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[TTHQ Staff]

TrimTabs Overnight Liquidity Update – January 17, 2007 We Recommend Turning Cautiously Bearish(50% Short) on EEM (MSCI Emerging Markets).  BRIC New Offering Backlog of $18.3Billion Nearly As Large As $20.0 Billion U.S. New Offering Backlog Even Though BRIC MarketCap Only One-Quarter of U.S. Market Cap.   We do not trade non-U.S. equity ETFs in our model portfolio.  If we did, we wouldassume a cautiously bearish (50% short) position in EEM (MSCI Emerging Markets).  Thelatest NYSE margin debt data shows that margin debt surged 14.0% from the end of Septemberthrough the end of November.  During this period, IWB (Russell 1000) was up 5.4%,while EEM (MSCI Emerging Markets) was up 13.5%--roughly equal to the increase in margindebt.   Since U.S. investors have apparently been leveraging up on BRIC stocks, we expect NewOfferings to explode in the BRICs this spring.  Dealogic reports that the BRIC newoffering backlog is $18.3 billion, which is nearly as high as the $20.0 billion U.S. newoffering backlog--even though the $5 trillion BRIC market cap is only a quarter of the $20trillion U.S. market cap.  When underwriters start pumping out huge amounts of newshares in the BRICs, we will recommend turning leveraged bearish (200% short) on EEM.   Schwab Flow Data Suggests U.S. InvestorsHave Been Big Buyers of Hot Non-U.S. Stocks.  Schwab Clients Pump $897 Million intoGlobal Equity Funds in December, 5.6 Times More Than $161 Million Inflow into U.S. EquityFunds.   Charles Schwab reported today that its clients bought $897 million in global equity fundsin December, the highest inflow since April 2006.  By contrast, its clients boughtonly $161 million in U.S. equity funds in December, the lowest inflow since September2006.  Since Schwab clients sent 85% of their fresh equity investments offshore inDecember and EEM jumped 13.5% during the previous two months, it is logical to assume thatmargin buyers were leveraging up on non-U.S. equities rather than U.S. equities at the endof 2006.   Schwab’s data also shows just how risk-averse individual investors have become.  In December, Schwab clients bought $1.5 billion in bond funds, thefifth consecutive inflow exceeding $1 billion.  They also bought $3.0 billion inmoney market funds, the eighth consecutive inflow exceeding $1 billion and the highestinflow since June 2006.  The $4.5 billion Schwab clients added to bond and moneymarket funds in December was quadruple the $1.1 billion they added to U.S. and globalequity funds in December.   Twelve-Month Running Total of TrimTabsSavings and Investment Soars to Record $755 Billion in December 2006, 6.2% Higher ThanPrevious Record of $711 Billion in November 2006.   As TrimTabs Personal Income and Consumer Cash Flow Analysis reportedyesterday, American consumers are generating record amounts of savings.  In December,the twelve-month running total of TrimTabs Savings and Investment flow soared to a record$754.6 billion, which was $43.9 billion, or 6.2%, higher than the previous record of$710.7 billion in November 2006.  Yet less than 5% of TrimTabs Savings and InvestmentFlow--inflows into bank savings, small-denomination CDs, half of large-denomination CDs,retail money market funds, and all long-term mutual funds--was directed into U.S. equityfunds in 2006.   As the graph below shows, the twelve-month running total of TrimTabs Savings andInvestment Flow has tracked the S&P 500 fairly closely since 1998.  The majorexception was from 1999 through 2000.  We suspect that the market was pushed higherin those years by huge direct investments in equities, which TrimTabs Savings andInvestment Flow does not measure.     Announced Corporate Buying Rebounds fromHoliday Doldrums: 6 New Cash Takeovers for $4.2 Billion and 6 New Stock Buybacks for $6.0Billion Announced Friday through Wednesday.   As we would expect with the wages of those on payrolls rising 7+% year-over-year,announced corporate buying has picked up steam as earnings season has begun.  Six NewCash Takeovers for $4.2 billion have been announced so far this week, including two dealsannounced today, Wednesday: Brookfield Asset Management is buying Mills for $1.2 billionin cash, and Landry’s Restaurants offered to buy Smith & Wollensky for $44million cash.  Meanwhile, New Stock Buybacks have been less robust. While theweek-to-date dollar amount totals $6.0 billion, only six buybacks have been announced,which is modest for the first few days of earnings season.  If thenumber of buyback announcements does not accelerate by the end of next week, we willreduce our estimate of Actual Stock Buybacks, which is now $2.3 billion daily.   “White Shoes” Swing Back intoAction after Holidays: Dealogic Reports $950 Million Scheduled for Wednesday Night and$1.4 Billion Scheduled for Thursday Night.  