Jobs Losses Continue...
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In This Issue..

* The dollar gets sold...                               
* China posts strong data...                                   
* Commodity Currencies & Commodities soar!                                          
* Dealing with reality...                                                                                                       

And Now... Today's Pfennig!

Jobs Losses Continue...                                        

Good day... And a Marvelous Monday to you! Are you staying warm? I know it's difficult to do, given the fact that most of the country is in a deep freeze! I checked the weather at my "fave" spring location, Jupiter Florida, and it was even "cold" (FOR THEM) there! We're supposed to see some thawing this week, so let's hope that holds true...

There's some thawing already going on in the currencies and commodities, thanks to a report from China yesterday... So, let's go to the tape and see what's happening this morning!

The non-dollar currencies and commodities are flying high this morning, hammering the dollar... The Aussie & Canadian dollars are heading to parity once again, the euro is back over the 1.45 handle, and Gold is up $20! It's all good, for non-dollar investors this morning... I don't want to sound like a cheerleader, like I've been accused of being in the past, but, this is a currency / economy letter, and it's geared to non-dollar currency investors... So, take that as it may come...

So... What's got the non-dollar currencies and commodities all lathered up this morning? A report from China yesterday that showed that China's December trade data posted the first positive surprise in the new year. Exports growth jumped to 17.7% in Dec from -1.2% in Nov. Imports registered a stunning 55.9% growth in Dec, reflecting the strength in domestic demand.

Let's remember that our "friend" that had a business in China for years, told us to believe 1/2 of what China says in their data reports... So, if that's  the case, their exports grew more than 8% in December, and that's still a HUGE jump! And when applied to their imports, it reduces the gain to 27%, and that's still a HUGE jump!

Of the two, I find that the imports number is the best of all worlds for Commodity countries, and thus, the rise in the Aussie dollar and Canadian dollar / loonie this morning!

The selling of the dollar began on Friday, when, as you've probably heard by now, job losses came in at 85,000, not the 0 (zero) the "experts" were forecasting... And... If we add in the 59,000 jobs the Bureau of Labor Statistics created out of thin air, the job losses would have been 144,000... The unemployment rate remained at 10%, and the air was completely let out of the sails of the "the recession is over, and the Fed will be raising interest rates soon" campers...

And, that's the BIG PICTURE this morning folks... Here in the U.S. our job losses continue to drag down the economy, but in China Imports show domestic demand, and exports are soaring once again. In Australia, we've seen 3 rate hikes, and in Norway we've seen 2 rate hikes... The worlds' economies are spooling up for a strong rebound, and here in the U.S. we're still licking our wounds... Now... Don't get me wrong here, I'm not enjoying telling you this... But it has to be said, so that the major media, who are spoon fed from Washington, can't spin this to be positive... For it's not! It's that simple!

The other thing that came out of Friday's reaction to the job losses was the fact that the dollar got sold on the bad data... Yet, another sign that we are returning to fundamentals... Now, if those responsible for this return to fundamentals would take another look at what's under the table here in the U.S. Like a national debt of $12.3 Trillion, and... Unfunded obligations of $106.9 Trillion... And no ability to shake our Gov't out of their deficit spending mind frame...

OK, enough of that... Like that's not depressing enough!

Let's do a country run-down...

In the Eurozone, European Central Bank (ECB) President, Trichet, is expected to speak today, a day after Moodys said that Portugal was in danger of having their credit rating cut... I hope Trichet speaks from the heart, and really tells it like it is, and not to feel the pressure to not talk that way... For, if Trichet were to speak from the heart, the euro would be trading 1.50 by the end of the week! But his hands are tied here folks...

In Australia, a job ads report showed a huge increase, in fact the highest since May of 2007, which could mean good things from the Jobs report / employment data due this Thursday... If we see an upside spike in jobs created this Thursday in Australia, it could very well be the springboard to A$ parity to the U.S. dollar... Yes, I'm quite well aware of the fact that the A$ is still 6.5-cents away from parity... I said, "it could be the springboard"...

In Canada, there's a ton of data to print this week, and as long as none of it shows Canada slipping down the slippery slope, we could see this move to 97.5 - cents this morning, added to as the week goes along...

All this talk of reaching parity to the dollar by the A$ and C$ is fine... But... The first currency to get there just might be the Swiss franc, whom we've seen at parity on more than one occasion in the past. As the franc edges closer to parity, new Swiss National Bank (SNB) Gov. Hildebrand, is getting his feet wet in the verbal intervention game, by reminding the markets that the central bank will continue to combat excessive appreciation... Those are just words, folks... And they won't mean a thing, until Mr. Hildebrand, shows us the swing... Real, physical intervention...

