Economic Charts

All economic charts are at the bottom of the page.

Saturday, December 18, 2010

FED POMO Purchase

Yesterday the FED performed another POMO (Permanent Open Market Operation) purchase of $2.03 billion dollars.  This brings the grand total since August 17th 2010 to $202.365 billion dollars and since November 3rd 2010 (when he announced the $600/900 billion dollar purchase plan) to $137.905 billion dollars.  The target is to purchase $75 billion per month and the FED has already purchased $64.836 in the month of December.

Operation Date:12/17/2010
Operation:Coupon Purchase
Settlement Date:12/20/2010
Maturity/Call Date Range:08/15/2028 - 11/15/2040
Total Par Accepted:$2,030
Total Par Amt Submitted:$6,679

Thursday, December 16, 2010

FED POMO Purchase

The FED performed another POMO (Permanent Open Market Operation) purchase today in the same amount as yesterdays $6.78 billion dollars.  This brings the grand total since August 17th 2010 to $200.335 billion dollars and since Nov 3rd 2010 (when the FED committed to 600/900 billion in printing) to $135.875 billion dollars.

Operation Date:12/16/2010
Operation Type:Outright Coupon Purchase
Release Time:10:15 AM
Close Time:11:00 AM
Settlement Date:12/17/2010
Maturity/Call Date Range:06/30/2013 - 11/30/2014
Total Par Amt Accepted (mlns) :$6,780
Total Par Amt Submitted (mlns) :$22,084

Weekly Initial Unemployment Claims

Last weeks Initial Unemployment Claims were released today with better than expected news.  Initial Unemployment Claims are the number of person whom filed for unemployment for the first time in the prior week.  Last weeks number of 421K was revised up by 2k to 423k.  This weeks forecasted number called for 421k and actually came in at 420k.  We see that the 4 wk Moving average is trending downward as has since the Augusts timeframes high of 504k.  It is somewhat coincidental that stores started the Christmas shopping season earlier and thus needed additional staff for this, but I don't have those figures (merely an observation on my part).

The Delta in revisions are staying more steady as last weeks revision was a revision up by 2k which has been a norm lately.  Going on past revisions and adding 2k to this weeks number we most likely have a number more like 422k which would have disappointed, but is progress non-the-less.

Weekly Fund Flows

The week ending 12/8/2010, saw additional outflows from Bonds (both Taxable and Municipal) and domestic stocks.  Foreign flows continued to see money flowing in.  Flows for Stocks and Bonds overall were negative as Domestic outflows outweighed Foreign inflows.
Figure 1

As usual with billions flowing out of Domestic stocks per week as you can see in figure 2, you have to wonder where does the money come from that is elevating the stock market (FED Printing press and the PPG or primary dealers? It seems logical).
Figure 2

Bond flows continue to show signs of stress as Taxable bonds join the sell off that municipal bonds started the week ending 11/10/2010.  More worrisome is the municipal bonds with outflows continuing, it leads you to wonder if municipalities will have enough or be able to get enough to float their budgets.  As I don't track bond auctions I don't know how much they are looking for and how much they are falling short, this would be a great statistic to get.

Figure 3

Yesterday's FED POMO Purchase

I apologize for the late post on this, but yesterday the FED performed another POMO (Permanent Open Market Operation) purchase to the tune of $6.78 billion dollars.  This brings the total since August 17th 2010 to $193.555 billion dollars and since November 3rd when he announced the purchase of $600 billion (really $900 billion) by June of 2011 the total purchased is $129.095 billion dollars.

Operation Date:12/15/2010
Operation Type:Outright Coupon Purchase
Release Time:10:16 AM
Close Time:11:00 AM
Settlement Date:12/16/2010
Maturity/Call Date Range:12/31/2014 - 05/31/2016
Total Par Amt Accepted (mlns) :$6,780
Total Par Amt Submitted (mlns) :$13,114

Tuesday, December 14, 2010

Monthly Business Inventories

The Manufacturing and Trade inventories report showed a better than expected number in the month of October.  Business Inventories are the change in the total value of goods held in inventory by manufacturers, wholesalers, and retailers. It is considered a signal of future business spending as companies are more likely to spend on materials to build up inventories if their current inventories are depleted.  The forecasted number called for a 0.9% increase, the actual headline number came in at 0.7%.  This seems negative, but considering the prior months number was -1.3%, this months number provides a sigh of relief.

