Daily Pfennig : Foreclosures

Cautiously Positive?

Chuck Butler — Thu, 10 Sep 2009 14:12:04 GMT

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In This Issue..

* Euro & yen add to gains...
* RBNZ disappoints...
* Foreclosures continue to stack up!
* BOE & BOC meet today...

And Now... Today's Pfennig!

Cautiously Positive?

Good day... And a Thrillin' Thursday to you! Ahhh! A change! Just thought that with the thrilling victories my beloved Cardinals have been accumulating, that Thrillin' would be a nice change to our Thursday lineup!

Front and Center this morning... The currencies added to their gains this week yesterday, albeit small gains, but gains nonetheless. The Fed's Beige Book was "cautiously positive"... And... Overnight, the Reserve Bank of New Zealand met, and left rates unchanged as suspected... This and more as we begin our Thrillin' Thursday!

The Big Dog euro has been off the porch chasing the dollar down the street for a week now, one would think that a return to the porch for food and water might be in the cards... But, as I was telling someone yesterday... Even though all signs point to a major stock sell-off, it hasn't happened, so why stand in front of the stock and risk assets rally bus?

The euro climbed to very near 1.46 yesterday, before falling back to 1.4550 as the day ended... Overnight, the euro has traded within a narrow range. The Aussie dollar (A$) got slapped on the wrist by traders after it was reported that Australia lost 27,100 jobs in August (consensus was to lose 15,000)... The unemployment rate in Australia remained at 5.8%, but the weaker than expected data caused the A$ to slide from the 86-cent handle to .8550...

If the heat remains on the dollar the rest of this week, then I would expect the A$ to rebound from that sell-off last night. Much like the Brazilian real sell-off last week... You may recall me saying that it was overdone, and I expected the real to bounce back, which it did, and the bounce was like a Super Ball Bounce!

The Reserve Bank of New Zealand (RBNZ) met last night, and kept rates unchanged as expected... But I really thought the RBNZ would opt to change the wording of their last statement following a rate announcement, in which they talked about leaving rates unchanged for some time to come... Well... They didn't change... And instead repeated the comment from the previous meeting... "We continue to expect to keep the OCR (official Cash Rate) at or below the current level through until the latter part of 2010".

Here we go again with a Central Bank making statements about rate policy months ahead to time! I don't see where they have the data to do something like that... But, they do it! I'll bet a dollar to a Krispy Kreme that the RBNZ has to move rates higher before "the latter part of 2010", and when they do, they'll be pushing rates up in 50 BPS clips!

Kiwi also took a slap across the wrist by traders after the RBNZ rate announcement and statement. I'm not so sure about this currency's ability to rebound, but if the A$ does rebound, kiwi normally hangs on the coat tails of the A$...

So... As I look across the screens this morning... I see that the euro and yen are the only currencies that are really stronger today than yesterday... So, my statement at the beginning that the currencies had added to their gains this week, needs to be tweaked, to say just euro and yen have added to their gains this week!

The Norwegian krone, was really on a run yesterday, trading below 5.90... But, couldn't hold those gains. I was reading a story last night about Norway's inflation rate falling, and how that might push back the Norges Bank (Central Bank) timetable for a rate hike from late this year to the 1st QTR of 2010... That thought process is responsible for the pull back in the krone yesterday, and overnight.

Do you see the mental giant (NOT!) thought process that goes through some of these traders? Sometimes it's all about yield differentials, and sometimes it's all about economic growth possibilities. Just like a baseball player wishes for consistency from the Umpire, I wish for consistency from the markets... UGH!

The Fed's Beige Book was "Cautiously Positive" yesterday... And of course, you know me, I want to know why the Fed is Positive at all! Let's see... The Beige Book said, that... Most districts characterized consumer spending as "soft" with a majority of reporting retail activity as "flat." And that the Cash for Clunkers was a positive... HEY! FED HEADS! Cash for Clunkers is over!

On the real estate component... Both residential and commercial real estate markets were described as "weak"... So... Do you see anything in here that spells "positive" for the Fed Heads? I sure don't!

I'll stop there... These guys at the Fed drive me up a wall, and cause me to go over to the walls and scream at them!

One thing the Beige Book didn't contain was the report yesterday that foreclosures in the U.S. jumped above 300,000 for the sixth consecutive month! RealtyTrac Inc. reported that a total of 358,471 properties received a default or auction notice or were seized last month, which is 18% higher than it was a year ago!

And then add in those details I gave you yesterday about the Option ARMs that will reset in the next three years, and this is getting ugly folks...

Doesn't it seem as though the "people in power" have turned their backs on this problem? I mean, don't get me wrong, I don't want the Government sticking their hands in everything, but they already started down this road, and then turned around and headed down a different road... That's the Gov't's way isn't it? As my football coach used to describe someone not giving everything to a play as doing it half-a_ _ ... That's what the Gov't does... I don't want you sticking your hands in the private sector! But! If you're going to do it, do it right and until it's fixed!

The Bank of England (BOE) and the Bank of Canada (BOC) both meet today... The BOE's meeting is going on as I write, while the BOC meeting will take place later today. I look for both Central Banks to remain steady at the wheel. The BOC will really tick me off later today when they repeat their earlier statement that interest rates will remain at near zero until June of 2010... The BOC also talked about the strong Canadian dollar / loonie in their last statement, as "significantly moderating growth"... As if a strong currency is a "bad thing", which it certainly is not! But here's an opportunity... If the BOC doesn't talk about the strong currency this time out, we could see a "relief rally" in the loonie...

Today, the U.S. data cupboard has July's Trade Balance, and since it's Thursday we'll see the latest Weekly Initial Jobless Claims. The Trade Balance is a misnomer as far as I'm concerned... It should read... The Trade Deficit! And while this Trade Deficit isn't as bad as it once was, due to the depression, it remains a bugaboo...

And talk about sticky! Those darn Weekly Jobless Claims! Last week they printed 570,000 new claims, and this week is expected to be 560,000 more! I wonder when these people will be counted as "unemployed" by the Bureau of Labor Statistics (BLS)! OK... You know me... The BLS is one letter too long, as the "L" should be removed!

And... Before I recap, is it just me? Or does anyone else see stock market bubbles all over the world? I've already talked till I'm blue in the face, which is normally red!, about the U.S. stock market being overbought... But there was news yesterday that Asian stock index hit a 1-year high... And that the FTSE, London's stock exchange, returned to the 5,000 level for the first time in a year! Bubbles Greenspan, should be in hog-heaven with all these bubbles floating around!

OK... Almost ready to go the Big Finish... Let's recap first though... Euro and yen have added to this week's gains, while other currencies have seen profit taking. Central Banks in the U.K. and Canada meet today, while New Zealand's Central Bank was a disappointment. U.S. Beige Book is "cautiously positive", and Foreclosures are greater than 300,000 for the 6th straight month!

