Refiguring the Trade Deficit
"Check this out: if you calculated the trade deficit on a 'daily deficit,' (or Double D!) you will find that January's 'daily deficit' was $2.2129 billion per day and the 'daily deficit' for February was $2.3464 billion."
By Chuck Butler In this issue… --- Advertisement --- EverBank® Metals Select*
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The euro dipped a bit after retail sales rebounded in March to the tune of 0.6%, and then bounced back a bit when the weekly jobless claims ticked up to 311,000. But all in all, it's a range bound day. So, the BHI was bang on again with regards to indicating what direction retail sales will go! Yesterday, I was screaming at the walls because of the dolts that thought and wrote about how the U.S. trade situation was "getting better." Here's something these mental giants should have thought about before opening mouth and inserting foot. Doesn't it make sense that February's deficit would be smaller than January's, simply due to the fact that February has fewer days? Check this out: if you calculated the trade deficit on a "daily deficit" (or Double D!), you will find that January's "daily deficit" was $2.2129 billion per day and the "daily deficit" for February was $2.3464 billion. Get out! So, the total monthly deficit figures that the media and dollar bulls jumped all over the other day weren't so much "better" after all - were they? Nope. Today, we'll see my favorite piece of data: Capacity utilization, and industrial production. For new readers, capacity utilization is really the only real piece of data that's forward looking. That's why I like it. Another reason is that no one else but me looks at this data! Anyway, both pieces of data are not expected to be any great shakes regarding a change in direction for the U.S. economy. So, we'll end the day early today, and head to an Easter egg hunt, eh? Well, China took another step toward a more flexible currency policy last night when the People's Bank of China announced that it will now allow companies and individuals to hold more foreign currency and qualified financial institutions to invest abroad. This will allow more movement outbound, and is just another step toward a flexible currency. I have to laugh though. As I've already told you, Chinese President Hu will visit the United States, next week. So, Hu comes to town with some arrows in his quiver. He can show the "boys" on "the Hill" that he not only allowed the renminbi to make a larger than 0.03 daily movement earlier this week, but has now allow outflows of the currency. I don't think that's going to appease the "boys," especially Schumer and Graham. Besides, Hu has some splainin' to do, Lucy! I'm sure the "boys" are going to point toward China's second-largest trade surplus that was posted the other day, and the announcement last night that their foreign exchange reserves rose 32.8% from a year ago! But, I don't think Hu will give two hoots! And, from the "Did You Know" files: Did you know that Asia holds 60.8% of worldwide reserve assets? Wow! Well, yesterday I told you that the Net Foreign Security Purchases (NFSP) data would be printed today. My bad. Those dates just blended together on my screen. The sun was in my eyes. I tripped on a rock…etc. The data will print on Monday. Earlier this week, I said, "Iceland is in the news overnight, as their central bank governor. said in an interview last night that he will push interest rates to record highs to put a lid on prices. 'Our models show to keep inflation at bay, we would have to go very much higher, even up to 16%.'" Well, Icelandic inflation has pushed up to 5.5%. So, it looks like the central bank governor has some work to do! Yesterday, someone asked me if I thought Iceland looked like a buying opportunity at current levels. Maybe. The way I look at it, the rot has been exposed and the central bank, along with the government, has addressed it. Now they need to take steps to correct the deficit problem. When we see them make those initial steps, it might be looked at as an opportunity. I've been tarred and feathered enough over Iceland, so I'll add the bit that this is just my opinion, and I'm not "advising" you on your investments! Canadian loonies and Aussie dollars both end the week on a sour note, as they were not able to maintain the higher levels they had achieved earlier this week. But then again, oil, and gold both stalled this week, too. Base metals, like copper, didn't stall and continue to push higher. Silver hasn't stalled either! Looky here: Silver is about to hit $13! Still a ways to go to get back to my 1981 buy level, but at least it is moving in the right direction again! I just think that once trading ended on Wednesday, things have gotten put on the back burner until everyone gets back from the long holiday next Tuesday. So, with that in mind, I'll head to the big finish, and go get my Friday latte' No latte' buddy today, as Michelle bagged me today! Ha! Currencies today: A$ .7285, kiwi .6188, C$ .87, euro 1.2115, sterling 1.7525, Swiss .77, ISK 76.20, rand 6.12, krone 6.4930, forint 220.35, zloty 3.25, koruna 23.6575, yen 118.50, baht 37.95, sing 1.6085, China 8.0184, pesos 11.10, dollar index 89.59, silver $12.98, and gold $595.50 That's it for today. Big night for the EverBank St. Louis office; we are all going to the baseball game tonight at Busch Stadium. Our little Christine has been so fired up all week! Tomorrow, my little buddy's football team gets to play at the Rams indoor facility; he's fired up about that, too! Well, time to go. Have a great Friday, and if you get a long weekend, enjoy that, too! | 
