by Calculated Risk on 11/25/2024 09:50:00 AM

An interesting paper from researchers at the NY Fed: The Financial Stability Implications of Digital Assets Here is the overview:

• This article considers the potential vulnerabilities associated with the digital asset ecosystem, adapting the Federal Reserve’s framework for assessing financial stability risks in the traditional financial system.

• In particular, it examines the potential channels through which stress in crypto­-asset markets could be transmitted to the traditional financial system and ultimately disrupt the real economy.

• The authors argue that, to date, the contribution of digital assets to systemic risk has been limited, given that the digital ecosystem is relatively small and not a major provider of financing and payment services to the real economy.

• However, the observed fragility in the digital asset space is associated with vulnerabilities that could destabilize the broader financial system if the digital ecosystem becomes more systemic
emphasis added

Many years ago, after the financial crisis, I warned "Each new generation of ... wizards figures out a new way to turn lead into gold, and to become wealthy while damaging the financial system. Some of these wizards are probably perfecting their financial alchemy right now."  

by Calculated Risk on 11/24/2024 08:01:00 PM

Weekend:
• Schedule for Week of November 24, 2024

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

• At 10:30 AM, Dallas Fed Survey of Manufacturing Activity for November.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 areup 25 and DOW futures are up 232 (fair value).

Oil prices were up over the last week with WTI futures at $71.24 per barrel and Brent at $75.17 per barrel. A year ago, WTI was at $75, and Brent was at $80 - so WTI oil prices are down about 5% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.03 per gallon. A year ago, prices were at $3.24 per gallon, so gasoline prices are down $0.21 year-over-year.

by Calculated Risk on 11/24/2024 08:21:00 AM

From STR: U.S. hotel results for week ending 16 November

Due to the Veteran’s Day calendar shift, the U.S. hotel industry reported mixed year-over-year performance comparisons, according to CoStar’s latest data through 16 November. ...

10-16 November 2024 (percentage change from comparable week in 2023):

• Occupancy: 63.3% (+1.5%)
• Average daily rate (ADR): US$154.96 (-1.1%)
• Revenue per available room (RevPAR): US$98.11 (+0.4%)
emphasis added

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

Click on graph for larger image.

The red line is for 2024, blue is the median, and dashed light blue is for 2023.  Dashed purple is for 2018, the record year for hotel occupancy. 

The 4-week average of the occupancy rate is above both last year and the median rate for the period 2000 through 2023 (Blue) - and will likely finish mostly unchanged year-over-year.

Note: Y-axis doesn't start at zero to better show the seasonal change.

The 4-week average of the occupancy rate has peaked for the fall business travel season and will decline seasonally through the holidays.

by Calculated Risk on 11/23/2024 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• NAR: Existing-Home Sales Increased to 3.96 million SAAR in October

• Housing Starts Decreased to 1.311 million Annual Rate in October

• Preliminary 2025 Housing Forecasts

• California Home Sales Up 9.5% SA YoY in October

• 3rd Look at Local Housing Markets in October

This is usually published 4 to 6 times a week and provides more in-depth analysis of the housing market.

by Calculated Risk on 11/23/2024 08:11:00 AM

The key reports this week include the 2nd estimate of Q3 GDP and October New Home Sales.

Other key indicators include the September Case-Shiller and FHFA house price indexes, and October Personal Income & Outlays (and PCE).

----- Monday, November 25th -----
8:30 AM ET: Chicago Fed National Activity Index for October. This is a composite index of other data.

10:30 AM: Dallas Fed Survey of Manufacturing Activity for November.

----- Tuesday, November 26th -----
9:00 AM ET: S&P/Case-Shiller House Price Index for September.

This graph shows graph shows the Year over year change in the seasonally adjusted National Index, Composite 10 and Composite 20 indexes through the most recent report (the Composite 20 was started in January 2000).

The National index was up 4.2% YoY in August and is expected to increase about the same in September.

9:00 AM: FHFA House Price Index for September. This was originally a GSE only repeat sales, however there is also an expanded index. The Conforming loan limits for next year will also be announced.

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

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

The consensus is for 730 thousand SAAR, down from 738 thousand in September.

10:00 AM: Richmond Fed Survey of Manufacturing Activity for November. This is the last of the regional Fed manufacturing surveys for November.

2:00 PM: FOMC Minutes, Minutes Meeting of November 6-7, 2024

----- Wednesday, November 27th -----
7:00 AM ET: 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 220 thousand initial claims, up from 213 thousand last week.

8:30 AM: Gross Domestic Product (Second Estimate) and Corporate Profits (Preliminary), 3rd Quarter 2024. The consensus is that real GDP increased 2.8% annualized in Q3, unchanged from the advance estimate of 2.8% in Q3.

8:30 AM: Durable Goods Orders for October from the Census Bureau. The consensus is for a 0.1% increase in durable goods orders.

