Calculated Risk

Note: This index is a leading indicator for new Commercial Real Estate (CRE) investment.

From AIA: Architecture Billings Index Remains Positive for Third Straight Month
On the heels of consecutive months of strengthening business conditions, the Architecture Billings Index (ABI) has now reached positive territory three months in a row. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the January ABI score was 50.9, following a mark of 51.0 in December. This score reflects a slight increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 61.2, down just a notch from a reading of 61.5 the previous month.

“Even though we had a similar upturn in design billings in late 2010 and early 2011, this recent showing is encouraging because it is being reflected across most regions of the country and across the major construction sectors,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “But because we still continue to hear about struggling firms and some continued uncertainty in the market, we expect overall economic improvements in the design and construction sector to be modest in the coming months.” Click on graph for larger image.

This graph shows the Architecture Billings Index since 1996. The index was at 50.9 in January (slight expansion). Anything above 50 indicates expansion in demand for architects' services.

Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.

According to the AIA, there is an "approximate nine to twelve month lag time between architecture billings and construction spending" on non-residential construction. So this suggests further declines in CRE investment in early 2012, but perhaps stabilizing later in 2012.


All current Commercial Real Estate graphs

First a comment from Michelle Meyer and Ethan Harris at Merrill Lynch: One of the most encouraging aspects of the report was the continued drop in inventory. The number of homes on the market for sale fell further in January after plunging 11.5% in December. This has left inventory almost 21% below the level last January. Combined with the recent gain in home sales, months supply has tumbled to 6.1 months, the lowest since April 2006. However, we expect this to be a temporary cyclical low. Part of the drop in inventory reflects delays in the foreclosure process which has slowed the flow of distressed properties into the market. We think the foreclosure process will accelerate, which will speed up the flow of distressed inventory. We expect supply to edge back to 8 months this year.The NAR reported inventory fell to 2.31 million in January. This is down 20.6% from January 2011, and this is about 8% above the inventory level in January 2005 (mid-2005 was when inventory started increasing sharply). This decline in inventory was a significant story in 2011.

The following graph shows inventory by month since 2004. In 2005 (dark blue columns), inventory kept rising all year - and that was a clear sign that the housing bubble was ending.

Click on graph for larger image.

This year (dark red for January) inventory is at the lowest level for a January since 2005. Inventory is still elevated - especially with the much lower sales rate - but lower inventory levels put less downward pressure on house prices (of course the level of distressed properties is still very high, and there is a significant shadow inventory).

Part of the reason inventory has fallen is because there are fewer foreclosures listed for sale. Merrill Lynch analysts think supply will edge back up to 8 months-of-supply as the lenders increase foreclosure activity.

There is also a seasonal pattern. Inventory usually starts increasing in February and March, and peaks in July and August. The seasonal increase in inventory will be something to watch this spring and summer, but the Merrill forecast would mean that inventory increases to over 3 million units this summer (assuming sales at the current rate). I don't think we will see inventory that high.

The following graph shows existing home sales Not Seasonally Adjusted (NSA).

Sales NSA (red column) are slightly above the sales for the last four years (2008 through 2011), but well below the bubble years of 2005 and 2006.

The level of sales is still elevated due to investor buying. The NAR noted:
All-cash sales were unchanged at 31 percent in January; they were 32 percent in January 2011. Investors account for the bulk of cash transactions.

Investors purchased 23 percent of homes in January, up from 21 percent in December; they were 23 percent in January 2011. Earlier:
• Existing Home Sales in January: 4.57 million SAAR, 6.1 months of supply
• Existing Home Sales graphs

The NAR reports: Existing-Home Sales Rise Again in January, Inventory Down
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 4.3 percent to a seasonally adjusted annual rate of 4.57 million in January from a downwardly revised 4.38 million-unit pace in December and are 0.7 percent above a spike to 4.54 million in January 2011.
...
Total housing inventory at the end of January fell 0.4 percent to 2.31 million existing homes available for sale, which represents a 6.1-month supply at the current sales pace, down from a 6.4-month supply in December.Click on graph for larger image.

This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993.