Currencies today 9/10/09: A$ .8560, kiwi .6940, C$ .92, euro 1.4530, sterling 1.6560, Swiss .9585, rand 7.6150, krone 5.9650, SEK 7.0520, forint 188.10, zloty 2.8710, koruna 17.5725, RUB 30.93, yen 92.10, sing 1.4270, HKD 7.75, INR 48.65, China 6.8292, pesos 13.54, BRL 1.8330, dollar index 77.12, Oil $71.69, 10- year 3.46%, Silver $16.07, and Gold... $984.55

That's it for today... I got the opportunity to sit down and talk with the Big Boss, Frank Trotter, yesterday... That doesn't happen very often, as he is a busy man! Frank always has a way of calming me down, or bringing me back to square one, when I'm all ticked off or keyed up about something. Get the brooms out! Cardinals sweep the Brewers! I was one of the millions probably that got my hands on the new box set from the Beatles, with all their albums re-mastered... My friend and colleague, Ann Hopkins, went to buy one for her husband, and asked me, knowing what a fan of the Beatles I am, if I wanted her to get me one too! How Sweet! And Too Sweet! It was bonus day for me, as I also received in the mail yesterday, my 40th Anniversary Woodstock CD's and DVD! WOW! OK... Enough! Time to get this Thrillin' Thursday started... I sure hope your Thursday is Thrillin'!

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

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

The Euro Gets Bogged Down...

Chuck Butler — Fri, 17 Apr 2009 13:28:23 GMT

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In This Issue..

* A split among ECB ministers...
* Trichet walks a fine line...
* China and gold and copper...
* Canada's economy has a pulse...

And Now... Today's Pfennig!

The Euro Gets Bogged Down...

Good day... And a Happy Friday to one and all! A Fantastico Friday as well, as all our prayers were answered once again, and my scans were clean! YAHOO! They did see something in my lung... It's called pneumonia! I knew this "thing" I had was more potent than anything I had ever had before... So... The proper medicine was dispatched, and hopefully in about 4 days I'll have this whipped! I've got the whole weekend to rest, and drink plenty of fluids! Now if I wasn't sick, that last sentence would take on a whole new meaning, if you get my drift!

OK... Now that we have that housecleaning out of the way, it's time to go to work! Well, the currencies traded in a very tight range yesterday, only to see the euro lose ground in the European session, this morning, as ECB President Trichet, deep sixed the currency this time!

Recall, yesterday I told you how European Central Bank (ECB) minister Axel Weber, confused the markets with a statement that left the markets scratching their collective heads. Well, this morning, ECB President Trichet, failed to calm the markets, and their fears of a split in the governing body of the ECB is weighing heavily on the euro. Trichet has got to get these split factions of the ECB together...

In one corner, we have Weber, who does NOT want to see interest rates fall below 1%, and does NOT want Quantitative Easing.

In another corner, we have the Greek contingent, that DO want to see deeper rate cuts, and Quantitative Easing if needed.

And then finally we have Austria's Nowotny, who agrees with Weber on the rate cuts, but believes that Quantitative Easing makes sense.

If Trichet can't get these factions to come together, then the euro is going to get bogged down in all this mess, for nothing will get done... Trichet tried to put on the "company face" and tell reporters in Tokyo this morning, that "we have a very united Governing Council"... But he must not have been convincing enough...

So, with the Big Dog, getting weighed down, the rest of the little dogs have to remain on the porch, and that means dollar strength folks... Shoot Rudy, even the Japanese yen lost ground last night, reversing what had been the trend for the week, with the high yielders backing down, and yen ratcheting up... But not last night and this morning! The dollar has walked into the saloon, and told the bartender to "spray the infield" with dollar strength! I say this because, this is what he told reporters in Tokyo... "to say the euro was weak would not reflect the current situation" and that he "agrees with the US' Strong Dollar policy" Hmmm... First time I've ever heard an ECB President talk about a strong dollar policy... He must have something up his sleeve, ala Bullwinkle, or... He's drank the kool-aid that the U.S. is serving...

If you want to know what I think about Trichet's venture into the strong dollar policy land, read on... If not... Skip to the next paragraph! I think Trichet is just trying to keep the euro from exploding higher here... All the talk on the street these days is that the U.S. will have no other choice but to continue to debase the dollar in order to finance debts... Now, Trichet can't have the euro, which is the offset currency to the dollar, going off on a rampage from people selling dollars right now! If Trichet were to say what he really feels, he say, "The euro is strong, and will remain strong as the dollar retreats"... But a politically inspired euro surge against the dollar would deepen the Eurozone recession, and most likely really spike the already sensitive feelings among some members about the strong euro... So... I think Trichet is playing his card here... So far, the markets are "all-in" with that card... Now, if I were some BIG TIME market mover, the markets would read this and call Trichet's bluff... But, I'm not... So... We have to deal with euro weakness for now... I think Trichet should be listening to the old song by Max Frost and the Troopers... Nothing Can Change The Shape Of Things To Come!

OK... For those of you who skipped the previous paragraph, you missed some of my best stuff in years! HA! Well, let's get jiggy with the rest of the currencies! Since the dollar is stronger this morning, let's take a look at just why that is...

Well, it couldn't be the data that's printed this week, that's not the stuff that a strong currency is made of, for sure! Yesterday, for instance... Realty Trac issued a report that painted a really sad picture, folks... Let's take a look... In the month of March we saw a record level of foreclosure activity - the number of households that received a foreclosure filing was more than 12% higher than the next highest month on record - Realty Trac. Aye-Yi-Yi!

San Fran Fed Head, Janet Yellen, was in the news last night... She came out and said that "allowing Lehman Bros to fail was a mistake." She went on to say, "Lehman Bros was too big to fail and its bankruptcy caused a quantum jump in the magnitude of the financial crisis."

Hmmm... I wonder what her boss, Big Ben Bernanke will have to say about this statement... Now, that would be really something to see the Fed Heads air their dirty laundry with Big Ben... Talk about causing problems! YIKES! It will be interesting to see how this "coming clean for Yellen, plays out"...

Gold sure got whacked yesterday... I looked up at one point in the day and saw it down $15, and it's down another $5 at the London Morning Fixing... UGH! Silver is barely hanging on to the $12 handle too... It's been an ugly week for the precious metals.

OK... There was a great story on the UK Telegraph the yesterday www.telegraph.co.uk by Ambrose Evans-Pritchard, regarding China and Gold... Here's a snippet of the story...

"Hard money enthusiasts have long watched for signs that China is switching its foreign reserves from US Treasury bonds into gold bullion. They may have been eyeing the wrong metal.

China's State Reserves Bureau (SRB) has instead been buying copper and other industrial metals over recent months on a scale that appears to go beyond the usual rebuilding of stocks for commercial reasons.

Nobu Su, head of Taiwan's TMT group, which ships commodities to China, said Beijing is trying to extricate itself from dollar dependency as fast as it can.

"China has woken up. The West is a black hole with all this money being printed. The Chinese are buying raw materials because it is a much better way to use their $1.9 trillion of reserves. They get ten times the impact, and can cover their infrastructure for 50 years."

Now, that's interesting! The article goes on to suggest that the Chinese are also doing this with their reserves so that they don't have to continue to push their currency higher VS the dollar.

I've said for some time now that Treasuries are a bubble. And that bubble was probably about ready to pop, when the Fed announced that they would be buying Treasuries... But, that just prolongs the inevitable in my opinion... And now, if this story has any legs, the Chinese could be backing away from the Treasury auctions... I'm back on the Treasury bubble popping wagon... The Fed may have kept the bubble floating for 6 months to a year, but haven't' we learned with past bubbles, the longer you keep them floating, the bigger they get, and the nastier the mess is when they pop!

I noticed the other day, that the Canadian dollar / loonie, had rebounded to 82-cents and change, and yesterday with all the dollar strength, the loonie held its ground at 82-cents... Yesterday we saw Canadian manufacturing sales in February rise for the first time since July 2008 increasing a strong 2.2%! So... There's a pulse here, at least!

