BUSINESS

Michael Lewis, one of the nation's great non-fiction authors, is scheduled to speak in Dallas on March 30. He'll be discussing his new book about the U.S. financial crisis, The Big Short: Inside the Doomsday Machine.

The book, which is due out March 15, is about how the credit bubble and ensuing financial crisis led to the economic crash. Vanity Fair is offering a preview of coming attractions in this excerpt.

The event is sponsored by the World Affairs Council of Dallas-Fort Worth. More here.

Lewis is also the author of Liar's Poker; Moneyball; The Blind Side; and other books.

The Texas Workforce Commission just put out a statement saying that the state's payroll employment grew by only 14,800 jobs in January -- less than half the total it announced last week.

The TWC blamed "technical issues with data transfer" for the correction it sent out today.

That's the second time in as many years that the TWC has had to adjust the January employment figure. Last year, the agency said in early March that Texas had lost 75,800 jobs in January 2009. A week later, it came back and said the January job loss was only 50,600.

Estimating employment changes is hard, and January is a particularly tricky month because of comprehensive revisions to the previous year's data. But I think we can agree that a better outcome is needed here.

Given all the chatter about problems in commercial real estate, you'd think that CRE loan defaults and late payments would be over the roof. But a new report by the Mortgage Bankers Association says not so much.
At the end of 2009, the delinquency rate of commercial real estate loans held by banks and thrifts was lower than the average for U.S. institutions. About 5 percent of commercial real estate mortgages were past due 30 days or more, compared to an overall 7.3 percent late loan rate, the MBA reports.
Compare that to single-family home construction and land development loans which had a whopping 18.56 delinquency.
In 2008 and 2009, banks and thrifts charged off less than 1 percent of their commercial real estate loans - about $11 billion in debt. That compares to more than $300 billion in total loan write offs, MBA researchers found.

The latest nationwide home price snapshot shows Houston rabbiting ahead while Dallas turtles along.
Clear Capital says that Houston area home prices jumped by 12.8 percent in February compared with a year earlier. That put Houston on the researcher's list of the highest performing U.S. home markets.
But Dallas' 3.2 percent year-over-year gain and its 2.1 percent decline over the last quarter earned the area a "low performer" rating from Clear Capital.
I was more interested to see that almost 40 percent of the recent home sales in both Dallas and Houston were foreclosed or distressed properties.

That's the good news. The bad news is that state employers cut payrolls by 354,200 last year, according to a comprehensive revision of 2009 jobs data. That's more than 78,000 more than the 276,000 job losses the state appeared to suffer last year according to earlier data released six weeks ago.

As for January, the state picked up 20,900 jobs in professional and business services, a category that includes a lot of temporary jobs. That's a really good sign because an increase in temporary jobs is traditionally a sign that labor markets are turning around after a recession.

The state also gained 1,800 manufacturing jobs in January, as well as 5,200 in trade, transportation and utilities and 6,300 in leisure and hospitality. Employers cut 2,000 jobs in information; 1,800 in government; and 1,100 in mining and logging.

A word of caution. The January jobs report is preliminary. Also, monthly jobs data are based on surveys, plus a bunch of estimates and assumptions. This month's report has even more statistical moving parts than usual. The 2009 data just went through a comprehensive revision.

Also, the January job gain comes after adjustments to account for typical seasonal variations. Without adjusting for seasonal factors, the state lost 170,700 jobs. But the state always loses jobs in January on a non-seasonally adjusted basis, as the economy cools off after the Christmas shopping rush.

The number of Dallas homeowners with mortgages who are seriously behind on their payments swelled to 6.14 percent in January, according to a new report from First American CoreLogic.
The percentage of Dallas-area mortgage holders who are 90 days or more late in payments is greater than Texas' 5.65 percent delinquency rate. But it's well below the 8.66 percent nationwide average last month, the California-based research firm reported Thursday.
A year-ago, only 4.22 percent of Dallas-area mortgage holders were seriously behind.

The Texas unemployment rate stood at 8.2 percent in January, the Texas Workforce Commission said this morning. That's the same as the December rate, which was revised to 8.2 percent after a preliminary reading of 8.3 percent announced in January.

"The Texas unemployment rate held steady over the past two months at 8.2 percent and remained lower than the national rate of 9.7 percent," said Tom Pauken, chairman of the Texas Workforce Commission.

