Today is Tax Day!
Daily Pfennig

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In This Issue..

* Currencies trade in a tight range...         
* All Risk takers... Out of the pool!          
* Retail Sales really disappoint!                         
* A plethora of data reports today...                                               

And Now... Today's Pfennig!

Tax Day!       

Good day... And a Wonderful Wednesday to you! Well... It's Tax Day, and to keep with tradition in the Pfennig... Here are the Beatles...

(if you drive a car, car;) - I'll tax the street;
(if you try to sit, sit;) - I'll tax your seat;
(if you get too cold, cold;) - I'll tax the heat;
(if you take a walk, walk;) - I'll tax your feet.


'Cause I'm the taxman,
Yeah, I'm the taxman.

OK... Every year, I bring you a different part of that song, which was so prevalent in my mind as I wrote out my check last night to mail my taxes...

So... The currencies remained in a very tight range yesterday, inching down VS the dollar slightly. While the high yielders like Aussie, real, and rand, all sit on the sidelines the past two days, Japanese yen moves higher VS the dollar, moving back below 100.

The break of currencies and stocks only lasted one day folks... So, no return to fundamentals... Instead, what we have is this all-or-none Risk or no Risk... It's almost like watching a poker game, which on a sidebar, I still don't understand why poker games are on a Sports Station! OK, back to the poker game... It's like when the guy goes "all-in"... It's either take risk, which then means "all risk assets", or don't take risk, which means "don't take all risk assets"... Or... More like saying... "All Risk Takers... Out of the pool!) Strange days indeed, so peculiar momma...

When risk assets are off the table... The high yielders, commodities, and stocks gets sacked... And the low yielders like dollars and yen bask in the sun. I recall last week mentioning that I hoped this link between stocks and currencies would soon be over, as stocks were entering their quarterly earnings period, and I certainly didn't think they would have good earnings, which would mean a stock sell-off... And if stocks are getting sold... The other risk assets, during these strange days, are getting sold...

The best performing currency overnight? The British pound sterling! It seems that pound bulls have had enough and they weren't going to take the selling of their currency any more! There's a report out this morning that says pound traders are the most bullish they've been in years... Hmmmm... Doesn't make sense to me that this currency would rally, or that there would be reason to be bullish on it, given the economy, low interest rates, and the fact the Central Bank has taken on Quantitative Easing!

Well... The Big News / Data yesterday was Retail Sales, and all the forecasters got it completely wrong! The consensus for Retail Sales in March was for a .3% gain... Retail Sales actually printed a negative 1.1%... Most of that loss was at gasoline stations... But, hey! That's part of the deal! This negative report however, was tempered by the upward revision of the previous month's negative .3% figure. The upward revision was +.3%, which makes February's figure flat...

I have to say that while we keep seeing 600K job losses each month, and Retail Sales in the negative, the physical evidence of a major slowdown is difficult to find. Every plane that I've been on recently is still packed with people... Restaurants I go to, are crowded...  I don't go to malls, so I have no idea what's going on there.

I saw a report the other day that quoted a group of economists that had been surveyed and the economists said that they believed the recession would end in the 2nd half of this year, but job losses would continue on for several more months. Hmmmm.... Now I know that these guys are far better educated than yours truly. But, I would ask them, just what is going to happen to reverse the economy, without job growth? We need a hoola-hoop!

Did you see that North Korea ordered International Atomic Energy Agency inspectors out of the country Tuesday? Talk about uncertainty in the world! And what can you look to in these uncertain times... Gold! It's the Uncertainty Hedge! And looky there! Gold is still trading in the spot market below $900!

The data cupboard today will print a plethora of reports, beginning with the stupid CPI (consumer inflation)... Right now, the forecasters are calling for a decline in consumer inflation for March...  The Gov't accountants want us to believe that inflation is only running at 1.7% annualized... HOGWASH! See, now why I say it's stupid!

OK... We'll also get the TIC-net flows, which is usually a good show... Feb.'s showing was a negative $43 Billion in net security purchases by foreigners... March is supposed to show a gain of $14 Billion... Even with the recover, if it prints as such, $14 Billion is NOT enough to cover our Current Account Deficit, which means the deficit gets carried forward... Eventually, we'll be so far in the future with these deficits, that we'll have to get that famous Delorean from Back to the Future, to bring us back here!

Then finally, Industrial Production and Capacity Utilization... For new readers... Capacity Utilization is one of my fave data prints, in that it is one of the few that is forward looking. Most data is old, stale, and backwards looking... But Capacity Utilization is forward looking. The Capacity Utilization rate reflects the limits to operating the nation's factories, mines and utilities. In the past, supply bottlenecks created inflationary pressures as the utilization rate hit 84 to 85 percent. March's CAP Utilization rate is forecast to be 69.6%... Far below the numbers hit in the glory days of the economy!

So... As I was writing this morning, I watched the euro rise to 1.33 from 1.3245 when I turned on the screens, but now that I'm getting ready to head to the Big Finish, it's right back at 1.3245... So... Range trading still...

Currencies today 4/15/09: A$ .7280, kiwi .5815, C$ .8255, euro 1.3245, sterling 1.50, Swiss .8755, rand 9.1720, krone 6.6775, SEK 8.1810, forint 218.80, zloty 3.2280, koruna 20.2575, yen 99.25, sing 1.5025, HKD 7.75, INR 49.65, China 6.8325, pesos 13.21, BRL 2.2075, dollar index 84.79, Oil $50.50, Silver $12.92, and Gold... $894.20

That's it for today... A tough loss for my beloved Cardinals last night, as our ACE pitcher, Chris Carpenter, is hurt yet again... UGH! Good luck to our Blues who begin their playoff series with Vancouver tonight. Speaking of Vancouver, I was talking to Bruce at Agora Publishing last week at the Richard Russell diner, and he invited me to come back to Vancouver for the Agora / Daily Reckoning Conference in July. They'll have a fancy name for it, and I'll pass along additional information when they give it to me. They will be celebrating 10 years of the Daily Reckoning. And Vancouver in July? Simply wonderful to be there! We had a visitor in the office here yesterday! My granddaughter, Little Delaney Grace came to visit us! She's so darn cute! OK... Time to go... I hope your Wednesday is Wonderful and not too tax-man related painful!

Chuck Butler
EverBank World Markets

Posted 04-15-2009 8:50 AM by Chuck Butler