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  • FOMC keeps rates low...

    In This Issue..

    * FOMC keeps rates low...
    * Carry trade is back on...
    * Senators try to legislate a higher renminbi...
    * An Irish toast...

    Top of the mornin to ye... Happy St. Patrick's Day to all of the Irish readers, and all of those who are Irish for the day! Both Chuck and I have pretty deep Irish roots, and St. Patrick's Day is always one of our favorites. Chuck will be spending the day enjoying baseball in the sunshine of Florida; and I will be heading to Florida myself later today. Speaking of which, I have to catch a plane in a couple of hours, so I better get going on today's Pfennig.

    ...
  • A HUGE Currency Rally!

    * Another currency rally.... * SNB cuts another 50 BPS! * Budget Deficit continues to widen! * Treasury yields go south for the winter! ** A HUGE Currency Rally! Good day... And a Tub Thumpin' Thursday to you! It's been quite the rally this week in the currencies led by the euro, which is like old times, eh? The Big Dog on the porch finally gets to stretch its legs and chase the dollar down the street! It's been a long time since we've seen this go on for more than a day. Yes, we've seen one day spikes, and even two day rallies turn into false dawns, but this one has lasted about a week now. Ever since last Friday's awful Jobs Jamboree, the tide has turned, and the Trading Theme that has held the currencies in a full nelson since the end of July, could very well be on the way out the door. I said that about the Trading Theme earlier this week, so I just wanted to repeat that to emphasize the point!...
  • Veteran's Day

    * The China good feeling dissipates... * Currencies lose their edge... * Fannie Mae needs more! * Silver manipulation? ** Veteran's Day Good day... And a Terrific Tuesday to you! A Veteran's Day Tuesday! This is a Banking and Federal Holiday today, so the bricks and mortar banks are closed, and there will be no mail delivery, and of course your friendly neighborhood Government worker gets the day off. I'm here, in the saddle, writing the Pfennig like it's a regular work day, and the boys and girls will begin to gather in about 2 1/2 hours from now. We'll get all caught up, return some calls and head home today. Veteran's Day... I thought I would begin today with a snippet of a Veteran's Day poem by Jared Jenkins......
  • Iceland Melts Down...

    * RBA cuts rates 100 BPS! * Iceland to peg the krona... * High Yielders get whacked! * Gold rallies in the face of a strong dollar! ** Iceland Melts Down... Good day... And a Terrific Tuesday to you! Well... Folks... The wheels, what was left of them, are really coming off this economy. It's a sad sight to see, but it's happening nonetheless, and there's no bailout, stimulus check, mortgage bill, truck loads of money supply, or whatever, that's going to stop this recession bus.. Memo to Paulson and Bernanke... Don't throw yourself under this recession bus... Well... The dollar continued to push the envelope against a handful of currencies yesterday. Up front and center, the high yielders got beaten about the head and shoulders by the dollar. Aussie, kiwi, real, rand, all took major hits from the dollar. It was one of the worst days I can remember seeing for these currencies. This huge sell off showed two things going against the high yielders... 1. Commodities (other than Gold) are getting whacked, and 2. The Carry Trade is Dead......
  • The Deed Is Done...

    * Adding $700 Billion to our debt... * U.S. loses 159K jobs in September! * Dollar rallies to 13-month high VS euro * Ding Dong the Carry Trade is Dead... ** The Deed Is Done... Good day... And a Marvelous Monday to you! The deed is done... The House, which had previously voted down the Bailout Package, decided to go ahead and put the country in debt by another $700 Billion... Yes, I know it the payouts will be in installments, but in my mind it was in one swoop that $700 Billion was added to our debt... And guess what? The dollar rallied on the news! More on the Bailout Package in a minute... The other thing happened on Friday was the awful Job Jamboree in which 159K jobs were reported lost by the Bureau of Labor Statistics (BLS) during September. The job losses were all over the place led by job losses in Manufacturing. And guess what? The dollar rallied on the news!...
  • Some Healing...

    * largest one-day move up in the euro! * largest one-day move up in Oil! * Gold and Silver rebound! * Renminbi finally moves! ** Some Healing... Good day... And a Terrific Tuesday to you! I heard from one of my two sisters that live in the Houston area yesterday. They rode out the Hurricane together, have some damage to her house, and is still without electricity. I can't imagine what that's all like. But they are both safe at that's what's important at this point. Well... The euro had it's largest one-day move upward VS the dollar since its inception in 1999, yesterday... We've seen some profit taking in the overnight markets, but just for good measure... I think it appropriate to show that the euro reached 1.48 yesterday... That was a 3.5 euro move, and after falling to a low of 1.3869 on 9/12 (before bouncing big that day), the euro has now recovered about 7%... I would call that "some healing"......
  • Paulson and Bernanke ride to the rescue...

    * 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....
  • Another Government Bailout!

    * Fannie & Freddie news... * Jobs Jamboree very disappointing! * Risk Taking back on the board! * Troubles brewing in China? ** Another Government Bailout! Good day... And a Marvelous Monday to you! We had some historic economic news over the weekend as the Gov't has decided to take over Freddie Mac and Fannie Mae... When I heard the news, I made sure I would check on the currencies later in the day when the Asian markets opened. At first, it was all dollar negative news, and the euro was flying high to near the 1.44 handle... So... I went to bed thinking that the markets would be a shambles this morning when I got to work, etc. etc. But, that's not the case, as I turned on the currency screens I saw the euro had lost all that ground it had gained and is back to looking sickly around 1.42 again. In fact, I just looked over, and the single unit has given up the 1.42 handle and is trading below... I'm searching and searching for news on this strong dollar move, and can't seem to find anything... So, I'll go on with the normal fun, and see if something pops up later as I go along......
  • Are Freddie and Fannie Insolvent?

    * Poole slams Freddie and Fannie... * The dollar gets sold again... * Bad data for the dollar today... * Renminbi matches '07 performance! ** Are Freddie and Fannie Insolvent? Good day... And a Happy Friday to one and all! A Fabulous Friday indeed! The euro broke out of that tight trading range yesterday, we had a distorted Weekly Jobless Claims number, and the un-dynamic duo of Ben and Hank got taken to the woodshed by Ron Paul... All this and more as we head into the 2nd Friday of July! OK... First on this Fabulous Friday, I forgot to talk about ex-St. Louis Fed President William Poole's comments about Freddie and Fannie yesterday... These comments were responsible for bringing the mortgage meltdown front and center to the markets once again... So... What did Poole say? Well... Poole flatly stated that, "Freddie and Fannie Mae are insolvent"... Uh-Oh! As I thought earlier this week that this meltdown of Freddie and Fannie Mae could be the risk event I've been talking about... Well... If Poole is correct... We're here......
  • The Dollar Swings A Mighty Hammer!

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