A Jobs Jamboree for Friday 01/08/2010...
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In This Issue..

* The dollar holds gains...                              
* Japanese saber rattling...                                  
* Geithner in trouble?                                          
* Commercial Real Estate in trouble...                                                                                                      

And Now... Today's Pfennig!

A Jobs Jamboree Friday...                                         

Good day... And a Happy Friday to one and all! The first Friday of 2010! So, let's call it a Fabulous Friday, and save the Fantastico for a day when we'll see the temperature at least reach the freezing mark! Our "snow day" is over, everyone was safe...

You see, and I hope you don't mind me taking this trip in the past, many years ago, I spend a winter of discontent, I might add, in Des Moines, Iowa... Where it began snowing in November and didn't stop until the first week of May... When I first moved there, I noticed that their street crews didn't plow the roads, and salt them like they did in St. Louis, they just threw cinders on the snow and people drove on it. That's where I really learned to drive on snow... As the years went by, back in St. Louis, dealing with snow, I realized that the way they did it in Des Moines was better!

OK... A little history... I was running a back office of a local brokerage firm in Des Moines in 1978/ 79... I've seen it all folks...

So... The dollar held the hammer over the non-dollar currencies yesterday, although the usual suspects of Aussie, Canada, kiwi and Norway didn't really lose that much ground... The real weakness has been seen in the 3 majors... Euro, yen and sterling...

There was a report that the Fed Reserve issued yesterday reminding banks to manage their interest rate risk, that reminded the markets that banks do have interest rate risk, and sparked a flood of "safe haven" buying in the dollar... Funny, what a stupid report from the guys who fueled all this mess, would created "safe haven" trades in the dollar... I just don't see why that happens... I know all the reasons why people feel that the dollar is a "safe haven" but, in reality, did that turn out to be true in the last financial meltdown?

Recall that there was this HUGE deleveraging of risk assets like currencies and commodities, and "safe haven" buying of dollars to buy Treasuries... I've told you many times before how that "safe haven" trade didn't exactly work out that way, with the dollar returning to its weak dollar trend, and Treasury yields going from 2% to 3.85%, which means a price loss! But... Don't let that fact get in the way of more so-called "safe haven" buying!

Today is a Jobs Jamboree Friday... Snuck up on you, eh? It snuck up on me... There's a story on the Bloomie this morning titled: "U.S. Payrolls May Have Stopped Falling As Economy Strengthened"... Now, wouldn't that be nice, if we could wake up, when the day was new... No wait... Wouldn't that be nice...

I'm afraid it would be lies, to make us feel good... Besides, it was December... How many people lose their jobs in December? The month is short, filled with good will, and so on... So, yes, we could actually see the job losses stop in December, the first time in two years that we wouldn't see job losses... But will it be a true indicator that the jobs problem has bottomed?

And, what, part will the Bureau of Labor Statistics (BLS) play in this report? We all know that they get their hands into every labor report and "massage" it...

OK... Yesterday, there was news all over the TV and internet about the NY Fed and AIG... According to the report, the NY Fed pressured AIG to keep their payments to brokerages like Goldman Sachs, a secret from the public... Now, doesn't that just tick you off? OH! And guess who was running the NY Fed at the time of these alleged deals to defraud the public? Why, it's Mr. Timothy Geithner, that's who! Is there any thing that this guys touches that's not a fuster?

The NY Fed is denying these findings... But, there's smoke here folks... And it's thick smoke! And it goes along with all the other things I keep talking about regarding the Gov't getting more involved in our personal lives... I'm sure, that Tim Geithner thought it to be "best" to not tell the public that the they were giving tax payer Billions to AIG, and AIG was turning it around and giving it to Goldman Sachs and others... And the excuse would be along the lines of: These are extraordinary times, and they call for extraordinary measures to save the world...

I'm going to stop there on that... This is a Friday, and I like to be upbeat and ready for the weekend... Everybody's working for the weekend...

Gold has found it difficult to add to its gains earlier in the week, instead it has seen some profit taking, and outright selling. It's down $9 this morning... The shiny metal is still well above the $1,100 level... Of which... I believe is the new line in the sand, and dips below that level should be looked at as buying opportunities... But, that's just my opinion, I could be wrong of course...

There is a lot of talk going 'round that centers on the Emerging Markets, and the prospects for rosy returns from these Emerging Markets in 2010... So, I thought I would touch on this... Countries like: Poland, Hungary, Czech Republic, Brazil, South Korea, Mexico, South Africa, India, China, and there's more...

