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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (207407)	12/1/2002 6:36:43 PM
From: Les H	Respond to of 436258

Delta-hedged economy prudentbear.com Broad money supply (M3) surged an eye-opening $95.7 billion last week, with six-week gains of $216.7 billion. This boosts 31-week M3 annualized growth above 10%. For the week, Demand Deposits increased $4.2 billion, Small Time Deposits $2.2 billion, and Savings Deposits $19.5 billion (and up $66.2 billion over three weeks). Large Time Deposits declined $12.9 billion, Repurchase Agreements dropped $6.3 billion, and Eurodollar Deposits slipped $1.9 billion. Retail Money Fund Deposits increased $4.5 billion. The action, however, was with Institutional Money Fund Deposits. This money supply component surged $86.1 billion, with two-week gains of $110.2 billion. Today from Dow Jones: “It may be less marked than the recent rebound in major stock indexes, but the commercial paper market is staging a comeback of its own.” On the surface, this may be true. Commercial paper increased $3.9 billion last week and has jumped $21 billion over the past three weeks. However, we have yet to see any evidence that access to the CP market is improving for most companies. Over the past three weeks, financial Sector CP borrowings have jumped $22 billion, while non-financial CP has actually declined $1 billion. After recent significant gains, Total Bank Assets declined $49.8 billion last week. Total Bank Credit contracted $28.7 billion, with Securities holdings declining $27.3 billion. In what has become seemingly inconsequential to other extraordinary Credit market developments, Bank Loans and Leases dipped $1.4 billion last week. Total Bank Assets have expanded at an almost 9% rate thus far in 2001. It is worth noting, however, that recent heightened risk aversion is responsible for the Treasury and Agency arena seeing the preponderance of foreign buying. During September, foreign-sourced purchasers acquired $46 billion of long-term U.S. securities ($49 billion monthly average over the past five months). Treasuries ($26.3B) and Agencies ($21.1B) basically accounted for all of net foreign purchases during the month. Foreigners actually sold almost $6.5 billion of U.S. stocks during the month (compared to 2001’s $9.7 billion of monthly average purchases), the largest sales since September 2001. At the same time, they purchased only $4 billion of U.S. corporate bonds (including asset-backed securities), down significantly from 2001’s $19 billion monthly average. Over the past five months, foreign purchasers have accumulated $244 billion of long-term U.S. securities (up 35% y-o-y and consistent with escalating current account deficits). Agency purchases over this period account for about $81 billion (33%), Treasuries $59 billion (24%), and corporate bonds (including asset-backs) $70 billion (29%). There were $11.5 billion of net purchases of U.S. stocks (5%) and $24 billion of foreign stocks and bonds (9%). Foreigners were, on average, net sellers of $9 billion of Treasuries during the comparable five-month period last year. Foreigners were also huge purchasers of U.S. corporate bonds last year, to the tune of $86 billion (48% of total U.S. long-term securities purchases) over the five comparable months. Foreign-sourced buyers also acquired $57 billion of agencies (31%) and $35 billion of U.S. stocks. Foreigners made net purchases of $13 billion of non-U.S. stocks and bonds (7%). We’ll wait to see if their appetite for U.S. risk assets returns.