The negativity in the overnight markets toward the currencies has lifted a bit since I came in and turned on the screens. The High Yielders like rand, real, Aussie are all coming back strong right now... I'll do a quick look around the playing field to see if there's anything behind this move by the High Yielders.... OK, I'm back now, didn't see anything right now.

OK, before I head to the Big Finish I wanted to share with you something Tim Smith thought of yesterday... Capacity Utilization was so bad, that maybe we could shorten it to CAPUT!

Currencies today 4/17/09: A$ .7210, kiwi .5725, C$ .8270, euro 1.3070, sterling 1.48, Swiss .8585, rand 8.9275, krone 6.7250, SEK 8.4525, forint 225, zloty 3.29, koruna 20.49, yen 99.20, sing 1.5010, HKD 7.75, INR 49.84, China 6.8325, pesos 13.10, BRL 2.17, dollar index 85.79, Oil $49.75, Silver $12.01, and Gold... $868.15

That's it for today... My beautiful bride told me yesterday morning that she thought I had pneumonia... I said, "no way"! But as Wayne says to Garth... "Way"! Nice win in Chicago yesterday for my beloved Cardinals. A long 4-game series in the Windy City should make for some good baseball watching this weekend. We've had some miserable weather here in St. Louis, but today, it's supposed to be 70 degrees and sunny! YAHOO! I received a note from our travel person extraordinaire, Gena, yesterday, reminding me that it's time to plan for the Las Vegas Money Show! Yes, the Las Vegas Money Show scheduled for May 11-14, at the Mandalay Bay Conference Center. Time to eat my apple, and get ready for the trading day... I hope your Friday is Fantastico, and your weekend is wonderful!

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

Retail sales disappoint even more…

Chuck Butler — Thu, 15 Jan 2009 16:16:31 GMT

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In This Issue..

* Retail sales disappoint....
* Chuck's views on the Lone Prop...
* Waiting on the ECB...
* Emerging market currencies sell off...

And Now... Today's Pfennig!

Retail sales disappoint..

Good day... The big news yesterday was the retail sales numbers, which fell twice as much as expected. Chuck predicted a tough Christmas season, and the BHI was right again. Sales dropped 2.7 percent according to yesterday's report from the Commerce Department. The falling home prices, rising job losses, and tighter credit have all combined to finally force US consumers to adjust their spending habits. No matter how low retailers slashed prices during the recent Christmas season, US consumers just weren't buying. The economy is forcing consumers to wean themselves off of the dangerous drug of easy credit. In spite of Bernanke and Paulson's attempts to get consumers borrowing and spending again, the economic slowdown is forcing the US consumers to reign in their spending. But while this change in consumer habits is good for the longer term economic health of the US, it only serves to drive the economy even further into recession over the short term.

And the bad economic data just keeps rolling in. U.S. foreclosure filings spiked by more than 81% in 2008, a record, according to a report released Thursday, and they're up 225% compared with 2006. The total foreclosure filings in 2008 topped 3 million and showed no signs of slowing down in spite of the efforts of both the government and banking industry to slow them down. Foreclosure filings actually accelerated in the 2nd half of the year, increasing 17% in December over November of 2008.

The Fed gave us a glimpse of their view on the markets yesterday with the release of their Beige Book. Nothing in the report was a surprise, as respondents from the 12 Fed districts portrayed a gloomy economic scene. The report suggests the Fed may need to implement further measures to restore credit markets. The Fed districts reported more job losses, hiring freezes, and reduced hours. The New York district reported that 'substantial' job reductions have yet to show up in payrolls data. Doesn't sound good for the US economy in 2009.

Today we will continue to get negative news on the US economy with the release of Producer Prices and the weekly jobs numbers. Producer prices will bbe down and initial jobless claims will probably top 500k. We will also get the very volatile Empire Manufacturing and Philadelphia Fed numbers showing further rot on the manufacturing vine.

The dollar actually rallied with these numbers, as investors turned back to it as a 'safe haven'. This move is similar to the moves we saw in the latter half of 2008 as the dollar rallied in the face of poor US economic data. Chuck sent me his thoughts on this latest 'safe haven rally' and wanted me to share them with you all:

"Reuters reported Wednesday night that the U.S. is close to extending Billions of more aid to Bank of America... Citigroup, as reported yesterday, is selling off units to raise capital... I wonder if Big Ben Bernanke and Hank Paulson drink more than 7 cups of coffee a day... Researchers show that drinking more than 7 cups of coffee a day may trigger delusions...

What does the rot on the vine at BOA and Citi have in common with delusions? Well... I think that Big Ben and King Henry are drinking more than 7 cups of coffee a day, if they believe their "stimulus" / TARP is going to get these two ginormous banks back on terra firma!

Remember the Lone Ranger? Remember a couple of years ago, when the dollar was propped up by Fed rate increases, and the tax amnesty for U.S. Corporations doing business overseas? Those props were pulled away one at a time, and for the next 2 1/2 years the green/peachback fell flat on its face... Well, it came up with another prop this summer... However, this time... There's only one prop... The Lone Prop, I'm going to call it from here on out... It's called the "Safe Haven" prop... And it has done the dollar well since July...

But just like in early December when I smelled a Santa rally to year end, and it happened... I'm seeing chinks in the dollar's Lone Prop's armor... The Fed has just about run the course of things it can do to get this economic engine revved up again, to no avail... And just like I said a couple of weeks ago, Paulson and Bernanke are like the King's men, who tried to put Humpty Dumpty back together again! Their stimulus plans, their money supply injections, their guarantees on debt, their taking over the Commercial Paper biz, to their putting their hands in bank's cookie jars... Nothing has worked... And why? Because, it's not nature's way to interfere! One of my all time fave songs, by Spirit (Randy California) called, "It's Nature's Way"... It's nature's way of telling, something's wrong... It's nature's way of telling you in a song.... It's nature's way of receiving you... It's nature's way of retrieving you... It's nature's way of telling something's wrong...

It's obvious they were singing about something else... But I would say if sung today, it would be sung to the economy... One of these days, these mental giants will figure out to leave well enough alone, and let markets take their course... But that's not happening now, and I'm sure it's not going to happen any time soon, given the news that President-elect Obama wants control of the remaining $250 Billion in TARP money, and then wants to push through a stimulus package that will be anywhere between $800 Billion and $1 Trillion as soon as he takes office!"

Chuck is pretty amazing, he had another tough day at the doctor's office yesterday, but still found the time to send me his thoughts on this recent move by the dollar.

The Euro sold off a bit yesterday as currency traders were waiting on the ECB which will likely cut 50 basis points this morning. Some actually began predicting a 75 basis point cut, but the noise on the street is confirming a 1/2% cut. But the markets will focus more closely on the press conference following the rate announcement. Many are expecting the ECB to signal more cuts are on the horizon, but I disagree. The leaders of the ECB have a hawkish tilt, and Trichet has continued to illustrate his desire to not follow the US Fed's ZIRP (Zero Interest Rate Policy). A 50 basis point move would put interest rates at the lowest levels since 1999, and a further move would be unprecedented. Trichet said last month that there is a limit on how far the ECB can cut rates and will likely push for a pause after today's cut.

But recent data out of Europe shows their economy continues to contract, and inflation is being held down so Trichet will face mounting pressure to drop rates further. If Trichet can hold the line, the euro will likely benefit vs. the US$. The euro rose 10 percent vs. the dollar in December, after Trichet said he wouldn't be trapped with borrowing costs too low. The European economy is slowing, but will likely be able to weather the financial tsunami better than the US.

