2012 February 20 | timiacono.com

RealtyTrac’s Latest Foreclosure Stats

From a RealtyTrac presentation on foreclosures last week comes the chart below showing the dramatic increase in the amount of time it takes for lenders to take back a property that goes into default. After the recent robo-signing settlement, you’d think these numbers will start coming down this year, but, then again, no one earns big bonuses at the big banks for helping management realize losses faster.

There are some other interesting charts in there as well, including pie charts on underwater mortgages, delinquent loans, and properties that have made it all the way through the foreclosure process, along with bank loss data for California properties where, to me, $41K sounded a little low given that average loan amounts were north of $400K.

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The Shale Oil Boom Grows Bigger

We hear a lot about the shale oil boom in this part of the country where, to the surprise of many coming in from out-of-town, gasoline prices are relatively inexpensive at around $3 a gallon (see this item from last week and GasBuddy’s heat map for more on this). This Globe & Mail story about the shale oil boom (that also extends into Canada) touches on some of the other ways in which North American and global energy markets are diverging.

Some analysts believe the growth in production in North America will continue to exceed market expectations and will swamp the mid-continental region with oil, driving down the benchmark U.S. crude, West Texas intermediate, and forcing Canadian producers to accept steep discounts on WTI prices.

Combined with lower demand and increased biofuel production, growth in oil output has resulted in a reduction of U.S. imports to 8 million barrels per day at the end of 2011, from 13 million barrels per day in mid-2007. Imports as a percentage of U.S. demand dropped to 45 per cent last year, from 60 per cent in 2005.

In recent report, Citigroup analysts forecast that additional tight oil production could add as much as 3 million barrels per day to U.S. supply by 2020, with the Gulf of Mexico output climbing by another 2 million barrels per day.

In addition to North Dakota’s booming Bakken, more production is expected in Texas’s Eagle Ford and Permian Basin, Colorado’s Niobara, Louisiana’s Mississippi Lime, Ohio’s Utica and the Monterey basin in California, a state that the U.S. Energy Information Administration estimates could hold 15 billion barrels of recoverable reserves, several times greater than the Bakken.

Energy companies are wished good luck in their attempt to begin fracking off the coast of California, though, with the state’s budget situation as it is, maybe it’s not as far fetched as it once was. The Citigroup report went so far as to say that the theory of “peak oil” is now dead, an idea that is more believable when realizing that there are Bakken oil formations in many other parts of the world – not just here in North America.

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China Cuts Reserve Requirements

China’s central bank cutting bank reserve ratios on Saturday in order to spur lending and boost economic growth was one of the weekend’s major stories, that is, along with more Middle East geopolitical turmoil and surging oil prices … perhaps they’re all connected.

Reserve requirements will be reduced from 21.0 percent to 20.5 percent for large banks, leaving China with what are still some of the highest bank reserve ratios in the world. Wikipedia provides a good discussion of this subject that includes the following caveat to the official reserve ratio of 10 percent here in the U.S.:

Effective December 27, 1990, a liquidity ratio of zero has applied to CDs, savings deposits, and time deposits, owned by entities other than households, and the Eurocurrency liabilities of depository institutions. Deposits owned by foreign corporations or governments are currently not subject to reserve requirements.

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Presidents’ Day Morning Links

MUST READS
Oil price hits eight-month high – BBC
China cuts RRR to ease credit crunch – China Daily
Eurozone crisis live: Greece bailout decision due today – Guardian
Iranian ships reach Syria, China warns of civil war – Reuters
Pressure, Chinese and Foreign, Drives Changes at Foxconn – NY Times
Icelandic Anger Brings Debt Relief in Best Crisis Recovery Story – Bloomberg
Shale oil boom drives down prices versus rest of world – Globe & Mail
Flaws in CBO’s output gap measure – Sober Look
More on the Output Gap – Modeled Behavior
The Government and the Currency – Mises
A New Bull Market? – Noland, Prudent Bear
Outrageous adverts from the past – Mail Online

MARKETS/INVESTING
Oil jumps to 9-month high after Iran cuts supply – AP
Gold climbs with euro on hopes for Greek deal – Reuters
Work-arounds for the politics of Keystone – EconBrowser
AAPL vs Gold, Silver & Past Bubbles – Profitimes
Crude Oil — $132 just ahead – Peter Brandt
Gas Prices Approaching Magic Freak-Out Point – Business Insider
Why silver will not rise above $35/oz – Commodity Online
Bears burned, bug vindicated? – MarketWatch
Buffett’s Bullion Blunder – Bullion Vault
Emerging Asia Demand for Gold – Gregor

ECONOMY/WORLD/HOUSING/BANKING
Christina Romer on Learning from the Great Depression – The Broswer
Percent Job Losses: Great Recession and Great Depression – Calculated Risk
MMT: An unconventional take on economic strategy – Washington Post
Modern Monetary Theory: What’s Modern About It? – Baker, CEPR
Manufacturing sees shortage of skilled factory workers – Washington Post
Hoisington’s Hunt Says It’s Recession For 2012 – Daily Capitalist
London House Prices Surge to Near Record High – Bloomberg
Japan’s record trade deficit highlights weakening Chinese demand – Reuters
Iron Lady Merkel Bucks German Street on Greek Aid – Bloomberg
China’s January Housing Prices Post Worst Performance in a Year on Curbs – Bloomberg
Is the Fed ready for the bond market’s Arab Spring? – The Big Picture
The Federal Reserve Rip-Off – AmmoLand

 
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