Economic Charts

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Saturday, January 15, 2011

King World News Interviews

King World News interviews Art Cashin, Ben Davies, Bill Fleckenstien & David Einhorn with some must hear information in the markets and the economy.

Art Cashin - Discusses the fact that the S&P has been over its 10 day moving average for 30 straight trading sessions which hasn't happened in 100 years.  Art discusses that the FEDs banks have hit the largest profit in history on the assets it bought and could face the greatest loss in history if rates go up forcing bond prices down.  Art mentions issues in food and commodities, siting scarcity of food & water resulting in riots.  He mentions that if rice spikes in price again, things will change drastically.

Ben Davies - Discusses crisis that is in front of us and supply constraints.  Ben is very bullish long term on commodities and bearish on debt due to issues in monetary policy and sovereign debt.   Ben believes that silver and gold are very undervalued at this time due to issues in the economic system.  He discusses how loose monetary policy in the U.S. is exporting inflation all over the world.

Bill Fleckenstien - Discusses the Municipal bond markets nasty break and a nasty break in the stock market coming.  Bill talks about the fact that the focus has been on the Euro and/or possible fracture of the Euro, when the U.S. is in greater trouble due to money printing.  He mentions we seem to be in a stagflation environment with Food and commodities are rising fast yet prices in other sectors are down (things we don't need to live are getting cheaper).

David Einhorn - Discusses his book on how he got started in his own business and how his father started his own business from scratch.  He reviews experiences of starting a business and lessons he learned in doing so.  David talks about the European debt trap that is being created where Germany isn't really guaranteeing the debt. 

Illinois Adds Insult to Injury

Illinois increases taxes on its employers and residents 67%.  This will force both to relocate for jobs, lower taxes and prosperity.  Illinois also increased their spending by 2% really nixing the ability to pay back the money.  Illinois is behind by $9 billion dollars, where does this leave the future of Illinois?

FED POMO Purchase

The FED performed another POMO (Permanent Open Market Operation) Purchase yesterday for $7.306 billion.  This brings the total since November 3rd 2010 (when the FED announced the printing of $600/900 billion dollars by June 2011) to $232.317 and since August 17th 2010 to $296.777 billion dollars.  Announcements this week by many said the FED may quit early on QE2 and that is certainly possible, becuase the way he is going he will definitely hit $600 billion before June 2011 (either way $600 billion is getting  printed).

Operation 1 - RESULTS
Operation Date:01/14/2011
Operation Type:Outright Coupon Purchase
Release Time:10:15 AM
Close Time:11:00 AM
Settlement Date:01/18/2011
Maturity/Call Date Range:01/31/2015 - 06/30/2016
Total Par Amt Accepted (mlns) :$7,306
Total Par Amt Submitted (mlns) :$24,887

Thursday, January 13, 2011

December Producer Price Index

December Producer Price Index was released today.  The Producer Price Index measures change in the price of finished goods and services sold by producers. It is considered a leading indicator of consumer inflation, these increases in producer prices usually get passed onto the consumer.  The forecast  called for 0.8%, but the actual headline number came in at 1.1%.  Energy led the way in the increase of the index with an increase in December of 3.7%.  Crude materials increased 4.0% in the month of December as well.  Core PPI is PPI with food and energy removed.   The forecast for Core PPI called for 0.2%, and the actual headline number came in at 0.2%.

Weekly Initial Unemployment Claims

Last weeks Initial Unemployment Claims was much worse than expected.  Initial Claims measures the number of persons that filed for unemployment benefits for the first time in the prior week.  The forecast called for 405k, but the actual headline number came in at 445k.  This is a 2nd week in a row increase and was very expected after the Christmas retail season.  Between this and last weeks number we tore right through the 4 week moving average.  The delta between revisions came in at the lowest we've seen in years with it being off by 1k.

Wednesday, January 12, 2011

Weekly Fund Flows

Well this past week provided a reversal back to the downside in domestic stocks.  Domestic Stocks saw a negative flow of -$4.229 billion dollars, while $2.416 billion dollars continued to flow into foreign stocks.  So much for a possible reversal to the upside in domestic stocks, I guess the FED will have to continue to prop up the domestic stock market.  Taxable bonds had a 2nd week of inflows, this past week of $2.693 billion dollars (after 3 weeks of selling).  Municipals continue their mass exodus with -$2.146 billion dollars flowing out.  The entire 2nd half of 2010's inflows and quite a bit of the 1st half of 2010 has been wiped out completely.  People are getting wise to the problems we face with Municipalities this year.

Nigel Farage on Europe

FED's New Printing Schedule

Well  guess the question as to whether the FED is going to keep printing has been answered.  Here is the schedule from 01/13/11 to 02/09/11.  Billions more to print.

Tuesday, January 11, 2011

Gary Parr on the Euro

Gary Parr talks about the good and bad linkages in Europe, as well as the impact on the Euro.  Gary mentions that Europe has more uncertainties than the U.S. currently, which is going to be a problem.  He also mentions down the road the U.S. will have their crisis as well with states  and municipalities failing.