Basically, as I've explained to you many times in the past, These Emerging Markets currencies tend to trade in packs... So, if something bad happens in say, Mexico, then the rest of the Emerging Markets get tarred with the same brush... But... If it's all seashells and balloons for the Emerging Markets, like it has been so far this year (5 days, Chuck, come on!) then they all get bought...

To that end, the Emerging Markets co-head at PIMCO, sent out a report yesterday saying that Poland, Mexico and South Korea are his picks for 2010... Well... I like Poland best of those three, and have since 2003, when I wrote the piece about how Poland, Hungary and the Czech Republic were on the "fast track" to euro acceptance... Unfortunately, that "fast track" had a detour, and other countries moved to euro acceptance before the "three amigos"... Finland, Greece are two that moved ahead of the three amigos... Of course, right now, the European Union and European Central Bank probably wishes they had never accepted Greece...

After the comments by the Japanese Finance Minister the night before, last night saw comments left and right trying to calm the markets down... Prime Minister, Hatoyama, chastised the Finance Minister, by saying that the Gov't should not comment on FX, and added that the Finance Minister's currency views reflected business sentiment only... Then, as you might guess if you follow Japanese politics... The Finance Minister conceded that "currencies undoubtedly should be determined by markets"

So... One day imminent Japanese intervention was on the table... And the next day it was removed... But one thing is clear here folks... The Japanese want the yen weaker, they just don't want to see wild swings...

This has just got to get under the skin of U.S. officials, who know in their heart of hearts that they need a cheaper dollar, but their two largest trading partners have designs on keeping their currency weak...

Remember how both Chris and yours truly, pointed out to you that Commercial Real Estate was the next shoe to drop on the mortgage business? Check out this that Reuters posted... "Commercial mortgages delinquent 30 days or more shot up to 6.07% last month in the U.S., the highest rate since commercial mortgage-backed securities were first market."

Oh My! This is going to get really ugly folks...

Then there was this... This NY Fed / Geithner / AIG / thing is really interesting... It really ticks me off... But the thing that I find to be the most important to take out of this, because we can't do anything to reverse what's been done, is to realize that the Gov't will stop at nothing to pull the wool over our eyes... My good friend, David Galland put it this way... "Of course, what's actually important in all of this is the confirmation - as if we needed it - that high government officials are willing to take active measures to keep the public in the dark on matters that would be inconvenient if revealed."

Back to me... So... If the Gov't was good with doing this to us... You can see where I've had my suspicions about the data reports they give to us... About the PPT... About the "Caribbean Treasury buyers"... And so on...

To recap... The dollar holds on to the hammer overnight and early in European sessions. The 3 majors see most of the damage, Euro, yen and sterling... Gold has sold off $9 overnight and this morning, and it's a Jobs Jamboree Friday, with no job losses for December expected... I would have to say that if that's what's expected then the BLS will make certain that that's what you get!

Currencies today 1/8/10: American Style: A$ .9145, kiwi .7305, C$ .9645, euro 1.4290, sterling 1.60, Swiss .9640 (look at that! The C$ has passed the Swiss franc!) European Style: rand 7.45, krone 5.7250, SEK 7.1550, forint 188.40, zloty 2.8750, koruna 18.4425, RUB 29.77, yen 93.25, sing 1.3985, HKD 7.7560, INR 45.76, China 6.8275, pesos 12.79, BRL 1.7475, dollar index 78.03, Oil $82.35, 10-year 3.84%, Silver $18.15, and Gold... $1,123.30

That's it for today... Congratulations to Alabama, winners of the BCS Football Championship... Texas was stunned when their star quarterback had to leave the game in the 1st quarter, to never return... I'm not saying the outcome would be different, it would have been a different game though... It's college basketball season now! My beloved Missouri Tigers, lost a chunk of their team last year, so this is a rebuilding year, I afraid, although they beat Illinois! Good luck to my good buddy, Kevin, who had knee replacement surgery yesterday... Just a friendly reminder about the Orlando Money Show, which takes place at the Gaylord Palms Hotel, Feb. 3 through 6... I'll be there, along with Chris and Kristin, so escape the bitter cold, and snow and come to Orlando... (yes, I'm well aware that it's cold in Orlando right now too, but that should change quickly!) And tomorrow the NFL Playoffs begin... Well... It's that time again... I hope you have a Fabulous Friday... Stay warm!

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





Posted 01-08-2010 9:01 AM by Chuck Butler