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  • Waiting On The Norges Bank...

    In This Issue..

    * Euro continues to get sold...
    * Will Norges bank get confused?
    * Thoughts on China...
    * Gold gets dragged down by euro...

    Good day... And a Wonderful Wednesday to you! It's getting quite ugly out there in the investing world. Yesterday I tried to draw a line of comparison from the near collapse of Bear Stearns to the problems of the Eurozone... That line became quite a bit more clear yesterday and in the overnight markets... Let's go to the tape!

    Well... It was another day of selling the euro and dragging other currencies along for the ride... This time, Gold and Brazilian real could no longer resist the pull / drag of the euro selling... It has actually become a rout on the single unit, as now, we're not only dealing with the sovereign debt risk of Greece (which I still contend is not that big in the whole scheme of the Eurozone) but now, the euro is sailing into technical trading rough waters......
  • Germany & France Exit The Recession...

    In This Issue..

    * Currencies rally...
    * Eurozone growth unexpectedly stronger!
    * FOMC extends QE...
    * Norges is the first!

    Good day... And a Tub Thumpin' Thursday to you! Well... Turn-around Tuesday came 24 hours later this week! HA! Yes, the currencies came back yesterday, but not with a lot of conviction... You see... Stocks rallied, but that doesn't mean what I talked about yesterday still won't happen... Be careful there!

    The euro has received some additional love this morning, as the Eurozone's economic growth printed better than expected, albeit still negative... But... Germany and France showed growth, which I must say is very unexpected! That means that both Germany and France have exited the recession... Well, that is at least for now! For those of you keeping score at home, Eurozone GDP fell -.1%, which is far better than the -.5% that was expected... Oh! And this is for the 2nd QTR... You would have to think that data like this would be very good for the euro, and from the looks of it, that's exactly what's happening!...
  • Trade Deficit Narrows...

    * Dollar rally continues... * Be careful what you wish for! * Prime loans now in trouble... * Norges Bank to keep rates unchanged... ** Trade Deficit Narrows... Good day... And a Wonderful Wednesday to you! Tuesday saw more volatility in the currencies as the dollar went back in forth, but well within a trading range. The euro has melted down to the 1.49 area, where it seems to have found some breathing room. The Trade Deficit for June shrunk, but the Budget Deficit widened... Again, the fundamentals in the U.S. continue to point to recession. All this and more in today's Pfennig, so grab a cup o'java, a chair, and let's go! OK... Front and center this morning, I want to talk about the Trade Deficit, which in June showed a narrowing from $59.8 Billion to $56.8 Billion, which looks good, right? Well... As I told you in yesterday's Pfennig, you have to be careful what you wish for. This drop in the Trade Deficit pushed the dollar higher yesterday morning, and got me thinking... (I know, that could be dangerous, but stay with me here...) A stronger dollar will not play well, share toys, and keep its hands to itself, with exports... And exports have been something short of amazing with the dollar being weak. In fact, exports have accounted for the largest contribution to GDP in the past 5 quarters! (with U.S. Consumer spending drying up, this is possible!) Add to that, everyone getting goose bumps regarding a global slowdown... If the world slows down, like the dollar bulls are claiming they will, thus propping up the dollar, then U.S. exports will slow even more!...