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  • Governor Stevens and the RBA surprises the markets...

    In This Issue..

    * Dollar slides as risk returns...
    * RBA surprises the markets...
    * Gold moves higher...
    * Obama offers up record deficits...

    Good day... And a happy Ground Hog day to everyone! Yes, today is the day Phil decides if we are going to have more winter weather or a quick spring. While I can find something to like during all of the seasons, I do find myself hoping we see a quick end to the cold weather as we turn the calendar over to February. Unfortunately, the folks who make a living predicting the weather don't believe we will get an early spring this year, but their record is about as good as Groundhog Phil's, so we will just have to wait to see what Mother Nature brings us. Kristin and I will be joining Chuck down in Orlando tomorrow, so hopefully a few days of warm weather will hold me over until April....
  • Dollar rally peters out...

    In This Issue..

    * Dollar rally peters out...
    * Obama defends his policies...
    * Commodity currencies should outperform...
    * Global Power Shift Index...

    Good day... And happy Thursday to everyone! Hope everyone made it through the 'hump day' with no worries. We started the morning here with rainshowers, but it ended up being a beautiful afternoon and evening. Currency markets were similar to the weather here, as most currencies started Wednesday in the loss column vs. the US$, but rallied as the day progressed. The dollar had strengthened over the past couple of days due to 'safe haven' demand; but a surprisingly strong durable goods number (ex autos) combined with an 'all clear' signal from President Barack Obama had investors moving back into riskier assets. The commodity based currencies also got a boost as China signaled it would maintain an accommodative policy, easing speculation that the Bank of China would try to rein in bank lending. Lots to cover today, so lets get right to it....
  • The waiting game...

    In This Issue..

    * Waiting on G20 and the ECB...
    * US home prices plunge...
    * What will come from G20...
    * ECB to cut rates, but no quantitative easing...

    Good day... The markets will play a waiting game today, and I expect the currencies to trade in a pretty flat range. The focus will be on the G20 which starts tomorrow, and the ECB announcement which will also be released tomorrow. So today I will share my views on both of these topics, but first I will report on what occurred yesterday and overnight in the currency markets.

    The dollar climbed yesterday morning as data released showed US home prices plunged at a record pace and consumer confidence continues to bottom. US home prices fell nearly 19% in January according to the S&P Case Shiller index. This was even worse than economists had predicted, and December's numbers were revised down....
  • Geithner's Plan Disappoints...

    * Trade Deficit to narrow further... * Currencies rally, then sell off... * Obama's stimulus loses backers... * Riksbank cuts 100 BPS unexpectedly... ** Geithner's Plan Disappoints... Good day... And a Wonderful Wednesday to you! Well... Tim Geithner didn't experience a Terrific Tuesday, as I had wished for him... And now, it looks as though the shine is coming off the new President as more and more individuals are "not buying" his appeal to the nation to get a stimulus package passed... The currencies rallied and then sold off after Geithner gave the details of his "new and improved" plan... We've got some potential market moving data printing today and more! So... Let's go to the tape!...
  • Gold As An Inflation Fighter!

    * BOE to cut rates today... * ECB will wait to cut for now... * Black clouds forming for India? * German factory Orders plunge! ** Gold As An Inflation Fighter! Good day... And a Tub Thumpin' Thursday to you! Day One at the Orlando World Money Show (WMS) went well. My room for the presentation was packed! It was standing room only, and the good part was the fact that there were only about 30 Pfennig readers in the crowd. I say that not because I have something against Pfennig readers, oh Lord, they are dear readers! The reason I say that is I like to know how many of the non-readers I can convert to Pfennig readers!...
  • A "New & Improved Stimulus Package"

    * The dollar fights back! * Another $900 Billion in the red... * RBNZ cuts rates 150 BPS! * Jamie Dimon tells it like it is... ** A New & Improved Stimulus Package Good day... And a Thunderin' Thursday to you! Well... The Fed kept rates at near zero, as if they had any ability to raise them, the House sent the Stimulus Bill on to the Senate, the dollar rebounded on all these two items, and I have some very strong quotes for you at the end of today's lesson... So, get your coffee, or OJ, or V-8, sit down, and let's go! OK, I had better start with the dollar reaction to the two items yesterday, as what looked like an end to this dollar strength mess, was about to take place as the euro pushed to 1.33, taking the other currencies along for the ride, was just a head fake... The dollar had more strength to show us, after the Fed kept rates unchanged, and the House passed the Stimulus Bill....
  • Gold Ends The Week Strong!

