by Calculated Risk on 1/14/2010 06:15:00 PM

Note: this is not seasonally adjusted. There is a very distinct seasonal pattern for imports, but not for exports. LA area ports handle about 40% of the nation's container port traffic.

Sometimes port traffic gives us an early hint of changes in the trade deficit. The following graph shows the loaded inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container). Although containers tell us nothing about value, container traffic does give us an idea of the volume of goods being exported and imported.

Click on graph for larger image in new window.

Loaded inbound traffic was 2.9% above December 2008. (-9.2% over last three months)

Loaded outbound traffic was 35.9% above December 2008. (+14.5% three months average) This was an easy YoY comparison for exports, because U.S. exports fell off a cliff in November 2008.

It took a little longer for imports to decline sharply because the ships were already underway.

Exports recovered somewhat earlier this year, however export growth has been sluggish since May. Last year (2009) was the 3rd best year for export traffic at LA area ports, behind 2007 and 2008.

For imports, traffic is at about the December 2003 level, and 2009 was the weakest year for import traffic since 2002.

Note: Imports usually peak in the August through October period (as retailers import goods for the holidays) and then decline at the end of the year.

by Calculated Risk on 1/14/2010 03:48:00 PM

From HotelNewsNow.com: STR: Los Angeles-Long Beach leads weekly numbers

Overall, in year-over-year measurements, the industry’s occupancy decreased 3.9 percent to end the week at 40.5 percent. ADR dropped 6.8 percent to finish the week at US$91.85. RevPAR for the week fell 10.4 percent to finish at US$37.21.

Click on graph for larger image in new window.

This graph shows the occupancy rate by week for 2008, 2009 and 2010 - plus an average (dashed line) for 2005 through 2007.

2010 is in Red - and it has just started (see far left).

Notes: the scale doesn't start at zero to better show the change.

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

The above graph shows two key points:

This is a multi year slump for the hotel industry. Although occupancy is off 3.9% compared to 2009, occupancy is off about 17% compared to the 2005 through 2007 average.

There is a distinct seasonal pattern for the occupancy rate. The occupancy rate is higher in the summer (because of leisure travel), and lower on certain holidays.

The HotelNewsNow press release also has this graph on occupancy variance compared to 2009.

This shows that business travel (mid-week) was off more than leisure travel (weekends).

Business travel fell off a cliff in late 2008 with the financial crisis, and has been off significantly more than leisure travel. It is surprising, given the easy comparison to 2009, mid-week travel is still off more than weekend travel. This is something to watch carefully.

This is just one week, but it suggests businesses might still be tightening their travel budgets.

by Calculated Risk on 1/14/2010 01:07:00 PM

From Treasury: Fact Sheet: Financial Crisis Responsibility Fee

Today, the President announced his intention to propose a Financial Crisis Responsibility Fee that would require the largest and most highly levered Wall Street firms to pay back taxpayers for the extraordinary assistance provided so that the TARP program does not add to the deficit. The fee the President is proposing would:

Require the Financial Sector to Pay Back For the Extraordinary Benefits Received: ...

Responsibility Fee Would Remain in Place for 10 Years or Longer if Necessary to Fully Pay Back TARP:

Raise Up to $117 Billion to Repay Projected Cost of TARP:

President Obama is Fulfilling His Commitment to Provide a Plan for Taxpayer Repayment Three Years Earlier Than Required: ...

Apply to the Largest and Most Highly Levered Firms: The fee the President is proposing would be levied on the debts of financial firms with more than $50 billion in consolidated assets ... Over sixty percent of revenues will most likely be paid by the 10 largest financial institutions.

There is much more detail at the link. The proposed fee would be 15 bps of covered liabilities per year.

by Calculated Risk on 1/14/2010 11:33:00 AM

Update: Why are so many examples "mortgage brokers"? But the part about extensions not doing favors for homeowners is correct.

From Paul Kiel at ProPublica: Homeowners Say Banks Not Following Rules for Loan Modifications

A few excerpts:

Reynolds was a prime candidate for a loan adjustment and was among the earliest homeowners to receive a trial modification.

His mortgage brokerage business had followed the market downward, and as a result, he’d fallen three months behind on his interest-only mortgage. ...

