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  • Bad news for GM and Chrysler rallies the US$...

    In This Issue..

    * Bad news for car makers rallies the US$...
    * Yen comes back strong...
    * Singapore to devalue?...
    * German Chancellor Merkel gives warning...

    Good day... And good Monday morning to all of you. I can't believe March is nearly over, it seems as though it just started. March will end up being a pretty good month for the currency markets, as investors exited the safety of US treasuries and started moving funds back into higher yielding assets. But the markets continue to be volatile, and news released on Friday and over the weekend has sent these investors rushing back to the safe haven of the US dollar.

    The Japanese Yen and US dollar benefited after a US Government official said Friday that bankruptcy may be the best option for GM and Chrysler. The dollar continued to gain strength this morning after US Treasury Secretary Geithner warned yesterday that some financial institutions will need 'large amounts' of aid. When the Treasury Secretary says large amounts, you know it is going to be billions or trillions! Geithner was making the rounds of Sunday morning talk shows to try and justify the money already spent and prepare the taxpayers for another request of funds....
  • Bailout failure accelerates dollars decline...

    * Senate rejects auto bailout... * ECB pushes back from the rate cut table... * Goldman and Citigroup predict a dollar fall... * China to continue to appreciate... ** Bailout failure accelerates dollars decline... Good day... Not sure when all of you will be receiving this today, as it took nearly over a half hour for my computer to boot up this morning. But its all good news for currency investors, so I'll get it written and out to you as quickly as I can. The dollar slowed its decent overnight, but continued to fall vs. most of the major currencies as the US Senate rejected the $14 billion bailout for the auto industry. The big winner in the Senate rejection of the bailout plan was the Japanese yen, as Japanese car makers are predicted to grab an even bigger piece of the US auto market. The yen, which has been rallying due to global deleveraging and carry trade reversals, suddenly had another reason to rally. The yen rose to a 13 year high, trading below 90 yen per dollar, and some are now predicting a rise to 80. Finance Minister Shoichi Nakagawa boosted the yen further after telling reporters in Tokyo that Japan isn't considering intervening in the currency markets....
  • The Worst Jobs Report Since 1974!

    * Will -533K turn to -600K? * A glimmer of light brings back risk takers... * Another week of data... * Fedspeak today... ** The Worst Jobs Report Since 1974! Good day... And a Marvelous Monday to you! What a Whirlwind Weekend for your truly, as it came and went, I did a ton of stuff, but no rest, and this morning, I was reminded that I had not gotten any rest! UGH! But! It was all fun! A great time in Jacksonville at the Headquarters' version of a Holiday Party... It was great to see the folks there that I know. OK... Did you see the rot on labor's vine Friday? The Jobs Jamboree was very unkind to many, with a 533K jobs lost in November. That number was the worst figure since 1974! The tally of 1.9 million jobs lost this year surpasses the losses of the past two recessions, and according to the Wall Street Journal, signals that the current downturn could be the worst since the years immediately following World War II....
  • The NBER Finally Says So!

    * RBA cuts 100 BPS... * It IS a recession! * Paulson to ruffle feathers? * Yen to rally hard? ** The NBER Finally Says So! Good day... And a Terrific Tuesday to you! Quoting one of my all time fave Christmas songs, Baby, it's Cold Out There! Winter has arrived, and I had to drag out the big heavy winter coat this morning. So... The seasons pass us, which is a good thing, because without winter, we couldn't have spring, and spring training! OK... Right out of the starters blocks this morning, the Reserve Bank of Australia (RBA) pulled the rug right out from under the "high yield status" of their economy, with another HUGE rate cut overnight... This time, the RBA cut 100 BPS, to an internal cash rate of 4.25%. This brings the total since September to 300 BPS! WOW! Talk about effectively unwinding seven years of tightening! The statement following the rate announcement leads me to believe that the RBA is probably finished cutting rates for now... It will be a wait-n-see what happens globally, before the RBA entertains any talk of further rate cuts... At least that's my opinion!...
  • SNB Cut Rates 100 BPS!

    * Trading Theme returns... * Automakers' bailout vote today... * Not using all your arrows... * Housing Starts go back to 1959! ** SNB Cut Rates 100 BPS! Good day... And a Tub Thumpin' Thursday to you! It's a short week for me, so this IS a Tub Thumpin' Thursday! I head to Florida tomorrow, and I'm ready! After last week, and the cold that's set in here, I'm ready! Too bad I'll be working about 1/2 the time! But, I'm not complainin'! OK... Whew! What an awful day yesterday for the currencies... In the morning, they ere in rally mode with the euro gaining ground to well within the 1.27 handle. But then the Trading Theme set in, and those gains were wiped out. The Trading Theme was set off by the awful Housing data, which reminded everyone of the deep, dark , dangerous days ahead... I bought some euros, and watched them rise, and went off to do something else... When I returned, they had fallen... UGH! The Japanese yen, however, rallied, as is the case with the Trading Theme... Risk trades get unwound, which benefits dollars, and yen. I've explained all this before, so I won't get into it again, but there's someone that has gone into the problems (credit markets and the Fed and Treasury's response to the crisis), and does a great job of telling it like it is... So, instead of hearing from me, ranting and cursing the "leaders" I'll let someone else explain it to you... This is a fellow named Ted Cook, that Ty Keough sent my way......
  • The Junk Yard Dog Bites!

    * The dollar rallies big time! * A dollar conspiracy? * Bailing out the automakers? * Weathering the storm in N.Z.? ** The Junk Yard Dog Bites! Good day... And a Wonderful Wednesday to you! Well, the Junk Yard Dog got a hold of the euro yesterday, and even though the U.S. Banks, thus the majority of currency desks, were observing Veteran's Day, the move down in currencies VS the dollar, led by the euro, was drastic! The Junk Yard Dog I'm talking about is Jean-Claude Juncker, chairman of the Euro group... I stopped the euro in its tracks from its nascent rise in the past month, by saying the "euro's recent rise was undesirable"... He also deep sixed the euro, and thus all the currencies save yen, by saying he "didn't see any reason there couldn't be more rate cuts by the ECB"... (the ECB is of course the European Central Bank) Well... These two comments tore through any gains the currencies had mounted VS the dollar in recent weeks, like a Junk Yard Dog tears though some raw meat! It was a knife to the euro's heart......