What about payroll employment? Those data are delayed, as we warned might happen in today's front-page story. It's still unclear when the information will be released. Here's what the TWC said:

The U.S. Department of Labor Bureau of Labor Statistics has informed TWC Labor Market and Career Information of a delay in the release of the seasonally adjusted Current Employment Statistics (CES) due to inclement weather on the eastern coast of the United States. CES data provide information on job growth in Texas and in each major Texas industry. At this time, TWC has not been notified of a time estimate when the data will be available.

So we''ll have to wait for the January payroll employment number, as well as the benchmark revision for 2009 data.

The unemployment rate for the Dallas-Plano-Irving statistical area spiked to 8.7 percent in January, from 8 percent in December. But the number is not adjusted to reflect seasonal variations. So I would suspect that what we're seeing there is the result of the end of the holiday shopping season. Once the Christmas rush is over, many stores and other businesses don't need as many employees.

The Federal Reserve released its periodic Beige Book report on economic conditions today, and here's what it said about the Dallas district, which includes all of Texas and parts of Louisiana and New Mexico:

Economic activity improved further in the Eleventh District over the past six weeks. Firms across a wide range of industries continued to report slight increases in demand. However, conditions in a few sectors, notably commercial real estate, financial services and construction-related manufacturing remained weak. Outlooks were generally more upbeat than last time.

That's consistent with the Dallas Fed's view that we're in a slow, gradual recovery. The good thing about a slow, gradual recovery is that it's better than a recession. The bad thing is that there's not a lot of hope for a huge increase in job creation.

Here's what the Dallas report says about jobs:

Most respondents noted steady employment levels. Still, there were scattered reports of layoffs at selected retail, high-tech, emergency vehicle and construction-related manufacturing firms. On a positive note, staffing firms continued to report increased hiring activity. In addition, there were reports of an uptick in staff levels at some energy service, food, high-tech and transportation manufacturing firms.

Wage pressures were nonexistent. A few firms reported they either had already given, or planned on giving small pay increases to employees this year. In contrast, real estate contacts noted that people were taking jobs at reduced salaries.

The outlook for construction-related manufacturing is "bleak." Conditions were mixed in transportation manufacturing and petrochemicals. And high-tech manufacturers report "continued strong growth in orders and production."

Housing activity is mixed. Commercial real estate "remains depressed."

Here are some other highlights:

Forbes ranked the Dallas-Fort Worth area No. 3 on a list of U.S. metro areas where the recession is easing. Austin-Round Rock was tied for No. 1 with Washington, D.C., home of the federal government.

Houston and San Antonio were also in the Top 10. Here's what Forbes said about Texas:

If one state is a poster child for economic recovery, it's Texas, home to four of the 10 cities on our list. There's more to why Austin, Dallas, San Antonio and Houston are faring well than just the state's energy industry. The tech, government and education industries supplement the oil state's riches. As for housing, cities in Texas didn't see the same run-up in home prices and rampant speculation that led to the spectacular bubble burst elsewhere in the country.

"The housing market got lucky, if you want to look at it that way," says James P. Gaines, research economist at the Real Estate Center at Texas A&M University. "We didn't have excessive overbuilding, so we don't have a big overhang of unsold new homes, and because Texas has among most affordable housing in the country, the demand sustained."

The list was based on jobs data, economic growth projections by Moody's Economy.com and median sales price of single family homes. Here's the Top 10 among the nation's 40 largest metro areas:

1. and 2. (tie): Austin-Round Rock, Washington, D.C.
3. Dallas-Fort Worth
4. and 5. (tie): Houston and Minneapolis-St. Paul
6. Denver
7. San Antonio
8. Boston
9. Los Angeles
10. Kansas City

Just the really big ones, that is. That's what Dallas Fed President Richard Fisher told a New York audience this morning.

Here's what he said about banks that are too big to fail, or TBTF:

The dangers posed by TBTF banks are too great. To be sure, having a clearly articulated "resolution regime" would represent steps forward, though I fear they might provide false comfort in that a special resolution treatment for large firms might be viewed favorably by creditors, continuing the government-sponsored advantage bestowed upon them. Given the danger these institutions pose to spreading debilitating viruses throughout the financial world, my preference is for a more prophylactic approach: an international accord to break up these institutions into ones of more manageable size--more manageable for both the executives of these institutions and their regulatory supervisors.

Fisher's made similar points before, but this struck me as a particular forceful statement, especially in the epicenter of Big Finance.

Fisher also argued against taking away the Fed's powers as a banking regulator. In theory, he said, the Fed's regulatory authority is separate from its responsibility for conducting monetary policy. But in practice, he said, the two functions complement each other.