Soon after the loan program was announced last February, Reynolds applied. He received an application in late April and was accepted, making his first payment of about $2,400 (down from $3,300) in May. He made six more payments. ... [In late November, he received an answer: He was denied a permanent loan modification.

The reason? A Chase employee explained to Reynolds that they’d determined his financial difficulties weren’t permanent. In his application, he’d written that he believed that the government’s rescue efforts would “save the U.S. housing market” and that his business “will once again be profitable.” The Chase employee told him that statement indicated his hardship was only temporary.
...
Chase spokeswoman Christine Holevas told ProPublica that Reynolds had been denied "because the skill and ability is still there to earn the income." Since he’d "stated in his letter that business would be picking up," it was "not considered a permanent hardship," Holevas said.
emphasis added

Just an anecdote, but one of many. And on the length of the trial period:

[T]rial modifications routinely last more than six months, homeowners and housing advocates say.

There are a number of adverse consequences of a trial period’s dragging on, said the consumer law center’s Thompson. Because a homeowner is not making a full payment, the balance of the mortgage grows during the trial period. The servicer reports the shortfall to credit reporting agencies, so the homeowner’s credit score can drop. And most importantly, says Thompson, the homeowner isn’t saving money in case the modification fails and the home is foreclosed. "Keeping someone in a trial modification really does not do them a favor," she said.

The trial period was extended last year from 3 months to 5 months, probably because of the low conversion rate to permanent status, and then extended again in late December to at least the end of January. This isn't doing any favors for the homeowners that will eventually be rejected.

As I've noted before, HAMP is a fine modification program for the people that qualify and aren't deep underwater on their homes - AND actually get a permanent modification! (added) However the program was oversold - I doubt this program will "reach up to 3 to 4 million at-risk homeowners" as Treasury originally projected. So too many homeowners were allowed in the trial programs without sufficient pre-screening - and the program was started before servicers were really ready.

by Calculated Risk on 1/14/2010 08:55:00 AM

On a monthly basis, retail sales decreased 0.3% from November to December (seasonally adjusted), and sales were up 5.4% from December 2008 (easy comparison).

Click on graph for larger image in new window.

This graph shows retail sales since 1992. This is monthly retail sales, seasonally adjusted (total and ex-gasoline).

This shows that retail sales fell off a cliff in late 2008, and appear to have bottomed, but at a much lower level.

The red line shows retail sales ex-gasoline and shows there has been only a little increase in final demand.

The second graph shows the year-over-year change in retail sales since 1993.

Retail sales increased by 5.4% on a YoY basis. The year-over-year comparisons are much easier now since retail sales collapsed in October 2008. Retail sales bottomed in December 2008.

Here is the Census Bureau report:

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for December, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $353.0 billion, a decrease of 0.3 percent (±0.5%)* from the previous month, but 5.4 percent (±0.5%) above December 2008. Total sales for the 12 months of 2009 were down 6.2 percent (±0.2%) from 2008. Total sales for the October through December 2009 period were up 1.9 percent (±0.3%) from the same period a year ago. The October to November 2009 percent change was revised from +1.3 percent (±0.5%) to +1.8 percent (±0.2%).

It appears retail sales might have bottomed, and there has been little pickup in final demand.

by Calculated Risk on 1/14/2010 08:30:00 AM

The DOL reports on weekly unemployment insurance claims:

In the week ending Jan. 9, the advance figure for seasonally adjusted initial claims was 444,000, an increase of 11,000 from the previous week's revised figure of 433,000. The 4-week moving average was 440,750, a decrease of 9,000 from the previous week's revised average of 449,750.
...
The advance number for seasonally adjusted insured unemployment during the week ending Jan. 2 was 4,596,000, a decrease of 211,000 from the preceding week's revised level of 4,807,000.

Click on graph for larger image in new window.

This graph shows the 4-week moving average of weekly claims since 1971.

The four-week average of weekly unemployment claims decreased this week by 9,000 to 440,750. This is the lowest level since August 2008.

