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  • UK data boosts the dollar...

    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....
  • A Horrific Jobs Report!

    * 651K jobs lost in Feb... * Dec. and Jan Job losses revised up... * Talking Norway, Canada, Australia... * Brazil stealthlike for 3 months... ** A Horrific Jobs Report! Good day... And a Marvelous Monday to you! A wonderful weekend here in St. Louis, a taste of spring was in the air. I got to spend some time with some of my closest friends on Friday night, a good time was had by all! Well... Our Fantastico Friday was interrupted by that horrific Jobs Jamboree number that printed Friday morning... 651K jobs were lost in February, which let me remind you is a couple of days shorter than other months. So, it could have been worse! Hard to believe that could be the case, but it's true. The unemployment rate rose to 8.1%, from 7.6% in January. The jobless rate is the highest since 1983. The economy has now shed 4.4 million jobs since the recession began in December 2007, with almost half of those losses occurring in the last three months alone....
  • A change in the Trading Theme?

    * A change in the Trading Theme? * Gold rebounds Big time! * ECB cuts 50 BPS, as expected... * Lots of lessons today... ** Jobs Jamboree Friday! Good day... And a Happy Friday to one and all! It supposed to be 70 degrees here today, so in my book that makes it a Fantastico Friday! It's also a Jobs Jamboree Friday, and while this report is probably not going to be anything good, it will be Fantastico BAD! The experts have forecast a job loss in February to be 650K!!!!!! Six Hundred and Fifty Thousand did I say? Yes, sir, may I have another, sir? Well, shiver me timbers, this is just downright awful! And if it prints this bad, it will be the most jobs lost in a month since 1949! This is horrific, just plain horrific folks... And in my opinion, will NOT signal the bottom of the barrel for labor just yet... This thing has momentum and I don't think you'd want to step in front of this run-away bus!...
  • China Announces A Stimulus Plan...

    * China to grow 8%? * An end for Mark-to-markets? * What will the ECB do today? * Gold at a discount.... ** China Announces A Stimulus Plan... Good day... And a Tub Thumpin' Thursday to you! It's a Tub Thumpin' Thursday, because I woke up to see that my beloved Missouri Tigers had beaten #3 ranked Oklahoma last night! YAHOO! I had to hit the sack at half-time, so the outcome was in question when I went to bed. Great stuff! This was HUGE after being not ready for prime-time last Sunday against Kansas... Be gone you demons! You monkeys on our backs too! We just beat OU! Whew! A poet and I didn't know it! Well... We have the Bank of England (BOE) and the European Central Bank (ECB) meeting today. Look for rate cuts from both of them, as recessions are deepening in both camps. The BOE doesn't have many arrows in their quiver, while the ECB has held some in reserve. I doubt the ECB would go for a "huge honkin'" rate cut today, as they are normally more stick in the mud thinking... The BOE will probably move rates nearer to zero......
  • A "Stock Tip From The Top Guy!"

    * Australia's economy contracts.... * Bank of Canada cuts rates to .50% * Meeting margin calls... * TALF... ** A 'Stock Tip From The Top Guy!' Good day... And a Wonderful Wednesday to you! My beautiful bride is getting ready to leave this morning. I'm not used to 'talking' to someone when I get up at my usual early hour! She'll be gone in a few, as I write, and then it will be my little buddy, Alex, and your Pfennig writer on their own for 5 days! YAHOO! Well... After a day of waxing eloquently about the how well the Aussie economy was doing compared to the rest of the world, they go and post a contraction in their economic growth! UGH! That's the way to show me up! The Aussie economy shrank in the 4th QTR by .5% VS the forecast of .2% growth... The news scared the markets into believing the Asian problem will be worse off than previously thought. Oh Come On! Australia is STILL doing better than most countries, especially those that I listed in yesterday's Pfennig!...
  • It’s a Jobs Jamboree Friday!

