facilitate the transaction that was set to expire this past Tuesday, November 19, 2013. There are reports of potential buyers other than previously identified Talmer Bancorp, Inc. surfacing that are interested in acquiring some of the remaining banks controlled by Capitol Bancorp.

by Calculated Risk on 11/22/2013 07:28:00 PM

From the WSJ: Weak October Sales Have Home Builders Fretting About Spring

A monthly survey of builders across the U.S. by John Burns Real Estate Consulting, a housing research and advisory firm, has found that respondents’ sales of new homes declined by 8% in October from the September level and by 6% from a year earlier. Last month’s result marked the second consecutive month in which the survey yielded a year-over-year decline in sales volumes, the first dips since early 2011.
...
“October was basically a crummy month for a lot of builders,” said Jody Kahn, a senior vice president at Irvine, Calif.-based Burns. “Their frustration is about the government shutdown and how it probably trumped any seasonal (sales) lift that builders were hoping to see. Most did not have very good sales.”
...
“I think this (slowdown) is a good wakeup call for the industry,” Mr. [Scott Laurie, chief executive of The Olson Co] said. “You can’t just raise prices 2% a month. That doesn’t work. What works is affordability.”

New home sales have been weak for a few months. Part of the reason is that builders have been raising prices significantly, and in October the government shut down probably hurt sales too.  Still 2013 has seen a solid increase in new home sales over 2012, and I'm pretty confident new home sales will continue to increase in 2014.

by Calculated Risk on 11/22/2013 04:00:00 PM

The Department of Transportation (DOT) reported:

◦ Travel on all roads and streets changed by 1.5% (3.7 billion vehicle miles) for September 2013 as compared with September 2012.

◦ Travel for the month is estimated to be 241.7 billion vehicle miles.

◦ Cumulative Travel for 2013 changed by 0.4% (9.8 billion vehicle miles).

The following graph shows the rolling 12 month total vehicle miles driven.

The rolling 12 month total is still mostly moving sideways but has started to increase a little recently.


Click on graph for larger image.

In the early '80s, miles driven (rolling 12 months) stayed below the previous peak for 39 months.

Currently miles driven has been below the previous peak for 70 months - almost 6 years - and still counting.  Currently miles driven (rolling 12 months) are about 2.5% below the previous peak.

The second graph shows the year-over-year change from the same month in the previous year.

Gasoline prices were down in September compared to September 2012. In September 2013, gasoline averaged of $3.60 per gallon according to the EIA. In 2012, prices in September averaged $3.91 per gallon.  (In 2012 there were refinery issues in September).

Gasoline prices were down sharply year-over-year in October, so I expect miles driven to be up in October too.  

As we've discussed, gasoline prices are just part of the story.  The lack of growth in miles driven over the last 6 years is probably also due to the lingering effects of the great recession (high unemployment rate and lack of wage growth), the aging of the overall population (over 55 drivers drive fewer miles) and changing driving habits of young drivers.

With all these factors, it might take a few more years before we see a new peak in miles driven. 

by Calculated Risk on 11/22/2013 12:23:00 PM

From the BLS: Regional and state unemployment rates were little changed in October

Regional and state unemployment rates were little changed in October. Twenty-eight states had unemployment rate decreases from September, 11 states and the District of Columbia had increases, and 11 states had no change, the U.S. Bureau of Labor Statistics reported today.
...
Nevada had the highest unemployment rate among the states in October, 9.3 percent. The next highest rates were in Rhode Island, 9.2 percent, and Michigan, 9.0 percent. North Dakota continued to have the lowest jobless rate, 2.7 percent.

Click on graph for larger image in graph gallery.

This graph shows the current unemployment rate for each state (red), and the max during the recession (blue). All states are below the maximum unemployment rate for the recession.

The size of the blue bar indicates the amount of improvement - Michigan, Nevada and Florida have seen the largest declines and many other states have seen significant declines. 