The decline in the 4-week average is good news, although the level is still relatively high and suggests continued job losses, or at best, minimal job gains. The current level is still mostly above the level of the previous two "jobless" recoveries.

by Calculated Risk on 1/14/2010 12:43:00 AM

Press Release: RealtyTrac® year-end report shows record 2.8 million U.S. Properties with foreclosure filings in 2009 (ht Ann)

RealtyTrac® ... today released its Year-End 2009 Foreclosure Market Report™, which shows a total of 3,957,643 foreclosure filings — default notices, scheduled foreclosure auctions and bank repossessions — were reported on 2,824,674 U.S. properties in 2009, a 21 percent increase in total properties from 2008 and a 120 percent increase in total properties from 2007. The report also shows that 2.21 percent of all U.S. housing units (one in 45) received at least one foreclosure filing during the year, up from 1.84 percent in 2008, 1.03 percent in 2007 and 0.58 percent in 2006.

Foreclosure filings were reported on 349,519 U.S. properties in December, a 14 percent jump from the previous month and a 15 percent increase from December 2008 — when a similar monthly jump in foreclosure activity occurred. Despite the increase in December, foreclosure activity in the fourth quarter decreased 7 percent from the third quarter, although it was still up 18 percent from the fourth quarter of 2008.

“As bad as the 2009 numbers are, they probably would have been worse if not for legislative and industry-related delays in processing delinquent loans,” said James J. Saccacio, chief executive officer of RealtyTrac
emphasis added

AP is reporting that RealtyTrac expects 3 to 3.5 million foreclosures in 2010.

There should be a pickup in foreclosure activity in February when the trial modifications end, however I think the themes in 2010 will be short sales (although NODs¹ count as filings) and higher priced foreclosures (but fewer in that range) - so the total filings in 2010 might be a little lower than RealtyTrac expects - but it will definitely be a busy year.

¹NODs: Notice of Default

by Calculated Risk on 1/13/2010 10:04:00 PM

From Jon Stewart at the Daily Show (click here if embed doesn't load) (ht MrM)

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
Clusterf#@k to the Poor House - Wall Street Bonuses
www.thedailyshow.com
Daily Show Full Episodes Political Humor Health Care Crisis

by Calculated Risk on 1/13/2010 07:05:00 PM

From Bloomberg: California’s Credit Cut by S&P Amid Budget Deficit

California’s credit rating on $64 billion of general obligation bonds was cut by Standard & Poor’s today as [California] faces strains over a $20 billion budget deficit.

... the rating was lowered one level to A-, the seventh-highest investment grade. ... the company has a negative outlook on California debt, a sign its standing may decline further. ... S&P’s cut brings its rating on California closer to that of Moody’s Investors Service and Fitch Ratings. Moody’s rates the state Baa1 and Fitch at BBB.

More from Tom Petruno at the LA Times: California's debt rating cut to A-minus by S & P on budget woes

S&P worries that the state could face a cash crunch in March, before it receives the income tax payments due in April.

"There could be days in March when they go into a negative cash position," said Gabriel Petek, an S&P analyst in San Francisco.

Although Petek said he didn't believe California would be in jeopardy of missing any payments due on its debt, he said the government might again pay other obligations with IOUs, or the state might again require a short-term loan from Wall Street.

Possibly more IOU fun for California!

by Calculated Risk on 1/13/2010 03:25:00 PM

From The Times: Britain's recession the steepest for 88 years

Britain's economy fell last year at the sharpest rate since 1921, despite hopes that it finally emerged from recession in the last three months of the year, according to a respected economics forecaster.

The National Institute of Economic and Social Research (NIESR) said today that its latest estimate showed that GDP rose by a modest 0.3 per cent in the final three months of 2009 compared with the third quarter.

That means that, for the year as a whole, the economy contracted by 4.8 per cent, a bigger fall than in any year of the Great Depression and the biggest contraction for 88 years.

Wow. The largest one year decline since 1921. Of course, during the Depression, there were a number of bad years in a row.

And from Statistischen Bundesamtes Deutschland: Germany experiencing serious recession in 2009 (ht Uwe)

Click on graph for larger image in new window.

The German economy shrank in 2009 for the first time in six years. With –5.0%, the decline in the price-adjusted gross domestic product (GDP) was larger than ever since World War II. This is shown by first calculations of the Federal Statistical Office (Destatis). The economic slump occurred mainly in the winter half-year of 2008/2009. Over the year, there were signs that the economic development would slightly stabilise on the new, lower level.