Daily Pfennig : Fannie Mae

He Said What?

Chuck Butler — Wed, 13 May 2009 15:58:37 GMT

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In This Issue..

* Foreclosures rise...
* Green Shoots, no so green!
* getting on a bus...
* Losing a triple A rating?

And Now... Today's Pfennig!

He Said What?

Good day... And a Wonderful Wednesday to you! Not wanting to start the day off with bad news... But I just saw a flash on the TV that said, "foreclosures jumped 32% last month"... More Blood in the Streets, eh? That just happens to be the title of my presentation today... Blood in the Street: Bargain time or just a cease fire? Hey! I don't make these things up...

OK... Another day here in Sin City... This city is packed with people, everywhere we go, it's simply amazing... There's been no sign of a recession here... Of course, if you got out of the casinos, and shows, you would see some of the greatest devastation any where in the housing market here... So.. It's not a seashells and balloons in Vegas... I guess with the economy so rotten, people are hoping to strike it rich in the casinos though... Hmmm, have they not figured out that these ginormous buildings are here to make money?

The Currencies lost ground yesterday, most of the day, and then overnight too... Not major ground, but ground that had been previously won VS the dollar, not something a dollar bear wants to see. There's more rot on the economy's vine, this morning with Retail Sales, and all that euphoria that was in the markets last week, is dissipating, quickly... So, let's go to the tape on Retail Sales...

Retail Sales for April were down again (the BHI was wrong! YIKES). The .4% fall in April added to the .9% fall in March (revised to -1.1% today) tells me that after signs of consumers picking up spending again in the fist two months of the year, this is turning out to be an absolutely dreadful quarter for Retail Sales... Oh, and let's go back to the GDP print of about 2 weeks ago... There was hope in the GDP figure that "consumption" may pull the economy out of the recession, for consumption was up 2.2%... But with these Retail Sales figures so far in the 2nd QTR, you can kiss that hope good-bye!

This is the kind of stuff I was all worried about the other day in the Pfennig... Recessions are like that... You get a pop, but it has no legs, and then leads the economy right back to the depths of the recession... This is why I wanted to get the currencies back on the fundamentals of having different pricing mechanisms and low correlations to stocks... The diversification fundamentals that have been forgotten in the past 6 months....

And... Here's a good one for you... OK... Who said this... "Even though we have been having some fairly strong gains in home prices, it is our conclusion that it is UNLIKELY that we are confronting a housing bubble."

Give up? It was a quote in the 2002 Fannie Mae Annual Report... By our esteemed (NOT!) former Fed Chairman Big Al Greenspan! This guy's track record of forecasting going all the way back to his days as a consultant before he was brought on at the Fed, is absolutely horrible! Now... Why do I bring this up now? Well... Yesterday, Big Al Greenspan decided to give us a forecast that allowed stocks to recover on the day... What did he say this time? Greenspan said in an interview that "Housing May Have Bottomed and be a the verge of a recovery."

Oh boy, now that's something to hang your hat on, eh? I shake my head in total disgust... This man was at the root of the whole problem, and people still listen to him?

OK... Enough on that exercise... I could write for days about all the things he has done... But, better yet... Go to Amazon and buy Bill Fleckenstein's book on the Fed and Greenspan...

My friend, John Mauldin, wrote a great piece last Friday for his weekly newsletter regarding all the talk about Green Shoots... The Green Shoots were the thoughts that data prints were getting better (so they thought) and that the economy was getting better... John pointed out that he didn't believe the green shoots were for real, and said they probably were more like dandelions... I totally agree... Both he and I took the Jobs Jamboree data that was considered a Green Shoot, and tore it apart to expose it as the fraud it was... No Green Shoot here!

Here's another one... Import prices in the U.S. rose by 1.6%... That's HUGE folks! I saw something that said that in the last 100 prints of this data there have been only 12 larger prints! YIKES... Here's the skinny... Recall, that I've told you that China's stimulus was working and that they would be the first country to come out of the economic doldrums... Well, with their stimulus working, that means commodity prices will be rising, and if commodity prices rise, that means inflation will rise... No Green Shoot here!

OK, enough of that! Did you see where the Obama The Obama administration has begun serious talks about how it can change compensation practices across the financial-services industry, including at companies that did not receive federal bailout money?

See? I told you that you give the Gov't a foot in the door, and they will begin to push their way completely through the door... And with banks that's exactly what's happening... Isn't that sad? The Gov't wants to dictate how banks pay their employees, even if they didn't accept TARP money! How do you like being put on the train to socialism? And you can't get off?

I had better stop there, I might say something that would get me into trouble!

Well... There was another thing that showed up yesterday that could mean very bad things for the U.S. and their ability to attract financing... The Financial Times ran a story regarding the U.S.'s Triple A rating... Let's see what The FT had to say...

"Long before the current financial crisis, nearly two years ago, a little-noticed cloud darkened the horizon for the US government. It was ignored. But now that shadow, in the form of a warning from a top credit rating agency that the nation risked losing its triple A rating if it did not start putting its finances in order, is coming back to haunt us.

That warning from Moody's focused on the exploding healthcare and Social Security costs that threaten to engulf the federal government in debt over coming decades. The facts show we're in even worse shape now, and there are signs that confidence in America's ability to control its finances is eroding."

Hmmm... That's scary folks... And... To add to that, an attendee came up to me yesterday after my first presentation, and said, "Chuck, great talk, but you didn't mention the debt that the U.S. will have to deal with in the future." Yes, he's right... I don't do that very often because I don't want people going outside and throwing up, or even worse things. What I'm talking about here is the debt that the U.S. will be under when all the Baby Boomers are drawing Social Security and Medicare... If you are not aware of these figures, and how bad they will become... Go to Amazon and buy the I.O.U.S.A. book by Addison Wiggin and Kate Incontrerra...

OK... Time to go to the Big Finish, I've got to go through my presentation once more before I head down to the Show...

Currencies today 5/13/09: A$ .76, kiwi .5970, C$ .8590, euro 1.3610, sterling 1.5165, Swiss .9045, rand 8.4950, krone 6.5150, SEK 7.8710, forint 208.15, zloty 3.2575, koruna 19.7090, yen 96.17, sing 1.4630, HKD 7.75, INR 49.71, China 6.8230, pesos 13.34, BRL 2.0960, dollar index 82.61, Oil $59.09, Silver $14.09, and Gold... $926.90

That's it for today... A very long day for yours truly yesterday... Hopefully today will be a bit shorter! An old friend stopped by my morning presentation to say hi yesterday... Thom Calandra, who started CBS MarketWatch stopped by... I hadn't seen Thom in years! He was huge for us years ago, when we were trying to get the word out about our products... I get a lot of people stopping by the booth each day just to see if I'm doing OK... They want to know if I'm feeling well, and to let me know that they are still praying for me... WOW! Pretty amazing, I'm so blessed! And Thanks to a real "star" my travel organizer supreme... Gena, you are a star! And... Today, we have two birthdays to celebrate... Our newest person on the trade desk Aaron Stevenson... And the young lady that is the engineer for my video projects, Lori Mucho... Happy Birthday! Time to go... I hope your Wednesday is Wonderful!

Chuck Butler
President
EverBank World Markets
1-800-926-4922
1-314-647-3837

Veteran's Day

Chuck Butler — Tue, 11 Nov 2008 14:47:07 GMT

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In This Issue..

* The China good feeling dissipates...

* Currencies lose their edge...

* Fannie Mae needs more!

* Silver manipulation?

And Now... Today's Pfennig!

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...

For every life, there is a soul

For every soul, there is a life

For those who have died, we show great appreciation and remembrance

For those who live, along with them live the horrific memories of battle

Some, memories of defeat

Some, memories of victory

Our veterans were more than soldiers

They were, and still are heroes

OK... Well... All that build up yesterday about how the markets liked the sound of the Chinese announcement to inject $586 Billion worth of renminbi into their economy, dissipated early on in the NY market yesterday. As I left you the euro had climbed above 1.29 again, but ended the day around 1.2740... This is tied directly to the Trading Theme, and that's all I have to say about that... Have a great day, and I'll talk to you tomorrow...

HA! Had you there for a minute! The dollar rallied once again, when the deep, dark, dangerous clouds returned, and the risk takers that had come out of the woodwork on Friday, disappeared, which left the currencies hung out on the line. Gold rallied $10, which is really counter-intuitive to the risk takers disappearing and the dollar rallying... But it did, and I'm not here to argue about that!

As I said yesterday, the data cupboard was bare with no data to report Monday... With today being a holiday, we won't get our next glimpse of the awful fundamentals data until Wednesday. In the overseas version of a data cupboard, the German Investor Confidence, as measured by the think tank, ZEW, surprised on the good side, with the index rising in October... This index had been on the slippery slope for the past few months. The news is that the index rose because the European Central Bank (ECB) stepped to the plate a couple of weekends ago, and made good contact with the financial meltdown in Europe.

Again... Let me say this loud and clear, folks... There's a HUGE difference in Central Banks that provide liquidity... One does so from a position of strength like the ECB and China... and the other does so from a position of weakness (the Fed)...

But the good report isn't doing anything to help the euro this morning, as the overnight stock markets didn't fare too well, which has led to U.S. index futures being off... And all that means a rotten trading day, thus keeping the risk takers on the sidelines, and the dollar being the king of the hill...

And... All this means the Japanese yen is back on the rally tracks! I see this morning where BNP Paribas says that their Elliott Wave chartists believe yen will trade to 96.85 in the next week... Of course you know me folks... Trends are what move currencies... Charts merely tell you or give you an excuse as to why a currency moved in that trend. In this case... We all know that while the deleveraging is going on during the credit market squeeze, that dollars and yen are the only two currencies to gain (Chinese renminbi goes back and forth)...

Back here in the Good Old U.S.A.... The accountants over at Fannie Mae announced that the $100 Billion pledge to them "may not be enough"... This announcement came after Fannie posted a record $29 Billion loss and confronting more difficulty in issuing and refinancing debt. I guess the folks at Fannie thought, Shoot Rudy, if AIG can go back for second helpings of bailout funds, then we can too! I think we should all get used to this, as I said when all the original plans to bail out these firms were announced... These bailout funds are going to be like cocaine to these needing bailouts, and they are going to need more and more...

And the Wall Street Journal reported this last night that... "The Federal Reserve said Monday it will allow American Express to become a bank-holding company, saying "unusual and exigent circumstances affecting financial markets" justified a fast approval of the company's application. The surprise move would give American Express access to new low-cost financing from the Federal Reserve."

Before it's all said and done, we'll all be one big happy family, no make that dysfunctional family of "bankers"... Shoot, they may as well bring the automakers into the fold too, they need some of the low-cost financing from the Fed too! I could really go off on a tangent here... But, I'll keep it on a even keel, as it's not like there's anything I can do about all this, so why get to upset with all these dolts!

So... The bad fundamentals, no make that awful fundamentals, continue to mount for the U.S. to deal with... But before we can deal with the awful fundamentals, we have to deal with the credit markets squeeze... No ifs, ands or buts... If we can get the lending going again, and I'm not talking about to individuals, I'm talking about between banks, and with Corporations, then the focus will return to the fundamentals... That's my story and I'm sticking to it!

You know... One thing that I talked about last summer, and was even quoted in the Wall Street Journal talking about, was the fact that with the low interest rates in the U.S. the dollar had replaced the Swiss franc as a funding currency in the carry trade... And since then, the borrowing rates in the U.S. have gone even lower... But Carry Trades are not too popular at the moment, with risk taking on the sidelines... So the affect on the dollar at this point is mute. But, this explanation helps with the "reason the dollar is rallying"... I've explained more times than I care to that with Carry Trades unwinding, the "funding currency" which was sold short, gets bought to cover the short position, and so, just like Japanese yen, the dollar rallies...

And while I'm on the weird things going on in the U.S. I thought I would give you a snippet of a letter that Ted Butler (no relation, that I'm aware of) sent out regarding what he feels is manipulation of Silver. Here's the other "Mr. Butler"...

"This week, I received a copy of a letter, dated October 8, sent from the CFTC to a California Congressman, Gary G. Miller. It discussed allegations of a silver market manipulation because of the data in the monthly Bank Participation Report. The data in that report for August showed that one or two U.S. banks held a massive short position in COMEX silver futures of 33,805 contracts, or more than 169 million ounces. This is equal to 25% of annual world mine production, and was up more than five-fold from the prior month's report. After this position was established, silver prices fell more than 50%, in spite of a widespread shortage in retail forms of investment silver."

