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  • It's All About The Jobs Jamboree...

    * Currencies rally then fall back... * Rate slashers! * Following Japan? Let's hope not! * Canada's woes mount... ** It's All About The Jobs Jamboree... Good day... And a Happy Friday to one and all! A Fantastico Friday! A Jobs Jamboree Friday! Anything else, Chuck? No, I don't think so, I'll stop there... It's all about the Jobs Jamboree today. It's all about finding out just how badly the rot on the labor vine has gotten... The Weekly Initial Jobless Claims, yesterday, remained above 500K per week, which doesn't bode well for next month's data... But first... November's Jobs Jamboree on the docket! The "experts" have forecast a -335K drop in jobs for November... But, your old Pfennig writer believes that this forecast is low. I think it will be closer to -375K... The reason I say that is the employment piece of the ISM report that printed the other day... The employment index of that report showed some real serious rot on the labor vine... I read a report last night, where an economist was attempting to show how the report should read -750K... As bad as -375K is, I don't think the Bureau of Labor Statistics (BLS) would have anything to do with printing a -750K report!...
  • Automakers Say They Need Funding Now...

    * Currencies trade in a tight range... * China... * Commodity prices to blame... * "Safe" Treasuries? ** Automakers Say They Need Funding Now... Good day... And a Wonderful Wednesday to you! Well... I went "shopping" yesterday evening... At least I can say I did my bit to keep the economy afloat! HA! Thanks to all who sent along notes to me yesterday with kind words. I truly appreciate the kind words, you are all too kind! The automakers made their pleas to Congress yesterday, and they claim they are in deep dookie! GM says they need $4 Billion right now! And... The original $25 Billion figure has grown to $35 to $40 Billion... The currencies were lifeless yesterday, with only a blip up in euros to 1.2740, only to give it back overnight. Aussie dollars (A$) rallied on the Huge 100 BPS rate cut news from the previous night, but at the end of the day, that was all but forgotten... It was as if the currencies did a Hans and Franz... Got all pumped up... But then turned into 100 lb weaklings again as the day turned to night....
  • Back to Risk Aversion...

    * Japanese yen rallies... * Renminbi stumbles... * A very tough data week in store... * Rate cuts all around the world... ** Back to Risk Aversion... Good day... And a Marvelous Monday to you! In addition, Welcome to December! We had our first "dusting" of snow over the weekend, after experiencing wonderful weather Thursday and Friday. As much as they tried, even my beloved Missouri Tigers losing to ultra-rival, Kansas on Saturday, couldn't ruin what was a very fun and relaxing weekend for yours truly! Well... When I left you last Wednesday, I had thought that we could be on the cusp of a "change" in the currencies, as the Trading Theme that had held a tight grip on the currencies since July, was thrown to the side for a couple of days... But, I doubt "that" has happened, as a return to risk aversion is back on the table, which means the currencies and precious metals get sold, while Japanese yen, and U.S. Treasuries (read dollars) get bought....
  • Obama picks his economic team...

    * Obama picks his economic team... * Nordic currencies rise... * US floods market with dollars... * China looks to keep growth at 8%... ** Obama picks his economic team... Good day... Hope everyone had a great weekend, mine sure was. We had a fun time Friday night bowling and playing pool at our Xmas party. Unfortunately Chuck wasn't able to attend, as he was down in Florida speaking at a Wealth Masters Conference. He will be heading back into St. Louis today, and will be back in the saddle tomorrow morning for what will be a short week. The big news over the weekend was the unveiling of President elect Obama's economic team. Obama has picked Timothy Geithner, head of the Federal Reserve Bank of New York, to be his Treasury secretary, and former Treasury chief Lawrence Summers will be White House economic director. Obama is also likely to nominate New Mexico Governor Bill Richardson as Commerce Secretary. Geithner has had a primary role in the Federal Reserve's attempt to steer Wall Street through the current financial tsunami. He also oversees most of the Fed's special lending programs set up this year to channel more than $1 trillion to banks and other financial institutions....
  • Misguided risk aversion...

    * Bad data pushes investors into US treasuries... * Barclay's says the euro will rally... * SNB surprises with a rate cut... * Iceland gets their bailout... ** Misguided risk aversion... Good day...The dollar rallied a bit yesterday on some very poor economic data which illustrated just how bad things are getting here in the US. As Chuck has repeatedly told everyone, in the current trade pattern the dollar rallies whenever we get negative data for the US economy. Investors get spooked by this negative data, and run scared into the 'safety' of US treasuries. Ty sent me a quote from respected newsletter owner/author Bill Bonner yesterday: "Misguided risk aversion, anyone? A few months ago, investors stretched for yields. Now, it's safety they reach for...and grab U.S. Treasury debt with both hands. Investors now seem to have an unqualified trust in the full faith and credit of the world's largest debtor. Yields on 91-day T-bills have fallen to 0.11% - scarcely a tenth of one percent!"...
  • Paulson throws the markets a curve...