    * The dollar continues to rally... * No risk takers to be found... * Simply awful data yesterday... * Gold continues its rally... ** Gold Ends The Week Strong! Good day... And a Happy Friday to one and all! A Fantastico Friday for me, as it was a Tub Thumpin' Thursday as well! You see, I got the results of my latest scans yesterday afternoon, and my oncologist is thrilled! (as I too am!) This marks 1 year of clean scans, and if it weren't for this rogue metastasis in my left eye, it would be all seashells and balloons! I go on Monday to see if the blood clot that has made things difficult for me for 15 months now, has finally dissolved. If so, there's another biggie off my list! I have to personally thank God, who has chosen to cure me, and it's probably a result of all you wonderful readers that have sent along good wishes and prayers... I also thank my family for their support, and my doctors who have never once not taken the aggressive course to getting me well......
  • Euro Rally Fizzles Out...

    * Yen continues to kick! * Jim Rogers disses sterling... * China's 4th QTR GDP... * Singapore announces stimulus... ** Euro Rally Fizzles Out... Good day... And a Tub Thumpin' Thursday to you! A nasty day in the currencies yesterday, except Japan of course. The Dow jumped 290 points yesterday, maybe an Obama bounce? You all know that I subscribe to an Obama bounce for stocks and the dollar in the first part of this year... But given what I know about, and what you now know about, after I drew it all out yesterday, the additions to the deficit that Obama will make, the focus on the fundamentals should return by late spring, early summer... That's my story and I'm stickin' to it! Well... As I said in the opening, the currencies led by the Big Dog, euro, suffered through a nasty trading day, with the euro touching below 1.29 for a good part of the day. The risk takers are nowhere to be found. Where have all the risk takers gone... Long time passing... A Reuters reporter asked me yesterday if I was still of the opinion that the yen had more to rally or was it overbought? I said, that as long as the risk takers are nowhere to be found, yen should continue on its path higher VS the dollar, euro and sterling. The RSI (Relative Strength Index) for yen, shows that it is a tad overbought, but that's not enough to change my mind. Nor is it enough to change the mind of a currency trader at the Bank of New York (BONY), who believes yen may rise to 85 VS the dollar by midyear... Another currency trader at the Royal Bank of Scotland (RBS) believes the Bank of Japan will step in and intervene to stem the yen's rise.......
  • Inauguration Day 2009...

    * Rogers and Roach... * Dollar gaps higher! * Ireland's problems... * Bad data... ** Inauguration Day 2009... Good day... Well... And a Terrific Tuesday to you! I got to enjoy a nice restful 3-day weekend. I realize not everyone got yesterday off, so I won't carry on about it. Can you believe it? The St. Louis Cardinals Football Team A.K.A. The Big Red, no wait, Chuck, they left town 20 years ago... OK, the Arizona Cardinals are going to the Super Bowl? When they were here, I never thought I would live to see the day... Front and Center this morning, I have two quotes from people I truly respect... first from Jimmy Rogers... second from Stephen Roach... If I were you, I would be worried about the U.S. dollar,' said Rogers, 66, in a speech at the Asia Financial Forum in Hong Kong today. 'The Americans are printing U.S. dollars. The Americans are going to do whatever they can to revive their economy, even if it means destroying the U.S. dollar.'...
  • The Dollar Swings A Mighty Big Hammer!

    * Another dollar rally.... * Rumors in Ireland... * Trade Deficit narrows... * Retail Sales to disappoint? ** The Dollar Swings A Mighty Hammer! Good day... And a Wonderful Wednesday to you! I'm writing from home today, as I will not be in the office on this wonderful Wednesday. Writing from home, or the road, always presents problems for me, as I'm so used to being in the "saddle" at my desk, and having information all around me. But, my little work desk at home has some of those amenities... So, what the heck, quit your grumpiness, and get to writing, Chuck! The dollar ripped through the 1.32 handle of the euro yesterday, like a hot knife goes through butter! There was little to no resistance in that 1.32 handle, and before you could tell one of the many people on the desk here that sneeze all day, God Bless you, we were trading with a 1.31 handle in euros. The talk about a European Central Bank (ECB) rate cut has really ramped up this week, and taken its toll on the single unit. No one is mentioning that even if the ECB cuts 75 BPS this week, they'll still have a an interest rate / yield advantage over the U.S! I guess they'll sort that all out somewhere down the line, eh?...
  • A New Year’s Jobs Jamboree Friday...

