World Economic Forum Worlds Growing Demand for Credit

Here is the document presented at Davos by the World Economic Forum discussing the worlds growing demand for credit. It discusses the need for another $100 trillion in debt be generated to support global growth.  Jim Rickards discusses this on King World News interview here.

More Credit with Fewer Crises 2011

Jim Rickards on Inflation

NewWaveSlave.com brought this interview with Jim Rickards on Inflation, very interesting on the ripple effects of inflation.

M1/M2 Money Supply

The M1 Money supply expanded by 1.64% and M2 expanded 0.53% from the previous month.  M1 is composed of currency, traveler's checks, demand deposits and other checkable deposits.  M2 is composed of M1 plus retail MMMF's, savings, and small time deposits.  The following graphs shows year over year change in M1 and M2 money supply.

Weekly FDIC Bank Failures

This week 4 more banks failed, which brings the total banks failed in 2011 to 11.  The following banks were either acquired or totally failed; First Community Bank of Taos NM, FirsTier Bank of Louisville OK, Evergreen State Bank of Stoughton WI and First State Bank of Camargo OK.  

FED POMO Purchase

The FED Performed another POMO (Permanent Open Market Operation) purchase today in the amount of $8.360 billion dollars.  This brings to total since November 3rd 2010 (when the FED announced the printing of $600/900 billion dollars by June 2010) to $283.072 billion dollars and $347.532 billion dollars since August 17th 2010.

OPERATION 1 - RESULTS

Operation Date:	01/28/2011
Operation Type:	Outright Coupon Purchase
Release Time:	10:15 AM
Close Time:	11:00 AM
Settlement Date:	01/31/2011
Maturity/Call Date Range:	02/15/2018 - 11/15/2020
Total Par Amt Accepted (mlns) :	$8,360
Total Par Amt Submitted (mlns) :	$20,201

Food Stamp Usage Since 2007

Food Stamp usage is at a record high, with 2010 (the year of the recovery) being the fastest acceleration of usage. So why if we are doing so well, are some are so many people going on food stamps?

Monthly Durable/Core Durable Goods

Decembers Durable and Core Durable Goods order numbers were released today.  Durable Goods Orders are change in the total value of new purchase orders placed with manufacturers for durable goods.  It is considered a leading indicator of production as new orders will cause manufacturers to increase activity and potentially hiring to meet rising production orders.  Core Durable Goods Orders are Durable Goods excluding transportation items.  

Durable Goods forecasted number called for a +1.6%, but the actual headline number came in at -2.5%.  The Core Durable Goods forecasted number called for a 0.9%, but the actually headline number came in at 0.5%.  Both numbers are down from forecast and down from the previous forecast.  Transportation items doing better than everything other than transportation.  This does not look like an economic recovery for the month of January 2011.  We'll see when we see the jobs numbers in January.

Monthly Pending Home Sales

The Pending Home Sales for December 2010 was released today showing tepid growth.  Pending Home Sales is change in the number of homes under contract to be sold but still awaiting the closing transaction, excluding new construction. It's a leading indicator of economic health due to the ripple effects it has in the economy (mainly in the financial and home improvement).  The forecast called for an improvement of .9%, but the actual headline number came in at 2.0%.

The West performing the worst of the regions in pending home sales, which could be an indicator of January's new home sales or existing home sales number.

Monthly New Home Sales

Yesterday the New Home Sales for December 2010 with bad news for most of the regions except the West.  New Home Sales is an annualized number of new single-family homes that were sold during the previous month.  It is considered a leading indicator of economic health due to its ripple effects throughout the economy.  The forecasted number called for 302k and the actual headline number was 329k, beating forecast and the prior months revised figure of 280k (revised from 290k).  Decembers number is down -8.2% from the prior years number and up 14.9% from the prior month.  

To break down the U.S. number further by the separate regions we see that only one region (the West) is doing the best.  The Western region grew Year-over-Year by 32.53% and 71.87% Month-over-Month.  The Northeast reduced home sales Year-over-Year by -50% and -5% Month-over-Month.  The following graphs have the breakdown of the regions.

