View Full Version : Senior loan officer survey, not as wonky as it may sound
A chart based on the Fed's quarterly survey of senior loan officers, which shows both certain loan type demand rates and also if credit is tightening or loosening on certain types of loans.
It was one of the 3 or 4 key charts that helped me to correctly call the housing top in 2005, just from noticing that loans were getting tighter and a key trend had changed.
In order to hopefully more clearly present the data, I've inverted the right hand scale on which both the red & green lines should be read. In other words, when loan demand goes down, the red & green lines go up.
http://www.nowandfutures.com/images/loan_officer_survey.png
:eek: He he he !.... This was brilliant. Where is jtabeb?
BiscayneSunrise
04-27-09, 04:03 AM
Interesting to note, that we are just now at levels seen in the 2000-2003 timeframe.
Arguably, since overall macro conditions are worse now, those trends will continue north. Or are you seeing a change in trend?
The only trend change is in prime loan standards, but they're still in a record high range and also still tightening on a relative basis.
The only trend change is in prime loan standards, but they're still in a record high range and also still tightening on a relative basis.
the timing of the recent turn looks coincident with finster's fdi.
the timing of the recent turn looks coincident with finster's fdi.
I urge caution with that interpretation since the most recent data on the loan survey is from the quarter ending 1/2009.
The Bank of Japan just recently released their own loan survey and here's one of the charts.
http://www.nowandfutures.com/d2/loan_demand_boj_japan2000-2008.png
http://www.boj.or.jp/en/type/stat/boj_stat/loos/loos0904.pdf
:eek: He he he !.... This was brilliant. Where is jtabeb?
I'm here but to be honest I don't know what conclusion you can draw from the data. House prices declined modeslty from 1991-1995. What is the take-away from the current data vs. housing prices. (Yes, I don't see it)
I'm here but to be honest I don't know what conclusion you can draw from the data. House prices declined modeslty from 1991-1995. What is the take-away from the current data vs. housing prices. (Yes, I don't see it)
I may be wrong, but to me It means that if the Fed continue to treat the economy with a high pressure dollar enema, very soon a homebuyer with a good credit may get the best deal in real wealth terms (with medium range interest factored in).
I'm here but to be honest I don't know what conclusion you can draw from the data. House prices declined modeslty from 1991-1995. What is the take-away from the current data vs. housing prices. (Yes, I don't see it)
In the 1991-95 period, housing went down quite substantially in places like California, and the growth rate also slowed substantially in all housing... and even lost value when inflation adjusted.
http://www.nowandfutures.com/images/case_shiller_cpi_lies1900on.png
And as I noted in the initial, the trends reversed quite clearly near the housing top in 2005. Currently, the take away is that all the chart really shows is the same trends being in motion that started in 2005-6.
I mostly posted it as an aid for helping determine when housing has bottomed, which I generally expect within two years and probably less. Bottoming does not necessarily mean that they'll start going back up at a rate higher than inflation though.
In the 1991-95 period, housing went down quite substantially in places like California, and the growth rate also slowed substantially in all housing... and even lost value when inflation adjusted.
http://www.nowandfutures.com/images/case_shiller_cpi_lies1900on.png
And as I noted in the initial, the trends reversed quite clearly near the housing top in 2005. Currently, the take away is that all the chart really shows is the same trends being in motion that started in 2005-6.
I mostly posted it as an aid for helping determine when housing has bottomed, which I generally expect within two years and probably less. Bottoming does not necessarily mean that they'll start going back up at a rate higher than inflation though.
Here is the conndurum I'm stuck with.
The Depression vs what we have now.
Itulip's call for no housing bottom any time soon, based on job losses accelerating, crashing economy etc. Vs Shadow Stats Real Home prices (in the above) showing "hey, we are back to (almost) historical levels of real prices".
I would buy in Califoria right now. My problem is I'm looking in oregon and it is CHEAPER to buy a similar house on the forclosure market in CA vs doing the same in OR. (BTW OR has the 3rd highest unemployment rate in the country, and it's getting worse by the day).
I'm flummoxed, which is a relatively rare state for me to find myself in.
(Grumble, Cuss, Grumble)
Bottoming does not necessarily mean that they'll start going back up at a rate higher than inflation though.
Good point bart, and if higher mortgage rates are to be factored in flipping houses may be dead for a few years (like 5-10) as a way of "investment.
Here is the conndurum I'm stuck with.
The Depression vs what we have now.
Itulip's call for no housing bottom any time soon, based on job losses accelerating, crashing economy etc. Vs Shadow Stats Real Home prices (in the above) showing "hey, we are back to (almost) historical levels of real prices".
I would buy in Califoria right now. My problem is I'm looking in oregon and it is CHEAPER to buy a similar house on the forclosure market in CA vs doing the same in OR. (BTW OR has the 3rd highest unemployment rate in the country, and it's getting worse by the day).
I'm flummoxed, which is a relatively rare state for me to find myself in.
(Grumble, Cuss, Grumble)
I wish I had anything helpful to say about Oregon prices but I'm not familiar with the area. Perhaps something about laws & regulations is making the difference or maybe its emigration from California & elsewhere - or who knows what else.
As Symbols noted, my point about bottoming doesn't mean anything not only about prices going up at a rate equal to above inflation but also means they may not even move on a nominal price basis - not unlike what that Case Shiller chart shows between about 1990 and 1996.
And then there's the wild cards of taxes, fees and also the normal stuff about maintenance, insurance, etc. They're all "necessities" which roughly means they likely won't be going down in price much if any when an apples to apples comparison is made.
