Bailout Package For Greece Put On Hold...
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In This Issue..

* Euro rally fades on latest Greek development...

* Brazilian real rallies...

* Canadian loonie ratchets higher...

* Another Geithner smoking gun?

And Now... Today's Pfennig!

Bailout Package For Greece Put On Hold...

Good day... And a Tub Thumpin' Thursday to you! It's Tub Thumpin' because... I say so! Every day's a new day... And for someone like me that had two strikes called on me before I knew the pitch was even coming... Every day is special!

I want to thank every one that sent along a note of good wishes, and advice to tell the people that decide that email is a good way to ruin someone's day, good riddance... I'll have more on this in the Big Finish...

But what a day the currencies had yesterday! The euro gained ground all the way back to 1.3730 (but saw some profit taking at the end of the day) and all the other currencies followed in step... Now... There's two ways to look at this... Either the euro is like a star that's getting ready to burn out... (it always shines brightest before it burns out), or... It's like a star that had been covered up by another planet, and is coming back into view!

I tend to think it's the latter of the two... But, the euro is not out of the woods, with regards to Greece, and any thoughts to that end will be quickly met with disappointment, I'm sure!

The news overnight was quite damaging to the euphoria that the aid package of 34 Billion euros provided the other day. German Chancellor, Angela Merkel, whom I've quoted many times in the past and believe she "gets it", put a dagger in the heart of the aid package when she said that a planned meeting with the Greek Prime Minister, "won't be about aid commitments"... Uh-Oh! What's Ms Merkel telling us? That the 34 Billion euro package to Greece that the media reported on last Saturday is not going to materialize? That stinks!

Look, as I said the other day, I'm NOT for bailouts, and in the Eurozone, one bailout of Greece would probably beget another bailout of the next sister state of the poor, the needy would be lined up at Germany's doorstep looking for a handout... However, it looked, the other day when it was announced, that this bailout was what the markets wanted to see, to provide calm to the region... So, in that vein I'm all for it... But... Now Ms Merkel has thrown a cat among the pigeons...

The French finance Minister seemed to be singing from the same song sheet as Ms Merkel, as she said, "if there is a need for assistance, there will be a way to do it, but there is no need at this time."

I guess the results from today's auction of a 10-year Greek syndicated bond offering will dictate whether there is "need" or not, eh? I mean, if Greece can't get bonds sold, that's pretty telling right there! More on Greece in the "then there was this section"...

I guess we'll have to tip toe through the tulips with the currencies right now, it's just not out of the question...

The news on the day brought us information on how the U.S. Service sector ramped up, which reminds me of the status of the U.S. economy before the financial meltdown... We had become a service sector economy (and our service was horrible!) which is not exactly what good economies are made of... You need to make things... Manufacture things... Grow things... And so on... Not just service someone else's products that are shipped to your country and made elsewhere! This makes us big on consumption... And I used to say this over and over again back in the day, that consumption does not build wealth! In fact... The Big Boss, Frank Trotter, tells a story about Consumption... He says that he was walking through an old cemetery and most of the long perished people had recorded that they had died from consumption... So, even back then it was not a good thing!

But with 21% unemployment, I can't imagine that consumption would get to the levels it got to before the financial meltdown...

Oh! And add one more state to the list of states here in the U.S. that have basically gone into default, failing to pay this, that or the other thing... Massachusetts, went into the red on their pension payments last month, and had to borrow from the Government to make the payments... Recall a couple of weeks ago, when 49 of the 50 states had snow on the ground? I'm afraid we're headed toward that same kind of roll call when it comes to defaulting states here in the U.S.

One of the best performing currencies of the past week has been the Brazilian real... Recall when the Brazilian Sovereign Wealth Fund (BSWF) first came on the scene promising to buy dollars and make the real weak, I said, "it would only work temporarily, and only as long as the BSWF has an appetite for dollars"... Well, from the looks of it, the BSWF's appetite for dollars was satisfied... Or... They are setting a trap... I'll say to tread carefully here, for a while, do not go "all in"...

More good news from Australia last night... Australia's trade deficit narrowed more than expected in January... Exports of raw materials increased and imports for fuel decreased... Now that's a winning formula! The A$ was over 90-cents most of yesterday, but succumbed to the profit taking and fell below the 90-cent figure briefly overnight, but has rallied back to the figure early this morning... It seems that 90-cents has been a real big hurdle for the A$ to get past since falling below it in January. So... Without a chart, I would say that it looks like a line of resistance... Or... Traders just don't want to get behind it above 90-cents until the problems in the Eurozone fade... I personally like the latter of the two!