Weekly Initial Unemployment Claims

The weekly initial claims were released today with worse than expected news.  The Initial Unemployment Claims measures the number of persons who applied for unemployment benefits in the prior year.  The forecast called for $407k, but the actual headline number came in at 454k.  The prior weeks number of 404k was revised down to 403k.  This resulted in a loss of 51k jobs in the prior week.  The initial claims number has been very erratic the past few weeks with ups and downs from week to week.  The current 4 week moving average shows 428K jobs are being lost per week and seems to be bottoming on the decline in initial claims and heading up from here.

Weekly Fund Flows

The weekly fund flows showed more selling in municipals and a pile into domestic stocks.  Domestic stocks saw inflows of $2.971 billion dollars and Foreign stocks saw continuing inflows of $1.651 billion dollars.  Taxable bonds saw inflows of $3.584 billion dollars, while Municipal bonds sold off to higher levels than seen in the past year with outflows of $5.748 billion dollars.  This is going to be putting the squeeze on municipals trying to raise money to fund new or existing programs.  In the past 11 weeks the Municipal bond market has sold off $30.788 billion dollars eclipsing the inflows of the year prior.

FED POMO Update

The FED performed another POMO (Permanent Open Market Operation) purchase (a.k.a. money printing) in the amount of $7.72 billion dollars.  This brings the total since November 3rd 2010 (when the FED announced the printing of $600/900 billion dollars) to $268.922 billion dollars and since August 17th 2010 to $333.382 billion dollars.

OPERATION 1 - RESULTS

Operation Date:	01/25/2011
Operation Type:	Outright Coupon Purchase
Release Time:	10:15 AM
Close Time:	11:00 AM
Settlement Date:	01/26/2011
Maturity/Call Date Range:	01/31/2015 - 06/30/2016
Total Par Amt Accepted (mlns) :	$7,720
Total Par Amt Submitted (mlns) :	$27,965

FED POMO Update

The FED performed another POMO (Permanent Open Market Operation) purchase today in the amount of $8.869 billion dollars.  This brings the total since Novermber 3rd 2010 (when the FED announced that it would be printing $600/900 billion dollars by June 2011) to $261.202 billion dollars printed and since August 17th 2010 to $325.662 billion dollars.

OPERATION 1 - RESULTS

Operation Date:	01/24/2011
Operation Type:	Outright Coupon Purchase
Release Time:	10:15 AM
Close Time:	11:00 AM
Settlement Date:	01/25/2011
Maturity/Call Date Range:	07/31/2016 - 12/31/2017
Total Par Amt Accepted (mlns) :	$8,869
Total Par Amt Submitted (mlns) :	$22,356

Food Stamp Update

After a rewrite of my analysis program (to make it easier to break down the data) the current number of persons on food stamps stands at 43,200,878.  Going forward the rewrite will enable me to provide where the changes are and provide the ability to spot new trends.  California, Florida, NY and Texas remain in the lead for the number of persons on the food stamps.

Weekly Unofficial Problem Bank List

CalculatedRisk published their weekly "Unofficial Problem Bank List" with 937 institutions on the list with assets calculated at $409.4 billion.  This week there were 11 additions to the list and 7 removals.  Of the removals, 4 of them were due to failures this week (ref FDIC Bank Failures).  For further details of removals and additions click here.  Breaking down the numbers in the problem bank list to see how many banks are on the list per state we get the following:

This will give you a general sense for where your state stands on the problem bank list.  It would seem that Illinois is the clear winner (winner being used loosely) here with 75 banks on the problem bank list.  

Weekly FDIC Bank Failure List

This week we lost 4 additional banks in the year 2011, bringing the total banks failed during 2011 to 7.  The following failed last week and either were acquired during failure or completely failed: United Western Bank in Denver Colorado, The Bank of Asheville in Asheville North Carolina, CommunitySouth Bank and Trust in Easley South Carolina and Enterprise Banking Company in McDonough Georgia.