When 8.5% Is Really 15.6%!
Daily Pfennig

Blog Subscription Form

  • Email Notifications
    Go

Archives

.........But First, A Word From Our Sponsor..........
Record 2008 results take EverBank® to new heights.

In a year that saw many of the nation's largest financial institutions falter, EverBank excelled. Our 2008 achievements, which came as no surprise to us, included:

.Record net income of $46.0 million, a 52% increase from 2007
.Assets grew by 28% during the year to over $7.0 billion
.Bank deposits grew by 29% during the year, an increase of $1.1 billion and the largest annual deposit growth in company history to over $5.0 billion

The numbers-they say it all. We've solidified our place as one of the nation's strongest and most stable banks. And there's no mystery to our success. We're well-diversified, we've never engaged in subprime lending and we've got smart, dedicated folks working for us. Take advantage of our strength and stability. Visit http://www.everbank.com.

EverBank is a Member FDIC and Equal Housing Lender.
......................

In This Issue..

* Job Losses Continue To Mount!            
* Currencies rally on the day...             
* Shhhhh! The Gov't wants to keep this quiet....                            
* Richard Russell...                                            

And Now... Today's Pfennig!

When 8.5% Is Really 15.6%!    

Good day... And a Marvelous Monday to you! OK, it's Opening Day here in St. Louis, so traditionally I bring this to you on Opening Day... Beat the drum, and hold the phone, the sun came out today, we're born again, there's new grass on the field... A-rounded third, and headed for home, it's a brown eyed handsome man, anyone can understand the way I feel.....

Yes, baseball freaks like me, believe we're born again every spring on Opening Day, for before that first pitch is thrown, everyone is in first place!

OK... Enough of all that... I've got some serious stuff to talk about here... And it all begins with Friday's Jobs Jamboree.... I was heading to the airport when the number was released that showed 663,000 more U.S. jobs lost... March's number of -663K, put the unemployment rate at 8.5%... But seriously folks... I'm not using "new math" when I tell you that the real unemployment rate is around 15.6%! I know, I can hear you saying, "Chuck, where in the world did you get that number?"

Ahhh grasshopper... You get 15.6% when you add in all the people that are laid-off but their unemployment benefits have expired... You may recall me telling you this over and over again in the past... But... The Bureau of Labor Statistics (BLS) does NOT count people that are unemployed and have had their benefits run out, as unemployed.... What do they count them as? Who knows, but they sure don't count them for what they are! And isn't that really questionable? Why not call them for what they are?

Dean Baker, who is the co-director of the Center for Economic and Policy Research in Washington, said this about the report.... "There's just no way we're anywhere near a bottom. We'll be really lucky if we stop losing jobs by the end of the year." He went on to say..."We're clearly looking at a worse downturn than they (the Obama administration) had been anticipating when they planned the stimulus. We're going to need some more."

And finally... The thing that really TICKS ME OFF! Was the revision of the Feb job losses... Stealth like, the BLS slid a revision of 86,000 additional jobs lost in Feb to bring the total to 741,000! My friend Ian Mathias over at the 5-Minute Forecast (which by the way if you don't read it, you should!) had this to say about the revision...  "That's actually the biggest monthly drop in 59 years. Such a number would have sent stocks to the woodshed back in early February, but since the revision is now so backward looking, there isn't much traders can do. Clever trick, eh?"

Geez Louise, will the talk of stimulus ever end? More later, but first... Let's see what the currencies did in reaction to this data...

Currencies enjoyed another day in the sun on Friday (except yen) as the more everyone talks about stimulus, and bailouts, and so on, the more the risk takers expose of their body to the currency waters. One would think it to be the other way around, BUT! Not now... Everyone heard it from G-20 this week, they are going to make it all right on the night for everyone, no worries!

The euro traded up near 1.35 on Friday, and saw the Aussie dollar (A$) push higher to .7155... So.... Remember on Thursday when I told you that the euro had backed off some because of the Eurozone's jobs report, and that I said it won't be as bad as the U.S. report... It all goes back to what I was saying the other day... Other countries might be experiencing their own problems right now, but they don't compare to what's going on here in the U.S!

Last night when I returned home from San Diego (plane was delayed over 3 hours! UGH!) The euro was trading well into the 1.35 handle, at 1.3560! I don't know if you been following the A$ closely since I said before I left on vacation, that it appeared to have turned the corner... But if you have, then seeing A$'s trade close to 72-cents again is not a shocker to you... For those of you not keeping score at home, it probably is a shocker to you... But in a good way, eh?