When compared to the prior year we see sales are up YoY (Year over Year) as well as inventories.  If inventories were the only items up and sales were down or flat then there would be concern.  This inventory buildup is more than likely due to expected turnover due to sales.  We will have to keep a watch on inventories after the holiday season to better assess.

Monthly Core/PPI

The Core PPI and PPI (Producer Price Index) were released today showing positive news.  The PPI is the change in the price of finished goods and services sold by producers and Core PPI is PPI excluding food and energy. Core/PPI is a leading indicator of inflation and can have ripple effects on prices of goods and consumer spending.

Core PPI

So what does this data tell us.  Well it says that Food and energy are 0.5% of the increase and the cost of brining food and energy to market have gone up significantly, which will then have to be passed on to the consumer.  This can be a troublesome sign as food and energy are not discretionary items, they are "must have" for survival.  The other 0.3%, depending on what it is, is less concerning because consumers can just choose to do without.  This is the largest jump in PPI since February of this year where the increase was 1.4%.  We will have to keep an eye on the coming numbers to see if a trend begins from this.

Monthly Core/Retail Sales Numbers

The monthly retails sales numbers were released today showing a better than expected number. Retail sales are change in the total value of sales at the retail level and is considered a primary gauge of consumers spending.  The forecasted number called for a 0.6% MoM (Month over Month) increase, but the actual headline number was a 0.8% MoM increase.  This number makes sense due to the holiday season and increased sales due to the holiday spending season.

Core Retail Sales numbers were also better than expected beating the prior months 0.8% increase.  Core Retail sales are the change in the total value of sales at the retail level, excluding automobiles and are considered a more accurate gauge of consumer spending due to the removal of Auto's. The forecasted number called for a 0.7% increase, but the actual headline number came in at 1.2%.  
The report showed an increase from 2009 by a larger margin, across the board the month of November 2010 beat November 2009's spending. 
Courtesy of the U.S. Census Bureau

You can view the full report here.

Monday, December 13, 2010

Dylan Ratigan on Tax Cut Vote

Europe's Debt Domino Effect

Spotlight on Banks' Exposure In Europe

The WSJ's Nina Koeppen wrote an article in todays Money and Investing section entitled "Spotlight On Banks' Exposure In Europe" where Nina points out that German and French banks exposure to Ireland and the southern rim of the euro zone was greater than previously thought for the second quarter.   Quoting the BIS data, here are the following countries exposures. 

CountryTotal Exposure

Total Exposure to the PIGS is $2.2813 trillion dollars.  Of this Germany is exposed to $512.7bn or 22.47%, France is exposed to $410.2 bn or 17.98%, USA is exposed to $352.9 or 15.47% and Great Britain is exposed to $370bn or 16.2% and finally other Euro areas are exposed to $281.1 or 12.3%.  Here is the link to the BIS report.


The FED performed another POMO (Permanent Open Market Operation) purchase today for $7.79 billion dollars.  This brings the total since August 17th 2010 to $186.775 billion dollars and since the FED announced a $600 billion (really $900 b) on Nov 3rd/4th 2010 it has printed $122.315 billion dollars.  According to the schedule the FED was going to target anywhere between $7b - $9b for todays purchase and almost came in the middle of that range.  Wednesday the 15th is scheduled another $6 to $8 billion.

Operation Date:12/13/2010
Operation Type:Outright Coupon Purchase
Release Time:10:15 AM
Close Time:11:00 AM
Settlement Date:12/14/2010
Maturity/Call Date Range:06/30/2016 - 11/30/2017
Total Par Amt Accepted (mlns) :$7,790
Total Par Amt Submitted (mlns) :$18,268

Sunday, December 12, 2010

FED to Buy Municipal Bonds to Keep them Afloat

A great point on this video is that the FEDs attempt at surprising interest rates (printing) in the mortgage market has done exactly the opposite and are going up. This is a sign that the dollar is in serious trouble.

Your Hard Earned Dollars at Work

Nobody Watching the FED

This video just shows a complete lack of oversight of the Federal Reserve with OUR (taxpayers) money. You have to wonder why we employ this institution to watch the FED, we could probably save billions by eliminating these kind of institutions that do nothing but cost the taxpayers hard earned money.

Weekly Updated Unofficial Problem Bank List

CalculatedRisk released their latest update of the Unofficial Problem Bank List with 919 institutions on the list declining by 1 from the previous weeks 920.  Total assets increased by $1.1 billion dollars to $411.4 billion.