And... Talk about some wild swings! That Brazilian real... You've got to have an iron stomach, or, just not watch these daily wild swings in this currency! On Friday morning, I bought some reals at 1.74... This morning, the real is 1.7190! And that's a tame swing for this currency! But... As last year showed us, if you don't get caught up in the daily noise and these wild swings, the end result of a 33% return VS the dollar could have been your reward...

The thing to think about here is that these HUGE moves were done overnight in Asia, and Europe... We'll have to wait-n-see what the U.S. traders think of these moves, and if they go along with the dollar selling, or do they think this has gone too far, too fast, and pull back on the reins...

Well... It's another Treasury Issuance Week... This week's issuance brings us $84 Billion of new issues to auction off... $40 Billion 3-year, $21 Billion 10-year, $13 Billion 30-year, and $10 Billion 10-year TIPS...

There's a number of Fed Heads on the speaking docket this week, and they are all what I would consider to be hawks... So, there's always a chance that they slip in a reference to higher rates in the U.S., which after last week's jobs losses, would be a far reach, and hopefully the markets see any such mention of higher rates for what they are...

And what that might be, I hear you asking? Ahhh grasshopper... We've played this game for so long now, but I do realize there are new players all the time, so for them... Basically, it's like this... The U.S. needs a weaker dollar... But they can't be seen to "want a weaker dollar" for that would scare the bejeebers out of the foreigners that the U.S. Gov't depends on to buy our debt... So... They play this game, of give and take, it's game they play, to keep foreigners from thinking the Gov't wants a weaker dollar...

When in reality, it's the only way, they have a chance to pay the interest on their debt that they have issued... (Notice I didn't say pay back the principal?, for we can't even think of doing that!) To change $20 into $5 bills, so that they go farther in paying the interest...

I hope you all can make it to the Orlando Money Show, for I'm going to get down and dirty and  show you a long list of errors, lies, and omissions that the Gov't. / Fed / Treasury/ has given us in the past 5 years, and then compare it to the list of statements I've made in the past 10 years... You don't want to miss that! Once back from the Show, I'll share this whole presentation's text with you...

Then there was this... Get ready for it! The HUGE jobs gains this year! These are guaranteed to be created! Yes, step right up, and don't be shy, cause you won't believe your eyes! 1.2 million jobs will be created this year... OK... Let's calm down... The 1.2 Million jobs will be created by the Gov't for the Census... Not really, a long time job commitments, eh? But... These 1.2 workers will be spending the money they make during this time... So... Look for the major media knuckleheads to get all lathered up about the jobs increases in the coming months... Not having a clue that they are Gov't hired census workers...

To recap... The Jobs Jamboree on Friday surprised the markets with a "real" -144,000 job losses, and the dollar got sold... Overnight though the Big move in the non-dollar currencies and commodities have come via the Chinese report on December exports and imports, with both showing HUGE gains, thus turning on the green light to currency appreciation for the commodity currencies... And commodities with Gold up $20 this morning!

Currencies today 1/11/10: American Style A$ .9320, kiwi .7410, C$ .9740, euro 1.4530, sterling 1.6180, Swiss .9835, European Style: rand 7.3190, krone 5.60, SEK 7.0150, forint 183.50, zloty 2.7885, koruna 18.0250, RUB 29.38, yen 92.40, sing 1.3875, HKD 7.7545, INR 45.32, China 6.8263, pesos 12.62, BRL 1.72, dollar index 76.91, Oil $83.83, 10-year 3.84%, Silver $18.86, and Gold... $1,158.50

That's it for today... I totally forgot to mention on Friday, that it was our Mary Vance's birthday. Mary shares her birthday with Elvis, who would have been 75 this year... Imagine Elvis at 75... I tried my best to remain indoors this past weekend, hunkered down, watching football playoff games, and my beloved Missouri Tigers win their basketball game on Saturday... The kids were all over yesterday to celebrate son Andrew's birthday (tomorrow), which meant little Delaney Grace was entertaining us... She is just so darn cute! Took the Christmas Tree out to the curb yesterday... All the decorations are down, it's so depressing... Now all we have is two months of cold, gray days, with no colored lights, no decorations to warm us... Oh well, it's not like this is the first time! And it won't be the last either! So deal with it Chuck! And... On that note, I'll get this out the door... I sure hope that you have a Marvelous Monday, and if not, tomorrow will be better!

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





Posted 01-11-2010 10:17 AM by Chuck Butler