So, there you go! Ted Butler believes he has the proof of manipulation in Silver, but what's the Gov't going to do about it... Ahhh... As one of my all time faves, Edwin Starr, sings... Nothing, absolutely nothing, say it again!

There was an article posted on CNBC's website yesterday that listed Companies here in the U.S. that are announcing layoffs... This was not a pretty scene folks... But if you want to check it out, click here... http://www.cnbc.com/id/27645929

Yesterday, I told you the "news of the weird" with the announcement by the Fed that the guy who was responsible for risk management at Bear Stearns, the now defunct Bear Stearns I might add, was hired to head the group that overseas the purchase of the toxic waste bonds by the Fed... This to me is akin to putting the fox in control of the hen house! Any way... A long time reader sent me a note regarding this announcement... "I read somewhere about this appointment in several places last week on the web. One "source" actually suggested perhaps he was hired just to keep his mouth shut as who would better know how really toxic the traded paper is and what really lies out there?"

OK... You know me, I'm not one to put speculation in the Pfennig, especially when it appears on a website... But, this really struck a chord with me (probably cmaj7 my fave chord!)... And it appeals to my conspiracy theory blood... Let's just hope it's not even close to the truth!

I hear that the major oil companies that are attempting to get Oil out of the oil-sands in Canada, have decided to halt the spending there. For those of you not familiar with these oil-sands in Canada... These are the world's biggest energy reserves outside Saudi Arabia. Getting the oil out of the ground here is a real problem and costly, and with the price of Oil dropping since July, the oil companies drilling here, have decided to cut back on the costs... I don't understand this decision, as this IS the time to drill!

Currencies today 11/11/08: A$ .6685, kiwi .5830, C$ .8385, euro 1.2740, sterling 1.5575, Swiss .85, ISK 182, rand 10.1825, krone 6.90, SEK 7.875, forint 210.50, zloty 2.2050, koruna 19.89, yen 97.75, baht 34.94, sing 1.4980, HKD 7.75, INR 48.10, China 6.8250, pesos 12.88, BRL 2.2050, dollar index 86.02, Oil $60.30, Silver $9.97, and Gold... $739.15

That's it for today... Funny thing happened this morning as my alarm went off... Jim Croce was singing, "I hope I didn't wake you" I said, "OF COURSE YOU DID!" HA! Then as I was sitting here typing away, the rain was pelting against the window, and the great song by POCO was playing on the radio... Bad Weather... I saw some more previews for the new season of 24 last night... Can't wait for that to start again! This coming weekend, I'll be in New Orleans for the New Orleans Investment Conference. This is the granddaddy of all investment conferences, and has been a "go to" place for the Gold Bugs over the years, as it was started by THE Gold Bug, Jim Blanchard... I really moved up the roster of speakers at the New Orleans Conference this year... Last year, I was the very last speaker of the Conference... This year, I'm the second to last speaker! See how I've moved up in the world? HA! That's OK... It's a good crowd... The Big Boss, Frank Trotter, is filling in for me on an investment panel Saturday morning, as I don't arrive there until Saturday afternoon. Then he leaves as I arrive. Two ships passing in the night! OK... Well, I would just like to say Thank You to anyone that reads this letter that is or was in the service for this country... And Thank You to those that are no longer with us to read the Pfennig. Sure hope your Tuesday is Terrific...

Chuck Butler

President

EverBank World Markets

1-800-926-4922

1-314-647-3837

Falling In And Out Of Love...

Chuck Butler — Thu, 11 Sep 2008 14:22:56 GMT

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In This Issue..

* Euro sinks to 1-year low...

* RBNZ cuts rates 25 BPS...

* Carry Trades continue to unwind...

* Fannie and Freddie cause problems for banks...

And Now... Today's Pfennig!

Falling In And Out Of Love...

Good day... And a Thunderin' Thursday to you! Today we mark 7 years since the "monsters" attacked our great nation and thousands of lives were lost needlessly. My blood still boils at the thought of what happened on Sept 11, 2001, and the thoughts of the twin towers coming down still flashes in my mind. 7 years ago today, we witnessed the horrific scenes from terrorists in our country. I recall trying to come up with words the next day, and just couldn't, so I stuck to currencies, in attempt to keep things as normal as they could be. I hope everyone flies their flag today in remembrance of this day 7 years ago.

OK... We're seeing a complete meltdown in the currencies this morning, folks.. The euro has fallen to the low 1.39 handle, and all is looking quite bleak for the single unit right now. Our metals trader, Kristin, sent me this note that she came across regarding the euro...

The market's love affair with the euro is surely flagging when UBS analysts can write: "We have revised our long term targets for the USD higher across the board as America's economy is likely to come out of recession faster than the rest of the world. We now look for the euro to fall to 1.30 over the next year."

She didn't tell me who actually said that, but the point is simply that the market's love affair with the euro has gone to another lover. To me, it's a case of: "falling in and out of love with the euro"

The actual stories flying around the markets right now is that the economic growth outlook for the dollar is soaring, and with it, the dollar. I've said this before many a time, but it's worth repeating... I learned many years ago, that: "The markets are never wrong"... So, I won't sit here and pretend to know more than the markets who have now switched their affections to the dollar, based on an economic growth outlook that is so full of holes it looks like a sieve instead of a pipeline to euphoria...

There's also a note on the news screen this morning that the Fed is going to increase their lending to banks, brokers as the "mother of year ends" nears... You would think that a story like that would scare the bejeebers out of the markets, as it does me... But NOOOOOOOOO! The markets have decided to become "comfortably numb" with the bad news in the U.S. On a side bar, Chris said the other day that he liked when I used that term, "comfortably numb". I said, "Just as long as everyone realizes that I'm referring to the song by Pink Floyd, and not the remake by the Scissor Sisters"... A young lady that sits behind me, said, "Chuck, I'm surprised that you know the Scissor Sisters"... I guess that just show to go you that you should never be surprised at what I know!

OK... The Reserve Bank of New Zealand (RBNZ) did cut rates 25 BPS last night to 7.75%, and the currency got whacked by 1%... That just doesn't make sense to me... Sure the rate was cut, but it's still 5.75% above the 2% Fed Funds rate in the U.S.! Again, though, the markets are on a mission to mark down the currencies that have gained so much VS the dollar in the past 6.5 years... The markets have been drawn into Big Ben and Hank Paulson's evil web of deceit and future economic horrors...

The New Zealand dollar / kiwi, too a one-two punch in the gut with the rate cut news and more unwinding of Carry Trades... That's unwinding can be seen in the Japanese yen's strength (trading in the 106 handle today)... Poor kiwi, this one-two punch has it keeling over...

But... And this is a BIG BUT (notice one "T" not two!), this is all good news for the Japanese yen... So in keeping with my long time thought that the Asian currencies needed to gain VS the dollar to allow some correction in the global imbalance / Current Account Deficit... It also proves the point I was making for at least two years that the yen was undervalued only due to the selling pressure from using it as a funding currency of the Carry Trade.

One other thought comes to mind here... And that is... "There's always a bull market somewhere"...

Yesterday, I talked about the "scaredy cat" traders, that were no longer "your father's currency traders"... And Chris Gaffney had these additional thoughts to that... "Continuing on your 'scaredy cat traders thought', the 'easy' money which these currency desks used to have to play with is no longer available. All currency desks have been hit with a tightened credit market, making it harder for them to make big bets and even more difficult for them to fight the central banks. So in the current credit environment, the central banks are walking with a much bigger stick.

But as we have seen in the past, intervention doesn't last. The markets will always return to fundamentals, it is just a question of how long it will take."

I was really taken back by the comment that was made about "lipstick on a pig" yesterday, as this "was" one of my fave expressions... A reader sent me this note... "I'm guessing we won't be seeing the expression "lipstick on a pig" in the Pfennig anymore. You probably never realized what dangerous waters you were sailing into! Another perfectly good & colorful expression assigned to the Forbidden Words & Phrases bin."

OK... I went off on a tangent there, but I'm back now... The dollar strength that is being displayed this morning, is quite something to behold. And all this with the black cloud hanging over the financial institutions... Did you see the news on Lehman Bros yesterday" The Wall Street Journal reported that "Lehman would post a $3.9 Billion 3rd QTR loss on net mark-to-market adjustments of $5.6 Billion. The firm said it will spin off its commercial real-estate assets and sell a majority stake in its investment-management division. It slashed its annual dividend to 5 cents a share from 68 cents."

This is the kind of stuff the dollar should be getting sand kicked in its face over... But, for now... The dollar has gotten all gussied up, put on the red dress, and had its hair done, for the suitors that come knocking at its door... The line of suitors is long and wraps around the block!

Today, we get the skinny on July's Trade Deficit, which is expected to have risen in July to $58 Billion from $56.8 Billion in June... You have to remember back to July, to recall that Oil was still kicking sand in the dollar's face, therefore oil imports were still expensive... Not that they have become cheap... Just cheaper...

We'll also see the Weekly Initial Jobless Claims that have remained above 400K now for some time... And the monthly budget statement for August...

These data prints "could" take the shine off the dollar... But I doubt it, given the whole "love scene" going on for the green/peachback. But maybe, just maybe, 'cause you never know, someone with some intestinal fortitude will stand up and say, "The U.S. economy isn't going to get strong any time soon with numbers like this!" But then, I believed in Santa Claus until I was almost driving a car!

The price of Oil has fallen to $101.70! That's all fine with me, but again, I can't help but feel that there has been no fundamental change in what was going on two months ago and now... And that leads me once again to "window dressing" for the elections... But, I'm not going to be too upset with the fall of the Oil price... Shoot Rudy! I've got to put gas in my cars too! But, I guess what I'm saying is that we, as Americans, shouldn't grow complacent with this fall in the Oil price, we still need to find other measures / energy sources!

The fall in the price of Oil has really helped the dollar rebound... And has pushed Gold to levels it had not seen in a year... The shiny metal lost $20 yesterday in price! UGH! It has lost another $8 this morning... I know, I know, I said the other day that a price below $800 seemed like a blue light special to me, and I can't help but think that if I liked it at $790, I should love it at $744!

This is one of the great things about the Gold MarketSafe CD's we used to sell... As the price of Gold ratcheted up to over $1,000, and now heads back down, the Gold CD uses an average price... So, I doubt many investors in Gold sold at the high... Too bad the market makers decided it was to volatile an asset to allow us to offer the Gold CD any longer... It was my fave!

The Canadian dollar / loonie fell below the 94-cent handle it had held onto during all this dollar strength... But, it's not because of bad data in Canada... Earlier this week I reported that Canada created 15K new jobs in August... And now Canada reports that Housing Starts in July were up 13.1%! I think that these two data prints point out that the economic picture in Canada may not be as bleak as some had thought it was...

I was trading emails with a reader yesterday, regarding the problems the Fannie and Freddie bailout were going to cause on Banks that held their preferred notes that got squashed in the agreement... I said that I believed this would cause even more problems for banks, and that the 11 banks that had failed so far this year would be chickenfeed compared to those that would fail because of this bailout... He then sent me a link to a story that was in the U.K. Telegraph this morning... Here's a snippet...

"The nationalisation process that has wiped out value for many institutions which had invested in Fannie and Freddie, together with ordinary equity investors and those holding preferred shares.

Up to 40 US regional banks owned preferred shares in the mortgage companies, with analysts estimating that at least eight banks have more than 10% of their capital tied up in the shares, while another six had between 5% and 9% of their capital invested in Fannie and Freddie.

The US Federal Deposit Insurance Corporation, which provides a lifeboat fund for customers of collapsed banks, currently has 117 problem banks on its watch list, the highest level in five years."

I'm going to the Big Finish now, as I'm just plain worn out from all this dollar strength in the face of bad fundamentals and a financial institution meltdown... ECB President, Trichet speaks at the Eurofin Conference today, maybe he can light a fire under the euro...

Currencies today 9/11/08: A$ .7945, kiwi .6480, C$ .9310, euro 1.3940, sterling 1.7510, Swiss .8785, ISK 91, rand 8.2480, krone 5.8090, SEK 6.8275, forint 172.10, zloty 2.4510, koruna 17.6450, yen 106.80, baht 34.75, sing 1.4440, HKD 7.7990, INR 45.47, China 6.8460, pesos 10.64, BRL 1.7875, dollar index 80.15, Oil $101.70, Silver $10.67, and Gold... $746.96

That's it for today... Again, my thoughts are still filled with the pictures from Sept 11, today... I took down my University of Missouri flag last night, and put up my American flag... Everyone should fly their stars and stripes today... This is it for me this week and next, as I will be at the hospital for most of the day tomorrow, and then set out on the road for the first leg of the Currency Tours next week... These Currency Tours are doing well with regard to booking attendees... It looks like we'll have our biggest crowd in San Diego! It's an educational seminar, not a "buy this and sell that" seminar... So if you want to learn about currencies, the history, how to buy them, hold them, trade them, options and bonds, this is the place! I won't be my normal sarcastic, speaker, as I will be an "educator"! Now, that sounds funny! HAHAHAHAHAHA!