Sales in January 2012 (4.57 million SAAR) were 4.3% higher than last month, and were 0.7% above the January 2011 rate.

The second graph shows nationwide inventory for existing homes.

According to the NAR, inventory decreased to 2.31 million in January from 2.32 million in December. This is the lowest level of inventory since March 2005.

The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.

Inventory decreased 20.6% year-over-year in January from January 2011. This is the eleventh consecutive month with a YoY decrease in inventory.

Months of supply decreased to 6.1 months in January, down from 6.4 months in December.


All current Existing Home Sales graphs

From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey
The Refinance Index decreased 4.8 percent from the previous week. The seasonally adjusted Purchase Index decreased 2.9 percent from one week earlier.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 4.09 percent from 4.08 percent ...

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500)increased to 4.32 percent from 4.30 percent ...The purchase index is still moving sideways at a very low level.

There were some interesting comments from the Home Depot CEO today (transcript with via Seeking Alpha). Home Dept CEO Francis Blake talked about the favorable weather, but he thought there was more: There are some interesting challenges in setting expectations for 2012. First, the macro data on housing suggest uncertainty. ... The Fed has noted that housing remains a drag on economic recovery with factors such as delayed household formation and credit supply, contributing to a continued imbalance between housing supply and demand. The Fed has suggested the policy actions will be needed to fix this, but it wouldn't appear that any major policy changes are likely in the near-term.

Second, despite this, the performance of our business particularly in the back half of 2011, would suggest the strengthening market. This quarter's comps were achieved against a very strong fourth quarter comp in 2010 and exceeded our internal forecast. But we're mindful that this past December and January were the fourth warmest on record, with much of the nice weather occurring across the heavily populated eastern U.S. Better weather translates into improved sales for exterior categories like building materials and also translates into increased customer transactions, which lift the entire business.And in the Q&A:Dennis McGill, Zelman & Associates: Just a question focused on some of the regions, you mentioned California being at the company average and Florida being above and 2 areas that we wouldn't normally attribute to being volatile from the weather standpoint. So just wondering if you could elaborate there, particularly in California, where it seemed like weather was pretty steady year-over-year, especially with some of the housing metrics improving in those markets?

CEO Blake: Dennis, I think that's exactly the point. I mean, wanted to call out California and Florida because they really aren't weather-related. And so that's an indication that there was more than just weather ... And I think just exactly as you said, that those markets are more reflective of not a housing recovery, but a stabilization in the markets that we've seen over the last 2 years, as they've just -- they've gotten kind off there, off the floor in effect on housing.In other comments, Blake mentioned that we've seen a little improvement before, but those were policy related (like the housing tax credit). CEO Blake: [W]e are now not -- we have no government programs to cloud what's happening. ... And the way we look at it is, there are some positives that you definitely see on housing.He mentioned some negatives too, but it seems like they are seeing some improvement.

LPS released their First Look report for January today. LPS reported that the percent (and number) of loans delinquent declined in January from December, but that the percent (and number) of loans in the foreclosure process increased slightly.

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

LPS: Loans Delinquent and in ForeclosureJan-12Dec-11Jan-11 Delinquent7.97%8.15%8.90%In Foreclosure4.15%4.11%4.16% Less than 90 days 2,226,0002,309,0002,551,000 More than 90 days1,772,0001,792,0002,168,000 In foreclosure2,084,0002,066,0002,203,000Total6,082,0006,167,0006,922,000

At the current rate of decline, the number of delinquent lonas will be back to "normal" in about three years (around 4.5% to 5% of loans are delinquent even in good times). However the number of loans in the foreclosure process hasn't change year-over-year - although that will probably change soon with the mortgage servicer settlement (around 0.5% of loans in foreclosure is "normal").

Note: Vehicle miles have moved sideways for over four years. And gasoline consumption has declined slightly over the same period. For a discussion of the causes, see NDD's post at the Bonddad blog this morning: Why the decline in gasoline demand doesn't mean a recession -- yet. Among other points, NDD writes: "It appears that gasoline conservation is a top priority of consumers." and he provides a list (with data): Ridership of mass transit is up, online retail purchases have increased, automakers are selling more fuel efficient cars, teen driving is down, and more.

