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  • Silver Shines Above $20!

    In This Issue..

    * The Risk Aversion fog hovers over the currencies..

    * Aussie $ punches a hole in the fog....

    * Japanese officials still try to jawbone...

    * Swiss franc nears parity!

    ...
  • It Was a Risk Off Day!

    In This Issue..

    * Risk aversion sets in again...
    * IMF sends Gold to the woodshed...
    * Ron Paul chimes in...
    * U.S. data all prints good...

    Good day... And a Tub Thumpin' Thursday to you! How are you today? You know, I was thinking about that yesterday... I tend to tell you quite a bit how I'm doing, but I fail to ask you how you're doing... Heard one of my all-time fave songs on the way to work today, which put a smile on my face, and of course led me to sing-along! Oh! The name of the song? Mellissa - by the Allman Brothers...

    Well, front and center this morning, we had the entire day and a half rally in the risk assets completely erased, wiped out, and reversed yesterday... Recall, that I told you in the morning that the euro had lost about 1/4-cent while I was writing... Well, it held to near 1.37 until about mid morning, and then the trap door was sprung, and the euro went falling through the 1.37, and 1.36 floors!...
  • China Puts The Brakes On!

    In This Issue..

    * Risk Aversion sets in, on China's moves...
    * Now, we know what's going on with the TIC's!
    * Germany to step in to save Greece?
    * Honkers losing value VS the dollar...


    Good day... And a Wonderful Wednesday to you! As I understand it, we are in for some Monsoon like rain today and the next couple of days... Living in a little river town, and having a creek at the back of my property, lends itself to cause me to worry when I hear things like Monsoon like rains expected... But... It's mother nature, I can't do a thing to stop it, so, I carry on... But worrying while I carry on!

    The rain is falling on the currencies too... The dollar has rebounded very quickly the past few days, and there are no roadblocks right now. The risk takers in the markets are running for safety again, sent running by China's decision to curb lending and attempt to slow growth before their economy overheats......
  • Japan Posts a 4.8% GDP!

    In This Issue..

    * Risk Aversion goes away mad...
    * China just says 'no' to currency flexibility...
    * Maybe a return to fundamentals?
    * Gold continues to soar!

    Good day... And a Marvelous Monday to you! It's raining here, so it's one of those Rainy Days and Mondays... But I won't let it get me down, as opposed to the song! I got a chance to check out our new digs in the building next door to us here... Very nice! And... A long way from that small office I sat in on Olive St. a decade ago, when we started EverBank... To think back 10 years ago, and where we are today... Simply amazing!

    OK... As I told you Friday, the President was in China this past weekend, trying his best to get the Chinese to agree to a greater flexibility for the renminbi... Well... There were a few stories this past weekend that hinted about the Chinese agreeing to do such... But I prefer to go with this story that appeared on Reuters last night... 'The Chinese government has sought to distance itself from speculation surrounding a central bank statement earlier this week that was interpreted as a shift in currency policy towards a stronger yuan. However, a report on Saturday by Xinhua, the state-controlled Chinese news agency said that the government would not allow the currency to gain against the dollar in the short term.'

    ...
  • Germany & France Post 3rd QTR Growth...

    In This Issue..

    * Risk Aversion fuels dollar rally yesterday...
    * Eurozone growth may stop the Risk Aversion...
    * Budget Deficit is a record $176.4 Billion!
    * Euro, Swiss, Aussie, Norway, all cheaper today!

    Good day... And a Happy Friday to one and all! Let's try to make this a Fantastico Friday as well! The Risk Aversion that was creeping into the currency markets yesterday really took hold in the U.S. trading session, which meant the dollar was being bought once more, along with Japanese yen...

    It just makes me laugh out loud, when I write that the 'safe haven currencies' during Risk Aversion trading are the dollar and yen... These two countries have debt up to their eyeballs, pay no interest on their deposits, and have a leadership deficiency... (ok, before every begins to think that I'm ripping the president again, I'm not... I'm talking about the Central Bank, and lawmakers of each country)...
  • RBA Raises Rates Again!

    In This Issue..

    * Risk Aversion boosts dollar...
    * U.S. manufacturing is strong...
    * More stimulus? Please say it ain't so Joe!
    * Thoughts from the Big Boss!

    Good day... And a Terrific Tuesday to you! Well, I'm here! Just when you thought I would be gone for the week, and you would get away from my rants, and get the calm Chris Gaffney, the rug gets pulled out from you! I am so bummed! I was told that I could not travel to Cabo for the Sovereign Society's Offshore Advantage Conference, and I was to remain at home, with my leg up, blah, blah, blah... What a crock!