The emerging market currencies of Brazil and South Africa slid yesterday with 'risk aversion' back in vogue. The Brazilian real sold off to a two week low on concern over a further deterioration of the US economy. The South African rand sold off in concert with a drop in the price of gold and commodities. The higher yielding currencies of New Zealand and Australia also fell vs. the US$ as investors turned back toward the 'safe haven' of the US$. But don't expect this dollar strength to last, as this lone prop of 'safe haven' will be kicked out from under the dollar.

On to the currency wrap up:

Currencies today 1/15/09: A$ .6632, kiwi .5379, C$ .8033, euro 1.3170, sterling 1.4602, Swiss .8928, rand 10.1408, krone 7.2099, SEK 8.3956, forint 212.64, zloty 3.2109, koruna 20.6965, yen 89.11, sing 1.4957, HKD 7.7598, INR 49.0175, China 6.8365, pesos 14.1862, BRL 2.3841, dollar index 84.253, Oil $37.80, Silver $10.50, and Gold... 812.35

That's it for today... I see where the ECB did cut 50 basis points, which was widely expected. I can look forward to another full day of meetings on the new computer system we are looking to install later this year. I'll be heading out to Colorado tomorrow for a 'guy's weekend' of skiing. Hope everyone has a Terrific Thursday!!

Chris Gaffney, CFA
Vice President
EverBank World Markets
1-800-926-4922
1-314-647-3837

Chuck finally heads back home...

Chuck Butler — Thu, 23 Oct 2008 17:00:19 GMT

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In This Issue..

* Chuck's thoughts...

* US housing still a drag...

* Rate cuts push currencies lower...

* Yen rallies and is joined by some odd partners...

And Now... Today's Pfennig!

Chuck finally heads back home...

Good day...Another big move up by the dollar and the Japanese yen last night. Really just another repeat of what we have been seeing each day of this week, dollar down, gold down, and oil down. And with the stock market falling dramatically yesterday, all of us on the desk were searching for something that was actually up yesterday. Our bond trader, Don Reis let me know that muni bonds rallied dramatically, along with US treasuries. So I guess investors are just continuing to park funds into the US fixed income markets.

Chuck is headed back home this afternoon, after spending the past two weeks traveling the country with FX University. I'm sure he will be happy to get to sleep in his own bed again tonight, and will catch up on his rest tomorrow. He sent me the following note to share with readers:

"Well... Another day and another dollar rally... I'd like to thank Chris for all his work on the Pfennig while I've been out... I'll talk to you all on Monday. But for now... Chris did an excellent job putting together all my different reasons for the dollar being so strong yesterday, didn't he? Since nothing's changed in that regard, and nothing probably will for months, I thought I would skip the dollar talk and go somewhere else...

First of all... Here's a quote by Thomas Jefferson that really struck a chord with me... (remember Thomas Jefferson wrote this over 200 years ago!)

""The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution....Bankers are more dangerous than standing armies......(and) if the American people allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and CORPORATIONS that will grow up around them will deprive the People of all their property until their children will wake up homeless on the continent their Fathers conquered."

Now if that doesn't shake you up, and get you mad at all these dolts that have put our country in this mess, that's now spreading into Europe, I don't know what will... OH! Maybe it's this...

Yesterday, I came across a story regarding the audit of the credit ratings agency, Moodys... You see, the examiners are convinced that ratings Agencies employees were doing no good in rating those mortgage bonds so high... Well, in an examination of email they found this quote by an employee of S&P (according to the story on Bloomberg) "An e-mail that a S&P employee wrote to a co-worker in 2006, obtained by committee investigators, said, ``Let's hope we are all wealthy and retired by the time this house of cards falters."

And in an investigation over at Moodys... the Employees at Moody's Investors Service told executives that issuing dubious creditworthy ratings to mortgage-backed securities made it appear they were incompetent or ``sold our soul to the devil for revenue"...

Shame, shame, shame... Shame on all of you! But then, they haven't been convicted of anything yet, so in this country they are presumed innocent until found guilty..."

Chuck always calls it like it is! And he just sent me another message reminding me that the founding father of all of this mess, Alan Greenspan, will be on capitol hill today addressing the House Committee on Oversight and Government Reform. Big Al was very vocal in his aversion to increasing financial supervision as Fed chairman from August 1987 to January 2006. He said in a May 2005 speech that "private regulation generally has proved far better at constraining excessive risk-taking than has government regulation." During his term at the Fed's helm, Greenspan repeatedly warned lawmakers against inhibiting markets, such as by tightening oversight of certain types of derivatives.

Greenspan's office released a copy of the prepared testimony he will give to congress today, and in it the Former Fed head does a dramatic about face. He is now trying his best to distance himself from the free-market culture that he helped create. But during his testimony today, he will call for tighter regulation of financial companies. "Firms that bundle loans into securities for sale should be required to keep part of those securities," Greenspan will say in his testimony today. Other rules should address fraud and settlement of trades, he will say. I doubt if any of his buddies on Capitol Hill will really let him have it (they let the rating agency heads skate right on through yesterday). As usual, the individuals who were asleep at the wheel during the creation of this crisis will be let off the hook and left to enjoy their retirement while all of us taxpayers pay for their excesses.

I haven't written much about the data releases in the US this week as it has been a very slow data week. Today will be the most interesting piece of data as we will get the weekly jobs numbers along with the US house price index. Initial jobless claims will probably increase again this week, as the US economy continues to stumble along in a recession.

Yesterday we got more bad news on the US housing front, as US foreclosure filings increased 71 percent in the third quarter from a year earlier. Foreclosures are now at the highest on record as home prices continue to fall and stricter mortgage standards make it harder for homeowners to sell or refinance. As we have repeatedly warned, the government bailout on Wall Street will not have an impact on the housing market slide. All of the money given to the big Wall Street financial firms is being used to make up for the losses they have on the 'creative' investments they sold each other. All of the talk about how this bailout money will help homeowners is just a bunch of Paulson doublespeak.

Now the administration is finally starting to talk about giving homeowners some relief, with both the candidates and congress suggesting we come up with a second bailout package aimed at individuals. I guess the first $1.3 trillion just didn't do the job, or maybe it was just aimed at the wrong institutions. As we have been saying all along, this financial crisis still has a few surprises to spring on us, and it is far from over for the US taxpayers.

One of the reasons I have heard for the fall of the Euro is that currency traders expect the ECB to continue to cut rates to stimulate their economy. But ECB President Trichet has held to his commitment to combat inflation which continues to hold above the ECBs 2% target. But on this side of the Atlantic, officials are more than willing to ignore inflation and as our FOMC is expected to continue to be very aggressive cutting rates over the next few weeks. The FOMC will probably reduce the benchmark federal funds rate by half a point next week to just 1%, the lowest since May of 2004. The official rate has never been lower. So how can currency traders be taking the euro lower on the mere possibility of ECB cuts when the US has all but guaranteed even more aggressive reductions? It doesn't make sense to me, but none of the markets haven't been making much sense lately!

Both the Reserve Bank of New Zealand and the Riksbank in Sweden cut rates last night. New Zealand cut by a record 100 basis points last night in an aggressive move to stimulate their economy. The RBNZ did not express concern over the fall of the New Zealand dollar or imported inflation in their accompanying statement. The kiwi initially rallied on the cut, as markets had actually priced in an even more aggressive cut. But the short rally didn't last and the kiwi is opening up this morning down slightly from where it was trading yesterday.