Oh! And the Trade Deficit narrowed A$ 1.18 Billion in January to A$ 2.17 Billion! WOW! A couple of good months and that could be wiped out completely!

My friend, Ashish Advani, will be very happy this morning, as the Indian rupee has gone below the 46 figure with by a huge leap! Unfortunately, this is where the Indian Central Bank normally steps in to stop the rally of the rupee... But, hey! We can hope the Central Bank doesn't act, and the rupee can continue on its own happy path higher... Just wishin', and hopin', and thinkin' and prayin'...

Over on this continent... Canada will be seeing the color of the budget for the first time today... I would think that Canadian officials would be quick to get the budget passed as to not upset the applecart of what's positive in Canada right now... Speaking of what's right... The economy... The latest report of manufacturing will print today, and is expected to reflect the manufacturing index to surge higher... If so, that's another notch in the belt of the rate hike campers!

The European Central Bank (ECB) and the Bank of England (BOE) both meet this morning, but both are meeting with handcuffs on, for they couldn't raise rates if they wanted badly to do so! In the ECB, I'm sure the official statement by ECB President, Trichet, will center around when further stimulus may be removed... And in the BOE, I'm sure that the BOE will be discussing the continuance of Quantitative Easing, for things in the U.K. economy remain pretty dire.

It's Thursday, and that means.... Drum roll please... That means we'll see the latest Weekly Initial Jobless Claims report! We'll also see a Factory orders report, and the stupid non-farm productivity report... So... The Jobless Claims carries the BIG STICK today, data wise!

Carrying the Big Stick tomorrow will be the Jobs Jamboree! More on that tomorrow...

And... It appears that there's yet another smoking gun in U.S. Treasury Sec. Geithner's office... This time it centers around his participation in the AIG bailout, on a different angle than previously discussed... I can't believe that the Treasury Sec. is still around quite frankly... It seems that he could have been sacrificed to save face for the Gov't by now... Maybe as this story unfolds, that will be the case... Not that I want to see him lose his job, mind you... I just think this whole thing while he was President of the N.Y. Fed stinks!

Then there was this... It seems that the Greeks didn't like the 6 Billion euro spending cut that the Greek Gov't put together yesterday to calm the markets... Greece's federation of civil servants unions decided a work stoppage tomorrow beginning from midday and a protest rally in Athens to oppose the government's austerity measures... There was also a report that the Finance Minister's building was blocked by protesters...

I see the same kind of insurrection in this country if our Gov't were to make "real spending cuts"... But for now, we don't have to worry about that, for, our Gov't, bless their hearts, is not making "real spending cuts", instead, they are spending more money we don't have, and will never be able to repay!

And finally... The emails... Here are the new rules... I no longer will respond to nasty emails... I personally don't have the time to deal with these any longer, so if you write one, be sure that it won't be read, responded to, or talked about, it will simply be deleted... If you want to debate something with me in a normal way, go for it! But... Sticks and stones may break my bones, but nasty emails will no longer hurt me!

To recap... The currencies really had a nice performance yesterday, but that was wiped out, first by profit taking, and then the putting of the Greece bailout on hold for now... Has the Brazilian Sovereign Wealth Fund's appetite faded for dollars? It appears likely... And the best performers on the day appear to be Canadian loonies, and Indian rupees...

Currencies today 3/4/10: American Style: A$ .9015, kiwi .6890, C$ .9705, euro 1.3670, sterling 1.5090, Swiss .9345, European Style: rand 7.50, krone 5.90, SEK 7.1350, forint 194.90, zloty 2.8550, koruna 18.89, RUB 29.80, yen 88.50, sing 1.3990, HKD 7.7630, INR 45.80, China 6.8264, pesos 12.70, BRL 1.7910, dollar index 80.08, Oil $78.90, 10-year 3.62%, Silver $17.17, and Gold... $1,138.10

That's it for today... My little buddy, Alex, was so happy yesterday, when he found out that he gets to have his braces taken off in 3 weeks... I'm going to have to stop calling him "my little buddy", as I realized that he'll be in high school next year, and will have reached the age to obtain a driver's permit this summer! YIKES! I go today to the retina institute that tried to save the vision in my left eye... It has gone completely blind, but that's something they told me might happen if I had to go through radiation on the eye, which I did... So, I hope they have one more trick up their sleeve! My beautiful bride called me from south Florida last night, to tell me she was freezing! And spring training games begin today for the Cardinals. The first "home game" is tomorrow in Jupiter... So let the games begin! I hope your Thursday is Tub Thumpin'!

Chuck Butler

President

EverBank World Markets

1-800-926-4922

1-314-647-3837





Posted 03-04-2010 9:06 AM by Chuck Butler