- Treasury International Capital (TIC) Report showed foreign demand for US assets easing especially in the last two of three months (down $43 Billion in Jan/down $25.6 Billion in Nov '08) in terms of long term flows. In aggregate, foreign investors continue diminish US agency holdings including corporate bonds, BUT there is continued purchasing of US Treasuries (most importantly China's $12.2 Billion). This is especially notable in light of Chinese Premier Wen Jiabao's recent statements about concerns over US Treasuries and the FOMC announcement this week which included a call to purchase $300 Billion in the 2-10Yr Bond Products. Activity here will continue to be critical to be aware of as relates to our government's economic stimulus intentions. Their intentions rest on the continued interest of foreigners to finance their money printing via US Treasury purchases.
- Industrial Production in February was worse than expected and has fallen in eleven of the last thirteen months. Weakness remains broad based.
- Housing Starts rebounded in February following January's very low number albeit likely a seasonal factor.
- PPI (Producer Inflation) saw a second month in a row of increase with energy as the leading cause. CPI (Consumer Inflation) also increased on an increase in energy costs. Food was essentially flat. In sum, rising prices occurred among most items excluding food.
- FOMC Announcement revealed an unchanged interest rate policy BUT stated its intention to purchase up to $300 Billion in government bonds, $200 Billion in agency debt, and $750 Billion - $1.25 Trillion in mortgage backed securities over the next six months. Apparently in the Fed's mind, destroying the value of what the lowly taxpayer must earn in order to spend and fork over to the IRS is the path to "prosperity" and "economic stability".
And the beat goes on....
- Notable Reports for the week of March 23-27 include Existing Home Sales, Durable Goods, GDP, EIA Petroleum Report, Jobless Claims, and Personal Income/Outlays. Also, numerous bureaucratic talking heads flapping their gums.