The Department of Transportation (DOT) reported:
• Travel on all roads and streets changed by +1.3% (3.2 billion vehicle miles) for December 2011 as compared with December 2010.

• Cumulative Travel for 2011 changed by -1.2% (-35.7 billion vehicle miles). The following graph shows the rolling 12 month total vehicle miles driven.

Even with a small year-over-year increase in December, 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 49 months - and still counting!

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

This is the first year-over-year increase in miles driven since February 2011.

With the recent increases in gasoline prices, we might see year-over-year declines again in January or February. But this doesn't mean a recession - instead, as NDD notes, it appears that behavior is changing, and also that the fleet is becoming more efficient ... and, of course, growth is still sluggish and holding back driving too.

From economist Tom Lawler: Number of Seriously-Delinquent FHA-Insured SF Loans Jumped Again in January; HUD Secretary “Fiddles” as FHA Burns

Data from the FHA’s Neighborhood Watch Early Warning System indicate that the number of FHA-insured loans that were seriously delinquent jumped again in January. According to report on the EWS for servicers who combined have an “active” FHA servicing portfolio of over 7.33 million loans, 732,775 of these loans were seriously delinquent at the end of January. While this report does not exactly match the SDQ numbers reported in various monthly FHA reports (which have not yet been released in January, it tracks the “official” numbers pretty closely. These data, combined with other data from the EWS (not shown here), suggest that the performance of the FHA’s pre-2010 book has continued to deteriorate significantly.

Based on this report, I estimate that the serious delinquency rate on FHA’s SF book in January (as measured by the FHA Monthly Outlook and/or FHA Monthly Report to the FHA commissioner) jumped to around 9.9% last month, up from 9.59% in December, 8.18% last June, and 8.89% last January.

As I noted last week, the pace of FHA loan modifications slowed dramatically in the latter part of last year, while the pace of property “conveyances” was shockingly low given the large number of seriously delinquent/in-foreclosure loans. Obviously, the slow pace of problem-loan “resolutions” has been at least partly behind the sharp increase in the number of seriously-delinquent FHA loans.

Many find it moderately disturbing that HUD Secretary Donovan has of late been working mainly on the big “mortgage settlement” -- and even worked to have part of the mortgage settlement money go to FHA – and has been “jawboning” Fannie and Freddie to “embrace” principal write-downs, while at the same time FHA’s problem-loan resolution activity plunged and the number of seriously delinquent FHA loans has surged. However, headlines such as “Donovan Fiddles as FHA Burns” seem a bit strong – but I used it anyway!

The Chicago Fed released the national activity index (a composite index of other indicators): Index shows economic growth in January again above average
The Chicago Fed National Activity Index decreased to +0.22 in January from +0.54 in December, but remained positive for the second straight month for the first time in a year. ...

The index’s three-month moving average, CFNAI-MA3, increased from +0.06 in December to +0.14 in January, reaching its highest level since March 2011. January’s CFNAI-MA3 suggests that growth in national economic activity was slightly above its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests limited 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 slightly above trend in January - but still not strong growth.

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.

Reuters (via Peter Spiegel) Euro zone finance ministers strike deal on second Greek package. Financing of 130 bln euros, debt-to-GDP of 121 pct by 2020

Update: From Reuters: Euro zone strikes deal on second Greek bailout packageEuro zone finance ministers struck a deal ... that includes new financing of 130 billion euros and aims to cut Greece's debt to 121 percent of GDP by 2020, two EU officials said.

"The financial volume (of the Greek package) is 130 billion euros and debt-to-GDP (will be) 121 percent. Now it's down to work on the statement," one official involved in the negotiations told Reuters.
...
Private sector holders of Greek debt are expected to take losses of up to 53.5 percent on the nominal value of their bonds as part of a debt exchange that will reduce Greece's debts by around 100 billion euros.Press conference soon

EU Press Releases (no statement yet)

While we wait for news from Europe, here is an update from economist Tom Lawler:

Several of the home sales reports I’ve seen since early last Friday showed materially stronger YOY growth than I had expected, especially in a number of Midwest markets. As a result, I have upped my estimate for January existing home sales as measured by the National Association of Realtors. Right now my regional tracking suggests that the NAR will report that existing home sales ran at a seasonally adjusted annual rate of about 4.76 million, up about 3.3% from December’s pace, and up about 2.6% from last January’s pace. Note that January is seasonally the weakest month of the year in terms of closed home sales. (The weakest month for contracts signed from a seasonal perspective is December).