But... Just as always the prosperity just can't seem to hold serve, and in the overnight markets the profit taking set in, with the euro coming back to 1.35... But hey! It's still 8 figures higher than it was before I went on vacation last month!

I saw this report on the AP newswire Saturday regarding Modified Mortgages...

Remember how Modified Mortgages were going to be the end all of what ails the mortgage meltdown? The first reports of these aren't so rosy.... "Fewer than half of loan modifications made at the end of last year actually reduced borrowers' payments by more than 10%. The report based on an analysis of nearly 35 million loans worth more than $6 Trillion, was published by the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS) The report helps to explain why many loans are falling back into default after being modified. Many borrowers and consumer groups contend that the modifications offered by the lending industry are very generous, despite public prodding from regulators."

Hmmm... Looks like they need to go back to the drawing board, eh?

And... In another item from Washington that appears to have gone back to the drawing board, at least with the accountants is the story that appeared in the WSJ on Sunday regarding how much the TARP is going to end up costing taxpayers... I'm sure we need to deal with this delicately and quietly... So.... SHHHHHHHHHHHHHHH.... I'll whisper this next part, because the Gov't doesn't want you to realize how much of their spending is going to cost you!

OK... "The Congressional Budget Office has quietly altered its estimate of the ultimate cost to taxpayers of the $700 billion Troubled Asset Relief Program, now figuring the initiative will be much more expensive in the long run than it previously figured. In January, the CBO pegged the ultimate cost to taxpayers of the $700 billion TARP at $189 billion. When the agency issued revised numbers in late March, it revised that to $356 billion, a change that drew little attention."

See... They tried to keep it quiet, so that's why I SHHHHHHHHHHH'd!

Have you heard Neil Young's new song? (it just new words to an old Neil Young song)
There's a bailout coming
And it's not for you....

Old Shaky got pretty tricky with those words...

I have to tell you something about Saturday Night's Richard Russell Tribute Dinner, which by the way was a grand time had by all... First of all... Richard was asked, "if you, Richard Russell, were named president what would you do in these times?" to which Richard answered... "I would do nothing... I would let the bear markets run their course"... Now, I sat there gleaming, because how many times have you all read that from me since the stimulus and bailouts started? Many, would be the answer, so it was good to hear it from the "maestro"...

Then, my eyes lit up even more when my good friend Mary Anne Aden told me that she had met with Richard earlier, and he asked her to list who she knew was coming. When she got around to my name, he stopped her, and told her that he read the Pfennig almost daily on Kitco, and that he really like it, and me.... WOW! Talk about making my day! OK, I don't want to come back down from this cloud, it's taken me all this time to find out what I need.... But I guess I will...

Currencies today 4/6/09: A$ .7135, kiwi .5895, C$ .8115, euro 1.3510, sterling 1.4950, Swiss .8860, rand 8.9930, krone 6.52, SEK 7.9620, forint 218.27, zloty 3.2890, koruna 19.6925, yen 100.80, sing 1.5050, HKD 7.7510, INR 50.05, China 6.8330, pesos 13.50, BRL 2.1470, dollar index 84.04, Oil $52.63, Silver $12.45, and Gold... $882.80

That's it for today... The weather people are saying it's going to be a winter wonderland at Busch stadium today for the home opener... Hmmmm... Those job losses keep mounting don't they? I'll tell you something though, the restaurants are still pretty busy... The airplanes I've been on recently are still full... Makes you shudder in fear that these mounting job losses could go on for some time before it shows up in the economy... The good news is that the losses to date haven't clamped down the entire economy... OK... It was great to see a lot of old friends at the Richard Russell Tribute on Saturday... As I said, Mary Anne Aden was there along with sister Pam, Bonnie and Rick Rule, Steve Sjuggerud, Bill Bonner, Addison Wiggin, John Mauldin, and the list goes on!

Addison Wiggin said in the bar afterward that he looked around the room and saw about 400 people that would for the most part agree with the things we try to tell people about the deficits, etc. but that the media would think we were all kooks... That's OK I said... We think the media are all kooks! It goes both ways!  I've carried on enough... Hope you have a Marvelous Monday... And Opening Day... Why isn't Opending Day a National Holiday?

Chuck Butler
President
EverBank World Markets
1-800-926-4922
1-314-647-3837





Posted 04-06-2009 9:30 AM by Chuck Butler