    * BOE cuts 50 BPS... * ECB keeps rates unchanged... * Initial Jobless claims hit a record! * Recession or Depression? ** Jobs Jamboree Friday! Good day... And a Happy Friday to one and all! A Fantastico Friday, and Jobs Jamboree Friday to boot! You should have seen the crowd that gathered for my second presentation yesterday... WOW! Jason tells me that he had to turn away about 50 people that couldn't jam into the room! I guess people are still interested in what I have to say... Either that or, no one else was speaking at that time! HA! Another very tight trading range for the currencies yesterday, with a bias to buy dollars... And for once this bias to buy dollars didn't include buying Japanese yen, as yen fell 2 whole figures yesterday! You have to wonder if the words coming out of Capitol Hill that they will vote on the Stimulus package soon, has the risk takers dipping their toes back into Carry Trades, for yen is weaker and the Aussie dollar (a high yielder, even in today's zero rate environment) is stronger... It's not just a co-in-que-dink!...
  • 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!...
  • Groundhog Day 2009

    * The dollar remains strong... * GDP sinks to -3.8% * Central Bank rate meeting week... * Gold outperforms just about everything! ** Groundhog Day 2009 Good day... And a Marvelous Monday to you! It's Ground hog Day (what a great movie!) today... And what a Super Bowl Game last night! WOW! Almost as exciting as the year our Rams won and the tackle on the last play of the game for a touchdown, was made on the one yard line... Seems like eons ago, that the Rams won... Well, front and center this morning, the euro and other currencies are still reeling from that shot to their mid section by George Soros at the World Economic Forum, in Davos Switzerland. The dollar has flexed its muscles a bit more and taken the euro to just above 1.27... Not that euro holders want to hear this, but this IS what I was talking about all last month with the talk of an Obama bounce. The stock market hasn't caught on yet though......
  • Passing Out The Dollars...

    * Risk Takers return... * Bank of America gets more cash! * 30-year mortgages below 5%! * Looking for direction... ** Passing Out The Dollars... Good day... And a Happy Friday to one and all! A Fantastico Friday so far, let's keep it going, eh? It is downright cold here. I'm reminded of that one looooonnnnngggg winter I spent in Des Moines, Iowa... This artic cold was the "norm" for that winter there... I didn't need any other reason to move back to St. Louis, once the spring thaw came around! Well... Right out of the starters blocks this morning, we have a change in sentiment going on... The Risk Takers are back in the driver's seat this morning, as the markets are feeling better about things given that the remaining TARP money has been given to the Obama campers to dole out, and Bank of America came away with an emergency lifeline from the Gov't that totals about $138 Billion... $20 Billion in cash, right here, right now, with the rest spread out between liquidity access and guarantees... And... The TARP money... Given the fact that the Obama people have been itching like they just rolled around in poison ivy, to get their hands on that money... You've got to wonder... Are these guys going to do their best to out do the previous administration when it comes to piling up debts?...
  • Retail sales disappoint even more…

    * Retail sales disappoint.... * Chuck's views on the Lone Prop... * Waiting on the ECB... * Emerging market currencies sell off... ** Retail sales disappoint... Good day... The big news yesterday was the retail sales numbers, which fell twice as much as expected. Chuck predicted a tough Christmas season, and the BHI was right again. Sales dropped 2.7 percent according to yesterday's report from the Commerce Department. The falling home prices, rising job losses, and tighter credit have all combined to finally force US consumers to adjust their spending habits. No matter how low retailers slashed prices during the recent Christmas season, US consumers just weren't buying. The economy is forcing consumers to wean themselves off of the dangerous drug of easy credit. In spite of Bernanke and Paulson's attempts to get consumers borrowing and spending again, the economic slowdown is forcing the US consumers to reign in their spending. But while this change in consumer habits is good for the longer term economic health of the US, it only serves to drive the economy even further into recession over the short term. And the bad economic data just keeps rolling in. U.S. foreclosure filings spiked by more than 81% in 2008, a record, according to a report released Thursday, and they're up 225% compared with 2006. The total foreclosure filings in 2008 topped 3 million and showed no signs of slowing down in spite of the efforts of both the government and banking industry to slow them down. Foreclosure filings actually accelerated in the 2nd half of the year, increasing 17% in December over November of 2008....
  • Risk Aversion Reigns Supreme!