Dennis Gartman on the Euro Crisis

Portugal Being Pressured for Aid

FED POMO Purchase

The FED performed another POMO (Permanent Open Market Operation) purchase of $7.802 billion dollars.  This brings the total since Nov 3rd 2010 (when the FED announced printing $600/900 billion dollars by June 2011) to 216.599 billion. The total since August 17th 2010 is $281.059 billion dollars.

Operation 1 - RESULTS
Operation Date:01/11/2011
Operation Type:Outright Coupon Purchase
Release Time:10:15 AM
Close Time:11:00 AM
Settlement Date:01/12/2011
Maturity/Call Date Range:07/31/2016 - 12/31/2017
Total Par Amt Accepted (mlns) :$7,802
Total Par Amt Submitted (mlns) :$21,104

Monday, January 10, 2011

FED POMO Purchase

Today the FED performed another POMO (Permanent Open Market Operation) purchase of $7.79 billion dollars.  This brings the total since Nov 3rd 2010 (when he announced the printing of $600/900 billion by June of 2011) to $208.797 billion dollars.  The total since August 17th 2010 is at 273.257 billion dollars.

Sunday, January 9, 2011

King World News interviews Rick Rule, Jeffrey Saut and John Embry this week.  These interviews span precious metals, energy and the stock market and are great perspectives to consider when making your investment decisions (be aware of their interests though, as always).

Rick Rule - Discusses the high volatility we are going to experience in 2011 and how investor are going to have to ride through it and have good strategies.  Rick talks about precious metals and gold stocks.

Jeffrey Saut - Discusses the possibility of buying banks again.  Jeffrey says that 2011 will be the year of the banks.  (I think it may be the year of bank failures).  Jeffrey says he is not bearish on the stock market, but becoming cautious.  Jeffrey also discusses the demand for energy is going higher causing energy prices higher (Crude Oil and Nat Gas).

John Embry - Discusses how tight the physical market in Silver is.  John thinks based on this silver will go to $50.00 per oz in the short term.   John discusses issues in the Comex which have been happening with the banks and wealthy (assuming his is referring to he banks and wealthy whom are taking physical possession of silver, link here).  John suggests the Government is holding the stock market up through POMO and primary dealers (great thinking).

Weekly M1 and M2 Money Supply

Weekly M1 and M2 Money supply is on the rise again.  This number fluctuates as loans default and are wiped off the books (money disappears) and more is printed (billions by the day).  Another reason for this expansion in money supply is due to consumers charging Christmas on their charge cards (which expands the money supply).

Weekly Bank Failures

We are starting fresh for the year of 2011 with a total banks failed year to date to 2.  2009 brought us 140 bank failures and 2010 brought us 159 bank failure.  This week only 2 banks failed; Legacy Bank in Scottsdale AZ and First Commercial Bank of Florida.  CalculatedRisks "Unofficial Problem Bank List" has been brought to 932 institutions with assets of  $410 billion dollars (see link).

FoodStamps on the Rise

Foodstamps rose to 42,911,141 with California and Texas leading the way (which is understandable as they are the larger states).  New York and Florida are fast on their heels.  The number of persons obtaining foodstamps are hitting record levels during this "economic recovery".  The amount of money being spent to support the food stamp program is truly at astonishing levels, re American Thinker article on "Fiscal Year Food Stamp Benefit Per Poor Person".

December Non-Farm Payrolls

December's Non-Farm Payrolls were released yesterday disappointing forecasts.  Non-Farm Payroll is change in the number of employed people during the previous month, excluding the farming industry.  The forecast called for adding 159K jobs in December, but only 103K were added disappointing the market.  As Dylan Ratigan reports this is only 1/3 of what is needed per month to begin to recover the number of jobs lost since the recession began.

Monthly Unemployment Rate

December's unemployment rate was released yesterday and at first glance seemed to be a better number.  The unemployment rate is a U3 measurement, in other words measures the number of people that participate in the labor force vs. the number of unemployed.  The size of the labor force grows and contracts month to month.  This month the labor force contracted by 317k due to aging population (becoming of age and aging out).  The 99rs no longer qualifying to be counted as unemployed reduced the number of counted unemployed.  This most likely impacted the 634k improvement in the number of persons counted as unemployed.  U6 unemployment (not publicized) does not count the 99rs as well, but does count Marginally Attached, Discouraged and Part time for economic reasons (most of which increased).
Marginally attached workers increased by 78k, Discouraged workers increased by 36k and Part-time for economic reasons decreased by 29k.  Part-time for economic reasons could be decreased due to a policy back in November that the retailers took that part-time employees would be brought on full time (we'll see how long that lasts), so they could not be counted anymore.
To add to this argument against a better unemployment rate I encourage you to read the article entitled "Presto! 9.4% Unemployment! How The Government Lies" by Tyler Durden, guest poster at  Another great breakdown to aid was done by CalculatedRisk entitled "Employment: The Declining Participation Rate", which is a must read.