by Calculated Risk on 5/22/2012 08:48:00 AM

From the Financial Times: OECD joins call for eurozone bonds

The Organization for Economic Co-operation and Development has joined French and EU officials in calling for a move towards jointly-guaranteed euro bonds ...

Speaking to the Financial Times, Pier Carlo Padoan, the OECD deputy secretary general and chief economist, said fiscal consolidation alone without other elements of a “growth compact” could ruin chances of a longer-term economic union.

“We need to get on the path towards the issuance of euro bonds sooner rather than later,” he said.
excerpts with permission

Earlier from the Financial Times: France to push for eurozone bonds

France is determined to push the idea of jointly guaranteed bonds as a new form of borrowing for eurozone countries despite Germany’s opposition, Pierre Moscovici, finance minister, said in Berlin on Monday.

Speaking after a first intensive meeting with Wolfgang Schäuble, his German counterpart, Mr Moscovici confirmed that François Hollande, the newly elected French president, would include the concept as part of a package of growth measures to be debated by European leaders at an informal summit on Wednesday.

Update: From the WSJ: IMF Chief, OECD Call For More Euro Debt Sharing

International Monetary Fund head Christine Lagarde Tuesday called on euro-zone governments to accept more common liability for each other's debts, saying that the region urgently needs to take further steps to contain the crisis.

"We consider that more needs to be done, particularly by way of fiscal liability-sharing, and there are multiple ways to do that," Ms. Lagarde told a press conference in London to mark the completion of a regular review of U.K. finances.

by Calculated Risk on 5/21/2012 09:31:00 PM

• Existing home sales for April will be released by the National Association of Realtors (NAR) at 10 AM ET. Existing home sales were at a 4.48 million seasonally adjusted annual rate in March, and the consensus is that sales increased to 4.66 million in April. Housing economist Tom Lawler is forecasting the NAR will report sales of 4.53 million.

Inventory will be closely watched. The NAR reported inventory at 2.37 million in March, and usually inventory increases sharply in April. The median increase from March to April over the last 10 years was 8%. Other sources suggest a smaller than normal seasonal increase, but as Tom Lawler noted last week: "for some reason the NAR’s inventory number in April has for many years shown a much larger monthly gain than listings data might suggest ...", and Lawler is projecting the NAR will report a 6.8% increase for April.

• Also at 10:00 AM, the Richmond Fed will release the regional Survey of Manufacturing Activity for May. The consensus is for a decrease to 11 for this survey from 14 in April (above zero is expansion).

For the monthly economic question contest:

by Calculated Risk on 5/21/2012 04:45:00 PM

LPS released their First Look report for April today. LPS reported that the percent of loans delinquent increased slightly in April from March, and declined year-over-year. The percent of loans in the foreclosure process was unchanged and remained at a very high level.

LPS reported the U.S. mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) increased to 7.12% from 7.09% in March. The percent of delinquent loans is still significantly above the normal rate of around 4.5% to 5%. The percent of delinquent loans peaked at 10.97%, so delinquencies have fallen over half way back to normal. Note: There is a seasonal pattern for delinquencies, and it is not unusual to see an increase in April after a sharp decline in March.

The following table shows the LPS numbers for April 2012, and also for last month (March 2012) and one year ago (April 2011).

LPS: Percent Loans Delinquent and in Foreclosure Process
	Apr-12	Mar-12	Apr-11
Delinquent	7.12%	7.09%	7.97%
In Foreclosure	4.14%	4.14%	4.14%
Number of loans:
Loans Less than 90 days	1,927,000	1,888,000	2,243,000
Loans More than 90 days	1,595,000	1,643,000	1,961,000
Loans In foreclosure	2,048,000	2,060,000	2,184,000
Total	5,570,000	5,591,000	6,388,000

The number of delinquent loans is down about 16% year-over-year (682,000 fewer mortgages delinquent), and the number of loans in the foreclosure process is down 136,000 year-over-year (the percent in foreclosure is unchanged, but the number of total loans has declined).

The percent of loans less than 90 days delinquent is about normal, but the percent (and number) of loans 90+ days delinquent and in the foreclosure process are still very high.

by Calculated Risk on 5/21/2012 02:34:00 PM

The Department of Transportation (DOT) reported:

Travel on all roads and streets changed by +0.9% (2.3 billion vehicle miles) for March 2012 as compared with March 2011. Travel for the month is estimated to be 251.4 billion vehicle miles.

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

Even with the year-over-year increase in March, the rolling 12 month total is mostly moving sideways.

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 52 months - and still counting.

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

This is the fourth consecutive month with a year-over-year increase in miles driven.

Even though gasoline prices were up sharply earlier this year, prices also increased quickly last year in March and April - so we might not see a year-over-year decline in miles driven in the coming months.

The lack of growth in miles driven over the last 4+ years is probably due to a combination of factors: the great recession and the lingering effects, the high price of gasoline - and the aging of the overall population.

