May 2009 - Daily Pfennig

In This Issue..

* dollar rallies on N. Korea warning...
* Emerging Markets decouple...
* A debt upgrade for New Zealand...
* Swiss francs rise despite SNB warnings...

Good day... And a Thunderin' Thursday to you! Yes, the rain continues here in St. Louis, but that's normal for this time of year. But the rain brings the thunder... And so it is a Thunderin' Thursday!

Well... The dollar came back with some vengeance yesterday pushing the Big Dog, euro, back well within the 1.38 handle, and all the other little dogs, other currencies, followed. There wasn't data to speak of yesterday to push the dollar higher, it was simply a case of fright, as safe haven flows went the dollar's way after the news of a N. Korea attack warning spread throughout the markets....

In This Issue..

* Too far, too fast?
* Currencies give back some ground...
* Did China send a message?
* The Mogambo and more!

Good day... And a Terrific Tuesday to you! I hope your Memorial Day Holiday weekend was grand... We had beautiful days Friday and Saturday, but Sunday and Monday brought the monsoons! Still... I got to spend time with family and friends, and attend a Cardinals game! YAHOO!

Well... Recall on Friday morning, I told you about how we could see wild swings because of the thinned out trading desks? Well, that's exactly what happened... The Big Dog, euro, traded well into the 1.40 level, up to 1.4050 at one point! The currencies across the board were kicking sand in the dollar's face and laugh. You may also recall that I said that Friday didn't seem like a good time to buy given the strength... And that too, has played out with the currencies giving back a good chunk of ground taken last week, in the overnight markets....

In This Issue..

* Currencies & Gold move together!
* Fed downgrades economic growth...
* More on China...
* Yen breaks the trading pattern...

Good day... And a Tub Thumpin' Thursday to you! It's Tub Thumpin' here, as the warm winds of spring have finally sprung, the Cardinals have won two in a row from the rival Cubs, and I'm headed to Busch Stadium tonight! Oh! And fundamentals, as far as currencies and metals are concerned, seemed to be in place yesterday...

That's right... The rout on the dollar was on (recall yesterday, Wayne and Garth playing street hockey... Game On!) and this time... Not only did the currencies rally VS the dollar, Gold and Silver took part in the proceedings too! It's been a long time since we've seen this happen... For the most part, whenever the currencies (minus yen) rallied, Gold would back off, and vice versa... Not yesterday! For the first time in a long time, the negativity toward the dollar was front and center BIG TIME!...

In This Issue..

* Risk Assets soar!
* German Investor Confidence surprises!
* High yielders kicking tail...
* Who's afraid of the SNB?

Good day... And a Terrific Tuesday to you! Finally! Spring has arrived and for more than one day at a time here in St. Louis! YAHOO! A very cold and wet spring for us, brought us to the middle of May before normal spring weather was upon us... Good things come to those who are patient, right?

OK... Speaking of patience... I think that's what we'll all have to possess a lot of going forward with these currencies and stocks... Here's what I'm talking about... Yesterday morning it looked as though the recent rally in stocks was over, complete, pack up the bags, get on the bus, Gus... And with the trading theme of throwing all risk assets in the same bag and trading them alike that's been in place since last July, this would seem to be a nail in the coffin of the currency rally we've seen going on since March 1st.......

In This Issue..

* Carry trades unwind...
* Euro zone GDP falls...
* Will TIC flows be enough??
* Aussie dollar predicted to outperform...

Good day...Chuck handed me the Pfennig this morning, as I took an early flight home yesterday and he got back to St. Louis much later than I did. The Las Vegas Money Show went well, as Chuck packed the presentation rooms with investors looking to learn more about investing in Gold and currencies. Attendance seemed like it was down a bit, but we stayed busy at the booth with investors looking for diversification. We also got to see a number of 'old friends' who stopped by the booth to say hi. All in all it was a good three days, but as always, it is good to get home and back into the routine.

The currency markets fell back into their established routine also, as fear drove investors out of riskier assets and back into the US$. We saw a general reversal of the carry trade, with the Japanese yen the only major currency which appreciated vs. the US$. As Chuck pointed out last week, investors feeling more confident about the global economy, dusted off their carry trades which had made them good money over the past few years. But traders are still a bit skittish, and move back out of these leveraged trades at the first sign of trouble in the global economy....

In This Issue..

* Foreclosures rise...
* Green Shoots, no so green!
* getting on a bus...
* Losing a triple A rating?

Good day... And a Wonderful Wednesday to you! Not wanting to start the day off with bad news... But I just saw a flash on the TV that said, 'foreclosures jumped 32% last month'... More Blood in the Streets, eh? That just happens to be the title of my presentation today... Blood in the Street: Bargain time or just a cease fire? Hey! I don't make these things up...

OK... Another day here in Sin City... This city is packed with people, everywhere we go, it's simply amazing... There's been no sign of a recession here... Of course, if you got out of the casinos, and shows, you would see some of the greatest devastation any where in the housing market here... So.. It's not a seashells and balloons in Vegas... I guess with the economy so rotten, people are hoping to strike it rich in the casinos though... Hmmm, have they not figured out that these ginormous buildings are here to make money?...

In This Issue..

* Jobs Jamboree results...
* A double whack for Treasuries...
* The loonie is stealth like...
* Oil on the rise...

Good day... And a Marvelous Monday to you! I hope you enjoyed your Mother's Day weekend. Friday was absolutely crazy in the markets. The currency screens lit up, the price of Oil was on the rise, and Treasury yields were rising, thus pushing the value of existing bonds downward. An absolutely crazy day, that scared the bejeebers out of the Chinese... So, let's go to the tape to see what's going on here...

Front and center to talk about this morning, was the Jobs Jamboree... The mass media would have you believe that the recession has ended, and there are no longer any problems with the credit markets, and liquidity, not to mention the sorry state of financial institutions... Why? Because after the previous month's job losses were revised up from 663,000 to 699,000 (nobody cared about that!) the April figures came in at, according to the media, "just" 539,000... YAHOO! Let's have a party, according to what I kept seeing on the TV!...