Let's hope today is a Thunderin' Thursday... And fly those flags!

Chuck Butler

President

EverBank World Markets

1-800-926-4922

1-314-647-3837

Scaredy Cats!

Chuck Butler — Wed, 10 Sep 2008 14:26:06 GMT

.........But First, A Word From Our Sponsor..........

Announcing the FX University Seminar Series. It could open your portfolio to new horizons.

Come learn from some of the world's authorities on foreign currency investing. The one-day seminar will take place in 8 cities across the nation this September and October.

What this seminar can mean for you: Get an expert's view on a vast range of currency opportunities - leave with tips, tactics and insights you need to diversify with confidence.

EverBank is a Member FDIC and Equal Housing Lender.

......................................................

In This Issue..

* Not your father's currency traders....

* The euro does the rope-a-dope...

* Deep Thoughts

* Jimmy Rogers on the bail out...

And Now... Today's Pfennig!

Scaredy Cats!

Good day... And a Wonderful Wednesday to you! Hurricane Ike moves into the Gulf... Which way it goes from here isn't good for anyone. We had another day of watching the euro rally during the day, only to see it fizzle out by the end of the day. I go home each night and think all the way home about all this stuff going on, and wonder just who in their right minds would be buying dollars right now... Scaredy Cats that's who... So... Here you go... Deep Thoughts by chuck butler...

Here's the skinny on that thought... Ever since the Fed, Bank of Japan (BOC), and European Central Bank (ECB) intervened in their coordinated, covert operation, market participants and traders are scared to death to short dollars, for fear of more intervention that could wipe out their trades, and post losses for them. Come on... These aren't the currency traders that I grew up with! Those traders took any Central Bank intervention as a "challenge" and would laugh in the face of Central Bank intervention! Central Bank intervention usually meant it was a desperate measure to shore up a currency, and that was like blood in the water for a shark... Currency traders would hit that currency even harder!

But not these scaredy cats! That's one thing I think about... And then there's this...

The Government's decision to bail out Fannie and Freddie and place them into conservatorship may shore up the mortgage meltdown in the short term... But to me, this is just another in the line of things the Fed and Treasury have done in an attempt to bring calm to the financial markets... (Bear Stearns, mortgage bill, money supply, low interest rates, and dollar intervention, stimulus checks, and more!) But, when you step back and look at all this, none of it, and I mean NONE of it had done anything to alleviate the pressures on rising home inventories, falling home prices, upside down mortgages, unemployment, the deteriorization of the financial markets (see the dead man walking list of banks that are in deep dookie) and that doesn't just mean banks... The major Brokerages are standing on the street corners with their hands out, begging for any sovereign wealth fund that might give them a capital infusion... I started to describe them standing on the street corner in different light, but remembered this is a family newsletter!

And all that brings me right back to my call several months ago, and one that has been on the opposite side of the markets... And that is, that the Fed will come back to the rate cut table before they go to the rate hike table.

And when I think about all these fundamental problems, with lower rates, and money supply, I can't think about anything else this all does but cause dollar weakness. And thus my conspiracy theory from last week... And here's one step further that I've already mentioned before, and that is this dollar intervention is all "window dressing" for the elections... And thus, my previous thought that we could see this dollar strength through the elections, and maybe into next year, but eventually we come back to the weak dollar fundamentals...

On Monday... (and I love Mondays for one reason, I get to read my friend the Mogambo Guru's latest letter) My friend, the Mogambo Guru was talking about Gold as usual, and printed this quote from Jeff Clark at Doug Casey's Big Gold newsletter...

"Due to the bloating federal deficit and the big-dollar promises the politicians have made, but that the U.S. can't possibly pay, further rapid growth in the money supply lies ahead. And that means more inflation, which means the dollar's recovery will turn out to be temporary. And more debasement of the dollar equals higher gold.

If the bull market in gold were over, it would mean that inflation was under control, the dollar's long-term problems had been solved, the government had become restrained in printing new money, banks were healthy, house prices had stabilized, a surprising new source of energy had been discovered, unemployment was diminishing, and everyone was smiling."

Yes, Jeff... My sentiments, exactly! I couldn't have said it better myself!

So... All this strong talk, and... The dollar has the euro on the 1.41 ropes again... Yes, the euro is doing the "rope-a-dope" with the dollar punching its lights out. There's not much else I can say about all of it... In the category of "not helping the euro"... The European Union cut their economic growth forecast for 2008 to 1.3% from the previous forecast of 1.7%... At least they don't have currency weakness providing export growth as the main driver of their economic growth, like here in the U.S.! And for all those naysayers that keep banging on the EU's economic growth, and saying the EU will have a recession... You may have noticed that the lower, revised growth forecast is still on terra firma in positive territory!

Monday and Tuesday saw Carry Trades being put on again... But, late yesterday afternoon, and overnight, those Carry Trades are getting wiped out, as the markets, who had checked their brains at the door, come to the realization what I was talking about above, that the Gov't sticking their hands into the markets and acting like they know what they're doing, is not solving any of the problems hanging over the markets like the Sword of Damocles!

So, that means Japanese yen gets some love again, and is trading well into the 107 handle... While Aussie and kiwi get taken back to the woodshed. I really didn't think that return to risk positions was going to last long but it was there and had to be talked about as the reason for the movements in those currencies associated with the Carry Trade.

My friend Jim Rogers had a lot to say about the bail out of Fannie and Freddie, comparing it all to communism... Here's Jim Rogers... "America is more communist than China is right now," Rogers told CNBC Europe's "Squawk Box Europe" September 8. It's bailing out the financiers, the banks, the Wall Streeters."

Yes, Comrade... I would agree with that... Jim Rogers also said... "I'm waiting for the dollar to continue to rally so I can sell my dollars. The dollar recovery is certainly taking place and has a ways to go; a few weeks, a few months, maybe even another year or so that the dollar could recover because it was beaten down do much." He went on to say that he is buying the "victims of the Carry Trade": Japanese yen and Swiss francs...

I would agree with that too!

OK... The data cupboard is empty today, but tomorrow it gets restocked with The Trade Deficit, Weekly initial Jobless Claims, and... The Monthly Budget Statement... Yesterday, the Budget Office offered up a number that makes one choke... The Budget Office said that we could see at $407 Billion Budget Deficit this year... Hmmmm... I say this, if the Budget Office is offering up $407 Billion now... It will be worse than that when all the dust settles! And... They obviously offered this up before the tallies on the tote board showed the results of the stimulus checks, and the Fannie and Freddie bail out!

How about that Screaming Eagle roller coaster ride in stocks? The stock jockeys can't seem to decide whether they want to rally or sell off, one day down 300, next day up 280, next day down 300... I'm glad I don't mess with stocks... I think that currency dolts make me yell at the wall now? I can't even imagine trying to make heads or tails out of stocks!

My friend, Ian Mathias, over at the 5-Minute Forecast, which by the way is a "must read" each day, also does some additional writing. I was reading an article by Ian last night, titled: Enter the Fed's Trash for Treasuries... It's a great read, and explains the Fed's deal to take in the mortgage backed securities that no one else would buy because they were beaten down so much, and exchange them for Treasuries...

I don't know about you... But I've stated before that this scenario scares the bejeebers out of me! The Fed & Treasury are totally out of control! But unless the media decides that this is important to talk about, it's just Ian, me and a few of our adult beverage drinking buddies shouting from the rooftops... And right now, very few are stopping to listen...

That's a real downer to end the morning Pfennig with... So... I'll end it with the news that Lance Armstrong has announced that he is coming out of retirement, and has set his sights on winning another Tour de France! You show 'em Lance! You show 'em what a cancer survivor can do!

Currencies today 9/10/08: A$ .8055, kiwi .6685, C$ .9350, euro 1.4110, sterling 1.7570, Swiss .8835, ISK 90.98, rand 8.0225, krone 5.7075, SEK 6.7405, forint 170.40, zloty 2.4575, koruna 17.57, yen 107.50, baht 34.62, sing 1.4340, HKD 7.80, INR 45.14, China 6.8380, pesos 10.54, BRL 1.7770, dollar index 79.60, Oil $103.60 (strange that the oil price isn't rising with Ike in the Gulf), Silver $11.25, and Gold... $774.75

That's it for today... A great ninth inning rally for a win for my beloved Cardinals VS the Cubs last night... It's probably too little too late for the redbirds, but, any time they can beat the Cubs, it makes the home crowd happy! (as it does for Cubs fans when they beat the redbirds at Wrigley) Had a visit from an old fave, Ellie Williams, yesterday... Ellie is a cancer survivor too, and that just makes me smile when I see her! Looks like the presidential race is a dead heat after both conventions... This ought to be a looooonnnnnggggg election period, I'm already tired of having to change the channel when one of either party's "I approve of this message" ads come on! UGH! Was going to go on a walk through of our digs in the building next door yesterday, which will be on the 6th floor, but had to back out when they told me the elevator wasn't working yet! YIKES, like I'm going to drag me and my cane up 6 floors of steps? Yeah, right! Oh well, maybe someday! Time to go... Hope your Wednesday is Wonderful!

Chuck Butler

President

EverBank World Markets

1-800-926-4922

1-314-647-3837

Does The Bail Out Constitute A CDS Event?

Chuck Butler — Tue, 09 Sep 2008 14:05:37 GMT

.........But First, A Word From Our Sponsor..........

Announcing the FX University Seminar Series. It could open your portfolio to new horizons.

Come learn from some of the world's authorities on foreign currency investing. The one-day seminar will take place in 8 cities across the nation this September and October.

What this seminar can mean for you: Get an expert's view on a vast range of currency opportunities - leave with tips, tactics and insights you need to diversify with confidence.

EverBank is a Member FDIC and Equal Housing Lender.

......................................................

In This Issue..

* A potential CDS debacle...

* Currencies rally back...

* Brazilian real history...

* Saber rattling or geopolitical pressure?

And Now... Today's Pfennig!

Does The Bail Out Constitute A CDS Event?

Good day... And a Terrific Tuesday to you! Right out of the starters blocks this morning, I have to apologize for the tardiness of the Pfennig yesterday... We were experiencing some technical difficulties... In fact, if you sent me an email, I didn't get it yesterday! Things look better this morning, so, maybe we're back on track! I know it's no one's fault when this stuff happens, but it sure doesn't make me feel good about getting up at X:XX AM (I won't say because you will think I'm crazy!) to come in and write the Pfennig, only to see it not go out until late in the day!

Well... The stock market here in the U.S. sure liked the news about Fannie and Freddie! I guess, they, just like the dollar bulls, didn't get the memo that this will put billions of dollars of tax burden on taxpayers, and most likely is going to cause a major disruption in the Credit Default Swaps (CDS) that are on the books... Oh, well, we have to learn to deal with mental giants all our lives, this is just another case of that!

So, first, I'll get to the currencies, and then take you for a ride on the CDS liquidation wagon... It's not a pretty / scenic ride, but one that has to be taken!

OK... So, the Fannie and Freddie news caused dollar bulls to shake the euro to its foundation yesterday, with the single unit falling even further, and at one point looked as though it might fall below 1.40. The euro (and other currencies) selling came swift and harsh, right after the stock market opening bell. The good news though is that the euro has rebounded in the overnight markets of Asia and Europe to 1.4175...

There wasn't any data prints or news from overseas yesterday morning to warrant that selling, just plain and simple stock market euphoria, and foreigners wanting in on the "action"... When foreigners are buying U.S. stocks, they have to exchange their currency for the dollar...

But, as I said, the currencies have rallied back overnight, so, as long as yesterday's selling is water under the bridge, I'll be OK with that!

Let's get to this Credit Default Swaps stuff, because this is important stuff folks... There will be a meeting today to discuss how this is going to all fall out... But here's some perspective on the situation... First and foremost, there's a question as to whether the Gov't's conservatorship constitutes a "CDS event", which would force the settlement of the CDS contracts that are outstanding... Fannie and Freddie have roughly $1.5 Trillion in debt outstanding... But that's chickenfeed compared to the notional amounts of CDS contracts that could be multiples of that $1.5 Trillion!