Critics have argued that the Fed and other regulators dropped the ball during the massive housing bubble - a time when more effective banking regulation would have come in handy. Banking regulators could have cracked down on the most predatory home loans. They could have cooled off the easy-lending environment that helped fuel the rise in house prices. They could have restored a measure of common sense to an industry that was falling all over itself to lend to borrowers who couldn't prove their incomes or whether they even had a job.

Speaking of economic forecasts, the Western Blue Chip forecasts were updated this week. The forecasts are compiled by Arizona State University's W. P. Carey School of Business.

Texas continues to shine in the weak economy. It's expected to have 4.3 percent growth in personal income, more than any other western state. Payroll employment is expected to grow 0.8 percent, more than any western state except New Mexico, where a 1.1 percent increase is expected. Population is expected to grow 1.7 percent, tied for first with Colorado.

The consensus forecast for personal income growth in Texas ticked up this month from last month's 4.2 percent forecast. The forecast for retail sales also rose, to 3.5 percent from 3.2 percent. But expectations for the payroll employment got slightly worse, falling to a forecast of 0.8 percent growth from 0.9 percent last month.

Al Niemi, Dean of SMU's Cox School of Business, shared his latest thoughts on the economy at a talk in Plano today. It wasn't a bright outlook. He says he expects "a painfully sluggish recovery, one of the slowest we've seen."

That means economic growth of at most 3 percent this year, and a U.S. jobless rate that will bounce around between 9 percent and 10 percent. "2010 and 2011 are both going to be relatively sluggish years," he said, adding that he thinks there's a one-in-three chance the economy will slide back into recession in 2011.

Niemi added that he expects the North Texas economy to be better than the national average. But I think he'd be the first to agree that we're closely connected to the rest of the nation. So if the U.S. economy is as slow as he expects it to be in the next couple years, we'll feel it here, too.

Niemi also offered some interesting historical perspective on the 25 years between 1982 and 2007. For people like me who came of age during that period, it seemed normal. But it wasn't normal in economic terms, Niemi says. It was great.

"There's never been anything like it in the history of this great economy, and we may never see anything like it again"

As many as 25,000 unemployed Texans stand to lose their unemployment benefits this week as a result of a Senate stalemate over legislation that would extend funding for the benefits. The extension is included in a bill that has been held up by Sen. Jim Bunning, a Kentucky Republican who objects to the fact that it would add to the deficit. The bill also extends federal subsidies for employer-sponsored health insurance through the COBRA program.

Unemployment insurance is a joint federal-state program that first pays benefits out of state funds. Currently, about 630,000 Texans receive some amount of unemployment insurance, said Ann Hatchitt, a spokeswoman for the Texas Workforce Commission. In Texas, the state pays benefits for up to 26 weeks. The expired law allowed Texas workers to qualify for up to 67 more weeks of federally-funded benefits, Hatchitt said. Now, Texans who exhaust their 26 weeks of state benefits won't receive any additional federal payments as long as the stalemate continues.

The stalemate could end soon, if Senate Democrats file a procedural motion, known as cloture, which ends debate on the bill. But under Senate rules, that would require waiting about four days before the legislation could be considered on the floor. Otherwise, Senate Republicans would have to persuade Bunning to drop his hold on the bill.

In the meantime, Senate Democrats are portraying Republicans as obstructionists whose maneuver stands to hurt families relying on unemployment insurance to buy food and pay bills. "It is immoral, it is obscene to say to those people, 'we are stopping the extension of your unemployment benefits. And you are on your own,'" said Sen. Bernie Sanders, D-Vt. Sen. John Cornyn, R-Texas, says he doesn't support Bunning's move but hasn't spoken to the Kentucky senator. "I think there's a better way to make the point," Cornyn said. "Where I do think Senator Bunning has a point is on continued deficit spending flies in the face of what we're hearing from the American people."

I wrote this weekend about the newest -- and by far the most ambitious -- casino in Oklahoma that does about 90 percent of its business from North Texas gamblers. I was a bit surprised at the swell of comments on the story that argued for legalized gambling in Texas, which has been a sort of third rail for politicians as long as I've been here.

But the numbers are interesting from an economic development standpoint: $1.5 billion in revenue for the tribes in Oklahoma with western border casinos; $3 billion for the whole state, $106 million of which went to state coffers. And the job creation is thousands of jobs and indirect spending as well. Whether you're morally against gambling or not, it's hard to be against the economic impact in this recession.

That said, I don't see it being discussed at all in the governor's race or really talked much about at all in Austin. I don't know what the numbers are going to have to be in Oklahoma and Louisiana combined (Shreveport's casinos did about $792 million in the last year reported) before anybody or any party starts talking aloud about the potential to keep that impact here at home.