Sweden cut its key lending rate by a half-point for the second time in two weeks and forecast another similar reduction within six months to cushion the economic slowdown. It also lowered forecasts for growth and inflation. "The interest rate cuts are aimed at alleviating the effects of the financial crisis on the real economy and at the same time attaining the inflation target of 2 percent." The cut was widely expected so it didn't have a dramatic impact on the Swedish Krona which is actually up a bit vs. the US$.

The yen continued to strengthen overnight, but was joined by some odd bedfellows. We are used to seeing the yen rally as currency trades are reversed, but over this morning the high yielding currencies of South Africa, Mexico, and Brazil have joined it. As I mentioned yesterday, expect the unexpected in these markets. Apparently the South African rand is rallying after the central bank assured investors that banks in South Africa are well-capitalized and won't need a government bailout. South African banks have very little direct holdings in US sub-prime related assets and do banking in a more traditional manner. The report from the Central Bank assured investors that the banking system in South Africa is very well regulated and 'safe and boring'.

The rand rallied in spite of another drop in Gold which is close to breaking below $700 per ounce. And I thought my purchase at $850 was well timed! We continue to have trouble buying coins or bars in either gold or silver, so the shortage of the physical metal remains. Apparently much of the selling of gold and silver is coming from institutional holders who are having to raise cash, and are using sales of these hard assets. I continue to believe that both gold and silver are cheap at these levels, as global inflation will spike as a result of the tremendous increases in global money supplies.

On to the currencies:

Currencies today 10/23/08: A$ .6603, kiwi .5879, C$ .7873, euro 1.2795, sterling 1.6185, Swiss .8570, ISK (No Quote), rand 11.18, krone 7.1741, SEK 7.8481, forint 222.26, zloty 3.0928, koruna 20.2269, yen 97.35, baht 34.63, sing 1.5029, HKD 7.7529, INR 49.82, China 6.8355, pesos 14.1105, BRL 2.5052, dollar index 85.67, Oil $68.10, Silver $9.3663, and Gold... $706.37

That's it for today...I will be happy to see Chuck back in the office next week, hopefully he will bring a little currency rally along with him. Blues lost a tough one last night, but are still off to a great start. My wife and I will be heading to the hockey game on Friday night, and Chuck will be going also. I just heard that Sarah Palin will be dropping the puck, so it should be a fun night. The markets continue to be crazy, and the phone volume has picked up again, so I'll have to jump now. Hope everyone has a Tub-Thumpin Thursday!!

Chris Gaffney, CFA

Vice President

EverBank World Markets

1-800-926-4922

1-314-647-3837

Retail Sales Disappoint Again...

Chuck Butler — Thu, 14 Aug 2008 14:03:23 GMT

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In This Issue..

* Dollar rally continues...

* U.S. data continues to be weak...

* Gold and the A$...

* Sterling melts away...

And Now... Today's Pfennig!

Retail Sales Disappoint...

Good day... And a Thunderin' Thursday to you! Michael Phelps didn't swim in any finals yesterday, so no Gold for the U.S! I'm just floored by this kid! My oldest son, Andrew, was a pretty good swimmer in his day, but my goodness, this kid is on a different planet!

OK... Well, front and center this morning, we have a report that just printed that shows U.S. Home Foreclosures rose 55% in July. Bank seizures almost tripled according to RealtyTrac Inc. That's sad folks, simply sad... I look at this report and shake my head in disgust for Alan Greenspan. Yes, Big Al Greenspan is the root of all evil in the housing meltdown... Sure there were the greedy folks that booked loans that shouldn't have happened and all that, but down at the root of the meltdown you'll find Big Al's picture!

But dollar bulls are still dancing in the streets, as the dollar continues to not give up ground it has gained VS the euro and other currencies in the past 3 weeks. I talked to a guy yesterday and he asked me how I was doing with all this dollar strength. I said, "dollar strength? The dollar isn't "strong" by any stretch of the imagination, it's simply stronger than it was, which isn't saying much considering how weak it had gotten." And that about sums it up, folks... So, with that, I'll head to the Big Finish, and go back to sleep... Thank you, you've been a great audience, I'm here all week, try the veal!

HA! Had you going there for a minute, eh? Nah, I couldn't be that short-n-sweet! Besides, who would talk to you about the -.1% showing of Retail Sales yesterday? Yes, Retail Sales printed negative -.1% in July, but if you take out the meltdown in auto sales, Retail Sales would have been positive! Now... Let me ask you something here... What did I just do there? Yes, that's right, I did what the media always does to put lipstick on the pig... (I did it on purpose to have this discussion!) Why would we care if auto sales were taken out, etc. etc.? If they were included on the way up, they should be included on the way down! That's so typical of how we view things these days... If it makes us feel bad / or makes us work harder, just take them out... We grow seedless watermelons... We take pulp out of orange juice... We don't count "unemployed people who's benefits have run out" ... We take food and energy out of inflation calculations... Oh, I could go on there, but you get my drift...

Retail Sales were disappointing, just as I thought that they would be... Looks like the "fluff" from the stimulus checks has all gone through the wringer! And Credit Cards are getting maxed out... Shoot Rudy, even American Express, who you would think would have more upscale card holders, are reporting a huge increase in late payments... So... Where does the U.S. Consumer turn for money to spend now? I hate to have to say it, but retirement money is the next pile of cash to get raided... Shoot Rudy, if the Government can do it, why not it's citizens? Think about that one for a minute... OK, stop! I had to stop thinking about that, because it scares the bejeebers out of me!

Gold finally showed some life yesterday rising $18 at one point in the day... I was telling a customer yesterday that it appears to me that Gold and A$'s have been tarred with the same brush, and so... If Gold recovers, as I believe it will, it should take A$'s along for the ride... But that's no given! So don't be firing off emails to me telling what a dolt I am for saying that "would come true", if it doesn't. I'm just painting pictures here, and my picture shows Gold and A$'s as closely related trading wise at this time.

The A$ did see some love (finally!) with the rise in Gold yesterday... But, there are rumors going 'round that someone's underground, and... That Japanese are beginning to sell their A$ holdings... Now, wait a minute there! I wrote about this yesterday as something to look for, but didn't believe it would really take hold at this time, and then rumors get started? Hmmmm... Has the Pfennig grown to have the reach to start rumors? Now, that would simply blow me away! I doubt it could happen, as this is just my little old newsletter that I share with a few hundred thousand readers each work day! I don't give any credence to those rumors at this point...

In the Eurozone this morning, we had a flash estimate of 2nd QTR GDP print right in line with expectations at .2%, or 1.5% year-on-year... Nothing to write home about, but not negative! And not the armegeddon that the traders have been pricing into dollar/euro... But before the euro could add to yesterday's small rise, Eurozone CPI printed softer than expected at -.2% for the month of July, bringing the annual inflation rate to 4%...

Now, 4% is still leaps and bounds above the 2% ceiling target for inflation that the European Central Bank (ECB) hangs on inflation... So... In my mind, that should keep interest rates right where they are. However, traders, who, I've really come to the realization are not mental giants, are looking at this downward move in inflation as a reason the ECB could lower rates. Again, I'm not buying that line of reasoning either! Geez Louise, serenity now!

Some of the euro's performance problems in the past few days has been affected by the meltdown in pound sterling... You know, I've explained these cross trades to you before, so I won't go deep into this, but all these currencies are tied together by cross trades... As American investors we only concern ourselves with the dollar VS another currency... But in the currency world, there are more cross pairs of currencies than you can shake a stick at... It's just that way, so sometimes a currency is dragged down by the outstanding cross trades it has against it... When I travel with the FX University people I'll make a point of explaining crosses!