If the Gov't's conservatorship does constitute a "CDS event" there won't be enough debt to settle the contracts, which will lead to a need for cash... And that could lead to major problems, with the least of them being the holders needing cash, might have to sell other assets to raise the cash needed...

I know this all is confusing, it took me a time or two before I fully understood these Credit Default Swaps... But in essence they are simply an insurance policy, as it can be used by a debt holder to hedge, or insure against a default under the debt instrument. This would be under the heading of "derivatives" that you've heard all about. When the "credit event" or "default" occurs, then these contracts get unwound, and Peter pays Paul, and Paul pays Robert, and so on... In other words... It could get very ugly out there! The Association that governs the Credit default swaps, ISDA, will meet today to discuss how this will all come down or fall out... So, more on this tomorrow...

I got a kick out of Bill Bonner's thoughts yesterday regarding the bail out... He called it "Hurricane Hank sweeps through the nation's capital" That's in reference to U.S. Treasury Sec. Hank Paulson, who is the "brains" behind this bail out... Bill's actual comment was: "Hurricane Hank swept through the nation's capital yesterday with gale-force regulatory winds and a tidal surge of federal cash, upending two of Washington's biggest enterprises and permanently changing the landscape of housing finance in America." (www.dailyreckoning.com)

OK, there's got to something else to talk about besides this bail out... And I've got just medicine!

Last night, I was doing a bit of reading while taking in the Monday Night Football game. (of course I can only stay up for the 1st half, and not even that most Mondays) I came across some research by HSBC on the Brazilian real that I think is important... And you know how I love to use a historical perspective to give direction on what's going to happen... Here you go...

"During the great Brazilian real (BRL) run of the last 5 years, the Brazilian currency has corrected and closed at least 10% from the highs a total of 4 times, 5 if you include the current sell off. ** Since crossing the -10% threshold ** it took BRL as little as 6 weeks to resume its rally and post a new 'highest close' and as long as 44 weeks... average time before posting a new high is 22 weeks. As far as magnitude is concerned, the 4 individual corrections in this study have seen BRL close as much as -15.5% from the all-time high, with an average sell-off of 13.4%. Last Thursday we closed beyond the 10% correction threshold in dollar / BRL. History suggests two things: For one, we'll be here a while.. and two, the greater part of the correction (in magnitude) is behind us."

Great stuff!

Aussie and Kiwi rallied throughout the night, which indicates to me that Carry Trades are getting put back on the books of investors. Japanese yen moved to a touch below 108 this morning, but could not move further, again, indicating to me that Carry Trades are in being put on the books. We'll see how these Carry Trades react when the Reserve Bank of New Zealand (RBNZ) meets this week and cuts rates 25 BPS as they are expected to do...

This (Carry trade junk) being put on in the face of a HUGE geopolitical news story this morning... Here's the skinny: Admiral Eduard Baltin, former commander of Russia's Black Sea fleet said yesterday that Russia was to conduct joint naval exercises with Venezuela in the Caribbean.

What? Just what is going on here? Is Russia really going to send one of its most powerful war ships as part of the exercise to take place in the Caribbean? YIKES! This would be the first such deployment so close to the U.S. since the end of the Cold War.

The admiral indicated that if the U.S. wants to interfere in the Black Sea, then Russia will play war games in the U.S.'s back yard.

OK... I don't like the sound of this folks... Even if it's just saber rattling, which it probably is, I don't like it! And the geopolitical risk should weigh heavily on things like the Carry Trade, and make currencies like the Swiss franc, more valuable... But, we'll have to wait-n-see, eh?

The data cupboard will yield July's Pending Home Sales data this morning. This probably won't be a market moving piece of data, but you never know these days...

I think that with all this saber rattling, and GSE bail out, and CDS problems, that Gold looks to be at a bargain basement price of $803... The Blue Light Special siren is going off, and the spotlights into the sky are sending a signal... But then that's just my opinion, I could be wrong... But I fell as though I'll be right as rain! But... Again! It's just my opinion! And with the dollar intervention and subsequent dollar admiration going on, my track record has been tarnished!

But then... In love and war all is fair, but the dollar's got cards it's not showing... But former Fed Chairman, Paul Volcker says that, "the U.S. financial system is broken."

Currencies today 9/9/08: A$ .8120, kiwi .6740, C$ .9420, euro 1.4170, sterling 1.7620, Swiss .8855, ISK 89.40, rand 7.88, krone 5.6550, SEK 6.6780, forint 169, zloty 2.4375, koruna 17.4650, yen 108, baht 34.54, sing 1.43, HKD 7.80, INR 44.80, China 6.8380, pesos 10.46, BRL 1.7360, dollar index 79.23, Oil $105.15, Silver $12.06, and Gold.... $800

That's it for today... Thanks to all who have been sending along good thoughts and wishes regarding my upcoming scans on Friday. A loooooonnnnnggggg day yesterday, and I was beat! But, ready to go this morning! As mentioned above, we couldn't receive email yesterday... We could send it out, but not receive it... Funny, how dependent we have become to email... Pretty amazing. I forgot to mention last week that my colleague and long time friend, Chris Gaffney had completed a triathlon and bettered his previous best time! Good Show! Hey! I almost forgot again! I've wanted to tell you all this for the last week, but kept forgetting... My friend, Addison Wiggin's movie I.O.U.S.A. is still in the theaters. You can find out if its playing near you by clicking this link and entering your zip code... http://www.fandango.com/i.o.u.s.a._113616/movieoverview

I think I saw that Google celebrated their 10th anniversary yesterday... WOW! In 10 short years they have conquered the world! Or so it seems, eh? Who hasn't said... "hey just Google it"? Happy anniversary Google... Hurricane Ike is headed toward the Gulf of Mexico... Again, let's hope it fizzles out before it hits land... I hope you have a Terrific Tuesday!

Chuck Butler

President

EverBank World Markets

1-800-926-4922

1-314-647-3837

Another Government Bailout!

Chuck Butler — Mon, 08 Sep 2008 19:32:11 GMT

.........But First, A Word From Our Sponsor..........

Announcing the FX University Seminar Series. It could open your portfolio to new horizons.

Come learn from some of the world's authorities on foreign currency investing. The one-day seminar will take place in 8 cities across the nation this September and October.

What this seminar can mean for you: Get an expert's view on a vast range of currency opportunities - leave with tips, tactics and insights you need to diversify with confidence.

EverBank is a Member FDIC and Equal Housing Lender.

......................................................

In This Issue..

* Fannie & Freddie news...

* Jobs Jamboree very disappointing!

* Risk Taking back on the board!

* Troubles brewing in China?

And Now... Today's Pfennig!

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...

The Jobs Jamboree on Friday was not anything to light a fire under the dollar, as we saw a Bureau of Labor Statistics (BLS) trumped up -84K loss in jobs for August... I say trumped up, because... The BLS added +115K jobs, through their Birth / Death Model, or "ghost jobs" as I like to call it. The Unemployment rate jumped to 6.1%, the highest in 5 years, but the dollar did not lose ground.

The fact that the dollar didn't lose ground on this awful data print, is a sign... It's a sign that we've moved to a period of time, much like in 2005, when bad data doesn't affect the dollar. It's like I've said a couple of times now, that the markets have become comfortably numb with the awful data in the U.S. and it would take something BIG to make them notice it these days.

Something Big like Fannie and Freddie being taken over by the U.S. Gov't, which will cost taxpayers billions and billions of dollars... But... Apparently not! Why not? I have no idea! This is something, a risk event, that should have shook the U.S. dollar down to its foundation! But NOOOOOOO!

I'll tell you something the takeover of Fannie and Freddie will push the markets to do... And that is TAKE ON MORE RISK! Oh, yes... Risk, and more risk, and why not? The Gov't will be there bail you out if you get in over your head! OK, excuse me for a minute I'm going to go yell at the wall!

OK, I'm back now... That feels better, but doesn't change anything! The Wall Street Journal is reporting that Washington Mutual's CEO has been shown the door. The Bloomie says that Lehman Bros. announced some shuffling of their top ranked officials, for the third time this year. Apparently, things are getting any better for these two...

So... The return of risk taking to the markets did help the beaten and downtrodden Aussie, kiwi and South African currencies last night. But, I'm not a fan of this risk taking mentality not at this time, when there is so much risk in the air you could cut it with a knife!

That means that the funding currencies for the Carry Trade, which is being put back on with the return to risk taking, the Japanese yen and Swiss franc are seeing selling... UGH! Oh... And on Friday, my fat fingers were the reason the Swiss franc had a price that would make most people smile! Unfortunately it was a fat finger price...

This will not be a strong week for data on either side of the Atlantic, but we will see July's Trade Deficit and the August Budget statement on Thursday, and then we finish the week with August Retail Sales... The BHI tells me that Retail Sales will show some life because of the "back to school" purchases... But that will be short-lived! And then finally on Friday, which I will not be here, we'll see the U. of Michigan Consumer Confidence report... And of course, the mental giants they survey will be very confident, because the Gov't keeps BAILING OUT ANYONE THAT GETS INTO TROUBLE! (OK, could you tell that I was yelling while typing that?, I bet you could!)

This is going to be a little longer than usual this morning, because I came across a story this weekend that is quite important and I want to bring this to you...

Under the heading of: Problems Brewing In China...

The NY Times ran an article over the weekend, that was picked up by my local paper, regarding China's Central Bank dealing with the declining value of U.S. bonds and mortgage debt that they have purchased over the years. I've long said that this is the stuff that's pushed way back of the deep dark closet of economic horrors for the U.S., and hoped that we never had to deal with this...

Here's a snippet of the story...

"It has been on a buying binge in the United States over the last seven years, snapping up roughly $1 trillion worth of Treasury bonds and mortgage-backed debt issued by Fannie Mae and Freddie Mac.

Those investments have been declining sharply in value when converted from dollars into the strong yuan, casting a spotlight on the central bank's tiny capital base. The bank's capital, just $3.2 billion, has not grown during the buying spree, despite private warnings from the International Monetary Fund.

Now the central bank needs an infusion of capital. Central banks can, of course, print more money, but that would stoke inflation. Instead, the People's Bank of China has begun discussions with the Finance Ministry on ways to shore up its capital, said three people familiar with the discussions who insisted on anonymity because the subject is delicate in China."

OK... This was a long story, and I can't bring you the whole thing... But it goes on to say that this problem my slow down the appreciation of the renminbi. (remember, the renminbi is the "official" name of the Chinese currency, and the yuan is just the slang name. It has always been my contention that the media picked up the use of yuan as the Chinese currency because it's easier to say and type!) Anyway... This is something we need to deal with... But, the report did not mention that the Chinese would "stop" the appreciation, just slow it down...

Well... The price of Oil has pushed higher over the weekend, as Hurricane Ike heads towards the Gulf of Mexico. The good news is that there isn't any others Hurricanes in the Atlantic right now. So, Hopefully we can get Ike to fizzle out, and go on with normal life in the Gulf. The price of Oil saw an 8% drop last week, as Hurricane Gustav didn't have the strength it was thought to have had.

The price of Gold moved higher too, in the face of a rallying dollar... So, that's not something you see every day!

The Brazilian real took this return to risk taking in stride, and rallied for the first time in a week. The real, South African rand, Mexican pesos had seen some strong selling in the past week, but a tourniquet has been wrapped around their wounds, and they have all rallied strongly overnight.

And while the U.S. was losing almost -200K jobs in August, Canada was adding 15K jobs... So, the two countries' economies aren't as closely tied together as many think they are. And... Maybe, just maybe the Bank of Canada (BOC) will see the error of their ways... (read rate cuts)... The loonie has moved back above 94-cents...

The euro has bounced off that move below 1.42 and is pushing higher as I head to the Big Finish!

Currencies today 9/8/08: A$ .8185, kiwi .6735, C$ .9410, euro 1.4230, sterling 1.7640, Swiss .8860, ISK 87, rand 7.8450, krone 5.6190, SEK 6.6450, forint 169.40, zloty 2.4360, koruna 17.52, yen 108.80, baht 34.54, sing 1.4275, HKD 7.8040, INR 44.58, China 6.8430, pesos 10.43, BRL 1.7150, dollar index 79.19, Oil $106.96, Silver $12.37, and Gold... $808.07

That's it for today... My radio gig on Friday morning went so well, that the Rocky Mountain Radio Network, asked me to be a regular on Friday mornings! WOW! Good thing it's just a quickie 5 minutes gig, as I don't have time to take on any other "things" these days! A BIG win for my beloved Missouri Tigers and my little buddy Alex's 7th grade Lindbergh Flyers on Saturday... Alex recovered a fumble while playing linebacker, so he was pumped! I'll be gone all next week, on the first phase of the Currency Tours... Seattle, San Diego, and Dallas here I come! I won't be in one city long enough to enjoy the city, so... I'll just be passing through... Friday I'll be at the hospital most of the day for tests... I'm keeping my fingers crossed... Got the news last week that we'll be moving into the building (that's under construction right now) next to us next year... We've grown so much that a larger space was needed, and with a building going up right next to us, it made abundant sense! Time to hit the send button, and get to work, as Mondays are always crazy around here! I hope your Monday is Marvelous, and you have a Wonderful Week!

