Rick Santelli on Government Shutdown & the Deficit

Rick Santelli discusses out loud the Government shutdown and kicking the can down the road. Then if you can believe it you get Stuart Hoffman says he thinks the claims numbers were pretty good, apparently he didn't look at the revisions from last weeks original headline number, a 12k miss making it 394k instead of 382k (so what does that mean for next weeks number as well as the unemployment rate for March (revised of course, headline is rarely accurate).  Then the obvious was pointed out by Stuart that prices are rising, yeah we all new that already (no new news there).

As Rick says "You can't make this stuff up"

Weekly Initial Unemployment Claims

This weeks unemployment numbers, though bad, were not the big story.  The big story was the revisions from last weeks number, but we'll get to that.  Initial Unemployment Claims is a measure of the number of persons filing for unemployment benefits for the first time in the prior week.  It is an indicator of economic health as consumer spending tends to suffer from increasing numbers, which impacts the economy as a whole.  The forecast this week called for a number of 379k, but the actual headline number was 388K.  Again, that is not the big story.  The prior weeks 382k headline number was revised to 394k, that is a difference of a 12k error, marking one of the largest revisions I have seen since I started tracking (refer to revisions delta chart below).

This is one of the largest revisions I have seen since I have been tracking this, with this size of revision, making a guesstimation of the revision is tough.  

Rick Santelli on Employment and Statistics

Rick Santelli trying to be as politically correct as he can when discussing the employment numbers, but in true form Rick lays subtle reality out there for you. Rick tackles the argument of historical references to Quantitative Easing and if it will actually stop.

Weekly King World News Interviews

This week King World News interviews Bill Fleckenstein, John Hathaway, Gerald Celente and Jim Rickards.  Topics cover war in Libya, unrest in the Middle East, QE II/III, what these major events mean to our economy, as well as Gold and Silver's performance.

Bill Fleckenstein - Discusses the fact that the Yen gained in strength against the dollar over the past few weeks brining it under 80 per dollar, the FED then stepped in to strengthen the dollar against the Yen to bring it back above 80.  Bill says all fiat currencies are actually in trouble so comparing the dollar vs any fiat currency doesn't make a lot of sense.  Bill believes QE2 will stop and will never shrink the balance sheet.  If an event occurs to assist, then QE3 will appear.  Bill believes their is a whole event coming in housing precipitating housing down further, but their are so many problems currently any of of them is a catalyst to bring the economy down.  Bill discusses other very interesting topics including inflation.

John Hathaway - Discusses how we need to see Gold stay above 1440 to be sustained, as well as, take off from here.  John thinks if it were to trade this way for a week or so then gold will take off.  John says major events like Libya and Japan could be more reasons to continue money printing.  John says that gold is still under-owned and the average investor things that gold is where it is at due to Libya, when that is the smaller story.  John continues to talk about gold stocks, catalysts for gold and what worries him in the gold market.

Gerald Celente - Discusses the war in Libya and the unrest in the middle east, as well as why the U.S. would go in to assist a country needing it.  Gerald also discusses the how the Government wants to balance the budget and we are cutting funding for our people, yet we always have money to fund wars.  Gerald brings up a lot of good questions on the economy and the current wars we are in, as well as draws some of his own conclusions as to why we are where we are.

Jim Rickards - Discusses more on his QEII interview and concepts he brought out on permanent on-going QE.  Jim re-iterates that the FEDs balance sheet that the rollover of maturity can be used to perform an informal QEIII.  This makes it look like QE ended from a political standpoint, but is really going on through debt maturity.  In this interview Jim corrects some of his statements on QE and monetization for listeners.  He says the point of QE was to keep interest rates low which involves buying enough debt to keep fear in the market to drive interest rates down.  Jim regards the Japan event and Libya issue as providing an oil supply shock and demand shock as Japan will have to go to oil and gas to take up for loss in nuclear (putting a floor under oil above 80).  Jim says given the debt problems in the world even small shocks can drag us back down.  One of the FED officials confirmed Jim's analysis of on-going QE by the FED through debt maturity.  Jim also mentions that their is still a chance for QEIII due to world events happening in the past few weeks.  Jim goes on to talk about the FEDs toolbox and different things it can do, very interesting analysis.

King World News has a great weekly Metals wrap that is a must listen if you are a metals investor as well.  KWN also posts articles on metals, the economy and other interesting topics, so be sure to visit them at http://www.kingworldnews.com

Weekly M1 and M2 Money Supply

This week the M1 (which includes Currency, Travelers checks, demand deposits and other checkable deposits) decreased by -0.17% and M2 (which includes M1 plus, Money Market Mutual Funds, Savings and small time deposits) decreased by -0.28%.

Weekly Unofficial Problem Bank List

CalculatedRisk published their weekly "Unofficial Problem Bank List", which had increased to 985 institutions with assets of $431.1 billion.  This could make the latter part of this year a real problem for banks as the list has increased in the number of banks it picks up.  Their were eight additions and 3 removals from the list.  For more details on additions/removals see CalculatedRisk.com.

The following table shows the number of institutions added/removed from the list by state:

State	Change
AL	+1
AR	+1
CA	+1
GA	+1
MI	-1
NJ	-1
NV	+1
TN	+2
TX	-2

Weekly FDIC Bank Failures

We had one bank fail this week, The Bank of Commerce in Wood Dale, IL, bringing the total banks failed in 2011 to 26 institutions.  We are now trending slower than last year on the number of banks failed to date.

Weekly Fund Flows

This past weeks fund flows report continued to see selling in domestic stocks and municipal bonds, while foreign stocks and Taxable bonds continued to climb.  Domestic stocks saw out-flows of -$1.307 billion dollars, while foreign stocks saw in-flows of $1.889 billion dollars.  Municipal bonds continued out-flows of -$618 million, while Taxables had an in-flow of $3.493 billion.

FED POMO Purchases

The FED performed multiple POMO (Permanent Open Market Operations) purchases this week totally $29.412 billion dollars.   This brings the total since November 3rd 2010 (the day the FED announced the printing of $600 billion by June of 2011) to $478.842 and brings the total since August 17th 2010 to $543.302 billion.