In This Issue… Calling the jobs data correct! I want some of Big Al's kool-aid! Time for traders to buy yen! A hawkish report from the RBA!
--- Advertisement --- Need more World Market deposit slips? Simply give us a call at
800.926.4922, or, you can send an e-mail to
worldmarkets@everbank.com. We'll be happy to send you more Bank-
By-Mail envelopes by return mail. ------------------------- And Now… Today's Pfennig! Trumped By Greenspan!
Good day… Well… I'm back in the saddle today, sure seems like I was
gone a long time! Congrats, again to the New England Patriots for their
Super Bowl win… That was a good game! And, wasn't Paul McCartney
great? Ok, enough of that… We've got to get to that big sell off in the
currencies on Friday. Thanks to all who sent me a note on my call, Friday, that the jobs data
would disappoint… And disappoint is exactly what it did… 250k were
expected… 146k were booked… A reader sent me a note regarding the
number, and he confirmed my suspicions that the BLS would reverse a lot
of their "ghost" jobs previously put on the books. I wish they would just
leave the number be the number without all this "new math"! Anyway, the
dollar began to get sold and the euro was up to 1.3050, when I signed off
and went down to meet Chris and Frank for breakfast… Frank shows up
and tells me that Big Al was talking trash, and the euro was back down to
1.2950… So… I went to the booth, fired up my laptop and there it was…
Big Al, talking a bunch of junk that he got out of his trunk! The Current
Account Deficit is not a problem… It will come under control, blah, blah,
blah! I want what he's having! Because it gives you these delusional thoughts!
There was even one part where he said that Corporate profits were looking
healthier because of the weak dollar, and what did the markets do? The
made the dollar stronger! Huh? I tell you I just don't get it… But if allow my thoughts to drift back to last
year about this time, we started the same stuff, and eventually got rid of all
the technical trades and short timer positions to end up back in the depths
of the weak dollar trend. I very certain that we'll experience the same thing
this time. But, I still don't get the markets' reaction to Big Al's statement
that the weak dollar was good for Corporate profits… So much for those
profits! The buying of the dollar was strong, and swift, before dollar bears knew it
the euro had fallen below the 1.29 level, and remained there the rest of the
day. It's still trading with a 1.28 handle this morning… I'm not really going
to rail on it any longer… It just frustrates me to no end! So then, I thought, OK, let's see what G-7 has to say… Well… They didn't
say anything! It was all about debt relief for poor countries… And China?
Well… Their Central Bank Gov, Zhou even said that this is "not the time"
and that there is "no imminent time for a renminbi revalue" Oh, and then
Zhou drank some of Big Al's kool-aid and said the "renminbi is not
undervalued"… HAHAHA! Yeah… Let's see an economy that continues to
grow at a greater than 9% clip… And the currency which is pegged to a
weak currency isn't undervalued? Ok… That's a good one! OK… So this is basically what I thought China would say… And no I'm
looking for the markets to grow tired of waiting, and begin to run up the
value of yen, Thai baht, and Singapore dollars… Which I think would have
happened overnight in Asia, if Greenspan hadn't spewed his delusional
thoughts! I did see some encouraging news from Australia over the weekend… The
Reserve Bank of Australia released their Monetary Policy Statement from
the last meeting, and in it they sounded more hawkish than ever before.
The statement suggests they have their finger on the rate hike trigger, and
if there is even the slightest movement in their sights, towards more
inflation pressure, they will fire. They also said that they believed 2005
growth will continue at an above average pace, which is good… And that
movements in the currency between 76 and 79 cents are neither here nor
there, and consistent with broad currency direction… That's central bank
parlance for… They don't care about the strength of the currency until it
gets above 80-cents! Wouldn't you know it… That's my target price too! Now, that I'm back to thinking good thoughts… I'll say that I expect some
technical trading to help the euro for once this week… We'll see… Today, we'll see Consumer Credit, which I feel is a big bug-a-boo for the
U.S. economy… You know on my flight down to Florida, I was looking at
a graph in the USA Today that showed the number of individual
bankruptcies has made huge jumps each of the last 3 years… And I expect
that number will continue to grow even higher. The booth across from us at the Money Show was the Martin Weiss
folks… Yes, THE Martin Weiss of the Safe Money report. So, I asked the
guys there if I could have his latest letter to read, and in it I found a quote
from Martin Weiss that he believes the dollar decline and the commodity
price inflation will continue to be the primary factors… He also said that
"when there's a correction, as we've seen in recent days, it's a time to buy…
Not to sell"… My thoughts exactly! Currencies today: A$ .7740, kiwi .7090, C$ .7985, euro 1.2860, sterling
1.8725, Swiss .8250, rand 6.17, krone 6.49, forint 189.93, zloty 3.09,
koruna 23.30, yen 104.10, baht 38.24, sing 1.6375, pesos 11.16, and
gold… $415.30 That's it for today… It was great to see a lot of you last week, I hope you
got a chance to come to our presentation! Thanks to Jen, here on the desk,
for trading last week. I think I'm around for the rest of the month, with my
next trip planned for San Diego the first week of March! I can't wait!
Hang in there, and have a great Monday and week! |
