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In This Issue..

* UK data boosts the dollar...
* US GDP falls further...
* Norway cuts rates...
* Big wins by MIZZOU and BLUES...

Good day... I want to start this mornings Pfennig with a big congratulations to the MIZZOU Tigers who pulled off what most believed was an unlikely win over Memphis last night. What a game! They move on to the Elite Eight to play powerhouse UCONN on Saturday.

The currency markets weren't as exciting as the basketball games yesterday, as the dollar held in a fairly tight range. The big move came in early morning trading as a report was released in the UK showing their economy's contraction was worse than previously thought. This news was GDP in the UK fell 1.6% in the 4th quarter of 2008 vs. the previous quarter. And the outlook presented by the Bank of England is not rosy. BOE Chief Economist Spencer Dale said this morning that the British economy's short term prospects are 'bleak'. Chuck has brought up the comparison between the UK and US economies several times, as the UK economy looks like mirror image (albeit smaller) of the US. The UK economy has been slightly ahead of the US in the race toward economic meltdown. Unfortunately the US Fed seems to be shadowing every move by the UK, cutting rates to near zero and then using 'quantitative easing' to force them down even further....

* The dollar rebounds... * Home prices collapse! * Consumer Confidence finally rings true... * Chuck Speak to end the year! ** The End of 2008! Good day... And a Wonderful Wednesday to you! An end of the year Wednesday to boot! And end of a completely awful year financially and economically. Personally, it was great! I got good news from scans about the cancer I'm fighting, had a setback with the eye, but I'll get through that too, and if not, well, it will be just like my kidney... I lost one, but still have a good one, and if I lose the vision in one eye, I'll still have a good one! The currencies look like they'll end the year on a sour note, except Japanese yen, of course. The dollar rallied back overnight after spending most of the day yesterday range bound in euros 1.41-1.42... This morning, as I turn on the screens, and hear one of my all time faves on the radio, Leon Russell, "we're alone now and I'm singing this song to you" The euro has fallen to 1.3950......

* The winner is... Deflation! * Trading theme in place... * RBA cuts rates 75 BPS! * Manufacturing collapses! ** Election Day! Good day... And a Terrific Tuesday to you! It's Election Day! One more day of all that he said, she said, no I didn't, yes you did, aggravating election advertising! That's it! We're finally finished with all of it! Thank Goodness it's Election Day! TGIED! This will be the end of another of the things that's keeping the fundamentals in the back of the classroom. All we'll have left is the credit squeeze... Unfortunately though I feel like we're going to have to live with that one for some time to come! There are signs that things are loosening up, but it's a far cry from what should be considered as "normal" in the lending arena! As long as the credit squeeze remains in place and on the minds of traders & investors everywhere, we're stuck with the Trading Theme of 2008... Well, let's see, it didn't come into play until late July, so it should be called the Trading Theme of late 2008 and 2009....

* Inflation & Deflation * ECB to hold rates? * Commodities skyrocket * Chinese inflation...