The states are ranked by the highest current unemployment rate. No state has double digit unemployment and the unemployment rate is at or above 9% in three states: Nevada, Rhode Island and Michigan.

The second graph shows the number of states with unemployment rates above certain levels since January 2006. At the worst of the employment recession, there were 9 states with an unemployment rate above 11% (red).

Currently three states have an unemployment rate at or above 9% (purple), thirteen states at or above 8% (light blue), and 23 states at or above 7% (blue).

by Calculated Risk on 11/22/2013 11:00:00 AM

From the Kansas City Fed: Tenth District Manufacturing Survey Continued to Grow

The Federal Reserve Bank of Kansas City released the November Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that Tenth District manufacturing activity continued to grow, and producers’ expectations for future activity improved moderately.

“Factory activity in our region continues to hum along at a moderate rate of growth” said Wilkerson. “The marked improvement in hiring plans was a nice development"
...
The month-over-month composite index was 7 in November, up from 6 in October and 2 in September ... The new orders index jumped from 3 to 15 ...
emphasis added

In aggregate the regional surveys have suggested slower growth in November. The last of the regional Fed manufacturing surveys for November will be released early next week (Richmond and Dallas Fed).

by Calculated Risk on 11/22/2013 10:00:00 AM

From the BLS: Job Openings and Labor Turnover Summary

There were 3.9 million job openings on the last business day of September, little changed from August, the U.S. Bureau of Labor Statistics reported today. The hires rate (3.4 percent) and separations rate (3.2 percent) were little changed in September. ...
...
Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. ... The number of quits (not seasonally adjusted) increased over the 12 months ending in September for total nonfarm and total private, and was little changed for government. The number of quits rose in several industries. Over the year, quits increased in the Midwest, South, and West regions.

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

This series 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 September, the most recent employment report was for October.

Click on graph for larger image.

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

Jobs openings increased in September to 3.913 million from 3.844 million in August.  The number of job openings (yellow) is up 8.6% year-over-year compared to September 2012 and openings are at the highest level since early 2008.

Quits were mostly unchanged in September and are up about 18% year-over-year. These are voluntary separations. (see light blue columns at bottom of graph for trend for "quits").

Not much changes month-to-month in this report - and the data is noisy month-to-month, but the general trend suggests a gradually improving labor market.

by Calculated Risk on 11/22/2013 08:44:00 AM

According to the First Look report for October to be released today by Lender Processing Services (LPS), the percent of loans delinquent decreased in October compared to September, and declined about 11% year-over-year. Also the percent of loans in the foreclosure process declined further in October and were down 30% over the last year.

LPS reported the U.S. mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) decreased to 6.28% from 6.46% in September. The normal rate for delinquencies is around 4.5% to 5%.

The percent of loans in the foreclosure process declined to 2.54% in October from 2.63% in September.   The is the lowest level since late 2008.

The number of delinquent properties, but not in foreclosure, is down 348,000 properties year-over-year, and the number of properties in the foreclosure process is down 524,000 properties year-over-year.

LPS will release the complete mortgage monitor for October in early December.

LPS: Percent Loans Delinquent and in Foreclosure Process
	October 2013	September 2013	October 2012
Delinquent	6.28%	6.46%	7.03%
In Foreclosure	2.54%	2.63%	3.61%
Number of properties:
Number of properties that are 30 or more, and less than 90 days past due, but not in foreclosure:	1,869,000	1,935,000	1,957,000
Number of properties that are 90 or more days delinquent, but not in foreclosure:	1,283,000	1,331,000	1,543,000
Number of properties in foreclosure pre-sale inventory:	1,276,000	1,328,000	1,800,000
Total Properties	4,427,000	4,593,000	5,300,000

by Calculated Risk on 11/21/2013 07:53:00 PM

From the Financial Times: Fed chair nominee Janet Yellen wins Senate committee backing

US Federal Reserve chair nominee Janet Yellen received approval by the Senate banking committee on Thursday, clearing the way for a full Senate vote possibly before the end of the year.

