FED POMO Purchase

The FED performed another POMO (Permanent Open Market Operation) purchase yesterday in the amount of $7.199 billion dollars.  This brings the total since November 3rd 2010 (when the FED announced the printing of $600/900 billion dollars by June 2011) to $201.007 billion dollars printed.

Operation 1 - RESULTS

Operation Date:	01/07/2011
Operation Type:	Outright Coupon Purchase
Release Time:	10:15 AM
Close Time:	11:00 AM
Settlement Date:	01/10/2011
Maturity/Call Date Range:	07/15/2013 - 12/31/2014
Total Par Amt Accepted (mlns) :	$7,199
Total Par Amt Submitted (mlns) :	$24,168

Monthly ETF Flows

November 2010's ETF money flows report showed that ETF flows overall were positive, but down from October 2010's inflows.  Still this is an improvement over September 2010's flows which were negative.  

When breaking down Novembers report we see large out-flows from Large Cap stocks of $3.378 billion dollars, Mid-cap stocks saw outflows of $48 million, Health outflows of $32 million, Utilities outflows of $334 million, Government bonds had outflows of $665 million and Municipal bonds had outflows of $115 million.  Small-cap, Commodities, Natural Resources and Emerging markets had inflows of $1 billion plus.

Weekly Initial Unemployment Claims

The weekly initial unemployment claims was released today with rising initial claims.  Initial claims is the number of unemployment claims filed for the first time in the prior week.  Initial claims gives us a glimpse on a shorter term bases on employment reduction.  The trend has been on a downward path for a few weeks, this is a rise from the previous weeks revised up figure by 18k jobs cut. 

The prior weeks initial claims number was revised by by 3000 jobs and is staying between an error range of 2000 to 3000 up.

FED POMO Purchase

The FED executed another POMO (Permanent Open Market Operation) purchase today in the amount of $6.78 billion dollars.  This brings the total since November 3rd 2010 (when the FED announced the printing of $600/900 billion dollars) to $193.808 billion dollars and a total of $258.268 billion dollars since August 17th 2010.  

OPERATION 1 - RESULTS

Operation Date:	01/06/2011
Operation Type:	Outright Coupon Purchase
Release Time:	10:15 AM
Close Time:	11:00 AM
Settlement Date:	01/07/2011
Maturity/Call Date Range:	01/31/2015 - 06/30/2016
Total Par Amt Accepted (mlns) :	$6,780
Total Par Amt Submitted (mlns) :	$18,564

Weekly Fund Flows

This weeks fund flows report showed that money is slowly flowing back into domestic stocks and there are some brave souls going back into the taxable bond market.  Domestic stocks received $493 million of in-flows and while money continues to pour into Foreign stocks to the tune of $2.289 billion dollars.  Taxable bonds received $2.468 billion of in-flows, while Municipal bonds continue to be treated as toxic with out-flows of -$2.827 billion dollars.

FED POMO Purchase

The FED performed another POMO (Permanent Open Market Operation) purchase today in the amount of $1.5 trillion dollars.  This brings the total since November 3rd 2010 (when the FED announced that he will print $600/900 billion by June 2011) to $187.028 billion dollars.

OPERATION 1 - RESULTS

Operation Date:	01/05/2011
Operation Type:	Outright Coupon Purchase
Release Time:	10:15 AM
Close Time:	11:00 AM
Settlement Date:	01/06/2011
Maturity/Call Date Range:	08/15/2028 - 11/15/2040
Total Par Amt Accepted (mlns) :	$1,500
Total Par Amt Submitted (mlns) :	$9,360

December ISM Non-Manufacturing

The December ISM Non-Manufacturing report was released today. ISM Non-Manufacturing measures the level of a diffusion index based on surveyed purchasing managers, excluding the manufacturing industry. It is considered a leading indicator of economic productivity. The forecast called for an index of 55.6, but the actual headline index came in at 57.1. This was a beat from Novembers 55.0.

Similar to the ISM PMI report Business Activity and New Orders were growing, but employment and supplier deliveries were growing slower.

Inventories and prices were increasing.  The rising prices has accelerated and will eventually be passed on to the consumer if they haven't already.

Even though the new orders news is very encouraging the trend with prices and inventories is not so encouraging.  The increased prices may impact new orders in the near term.