Anyway... Pound sterling has been doing a wicked witch of the West, and melting... I'm melting, I'm melting, what a world, what a world, who would have thought a little girl...... I don't mean to make light of sterling's problems, so I'll stop with the Wizard of Oz stuff. However, it is melting away, and there's nothing the Bank of England (BOE) can do about it. I told you yesterday that the BOE had slashed their growth forecast for the U.K. and that was on a day that saw inflation rise... Uh-Oh! This means stagflation for the U.K. and that's not a good thing... Of course I truly believe that's what's in our future here in the U.S. too... But that's for a different discussion, as this is about pound sterling! Pound sterling is going to be facing an uphill battle VS the dollar, euro and yen this year...

The Brazilian real has been able to hold its ground pretty good VS the dollar during this dollar rally... The real is the "darling" of emerging market currencies these days, and why not? The economy is juiced, and the Central Bank is doing what it can to control inflation. Interest rates are high enough to attract investment, and so on and so on...

Today in the U.S. we'll see the data cupboard yield July's CPI report along with the Weekly Initial Jobless Claims, which lately have been going in the wrong direction. But first, the stupid, CPI report... The experts have forecast CPI for July to have increased .4%, bringing the annual rate to 5.1%... But hear me know and listen to me later, the media will only talk about the "ex-food and energy" number of .2% and an annual rate of 2.4%...

OK... If we see an up tick in inflation the dollar will get an additional boost... Because... The mental giants will see this as paving the road to higher interest rates here in the U.S. Of course they are forgetting all the bad stuff going on that would get worse should rates go higher in the U.S., but don't let that get in the way of their thought process!

I had better get to the Big Finish this time, as I'm beginning to get cynical and when I do that, who knows what might get typed by my big fat fingers!

Currencies today 8/14/08: A$ .8770, kiwi .7025, C$ .9435, euro 1.4920, sterling 1.8750, Swiss .92, ISK 80.75, rand 7.8345, krone 5.3720, SEK 6.2825, forint 159, zloty 2.2180, koruna 16.29, yen 109.60, baht 33.72, sing 1.4080, HKD 7.81, INR 43, China 6.8615, pesos 10.14, BRL 1.6115, dollar index 76.33, Silver $14.92, and Gold... $833.41

That's it for today... I got great news yesterday afternoon, as it was decided after all that I DON'T have to go to Orlando all next week! YAHOO! Chris and Jen will be going to Orlando, thus leaving the desk quite short handed, but I'll be here as the anchor! I will be doing an interview on a radio show that I've been on several times in the past tomorrow morning... Here's the skinny: KRCN-AM's Business for Breakfast (Longmont, CO) Fri, 8/15: 10:34 am CT/ 9:34 am MT It will be a quickie 5-minute deal, so be there or be square! We've been experiencing some unbelievable Chamber of Commerce type weather for St. Louis in August, and I'm loving it! I will take the kudos for bringing it back from San Francisco with me! On that note, I'll hit the send button... I hope your have a Thunderin' Thursday!

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

More Awful Housing Data!

Chuck Butler — Fri, 25 Jul 2008 13:55:00 GMT

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This is another groundbreaking step from EverBank. And further proof why we're worlds apart from ordinary banks.

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In This Issue..

* Existing Home Sales fall...

* Foreclosures spike!

* Euro rebounds...

* Aussie dollar sees some weakness...

And Now... Today's Pfennig!

More Awful Housing Data!

Good day... And a Happy Friday to one and all! Well... The touch of food poisoning I got ( I think) stayed with me most of the day yesterday. I did make it to my presentation with Addison Wiggin, but you should have seen me... I was a mess... But I got through it, stayed at the booth for an hour to talk to people and then headed back to the room to basically fall asleep until now... UGH!

I have to say that I believe this conference to be the absolute best conference I have ever attended, and believe me, I've attended quite a few conferences in my time! We have talked to so many people that are genuinely interested, some that already completed their applications, and then there were the 100's of people that are already customers, wanting to know more! It has been a great conference!

Yesterday, Jim Rogers was here... I was thinking about this the other day... I spoke from the same main stage podium that Jim Rogers spoke from, and people like Doug Casey, Bill Bonner, Rick Rule, and more... WOW!

OK... After seeing 3 days of dollar strength, we finally saw the currencies rebound a bit yesterday as the Housing Data was awful, and once again reminded the dolts that want to forget we have this albatross around our necks, that the fundamentals here are awful! That Housing data came in two pieces... First we had the Existing Home Sales for June, which fell 2.6% from May, according to the National Association of Realtors. The median home price was $215,100 in June, down 6.1% from $229,000 in June 2007. The median price in May this year was $207,900. So... Look at that median home price... It blipped up in June from May 215K VS 207.9K... Now, that doesn't make sense, but could be reason Existing Homes fell so hard! We only began keeping score of this data in 1999, but this report represents an all-time low for the data series... How low can you go? Limbo rock!

The second piece of the awful Housing data was the foreclosures data... U.S. foreclosure filings more than doubled in the second quarter from a year earlier as falling home prices left borrowers owing more on mortgages than their properties were worth.

One in every 171 households was foreclosed on, received a default notice or was warned of a pending auction, that was an increase of 121% from a year earlier, and 14% from May!

The dollar bulls were playing this game of: who's data is worse, this week, pointing to weakening data in the Eurozone, etc. but that game's all over now, as these Housing facts blew away the fact that German confidence fall, or whatever... The emphasis on who's data is worse, comes right back to square one... The U.S. economic data is the one circling the bowl ahead of others.

So... The euro jumped higher and out of the 1.56 handle it had been stuck in for a couple of days... It brought along the usual suspects to higher ground.

It was an ugly day for stocks with a 280 point drop... The Housing data put Risk Aversion back on the table, but the question will be, for how long? We've seen these one, two, maybe three day moves to Risk Aversion in the past couple of months, but never with staying power... Risk Aversion would be like manna from heaven for Japanese yen and to a lesser extent, Swiss francs. It would be like seashells and balloons too! But, I can't get ahead of myself here, for Risk Aversion has had no staying power, I can't think that one day begins a trend!

The Eurozone printed a softer Money Supply report this morning... Overall M3 growth fell below 10% for the first time in a month of Sundays, falling to 9.5%. And then... European Central Bank (ECB) minister, Liebscher, said that "interest rates are at a good level at the moment", and followed that by saying that "the ECB has room to move interest rates higher"... So... Falling Money Supply and some hawkish statements help keep the euro above the 1.57 level this morning.

I like that falling Money Supply number... Long time readers know that I continually bang on the ECB to not only raise interest rates but to reduce Money Supply... I can only hope that this is the beginning of a reduction trend!

In Japan overnight, inflation continues to move upward, which HERE is a good thing! Good you ask? Well, they had none, nada, zero, zilch inflation for so long that a little here and there wouldn't be so bad for them and might, just might get the Bank of Japan (BOJ) to do something about interest rates! Japanese inflation accelerated from 1.5% to 1.9% in June. This is the biggest monthly jump in inflation since January 1998! If this trend could continue, we would finally see the BOJ raise rates, thus making borrowing costs of yen higher, and that could go a long way toward unwinding Carry Trades!

