by Calculated Risk on 9/22/2014 08:30:00 AM

The Chicago Fed released the national activity index (a composite index of other indicators): Index shows economic growth decelerated in August

Led by declines in production-related indicators, the Chicago Fed National Activity Index (CFNAI) decreased to –0.21 in August from +0.26 in July. Two of the four broad categories of indicators that make up the index decreased from July, and two of the four categories made negative contributions to the index in August.

The index’s three-month moving average, CFNAI-MA3, decreased to +0.07 in August from +0.20 in July, marking its sixth consecutive reading above zero. August’s CFNAI-MA3 suggests that growth in national economic activity was somewhat above its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests limited inflationary pressure from economic activity over the coming year.
emphasis added

This graph shows the Chicago Fed National Activity Index (three month moving average) since 1967.

Click on graph for larger image.

This suggests economic activity was slightly above the historical trend in August (using the three-month average).

According to the Chicago Fed:

What is the National Activity Index? The index is a weighted average of 85 indicators of national economic activity drawn from four broad categories of data: 1) production and income; 2) employment, unemployment, and hours; 3) personal consumption and housing; and 4) sales, orders, and inventories.

A zero value for the index indicates that the national economy is expanding at its historical trend rate of growth; negative values indicate below-average growth; and positive values indicate above-average growth.

by Calculated Risk on 9/21/2014 08:38:00 PM

Another excellent article from Nick Timiraos at the WSJ: Should Mortgage Lending Standards Ease?

Easy credit fueled the home-price bubble of the past decade, which spurred overbuilding of homes and boosted consumer spending on everything from cars to college educations. Mortgage investors suffered huge losses after prices collapsed, and private lending markets have struggled to revive. Banks now are sharply limiting their mortgage offerings.

Subprime auto lending, by comparison, contracted sharply during the recession but has roared back—at a pace nearly four times that of prime lending over the past four years.

Auto lending has rebounded in part because investors didn't take the drubbing that mortgage investors did. Loans are smaller, cars can be repossessed faster than homes when borrowers default, and the collateral is easier to value. Car sales have also been fueled by an aging fleet that has resulted in pent-up demand.

Monday:
• At 8:30 AM ET, the Chicago Fed National Activity Index for August. This is a composite index of other data.

• At 10:00 AM, Existing Home Sales for August from the National Association of Realtors (NAR). The consensus is for sales of 5.18 million on seasonally adjusted annual rate (SAAR) basis. Sales in July were at a 5.15 million SAAR. Economist Tom Lawler estimates the NAR will report sales of 5.12 million SAAR.

Weekend:
• Schedule for Week of September 21st

From CNBC: Pre-Market Data and Bloomberg futures: the S&P futures are down slightly and DOW futures are up slightly (fair value).

Oil prices were up over the last week with WTI futures at $92.41 per barrel and Brent at $98.08 per barrel.  A year ago, WTI was at $104, and Brent was at $110 - so prices are down 10%+ year-over-year.

Below is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are around $3.35 per gallon (down almost 15 cents from a year ago).  If you click on "show crude oil prices", the graph displays oil prices for WTI, not Brent; gasoline prices in most of the U.S. are impacted more by Brent prices.

Orange County Historical Gas Price Charts Provided by GasBuddy.com

by Calculated Risk on 9/21/2014 12:13:00 PM

From HotelNewsNow.com: STR: US results for week ending 13 September

The U.S. hotel industry recorded positive results in the three key performance measurements during the week of 7-13 September 2014, according to data from STR.

In year-over-year measurements, the industry’s occupancy rate rose 4.5 percent to 68.0 percent. Average daily rate increased 6.9 percent to finish the week at US$117.73. Revenue per available room for the week was up 11.8 percent to finish at US$80.04.
emphasis added

Note: ADR: Average Daily Rate, RevPAR: Revenue per Available Room.

The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

There is always a dip in occupancy after the summer (less leisure travel), and business travel should pick up soon.

Click on graph for larger image.

