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  • The US dollar reverses course ...

    In This Issue.

    * Dollar reverses course ...

    * Yen won't copy the '95 increase following Kobe quake ...

    * India's growth to force higher rates? ...

    * Brazil tries to keep a lid on the real ...

    * EU leaders agree on a new and improved bailout ...

    ...
  • 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....
  • 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......
  • Paulson throws the markets a curve...

    * Paulson throws the markets a curve... * Goldman says to buy the yen... * RBA intervenes to protect the AUD$... * China provides support to commodities... ** Paulson throws the markets a curve... Good day... Chuck is out today, so I get the opportunity to share some of my thoughts on the markets. As many of you know, I spent most of last week in Washington DC giving presentations at the Money Show. On the way to the hotel, the cab driver who had noticed my EverBank luggage tag asked if I was a banker. He said he had seen a lot of us lately. I guess I was one of the few bankers flying into Washington DC who wasn't heading over to the Treasury Dept. to get some of the cheap money they are passing out. I had a great trip to Washington and really enjoyed the opportunity to spread the word about EverBank and the protection that portfolio diversification provides. I don't think Treasury Secretary Paulson is having as good a time as I did in the nation's capital. When he came down from NY a couple years ago to take over the Treasury, he was Wall Street's best paid CEO and looked to cap his career with a high-profile sojourn in public service. But his credibility has really taken a hit over the past year, and his update before congress yesterday didn't quite go as everyone expected. Chuck left me the following to share with readers this morning....
  • 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......
  • Rescue plan not an instant fix...

    * Rescue plan to take time... * Pound sterling rallies (for now)... * Brazil supports the real... * Iceland cuts rates... ** Rescue plan not an instant fix... Good day...Another roller coaster of a day, as the dollar continued to slide through lunch but then rallied back up in the afternoon. As I walked out the door last night, most of the major currencies were trading right about where they were when I turned the screens on. The dollar has started to fall again in overnight trading, so the up and down of the past few weeks looks to continue. The news stories coming across the wires this morning seem to be as volatile as the currencies. I have now counted three different stories which state the markets are moving back into higher yielding currencies and riskier investments after the coordinated bank bailout plan which was announced yesterday. But several other stories are talking about how investors are moving out of the higher yielding assets because of concern that the bank rescue will take too much time to unfreeze global credit markets. I tend to agree with the latter of these....
  • Govt to follow Buffet's lead...

    * Govt to follow Buffet's lead... * Aussie $ has biggest gain ever... * Yen reverses on carry trades... * China's currency reserves rise... Good day...And what a day it was! As I stated in yesterday's Pfennig, Columbus day is just sort of a holiday for the markets. These 'semi-holidays' can create some volatile trading, as not all of the markets are open and many desks are short staffed. So with the Federal Reserve and the banking system closed, the equity markets had the largest one day gain in over seven decades. I guess the stock jockeys figured they weren't going to get any bad news out of the credit markets, which were closed, so no news is good news!! The rally was certainly welcomed, and hopefully some of the gains will stick today as we return to a normal trading environment. And I guess some of the credit for the stock rally has to go to finance ministers around the globe who finally agreed on a plan which seems to be able to work. The leaders of a majority of the worlds largest economies borrowed a page from Warren Buffet's playbook and decided to invest directly into some of their largest financial institutions. The Bush administration announced it would invest $125 billion in nine of the biggest US banks. The US move came after France, Germany, Spain, the Netherlands, and Austria committed $1.8 trillion to guarantee interbank loans and take equity stakes in European banks....
  • 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!...
  • Wooden Arrows?

    * A euro revelation! * House to vote on Bailout... * Yen remains strong... * Jobs Jamboree Friday! ** Wooden Arrows? Good day... And a Happy Friday to one and all! A Fantastic Friday, I hope! As the blind man said, as he spit into the wind... It's all coming back to me now... And so it was yesterday morning after I had hit the send button for the Pfennig, a trader friend called to give me some insight, and... After talking to him, it all came back to me now... What the heck is he talking about now? I hear you asking... Well, recall how I and probably all of you too, have been scratching my head and wondering just how in the world the dollar could be rallying in the face of all that's going on, and the bad data to boot. Well, here it is folks, sit back and take a sip of coffee......