Chuck Butler

President

EverBank World Markets

1-800-926-4922

1-314-647-3837

Fannie and Freddie Back In The News...

Chuck Butler — Thu, 21 Aug 2008 13:09:07 GMT

.........But First, A Word From Our Sponsor..........

Announcing the FX University Seminar Series. It could open your portfolio to new horizons.

Come learn from some of the world's most trusted authorities on foreign currency investing. The one-day seminar will take place in 8 cities across the nation this September and October.

What this seminar can mean for you: Get an expert's view on a vast range of currency opportunities - leave with tips, tactics and insights you need to diversify with confidence.

EverBank is a Member FDIC and Equal Housing Lender.
......................................................

In This Issue..

* Strange trading days...
* U.K. Retail Sales surprise....
* Norway's GDP prints strong!
* A CDO lesson...

And Now... Today's Pfennig!

Fannie and Freddie Back In The News...

Good day... And a Tub Thumpin' Thursday to you! Don't know why... I just felt like it should be a Tub Thumpin' Thursday! I hit the wall yesterday, as I went home, and fell asleep at 3 o'clock, and didn't wake up till night time! Watched a few innings of my beloved Cardinals, wanted desperately to stay up and watch the May-Walsh beach volleyball game, but went right back to bed! So... I should be rested, eh? One would think so, but with the treatments I take, they just simply wipe me out! But... Hey! I always said that sleep was the greatest thing... I just get to enjoy more of it, right?

OK... Another day of strange trading... As I signed off yesterday, the euro had given up it's previous day's gains, but found some terra firma at 1.47 and then rallied in the afternoon... If you guess right, as I have not done so this week, you can catch a great price to sell, and buy, all in the same day!

In the overnight markets of Asia and Europe, there has been some distinct movement in Japanese yen VS the high yielders... Of course yesterday, I wrote about how the high yielders were inching back because there was no risk aversion in the markets... But that's changing, and the thing pushing risk front and center once again is our old friends, Fannie and Freddie! Fannie and Freddie shares are down about 30% overnight, as it now appears that a nationalization bail out is the real McCoy. With risk back on the table, yen has rallied to the 108 handle! And... Aussie and kiwi, back off... Again!

The U.S. dollar should be trading lower on this latest Fannie and Freddie development. That's all that needs to be said regarding that... The dollar is overvalued right now given what's going on... JP Morgan issued a report signaling the euro to be oversold, and that the losses have been excessive, according to their charts...

In the U.K. Retail Sales printed stronger than expected by a wide margin, thus showing that there is still a pulse in the U.K. economy. July Retail Sales posted a .8% gain... But one has to think that this is a "one and done" for Retail Sales, given the June number was a negative 4.3%, and the forecast for the U.K. economy isn't bright... I'd say... If this quickie in Retail Sales bumps pound sterling then use the bump to your advantage...

Back to the U.S. credit market for a minute or two (depending on if you took Evelyn Woods' speed reading course! HA!). We have a great older gentleman that works with us from time to time, and offers his insights in the Review & Focus from time to time, Joe Losos. Whenever he is in the office, he'll bring us his Financial Times after he's read through it... Well, yesterday, I noticed a story in the Financial Times (thanks Joe!) that said the CDO (collateralized debt obligation) values are in a "free fall", and that defaults are increasing... Uh-Oh! Long ago, I explained these CDO's, but thought that we probably need to go over this in class again, since I think everyone will be hearing lot of this term going forward!

A CDO (collateralized debt obligation) is: An investment-grade security backed by a pool of bonds, loans and other assets. CDOs do not specialize in one type of debt but are often non-mortgage loans or bonds.
Similar in structure to a collateralized mortgage obligation (CMO) or collateralized bond obligation (CBO), CDOs are unique in that they represent different types of debt and credit risk. In the case of CDOs, these different types of debt are often referred to as 'tranches' or 'slices'. Each slice has a different maturity and risk associated with it. The higher the risk, the more the CDO pays.

There's our lesson for today class, please write at least 500 words on how the issuance of CDO's got completely out of control pre-August 2007, and turn it in tomorrow...

Yesterday, I told you about the OECD recommending rate hikes to Norway... Overnight, Norway printed a stronger than expected report on economic growth. Norway, which excludes oil production from their growth numbers, reported a very strong 1% gain in the 2nd QTR, thus adding pressure on the Norges Bank (Norway's Central Bank) to raise interest rates. The experts had forecast a gain of .6%... So, economic activity was much stronger than expected, and you've gotta love that! The krone has gained a bit on the news, but really needs the euro to get on the rally tracks before the krone and other currencies can take a strong run at the dollar.

There are geopolitical risks in oil producing countries increasing again... But this time, it's not the usual suspects in the Middle East... This time it's Russia. Seems relations are getting strained between the U.S. and Russia over the invasion by Russia into Georgia. That invasion closed some oil export routes... These tensions are pushing the price of oil higher again... Oil is trading this morning at $117.15, that's up quite a bit from yesterday's $114, and earlier this week's $112.87...

Oil's rebound has the Commodity Index (CRB) on the rise again... The CRB is trading this morning at 391.33, VS 382 last Friday. It will take more than Oil rebounding to get the Commodity Currencies back in favor though...

Gold put in another good performance gaining $12 overnight... So... Maybe, we can get Gold back on terra firma, which would be good for Aussie dollars.... Recall last week, I pointed out how Gold and Aussie dollars had been tied together... Well, if it was like that on the way down, it had better be like that on the way up!

The Brazilian real continues to be strong VS the dollar, and if this story that appeared on Reuters yesterday has anything to say about it, the real could be in for a strong run....

SAO PAULO, Aug 19 (Reuters) - Bradesco, Brazil's largest private-sector bank, said on Tuesday it signed an agreement with Mitsubishi UFJ Financial Group to sell funds that invest in Brazilian assets to Japanese retail investors.

OK... So maybe you're wondering... "Why does that story help the real?" Ahhh grasshopper, sit down, hear me now and listen to me later... Remember the strong runs of Aussie and kiwi that were fueled by Japanese investors looking for higher yields? Oh yes, these were huge! And this story indicates that Brazilian real could very well be the next destination for Japanese investors looking for higher yields! I would think this to be quite the blinking blue light special notification... But, then, that's just me, I could be wrong here, and this story might not mean dookie!

The data cupboard will yield three second tier reports today. First, will be the Weekly Initial Claims data, which has exploded above 400K, and remained there with little indication that it will go back down. Look for last week's jobless claims to have risen by 450K...

Then we'll see the current Philly Fed Index (manufacturing), which has been negative for some time now. The Philly Fed report will then be followed by one of my faves... Leading Indicators... I complain all the time about how the markets don't pay any attention to this data, and it's true, they just don't give it two looks! But I do! And Leading Indicators should continue to print negative.

And finally... The Chinese renminbi booked a second day of gains VS the dollar overnight after losing ground to the dollar for the past 4 weeks... This just means that the stars are getting back in alignment, and the karma is beginning to flow for the currencies again... Things just didn't look right with the renminbi losing ground to the dollar, day after day...

Oh wait! Someone asked me yesterday whey I don't talk about the Swiss franc on a regular basis... It's always the euro this, and euro that... Well... That's because the euro is the BIG DOG! But, with regard to the Swiss franc... Except in times of geopolitical tensions or major global risk events, the Swiss franc tends to follow the euro... Yes, it was held down by the Carry Trade, but in the grand scheme of things, the franc is a little dog to the euro's Big Dog...

Currencies today 8/21/08: A$ .8690, kiwi .7115, C$ .9475, euro 1.4780, sterling 1.8635, Swiss .9145, ISK 82.52, rand 7.7175, krone 5.3760, SEK 6.3460, forint 158.15, zloty 2.2415, koruna 16.46, yen 108.50, baht 33.95, sing 1.4125, HKD 7.8075, INR 43.51, China 6.8445, pesos 10.13, BRL 1.6180, dollar index 76.67, Silver $13.59, and Gold... $826.40

That's it for today... I go to the oncologist doctor today... Probably time to schedule a new scan, so we'll probably discuss that, and how much longer I'll be on these treatments! I'm talking to an editor from a publisher about a project that I hope will come together regarding the Pfennig... More later... Our legal person sent me a note yesterday and said she "needed" to come see me... UH-OH! What did I say now that was wrong, I thought? She assured me it was just "housekeeping items"... Let's hope so!

Today is the BIG PREMIERE of I.O.U.S.A! And since I've seen it already, I have first hand knowledge of how this documentary / movie should be seen by everyone that pays taxes. It doesn't matter what side of the political room you stand on. Democrat, Republican, Libertarian, Independent, or nothing, this needs to be seen! So, when thinking about how I would put a song around this, I was reminded of the old Neil Diamond song... Brother Love's Traveling Salvation Show... Because it goes like this:

"It's Love, Brother Love, say
Brother Love's Traveling Salvation Show
Pack up the babies and grab the old ladies
And ev'ryone goes, 'cause everyone knows
Brother Love's show...

That's right, pack up the babies, and grab the old ladies, cause everyone needs to go! Here's the link to the movie trailer one more time! http://www.agorafinancial.com/iousa/movietrailer.html

I hope your Thursday is Tub Thumpin'!

Chuck Butler
President
EverBank World Markets
1-800-926-4922
1-314-984-0892

Falling Short On Financing...

Chuck Butler — Mon, 18 Aug 2008 13:22:11 GMT

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In This Issue..

* Dollar wages war on euro!
* TICs comes up short...
* An Oil discussion...
* Mexico raises interest rates...

And Now... Today's Pfennig!

Falling Short On Financing...

Good day... And a Marvelous Monday to you! This week is shaping up to be much like a college fraternity pledge "hell week", as we will be as thin as a razor swim suit, with many people out... All I can ask of World Markets customers is that they be patient when calling this week, the wait could be long.

OK... Friday saw some ups and downs but all-in-all a range bound day for the currencies. I'm not going to stick my foot in my mouth again and say that it looks like the euro has applied a tourniquet to the bleeding, like I did last week! I'll simply say that it held 1.47, and has added to that in the overnight trading.

I've repeated several times now for radio, newspaper, customers, Pfennig readers, and last night in the Review & Focus, that the dollar may have gotten up from its death bed, but the soft economy (actually recessionary economy) will limit the recovery time. Friday, we saw some data that had mixed reviews. The TICs data showed once again that the U.S. is having a difficult time attracting enough foreign investment to finance the Current Account Deficit. The Net Security Purchases by foreigners in June totaled only $51 Billion... Shoot, that doesn't even cover the Trade Deficit, much less the foreign direct investment and interest that is added to get the Current Account!

On the good side of the U.S. ledger, we saw Industrial Production post a .2% gain in July, adding to June's .4% gain. This is a good sign for the economy, but one that gets overlooked by the markets. In addition, Capacity Utilization inched up to 79.9%... If you went by these two pieces of data alone, you would think the U.S. economy is doing well... Unfortunately, that's not true.

The NAHG Housing Market Index is the only piece of data we have printing today, but get ready for PPI, Housing Starts, and Building Permits tomorrow!

Oil has been beaten about the head and shoulders now for about a month... Does anyone else get the feeling that this is something the U.S. Gov't is spearheading to achieve an election time price that most voters feel is better "than it was"? I do... And hey! If the Gov't can bully the oil price down, I'm all for that! But, why couldn't that have been done before it got to this level, or to this time before the election? And doesn't it make you wonder if it wasn't an election year, would they have gone down this road? I don't think so! But, bully for them! Anything to alleviate the pain at the pump!

But, just when you thought it was safe to get back in the water... An article in the Wall Street Journal quoted Iran's OPEC governor as saying the oil cartel may decide to cut oil production at its September meeting. Great! Oh, we can always depend on our "friends" (NOT!) at OPEC to help us out, eh?

