RSS Feed by Calculated Risk on 10/10/2010 12:30:00 PM
Sunday, October 10, 2010
Schedule for Week of Oct 10th
The key release this week will be September retail sales on Friday. Also Fed Chairman Ben Bernanke will try to explain the objectives of QE2 on Friday "Monetary Policy Objectives and Tools in a Low-Inflation Environment".
Ceridian-UCLA Pulse of Commerce Index™ This is the diesel fuel index for September (a measure of transportation).
CoreLogic House Price Index for August. This release could show further declines in house prices. The index is a weighted 3 month average for June, July and August.
Association of American Railroads rail traffic indicators for September. Trucking, rail traffic and the Ceridian diesel fuel index are all measures of transportation (a coincident indicator).
2:45 PM ET: Federal Reserve Vice Chair Janet Yellen speaks at the National Association for Business Economics meeting in Denver: "Macroprudential Supervision and Monetary Policy in the Post-Crisis World"
7:30 AM: NFIB Small Business Optimism Index for September. This index has been showing small businesses remain pessimistic and the survey shows that the major concern of small businesses is lack of customers.
11:45 AM: Kansas City Fed President Thomas Hoenig speaks at the National Association for Business Economics meeting in Denver. "The Economic Outlook and Monetary Policy: Challenges Ahead"
2:00 PM: FOMC Minutes, Meeting of September 21, 2010. Investors will focus on any discussion of QE2.
7:00 AM: The Mortgage Bankers Association (MBA) will release the mortgage purchase applications index. This index declined sharply following the expiration of the tax credit. The index has increased a little recently - possibly due to borrowers trying to beat the slightly tighter FHA requirements.
7:45 PM: Richmond Fed President Jeffrey Lacker will speak in Chapel Hill, NC.
8:30 AM: The initial weekly unemployment claims report will be released. Consensus is for a slight decrease to 443K from 445K last week.
8:30 AM: Trade Balance report for August from the Census Bureau. The consensus is for the U.S. trade deficit to increase to $44 billion (from $42.8 billion in July).
8:30 AM: Producer Price Index for September. The consensus is for a 0.1% increase in producer prices.
8:15 AM: Fed Chairman Ben S. Bernanke will speak at the Federal Reserve Bank of Boston Conference "Monetary Policy Objectives and Tools in a Low-Inflation Environment"
8:30 AM: Consumer Price Index for September. The consensus is for a 0.2% increase in prices. This is being closely watched for further disinflation, and also because Q3 is the quarter the annual annual cost-of-living adjustment (COLA) is calculated for Social Security (this will make it official that there will be no change in 2011).
8:30 AM: Retail Sales for September. The consensus is for a 0.4% increase from August.
8:30 AM: Empire Manufacturing Survey for October. The consensus is for a reading of 8.0, up from 4.1 in September. These regional surveys have been showing a slowdown in manufacturing and are being closely watched right now.
9:15 AM: Atlanta Fed President Dennis Lockhart participates in a question-and-answer session on the economy in Atlanta.
9:55 AM: Reuters/University of Mich Consumer Sentiment preliminary for October. The consensus is for a slight increase to 69.0 from 68.2 in September.
10:00 AM: Manufacturing and Trade: Inventories and Sales for August. Consensus is for a 0.4% increase in inventories in August.
After 4:00 PM: The FDIC has really slowed down closing banks - even though the Unofficial problem bank list continues to increase. The pace of closures will probably pickup soon ...
8:15 AM: Boston Fed President Eric Rosengren speaks at Federal Reserve Bank of Boston Conference
Pearlstein on Foreclosure-Gate
by Calculated Risk on 10/10/2010 09:08:00 AM
From Steve Pearlstein at the WaPo: To sort this mess, both banks and borrowers must do the right thing
Listening to the fiery rhetoric about the mortgage mess emanating from politicians this week, you'd think that big bad banks were trying to foreclose on hundreds of thousands of homeowners who were current on their payments but had become victims of sloppy business practices.I've pointed this out several times: the basic facts are 1) the homeowners have a mortgage and 2) the homeowner is seriously delinquent.
...
But if, as appears to be the case, the overwhelming majority of homeowners facing foreclosure have fallen far behind on their payments, then it is a good deal harder to summon up the same moral outrage over reports that the banks and loan service companies cut corners, failed to keep the right documents and engaged in shoddy and even fraudulent practices. Just because the banks and servicers have screwed up doesn't mean they and their investors are no longer entitled to get their money back.
