Mondays FED POMO Purchase

Monday December 6th 2010 the FED performed another POMO (Permanent Open Market Operation) purchase in the amount of $2.044 billion dollars.  This brings the grand total since August 17th 2010 to $162.236 billion dollars and $97.776 since November 3rd when the FED decided to expand purchases to $600 billion by June 2011 ($502.224 to go).

Operation 1 - RESULTS

Operation Date:	12/06/2010
Operation Type:	Outright Coupon Purchase
Release Time:	10:15 AM
Close Time:	11:00 AM
Settlement Date:	12/07/2010
Maturity/Call Date Range:	08/15/2028 - 11/15/2040
Total Par Amt Accepted (mlns) :	$2,044
Total Par Amt Submitted (mlns) :	$10,247

David Stockman on Jobs

Finally a guy who aligns with what I have been saying for a while now, bring back manufacturing and agriculture to America, Housing cannot be the growth machine for America any more.  The housing gamble is over.  About 3 minutes into this clip is where David Stockman starts.

Weekly King World News Interviews

This weeks KWN interviews include guests like Nigel Farrage, David Kotok, John Hathaway, Jim Rickards and Art Cashin.  Nigel Farage gives a great speech to the EU that you just cannot miss.

Nigel Farage - Covers the speech Nigel gave at the European Parliment.  Nigel discusses the Euro and its possible collapse due to Greece and Ireland bailouts and the upcoming possibility of Portugal and Spain requiring a bailout.  Nigel points out that most of the EU is stuck in inflation, but Ireland and Greece is stuck in deflation which will lead to a Grimm future for those countries.

David Kotok - Discusses municipal security issues and the states and cities challenges in the municipal bond market.  David talks about cities in the U.S. that are facing bankruptcies and are looking for the courts to make decisions on the debt cause they don't want to take fiscal discipline to remedy the situation. 

John Hathaway - Discusses why gold started heading higher Friday is because there doesn't seem to be any end to the printing and bailouts in the U.S. and Europe.   Also, Europe is now going down a path to larger problems in the banking systems.  John believes we are now past the point of no return in this crisis and we aren't getting out of paper money devaluating.

Jim Rickards - Discusses China and the FED putting their cards on the table about Monetary policy and that China is announcing that they will acquire Gold to hedge against the FED's printing to ensure the world they will not over-rely on the U.S. paper.  This is a part I of a 2 part series.

Art Cashin - Discusses how energy and food prices may inflate higher next year which will impact the economic recovery.  He also discusses how we came very close to martial law in the past financial crisis and that we are headed for another banking crises going forward.

Weekly M1 and M2 Money Supply Update

This weeks M1/M2 money supply showed M1 had a slight increase of 1.02% year over year and M2 an increase of 0.12% after M1 had contracted -4.38% year over year and M2 -0.04% per year. 

Banks that Received Emergency Loans From the Fed

During the financial meltdown the FED issues more than 21,000 loans and deals to the banks to bail them out of their financial mess.  Some banks said they never needed the loans as they were on solid financial ground.  As you can see from this chart, they clearly did need the bailout, with Citigroup leading the pack in the number of loans/deals and the amount of money.  Our friends at Goldman Sachs, whom has given record bonuses during this mess, took 138 loans/deals for  $782,328 billion dollars.  Goldman gave out $5 billion in bonuses this year for people that did just 3 months worth of work (article here).  I guess the joke is on us the American Tax Payers, cause they are laughing all the way to the bank with our money. 

2009 bonuses were much higher between $19 and $20 billion ( ref article).  This extraction of money from the Middle class in America to the rich seems to have no end or moral governance.

Sen Bernie Sanders Speach on CSPAN

Weekly Unofficial Problem Bank List

CalculatedRisk has released the latest "Unofficial Problem Bank List" which revealed the total number of institutions on the problem bank list is at 920.  There were 2 institutions added and one removed due to duplication.  The two institutions that was added were the First Community Bank of Glasgow, MT and Monadnock Community Bank, Peterborough, NH.  The List includes 920 institutions with a total asset value of $410.3 billion dollars.  [ Read More... ]

Weekly FDIC Bank Failures

This week we had no bank failures, which is quite refreshing.   This keeps the number of bank failures for the year to 150, which has surpassed 2009's by 10 institutions so far.  We'll see what happens in the last few weeks of this year.