Absent Big Overnights, This Week’sCalendar Unlikely to Top $3.5 Billion.   The “white shoe” boys and girls are getting back into action after the holidays.  While only $242 million in New Offerings priced on Friday and Tuesday,Dealogic reports that $950 million is scheduled to price on Wednesday night and $1.4billion is scheduled to price on Thursday night (all dollar amounts include the 15%“green shoe”).  Unless some big overnights materialize, this week’scalendar should not exceed $3.5 billion.    Assuming this week’s calendar is about $3.5 billion, U.S. New Offerings will havebeen below $5 billion daily for five consecutive weeks.  But we expect New Offeringsto accelerate to at least $1 billion daily beginning next week.   Investors Bet Heavily on Global Equities:U.S. Equity Funds and ETFs Lose $2.6 Billion Year-to-Date, While Global Equity Funds andETFs Get $8.2 Billion.   Both individual investors and portfolio managers have been betting heavily on non-U.S.equities this year.  Although U.S. equity funds posted estimated inflows of $697million on Thursday, January 11 and $817 million on Friday, January 12, they have receivedonly $224 million month-to-date.  In addition, U.S. equity ETFs have redeemed $2.8billion month-to-date.   While U.S. equity funds and ETFs have lost $2.6 billion month-to-date, investors havepoured $7.0 billion into global equity funds and $1.3 billion into global equity ETFs.  Global equity funds alone received a whopping $1.4 billion onThursday, January 11 and $1.1 billion on Friday, January 12.  Investors are so busychasing last year’s winners that they have probably not noticed that the U.S. stockmarket is outperforming this year.  If this outperformance persists, perhaps flowswill become less skewed toward non-U.S. stocks.     ESTIMATED MUTUAL FUND FLOWS FOR January 16, 2007 ALL EQUITY MUTUAL FUNDS:  INFLOW $1959 MILLION;  NAV UP 0.61% US EQUITY FUNDS FLOW:  INFLOW $817 MILLION BREADTH:  NEGATIVE 31 OUT VERSUS 17 IN NAV:      UP 0.54% INTERNATIONAL EQUITY FUNDS FLOW:  INFLOW $1142 MILLION BREADTH:  POSITIVE 11 IN VERSUS 6 OUT NAV:      UP 0.96% BONDS & HYBRID:  FLOW:    OUTFLOW $263 MILLION NAV:      FLAT 0% L1: NET FLOAT                    -$5,463 MILLION NEW ANNOUNCED CASH TAKEOVERS:        $2,222 MILLION COMPLETED CASH TAKEOVERS:            $0 MILLION NEW STOCK BUYBACKS                  $4,924 MILLION NEW OFFERINGS:                      $242 MILLION INSIDER SELLING                  $700 MILLION L2: US EQUITY FUND FLOW              $817MILLION Charles Biderman Chief Executive Officer TrimTabs Investment Research Charles.Biderman@TrimTabs.com +1 (707) 527 1501 The data and analysis containedherein are provided "as is" and without warranty of any kind, either expressedor implied. TrimTabs Investment Research (TTIR) any affiliates or employees, or any thirdparty data provider, shall not have any liability for any loss sustained by anyone who hasrelied on the information contained in any TTIR publication. All opinions expressed hereinare subject to change without notice, and you should always obtain current information andperform due diligence before trading. TTIR accounts that TTIR  or its affiliatedcompanies manage, or their respective shareholders, directors, officers and/or employees,may have long or short positions in the securities discussed herein and may purchase orsell such securities without notice. TTIR uses various methods to evaluate investments,which may, at times, produce contradictory recommendations with respect to the samesecurities. When evaluating the results of prior TTIR recommendations or TTIR performancerankings, one should also consider that TTIR may modify the methods it uses to evaluateinvestment opportunities from time to time. For this and for many other reasons, theperformance of TTIR's past recommendations is not a guarantee of future results. Thesecurities mentioned in this document may not be eligible for sale in some states orcountries, nor be suitable for all types of investors; their value and income they producemay fluctuate and/or be adversely affected by exchange rates, interest rates or otherfactors. TTIR has an investment management affiliate, TrimTabs AssetManagement (TTAM) which actively invests in highly liquid ETF securities which aresometimes similar or identical to those tracked in the TTIR model portfolio and sometimesdifferent.  The portfolio trades held by TTAM will not always be the same asthose recommended by TTIR, primarily because the TTIR trade recommendations are updatedweekly while TTAM portfolios are managed on a daily basis as conditions change.  Dueto the highly liquid nature of ETF securities tracked by TTIR, TrimTabs does not believethere is the potential for conflicts of interest.  Further distribution prohibitedwithout prior permission.  Copyright © 2006 TrimTabs Investment Research.  Allrights reserved.