Three additions to the list include Intervest National Bank, New York, NY; Great River Holding Company -- RiverWood Bank, Baxter, MN and RiverWood Bank, Bemidji, MN.

Removals include the two institutions that failed this week; Paramount Bank and Earthstar Bank as well as Millennium BCP Bank National Association, Newark, NJ (Voluntary Liquidation) and Oceanside Bank, Jacksonville, FL (acquired by The Jacksonville Bank).

Weekly King World News Update

This week KWN (King World News) interviews Jim Rickards ( Part II ), Bill Fleckenstein, James Turk, Jean-Marie Eveillard and Art Cashin.  This week KWN discusses Gold's play as a currency, cracks showing up in Gold and Silver delivery and the FED.  I'll include the link to Jim Rickards Part I in case you missed it.

Jim Rickards ( Part I ) - Discusses how the futures exchange works for Gold and Silver and how if the exchange get massive calls to take delivery to obtain gold or silver, the exchange will declare a timeout and when it is settled, they will cut you a check on the difference (not really gonna get your gold). Jim also says that QE2 isn't really $600 billion it will really be more like $1.2 trillion (mainly cause their is no real end date assigned to it) and that it will not really impact the economy.
Jim Rickards ( Part II ) - Discusses failure of banks whom are holding gold for storage purposes to deliver the recipients/holders gold when asked (in some cases taking months) furthering speculation that banks loaned out gold they did not own (fraud) and now have to re-coup that gold to deliver to the actual owner.  Jim further discusses a new currency in the U.S. which would be gold backed/based in the future being an inevitability.
Bill Fleckenstein - Discusses Robert Zoellicks (President of the World Bank) announcing that the dollar needs to be backed by Gold.  Bill also advises not to listen to economists and pundits that did not see the credit crisis coming in the first place, as they have no clue to what they are talking about.  Bill also says the reason to own gold is because the paper is no good.
James Turk - Discusses additional stories where delivery of metals from banking institutions are not getting delivered in the proper timeframe.  In certain cases persons that own the metal and are just paying for storage are waiting for months to get their silver or gold.  This raises questions of what the banks did with the gold that makes it unavailable for months.
Jean-Marie Eveillard - Discusses the FEDs actions and how they are widely inflationary in the United States and how it is affecting other countries.  Jean-Marie states that the country that holds the privilege of printing money needs to handle that responsibility responsibly.  Jean-Marie also mentions what he thinks the FED seeks to achieve, but there are risks.  He believes their will be a QE3 to follow on the heels of QE2.
Art Cashin - Discusses China's GDP and how that could be made up and the fact that China will most likely raise rates again.   Art also talks about how the stimulus that was introduced did not stimulate a thing as it was a huge wash, due to not being fully thought through.  Recent selloffs in bonds are starting to show issues for mortgage rates (causing them to increase), which will reduce lending.

Weekly M1 and M2 update

This week M1 expanded 8.4% YoY (Year over Year) and M2 expanded 3.23% Year over year.  I am posting the new chart which corrects last weeks as last weeks chart had an incorrect formula (copy paste issue).  As you can see the money supply is actually expanding again which definitely fly's it the face of Ben Bernanke's 60 minutes interview that money supply is decreasing.  

Having said this, money supply does contract when debt is paid down.  As our money supply is debt based, when a foreclosure occurs, credit cards are paid off, lands get paid and mortgages are written down, debt comes out of the system which contracts the money supply.  In an environment where all of this is occurring, it is telling that money supply is still expanding (due to money printing by the FED).  See Shadowstats chart at the bottom of the page for M3.

Weekly Bank Failures

This week we lost 2 more banks bringing the 2010 total to 152 banks failed.  This week we lost Paramount Bank in Farmington Hills, MI and Earthstar Bank in Southampton, PA.  I guess the positive sign is that the failures have slowed down in the past few weeks, but we have seen this before, so we need more weeks of zero or slowing failures to establish a trend.

Weekly FoodStamp Recipient Update

In the past 2 weeks the number of persons now on foodstamps increased by 521,423 people or 1.22%.  That is a large increase in the number of persons in a two week period with Illinois, California,Florida, North Carolina & Texas being the largest gainers (IL being the largest added 143,982).  West Virginia and Arizona actually showed an improvement by reducing the number of recipients by greater than 2k.