    * Will the ADP report be a good indicator? * China to slow treasury purchases? * Gold as a store of wealth... * Dealing with the devil... ** A Jobs Jamboree Friday... Good day... And a Happy Friday to one and all! A Fantastico Friday, as it is forecast to get to 50 degrees today here in St. Louis. Never mind that tomorrow's high will be 29! It doesn't take away from today! What a trading day in the currencies yesterday... Whew! It's a Jobs Jamboree Friday, so let's not beat around the bush... It's time to Jamboree! Today is the day the Gov't prints the December Jobs Jamboree, and if Wednesday's ADP report did what they said it was going to, and that is change their methodology to mirror the BLS (Bureau of Labor Statistics) then this morning's Jobs Jamboree will be a nightmare. Of course not the kind of nightmare that the over 2.5 million people that lost jobs in 2008 had! I was once in those numbers, as our old Bank, Mark Twain Bank, was bought by a bigger bank, Mercantile Bank, and Mercantile decided after a few months to perform ethnic cleansing of Mark Twain employees... I called it "my retirement" but with a 3 year old at home and on my lap most of the day, "retirement" couldn't last too long! My point is that you don't know the emptiness and failure you feel when they show you the door... So my thoughts are always with those that lose their jobs......
  • The Italian Job...

    * The dollar continues to rally... * Obama bounce picks up steam... * ECB and BOE meet this week... * Brazilian reals on a roll! ** The Italian Job... Good day... And a Terrific Tuesday to you! A very icy Tuesday here in St. Louis... When I left home this morning (I live Southwest of the office) there was nothing on the ground, but as I got closer to the office, I could see the ground was wet. Arriving in the parking lot, I found the wet to be nothing but ice! You should have seen me attempting to walk from my car to the front door! Shuffling my feet very slowly was more like it, but can you blame me? That's all I need is to take a nasty fall on ice when I'm already walking with a cane! Oh well, I'm here, and safe... Well, front and center this morning, the dollar has gained a huge chunk of ground back from the euro and Swiss franc that it had lost last month. The euro has seen the underside of 1.34 in almost a month, but that's where it sits this morning. And the Swiss franc has taken a tumble too... So, what's the reason behind this move? Ahhh grasshopper, sit, and listen, there's a story to this that you'll want to hear!...
  • The Obama Bounce Begins...

    * The dollar bounces! * ISM was simply awful! * Oil rallies... * Jobs Jamboree this Friday... ** The Obama Bounce Begins... Good day... And a Marvelous Monday to you! A weekend of football! And there's more this week with the College National Championship Game on Thursday, and then more playoff games next weekend. Crazy time of year for the sport, for sure! So... The Christmas Tree decorations came off yesterday, along with some of the house decorations. My beautiful bride doesn't like to leave that stuff up for long, but for me, I would leave it up all year long! Well... Although, technically, it's still the Christmas season (it doesn't end until Jan. 11), the Santa rally that pushed the euro to 1.45, has gone away, and we're on to the next phase, which I drew out for you over a week ago... And that is... The Obama bounce... This is something we'll have to deal with for the next few months. It all began with a huge stock rally on Friday, and that won't be the last one during the Obama bounce....
  • Obama picks his economic team...

    * Obama picks his economic team... * Nordic currencies rise... * US floods market with dollars... * China looks to keep growth at 8%... ** Obama picks his economic team... Good day... Hope everyone had a great weekend, mine sure was. We had a fun time Friday night bowling and playing pool at our Xmas party. Unfortunately Chuck wasn't able to attend, as he was down in Florida speaking at a Wealth Masters Conference. He will be heading back into St. Louis today, and will be back in the saddle tomorrow morning for what will be a short week. The big news over the weekend was the unveiling of President elect Obama's economic team. Obama has picked Timothy Geithner, head of the Federal Reserve Bank of New York, to be his Treasury secretary, and former Treasury chief Lawrence Summers will be White House economic director. Obama is also likely to nominate New Mexico Governor Bill Richardson as Commerce Secretary. Geithner has had a primary role in the Federal Reserve's attempt to steer Wall Street through the current financial tsunami. He also oversees most of the Fed's special lending programs set up this year to channel more than $1 trillion to banks and other financial institutions....