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  • Intervention?

    In This Issue..

    * Euro recovers 2-cents...
    * Gold gets trashed!
    * Questions on China...
    * Counting the deficit correctly...

    Good day... And a Thunderin' Thursday to you! The heavy rain is back! Just in time to ruin my first Cardinals game of the year too! Yes, a day game today, and it's raining... UGH! Oh well, time to start the letter... There are a couple of Big things to talk about today that happened yesterday, so let's get set, ready, go!

    OK... Front and Center this morning, we have the euro's rise yesterday, and Gold's awful performance... Let's go to the euro's rise first...

    The euro did a little magic act yesterday, defying gravity, by rising VS the dollar during the day, while every other currency not called U.S. dollars, Japanese yen, or Chinese renminbi, was getting sold like funnel cakes at a state fair. Does this sound suspicious to you? It did to me... And I told Chris during the day, that it sure looked like European Central Bank (ECB) intervention......
  • Spraying Round-up....

    In This Issue..

    * Industrial Production declines...
    * Stocks sell off, leading currencies down...
    * Indian election spurs a rally...
    * China stockpiles commodities...

    Good day... And a Marvelous Monday to you! Thanks to Chris for picking up the ball on the Pfennig Friday. I returned to St. Louis with a very swollen leg and foot from all that walking in Las Vegas. One of these days I'll learn, eh? Any way... A restful day with my feet up on Friday, and I was ready to go again!

    Well... As much as I dislike having to say so, because I told you this might happen... The currencies have given back some major ground VS the dollar since Friday morning. It's all tied to the fact that the euphoria going around the markets the previous week regarding stocks and the U.S. economy, came to a screeching halt last week. I pleaded and begged for the currencies to break this link to stocks, but it wouldn't / didn't happen and voila! What we have here is a failure to break the link, and now that there's a falling demand for stocks, currencies have tanked too... UGH!...
  • Up, up, and away...

    In This Issue..

    * TALF...
    * Dollar falls even more...
    * Commodities...
    * Still disappointing...

    And Now... Today's Pfennig!

    Good day...And a Fantastic Friday to you! It's the end of another week that not only brought us the beginning of spring but also a major shift in the currency market. The effect from the Fed's decisions on Wednesday carried over into yesterday's trading session with the dollar engaged in another large sell off. How long and how far would be the big question marks right now but until another major event comes along, the dollar should continue to get sold.

    As I just touched on, the dollar was still down and out suffering from a two day hangover yesterday as a result of the quantitative easing measures the Fed has decided to pursue. We also gained some insight into the TALF that I mentioned yesterday which is intended to resurrect both consumer and business lending. They will expand to accept securities backed by four types of loans that include leases of business equipment and rental car fleets, securities backed by loans extended by mortgage servicers to cover missed payments by homeowners, and securities for floorplan loans. The Fed also said that this announcement was a first step in expanding the TALF and that a number of other asset classes are under review....
  • Wild Swings!

    * Euro gains, then loses, then gains... * Inflation and Commodities... * The euro turns 10! * Risk Aversion remains but is waning... ** Wild Swings! Good day... And a Terrific Tuesday to you! Well, it happened way too late for yours truly to witness it, but my beloved Missouri Tigers rallied and won the Alamo Bowl in overtime. Go Tigers! Hopefully they can fix the defense before next fall! OK... Remember those Wild Swings I talked about yesterday? The Wild Swings that could be a result of thin volumes in this the second week of Christmas. Well... We witnessed them in earnest yesterday! As I signed off yesterday, I told you that the euro had rallied 2 whole figures to 1.43 and change. Well, that rally dissipated throughout the morning, and by late in the day the single unit was 1.39 and change... WOW! Now that's a Wild Swing! You can point to profit taking as the reason for the move, and with the volumes thinned out by Holiday trading, one profit taking sell begot another, and before you knew it, the euro was looking at a loss on the day....