November Factory Orders

November Factory Orders were released today and came out better than expected.  Factory orders measures the change in the total value of new purchase orders placed with manufacturers.  Rising purchase orders is considered a leading indicator of production.  The forecasted called for a number of -0.1%, but the actual headline number came in at 0.7% (beating Octobers number of -0.7% as well).  The report had the following breakdown in new orders:

New orders for manufactured durable goods in November decreased $2.6 billion or 1.3 percent to $193.7 billion, the U.S. Census Bureau announced today.  This decrease, down three of the last four months, followed a 3.1 percent October decrease.  Excluding transportation, new orders increased 2.4 percent.  Excluding defense, new orders decreased 2.3 percent.

It would seem defense is supporting factory orders and transportation is still suffering.

Transportation equipment, also down three of the last four months, had the largest decrease, $6.2 billion or 11.9 percent to $45.5 billion. This was due to nondefense aircraft and parts, which decreased $6.6 billion.

Inventories are up for eleven months straight with transportation having the largest increase in eleven months of $1.1 billion or 1.3% to $84.3 billion.  Increasing inventories is not a good sign.  After reading the report, I would say this actually wasn't a good report (especially for transports). 

FED POMO Purchase

The FED performed another POMO (Permanent Open Market Operation) purchase of $1.618 billion dollars.  This brings the total since November 3rd 2010 (when the FED committed to printing $600/900 billion dollars) to $185.528 billion dollars.

OPERATION 1 - RESULTS

Operation Date:	01/04/2011
Operation Type:	Outright TIPS Purchase
Release Time:	10:15 AM
Close Time:	11:00 AM
Settlement Date:	01/05/2011
Maturity/Call Date Range:	07/15/2012 - 02/15/2040
Total Par Amt Accepted (mlns) :	$1,618
Total Par Amt Submitted (mlns) :	$5,168

George Soros Discusses an Orderly Decline in the Dollar

George Soros talks about creating an international currency through SDR's (Special Drawing Rights) via the IMF (International Monetary Fund), whom has proposed using SDR's throughout 2010 as a temporary measure until an international currency could be created.  This is just another serious discussion that has been occurring by special interest in moving away from the U.S. Dollar as a reserve currency.  Soros says that if the U.S. doesn't agree to this type of arrangement, then China and other countries will go bilateral (using their own currencies between two countries, which is already occurring).   He states bilateralism will cause the dollar to be used less throughout the world (reducing dollar demand).

Raising the Debt Ceiling

With the $14.3 trillion dollar debt ceiling quickly approaching and at a run rate of $4 billion dollars per day, we should hit that ceiling around beginning of April 2011 (assuming that run rate does not accelerate or decelerate).  The white house economic advisors chairman Austan Goolsbee said the remarked:

"This is not a game," Goolsbee said on ABC's "This Week." "If we hit the debt ceiling, that's essentially defaulting on our obligations, which is totally unprecedented in American history.

"The impact on the economy would be catastrophic. I mean, that would be a worse financial economic crisis than anything we saw in 2008," Goolsbee said. "I don't see why anybody's talking about playing chicken with the debt ceiling."

If this is indeed true then this would provide a bright future for silver and gold speculators either way as if the debt-ceiling is not raised and we breach it, we default and fiat currency becomes a much bigger problem (ultimately leading to deflation, but with no reputable fiat currency available, gold and silver may become a currency safe haven).  If we raise the ceiling, that could mean that we are going to print more and expand the money supply by trillions more creating more inflation.

Republicans are seemingly asking for conditions in spending reduction if the ceiling is approved, but if history has taught us anything, the spending topic will be put to the wayside once this crisis has been averted until we have to raise it again (lets hope that is not the case).

Original Source

December ISM Manufacturing PMI

The December ISM Manufacturing PMI was released today with seemingly flat-to-better than expected news.  ISM Manufacturing PMI measures level of a diffusion index based on surveyed purchasing managers in the manufacturing industry. It is a survey of about 400 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.  The forecast called for an index of 57.0 in which the actual headline numbers were in-line with this number, but beats the prior months index of 56.6.  

New Orders, backlog orders & Production were up which is good (not significantly).  Employment, exports & supplier deliveries were all down.

Inventories grew higher than expected impacting its index, while supply executives reported prices generally higher in December. 

FED POMO Purchase

The FED performed another POMO (Permanent Open Market Operation) purchase today in the amount of $7.79 billion dollars.  This brings the total since November 3rd (when the FED announced  printing $600/900 billion dollars) to $183.91 billion.  

OPERATION 1 - RESULTS

Operation Date:	01/03/2011
Operation Type:	Outright Coupon Purchase
Release Time:	10:15 AM
Close Time:	11:00 AM
Settlement Date:	01/04/2011
Maturity/Call Date Range:	02/15/2018 - 08/15/2020
Total Par Amt Accepted (mlns) :	$7,790
Total Par Amt Submitted (mlns) :	$17,004