by Calculated Risk on 1/20/2014 09:36:00 AM

Container traffic gives us an idea about the volume of goods being exported and imported - and possibly some hints about the trade report for December since LA area ports handle about 40% of the nation's container port traffic.

The following graphs are for 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).

To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average.

Click on graph for larger image.

On a rolling 12 month basis, inbound traffic was up 0.3% compared to the rolling 12 months ending in November.   Outbound traffic increased 1.0% compared to 12 months ending in November.

Inbound traffic has been increasing and now it appears outbound traffic is also starting to increase.

The 2nd graph is the monthly data (with a strong seasonal pattern for imports).

Usually imports peak in the July to October period as retailers import goods for the Christmas holiday, and then decline sharply and bottom in February or March (depending on the timing of the Chinese New Year).

Inbound traffic was up 9% compared to December 2012 and outbound traffic was up 13%.

This suggests a pickup in trade in December. 

by Calculated Risk on 1/19/2014 08:18:00 PM

This is worth a mention - the drought in California is a "growing" concern ...

From the San Francisco Chronicle: California drought: Farmers, ranchers face uncertain future

On Friday, amid California's driest year on record, Gov. Jerry Brown declared a drought emergency in the state. As days pass without snow or rain, dairymen, farmers and other livestock producers are finding themselves in the same predicament as Imhof. Without water to irrigate, produce growers fear they will have to leave some fields fallow.

Ranchers and farmers say that as long as the drought continues, the nation's largest agricultural state will remain in turmoil, with repercussions stretching to consumer pocketbooks in the form of higher prices for such basic staples as meat, milk, fruit and vegetables.

This is the second year in a row with little rain or snow in the mountains (the Central Sierra snowpack is about 16% of normal). California is the largest agricultural state, and an ongoing drought could have an impact on food prices - and on the economy.

by Calculated Risk on 1/19/2014 11:56:00 AM

Note: The NAR will release existing home sales and inventory for December this coming Thursday. It is also interesting to look at the trend for distressed sales (foreclosures and short sales), and for all cash buyers (frequently investors).

Economist Tom Lawler sent me the updated table below of short sales, foreclosures and cash buyers for several selected cities in December.

From CR: Total "distressed" share is down in all of these markets, and down significantly in most.

Short sales are down sharply in all of these markets (this was a real change in 2013, and I expect further declines in short sales in 2014).

Important Note on short sales: Historically the IRS has considered debt forgiveness (like short sales) as taxable income. In 2007, Congress passed a measure to exempt most forgiven mortgage debt from being considered taxable income (this helped increase short sale activity). This measure expired on Dec 31, 2013. However, according to a letter from the IRS:

"[I]f a property owner cannot be held personally liable for the difference between the loan balance and the sales price, we would consider the obligation as a nonrecourse obligation. In this situation, the owner would not treat the cancelled debt as income."

So in states that passed anti-deficiency provisions (like California), this means many loans will be considered nonrecourse by the IRS (and forgiven debt will not be taxed). In other states, forgiven debt will be taxed.  

Foreclosures are down in all of these areas too (except Springfield, Ill).

The All Cash Share (last two columns) is mostly declining year-over-year.  It appears investors are pulling back in markets like Las Vegas and SoCal - probably because of fewer distressed sales and higher prices.

	Short Sales Share		Foreclosure Sales Share		Total "Distressed" Share		All Cash Share
	Dec-13	Dec-12	Dec-13	Dec-12	Dec-13	Dec-12	Dec-13	Dec-12
Las Vegas	20.7%	45.8%	8.5%	9.5%	29.2%	55.3%	44.4%	55.2%
Reno	24.0%	47.0%	4.0%	10.0%	28.0%	57.0%
Phoenix	9.5%	27.2%	7.5%	12.2%	17.1%	39.4%	34.6%	45.4%
Sacramento	12.0%	40.0%	7.3%	11.5%	19.3%	51.5%	19.5%	39.6%
Minneapolis	5.4%	12.4%	17.3%	26.7%	22.7%	39.1%
Mid-Atlantic	8.0%	13.0%	9.3%	9.7%	17.3%	22.7%	19.3%	20.3%
Orlando	13.6%	30.4%	19.1%	20.1%	32.7%	50.5%	44.9%	53.6%
California *	15.5%	26.7%	6.7%	15.8%	22.2%	42.5%
Bay Area CA*	10.5%	23.6%	4.5%	12.1%	15.0%	35.7%	22.5%	29.9%
So. California*	13.2%	26.7%	5.8%	14.2%	19.0%	40.9%	27.7%	35.8%
Hampton Roads					29.1%	31.7%
Northeast Florida					36.2%	42.7%
Toledo							36.5%	41.6%
Tucson							32.3%	33.1%
Des Moines							23.1%	21.6%
Omaha							23.9%	20.6%
Pensacola							35.5%	32.7%
Wichita							30.2%	30.6%
Memphis*			21.0%	25.6%
Birmingham AL			22.5%	34.0%
Springfield IL**			17.7%	14.2%
*share of existing home sales, based on property records
**Single Family Only