And here is a clueless comment from Senator Marco Rubio:

"While Dr Yellen is an accomplished individual, I will be voting against her nomination to chair the Fed because of her role as a lead architect in authoring monetary policies that threaten the short and long-term prospects of strong economic growth and job creation."

That is complete nonsense and shows Rubio (and many others) do not understand monetary policy.   Larry Summers is correct: Summers Says History Will Favor Fed's QE `98 to 2'

Friday:
• At 10:00 AM ET, the Job Openings and Labor Turnover Survey for September from the BLS. This results of this survey has been mentioned by Fed Chair nominee Janet Yellen.  In general, the number of job openings has been increasing.

• Also at 10:00 AM, the Regional and State Employment and Unemployment (Monthly) for October 2013.

• At 11:00 AM, the Kansas City Fed manufacturing survey for November. The consensus is for a reading of 6, unchanged from last month (above zero indicates expansion).

by Calculated Risk on 11/21/2013 04:49:00 PM

Economist Tom Lawler sent me an updated table below of short sales, foreclosures and cash buyers for several selected cities in October.

Lawler writes: "Note the low share of short sales relative to foreclosure sales in Florida last month, which reflects the “very aged” nature of the “distressed” property inventory."

From CR: Also note that foreclosures have declined significantly in most areas - but not in Florida. This is probably because of the large backlog of foreclosures in the judicial system.

The All Cash Share (last two columns) is mostly declining year-over-year.   However in certain areas of Florida there is still a significant amount of cash buying (frequently investors, but in Florida this might be foreigners - and maybe some drug related buying).

	Short Sales Share		Foreclosure Sales Share		Total "Distressed" Share		All Cash Share
	Oct-13	Oct-12	Oct-13	Oct-12	Oct-13	Oct-12	Oct-13	Oct-12
Las Vegas	21.0%	44.7%	6.0%	11.6%	27.0%	56.3%	44.9%	54.1%
Reno	16.0%	40.0%	4.0%	12.0%	20.0%	52.0%
Phoenix	8.4%	26.2%	6.9%	12.9%	15.3%	39.1%	31.6%	43.9%
Sacramento	11.4%	35.7%	5.1%	12.0%	16.5%	47.7%	23.9%	36.9%
Minneapolis	5.1%	10.4%	16.4%	24.9%	21.5%	35.3%
Mid-Atlantic	7.9%	9.1%	8.2%	13.0%	16.1%	22.1%	19.9%	20.0%
Orlando	15.1%	29.8%	20.7%	23.2%	35.8%	53.0%
California*	12.6%	26.7%	6.6%	17.1%	19.2%	43.8%
Bay Area CA*	10.3%	22.9%	3.6%	11.7%	13.9%	34.6%	22.8%	29.6%
So. California*	12.9%	27.2%	6.3%	16.3%	19.2%	43.5%	27.5%	32.8%
Florida SF	12.0%	22.6%	19.3%	17.9%	31.3%	40.5%	44.4%	46.5%
Florida C/TH	9.5%	18.4%	17.3%	16.7%	26.9%	35.1%	68.7%	74.3%
Miami MSA SF	16.0%	24.2%	14.9%	16.9%	30.9%	41.1%	46.9%	44.1%
Miami MSA C/TH	11.4%	20.4%	19.5%	16.9%	30.9%	37.4%	73.4%	78.3%
Northeast Florida					35.7%	44.2%
Chicago					34.0%	43.0%
Hampton Roads					25.5%	28.3%
Toledo							37.0%	38.6%
Tucson							32.9%	31.8%
Memphis							39.2%	39.6%
Wichita							30.5%	27.2%
Des Moines							20.2%	21.7%
Peoria							21.1%	23.7%
Omaha							20.0%	20.4%
SE Michigan							34.5%	44.3%
Spokane			13.8%	8.4%
Houston			7.5%	15.5%
Memphis*			18.4%	22.9%
Birmingham AL			21.0%	30.8%
Springfield IL			15.3%	18.4%
*share of existing home sales, based on property records