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  • Downgrading Japan.

    In This Issue.

    * Is a downgrade coming our way?

    * CBO revises forecast upward.

    * FOMC leaves rates & QE2 in place.

    * Richard Russell on the dollar.

    ...
  • Brazil To Benefit From New Carry Trade?

    In This Issue..

    * The dollar fights back...
    * Government deficit spending deep sixes us...
    * Brazilian rate hikes on the table...
    * Round Two of the PPT thoughts...

    Good day... And a Thunderin' Thursday to you! Well... It's not really Thunderin' outside, but it is snowing, with about 3-4 inches on the ground already, and the snow coming down so thick that seeing is difficult. I made it here, but then I drive a car that was made to go in stuff like this! Pretty soon, my phone will begin to ring, with colleagues calling to ask me how the roads were...

    Well... We had more probing higher in the non-dollar currencies only to see the gains wipe away at the end of the day yesterday. Still, as I told a radio audience in Oregon yesterday, traders, investors, etc. still believe the euro is worth more than the dollar by quite a bit... Gold also gave back some gains overnight......
  • Nothing comes out of the G20 meeting...

    * G20 largely a non-event... * Pound moves up... * Brazil falls on sell off of emerging markets... * Japan enters recession... ** Nothing comes out of the G20 meeting... Good day...and welcome back to another work week. I driving into work this morning and started thinking about the growing number of people who no longer have jobs to report to. And the problems are no longer just concentrated on the manufacturing sector. I was shocked at the long list of retail stores which are planning to shut down after the holiday season. The situation in the US economy continues to deteriorate, and unfortunately things are going to get much worse here in the US before they turn around. On that cheery note, I'll get started....
  • FOMC Meeting Begins Today...

    * Mini-currency rally is cut short * Is it Japan or U.S.? * Gold stages a rally... * Swiss francs remain well bid... ** FOMC Meeting Begins Today... Good day... And a Terrific Tuesday to you! Well... We saw some profit taking in the currencies yesterday, which meant a mini-rally in non-dollar currencies for the first time in what seems to be a month of Sundays! At one point in the day, the euro had added more than 1-cent to its figure dragging sterling, Swiss, Canada and a host of others along. But, that didn't last in the overnight markets, and we're right smack dab back on square one where we left off yesterday. This morning we'll listen in on former Fed Chairman Volcker's speech, which ought to be a good one, don't you think? I mean, this is the guy that said a couple of years ago that the U.S. could see a currency crisis... And didn't it? OK, it's not now, but turn your clocks back to June, and you'll see what I'm talking about here. Volcker is a "hero" of mine in how he took on the inflation of the late 70's early 80's and didn't dance around the dance floor with it... He whipped it into shape, and then left it all in good shape for Big Al Greenspan... We all know what happened after that!...
  • ECB to change dollar's direction?...

    * ECB to change dollar's direction?... * BOE leaves rates unchanged... * The worst is not over in US housing... * Japan's government signals expansion is over.. ** ECB to change dollar's direction?... Good day...The dollar continued its assault on the world's currencies yesterday as the dollar index moved above the 74 handle. I pulled a chart off the Bloomberg on my way out the door last night, and it showed the only major currency which was up vs. the US$ yesterday was the Swedish krona, which managed a .07% increase. This dollar rally has legs, but I still question the fundamentals behind the dollars surge. Today may be the day we see the dollar finally make a turn, as the ECB will be announcing their rate decision. It is not that I expect Trichet to raise rates, but I do expect him to sound hawkish and refocus the markets attention on Eurozone inflation and away from worries about growth. Two reports out of Germany this morning will bolster Trichet's hawkish stance. German exports rose more than economists expected in June, defying a stronger euro and pushing the trade surplus to a record. Exports increased 4.2% from may, the most since September 2006. German industrial production also increased for the first time in four months with output rising 1.7% from a year earlier. The IMF last month rose its forecast for German economic growth this year and said the global slowdown linked to the US financial crisis was less severe than it expected....