And I'll raise you a *mumble*... :confused:
And as long as real estate came up again, here's one of my attempts at a forecast, complete with reasoning.
http://www.nowandfutures.com/images/case_shiller_home_month_supply.png
...I would buy in Califoria right now. My problem is I'm looking in oregon and it is CHEAPER to buy a similar house on the forclosure market in CA vs doing the same in OR. (BTW OR has the 3rd highest unemployment rate in the country, and it's getting worse by the day)....
I wish I had anything helpful to say about Oregon prices but I'm not familiar with the area. Perhaps something about laws & regulations is making the difference or maybe its emigration from California & elsewhere - or who knows what else.....
Not to hijack too much, but as far as Oregon goes I would say there are two main reasons:
1) A time delay. The tech-bubble recession hit us pretty hard and things were slow to pick up again, so we were late getting ramped up in the housing bubble. A lot of the buyers that drove our bubble market came from California, but it took a while before they started selling their California homes at extravagant prices and then buying in Oregon (and elsewhere). A few years later, California, Vegas, et al then started to crash approximately a year before the decline finally reached Oregon and Washington.
2) Denial. As in the well-known investor sentiment cycle (http://bigpicture.typepad.com/comments/2006/08/sentiment_cycle.html) graphic. About a month ago, someone asked where we were on the iTulip home equity extraction chart, and FRED said between E and F (http://www.itulip.com/forums/showthread.php?p=86457#poststop).
http://www.itulip.com/homeequityextraction.jpg
I felt like Oregon was still at B or maybe C, which on the sentiment cycle I would put at Denial slipping into Fear. Still a lot of people around here hoping things will get better soon. JMHO
You are a bad guy, you broke my dream to be an American happy house flipper. At least we don't have the flu here in Brazil yet.
Not to hijack too much, but as far as Oregon goes I would say there are two main reasons:
1) A time delay. The tech-bubble recession hit us pretty hard and things were slow to pick up again, so we were late getting ramped up in the housing bubble. A lot of the buyers that drove our bubble market came from California, but it took a while before they started selling their California homes at extravagant prices and then buying in Oregon (and elsewhere). A few years later, California, Vegas, et al then started to crash approximately a year before the decline finally reached Oregon and Washington.
2) Denial. As in the well-known investor sentiment cycle (http://bigpicture.typepad.com/comments/2006/08/sentiment_cycle.html) graphic. About a month ago, someone asked where we were on the iTulip home equity extraction chart, and FRED said between E and F (http://www.itulip.com/forums/showthread.php?p=86457#poststop).
http://www.itulip.com/homeequityextraction.jpg
I felt like Oregon was still at B or maybe C, which on the sentiment cycle I would put at Denial slipping into Fear. Still a lot of people around here hoping things will get better soon. JMHO
No, you make a really good point.
I thought the bubble would collapse at the periphery first, but it seems to be more FIFO, than LIFO. By that I mean California boomed and then the bubble spread to surrounding state with out-migration. I think you're right and I got the process reversed. CA collapsed and that will have to reverberate out to the surrounding states as an echo. So I guess my understanding of the process is now[ BOOM-> Echo BOOM-> Bust ->Echo Bust].
Disclaimer, my wife and I grew up in eugene and are OSU grads, so we have an EMOTIONAL bias about buying a house back in our home state that we have to fight in order to make a more rational decision (great desire to be back with family, after spending all of our professional lives moving around the eastern half of the country).
jimmygu3
04-27-09, 10:42 PM
You are a bad guy, you broke my dream to be an American happy house flipper. At least we don't have the flu here in Brazil yet.
The operative word being "yet". But I hope you guys don't get it.
You are a bad guy, you broke my dream to be an American happy house flipper. At least we don't have the flu here in Brazil yet.
Aweber, this manbirdpig flu strain is really not a big concern (as I've previously said). The big risk is that this is an unstable virus and it can easyly mutate. There are already flu cases in New York. This is the true scary thing. Imagine if this virus get into Goldman Sachs and out of the two plagues a more a really lethal strain is born: the flying pigmen virus.
The spread of this new virus cannot be stopped. The progression of symptoms is a nightmarish
-the entry point is an infection of the government (at all levels)
-the mainstream media becomes delirious and the talking heads start talking nonsense creating optimum conditions for spreading the infection
- your retirement savings are consumed in the fraud fever
- your portfolio falls striken to the ground and is transformed into red blody phlegm
- your house value starts sweating to complete dehydration
- you lose your job
- you get in debt up to your eyballs
of course there other minor simptoms including a runny nose, feeling miserable etc etc
The only way to prevent falling a victim to this deadly pandemic is to use a good personal protection mask (http://www.givemeliberty.org/RTP2/MISC/Graphics/vendetta-mask.jpg), to have a stash of good antivirals (http://www.ar-15.us/pic/shootout/001_00036.jpg) and enough supplies for a healthy diet (http://www.eileencarda.com/FHA/gold-coins-images.JPG) to be able to survive the pandemic.
It seems my latest creative work or surreal fiction was not as appreciated as the Book of Greenspam.
Anyway, this is an interesting clip about housing:
http://www.cnbc.com/id/15840232?video=1105811137&play=1
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Very funny piece over flu, probably it is going to be worst to the economy than the people.
The video puts in perspective , my brazilian perspective anyway, the house market, probably California is going to follow what happened here, massive incentive to the low end that is living in subhuman conditions and can't afford to buy a place to live.
Until now the flu got only the major media here I hope it stand there.
New quarterly data released today.
http://www.nowandfutures.com/images/loan_officer_survey_short.png
WildspitzE
05-06-09, 11:44 AM
Is it because of the scale or does this graph look the same as the original one in post #1?
Is it because of the scale or does this graph look the same as the original one in post #1?
The initial one goes all the way back to when the data started being available in 1990. The other one starts in 1999 so that recent changes are more easily visible.
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