As I noted last month, HS Dent has a graph of gasoline demand by age (see page 13 of Age of Consumer demand curves based on Census Bureau data) - and this data shows that gasoline demand peaks around age 50 and then starts to decline. So the flattening of miles driven is probably, at least partially, another impact from the aging of the baby boomers (ht Brian).

by Calculated Risk on 5/21/2012 11:18:00 AM

In addition to Case-Shiller, CoreLogic, and LPS, I'm also watching the FNC, Zillow and RadarLogic indexes.

FNC released their March index data today. FNC reported that their Residential Price Index™ (RPI) indicates that U.S. residential property values increased 0.5% in March (Composite 100 index). The other RPIs (10-MSA, 20-MSA, 30-MSA) increased about 0.8% in March. These indices are for non-distressed home sales (excluding foreclosure auction sales, REO sales, and short sales).

The year-over-year trends continued to show improvement in March, with the Composite 100 index down only 2.4% compared to March 2011. This is the smallest year-over-year decline in the FNC index since 2007.

The year-to-year declines in the largest housing markets, as indicated by the 10- and 30-MSA composites, are now below 3.0%, the slowest year-over-year decline since 2007.

Click on graph for larger image.

This graph is based on the FNC index (four composites) through March 2012. The FNC indexes are hedonic price indexes using a blend of sold homes and real-time appraisals.

The indexes are showing less of a year-over-year decline in March. If house prices have bottomed, the year-over-year decline should turn positive later this year or early in 2013.

The March Case-Shiller index will be released next Tuesday.

by Calculated Risk on 5/21/2012 08:44:00 AM

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

Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) rose to +0.11 in April from –0.44 in March. ...

The index’s three-month moving average, CFNAI-MA3, ticked down to –0.06 in April from +0.02 in March, falling below zero for the first time since November 2011. April’s CFNAI-MA3 suggests that growth in national economic activity was near its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year.

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

Click on graph for larger image.

This suggests growth was near trend in April.

According to the Chicago Fed:

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 5/20/2012 10:49:00 PM

There are no major economic releases scheduled for Monday. Atlanta Fed President Dennis Lockhart speaks in Tokyo on monetary policy at 5:15 AM ET, and at 8:30 AM, the Chicago Fed National Activity Index for April is scheduled to be released.

The Asian markets are mixed tonight. The Nikkei is up about 0.3%, and the Shanghai Composite is down 0.4%. On China, here is a worrisome article from the Financial Times: China buyers defer raw material cargos

Chinese consumers of thermal coal and iron ore are asking traders to defer cargos and – in some cases – defaulting on their contracts, in the clearest sign yet of the impact of the country’s economic slowdown on the global raw materials markets.

The deferrals and defaults have only emerged in the last few days ...
Excerpt with permission

From CNBC: Pre-Market Data and Bloomberg futures: the S&P 500 futures are up about 5, and Dow futures are up 40.

Oil: WTI futures are down to $91.49 (this is down from $109.77 in February) and Brent is at $107.24 per barrel.

Yesterday:
• Summary for Week Ending May 18th
• Schedule for Week of May 20th

For the monthly economic question contest (for data to be released Tuesday, Wednesday and Friday):

by Calculated Risk on 5/20/2012 02:32:00 PM

The Depression led to an effort to enhance and expand data collection on employment, and I was hoping the housing bubble and bust would lead to a similar effort to collect better housing related data. From the BLS history:

[T]he growing crisis [the Depression], spurred action on improving employment statistics. In July [1930], Congress enacted a bill sponsored by Senator Wagner directing the Bureau to "collect, collate, report, and publish at least once each month full and complete statistics of the volume of and changes in employment." Additional appropriations were provided.

In the early stages of the Depression, policymakers were flying blind. But at least they recognized the need for better data, and took action. All business people know that when there is a problem, a key first step is to measure the problem. That is why I've been a strong supporter of trying to improve data collection on the number of households, vacant housing units, foreclosures and more.

But unfortunately some people want to eliminate a key source of data ...

From Matthew Philips at Businessweek: Killing the American Community Survey Blinds Business

On May 9 the House voted to kill the American Community Survey, which collects data on some 3 million households each year and is the largest survey next to the decennial census. The ACS—which has a long bipartisan history, including its funding in the mid-1990s and full implementation in 2005—provides data that help determine how more than $400 billion in federal and state funds are spent annually. Businesses also rely heavily on it to do such things as decide where to build new stores, hire new employees, and get valuable insights on consumer spending habits. Check out this video of Target (TGT) executives talking about how much they use ACS data.

From Catherine Rampell at the NY Times: The Beginning of the End of the Census?

“This is a program that intrudes on people’s lives, just like the Environmental Protection Agency or the bank regulators,” said Daniel Webster, a first-term Republican congressman from Florida who sponsored the relevant legislation.

“We’re spending $70 per person to fill this out. That’s just not cost effective,” he continued, “especially since in the end this is not a scientific survey. It’s a random survey.”

In fact, the randomness of the survey is precisely what makes the survey scientific, statistical experts say.

The good news is this vote is being criticized across the political spectrum ...

From the WSJ: Republicans try to kill data collection that helps economic growth

The House voted 232 to 190 to abolish the Census's American Community Survey, or ACS, which is the new version of the long-form questionnaire and is conducted annually. Republicans claim the long form—asking about everything from demographics to income to commuting times—is prying into private life and is unconstitutional.

