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* Yen trades to 98! * Carry Trades unwinding hurt high yielders... * Gold rallies back to $900! * Central Bank rate cuts.... ** Coordinated Rate Cuts! Good day... And a Wonderful Wednesday to you! Well... There's a ton of stuff to talk about today, one of which is the amazing run that Japanese yen has had in the past month, but particularly the last week! No need to sneak a peak at the currency round-up, Japanese yen is trading 98.80! WOW! I could be acting like a contortionist and trying to slap myself on the back, but that would unprofessional... And besides, the rest of the currencies are taking shots to the mid-section. Anyway... Blow the horn, the Carry Trade (for yen) is dead, may it rest in peace! OK... The currencies tried like all get out yesterday to rally VS the dollar, the euro did end the day 1% higher on the day, which after the bloodshed of the past month, I'll take that any old time! I would love to go back to 2005 (not really, but for this conversation's sake I will) and pull out some old Pfennigs where I talked about all the naysayers talking about a break up of the euro... We had the NO votes from France and Denmark on accepting the European Union's (EU) Constitution, we had riots in the streets of France, we had rising interest rates in the U.S. and dozens and dozens of naysayers called out the euro and said it would collapse under the weight. I said then, and I'll say now... HOGWASH!...

* Bailout package is voted down! * Biggest one day point drop for the DOW! * Dollar rallies hard... * Carry trades unwind... Again! ** King Henry Was Wrong Again! Good day... And a Terrific Tuesday to you! Well... Guess who was wrong AGAIN! That's right, King Henry Paulson, he of the U.S. Treasury Sec. throne... He told the world on Friday, that the bailout package was a "done deal"... And he told us again on Sunday that it was a "done deal"... The markets rejoiced, the stock jockeys danced in the streets, the karma flowed and all the stars were in alignment... And then... A (not so) funny thing happened on the way to the forum... King Henry's men revolted, and the bailout package did NOT have the votes to pass it, and the "done deal" was "undone"! Once again this man has led investors down the wrong path. I've documented the wrong statements by this man in the past year, and still, investors hang on every word by King Henry... When will they ever learn? When, will, they, ev-er learn?...

* Paulson and Bernanke ride to the rescue... * More debt for the US taxpayer... * Emerging markets rally... * Congrats to EverBank Soccer Greats... ** Paulson and Bernanke ride to the rescue... Ahoy thar maties.. Yesterday was a very volatile day in what has become an incredibly choppy week. The currency and metals markets began the day rallying vs. the dollar as it seemed yet another huge financial firm was circling the bowl. But late in the afternoon the dollar came charging back, and gold fell back below $850 after surpassing $900, ARRGH! So what caused this quick reversal? Senator Schumer was credited with turning the markets around. He announced, mid afternoon, that the Federal Reserve and Treasury were going to create a new government institution which would purchase all of the toxic debt instruments being held by Wall Street. Wall Street obviously thought this was just a fantastic idea, and the stock market immediately rallied, taking the dollar with it. The details of the plan still aren't available, but the markets have been desperately searching for a hero to come and rescue them, so even the hint of a rescue was enough to shoot stocks back up. The proposal currently being discussed in congress involves moving troubled assets from the balance sheets of American financial companies into a new government backed institution. The SEC also instituted a ban on short selling of financial stocks, copying a similar ban which was instituted yesterday in London. Chuck had a travel day yesterday as the FXU moved from San Diego to Dallas, but he was keeping an eye on the markets and sent me this last night....

* A potential CDS debacle... * Currencies rally back... * Brazilian real history... * Saber rattling or geopolitical pressure? ** Does The Bail Out Constitute A CDS Event? Good day... And a Terrific Tuesday to you! Right out of the starters blocks this morning, I have to apologize for the tardiness of the Pfennig yesterday... We were experiencing some technical difficulties... In fact, if you sent me an email, I didn't get it yesterday! Things look better this morning, so, maybe we're back on track! I know it's no one's fault when this stuff happens, but it sure doesn't make me feel good about getting up at X:XX AM (I won't say because you will think I'm crazy!) to come in and write the Pfennig, only to see it not go out until late in the day! Well... The stock market here in the U.S. sure liked the news about Fannie and Freddie! I guess, they, just like the dollar bulls, didn't get the memo that this will put billions of dollars of tax burden on taxpayers, and most likely is going to cause a major disruption in the Credit Default Swaps (CDS) that are on the books... Oh, well, we have to learn to deal with mental giants all our lives, this is just another case of that!...

* Hoenig's big fat cat! * Renminbi stalls... * Going out on the limb again... * Stocks get sold on oil price... ...