by Calculated Risk on 1/18/2014 05:03:00 PM

Here is an update to four key indicators used by the NBER for business cycle dating: GDP, Employment, Industrial production and real personal income less transfer payments.

Note: The following graphs are all constructed as a percent of the peak in each indicator. This shows when the indicator has bottomed - and when the indicator has returned to the level of the previous peak. If the indicator is at a new peak, the value is 100%.

Three of the indicators are above pre-recession levels (GDP and Personal Income less Transfer Payments and Industrial Production).  Only employment is still below the  pre-recession peak.

Click on graph for larger image.

The first graph is for real GDP through Q3 2013.

Real GDP returned to the pre-recession peak in Q2 2011, and has hit new post-recession highs for ten consecutive quarters.

At the worst point - in Q2 2009 - real GDP was off 4.3% from the 2007 peak.

The second graph shows real personal income less transfer payments as a percent of the previous peak through the September report.

This indicator was off 8.2% at the worst point.

Real personal income less transfer payments surged in December 2012 due to a one time surge in income as some high income earners accelerated earnings to avoid higher taxes in 2013 (I've left December 2012 out going forward).   Real personal income less transfer payments are now above the pre-recession peak.

The third graph is for industrial production through December 2013.

Industrial production was off 16.9% at the trough in June 2009.

Now industrial production is 0.9% above the pre-recession peak. 

The final graph is for employment and is through December 2013.  This is similar to the graph I post every month comparing percent payroll jobs lost in several recessions.

Three out of four indicators ain't bad, but employment is probably the most important indicator and unfortunately payroll employment is still 0.9% below the pre-recession peak.

Employment will probably be back to pre-recession levels in mid-2014.

by Calculated Risk on 1/18/2014 01:16:00 PM

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

Here is the unofficial problem bank list for January 17, 2014.

Changes and comments from surferdude808:

The Unofficial Problem Bank List had many changes as the OCC released details of its latest enforcement action activity and the closing of a national bank. In all, there were eight removals leaving the list at 605 institutions with assets of $199.8 billion. Aggregate assets fell under $200 billion for the first time since May 2009. A year ago, there were 826 institutions with assets of $308.7 billion on the list.

During the week, every manner of exit possible was used as there were four action terminations, two voluntary liquidations, one merger, and one failure, which has not happened since almost a year ago during the week ending January 18, 2013. Actions were terminated against Community State Bank, National Association, Ankeny, IA ($560 million); Community Bank-Wheaton/Glen Ellyn, Glen Ellyn, IL ($351 million); The First National Bank of Winnsboro, Winnsboro, TX ($134 million); and The Headland National Bank, Headland, AL ($102 million). Prosperity Bank, Saint Augustine, FL ($748 million) found a merger partner in order to get itself off the list.

The two voluntary liquidations were Liberty Bank, F.S.B., West Des Moines, IA ($267 million) and Capmark Bank, Midvale, UT ($120 million). It has been more than six months since the last voluntary liquidation of a bank on the list. The OCC got the FDIC liquidation crew cranked up for the first time in 2014 by closing DuPage National Bank, West Chicago, IL ($62 million). This is the 57th institution headquartered in Illinois that has failed as a result of the Great Recession. With a count of 57, Illinois only trails Georgia and Florida with 87 and 70 failures, respectively.

We do not anticipate for the FDIC to release its enforcement action activity through December 2013 next week, rather they will likely release on Friday, January 31st. After the FDIC release, the institution count on the list should drop below 600.