9:45 AM: Chicago Purchasing Managers Index for November.

10:00 AM: Personal Income and Outlays, October 2024. The consensus is for a 0.3% increase in personal income, and for a 0.4% increase in personal spending. And for the Core PCE price index to increase 0.3%.  PCE prices are expected to be up 2.1% YoY, and core PCE prices up 2.7% YoY.

10:00 AM: Pending Home Sales Index for October.

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

----- Friday, November 29th -----
The NYSE and the NASDAQ will close early at 1:00 PM ET.

by Calculated Risk on 11/22/2024 07:11:00 PM

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

For deaths, I'm currently using 4 weeks ago for "now", since the most recent three weeks will be revised significantly.

Note: "Effective May 1, 2024, hospitals are no longer required to report COVID-19 hospital admissions, hospital capacity, or hospital occupancy data."  So I'm no longer tracking hospitalizations.

COVID Metrics
	Now	Week Ago	Goal
Deaths per Week	597	703	≤3501
1my goals to stop weekly posts, 🚩 Increasing number weekly for Deaths ✅ Goal met.

Click on graph for larger image.

This graph shows the weekly (columns) number of deaths reported.

Although weekly deaths met the original goal to stop posting, I'm continuing to post now that deaths are above the goal again.  

Weekly deaths are now declining and will likely continue to decline based on wastewater sampling but are still almost double the low of 302 in early June.

And here is a graph I'm following concerning COVID in wastewater as of November 21st:

This appears to be a leading indicator for COVID hospitalizations and deaths.

COVID in wastewater is fairly low - only about 18% higher than the lows of last May - suggesting weekly deaths will continue to decline.

by Calculated Risk on 11/22/2024 05:18:00 PM

From WardsAuto: November U.S. Light-Vehicle Sales to Improve on October’s Growth (pay content).  Brief excerpt:

November’s forecast SAAR of 16.2 million units is the highest since May 2021. With the month having an atypical fifth weekend, the extended timeframe means there is more upside than downside to November’s forecast – especially with retail volume already showing solid growth.
emphasis added

Click on graph for larger image.

This graph shows actual sales from the BEA (Blue), and Wards forecast for November (Red).

On a seasonally adjusted annual rate basis, the Wards forecast of 16.2 million SAAR, would be up 1.0% from last month, and up 4.8% from a year ago.

by Calculated Risk on 11/22/2024 12:34:00 PM

From Goldman:

We left our Q4 GDP tracking estimate unchanged at +2.4% (quarter-over-quarter annualized) but boosted our Q4 domestic final sales forecast by 0.1pp to +2.0%. Our Q3 past-quarter tracking estimate stands at +2.9% (vs. 2.8% originally reported, quarter-over-quarter annualized). [Nov 21st estimate]
emphasis added

And from the Atlanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2024 is 2.6 percent on November 19, up from 2.5 percent on November 15. After this morning's housing starts report from the US Census Bureau, the nowcast of fourth-quarter real residential fixed investment growth increased from -1.2 percent to 0.1 percent. [Nov 19th estimate]

by Calculated Risk on 11/22/2024 10:18:00 AM

Today, in the CalculatedRisk Real Estate Newsletter: Preliminary 2025 Housing Forecasts

Excerpt:

Towards the end of each year, I collect some housing forecasts for the following year - and also provide my own outlook. Several more forecast will be available in early December.
...
The table below shows several early forecasts for 2025:

A few points from these early forecasts:

1. Forecasters expect house prices to increase next year in the low-to-mid single digits.

2. Everyone expects multi-family starts to stay depressed in 2025.

3. Everyone expects both new and existing home sales to increase in 2025, although existing home sales are expected to remain in the low 4 million range.

by Calculated Risk on 11/22/2024 08:11:00 AM

The new administration is talking about cutting the number of federal government employees.

This raises the question of how many people are employed by the Federal government?

The following data is from the BLS and does not include military personnel.

The first graph shows total government employment (Federal, State and Local).

Click on graph for larger image.

First, most government employees are local (police officers, fire department, etc), followed by state employees.  There are almost 15 million local government employees and 5.5 million state government employees. 

Approximately half of the state and local employees work in education (teachers!)

The Federal government has about 3.0 million employees.  Note that the spikes in Federal employment are for decennial Census.

The second graph shows total Federal employees, and Federal employees excluding postal workers since 1960.

Once again, the spikes are the decennial Census!

Currently there are just over 600 thousand postal workers, and just under 2.4 million other federal employees.

The Federal government has outsourced some functions to the private sector.

The third graph shows Federal employment as a percent of total employment.

Federal employment was around 4.3% of total employment in 1960 and is now down to 1.9%.

Just some numbers and graphs to keep in mind during the discussion of federal employment cuts.