by Calculated Risk on 10/27/2014 12:31:00 PM

Here is a minor indicator that I follow, from ATA: ATA Truck Tonnage Index Unchanged in September

American Trucking Associations’ advanced seasonally adjusted For-Hire Truck Tonnage Index was unchanged in September, following a gain of 1.6% the previous month. In September the index equaled 132.6 (2000=100), the same as in August and a record high.

Compared with September 2013, the SA index increased 3.7%, down from August’s 4.5% year-over-year gain. Year-to-date, compared with the same period last year, tonnage is up 3.2%. ...

“September data was a mixed bag, with retail sales falling while factory output increased nicely,” said ATA Chief Economist Bob Costello. “As a result, I’m not too surprised that truck tonnage split both of those readings and remained unchanged.”

“During the third quarter, truck tonnage jumped 2.4% from the second quarter and surged 4% from the same period last year,” Costello said. He also noted that the third quarter average was the highest on record.
...
Trucking serves as a barometer of the U.S. economy, representing 69.1% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 9.7 billion tons of freight in 2013. Motor carriers collected $681.7 billion, or 81.2% of total revenue earned by all transport modes.
emphasis added

Click on graph for larger image.

Here is a long term graph that shows ATA's For-Hire Truck Tonnage index.

The dashed line is the current level of the index.

The index is now up 3.7% year-over-year.

by Calculated Risk on 10/27/2014 10:00:00 AM

From the NAR: Pending Home Sales Hold Steady in September

The Pending Home Sales Index, a forward-looking indicator based on contract signings, inched 0.3 percent to 105.0 in September from 104.7 in August, and is now 1.0 percent higher than September 2013 (104.0). The index is above 100 for the fifth consecutive month and is at the second-highest level since last September.
...
The PHSI in the Northeast increased 1.2 percent to 87.5 in September, and is now 2.9 percent above a year ago. In the Midwest the index decreased 1.2 percent to 101.2 in September, and is now 4.0 percent below September 2013.

Pending home sales in the South increased 1.4 percent to an index of 118.5 in September, and is 1.7 percent above last September. The index in the West inched back 0.8 percent in September to 101.3, but is still 3.6 percent above a year ago.

Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in October and November.

by Calculated Risk on 10/27/2014 08:01:00 AM

Note: I follow several house price indexes (Case-Shiller, CoreLogic, Black Knight, Zillow, FHFA, FNC and more). The timing of different house prices indexes can be a little confusing. Black Knight uses the current month closings only (not a three month average like Case-Shiller or a weighted average like CoreLogic), excludes short sales and REOs, and is not seasonally adjusted.

From Black Knight: U.S. Home Prices Up 0.1 Percent for the Month; Up 4.9 Percent Year-Over-Year

Today, the Data and Analytics division of Black Knight Financial Services (formerly the LPS Data & Analytics division) released its latest Home Price Index (HPI) report, based on August 2014 residential real estate transactions. The Black Knight HPI combines the company’s extensive property and loan-level databases to produce a repeat sales analysis of home prices as of their transaction dates every month for each of more than 18,500 U.S. ZIP codes. The Black Knight HPI represents the price of non-distressed sales by taking into account price discounts for REO and short sales.

The Black Knight HPI is off 10.1% from the peak in June 2006 (not adjusted for inflation).

The year-over-year increases have been getting steadily smaller for the last 11 months - as shown in the table below:

Month	YoY House Price Increase
Jan-13	6.7%
Feb-13	7.3%
Mar-13	7.6%
Apr-13	8.1%
May-13	7.9%
Jun-13	8.4%
Jul-13	8.7%
Aug-13	9.0%
Sep-13	9.0%
Oct-13	8.8%
Nov-13	8.5%
Dec-13	8.4%
Jan-14	8.0%
Feb-14	7.6%
Mar-14	7.0%
Apr-14	6.4%
May-14	5.9%
June-14	5.5%
July-14	5.1%
Aug-14	4.9%

The press release has data for the 20 largest states, and 40 MSAs.

Black Knight shows prices off 41.2% from the peak in Las Vegas, off 34.4% in Orlando, and 31.5% off from the peak in Riverside-San Bernardino, CA (Inland Empire). Prices are at new highs in Colorado and Texas (Denver, Austin, Dallas, Houston and San Antonio metros). Prices are also at new highs in Honolulu, HI, Nashville, TN and San Jose, CA.

Note: Case-Shiller for August will be released tomorrow.

by Calculated Risk on 10/26/2014 08:25:00 PM

From CNBC: U.S. gasoline cheapest in nearly four years -Lundberg survey

The average price of U.S. retail gasoline dropped 18 cents in the past two weeks to the lowest level in nearly four years, driven by a steep drop in oil prices, according to the latest Lundberg survey released on Sunday.