The red line is for 2014, blue is the median, and black is for 2009 - the worst year since the Great Depression for hotels.  Purple is for 2000.

The 4-week average of the occupancy rate is solidly above the median for 2000-2007, and is at about the level as for the same week in 2000 (the previous high). 

Right now it looks like 2014 will be the best year since 2000 for hotels.   Since it takes some time to plan and build hotels, I expect 2015 will be a record year for hotel occupancy. Note: Smith Travel analysts say that supply growth will pickup next year, but remain relatively slow, "hotel supply growth in the United States is forecast to be 1% this year and 1.3% in 2015".

Data Source: Smith Travel Research, Courtesy of HotelNewsNow.com

by Calculated Risk on 9/20/2014 01:11:00 PM

The key reports this week are August New home sales on Wednesday, Existing home sales on Monday, and the third estimate of Q2 GDP on Friday.

For manufacturing, the September Richmond and Kansas City Fed surveys will be released this week.

----- Monday, September 22nd -----
8:30 AM ET: Chicago Fed National Activity Index for August. This is a composite index of other data.

10:00 AM: Existing Home Sales for August from the National Association of Realtors (NAR).

The consensus is for sales of 5.18 million on seasonally adjusted annual rate (SAAR) basis. Sales in July were at a 5.15 million SAAR. Economist Tom Lawler estimates the NAR will report sales of 5.12 million SAAR.

A key will be the reported year-over-year increase in inventory of homes for sale.

----- Tuesday, September 23rd -----
9:00 AM: FHFA House Price Index for July. This was original a GSE only repeat sales, however there is also an expanded index. The consensus is for a 0.4% increase.

10:00 AM: Richmond Fed Survey of Manufacturing Activity for September.

----- Wednesday, September 24th -----
7:00 AM: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

10:00 AM: New Home Sales for August from the Census Bureau.

This graph shows New Home Sales since 1963. The dashed line is the July sales rate.

The consensus is for an increase in sales to 430 thousand Seasonally Adjusted Annual Rate (SAAR) in August from 412 thousand in July.

During the day: The AIA's Architecture Billings Index for August (a leading indicator for commercial real estate).

----- Thursday, September 25th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for claims to increase to 300 thousand from 280 thousand.

8:30 AM: Durable Goods Orders for August from the Census Bureau. The consensus is for a 17.1% decrease in durable goods orders (last month durable goods orders were up 22.6% due to aircraft orders).

11:00 AM: the Kansas City Fed manufacturing survey for September.

----- Friday, September 26th -----
8:30 AM: Gross Domestic Product, 2nd quarter 2014 (third estimate). The consensus is that real GDP increased 4.6% annualized in Q2, up from 4.2% in the second estimate.

9:55 AM: Reuter's/University of Michigan's Consumer sentiment index (final for September). The consensus is for a reading of 84.6, unchanged from the preliminary reading of 84.6, and up from the August reading of 82.5.

by Calculated Risk on 9/20/2014 08:05:00 AM

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

Here is the unofficial problem bank list for Sept 19, 2014.

Changes and comments from surferdude808:

Only one addition and deletion to report this week to the Unofficial Problem Bank List. So the list count stays steady at 435 institutions but assets move down slightly to $137.4 billion. A year ago, the list held 692 institutions with assets of $242.9 billion. This is the fourth time since November 2012 the weekly list count has gone unchanged otherwise the week-to-week list count has been declining since August 10, 2012.

This week the OCC terminated its actions against The First National Bank and Trust, Atmore, AL ($130 million). Added this week was Fayette County Bank, St. Elmo, IL ($53 million). Notice of this action came from the Illinois Department of Financial & Professional Regulation, which is one of the few state banking departments in the nation to provide transparency around its enforcement actions against commercial banks. So we give them major props and wish that all of their state brethren be as transparent.

Next week, we anticipate the FDIC will provide an update on its enforcement action activities.

CR Note: The first unofficial problem bank list was published in August 2009 with 389 institutions. The list peaked at 1,002 institutions on June 10, 2011, and is now down to 435.