    OK, now that we've got that out of the way... Front and Center this morning, we have a very strong dollar rally going on... It began yesterday mid-morning, when things turned on one thin dime. First, we had the U.S. Manufacturing Index rise in September and the Trading Theme kicked in with the dollar getting sold on the good news for the economy... But then a strange thing happened on the way to the forum. Everyone began to fear what's been going on in Banking... Friday, the 115th bank failed this year, and suddenly, traders, investors, hedge fund dudes, and everyone else, got a case of the flu... Not the 'pandemic' H1N1 flu... This is the 'chicken flu'... Chicken to continue to takes risks in the face of a banking problems... Well, to think of it, maybe, just maybe, it's not the 'chicken flu' but the 'prudent flu'!...
  • The Dollar Bounces Back!

    In This Issue..

    * Rumors kill the currency rally...
    * Risk Aversion campers return...
    * Dr. Faber with some thoughts...
    * Big Mac and the real...

    Good day... And a Terrific Tuesday to you! The rain is back... First we had the coldest / rainiest spring I can ever recall, and then a very mild summer, now this... Cold and rain in the fall... I'd say that's climate change for you!

    Good news from the scans! By the grace of God, I sailed through the scans and tests, cancer wise... I would like to thank everyone that had me in their thoughts, and prayers... Those are powerful things, don't forget that one minute!

    OK... Well, the non-dollar currencies didn't enjoy such good news yesterday, as they got whacked a good one! After signing off yesterday, the non-dollar currencies continued to rally VS the dollar, and then the rug got pulled out from underneath them in a NY Minute! What happened? The risk assets were dropping like the Cardinals' batting averages at the end of the season... Well... Remember yesterday when I said that the data for the week looked like it might show some healing in the economy which would be bad for the dollar?...
  • U. of Michigan Spoils The Party...

    In This Issue..

    * Risk Aversion comes back strong!
    * Risk assets get sold...
    * What games will be played with TIC's?
    * 40 years since Woodstock!

    Good day... And a Marvelous Monday to you! A great weekend that was filled with watching my little buddy, Alex, play football, hosting a surprise 30th birthday party for my little girl, Dawn, and a sweep of the Padres by the Cardinals! This week gets cut short with me a the helm, as I head to San Francisco on Thursday. Chris will have the conn on the Pfennig Thursday through Monday.

    Well... Who'd a thunk it? Yes, who would have thought that the U. of Michigan Consumer Confidence could turn the markets upside down and spoil the party? Well... It happened on Friday! The U. of Michigan Confidence Survey for Aug unexpectedly dropped to 63.2, from the previous month's 66 level. The real drop though was from the forecast for this month which was 69! The drop brought the index to a five-month low....
  • Risk aversion disappears again...

    In This Issue..

    * Risk aversion has left the building...
    * CIT survives without Fed help...
    * SNB tries to fight the markets...
    * Light week for US data...

    Good day... We had just an amazing weekend of weather here in St. Louis, and this morning is shaping up to be another beautiful day. Friday turned out to be a beautiful day for those who have taken our advice and diversified their holdings out of the dollar. Risk aversion was placed on the back burner again, and investors moved money back out of the dollar into higher yielding currencies. The dollar and yen got sold but all other currencies rallied, and investors also turned back toward gold pushing the metal above $950 for the first time in over a month.

    So what caused all of this confidence? First, the housing data released Friday morning in the US showed a slight pick up in both building permits and housing starts. While the housing markets have a long way to go, the data have given investors an indication that construction may have found a bottom. Not to throw cold water on investors confidence in the building numbers, but while the residential market may be bottoming out, the commercial market continues to tumble. I spoke to a good friend over the weekend who is a commercial real estate developer down in Memphis. He told me that his development pipeline has completely dried up, and even the brokerage side of his business has slowed. The only part of his business which has picked up is the marketing of foreclosed properties. He has shifted his concentration to helping banks and lenders 'work out' of commercial projects which they have taken back onto their books. The economy has kept most companies from opening new stores, and many continue to shut down under performing ones. My good friend tells me most of the people he talks to don't believe the commercial real estate market will turn around until the end of next year. Not good news for the banks who are still reeling from the residential real estate bust....
  • Risk aversion returns…

    In This Issue..

    * Risk Aversion returns...
    * Money Multiplier dampens stimulus effects...
    * TIC flows show concern of foreign investors...
    * China back on growth track...

