Today, June 15th, 2011, the Treasury Department released a little known report that comes out monthly. This report was so “unimportant” that CNBC didn’t even talk about it when it was released, no breaking news, not even a wink and a nod. Yet this report reflects some of the most important economic data about the USA…the TIC Report.
The Treasury International Capital Data Flow report, or TIC as it is known, shows money flowing into and out of the USA. The report is two months behind, and probably for good reason. The Treasury does not want you to know what is really happening until after the fact. Remember, in the Dodd/Frank bill that passed, the Treasury was supposed to increase its transparency. They agreed. They just didn’t say when they would be transparent.
This TIC report is especially unnerving. The report summarizes private investment and government investment. Starting with private investment, in June, purchases of treasury bonds was minus $18 billion. Going back one year to June 2010, it was plus $312 billion. With government investment (other governments buying USA bonds), in June, purchases of treasury bonds was $13.8 billion. Going back one year to June 2010, it was $182 billion.
If we add together bonds and stocks for the month of June, foreign acquisition of long term securities is minus 8 billion. No wonder CNBC did not bother to mention this report or any part of the data. Can you say…failed auction?
Here’s an interesting note. Remember, this report is two months in the rears. In June the Market began to sell shares of stocks traded on the US stock exchanges, to the tune of minus 11.5 billion. If we look at the $DJIA for the month of June, the Market had come down but was on its way back up towards a high for the year. There was no major sell off. And it wasn’t until July / August that Congress was deadlocked with trying to figure out a resolution to extending the US debt. So why the minus 18 billion? What did the institutional traders and foreign investors/foreign governments know in June that was about to happen in August?
As a measure of what corporate insiders (company officers, directors, largest shareholders) knew, they were selling their own company’s shares at the fastest rate since data first was collected in 1970’s. It is assumed that corporate insiders know more about their company than anyone else. The sell-to-buy ratio was so steep that it finally stood at 6.43 to 1. This was the highest reading since October 1974. The real question is…who knew what and when, and how to the rest of us become a fly on the wall.