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In This Issue..
* Earnings reports begin this week...
* Dollar, yen, francs get bought...
* Medvedev shows off new coin!
* A busy week!
And Now... Today's Pfennig!
Back To Risk Aversion!
Good day... And a Marvelous Monday to you! A Home Run Derby Monday to boot! I have no Idea what's going on this morning, as I just woke up, and it's very late in the morning! I was very careful to set my alarm last night, and I've never been one of those people that hit the snooze button when it goes off, but here I am, waking up late... UGH!
So... I'm writing from home, and then I'll shoot in to work... We're short handed this week, so, I'm sure everyone will be arriving to the office, not see my car, and be a little ticked... So, I've got a surprise for them, something they've never seen... Me come in late!
Well... It looks like Risk is under pressure once again... And the only thing I can see that's causing this Risk Aversion, is the Corporate Earnings Season... For instance we get 4 banks reporting this week, Goldman (yes, remember they're a bank holding company now... They ex-chief, and ex-Treasury Sec. Paulson, made sure that the change was made so that Goldman would qualify for TARP last year!) We also have JP Morgan, Bank of America, and Citi...
Data wise, there are a few top shelf reports out this week, and the thought of them showing more dandelions instead of green shoots, is probably wearing heavily on the risk assets this morning too.
So... The euro is sitting just below 1.40 this morning at 1.3985, so no real harm being done at this time, but still the bias is to sell the risk assets like currencies and commodities as we start the week.
You know, I've harped about this for so long now, that I sound like a broken record, OOOPS! For the younger crowd that would be a scratched CD! What I'm talking about is the fact that the risk assets like currencies and commodities being thrown into the same barrel has stocks... And how I was just wishin' and hopin' and thinkin' and prayin' that we would return to the fundamentals of these asset classes not having anything in common with the stocks! I just knew... No wait, I can't say that... I just knew, not that I know anything on the inside, that is... That stocks were going to be under pressure from the Corporate earnings season, and with the "link" still in place... That wouldn't be good for currencies and commodities... Let's hope I'm wrong!
The one piece of data we get today is the Budget Statement... Last month, the Budget Statement printed an awful deficit of -$189.7 Billion (May)... Historically, June prints at a surplus... But Historically, so did April, and April was no where near a surplus this year! Year-to-date receipts for the Gov't are down 18%, and Year-to-date outlays are up 19%... That doesn't bode well for "history to come into play here"...
Last week, on Thursday, reported Friday in the Pfennig (thanks Chris!) was the Weekly Initial Jobless Claims, which printed the lowest level for this data series in more than 6 months, at less than 600K! But still, the number is still staggering, and one of the reasons that Commercial construction in the U.S. is set to decline 16% this year, followed by a 12% fall in 2010. No jobs... = no need to build offices for the "ghost jobs' that the BLS adds each month, because... THEY DON'T EXIST!
No need to get me started on the BLS (Bureau of Labor Statistics) this morning... I have to be clear and concise to get this out the door and me off to work!
Well... With the risk aversion back on the table... The two main beneficiaries remain to be Japanese yen and the U.S. dollar... Swiss francs are on the "kids table" but still a part of the beneficiary crowd...
The High Yielders like Aussie, kiwi, and South Africa get taken to the woodshed, when Risk Aversion comes to town... The Brazilian real is seeing a bias to sell, but for the most part has hung in there... Of course I remember saying that exact line early last fall, only to watch the real play catch up, until the turn-around in March of this year. So... I guess, what I'm saying is be careful!
So! Did you hear that Russian President Medvedev, showed off the "new world currency coin" at the G-8 meeting last week? He said.. "We are discussing both the use of other national
currencies, including the ruble, as a reserve currency, as well as supranational currencies. So... Here it is! This is a symbol of our unity and our desire to settle such issues jointly."
He then pulled a new coin out of his pocket and displayed to the attendees... Now... Don't get all tied up and twisted over this at this point. This was simply a "symbolic" move, there aren't mints all over the world rushing to get these coins minted and out the door... But, if you get the "symbolic" part, then you understand what Medvedev was attempting to do here... He was simply showing the G-8 attendees that if they really thought about it, they could see the need to move from a dollar reserve system, and to help them visualize it, he had a coin to pass around!
I can't believe that right now, with the whispering campaign to get an alternative reserve currency, that the dollar isn't getting sold, as I like to say, like funnel cakes at a State Fair! I guess the whispering will have to get louder, for this to make any real waves....
You know, I'm not for this "global currency"... I just wanted to make that clear! I'm not for removing the dollar as the reserve currency, for I know all of the "perks" that go along with it being the reserve currency! I'm just here to report the facts, and give my opinion / market commentary on how I think it will affect things...
I do believe, however, that given our deficit spending, and every growing to the moon National Debt, that the dollar deserves getting whacked, it's how things are done! Treasuries will get their comeuppance too one day... You can't just keep printing and printing and thinking that "buyers" will be there at the auction every time you print more... It's not going to happen that way... At least in my thoughts it won't!
OK... Time to go to the Big Finish... I know, I know, little shorter than usual this morning... But Hey! It was still chock-full-o-news!
Currencies today 7/13/09: A$ .7750, kiwi .6225, C$ .8605, euro 1.3980, sterling 1.61, Swiss .9240, rand 8.2930, krone 6.4830, SEK 7.9025, forint 198.10, zloty 3.1475, koruna 18.62, yen 92.10, sing 1.4650, HKD 7.75, INR 49.08, China 6.8328, pesos 13.71, BRL 1.9965, dollar index 80.16, Oil $59.96, 10-yr 3.30%, Silver $12.50, and Gold... $912.70
That's it for today... Went to the Futures Game yesterday, to sit through a 4-hour rain delay... UGH! Let's hope the rain stays away for the next two days! Home Run Derby tonight, All-Star Game tomorrow night. The family is all going to the Fan-Fest today, while I'm at work... Hey! Somebody has to work! HAHAHAHAHA! My beloved Cardinals went into the All-Star Game break on a good note, winning 6 of 10 on the road trip to end the 1st half of the season... This will be a very busy week for me, lots of writing to get done, and all the All-Star festivities... I go to my new oncologist this afternoon for the results of my scans on Friday, so all that and doctors stuff on top! UGH! Oh well, next Monday I head to Vancouver for the Agora Financial Wealth Symposium, their 10th year anniversary of the conference! And then I head off to vacation! So... Busy, busy, busy... Time to hit send, Hope your Monday is absolutely Marvelous I tell you!
EverBank World Markets
07-13-2009 11:42 AM