Monthly Non-Farm Payrolls

Novembers Non-Farm Payrolls number was worse than expected even though a positive number.  Non-Farm Payrolls are the change in the number of employed people during the previous month, excluding the farming industry.  The forecasted number called for 143k, but the actual headline number came in at 39k.  The previous months (October) number was 179k, so this months number was a bitter disappointment in the wake of the Christmas hiring season and the hype of the main media's "all is well in jobs" message.

Monthly ISM NMI Update

Novembers ISM NMI (Non-Manufacturing Index) which was reported to be improved and in some ways it was and some ways it was not. ISM NMI is the level of a diffusion index based on surveyed purchasing managers, excluding the manufacturing industry. It attempts to  measure employment, inventories, new orders, prices, backlog and such based on surveyed information from about 400 purchasing agents.  The forecasted number called for an index of 54.7, but the actual headline number was 55.0.  

 

Figure 1.

Figure 2 shows Business Activity and Backlog Orders decreased which is a negative sign for current business.  New orders and Export orders were up, which is a positive sign as it fills a pipeline of work and shows increasing business.

 

Figure 2.

In figure 3 Prices decreased which is very good for business (cheaper to produce goods).  The concerns here are the build up of inventories, if this is to fill orders it may be a wash.  We will have to see what happens in next months report to orders continue to grow.

 Figure 3.

FED POMO Purchase Update

The FED Performed another POMO Purchase today of $6.810 billion dollars.  This brings the total since August 17th 2010 to $160.192 billion dollars printed.  Precious metals definitely not keeping up with this constant devaluation of the dollar through printing.

 

Operation 1 - RESULTS

Operation Date:	12/03/2010
Operation Type:	Outright Coupon Purchase
Release Time:	10:15 AM
Close Time:	11:00 AM
Settlement Date:	12/06/2010
Maturity/Call Date Range:	06/15/2013 - 11/30/2014
Total Par Amt Accepted (mlns) :	$6,810
Total Par Amt Submitted (mlns) :	$21,668

Octobers ETF Money Flows

October saw inflows of almost $14 billion dollars into ETF's.  This is down slightly from September.  Figure one shows the hike in ETF investment in September, which is now starting to slow down.

Figure 1.

The big winner in the ETF''s was clearly Emerging Markets, seen in figure 2.  Emerging markets had a $8 billion dollar inflow in October, being responsible for 57% of the aggregate inflow, seen in figure 1. 

 

Figure 2.

Large Cap and Natural Resources were the only sectors that actually experienced a negative flow (outflow).  If Emerging markets is muted from the data (as it seems to be an outlier in the data) we see that commodities, financial and Technology are the big winners in October (ref figure 3).

Monthly Pending Home Sales

Octobers Pending Home Sales was much better than expected today. Pending Home Sales is the change in the number of homes under contract to be sold but still awaiting the closing transaction, excluding new construction.  The forecast called for -0.7% change, but actually came in at 10.4% beating expectations. 

When breaking down the pending home sales by region we find that the Western region was in the worst shape with a -0.29% change.  The Midwest experienced the greatest increase in pending home sales with the Northeast following closely behind.

Weekly Initial Unemployment Claims

This weeks Initial Unemployment Claims got worse that the week prior, but the market shook this off because, for the lack of a better word, it was a lower high.  It would seem the short term trend is down, but we need to get through the Holidays to really know what is going on.  Initial Claims is the number of persons that filed for unemployment for the first time in the prior week.  The forecast called for 425k, but the actual headline number was 436k, which was worse that last weeks revised 410k.

 

 

FED POMO Purchased Update

The FED performed another POMO (Permanent Open Market Operation) purchase today of $8.309 billion dollars.    This brings the total since August 17th 2010 to $154.012 billion dollars. You can really see the pick-up in money printing here and the cumulative amount is pointing higher and higher in a shorter amount of time.  Already in November and 2 days in December we have eclipsed the amount injected from 8/17/2010 to 11/1/2010.  Since 11/4/2010 the FED has injected $89.552 billion to date.

 

 

Operation 1 - RESULTS

Operation Date:	12/02/2010
Operation Type:	Outright Coupon Purchase
Release Time:	10:15 AM
Close Time:	11:00 AM
Settlement Date:	12/03/2010
Maturity/Call Date Range:	02/15/2018 - 08/15/2020
Total Par Amt Accepted (mlns) :	$8,309
Total Par Amt Submitted (mlns) :	$27,704