On the inventory front, it is pretty clear that existing home listings fell again nationally last month, though various “trackers” differ on how much. In addition, the NAR’s reported monthly inventory drop of 9.2 in December was significantly larger than listings data seemed to suggest. My “best guess” is that the NAR will report a monthly inventory drop of about 2.2%, which would be a YOY drop of 20.0%. While most realtor groups/associations reported a decline in active listings from December to January, there were several that reported increases.

CR Note: This sales rate, combined with a decline in inventory, could put months-of-supply under 6 months for the first time since early 2006. Some of the decline is seasonal (inventory is always low in January and months-of-supply uses NSA inventory numbers). The NAR is scheduled to report existing home sales on Wednesday.

Update2: Live video of meeting room (empty are 5 PM ET). A Greek site is reporting the main meeting has concluded, but they are still working on the Private Sector haircuts.

Resources here (Update: delayed as usual ...)

Press conference soon
This webcast is scheduled to start on 20 February 2012 23:00 CET

STARTING TIME SUBJECT TO CHANGE.EU Press Releases (no statement yet)

By request, the following graphs show the percent of loans delinquent by loan type: Prime, Subprime, FHA and VA. First a table comparing the number of loans in 2007 and Q4 2011 so readers can understand the shift in loan types.

Both the number of prime and subprime loans have declined over the last four years; the number of subprime loans is down by about one-third. Meanwhile the number of FHA loans has increased sharply.

Note: There are about 49 million total first-lien loans - the MBA survey is about 88% of the total.
MBA National Delinquency Survey Loan Count Q2 2007Q4 2011ChangeQ4 2011 Seriously Delinquent Prime33,916,83030,660,085-3,256,7451,631,117 Subprime6,204,5354,178,732-2,025,8031,017,521 FHA3,030,2146,611,3963,581,182596,348 VA1,096,4501,442,416345,96669,813 Survey Total44,248,02942,892,629-1,355,4003,314,799

Click on graph for larger image.

First a repeat: This graph shows the percent of loans delinquent by days past due. Loans 30 days delinquent increased to 3.22% from 3.19% in Q3. This is at about 2007 levels. Delinquent loans in the 60 day bucket decreased to 1.25% from 1.30% in Q4. This is the lowest level since Q4 2007.

There was a decrease in the 90+ day delinquent bucket too. This decreased to 3.11% from 3.50% in Q3 2011. This is the lowest level since 2008, but still way above normal (probably around 1% would be normal). The percent of loans in the foreclosure process declined slightly to 4.38% from 4.43%.

Note: Scale changes for each of the following graphs.

The second graph is for all prime loans.

This is the key category now ("We are all subprime!", Tanta).

Since there are far more prime loans than any other category (see table above), about half the loans seriously delinquent now are prime loans - even though the overall delinquency rate is lower than other loan types.

This graph is for subprime. This category gets most of the attention - mostly because of all the terrible loans made through the Wall Street "originate-to-distribute" model and sold as Private Label Securities (PLS). Not all PLS was subprime, but the worst of the worst loans were packaged in PLS.

Although the delinquency rate is still very high, the number of subprime loans has declined sharply.

This graph is for FHA loans. The delinquency rate increased in Q4. Most of the FHA loans were made in the last few years, not in the 2004 to 2006 period like subprime - but as those loans season, the delinquency rate is expected to increase.

The earlier improvement was a combination of the increase in number of loans (recent loans have lower delinquency rates) and eliminating Downpayment Assistance Programs (DAPs). These were programs that allowed the seller to give the buyer the downpayment through a 3rd party "charity" (for a fee of course). The buyer had no money in the house and the default rates were absolutely horrible.

