Losses Keep Piling On
"These losses just keep mounting, and sooner or later the pressure on the dollar will be tremendous… That is unless someone can invent a hoola-hoop, or something like that, for the mortgage bonds that were created and now show huge losses."
by Chuck Butler In This Issue… - Range bound currencies…
- Stocks rebound…
- So, you think Oil is expensive?
- Gold prices back off…
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Milk……………………………$163brl
Perrier Water……………………$300brl
Budweiser……………………….$447brl
Starbucks latte………………….$954brl
Ben & Jerry's ice cream…………$1,609brl
Tabasco sauce………………….$6,155brl
Chanel No 5………………..$1,666,560brl Speaking of oil prices… They sure have backed off this week, eh? But haven't we seen these pullbacks in oil several times in the past five years? Yes, we have! Is this just another one? I would have to think so… It's not like there were any oil discoveries that will add supply… And its not like things in China or India have slowed their appetite for demand. Sure, demand in the United States has seen some weakening, but you have to remember, the SUV. The SUV had become the "auto of choice" for Americans. We have a major highway that runs past our office (not now because it's closed due to construction), and when we would look out the window for more than a minute you could see that SUV's would outnumber regular cars by a huge margin. So… What I'm getting at here is it's not like SUV owners are going out and trading their SUVs for Toyota Priuses or something like that! So… Demand might weaken in the United States on price and the fact that we're in a recession, but it's not going to fall off a cliff! Anyway… The oil price going down has made it difficult for gold to rally this week. After looking like it would get back to $1,000 late last week, gold has fallen from $985 to $957… So… If you believe that the oil price pullback is just another in the line of pullbacks, and that oil will eventually head higher once again, then these gold prices look like bargains, eh? Time to head to the Big Finish… Much shorter and sweeter this morning, I'm beat! Currencies today 7/18/08: A$ .9720, kiwi .7640, C$ .9945, euro 1.5840, sterling 1.9949, Swiss .9775, ISK 79.05, rand 7.5550, krone 5.0850, SEK 5.9670, forint 144.55, zloty 2.0320, koruna 14.57, yen 106.70, baht 33.33, sing 1.3535, HKD 7.7980, INR 42.78, China 6.8165, pesos 10.22, BRL 1.5980, dollar index 72.15, Oil $131.34, Silver $18.36, and Gold… $957.65 That's it for today… I put the finishing touches on the August Review & Focus last night… Sometimes I feel like I write more stuff than the law allows! A very tough week for yours truly, but it has come to an end. I made it through again! I'm excited about going back to Vancouver, although I'm not excited about the lines coming into the country and going out of it! UGH! But once there, Vancouver is absolutely beautiful! And then… Another of my fave cities… San Francisco! In September, I'm going to take part in what's called FX University, and their "currency tours". I will be in Seattle, San Diego, Dallas, Philadelphia, Chicago, and my hometown of St. Louis. One day, in and out with a traveling group of currency professionals, educating investors that sign up for the seminars. I'll have more on all this in a separate Pfennig in a week or two… Until then… Have a Happy Friday! P.S. To get The Daily Reckoning sent directly to your inbox, sign up for our free email newsletter, or if you prefer to use RSS, subscribe to the Daily Reckoning RSS feed. Editor's Note: Chuck Butler is the senior vice president of EverBank World Markets. He oversees the trading desk and operations for over 12,000 individual and corporate clients, both in the United States and abroad, who look to EverBank for FDIC-insured World Currency Deposit Accounts, and Single-Currency and Index CDs .
Chuck is the author of The Daily Pfennig, which is reposted here at The Daily Reckoning. His respected analysis is frequently quoted in or referenced by: the Wall Street Journal, U.S. News and World Report, CBS Market Watch, USA Today, CNNfn, the Chicago Tribune and many other publications. |