    * Paulson throws the markets a curve... * Goldman says to buy the yen... * RBA intervenes to protect the AUD$... * China provides support to commodities... ** Paulson throws the markets a curve... Good day... Chuck is out today, so I get the opportunity to share some of my thoughts on the markets. As many of you know, I spent most of last week in Washington DC giving presentations at the Money Show. On the way to the hotel, the cab driver who had noticed my EverBank luggage tag asked if I was a banker. He said he had seen a lot of us lately. I guess I was one of the few bankers flying into Washington DC who wasn't heading over to the Treasury Dept. to get some of the cheap money they are passing out. I had a great trip to Washington and really enjoyed the opportunity to spread the word about EverBank and the protection that portfolio diversification provides. I don't think Treasury Secretary Paulson is having as good a time as I did in the nation's capital. When he came down from NY a couple years ago to take over the Treasury, he was Wall Street's best paid CEO and looked to cap his career with a high-profile sojourn in public service. But his credibility has really taken a hit over the past year, and his update before congress yesterday didn't quite go as everyone expected. Chuck left me the following to share with readers this morning....
  • The Junk Yard Dog Bites!

    * The dollar rallies big time! * A dollar conspiracy? * Bailing out the automakers? * Weathering the storm in N.Z.? ** The Junk Yard Dog Bites! Good day... And a Wonderful Wednesday to you! Well, the Junk Yard Dog got a hold of the euro yesterday, and even though the U.S. Banks, thus the majority of currency desks, were observing Veteran's Day, the move down in currencies VS the dollar, led by the euro, was drastic! The Junk Yard Dog I'm talking about is Jean-Claude Juncker, chairman of the Euro group... I stopped the euro in its tracks from its nascent rise in the past month, by saying the "euro's recent rise was undesirable"... He also deep sixed the euro, and thus all the currencies save yen, by saying he "didn't see any reason there couldn't be more rate cuts by the ECB"... (the ECB is of course the European Central Bank) Well... These two comments tore through any gains the currencies had mounted VS the dollar in recent weeks, like a Junk Yard Dog tears though some raw meat! It was a knife to the euro's heart......
  • Veteran's Day

    * The China good feeling dissipates... * Currencies lose their edge... * Fannie Mae needs more! * Silver manipulation? ** Veteran's Day Good day... And a Terrific Tuesday to you! A Veteran's Day Tuesday! This is a Banking and Federal Holiday today, so the bricks and mortar banks are closed, and there will be no mail delivery, and of course your friendly neighborhood Government worker gets the day off. I'm here, in the saddle, writing the Pfennig like it's a regular work day, and the boys and girls will begin to gather in about 2 1/2 hours from now. We'll get all caught up, return some calls and head home today. Veteran's Day... I thought I would begin today with a snippet of a Veteran's Day poem by Jared Jenkins......
  • U.S. Payrolls Plunge!

    * Job losses begin to accelerate... * Currencies inch higher... * News of the weird... * China announces a stimulus plan! ** U.S. Payrolls Plunge! Good day... And a Marvelous Monday to you! The weekend was great, as I got to spend it with my kids at the Missouri Tigers football game on Saturday. It was a cold one, but a great game, and fun time all day and night. Well... We might as well get right into this... I'm sure you heard that the Jobs Jamboree was awful on Friday. UGH! Jobs are dropping like the temperatures outside, and there doesn't seem to be anything to stop them from dropping either! For the record... October's jobs losses were worse than expected (-200K) and came in at -240K... OUCH! But the real kicker, something the mass media might not have covered, was found in the September revision... Recall that September's Jobs data showed a negative -159K... Well, that number was revised to -284K! Double OUCH!...
  • Heading Towards Zero...

    * Fed cuts rates 50 BPS! * Currencies rally Big! * 3rd QTR GDP to go negative? * I.O.U.S.A. ** Heading Towards Zero... Good day... And a Tub Thumpin' Thursday to you! It certainly was a Tub Thumpin' Wednesday for the currencies, foreign stocks, commodities, and the Philadelphia Phillies! This by no means that the deep dense fog that has hung over the markets for 3 months has lifted for good... It did, however, lift for one day, and what a day it was! Oh, and the Fed did indeedly do cut their Fed Funds rate to 1%, which works out great since Fed Funds had been trading at 1% anyway! I had a reported from Dow Jones call me a few minutes after the rate cut and ask me my opinion on what the dollar was doing, which at the time was rallying back a bit... I said it looked like a classic case of buy the rumor sell the fact, that enough speculators were pushing the dollar lower ahead of the rate cut in hopes that a larger cut would be made. That, however, was not the case, and the dollar rallied... But only for about 20 minutes, and then it took a rid on the slippery slope, with the euro pushing to the 1.29 handle as I left for the day....
  • A Currency Bounce...