The last graph is for VA loans. This is a fairly small category (see table above).

There are still quite a few subprime loans that are in distress, but the real keys are prime loans and FHA loans.

All current mortgage delinquency graphs.

From the Athens News: Venizelos: Bailout uncertainty to endFinance Minister Evangelos Venizelos said on Monday technical issues on the country's new bailout package were still being discussed but that he expected the uncertainty to end at a meeting of eurozone finance ministers in Brussels.

"We expect today the long period of uncertainty – which was in the interest of neither the Greek economy nor the euro zone as a whole – to end," Venizelos was quoted as saying in a finance ministry statement.From the WSJ: Finance Ministers Look to Sign Off on Greek Deal Finance ministers from the 17 euro-zone countries will meet in Brussels at 2 p.m. GMT on Monday, looking to sign off on a deal worth at least €130 billion ($170.9 billion) that will slash Greece's debt burden and allow it to stay in the euro zone, albeit under a degree of external control and scrutiny never witnessed in Europe in modern times.From the Financial Times: Eurozone crisis: live blog

Weekend:
• Summary for Week ending February 17th
• Schedule for Week of February 19th

Not a surprise ... from the WSJ: IMF Draft Sees Greek Debt Reaching 129% of GDP in 2020 The International Monetary Fund now expects Greece's debt to reach 129% of the country's gross domestic product in 2020 ... That is even further above the level most economists consider sustainable than previously thought, making it more difficult than ever to argue that the country can ever repay its debts.

Despite this, a number of signs last week had indicated that there was still enough political will in the euro zone to go ahead with a new, enhanced rescue package.It still sounds like something will be worked out. We will know soon. Here are a few key dates for Greece.

Yesterday:
• Summary for Week ending February 17th
• Schedule for Week of February 19th

The Census Bureau will report new home sales on Friday, and the consensus is for sales of 315 thousand on a seasonally adjusted annual rate (SAAR) basis. This is up less than 2% from the 310 thousand SAAR sales reported in January 2011.

That seems a little puzzling. Consider the following ...

First, look at the NAHB builder Housing Market Index. More builders still view sales as "poor" as opposed to "fair" or "good", but the HMI - and all of the components - are up sharply from a year ago (the most recent report was for February, but compare January 2012 to January 2011):
Housing Market IndexTraffic of Prospective BuyersCurrent Sales Jan-11161215 Jan-12252125 Feb-12292230
This would seem to suggest more than a 1% or 2% increase in sales.

Second, look at the recent builder reports (from Tom Lawler):

 SettlementsNet OrdersBacklogEnd 2011End 2010End 2009End 2011End 2010End 2009End 2011End 2010End 2009D.R. Horton4,1183,6375,5293,7943,3634,0374,5303,8544,136PulteGroup4,3034,4056,2003,0843,0443,7483,9243,9845,931NVR2,3912,6392,5502,1581,7652,0003,6762,9163,531The Ryland Group1,0409091,6669157759691,5141,1871,732Meritage Homes8948371,2027497136219157781,095Beazer Homes8825499617245537281,309800950MDC Holdings9508651,1095235196371,043842826Standard Pacific782619943615428547681414599M/I Homes667650858505460448676532650 Total16,02715,11021,01813,06711,62013,73518,26815,30719,450 YoY % Change6.1%-28.1% 12.5%-15.4% 19.3%-21.3%

From economist Tom Lawler on February 7th: The latest Census report on new SF sales showed a YOY increase in Q4/2011 sales of just 3%, and a YOY decline in Q4/2010 sales of 20.5%.

The nine-builder group’s order backlog at the end of 2011 was up 19.3% from the end of 2010.

As I’ve noted many times, Census’ methodology for measured new SF sales is not directly comparable to reports from builders. I’m guessing that part of the “stronger than Census” builder reports reflect gains in market share, but I’m also guessing that overall new home sales were a bit better than preliminary Census data suggested.

The combination of higher order backlogs, stronger sales, and unusually mild weather in much of the country is likely to result in single-family starts numbers in the first few months of 2012 that are significantly higher than “consensus.”Click on graph for larger image.