Aussie dollars saw some bad data which caused the currency to weaken... Here's the skinny... National Australia Bank, which is Australia's biggest retail bank, raised provisions for its exposure to CDOs by another A$ 830 Million... Obviously not on the same scale as the loss provisions by U.S. banks, but something to be concerned about I would say...

And this just in... U.S. Durable Goods Orders printed strong in June. I have to believe that the weak dollar is the main reason Durables printed strong... Orders for June rose .8%, VS the forecast of .3%... Now, there's a good piece of data for the U.S. too bad, it's what's called a 2nd tier piece of data that doesn't normally move the markets. But wait, I'm seeing the euro drop 1/4 of a cent since I first signed on this morning. UGH!

I'm going to head to the Big Finish now... I'm still feeling pretty shaky...

Currencies today 7/25/08... A$ .9576, kiwi .7440, C$.9865, euro 1.5715, sterling 1.9930, Swiss .9655, ISK 81.10, rand 7.5975, krone 5.1420, SEK 6.0250, forint 147.27, zloty 2.015, koruna 15.05, yen 107.70, baht 33.41, sing 1.3610, HKD 7.7990, INR 42.26, China 6.8185, pesos 10.01, BRL 1.5725, dollar index 72.66, Oil $125.97, Silver $17.46, and Gold... $927.50

That's it for today... I hear my little buddy, Alex did well in his swimming finals last night... Alex's older brother, Andrew, was a highly decorated swimmer in his day, and now teaches / coaches swimming. Did you all read what Ian Mathias had to say about me in the 5 Minute Forecast the other day? If you don't get it, you should, it's a great read... But here's what Ian said... "We enjoyed a tapas dinner with Chuck the other night, by the way. He's a class act. For such a boisterous writer, he's quite polite and quiet: a perfect gentleman." WOW! I sure hope my beautiful bride reads this, she'll want to know who was claiming to be Chuck Butler that night! HA! Jason and Frank head back today, I'll be here all by myself, don't want to be, all by myself... Anymore... But, hey! It won't be the first time, and probably not the last either! I have one more presentation with Addison Wiggin this afternoon, and then, I'm finally finished! This is it for me, I'm on vacation now until I get back from San Francisco... You'll get two weeks of Chris Gaffney!

Chuck Butler

President

EverBank World Markets

1-800-926-4922

1-314-647-3837

Aussie Job Creation Soars!

Chuck Butler — Thu, 10 Jul 2008 13:55:00 GMT

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

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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..

* A$ goes to 96-cents!

* Foreclosures at 53%

* Loonies rise?

* A new way to bail out?

And Now... Today's Pfennig!

Aussie Job Creation Soars!

Good day... And a Tub Thumpin' Thursday to you! I just realized yesterday that July was slip-slidin' away from me just like June did, and I had better get to work on my two presentations for the Vancouver Show coming up in two weeks... I've talked about this Conference for months now, but in case you missed the info... Here is the link... http://www.isecureonline.com/Reports/400SCONF/E400J307/

OK... The currencies, for the most part, remain in a trading range that's tight... The euro pops up to 1.5750, and then falls back to 1.5665, and with the euro in a trading range the other currencies are experiencing the same treatment... That is, except for... Drum roll please... The Aussie dollar!

Yesterday, I told you how the Aussie dollar's recent economic data had softened and the thoughts that the Reserve Bank of Australia (RBA) would end their rate hike cycle. These thoughts had stopped the Aussie dollar's potential rise to parity on the back burner... But, not anymore! Here's the skinny...

I've long talked about the job creation machine in Australia, right? Well, there were thoughts that the June employment numbers would soften like some of the recent economic data... WRONG! Aussie jobs gained 29.8K in June VS the forecast of 10K... This job creation machine is on a roll! OK... So now we look for the latest CPI (inflation) report that prints on July 23... If CPI remains high, the RBA might be pushed to raise rates at the August 5 meeting... Could be too soon, following the reports, but it could happen... And that thought is what has the A$ knocking on the 96-cent door this morning!

OK... RealtyTrac, tells us, this morning, that Foreclosures fell 3% in June from 56% to 53%... Hmmm... Seems to me that we should still be on Amber with regards to Foreclosures... 53% is an astronomical number, don't you think? Here's some more bad data... Bank repossessions almost tripled from a year ago! UGH! RealtyTrac tells us that 1 in every 502 U.S. households were in some stage of foreclosure...

Oh... And the markets still believe the Fed is going to fight inflation with higher interest rates? I know you can't say the markets are "wrong"... But I can say they are total dolts for taking the Fed's bait, hook, line and sinker! Why just yesterday I told you how Big Ben Bernanke is going to keep the Fed's lending window open, and I surmise that this is simply because he "knows" the troubles the financial institutions are having out there... Just yesterday the ratings agency, Fitch, announced that they were placing Merrill Lynch on ratings watch negative... There are some major debt / credit problems out there dear readers... Remember last August? That's when the you know what first hit the fan for mortgage debt... Could this August hold more of the same meltdowns?

A recent survey by Bloomberg shows that those surveyed believe the Fed is on hold until next year, as the economy will stall in the 2nd half of this year... Folks... This just shows you how these surveys can get stale... The economy has already stalled! Richard Berner, co-head of global economics at Morgan Stanley, believes "the Perfect Storm returns" for the U.S. economy, as consumers are poised to pull back...

Again... If it weren't for the stimulus checks, this economy would have circled the bowl a long time ago...

Last week, the Swedish Central Bank, Riksbank, raised interest rates 25 BPS... This was lost in the shuffle of the U.S. Holiday, and all the stuff that happened on Thursday. Well, this morning, Sweden announced that the CPI had risen again to 3.2%, matching a 15-year high. Thus, we could see the Riksbank back at the rate hike table in the future... The Swedish krona has had a very nice performance so far this year, as it is up slightly right now, but was up much more before last week's sell off of the euro, which took the "little dogs" along for the ride... I would continue to look for Sweden to push the envelope VS the dollar, along with its kissin' cousin Norway.

Speaking of Norway, their inflation rate pushed to a 6-year high at 2.4%... I would think Norway's Central Bank, Norges Bank, will also revisit the rate hike table this year... But, these two might be too closely aligned with the euro right now, and thus, as the euro goes, so goes these two...

The Canadian dollar / loonie, pushed even higher yesterday, as is now knocking on the door to 99-cents... This is such a strange move by the loonie, in that it couldn't buy a bid when Gold was $935 and Oil $145... But now that these two commodities have softened, the loonie catches a bid... Strange, but true...

U.K. pound sterling has really seen the dark side of all the bright lights that shined on the currency about two weeks ago... Recall, that then, traders believed the Bank of England (BOE) would reverse their rate cut, and pound sterling traded at $2 again... Ever since then it has been in sell off mode, and last night was no different as House prices keep tumbling... It was reported that U.K. house prices fell by 2.0% during June, and were down 6.1% in the last quarter. As I said the other day, the BOE has painted themselves into the same type of corner as their brothers-in-arms at the Fed... The BOE can't raise rates to fight inflation, and they can't drop them either as the economy teeters...

The European Central Bank (ECB) issued a statement overnight regarding the high price of Oil and its affect on the Eurozone economy... Let's listen in... "'Although the high price of oil has had a negative direct impact on the euro area current account, it appears that increased demand from oil-exporting countries has had a mitigating effect." OK, that's Central Bank parlance for: the Eurozone has benefited significantly from rising demand from oil-producing countries in recent years, and this has partly offset the negative impact of rising oil prices on the euro zone economy.