    * U.S. stocks soar! * Currencies rally! * Consumer Confidence at an all-time low! * Getting off the bench! ** A Currency Bounce... Good day... And a Wonderful Wednesday to you! The fall chill has really set in here as witnessed by my need to throw on a jacket and my Missouri Tigers baseball cap each morning! When you are basically bald like me, the cold air is not a friend to you, thus the need for a baseball cap from now until late spring! Well... The trading theme remained in place yesterday, but this time it was reversed. For those of you new to class, or any of you who have been playing horse hooky, the trading theme that has gripped the markets since August is: The deeper, darker, and more dangerous the U.S. economy and financial meltdown, including the credit market's locked status, the dollar gets bought... If there is any sign of light to all this mess, the dollar gets sold, for whenever the markets get their minds off the mess, they are reminded of awful fundamentals for the dollar....
  • Credit Fears Ease...

    * Credit fears ease... * Chuck's thoughts from the road... * India cuts rates... * China growth slows, but is still 9%... ** Credit fears ease... Good day...And welcome to what should be another volatile week in the markets. Credit worries eased somewhat over the weekend, which helped push money back into the higher yielding currencies. Today Federal Reserve Chairman Ben Bernanke will head to Congress to share his view on the economy. Should make for a pretty interesting day of trading. Hope you are sitting down and holding on, it looks like we are going to take another lap on the currency roller coaster! The yen fell over the weekend as investors began moving funds back into the higher yielding currencies of Brazil, Mexico, New Zealand and Australia. I won't go into the whole explanation of the carry trade again, but suffice it to say that these moves haven't proven to have much staying power. But I do like the news that the credit markets may be calming down a bit after the government moves to shore up the big international banks....
  • Govt to follow Buffet's lead...

    * Govt to follow Buffet's lead... * Aussie $ has biggest gain ever... * Yen reverses on carry trades... * China's currency reserves rise... Good day...And what a day it was! As I stated in yesterday's Pfennig, Columbus day is just sort of a holiday for the markets. These 'semi-holidays' can create some volatile trading, as not all of the markets are open and many desks are short staffed. So with the Federal Reserve and the banking system closed, the equity markets had the largest one day gain in over seven decades. I guess the stock jockeys figured they weren't going to get any bad news out of the credit markets, which were closed, so no news is good news!! The rally was certainly welcomed, and hopefully some of the gains will stick today as we return to a normal trading environment. And I guess some of the credit for the stock rally has to go to finance ministers around the globe who finally agreed on a plan which seems to be able to work. The leaders of a majority of the worlds largest economies borrowed a page from Warren Buffet's playbook and decided to invest directly into some of their largest financial institutions. The Bush administration announced it would invest $125 billion in nine of the biggest US banks. The US move came after France, Germany, Spain, the Netherlands, and Austria committed $1.8 trillion to guarantee interbank loans and take equity stakes in European banks....
  • Senate Passes The Bailout Package!

    * Euro falls to 1-year low.... * Bailing out foreign investors? * O'Neill has a better plan... * ISM collapses! But the dollar rallies... ** Senate Passes The Bailout Package! Good day... And a Tub Thumpin' Thursday to you! Rocktober started off with a bang for the dollar, as the green/peachback continued to gain VS the euro and other currencies, pushing the euro to a one-year low VS the dollar. We all sat here and shook our heads in disbelief yesterday, as the U.S. ISM Index (manufacturing) collapsed in September, but the dollar rallied anyway. The ISM Index fell from 49 to 43.5, the lowest print since Rocktober 2001, which happened to be near the end of the 2001 recession and right after the awful period following 9/11. So... To me... This really paints the recession picture clear and bright for all to see... So, why did the dollar rally with this albatross around its neck?...
  • The Bailout Lives!

    * The Senate to the rescue? * Dollar rallies big time... * Rumor day... * Consumer Confidence stronger? ** The Bailout Lives! Good day... And a Wonderful Wednesday to you! Welcome to October! Or as we say in St. Louis... Rocktober! September went by in a flash, let's hope Rocktober slows down a bit! Well... Monday we had carnage in stocks, and yesterday in currencies, while stocks rebounded. What a difference a day makes! On Monday, the House voted down the Bailout package (doesn't it just get your goat that it's still being referred to as the "rescue plan"?), and yesterday, seeing the collateral damage caused by the "no" vote, Congress decided to try and rescue the bailout plan....