More Awful Housing Data!
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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


EverBank World Markets



Posted 07-25-2008 8:55 AM by Chuck Butler
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