The falling Oil price has had a lot to do with the sell-off in Gold... So, you have to ask yourself "do I believe that the price of Oil has peaked, and we should see better times ahead?" I'm just as perplexed in this Oil price fall leading to a sell-off of Gold as everyone else is... But... I just can't get my arms around the idea that the price of Oil will continue to fall... Instead, it might continue to fall through the elections, but then watch out!

That means there could be more hard rows to hoe for Gold... But, again, I think that in the end, and all the dust settles, we could be experiencing some unbelievable buying opportunities in the shiny metal... Of course that's just my opinion on this, I could be wrong...

In the overnight trading, the euro actually rallied to the 1.48 handle, but then saw a quick sell-off after the latest Trade data printed. The Eurozone Trade balance has turned to a deficit, folks... We've seen this before, only to see it turn back to positive. The Eurozone Trade Balance printed at a negative - 3 Billion (euros) or $4.4 Billion in dollar terms. I'm not worried about this move into negative territory, as the slowdown of the Eurozone economy will dampen imports.

Speaking of the Eurozone slowdown... The Bundesbank (Germany's Central Bank), which in the old days, I used to call "Bubba"... Issued a statement this morning saying that Germany didn't need any economic stimulus packages, and that slower growth may not suffice to curb inflation. Which is Central Bank parlance for "interest rates are not going lower"... Now, anyone that doesn't believe that the Bundesbank doesn't hold a big stick over the European Central Bank (ECB) is not thinking correctly. The Bundesbank has the ECB's ear, BIG TIME!

The Eurozone will have some data to deal with this week too, as the German ZEW prints tomorrow, along with flash estimates of Eurozone manufacturing for this month.

Did you see where Mexico's Central Bank raised interest rates late last week? The peso has really responded well to the last two rate hikes by the Central Bank, and while I'm not a fan of pesos, they do have a track record of performing well, when their interest rates are at a level that provide a "risk premium" for investors. You see, investors have been burned in Mexico for years... It was just over 10 years ago that the Mexican Gov't chose to move the decimal in their currency price... So... When interest rates are high, they provide a "risk premium" for investors... Their internal rates are now over 8%, and I think one more rate hike here will finally get back to providing that risk premium.... The peso also has a track record of better performance when the dollar is rallying... So, something to think about... But again, I'm not a fan... So you won't see me running out to buy pesos, but for those that think the risk premium is there...

How about that story in the Wall Street Journal from Friday regarding the Fannie and Freddie bail outs? Here's the skinny... "Chances are better than even that government money will be used to prop up Fannie Mae and Freddie Mac, according to economists in the latest Wall Street Journal forecasting survey, and a nearly one-in-three said the institutions should be nationalized."

OK... I'm not for nationalizing... But thought it important to show what economists are thinking about what will happen with Fannie and Freddie... It's also important to read that "government money" is in reality "tax payers money"! Meanwhile back at the ranch... These economists went on to say more about the economy, so here's more of the WSJ... "Uncertainty continues to permeate the economists' forecasts, as they remain almost evenly split for the third month in a row on whether the U.S. is currently in a recession. They expect the economy to slow to a crawl in the second half of this year, registering just 0.6% growth at an annual rate in the fourth quarter. At the same time, the forecasts call for continued job losses and elevated inflation, with oil prices above $100 a barrel well into next year, though down from current levels."

Well... When I came in, about an hour ago, the euro was 1.4735, after trading higher overnight... But as I've typed away here, the single unit has edged down further to 1.4705... And not looking as though it will hold 1.47...

But, Hey! Everything here in the U.S. is just peachy keen, so buy dollars, right? Geez Louise, SERENITY NOW!

Currencies today 8/18/08: A$ .8725, kiwi .7125, C$ .9435, euro 1.4705, sterling 1.8660, Swiss .91, ISK 81.85, rand 7.7735, krone 5.4130, SEK 6.3615, forint 161, zloty 2.2725, koruna 16.68, yen 110.25, baht 33.87, sing 1.4130, HKD 7.8130, INR 43.48, China 6.8790, pesos 10.18, BRL 1.6380, dollar index 77.02, Oil $114.25, Silver $13.05, and Gold... $795.70

That's it for today... While in Vancouver last month, I was given a private screening of the movie that my friend Addison Wiggin spearheaded. "I.O.USA" And was blown away! It's a great documentary that will be premiering at a theatre near you this week! Here's some info on the movie that you might find helpful... http://www.agorafinancial.com/iousa/movietrailer.html

Speaking of Addison Wiggin... He's book "Demise of the Dollar" is still available... The foreword for that book was written by yours truly! And right there on the cover of the book is my name! WOW!

The Olympic swimming events are finished, and we now turn to track and field, Basketball, and other things... What drama on Saturday night with Michael Phelps and that "wonder woman" Dara Torres! My beloved Cardinals just can't get on a roll and put together a long winning streak... It will be difficult to catch the teams in front of them if they don't go on a long winning streak! But hey! 12 games over .500 this year is pretty darn good for a team that was picked to finish last this year! OK... I'm feeling a little shaky again this morning, but better than last Friday! So, onward and upward as we head into this Marvelous Monday!

Chuck Butler
President
EverBank World Markets
1-800-926-4922
1-314-647-3837

Dollar continues to slide...

Chuck Butler — Mon, 28 Jul 2008 14:02:44 GMT

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In This Issue..

* Dollar continues to slide...

* Housing bailout passes congress...

* Chinese Renmibi falls...

* Aussie dollar peaked?...

And Now... Today's Pfennig!

Dollar continues to slide...

Good day... And welcome to the last week of July. I spent the past week fishing with my son and father in law up in Manitoba, Canada. We had some great weather, and caught an absolute ton of Walleye and Pike. My son caught a Pike almost as long as he is tall. Just a great guys trip; but enough about my time off, I'm back at work now, so lets get to the currency markets.

The dollar continued to slide throughout Friday's trading as concern of further US credit losses trumped some negative data released in Europe. The dollar dropped for a second day against the Euro after a story in the Financial Times quoted Gary Stern, president of the Federal Reserve Bank of Minneapolis, saying the credit crunch will worsen. Nothing new here, but as Chuck stated in Friday's Pfennig, currency traders continue to play the game of "Who's Data is Worse" with the US economic data coming in even worse than the rest of the world.

Data released Friday showed US new home sales fell less than expected to 530k, down .6% from last month's numbers. The Senate passed the massive housing-rescue legislation which had made it through the House on Wednesday. President Bush dropped his opposition to the bill last week, so I would expect him to sign it quickly. The bill offers emergency funding to Fannie Mae and Freddie Mac along with establishing a $300 billion fund to help struggling homeowners. As regular readers know, Chuck is no fan of this bail out, and he sent me the following comments last night:

"The currency markets were dominated by a bias to buy dollars based on the Housing Legislation that passed last week... It's just another "bail out" I don't care how much lipstick they put on this pig, it's still a pig! Here's the skinny on the bail out...

The bill features a combination of tax relief for homeowners, a new regulator for Fannie Mae and Freddie Mac, and a $300 billion program to avert foreclosures. Also included is a dramatic Treasury Department proposal to help restore confidence in Fannie Mae and Freddie Mac by increasing their $2.25 billion lines of credit with the Treasury, as well as allow the government to potentially buy an equity stake in the firms.

Another $300 Billion to help out... Another $300 Billion added to the $150 Billion we already added to our debt earlier this year with stimulus checks... Where does this end? Well... I'll tell you where it looks like it's all going to end... Can you say, "we live in a banana republic?" Apparently the currency markets agree with Chuck, as they have reversed all of last week's dollar gains which occurred in some part due to this massive bail out plan.

The Euro is stronger this morning in spite of a fall in German consumer confidence to the lowest level in five years. Soaring energy prices have sapped purchasing power in Germany, Europe's biggest economy. Record oil and food prices pushed inflation in Germany to 3.4% last month, squeezing disposable incomes just as the euro's gains and a deepening US housing slump curbed demand for exports. But as we have written in the past, the markets know that the ECB will continue to focus on rising inflation, maintaining their hawkish bias. These higher interest rates should continue to keep the Euro well bid vs. the US dollar.

One currency which couldn't rally vs. the dollar over the weekend was the British pound, which continues to drop from $2.01 which it hit in mid-July. The UK economic situation is basically a copy of what we are facing here in the US. Data released today showed UK house values fell by the most in at least seven years in July. The report also stated that the property slump will continue for months. Prices fell 1.2% from June, the biggest annual drop since the index started seven years ago. The UK economy looks headed for a recession, and the BOE may have to drop rates after it left the key rate at 5% on July 10. I wouldn't be surprised to see the pound fall to $1.90 by year end.

Another currency which dropped vs. the US$ was the Chinese Renminbi which fell .2% over the weekend. This was the largest decline since the dollar peg was dropped in 2005. The fall came after the Chinese Politburo signaled a shift in focus to maintaining economic growth, fueling speculation they will slow gains to aid exporters. The Politburo, the Communist Party's top decision making body, wants to cool inflation and maintain "steady and relatively fast" expansion. We could see the Renminbi's appreciation slow significantly in the second half of 2008, as the government replaces preventing overheating with maintaining growth among its top priorities.

But don't look for a major fall in the value of China's currency. China will keep the Renminbi stable in a "self-initiated controllable and gradual manner," the People's Bank of China said in a statement on its Web site yesterday, after the monetary policy committee's second quarter meeting. The statement didn't reiterate the central bank's pledge to "increase the exchange rate's flexibility," included since the third quarter of 2007. The omission of 'flexibility' is being seen as a signal that the central bank will slow the pace of Renminbi gains. But I will again remind everyone not to expect any big moves in the Renminbi, as the currency is not allowed to trade outside a .5% band against the dollar on either side of the so-called central parity rate which is set by the government.

The Australian dollar held on and actually moved up slightly over the weekend after falling to a three week low on Friday after ANZ Banking Group Ltd joined National Australia Bank Ltd in warning of increased provisions for non-performing loans. Several currency strategists are now saying the Australian dollar's recent rally is coming to an end. The Aussie has gained 8.9% vs. the greenback this year, and has soared 44 percent over the past five years, on demand from China for the country's coal, iron ore, and nickel.

The Aussie $ has benefited from 12 increases from the Reserve Bank of Australia since April 2002 to curb inflation. Many of the currency strategists are now predicting a slide for the Aussie dollar this year, with Lehman predicting a drop to 85 cents as commodity prices fall and losses linked to subprime mortgage defaults slow global growth. But who can trust anything coming out of Lehman right now? I tend to agree with some of the Japanese analysts who continue to expect the currency to close the year at parity. Here is why I think the Aussie $ will continue to trade up: 1. As reported last week, consumer prices climbed 4.5% from a year earlier, the most since 2001. 2. Commodity prices will remain high, on Asian demand. These two factors should keep investors moving into the Aussie dollar, and the currency should hit parity by year end.

I would expect the US dollar to continue to trend off today, as we won't get any data releases to start the week. Tomorrow we will see more negative data on the US housing market as the S&P/Case-Shiller index is predicted to show another dramatic fall. Consumer confidence will also be released tomorrow. On Wednesday, we have a light data day with just the MBA mortgage applications released. Thursday will close out July with a major day of data including the quarterly GDP data, Personal Consumption, and the weekly jobless claims. And Friday will be another big day as we get US nonfarm payrolls and unemployment rate in the US for the month of July along with the ISM manufacturing data and US vehicle sales.

I think the upcoming data pose downside risks to the dollar for this week. Given the state of the US housing market, even the dollar bulls just can't be optimistic on the US economy. The data released this week will likely make it all but impossible for the Fed to raise rates any time soon. While the GDP data could end up surprising the markets on the upside, any gains after Thursday's report are likely to prove temporary as Friday's data will reverse any of these gains.

Should be an interesting week! Now on to the big finish:

Currencies today 7/28/08... A$ .9588, kiwi .7449, C$.9811, euro 1.5758, sterling 1.9886, Swiss .9675, ISK 82.35, rand 7.5127, krone 5.1311, SEK 6.0014, forint 146.65, zloty 2.0354, koruna 16.06, yen 107.68, baht 33.47, sing 1.3609, HKD 7.8007, INR 42.455, China 6.8373, pesos 10.08, BRL 1.5780, dollar index 72.70, Oil $124.86, Silver $17.48, and Gold... $932.34

That's it for today... Some pretty bad storms rolled through last night, with lightning and thunder keeping my kids up most of the night. The heat has returned to St. Louis, with the temps expected to be in the mid 90's most of the week. I'm going to really miss the mid 70 degree weather I enjoyed up in Manitoba last week. But now it's time to get back to work to try and pay for that trip! I hope everyone has a great start to their work week and a Marvelous Monday.