    Good day... Chuck got an early start on a two week hiatus from the desk, so you will be stuck with me writing the Pfennig for the next two weeks. But don't worry, you will still get a small dose of Chuck over the next week as he typically emails me his thoughts while on the road (I call it Pfennig Pfodder). Risk aversion dominated the currency markets overnight, as terrorists set off two separate explosions in Jakarta and investors moved money back into the 'safe havens' of the US$ and Japanese yen.

    Chuck wrote about this move yesterday, believing the bad news regarding CIT would probably cause a risk reversal. But the US stock market shook off the CIT news and rallied higher after a big earnings report by JP Morgan and a somewhat positive statement by Nouriel Roubini. Roubini, the New York University economist who is credited with predicting the financial crisis, said in a speech yesterday that the US economy might be close to the bottom. The stock jockeys took this statement along with the positive earnings reports and ran stocks up. But Roubini later tried to caution these bulls against reading too much into his statement, and reminded everyone that he has not changed his thoughts on a US recovery: 'I continue to see a shallow, below par and below trend recovery.'...
  • Feds Say NO To CIT...

    In This Issue..

    * Currencies have strong day...
    * What are the qualifications?
    * JP Morgan posts 36% increase in earnings...
    * RBA attempts to keep A$'s in check...

    Good day... And a Tub Thumpin' Thursday to you! The first day this week that I've gotten up and to work at my normal time. I hit the wall yesterday afternoon, went home, watched about 10 minutes of the Wizard of Oz (my all-time fave movie) with granddaughter Delaney Grace, and then went to sleep! Crazy, I know, but when you hit the wall, you hit the wall!

    Yesterday was a strong day in the currencies. I wrote yesterday about how the euro was inching toward 1.41, but the level had been a tough row to hoe, with the euro giving back ground each time it went higher than 1.41... And... That was the case yesterday! The euro did trade higher than 1.41. It was 1.4120 when I left the office! But, as I turn on the screens this morning, the single unit has fallen below the 1.41 figure......
  • China Is Back On The G-9 Docket...

    In This Issue..

    * Risk Aversion is strong once again...
    * Currencies get sold...
    * What's China really up to?
    * RBA to leave rates unchanged?

    Good day... And a Marvelous Monday to you! Some people have the day off today, so we'll probably not be back in full force until tomorrow... Not that we've been in full force, as a workforce in the U.S. for some time... But that's another story for another day! Today is a new day, and new week!

    Friday's thinned out markets were not what the currencies wanted to see, as the bias to Risk Aversion was magnified in the thinned out markets, only making the selling of the currencies even worse... Some 'levels' were hit in the thinned out markets, and that caused even more selling in the overnight markets as Japan and Asia came on board....
  • Throwing A Cat Among The Pigeons...

    In This Issue..

    * Risk Aversion returns...
    * RBA cuts 25 BPS...
    * Eurozone recession deepens...
    * Oil backs off...

    Good day... And a Terrific Tuesday to you! OK... I'll get to Opening Day in the Big Finish today, first, and foremost, I need to tell you about a guy that really threw a cat among the pigeons yesterday, causing a BIG scare and sell off of risk assets... Currencies that is...

    His name is Mike Mayo, and he used to work at Deutsche Bank, and now is a banking analyst at Caylon Securities... And brother can he ever move a market! To make a long story short... Mr. Mayo basically said yesterday in a report that 'Bank Loan Losses Will Exceed Depression Levels'... So, all that James Brown, feeling good, that went on last week with the G-20 singing everything is beautiful, all went down the drain after Mr. Mayo spoke......
  • Wild Swings!

    * Euro gains, then loses, then gains... * Inflation and Commodities... * The euro turns 10! * Risk Aversion remains but is waning... ** Wild Swings! Good day... And a Terrific Tuesday to you! Well, it happened way too late for yours truly to witness it, but my beloved Missouri Tigers rallied and won the Alamo Bowl in overtime. Go Tigers! Hopefully they can fix the defense before next fall! OK... Remember those Wild Swings I talked about yesterday? The Wild Swings that could be a result of thin volumes in this the second week of Christmas. Well... We witnessed them in earnest yesterday! As I signed off yesterday, I told you that the euro had rallied 2 whole figures to 1.43 and change. Well, that rally dissipated throughout the morning, and by late in the day the single unit was 1.39 and change... WOW! Now that's a Wild Swing! You can point to profit taking as the reason for the move, and with the volumes thinned out by Holiday trading, one profit taking sell begot another, and before you knew it, the euro was looking at a loss on the day....
  • Day Two For Risk Aversion...

    * More losses... * Currencies rebound... * Jumping off the bandwagon... * Slowing renminbi appreciation?...