There are rumors going 'round that someone's underground, and... Geez Louis, I don't know what happens when I do that, my fingers just keep typing and voila a song appears! OK... Let's try this again... There are rumors going around that there's a new way to "bail out" a financial institution... It's called "making an investment" and this "investment" is made by the Gov't / Fed... Oh Come on... How stupid does these markets guys think the public is? If the Gov't / Fed makes the $75 Billion infusion in Freddie and Fannie, it's the same was bailing them out in my eyes!

And here's their stage to present these "ideas"... Big Ben and U.S. Treasury Sec. Paulson address U.S. lawmakers today... The subject? Ahhh grasshopper, it just so happens they will address the lawmakers on "their" response to widening credit-market losses... (like the ones at Freddie and Fannie)

Oh, and this also plays well with the recent rhetoric by Paulson claiming that the Fed needs wider ranging powers... Oh brother! We need Big Ben with more powers like we need a hole in our heads!

Currencies today 7/10/08: A$ .96, kiwi .7575, C$ .9885, euro 1.5710, sterling 1.9745, Swiss .9685, ISK 75.29, rand 7.69, krone 5.1325, SEK 6.01, forint 146.82, zloty 2.0820, koruna 14.9450, yen 107.20, baht 33.65, sing 1.3610, HKD 7.80, INR 43, China 6.8425, pesos 10.30, BRL 1.6080, dollar index 72.75, Oil $136.35, Silver $18.15, and Gold... $929.90

That's it for today... Last week, the St. Louis EverBank group participated in a charity event that was a pinewood derby. My trading group won first place trophies for the Best of Show (their car) and the Best Pit Crew. Here's the skinny... Chris Gaffney headed up the group that made the car into an eerily exact duplicate of the "deathmobile" from Animal House, and they made the Big Cake that the deathmobile drives out of! Then the pit crew all dressed in togas! They were a sight to see! I'm trying to get the web people to post some pictures of them and their car! Toga, Toga, Toga! This has been a long week so far for me, so I'm glad that it's almost over, but first... Let's get to tub thumpin'! Have a great day!

Chuck Butler

President

EverBank World Markets

1-800-926-4922

1-314-647-3837

More Bad Data For The U.S. Economy

Chuck Butler — Wed, 14 May 2008 17:26:00 GMT

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

- Over 30 new web pages dedicated to foreign economies and currencies, including tips and insights from Chuck Butler, President of EverBank World Markets
- Condensed, relevant and timely economic information from around the globe
- Tools, charts and tables you need to compare and evaluate currencies
This is another groundbreaking step from EverBank. And further proof why we're worlds apart from ordinary banks.

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

In This Issue....

* Softer CPI?
* Foreclosures on the rise...
* Just wishing on a star...
* Jim Rogers on a Wednesday!

And Now... Today's Pfennig!

More Bad Data For The U.S. Economy

Good day... And a Wonderful Wednesday to you! Well... My first day at the Las Vegas Money Show went well... This place (Mandalay Bay) is so big and spread out, that's there's just too much walking for me. My presentation went well I think, as it's just too difficult to tell anymore for me...

Front and Center this morning we have the Gov't telling us that inflation was less than forecast last month... Just who do they think they're kidding here? I didn't just fall off the turnip truck! CPI rose .2% VS .3% forecast, putting the annual rate at 3.9% VS the previous 4.0%... Just doesn't sit well with you does it? Oh well... We carry on despite the dolts we have to work with!

Another piece of data already out this morning has foreclosures in the U.S. climbing 65% in April, and bank seizures more than doubling in the same period. RealtyTrac Inc. said this morning that there are more than 243,300 properties, or one in every 519 households, that were in some stage of foreclosure, which happens to be the highest monthly total since they began to keep the data!

Oh, but don't worry about all of this folks... Fed Chairman Big Ben Bernanke says the worst of over! And before I get away from all this, Freddie Mac, the second largest mortgage finance company, posted a $151 million 1st Qtr loss... And... I would bet they "fudged" the numbers to make them look "this good"!

I shake my head in disgust of the stuff we have to deal with... The lies, the cooked books... UGH!

Alright, I'm back now... I was away for a minute to yell at the walls!

The softer inflation data this morning is allowing the euro to gain some ground VS the dollar, as the market puts the Fed warnings of rising inflation and eventual rate hikes in the U.S. on the back burner.

Yesterday, we saw the euro lose a little ground after Fed Head Janet Yellen was wishing, and hoping and thinking and praying that the economy would be strong enough to raise rates... Oh give me a break! She's grasping at straws! Yellen stated that she "would be pleased" if the economy was strong enough to raise rates by year end. That's all nice and sweet, Ms Yellen... Did you realize you would move the markets with that "wish upon a star"?

Our friend, Jim Rogers, is back in the news today talking about the dollar rally... Let's listen in... "the dollar is going up, which is useful for people who want to sell the dollar down the road. With things the way they are, I would rather buy the Swiss franc and Asian currencies." Jim Rogers was also of the thought that carry trades are going to be reduced...

I'm all about this and agree with our friend... This is the stuff I pound out on the keyboard almost every day... The Carry Trade is a "risky trade", and when risk enters the markets in a big way, like I believe it will this year, the Carry Trade will be unwound, thus benefiting Swiss francs and the low yielding Asian currencies.

Last week I told you about the Chinese renminbi and how it had stalled at 6.98... There was a report this morning that Central Bank Gov. Zhou signaled that slowing exports will see an easing the pace of renminbi gains. If you recall that talk last week that I gave, this is what I was talking about... Slowing gains in the renminbi, (as if they weren't slow enough already!)

The Canadian loonie is knocking on the door to parity with the dollar again this morning... As it swaps places with the Swiss franc, that was at parity last month but has fallen back.

The Japanese yen is getting sold again... This is a back and forth tug-o-war with yen... But in the long run, I still see yen gaining VS the dollar... But we've got to get that stupid Carry Trade off the books first!

One currency that has remained pretty steady Eddie during this recent dollar strength is the Brazilian real... Of course I just put the "Chuck's kiss-o-death" on the real... Anyway... I was talking to a customer yesterday here at the show, and listed the positive balance of payment currencies from Norway, Sweden, Switzerland, euro, Japan, and Singapore as currencies an investor should look to... But added that Brazil and Australia have the "things" the world needs, and should keep these currencies underpinned...

Currencies today 5/14/08: A$ .9350, kiwi .7630, C$ .9995, euro 1.5470, sterling 1.9445, Swiss .9485, ISK 79, rand 7.6550, krone 5.07, SEK 6.0150, forint 161.50, zloty 2.1920, koruna 16.15, yen 105, baht 32.40, sing 1.38, HKD 7.8, INR 42.45, China 7, pesos 10.50, BRL 1.6665, dollar index 73.31, Oil $125.37, Silver $16.89, and Gold... $870.20

That's it for today... The BIG GUYS from Jacksonville were in town and came to my presentation yesterday. That was pretty exciting for yours truly... Since I got sick last summer, I haven't had much opportunity to be around the Big Guys from Jacksonville (the home office), and just talk to them, etc. So, that was good... We also have two of our NY Operations people here with us at the show... Rachel and Tom are doing great! And Kathy from Jacksonville is also here, so we've got plenty of help... I go back to the days when it would just be Chris Gaffney and I all day at the booth... Chris is on his way to Panama this morning... Better him than me, that's all I can say! I hope you have a Wonderful Wednesday!

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