Chris Gaffney, CFA

Vice President

EverBank World Markets

1-800-926-4922

1-314-647-3837

Credit Woes Sink The Dollar!

Chuck Butler — Tue, 15 Jul 2008 14:37:00 GMT

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In This Issue..

* No Bailout for Freddie and Fannie...

* The euro reaches a new record high!

* More risk today...

* Aussie hits 25-year high!

And Now... Today's Pfennig!

Credit Woes Sink The Dollar!

Good day... And a Tip Top Tuesday to you! I thought I would change it up there today... Well... Overnight, we've seen the euro reach a new record high VS the dollar, only to give some of that ground gained back on some weak German data. There was more news yesterday regarding the Freddie and Fannie saga, but I've grown tired of that talk, we dance now! Seriously, though, I have grown tired of all that Freddie and Fannie talk, that I'm going to go through an exercise explaining what GSE's are and then go on with life...

So... The euro reached a new record high overnight of 1.6038! WOW! This was reached based on the fears that credit problems in the U.S. are going to put the kyboshes on what little economic growth we now have. But the shine on the euro was rubbed out by a very weak ZEW... German Investor Confidence as measured by the think tank, ZEW, fell to a record low this month on the surging inflation problems, and rising interest rates. So for now, the euro is back below 1.60, but hear me now and listen to me later... This ZEW will soon be in the rear view mirror, and the euro won't have that albatross around its neck as it revisits its overnight high...

And don't look now, but the Aussie dollar is up to 98-cents! WOW! I've said for about 8 months that I wouldn't be surprised to see the A$ at parity to the green/peachback... It certainly has that parity look about it does it not? The last time the A$ was 98-cents was 1983... 25-years ago... 1/4 of a century, and all that!

The U.K. pound sterling is back to $2, which seems totally unlikely an event as possible, but it has happened, so, go on and crow if you thought I was wrong to say the pound was going to have problems once the Bank of England (BOE) started its rate cut cycle...

And the Canadian dollar / loonie has crept back to parity! It's been a long, time coming... It's going to be a long, time gone... (a little CSNY)...

And, the poor, downtrodden, Japanese yen, is at the bottom of the 105 handle, and looking like it wants to trade with a 104 next to it! I had to laugh at a story I saw flash across the screen... The title was... "Yen may gain as Bank of Japan (BOJ) is more likely to raise rates than the Fed". HAHAHAHAHAHA! Now that's funny! Ok, stay with me on this... A month ago, the dollar was getting bought like Pet Rocks because Fed Chairman, Big Ben Bernanke hinted that he was going to be an inflation fighter, thus interest rates would go higher... But here we are a month later, there's been on sign of Big Ben the inflation fighter, and now it's deemed that the BOJ could raise rates before the Fed! And the dollar bulls wonder why their currency is getting sold like funnel cakes at a state fair? Why don't the dollar bulls give Big Ben a call on the telly, and see if he can't help them out? Oh... That's right, Big Ben doesn't take calls from just anyone... According to our friend, Jim Rogers, on his Bloomberg TV interview yesterday morning... "Ben Bernanke and Paulson only take calls from their Wall Street Buddies"... HA!

Speaking of Jim Rogers... He was full of you know what and vinegar yesterday morning... He didn't pull any punches and said what was on his mind... You should have seen me here at the trading desk, Jim Rogers would say something, and I would clap and hoot and holler! At one point, Rogers said that the Gov't's plan to rescue Freddie and Fannie was "an unmitigated disaster"...

So... Remember early in the year when I kept telling you that there would be another "risk event" this year, and then we had the Bear Stearns meltdown, but that wasn't it for the "risk events" , and I kept harping that there would be more? Well... It's not like I was wishing, and hoping and thinkin' and praying for these things to happen... I was simply pointing out that the world today has too many "risk events" all over, and with the credit woes in the U.S. and the housing and mortgage meltdowns, I just figure it would touch here a few times.

Anyway... What I'm trying to get at here is simply that these are the things I kept telling people to protect themselves from by diversifying into currencies and precious metals... I also, recall, the wink, wink, I gave you when Gold was trading below $900 about a month ago... Today, Gold is $983!

OK, enough with all the "I told you so" talk! Let's talk about today... Well, today has "risk" written all over it! Big Ben goes to the "hill" to talk to lawmakers about the economy and Fed direction... You have to think that before the Meltdown last week of Freddie and Fannie (see more talk about them, I just can't leave them on the side of the road!), that Big Ben would go to the "hill" and talk the inflation fighter talk... But now... Not now... Not with the financial sector in meltdown mode... So this is a double-edged sword... If he doesn't go and sound hawkish, then the markets will take that as no rate hike is coming and take the dollar to the woodshed again... (you would think by now that the dollar would have gotten used to these beatings!)

Besides Big Ben, we get a ton-o-data today... PPI for June... Retail Sales for June... And Business Inventories for May... Retail Sales is the Big Kahuna of data today... And I would think that given the tax rebate checks that were still being mailed in June, Retail Sales would remain somewhat robust... Wait till July's number, I saw all the shopping bags from my beautiful bride's trip to Chicago this morning! But that's for next month! For now, PPI poses a treat to future Consumer inflation, so this one plays big too...

If any of this stuff comes in worse than expected, we could see the dollar not only get taken to the woodshed, but told to go pick the switch that it will get beaten with! (OK, that takes me back to the farm as a kid... If we were bad, we were told to go pick the tree limb (switch) that we would get smacked with... Talk about adding insult to injury!, but hey! Look at me! I grew up, didn't kill anyone, didn't rob my neighbors, didn't develop a drug addiction, and didn't hate my parents, wow! Now-a-days "they" would tell you that couldn't happen, not with getting spanked as a child! HA! What dolts!)

Oh... And rode my bike all day long from sun-up till sun-down without a helmet! OH NO! Of course some of you might say, see what happens! HA! Living dangerously, that was me! HA!

OK, enough of that! Today has "risk" written all over it, and I should stick to the facts here and not go off on tangents!

I said at the top that I was going to do a little 'xplainin' Lucy style, regarding these GSE's that keep getting talked about with regard to Fannie and Freddie... So... Here goes... Now, if you already know about GSE's, then go ahead and skip to the Big Finish...

First off... A GSE is... A Government Sponsored Enterprise... Here's the skinny on them...

The two largest housing GSEs of Fannie Mae (FNMA) and Freddie Mac (FHLMC) own and/or securitize upwards of 70% of the residential mortgage loans in the United States. Ginnie Mae (GNMA) is a government corporation that performs a similar function to Fannie and Freddie, and has the explicit backing of the full faith and credit of the United States government, although there is a perception (and a political reality) that Fannie and Freddie are "too large to fail" and, therefore, will be bailed out by the government should they get into financial trouble. This perception is reinforced by their line of credit with the U.S. Treasury and other benefits of GSE status, such as exemption from state and local taxes and use of the Federal Reserve as a transfer agent.

A GSE bond is perceived to have the same risk as a government bond, which is essentially near zero risk. While GSEs clearly state their securities are not backed by the U.S. government, the market largely perceives them to have an implicit government guarantee.

There you have it... All this and education too! And for free! WOW, where do I sign up for this letter? No wait, you dolt, I write it!

It looks like the selling from the German ZEW for the euro has already been put in the rear view mirror and the euro is back to above 1.60! That was quick!

Currencies today 7/15/08: A$ .9840, kiwi .7730, C$ 1.0020, euro 1.6020, sterling 2.0110, Swiss .9975, ISK 77.70, rand 7.6450, krone 5.0210, SEK 5.9250, forint 145.42, zloty 2.0370, koruna 14.56, yen 104.60, baht 33.48, sing 1.3460, HKD 7.7990, INR 43.20, China 6.8211, pesos 10.31, BRL 1.5970, dollar index 71.46, Oil $146.25, Silver $19.35, and Gold... $984

That's it for today... Tough day for yours truly yesterday, as the 4th week of treatment really kicked my tail... But I got through it, and today is starting out better, so I've got that going for me! The activity on the desk has really picked up in the last week, and rightly so, too bad these people are just now realizing that they need to diversify! Better late than never, I say! Next week, when I'm in Vancouver, the Pfennig will be at least 2 hours if not more later in the morning, due to the time zone... I didn't know that Chris was going to be on vacation during the Vancouver show, so I'll do it on the road, two hours later! What a show that Josh Hamilton put on at the Home Run Derby last night... WOW! He almost hit the ball out of Yankee Stadium! All-Star Game tonight, St. Louis Cardinal, Albert Pujols will bat cleanup for the National League! So... Watch out for all the risk today, and make it a TIP TOP Tuesday!

Chuck Butler

President

EverBank World Markets

1-800-926-4922

1-314-647-3837

Another Perfect Storm Averted!

Chuck Butler — Mon, 14 Jul 2008 14:21:00 GMT

.........But First, A Word From Our Sponsor..........

Come see the products mentioned in "The Wall Street Journal" and "New York Times". Go to EverBank.com, click Research & Planning, then Foreign Currency Resources.

......................................................

In This Issue..

* Paulson calms fears... For now!

* The dollar gets sold again...

* More risk events...

* Bill Gross wants dollars!

And Now... Today's Pfennig!

Another Perfect Storm Averted!

Good day... And a Marvelous Monday to you! Well... One of St. Louis' landmarks was sold this morning... One of my fave companies for a number of reasons, Anheuser Busch, was sold to InBev this morning... Just another in the line of Corporate Headquarters that will no longer reside in St. Louis... At one in the 80's, St. Louis was the 5th largest city, with Corporate Headquarters, in Western Hemisphere... I doubt we even are on the list these days...

OK... Well... Friday was chock full-o-fun, and not fun for some, as U.S. Treasury Secretary, Paulson, tried to calm the markets regarding Freddie and Fannie... That may have some soothing effect in the short run, but if home prices keep falling, and mortgage backed bonds keep losing value, this problem will return to the markets...

One problem that was rumored to be a major problem for IndyMac Bank, came to fruition. Federal Regulators seized the bank on Friday afternoon... I've got a message at the end of the Pfennig, right before the Big Finish, regarding the state of the Union for EverBank, in case you're wondering...

Another Perfect Storm was averted by the dollar on Friday, as Paulson soothed the markets' fears, and the Trade Deficit and The U. of Michigan Consumer Confidence report surprised on the up-side... ??? Here's the skinny... The Trade Deficit was actually just a touch better than the previous month's $60.5 Billion, it just didn't get to the forecast $62.5 Billion... So, guess what the mass media decided to focus on? You got it! But, here's the real meat here... The Trade Deficit was $59.8 Billion, which was a bit of a narrowing from the previous month, which tells me that the weak dollar is working a bit, along with the slowdown in imports...

The U of Mich. Consumer Confidence for the first two weeks of July showed an improvement that was unexpected for sure! The index improved from 56.4 to 56.6... Not a huge upward move, so don't be getting out that party dress for the big dance to celebrate the return of Consumer Confidence just yet! There was a big hit in the index taken by Sentiment... As well it should... We're getting squeezed by inflation big time! I don't believe that the food and fuel (commodity) inflation is going to spiral into wage inflation, not with 6 consecutive months of job losses.

This Commodity inflation is causing the biggest Transfer of Wealth in history (I believe). So, don't look for continued improvement in this index, or any other that measures the pulse of Consumer Confidence any time soon.

Paulson has thrown the Treasury behind Freddie and Fannie... I guess that's better than taking them over, which is what I thought he was going to announce on Friday morning... In fact, I yelled out across the desk when the announcement came that he was going to make a statement, that... "Another step toward socialism, as our once proud Republic fades away."... Of course then, I was wrong, he didn't announce a takeover, which is fine with me!

So... The Perfect Storm was averted, but still the negativity toward the dollar came front and center most of the day, with the euro rallying to 1.5935... Overnight, we've seen some short covering in the dollar, causing the euro to fall back to 1.5860... But, that move on Friday is just a tiny taste of what could happen to the dollar, should these "risk events" continue, as I believe they will!

I see where Bill Gross, the bond king, came out and said that he now favors the dollar over the euro for the first time... He believes the slowdown in the Eurozone will bring the euro back down to earth... I on the other hand don't believe the slowdown in the Eurozone will be enough to matter to the offset currency to the dollar, as the dollar continues to get sold on "risk events" in the U.S. financial sector. I'm sorry to see the bond king go this way, he had always been a huge proponent of the awful fundamentals in the U.S. will lead to dollar weakness, kind of guy...