Sure enough. Single family housing starts were revised up sharply for December and were above 500 thousand SAAR in January. As Lawler notes, some of this was probably weather related, but some of the pick up was evident in the builder reports.

So if the builders are reporting a “stronger than Census” increase in sales (even accounting for market share gains), confidence is up (actually less pessimism), and single family starts are up sharply from a year ago, it seems surprising that new home sales were essentially unchanged in January.

Goldman Sachs is forecasting sales of 310 thousand SAAR in January 2012 (no change year-over-year), and Merrill Lynch is forecasting 315 thousand. I think I'll take the over.

The causes of the Great Recession were similar to the Great Depression - as opposed to most post war recessions that were caused by Fed tightening to slow inflation - and I'm frequently asked if we could compare the percent job losses during the two periods. Unfortunately there is very little data for the Great Depression, although there are some annual estimates.

From BLS economist Steven Haugen: Measures of Labor Underutilization from the Current Population SurveyIt is estimated that in 1933, at the depth of the Great Depression, about 13 million persons in the U.S. were unemployed, which translates into an unemployment rate of about 25 percent.1 However, those estimates were not available at the time. Throughout the Great Depression, there was little information on the extent of unemployment in the country. More important, there was no good way to assess whether the situation was getting better or worse. The wealth of timely statistical information on the labor market that we now take for granted simply didn’t exist.1 Stanley Lebergott, “Labor Force, Employment, and Unemployment, 1929-39: Estimating Methods,” Monthly Labor Review, July 1948.

However we can use some of the annual estimate to get a rough idea of the comparison to the current recession:

Click on graph for larger image.

This graph compares the job losses from the start of the employment recession, in percentage terms for the Great Depression (rough estimate) and the 2007 recession.

Although the 2007 recession is much worse than any other post-war recession, the employment impact was much less than during the Depression. Note the second dip during the Depression - that was in 1937 and the result of austerity measures.

This graph shows the job losses from the start of the employment recession, in percentage terms for the post war recessions. This shows the depth of the employment recession - and the relatively slow recovery due to the lingering effects of the housing bust and financial crisis - similar to the lingering effects of the Depression.

Yesterday:
• Summary for Week ending February 17th
• Schedule for Week of February 19th

The debt deal needs to be finalized before March 20th when €14.4bn of Greek bonds mature. Without the debt deal, Greece would default on March 20th.

On Monday Feb 20th, euro-area finance ministers are expected to meet in Brussels and approve the deal. According to Reuters: Some officials in the 17-nation currency union warn chances of a deal at a euro zone meeting on Monday are little higher than 50-50.Obviously approval isn't assured.

Sometime next week the Greek parliament is expected to pass legislation to insert "collective action clauses" in bonds to force all private holders to accept the deal. The final details of the swap are expected to be set at the Monday finance minister meeting, and the swap is scheduled to take place between March 8th and March 11th (cutting it close!). See Financial Times: Greece sets date for €200bn debt swap

Even with all the austerity and severe recession, most Greeks still want to stay in the euro, from Reuters: A survey by pollster MRB for Sunday's Realnews newspaper showed 72.7 percent of Greeks want the country to stay in the euroHere is a list of key dates:

Feb 20th: Euro-area finance ministers meet in Brussels.
Week of Feb 20th: Greek parliament to vote on legislation to insert "collective action clauses" in bonds.

March 1st and 2nd: EU leaders meet in Brussels.
March 8th: ECB holds rate meeting
March 8th - 11th: €200bn private sector bond swap is scheduled.
March 12th: Euro-area finance ministers meet in Brussels
March 20th: €14.4bn of Greek bonds mature.

Earlier:
• Summary for Week ending February 17th
• Schedule for Week of February 19th

From the Mercury News: Gas prices surging beyond $4 a gallon -- and they will go higher Gasoline prices are rising at an almost unheard-of pace, and painfully so in California, where the cost for a fill-up now exceeds $4 a gallon in five cities and is approaching that dreaded mark in numerous others, including San Jose and Oakland.

