Saturday , October 31 2020
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The author Bill McBride
Bill McBride
A full time blogger, Mr. McBride retired as a senior executive from a small public company in the '90s. Mr. McBride holds an MBA from the University of California, Irvine, and has a background in management, finance and economics.

Calculated Risk

October 30 COVID-19 Test Results; Record 97,000 Cases

The US is now averaging close to 1 million tests per day. Based on the experience of other countries, the percent positive needs to be well under 5% to really push down new infections (probably close to 1%), so the US still needs to increase the number of tests per day significantly (or take actions to push down the number of new infections).There were 1,077,164 test results reported over the last 24 hours.There were 97,080 positive tests. This is a new record.Almost 22,500 Americans...

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Fannie Mae: Mortgage Serious Delinquency Rate Decreased in September

Fannie Mae reported that the Single-Family Serious Delinquency decreased to 3.20% in September, from 3.32% in August. The serious delinquency rate is up from 0.68% in September 2019.These are mortgage loans that are "three monthly payments or more past due or in foreclosure".The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%.Click on graph for larger imageBy vintage, for loans made in 2004 or earlier (2% of portfolio), 5.81% are seriously delinquent (up from 5.79% in...

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Las Vegas Visitor Authority: No Convention Attendance, Visitor Traffic Down 51% YoY in September

From the Las Vegas Visitor Authority: September 2020 Las Vegas Visitor StatisticsGradual increases continued in September as the destination hosted approx. 1.7M visitors, just under half of last year's estimated tally but up 10.9% from last month. While operating at varying capacities, open properties in September represented an inventory of 133,079 rooms.* Total occupancy reached 46.8% for the month as weekend occupancy improved to 66.1% and midweek occupancy reached 38.5%. Average...

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Q3 2020 GDP Details on Residential and Commercial Real Estate

The BEA has released the underlying details for the Q3 advance GDP report this morning.The BEA reported that investment in non-residential structures decreased at a 14.6% annual pace in Q3. This is the fourth consecutive quarterly decline (weakness started before the pandemic).Investment in petroleum and natural gas exploration decreased sharply in Q3 compared to Q2, and was down 60% year-over-year.Click on graph for larger image.The first graph shows investment in offices, malls and...

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Real Personal Income less Transfer Payments

Government transfer payments were mostly unchanged in September compared to August, but were still almost $1 trillion (on SAAR basis) above the February level.  Most of the increase in transfer payments - compared to the level prior to the crisis - is from unemployment insurance and "other" (CARES ACT).  There was a sharp decline in unemployment insurance in both August and September.This table shows the amount of unemployment insurance and "Other" transfer payments since February...

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Black Knight: Number of Homeowners in COVID-19-Related Forbearance Plans Increased Slightly

Note: Both Black Knight and the MBA (Mortgage Bankers Association) are putting out weekly estimates of mortgages in forbearance.This data is as of October 27th.From Forbearance Numbers Rise Above 3 Million Once AgainIn the past week, we saw the number of mortgages in active forbearance rise by 31,000 (a 1% increase). This increase was driven by limited extension and removal activity, along with an increase in forbearance starts. There were 50,000 forbearance removals this week, the lowest of...

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Personal Income increased 0.9% in September, Spending increased 1.4%

The BEA released the Personal Income and Outlays report for September: Personal income increased $170.3 billion (0.9 percent) in September according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $150.3 billion (0.9 percent) and personal consumption expenditures (PCE) increased $201.4 billion (1.4 percent). Real DPI increased 0.7 percent in September and Real PCE increased 1.2 percent. The PCE price index increased 0.2 percent...

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Friday: Personal Income and Outlays

Friday:• At 8:30 AM ET, Personal Income and Outlays for September. The consensus is for a 0.5% increase in personal income, and for a 1.0% increase in personal spending. And for the Core PCE price index to increase 0.2%.• At 9:45 AM, Chicago Purchasing Managers Index for October. The consensus is for a reading of 59.3, down from 62.4 in September.• At 10:00 AM, University of Michigan's Consumer sentiment index (Final for October). The consensus is for a reading of 81.2.

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October 29 COVID-19 Test Results

The US is now averaging close to 1 million tests per day. Based on the experience of other countries, the percent positive needs to be well under 5% to really push down new infections (probably close to 1%), so the US still needs to increase the number of tests per day significantly (or take actions to push down the number of new infections).There were 1,096,494 test results reported over the last 24 hours.There were 88,452 positive tests. This is a new record.Almost 21,500 Americans...

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Q3 GDP: Investment

Investment has been weak for some time, and slumped in Q1, and fell off a cliff in Q2 along with the overall economy.  Investment bounced back in Q3, especially for residential investment and investment in equipment - but not for non-residential structures.The first graph below shows the contribution to GDP from residential investment, equipment and software, and nonresidential structures (3 quarter trailing average). This is important to follow because residential investment tends to...

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