Prices fell 18 cents to an average of $3.08 per gallon for regular grade gasoline, according to the fortnightly survey conducted on Oct. 24, the lowest price since Dec. 2010.

Monday:
• Early, the Black Knight August House Price Index report

• At 10:00 AM ET, the Pending Home Sales Index for September. The consensus is for a 0.8% increase in the index.

• At 10:30 AM, the Dallas Fed Manufacturing Survey for October.

• During the day (Monday or Tuesday): Q3 NMHC Apartment Tightness Index.

Weekend:
• Schedule for Week of October 26th

• FOMC: End of QE3, Shorter Statement

From CNBC: Pre-Market Data and Bloomberg futures: currently the S&P futures are up 3 and DOW futures are up about 35 (fair value).

Oil prices were down over the last week with WTI futures at $81.18 per barrel and Brent at $86.13 per barrel.  A year ago, WTI was at $97, and Brent was at $109 - so prices are down close to 20%  year-over-year.

Below is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are around $3.05 per gallon (down about 25 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 10/26/2014 11:16:00 AM

Earlier I posted FOMC statement previews from Goldman Sachs and Merrill Lynch economists. Here is what I expect on Wednesday:

• The FOMC will announce the end of QE3.

• The FOMC statement will be shorter. Here is the September statement (895 words). Last year, in September 2013, the statement had 798 words. Ten years ago, in September 2004, the statement had only 277 words.

• Since there is no press conference following the FOMC meeting this month, I don't expect any major changes to the FOMC statement - just the elimination of certain sections, and some wording changes.

• Possible wording changes include:

1) some upgrade to "significant underutilization of labor resources",

2) some concern about less inflation, perhaps changing the word "diminished" in the phrase "the likelihood of inflation running persistently below 2 percent has diminished somewhat since early this year" to "increased recently". Note: Earlier this year, when inflation picked up a little, Yellen said: "The CPI index has been a bit on the high side, but I think the data that we’re seeing is noisy." So the FOMC might be patient on inflation again and wait until December to make any wording changes.

3) The "considerable time" phrase will probably remain (although the sentence might be tweaked).

"The Committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored."
emphasis added

Note: I don't expect any change to this key sentence: "The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run."

The over/under on the word count is probably around 800 words, and I'll take the under!

For some general thoughts on the QE, see: A Few Comments on QE

by Calculated Risk on 10/25/2014 02:31:00 PM

The key report this week is Q3 GDP on Thursday.

There will be an FOMC meeting on Tuesday and Wednesday, and the FOMC is expected to announce the end of QE3 on Wednesday.

----- Monday, October 27th -----
10:00 AM ET: Pending Home Sales Index for September. The consensus is for a 0.8% increase in the index.

10:30 AM: Dallas Fed Manufacturing Survey for October.

During the day (Monday or Tuesday): Q3 NMHC Apartment Tightness Index.

----- Tuesday, October 28th -----
8:30 AM: Durable Goods Orders for September from the Census Bureau. The consensus is for a 0.9% increase in durable goods orders.

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

This graph shows the nominal seasonally adjusted National Index, Composite 10 and Composite 20 indexes through the July 2014 report (the Composite 20 was started in January 2000).

The consensus is for a 4.9% year-over-year increase in the National Index for August , down from 5.7% in July (consensus 5.8% increase in Comp 20). The Zillow forecast is for the Composite 20 to increase 5.7% year-over-year in August, and for prices to increase 0.1% month-to-month seasonally adjusted.

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

10:00 AM: Conference Board's consumer confidence index for October. The consensus is for the index to increase to 87.2 from 86.0.

10:00 AM: Q3 Housing Vacancies and Homeownership report from the Census Bureau. This report is frequently mentioned by analysts and the media to report on the homeownership rate, and the homeowner and rental vacancy rates. However, this report doesn't track with other measures (like the decennial Census and the ACS).

----- Wednesday, October 29th -----
7:00 AM: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

2:00 PM: FOMC Meeting Statement.  The FOMC is expected to announce the end of QE3 asset purchases at this meeting.

----- Thursday, October 30th -----
8:30 AM: Gross Domestic Product, 3rd quarter 2014 (advance estimate). The consensus is that real GDP increased 2.8% annualized in Q3.

8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for claims to decrease to 280 thousand from 283 thousand.

----- Friday, October 31st -----
8:30 AM: Personal Income and Outlays for September. The consensus is for a 0.3% increase in personal income, and for a 0.1% increase in personal spending. And for the Core PCE price index to increase 0.1%.

9:45 AM: Chicago Purchasing Managers Index for October. The consensus is for a reading of 60.0, down from 60.5 in September.