Certainly banks and servicers should, at their own expense, be sent back to do things right. Those who engaged in fraud should be punished. And if there are legitimate questions about who owns a loan, those will need to be resolved before the proceeds of any foreclosure are distributed.
But none of that changes the basic reality that there are millions of Americans who took out mortgages they could not support on houses they could not afford.
As Tom Lawler wrote "mortgage servicers who messed up should bear all of the costs associated with their mess up". And I'd prefer alternatives to foreclosure (mortgage modification or even short sales / deed-in-lieu), but we also need to remember that the basic facts are not in dispute.
Saturday, October 09, 2010
IMF: Concern about fragile economy and exchange rates
by Calculated Risk on 10/09/2010 09:57:00 PM
Via MarketWatch: Summary of IMF meeting communique
Global economy: “Economic recovery is proceeding, but remains fragile and uneven across the membership. Faced with this source of potential stress, we underscore our strong commitment to continue working collaboratively to secure strong, sustainable and balanced growth and to refrain from policy actions that would detract from this shared goal. ... The rejection of protectionism in all its forms must remain a key element of our coordinated response to the crisis; renewed efforts are urgently needed to bring the Doha Round to a successful conclusion.”Not that anything will come of this, but clearly the IMF is still concerned about the "fragile" economy, and about exchange rates.
...
Mandate for international monetary stability: “While the international monetary system has proved resilient, tensions and vulnerabilities remain as a result of widening global imbalances, continued volatile capital flows, exchange rate movements and issues related to the supply and accumulation of official reserves. Given that these issues are critically important for the effective operation of the global economy and the stability of the international monetary system, we call on the Fund to deepen its work in these areas, including in-depth studies to help increase the effectiveness of policies to manage capital flows. We look forward to reviewing further analysis and proposals over the next year.”
Music: "Nobody Knows the Bubbles I've Seen"
by Calculated Risk on 10/09/2010 04:55:00 PM
Watch for the "Hoocoodanode" mention (A Tanta snark and the name of our message board) ...
Duration of Unemployment
by Calculated Risk on 10/09/2010 11:45:00 AM
An update by request ...
Click on graph for larger image.
This graph shows the duration of unemployment as a percent of the civilian labor force. The graph shows the number of unemployed in four categories: less than 5 week, 6 to 14 weeks, 15 to 26 weeks, and 27 weeks or more.
Note: The BLS reports 15+ weeks, so the 15 to 26 weeks number was calculated.
In Setpember 2010, the number of unemployed for 27 weeks or more declined to 6.123 million (seasonally adjusted) from 6.249 million in August. It appears the number of long term unemployed has peaked, but it is still very difficult for these people to find a job - and this is a very serious employment issue.
The 5 to 14 week category declined in September, however the less than 5 week category continued to increase - and is now at the highest level since January 2010.
The less than 5 week category shows how the turnover in the labor market has changed. Back in the '70s and '80s there was much more turnover in the labor market. And that added turnover is a key reason the overall unemployment rate was higher in the early '80s recession than right now.
Note: Even though these numbers are all seasonally adjusted, they can't be added together to calculate the unemployment rate.
And a repeat of a popular graph ...
The second graph shows the job losses from the start of the employment recession, in percentage terms (as opposed to the number of jobs lost).
The dotted line is ex-Census hiring. The two lines have joined since the decennial Census is almost over.
Best to all
Employment posts yesterday (with many graphs):
Unofficial Problem Bank List 877 Institutions
by Calculated Risk on 10/09/2010 07:27:00 AM
Note: this is an unofficial list of Problem Banks compiled only from public sources.
Here is the unofficial problem bank list for Oct 8, 2010.
Changes and comments from surferdude808:
The number of institutions on the Unofficial Problem Bank List remained unchanged this week at 877 but assets rose slightly from $416.1 billion to $417.3 billon.
Three institutions were removed with one because of action termination -- First National Bank and Trust Company ($296 million), and two others -- First National Bank & Trust Company in Larned ($34 million) and Clear Creek National Bank ($24 million) because they merged into other banks that are on the Unofficial Problem Bank List.
Additions this week include Valley Bank, Roanoke, VA ($763 million Ticker: VYFC); Fullerton Community Bank, FSB, Fullerton, CA ($705 million); and Fort Lee Federal Savings Bank, FSB, Fort Lee, NJ ($75 million), which received about $1.3 million of TARP capital in May 2009.
We anticipate for the OCC to release its actions from mid-August through mid-September next Friday.