I didn't drop a dime in the place myself -- having a home mortgage "cured" me of my every-18-months itch for craps that needed a scratch. But the casino, if you've seen from the video extra, is a step up from the typical Indian casino. I'm curious if its price points and high-end features might be, at least initially, TOO fancy for the crowd that typically favors border casinos, but if you haven't seen either the television advertising or billboards touting the new Choctaw property, you don't own a television or don't do a lot of driving. I'd wager that marketing campaign was the largest non-political marketing campaign the region has seen in a long, long time. (I asked the good folks up there how much they spent; they were mum.)

So let's hear it blog readers: Is Texas literally leaving too much on the tables up in Oklahoma and Louisiana not to at least bounce the idea of our own gaming down here?

The National Federation of Independent Business will host five webinars this month for small business owners.

All of the webinars begin at 11 a.m. and are free to NFIB members. The March 31 one is free for everyone.

March 3: "Employee benefits: legal essentials for small business" by lawyer Linda Rosenzweig.

March 10: "A top 10 list of search engine optimization strategies" by Network Solutions' Randy Windsor.

March 17: "How to sell: establishing your unique selling proposition" by John W. Heinrich, president of the Solutions Forum and chief mentor of the International School of Entrepreneurship.

March 24: "Tax Day 2010: what to watch for this year and how to plan for next year" by NFIB tax counsel Bill Rys.

March 31: "Last-minute tax tips for small business" by small business lawyer and author Cliff Ennico.

Dallas-area residential values will continue to trend lower through most of 2010, according to a new report from Economy.com and Fiserv.
The forecast for housing markets across the country estimates that local home prices will be down by about 2 percent through September. That compares to a nationwide forecast of a 6 percent decline during the same period.
The same home price outlook projects a scant 0.2 percent increase in home values here between Sept. 2010 and Sept. 2011.
In January local sales stats showed that median home sales prices were up about 1 percent in North Texas from a year earlier.
Economy.com and Fiserv said the worst 1-year change in home prices was in 1987 when values in the Dallas area fell by 7.7 percent.
You can see all the results at CNNMoney.com.

The Dallas-area is among the U.S. markets with the largest declines in average apartment rent, according to a new report from Internet marketing firm RentJungle.com.
Overall Dallas rents have dropped by about $94 or 8 percent in the last six months, RentJungle said.
Nashville and Denver had the largest, 9 percent, declines in the rent survey. Along with Dallas, rents in Phoenix, Los Angeles and Louisville were also down 8 percent.
Rents were up slightly in Wichita, Indianapolis , Miami and Memphis.
RentJungle says that nationwide average rents have fallen about $40 a month during the last six months - a drop of 4 percent.

A closely watched gauge of future development activity showed a sharp decline in January.
The American Institute of Architects' Architecture Billing Index fell by almost three points last month, indicating further declines in construction design services.
"Projects are being delayed or cancelled because lending institutions are placing unusually stringent equity requirements on new developments," AIA Chief Economist Kermit Baker said. "This is even happening to financially sound companies with strong credit ratings."
The industry finds that the billing index closely reflects what construction spending will be doing in nine to 12 months.

Forget about the Great Recession. The economic cataclysm we just lived through should be called the Great Panic.

So says Dana Johnson, Comerica Inc.'s chief economist. The recession's signature events were declines in employment and business investment that were much greater than historical experience would have suggested, he says. Fueling the declines was widespread panic - and not just in the financial markets.

What is far less discussed, however, is that the turmoil in the financial markets provoked panic in the non-financial business sector. The massive disruptions of credit flows triggered fears that the U.S. economy could be headed for an extended period of recession that might resemble the 1930s. Business leaders reacted by cutting payrolls and fixed capital spending far more aggressively than usual.

During the recession, the economy shrank 3.8 percent, Johnson said, which is just a hair more than the contraction in the 1957-58 recession. But employment fell 6.1 percent, compared with a 4.6 percent decline in 1957-58.

About 15 percent of Dallas-area homeowners with mortgages owed more than their house was worth at the end of 2009.
But that's much better than the national average of almost 24 percent of U.S. home loan holders who are underwater with their debt, according to a new report from First American CoreLogic.
The situation is even worse in some states.
In Nevada, about 70 percent of home mortgage holders are upside down with their housing values compared to debt.
And in Arizona, more than 51 percent of homeowners with loans have negative equity.
In Texas, the negative equity rate was about 12 percent.
Homeowners who owe more than their house is worth are much more likely to let the property fall into foreclosure, adding to the downward pressure on home values.