9:55 AM: Reuter's/University of Michigan's Consumer sentiment index (final for October). The consensus is for a reading of 86.4, unchanged from the preliminary reading of 86.4, and up from the September reading of 84.6.

by Calculated Risk on 10/25/2014 11:01:00 AM

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

Here is the unofficial problem bank list for Oct 24, 2014.

Changes and comments from surferdude808:

It was the fourth time in 2014 for the FDIC to close a bank on back-to-back weeks. Other than the failure, two other removals pushed the Unofficial Problem Bank List count down to 423 institutions with assets of $133.4 billion. A year ago, the list held 670 institutions with assets of $234 billion.

Northwestern Bank, Traverse City, MI ($849 million) and The First National Bank of Wyoming, Wyoming, DE ($302 million) found their way off the list through unassisted mergers.

The National Republic Bank of Chicago, Chicago, IL ($994 million) failed after operating under a formal action since April 2010 and a Prompt Corrective Action order since July 2014. This is the fifth bank headquartered in Illinois to fail this year and the 61st failure in the state since the onset of the Great Recession. Acquiring the bank in the assisted transaction was State Bank of Texas, Dallas, Texas, with has assets of $413 million. Usually the FDIC does not like an acquirer to be so much smaller than and this far away geographically from the failed bank. So it looks like these issues were deemed not as important as maintaining the minority ownership status of the failed assets.

Next week, we anticipate the FDIC to release an update on its enforcement action activities through September 2014.

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 423.

by Calculated Risk on 10/25/2014 08:11:00 AM

Excerpts from a research piece by economist Kris Dawsey at Goldman Sachs:

US data have generally been solid since the last FOMC meeting, with a few exceptions. However, concern about downside risks to global growth increased—echoed by Fed communications—while financial market volatility rose considerably. The market-implied date of the first rate hike shifted out by roughly a quarter to 2015 Q4.

Our analysis suggests that recent developments should have a limited effect on the Fed’s baseline expectation for growth in the near-term, although downside risks to inflation are more pronounced. The FOMC will probably acknowledge recent foreign developments in the October statement, but an explicit shift in the balance of risks for the US outlook to the downside would be a dovish surprise. Other changes to the statement will likely include a slight upgrade to the language on the labor market.

St. Louis Fed President Bullard’s suggestion that QE could be extended past the October meeting garnered a lot of attention, but this seems unlikely to us. ...

We think the “considerable time” forward guidance will only be adjusted slightly at the October meeting, removing the reference to the end of asset purchases. The September meeting minutes suggested that any major changes are most likely at a meeting with a press conference, such as December. ...
emphasis added

by Calculated Risk on 10/24/2014 08:50:00 PM

From Merrill Lynch:

The October FOMC meeting is likely to see the end of QE3 buying, as the Fed tapers the final $15bn in asset purchases. ... Tapering has been largely contingent on an improving labor market, and that has generally continued. The FOMC also has indicated multiple times that they are likely to end QE3 in October. Thus, it would take a significant adverse shock to change that plan, in our view.

As for the statement language, we expect the “significant underutilization” language to once again remain in place — although we see a modest chance that is downgraded, say to “elevated underutilization.” Meanwhile, the likelihood of changing the “considerable time” language is much more evenly split. Our base case remains no change in October, largely because there is no urgent need to revise, especially with the increase in downside risks to the outlook and heightened market volatility since the last meeting. However, there is general dissatisfaction on the FOMC with this phrase, and Fed officials have had another month and a half to consider alternatives. With no press conference scheduled after this meeting, the Committee may opt for re-examining the forward guidance language more comprehensively at their December meeting.

Perhaps most notable at this meeting may be the number and nature of dissents. We see a high probability of hawkish dissents from Dallas’s Fisher and Philadelphia’s Plosser. In our view, there is some chance the FOMC statement will note a bit more concern about downside risks to inflation — a reflection of recent data, the drop in breakevens, the strong US dollar, and disinflationary forces abroad. Should the Committee opt not to add such language, a dovish dissent from Minneapolis’s Kocherlakota becomes a risk. ... We continue to recommend focusing on the statement language and prepared remarks from Chair Yellen and other key Fed officials to understand the views of the majority of voters, who favor a patient and gradual exit process.

I'll post a preview this weekend, but it seems QE3 will end ... and the FOMC statement will be shorter!

by Calculated Risk on 10/24/2014 06:41:00 PM

From the FDIC: State Bank of Texas, Dallas, Texas, Assumes All of the Deposits of the National Republic Bank of Chicago, Chicago, Illinois

As of June 30, 2014, The National Republic Bank of Chicago had approximately $954.4 million in total assets and $915.3 million in total deposits. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $111.6 million. ... The National Republic Bank of Chicago is the 16th FDIC-insured institution to fail in the nation this year, and the fifth in Illinois.

Bank failure friday two weeks in a row!