RSS Feed by Calculated Risk on 10/18/2010 03:38:00 PM
Monday, October 18, 2010
Citigroup: Foreclosure Process is 'Sound', BofA expects to submit new affidavits next week
From Dow Jones: Citigroup Says Its Foreclosure Processing Is 'Sound' Dow Jones is reporting that the Citigroup CFO John Gerspach said they have found no issues with the foreclosure process, and they see no reason to halt foreclosures.
"While we use external attorneys to prepare [foreclosure] documents, each package is reviewed by a Citi employee, who verifies the information and signs the foreclosure affidavit in the presence of a notary," Gerspach said ...And from the WSJ: BofA Sets Timetable for Foreclosure Review. The WSJ is reporting that BofA will resubmit new affidavits for 102,000 pending foreclosures, and that they expect to resubmit the affidavits, with the proper reviews and new signatures, by October 25th.
Fed's Lockhart: QE2 is an "insurance policy" against further disinflation
by Calculated Risk on 10/18/2010 01:03:00 PM
From Atlanta Fed President Dennis Lockhart: The Challenges of Monetary Policy in Today's Economy
To opt for more quantitative easing at this juncture is a big decision. Today I will walk you through the thicket of considerations that lead me, at this moment, to be sympathetic to more monetary stimulus in the near future.Lockhart is not currently on the FOMC.
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With current inflation running at about 1 percent or a little higher and with official unemployment measured at 9.6 percent, it's clear that the economy is not where we want it to be. In my mind, the question is whether this situation is a call to immediate action.
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As a starting point, I expect final measures of third quarter GDP growth to be close to that in the second quarter which came in at 1.6 percent. My current forecast sees a modest increase in the rate of growth in the fourth quarter and further, but still modest, improvement in 2011. In this forecast, inflation remains low but with no further disinflation, and unemployment comes down very gradually.
In my thinking, the range of plausible divergence from this forecast is quite wide, and the risks are more to the downside.
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In my view, the decision is not clear cut. We policymakers have to weigh these arguments pro and con, potential costs versus benefits, and competing risks. As I said earlier, I am leaning in favor of additional monetary stimulus while acknowledging the longer-term risks the policy may present. At this juncture, and given the circumstances of sluggish growth and measured inflation that is too low, I give greater weight to the risk of further disinflation leading to deflation. In my mind, QE2 is a form of risk management—an insurance policy that is prudent to put in place at this time.
Note: Lockhart see modest improvment in both GDP growth and unemployment, but I think we will see a little more weakness in GDP growth and the unemployment rate will even tick up a little from 9.6%.
NAHB Builder Confidence increases in October
by Calculated Risk on 10/18/2010 10:00:00 AM
The National Association of Home Builders (NAHB) reports the housing market index (HMI) was at 16 in October. This is a 3 point increase from 13 in September, and is the highest level since June. The record low was 8 set in January 2009, and 16 is still very low ...
Note: any number under 50 indicates that more builders view sales conditions as poor than good.
Click on graph for larger image in new window.
This graph compares the NAHB HMI (left scale) with single family housing starts (right scale). This includes the October release for the HMI and the August data for starts (September starts will be released tomorrow).
This shows that the HMI and single family starts mostly move in the same direction - although there is plenty of noise month-to-month.
Press release from the NAHB: Builder Confidence Improves in October
Builder confidence in the market for newly built, single-family homes rose three points to 16 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for October, released today. This was the first improvement registered by the HMI in five months, and returns the index to a level last seen in June of this year.
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All three of the HMI's component indexes registered gains in October. The index gauging current sales conditions rose three points to16, while the index gauging sales expectations in the next six months rose five points to 23 and the index gauging traffic of prospective buyers rose two points to 11.
Industrial Production, Capacity Utilization decreased in September
by Calculated Risk on 10/18/2010 09:15:00 AM
From the Fed: Industrial production and Capacity Utilization
Industrial production decreased 0.2 percent in September after having increased 0.2 percent in August. ... The capacity utilization rate for total industry edged down to 74.7 percent, a rate 4.2 percentage points above the rate from a year earlier but 5.9 percentage points below its average from 1972 to 2009.
Click on graph for larger image in new window.This graph shows Capacity Utilization. This series is up 9.5% from the record low set in June 2009 (the series starts in 1967).
Capacity utilization at 74.7% is still far below normal - and well below the pre-recession levels of 81.2% in November 2007.
Note: y-axis doesn't start at zero to better show the change.
The second graph shows industrial production since 1967.Industrial production declined slightly in September, and production is still 7.5% below the pre-recession levels at the end of 2007.
This is below consensus expectations of a 0.2% increase in Industrial Production, and an increase to 74.8% (from 74.7% before revision) for Capacity Utilization.
Sunday, October 17, 2010
Schedule additions: Large Bank Financial Results
by Calculated Risk on 10/17/2010 09:53:00 PM
Here is the Schedule for Week of Oct 17th
Here is the Summary for Week ending Oct 16th (with plenty of graphs).
I've updated the schedule to include financial results for several large banks (ht Tony). Usually I wouldn't include an earnings calendar, but I'll be looking for comments on Foreclosure-Gate (and other comments).
The additions are:
HUD Secretary on Foreclosure-Gate: "Will respond with full force of the law"
by Calculated Risk on 10/17/2010 07:49:00 PM
From the HuffPo: How We Can Really Help Families
The recent revelations about foreclosure processing -- that some banks may be repossessing the homes of families improperly -- has rightly outraged the American people. The notion that many of the very same institutions that helped cause this housing crisis may well be making it worse is not only frustrating -- it's shameful.I hope actions follow words.
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[T]he Obama Administration has a comprehensive review of the situation underway and will respond with the full force of the law where problems are found. The Financial Fraud Enforcement Task Force that President Obama established last November has made this issue priority number one.