In fact, the ACS provides some of the most accurate, objective and granular data about the economy and the American people, in something approaching real time. Ideally, Congress would use the information to make good decisions. Or economists and social scientists draw on the resource to offer better suggestions. Businesses also depend on the ACS's county-by-county statistics to inform investment and hiring decisions. As the great Peter Drucker had it, you can't manage or change what you don't measure.
...
Since the political class is attempting to define the GOP as insane and redefine "moderation" as anything President Obama favors, Republicans do themselves no favors by targeting a useful government purpose.

From the NY Times: Operating in the Dark

The Web site of Representative Daniel Webster, Republican of Florida, instructs visitors to click on a link for “Census data for the 8th district” to learn about the area’s economy, businesses, income, employment, homeownership and other important features. And yet, on Wednesday, Mr. Webster declared that the Census Bureau’s American Community Survey — the source for much of that data — is an unconstitutional breach of privacy.

From AEI's Norman Ornstein at Roll Call: Research Cuts Are Akin to Eating Seed Corn

significant was the House vote to eliminate the annual American Community Survey and the Economic Census to provide basic information on the state of businesses and industries in the country and data used for generating quarterly gross domestic product estimates.

If ever we need evidence of ideology run rampant, these actions become exhibit A. Learning about the population and about the economy are fundamental for a society to understand where it has been and where it is going ...

From the WaPo: The American Community Survey is a count worth keeping

Every year, the Census Bureau asks 3 million American households to answer questions on age, race, housing and health to produce timely information about localities, states and the country at large. This arrangement began as a bipartisan improvement on the decennial census. Yet last week the Republican-led House voted to kill the ACS. This is among the most shortsighted measures we have seen in this Congress, which is saying a lot.

And from Menzie Chinn at Econonbrowser: The War on Data Collection

Pretty sad. The only good news is this vote was condemned across the political spectrum.

by Calculated Risk on 5/20/2012 10:48:00 AM

Way back in 2005, I posted a graph of "the Real Estate Agent Boom". I saw the following article, and decided to update the graph of the number of real estate licensees in California.

Eric Wolff at the NC Times writes: Real estate agents bailing out, except in Southwest Riverside County

Real estate agents are getting out of the profession in California ---- except in Southwest Riverside County, according to the California Department of Real Estate and the Southwest Riverside County Association of Realtors.

A housing crunch left real estate agents faced with selling houses for less than what homeowners owed in mortgages, working with lenders suddenly terrified to give out loans, and otherwise battling headwinds that dramatically reduced their sales.

For many agents, especially those attracted by a housing boom that made the profession seem like easy money, that meant it was time to leave. But in Southwest Riverside County, a few people decided a slow market was just the time to jump in.

Click on graph for larger image.

Here is a long term graph of the number of real estate licensees in California. The number of agents peaked at the end of 2007 (housing activity peaked in 2005, and prices in 2006).

The number of salesperson's licenses is off 29% from the peak, and has fallen to 2004 levels. But brokers' licenses are only off 7% and has only fallen to early 2007 levels. Even if activity and prices have bottomed, the number of agents will probably continue to decline.

Yesterday:
• Summary for Week Ending May 18th
• Schedule for Week of May 20th

by Calculated Risk on 5/19/2012 09:53:00 PM

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

Here is the unofficial problem bank list for May 18, 2012. (table is sortable by assets, state, etc.)

Changes and comments from surferdude808:

The OCC released its actions through mid-April 2012, which contributed to many changes in the Unofficial Problem Bank List. For the week, there were eight additions and four removals that leave the list with 928 institutions and assets of $361.9 billion. The list is up from 924 institutions last week, which represents the first weekly count increase since February 24th, a period of 11 weeks. A year ago, the list held 988 institutions with assets of $423.8 billion.

Among the removals is the failed Alabama Trust Bank, National Association, Sylacauga, AL ($56 million). There were two action terminations -- National Bank of Commerce, Birmingham, AL ($426 million) and BankTennessee, Collierville, TN ($247 million). The Peoples National Bank, Easley, SC ($324 million Ticker: PBCE) was removed because of an unassisted merger.

The eight additions this week are Sterling Bank and Trust, FSB, Southfield, MI ($762 million); The First National Bank of Talladega, Talladega, AL ($421 million); First Federal Bank Texas, Tyler, TX ($212 million Ticker: FFBT); Bank of St. Augustine, Saint Augustine, FL ($186 million); The First National Bank of Wamego, Wamego, KS ($159 million); The First National Bank of Hartford, Hartford, IL ($146 million); The First National Bank of Paducah, Paducah, TX ($56 million); and Flint River National Bank, Camilla, GA ($27 million). Flint River was removed from the list on April 20th when the OCC terminated an Formal Agreement, but the removal was inadvertent as they subsequently put the bank under a Consent Order.

Next week, we anticipate the FDIC will release the 2012q1 Official Problem Bank List and its enforcement actions through April 2012.

Earlier:
• Summary for Week Ending May 18th
• Schedule for Week of May 20th