The statewide average of $3.96 on Friday is 25 cents higher than just a month ago and 46 cents more than this time last year. ... Some oil analysts predict $4.50 a gallon or more by Memorial Day on the West Coast and major cities across the United States such as Chicago, New York and Atlanta.High gasoline prices is one reason American are driving less. Brad Plumer at the WaPo discusses a few other reasons: Driving, gas prices and the end of retail Americans have cut way back on driving in recent years. Total vehicle-miles traveled has stagnated since 2007. One big question is whether this is a temporary blip due to the downturn — unemployed people, after all, don’t commute — or evidence of a long-term structural shift.

Theories for a structural shift generally involve demographics: America’s swelling ranks of retirees don’t drive as much, while kids these days prefer Facebook to motoring around with friends. But there’s another possible factor: the torrid growth of online shopping. Phil Izzo has the numbers, which are striking.And below is a graph of gasoline prices. Gasoline prices bottomed in December and have been moving up again. Note: The graph below shows oil prices for WTI; gasoline prices in most of the U.S. are impacted more by Brent prices.

Orange County Historical Gas Price Charts Provided by GasBuddy.com

Earlier:
• Summary for Week ending February 17th

The key reports this week are the January existing home sales report on Wednesday and the new home sales report on Friday. The AIA's Architecture Billings Index for January will also be released on Wednesday.

On Friday, the US Monetary Policy Forum will be held in New York. The discussion will focus on a paper titled: “Housing, Monetary Policy and the Recovery”.

In Europe, the euro-area finance ministers will meet on Monday.
----- Monday, Feb 20th-----
All US markets will be closed in observance of Presidents' Day.

Euro-area finance ministers meet in Brussels to discuss the Greek debt deal.

----- Tuesday, Feb 21st -----
8:30 AM ET: Chicago Fed National Activity Index (January). This is a composite index of other data.

----- Wednesday, Feb 22nd -----
7:00 AM: The Mortgage Bankers Association (MBA) will release the mortgage purchase applications index. This index has been weak this year, although this does not include all the cash buyers.

10:00 AM: Existing Home Sales for January from the National Association of Realtors (NAR).

The consensus is for sales of 4.69 million on seasonally adjusted annual rate basis.

Economist Tom Lawler estimates the NAR will report sales of 4.66 million, up slightly from December’s pace. It is possible that months-of-supply will be under 6 months for the first time since early 2006, and that listed inventory will be at the lowest level since early-2005.

During the day: The AIA's Architecture Billings Index for January (a leading indicator for commercial real estate).

----- Thursday, Feb 23rd -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for an increase to 355,000 from 348,000 last week.

10:00 AM: FHFA House Price Index for December 2011. This is based on GSE repeat sales and is no longer as closely followed as Case-Shiller (or CoreLogic).

11:00 AM: Kansas City Fed regional Manufacturing Survey for January. The consensus is for an increase in this survey to 9 from 7 in January (above zero is expansion).

----- Friday, Feb 24th -----
10:00 AM ET: New Home Sales for January from the Census Bureau.

This graph shows New Home Sales since 1963. The dashed line is the current sales rate.

The consensus is for a slight increase in sales to 315 thousand Seasonally Adjusted Annual Rate (SAAR) in January from 307 thousand in December. The consensus might be a little low based on the homebuilder confidence survey.

9:55 AM: Reuter's/University of Michigan's Consumer sentiment index (final for February). The consensus is for a slight increase to 72.9 from from the preliminary reading of 72.5.

During the day: 2012 US Monetary Policy Forum [T]here will be a presentation on this year’s report on housing and the state of the recovery, which explores first, how bad is the physical and debt overhang of housing in the US economy? And secondly, does the peculiar state of the US housing market substantially limit the effectiveness of monetary policy that lowers long rates? The report titled "Housing, Monetary Policy and the Recovery," is being written by Mike Feroli (JP Morgan), Ethan Harris (Bank of America), Amir Sufi (Chicago Booth), and Ken West (University of Wisconsin). James Bullard (Federal Reserve Bank of Saint Louis) and John Williams (Federal Reserve Bank of San Francisco) will discuss the report.