The Aussie dollar followed the Big Dog, euro, on Friday, as it hit a 25-year high of 97+ cents! WOW! You know, I'm hearing lots of talk from people / analysts that they believe the Aussie dollar is vulnerable... I'm not seeing that, or getting why they feel that way... I even saw an article in the Economist that hinted toward A$ weakness... I would say, that I think the A$ will get to parity before it falls to 90-cents... So, we'll have to see who's right, eh?

You know, every once in a while I remember to write something about the Euro-Wannabes... Hungary, Poland and the Czech Republic... I gave them that name "Euro-Wannabes" 7 years ago, when I created the Euro-Opportunity Index CD, one that continues to book some very nice returns. These three were deemed to be on the "fast track" to euro acceptance... But something funny happened on the way to the forum for these three... They haven't joined the euro yet, and others have moved in front of them. Here's the thing though, they are still loosely tied to the euro... So, the euro strength shows up in Euro-Wannabe strength... It's that simple, Simon! HA! That reminds me of that silly Mike Meyers as Simon on Saturday Night Live... What a hoot!

The Canadian dollar / loonie was able to push past 99-cents on Friday... It's about time it got out of the 98-cent handle! Canada saw it's unemployment rate edge up to 6.2% on Friday, but the move in the actual numbers was miniscule, so don't expect this to push the Bank of Canada (BOX) to another rate cut when they meet this week. In fact, I believe the BOC is done with rate cuts, which should underpin the loonie as we go forward.

The data cupboard is empty today, but gets restocked tomorrow for a week chock-full-o-data... Of the more important data prints we'll see this week... The stupid PPI (wholesale inflation), Retail Sales for June tomorrow, the even stupider CPI (consumer inflation) prints Wednesday, along with the TICs Flow for May... Industrial Production and my fave, Capacity Utilization also print on Wednesday. Thursday brings us Housing Starts, and the Philly Fed Index (manufacturing)...

So... You can see that we'll have plenty of data to talk about, and there will be plenty of data to make the dollar feel like its getting picked on again! Oh, and we get Big Ben Bernanke's take on the economy at his testimony to lawmakers tomorrow...

The euro will see some data on its end this week also. Eurozone CPI inflation prints on Wednesday and the German ZEW on Tuesday. Look for the Eurozone inflation to remain above 4%, which should bring about some hawkish remarks from European Central Bank (ECB) ministers... Those hawkish remarks should help the euro maintain its edge VS the dollar.

OK... With all the goings on in the financial sector (see IndyMac above), and more to likely come, I thought it would be best to give this update on EverBank...

I wanted to share some EverBank news with Pfennig readers. As a private company EverBank is not driven by the demands of quarterly earnings reports and Wall Street expectations. Our Board and the executive management team set high expectations for performance, but hold a long term view on when and how these results are realized. EverBank also avoided entering into the exotic and risky sub-prime and Alt-A markets that are plaguing many firms today, and in doing so we believe that we have built a diversified financial services company that is strongly capitalized and positioned for significant growth.

One indication of this position is our results. In 2007, a year that saw many firms erase all earnings and sometimes more with write-downs, EverBank was able to make a year-on-year earnings gain on continuing operations. Over the past five years we have consistently had return on equity results in the high teens.

We have now closed the books on the second quarter of 2008 and will be reporting earnings in a press release later today. As Pfennig readers I thought I would give you a peek at the numbers so that you are the first to know. For the second quarter of 2008 EverBank Financial Corp will report record earnings of $44.7 million including the impact of the sale of our Reverse Mortgage business, with results from continuing operations of $18.5 million for the first six months of 2008 - up 8% over the same period in 2007. At quarter end the EverBank capital position now stands firmly at over $402 million supporting $6 billion in assets and over $4.1 billion in deposits. As our Chairman, Rob Clements states "EverBank's financial health and performance have never been greater."

Currencies today 7/14/08: A$ .9685, kiwi .7615, C$ .9905, euro 1.5865, sterling 1.9860, Swiss .9775, ISK 76.65, rand 7.6210, krone 5.08, and SEK 5.9750, forint 145.20, zloty 2.0540, koruna 14.70, yen 106.60, baht 33.66, sing 1.3580, HKD 7.8020, INR 42.98, China 6.8430, pesos 10.28, BRL 1.60, dollar index 72.19, Oil $143.80, Silver $18.71, and Gold... $958.64

That's it for today... Crazy day on Friday, for sure! Got to see my old neighbors Rich and Laura and their girls, Allison Road and Madison Ave. (I give them those silly names) on Friday night, such cuties! That little Allison Road just climbs in my lap and hugs me when she sees me... Can't wait for my granddaughter, Delaney Grace, to start that! Our little Christine is on vacation this week, then I'm gone next two weeks, first to Vancouver, then on vacation... Remember when I would get so excited about my summer vacation? Load up the family and head to our fave lake to camp, boat, water ski, relax... I had to skip it last summer (surgeries) and I'll have to skip it again this summer... Hopefully, by next summer I'll be good to go again! So... Get ready for a wild ride this week... And have a Marvelous Monday!

Chuck Butler

President

EverBank World Markets

1-800-926-4922

1-314-647-3837

Are Freddie and Fannie Insolvent?

Chuck Butler — Fri, 11 Jul 2008 14:13:00 GMT

.........But First, A Word From Our Sponsor..........

Come see the products mentioned in "The Wall Street Journal" and "New York Times". Go to EverBank.com, click Research & Planning, then Foreign Currency Resources.

......................................................

In This Issue..

* Poole slams Freddie and Fannie...

* The dollar gets sold again...

* Bad data for the dollar today...

* Renminbi matches '07 performance!

And Now... Today's Pfennig!

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...

So, with the renewed fears of a financial crisis looming once again, the dollar began to get sold... Recall a couple of weeks ago before Trichet got the "memo"? The euro had finally passed the 1.58 figure, but then tumbled, stumbled, bumbled and fumbled that figure... Trichet was to blame for putting his tail between his legs and not sounding hawkish... But get this... He sounds different now that the potential Perfect Storm passed... Here's Trichet...

ECB President Jean-Claude Trichet said on Thursday that euro zone inflation, which is running at 4 percent, will remain above the central bank's desired level for longer than first expected.

I signed off yesterday with the Aussie dollar just hitting 96-cents on their strong jobs data. The A$ spent the rest of the morning hitting upward toward .9630... A strong currency and high yield... This should pave the way to parity... But then, that's just my opinion, and I have been / could be wrong.

I didn't get a chance to see the "theatre" but I hear it was really good... I'm talking about Big Ben Bernanke and U.S. Treasury Sec. Paulson testifying to U.S. Lawmakers... I hear that Ron Paul took them to the woodshed for their handling of the economy... We all had a great big belly laugh at Paulson's claim that the "long term fundamentals will direct currency movements" That's right Hank! Those U.S. fundamentals OOOOOHHHHH, what a show! Reminds me of one of my fave movies of all time... Night Shift... There's a scene where this guy is watching the Flintstones, and another guy walks in and questions his choice of TV show... The first guys says... "Ahhh, that Barney Rubble, what an actor!" HAHAHAHAHA!

I also saw where some lawmaker announced that there would be a committee meeting this summer to discuss the dollar... Now, that ought to be good!

Have any of you received an email from an airline company requesting your help in reducing the skyrocketing oil / fuel prices? This is really something! They want more transparency and disclosure in the oil markets... They believe that speculation in the oil markets is the culprit... Well, it might be responsible for about 20% of Oil's price rise, but it's not the "end-all" of oil's rise...

Yesterday, the Weekly Jobless Claims posted an unbelievable collapse of 58K to 346K last week... This is so distorted that if can't possibly be believed... And the markets did believe it at first, before someone had the brains to say stop! This is distorted! The continuing claims, which are not subject to seasonal distortions, continued to rise to 3203K, a high exceeded only in the wake of the 1990-1 and 2001 recessions.

OK... Are you ready for some gloomy reading? How's this? Today, we'll see The May Trade Deficit, which will most likely bounce to $62 Billion from April's $60 Billion... And then we'll see the color of the first week of July's survey of Consumer Confidence as measured by the U. of Michigan... With all the stuff going on like soaring fuel and food prices, and stocks looking soft, I would expect this index to fall even further than last month's awful reading.

Neither of these two pieces of data will give the dollar any love going into the weekend... I fully expect to see the dollar going out the door to the pub this afternoon with a whimper.

Speaking of Consumer Confidence... Japan's Consumer Confidence fell to a record low in June... UGH! As if the yen needed any excuse to weaken VS the dollar and euro! Talk about gloom and doom... This index, which has a boom or bust line of 50 (like our ISM manufacturing index) reached that level for the first time since 1990 in April of 2006, but unfortunately, has fallen ever since... The index now stands at a paltry 32.6...

The Bank of England (BOE) did leave rates unchanged yesterday, as I fully expected them to do... They are really in a bind... And now the U.K. banks are asking for more liquidity from the BOE... Sound familiar? It's all happening here as well dear reader...

There a few large financial institutions that have been put on the burners this week... There are too many to start naming names, and besides, what good would that do? Besides, do you really think, after what we saw with Bear Stearns, that the Fed / Gov't will allow a large financial institution fail? Noooooo sirree Bob! They'll be rewarded for their mistakes and greed by being bailed out... Of course if I worked for one of those large financial institutions, I would want to be bailed out, eh? That's right...

So... If there's a perception of nastiness in the markets right now, why haven't the Carry Trades unwound yet? Well... Maybe, just maybe, cause you never know, they are holding on, because they truly believe the Fed's rhetoric of higher interest rates, thus propping up the dollar?

The Chinese renminbi just hit a 6.86% return year-to-date, that's what it made all of 2007! So... The currency appreciation of the renminbi continues... Not as fast as U.S. Treasury Sec. Paulson would like to see, or probably all renminbi holders, but still, it's appreciating, eh?

It's important for the renminbi to continue appreciating, as it gives the other Asian currencies the opportunity to appreciate... You see these Asian countries are all in competition with their exports, and they need to keep their currencies somewhat in the neighborhood of the other Asian currencies... So... In the end, renminbi appreciation should lead to yen strength... And Singapore dollar strength and so on...

So... The dollar is teetering this morning, and looking like it will go into the weekend with its tail between its legs... Let's hope there aren't any "memos" going around to keep the dollar from falling further, like we had last Thursday! (if you're puzzled here, I suggest you read Monday's Pfennig... You can read it here.)

I just can't head to the Big Finish without having some fun with this article in the Wall Street Journal yesterday... Here's a snippet...

"Economists are deeply divided over whether the Federal Reserve should focus more on fostering growth or keeping inflation in check, according to the latest Wall Street Journal forecasting survey. Of 53 economists surveyed, 22 said the Fed should be more concerned by economic weakness than inflation, while 21 said inflation should be the greater concern."

See what the Fed is up against here? Economists don't know what to do any more than the Fed Heads... Something like... Between a rock and hard place, eh?

And... Finally... How about those precious metals this week? Gold has really recovered nicely, along with Silver...

Currencies today 7/11/08: A$ .9630, kiwi .7596, C$ .9855, euro 1.5810, sterling 1.9785, Swiss .9745, ISK 76.30, rand 7.7670, krone 5.10, SEK 6, forint 146.60, zloty 2.07, koruna 14.88, yen 106.90, baht 33.65, sing 1.3580, HKD 7.8020, INR 42.88 (rupees have had a great week, eh?) China 6.8340, pesos 10.31, BRL 1.6050, dollar index 72.43, Oil $145.30, Silver $18.37, and Gold... $950.52

That's it for today... It's been a tough week for my beloved Cardinals, I think they truly need the All-Star break to regroup... OK! My interview on the PBS radio show "On The Money" is now Live on our web site, when you research a currency, on the right hand side there are likes to my radio interview and my Bloomberg TV gig... This will be a "boys" weekend at the Butler house as my beautiful bride is heading to Chicago to see what she can personally do to correct the slow Consumer Spending, and to help prop up the economy! My good friend Rick was by to see me the other night, he used to be my neighbor, now I rarely see him any more. So it was good that he stopped by... Ending my 3rd week of the required 4 on my cancer treatment, it really blows chunks, but... I'm not going to complain, not that it would do any good anyway! So... Let's get to the weekend and have some fun, eh? I hope your Friday is Fabulous and... Your weekend is Wonderful! Be careful out there!

Chuck Butler

President

EverBank World Markets

1-800-926-4922

1-314-647-3837