Another light trading day...
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In This Issue..

* US GDP falls as expected...
* Housing continues to slump...
* Christmas wishes...

And Now... Today's Pfennig!

Another light trading day...

Good day... The currencies remained in a very tight range, with the dollar drifting up slightly overnight. Today will be a short trading day, as the stock market will be closing at 1 pm EST. We will be heading home around 1 pm CST today, so if you want to make some trades you will have to contact us this morning. We will be at home celebrating the Christmas holiday tomorrow, but will return to work on Friday (I think the US should adopt boxing day!!).

The US data came in pretty much as expected yesterday, with 3rd quarter GDP falling .5% and Personal Consumption down 3.8%. The small decline in 3rd Q GDP is just a pause in what will be an accelerating drop in GDP through 2009. 4th quarter GDP will likely show a much larger drop. The confidence numbers were also in line with expectations, with U of Mich. confidence at 60.1 and ABC Consumer confidence dropping to -48 from -51 last week. I guess the drop in oil prices just isn't enough to combat the rising unemployment and sliding US economy.

The housing data showed the US housing market has still not hit bottom. New home sales and existing home sales were off slightly more than expected, with Existing Home Sales off 8.6% month on month. House prices continue to fall, dropping over 1% in October. The pace of the decline in prices is accelerating, an indication that housing is still not nearing a bottom. The 13% drop in the median resale price from a year earlier was the most since records began in 1968 and was probably the worst drop since the great depression.

Today we will get another load of data with Personal Income, Spending, PCE Deflator, Durable Goods orders, and the weekly jobless numbers. Economists expect this data to show continued weakness in the US, with Personal income and spending both expected to drop. Durable goods orders will also probably fall, and the weekly jobless claims will show a further deterioration of the US employment situation.

Needless to say, none of this data will be dollar positive. But the shortened trading day, along with very light trading will probably lead to another day of trading in a tight trading range. With that said, I will end another short Pfennig and head to the currency scorecard:

Currencies today 12/24/08: A$ .6826, kiwi .5745, C$ .8250, euro 1.4005, sterling 1.4760, Swiss .9311, ISK 145, rand 9.63, krone 7.0923, SEK 8.014, forint 190.64, zloty 2.9198, koruna 18.868, yen 90.48, baht 34.63, sing 1.4424, HKD 7.75, INR 48.0725, China 6.8397, pesos 13.33, BRL 2.3740, dollar index 81.094, Oil $37.15, Silver $10.29, and Gold... $836.41

That's it for today... I suffered through another ILLINI win over MIZZOU last night, the Tigers were never even in the game. But I did get to see Chuck (we waved to each other across the arena). Long time readers of the Pfennig know that Chuck always writes a Christmas poem to share with the Pfennig readers. So I will leave you with Chuck's latest:

A Christmas Pfennig

Twas the morning before Christmas
And all through St. Louis
The Cardinals are working and
Trying to get through it

The stockings are hung by our big window with care In hopes that they will be filled with goodies equally and fair

Mike Meyer, Mary Owens and I have just said good morning When out on the parking lot the police gave a warning

Away to the window I flew like a flash (yeah right!) Pulled back the curtain In time to see the crash!
Our Office is snug in the center of construction And there's not a day go by that we don't have destruction!

The moon on the breast of a new fallen snow Gave a luster of midday to the objects below When what to my wondering eyes did appear But The rest of the desk arriving, I gave a cheer!

There's Tim, and Don, and Ty and Kristin With John, and John, our little Christine, and don't forget Jen!
Chris Gaffney is running (as usual) he's in such good shape, and they're led by The Big Boss Frank Trotter, why...
He's wearing a cape!

Could it be he's Superman?
I thought, Oh my, do tell
But decided focus on the team
And gave a yell!

Hey! It's almost Christmas are you ready?
They all nodded yes, and we're all rock steady In our beliefs that Deficits do Matter We really don't understand all the opposite chatter!

The Operations folks support what we do
The Computer people support us too!
The Projects and Products team go out of their way And everyone works as a team, yeah, yeah, yeah!

It's been quite a year for the Pfennig writer His battle with cancer continues His long time friends know him as a fighter Now his new friends do too!

The currencies have had a split personality Rising for 6 months Then falling the next The Deficits keep mounting and a recession is upon us But Come On, I said "It's Christmas"
Let's not let this stuff taunt us!

So, as I think about all the wonderful readers that send me kind words I remind myself that I'm so blessed in the wonderful world My family, my friends, my dear readers, and all I just continue to see life as a ball!

And, as I put on my Missouri Tigers ball hat And get ready to leave for the night I say, Merry Christmas to all And to all, a Good Night!

Chris Gaffney, CFA
Vice President
EverBank World Markets

Posted 12-24-2008 11:38 AM by Chuck Butler