    * Currencies under dollar pressure * How strong can yen get? * TARP... * ECB rate questions... ** Risk Aversion Reigns Supreme! Good day... And a Terrific Tuesday to you! I'm draggin' the line this morning, but will get through this with my usual you know what and vinegar! The euro is trading at a one month low this morning, and the high yielders are getting stepped on again after enjoying a month a risk taking in the sun. That about explains everything, so I'll go the Big Finish now... Gotcha! Let's see what else is up on this cold and blustery Terrific Tuesday... So... It looks as though Risk Aversion is reigning supreme once again. I just don't buy into the dollar being the "safe haven" with all that's going on here. But, that's the way it is, and I can't change it. On a side bar, I used to have a customer that was convinced that I could move the markets with the Pfennig... I always thanked him for his complimentary remarks, but would hang up and have a chuckle, as IF I could change the way things are with my simple, humble little newsletter!...
  • A Jobs Disaster!

    * Retail Jobs are cut in December! * Dollar rallies on renewed Trading Theme... * Looking for the Obama bounce... * High yielders get sold... ** A Jobs Disaster! Good day... And a Marvelous Monday to you! A grand weekend for yours truly with time spent resting, watching football, Alex play basketball, dinner with friends, and finally a wonderful dinner with my kids as we celebrated my oldest son, Andrew's, birthday. Whew! I'm at work about an hour earlier than usual this morning, as I couldn't sleep, and just decided to get up and come in... UGH! OK... Well, the big news this morning, is that the Jobs Jamboree was just awful, but "not as bad as some forecast" and therefore the dollar rallied. OK, I'm shaking my head in disgust too, but that's what the headlines reported later in the day on Friday, as the reason for the dollar rally. But let's get to the meat of the Jobs report... First of all, jobs lost in December were -525K, which was bang on the forecasts. But here's the two things I found to be very scary in the report... First of all, November's awful print of -533K was revised downward to -584K (recall, I questioned a month ago if it would reach -600K on the revision)... And here's the really scary number... -67K Retail jobs were cut in December... That's right, December! The month when retailers are supposed to be on fire!...
  • A Trading Pattern For Gold...

    * The currencies rally back! * The risk takers are back! * Mixed bag of economic reports... * A 'cross thing' for sterling... ** A Trading Pattern For Gold... Good day... And a Wonderful Wednesday to you! No ice this morning, thank goodness! Winter, in my mind, is bad enough without the slip-sliding away! Snow is one thing, ice is another and it's not high on my Hit Parade! Well, front and center this morning is a rally in the currencies that began yesterday mid-morning, and has carried through the Asian and European markets. I'd tell you why the euro is 2.5 figures above yesterday morning's level, but you'd laugh at me... No wait! That's what you're supposed to do, Chuck, tell the people what's going on! HA! Seriously though... I don't think you'd laugh at me, maybe the dolts that run trading floors around the world, or the pundits that write stories about the markets, but not me!...
  • 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!...
  • Spending More Money...

    * Turn back the clocks to 1950... * Currencies rally on the day... * Bank of Canada to cut rates today... * Fed Funds to zero? ** Spending More Money... Good day... And a Terrific Tuesday to you! It's raining like cats and dogs outside, and that rain is supposed to turn to snow tonight, so we've got that going for us! Always love that rain to snow bit, as it puts a nice layer of ice under the snow! Well... It looks like the new president wants to spend more money... Yes, President-elect Obama, presented his economic plan yesterday, and before doing so, issued a warning that the economy is going to get a lot worse before it gets better. His plan calls for a pledge to spend the most on infrastructure since the 1950's... Now, let me say this... The Big Boss, Frank Trotter, and I talk about this all the time... To spend money on Financial Institutions and things that don't get used more than once like bullets and bombs, isn't our "fave" way to spend money... But building something that could be used over and over again, well, that makes sense... However, this spending could be coming at the absolute most awful timing, as the Deficits are exploding in front of our eyes, and it certainly isn't as appealing as watching the fireworks display in Vancouver!...