05/09/08 - The Yen is Back!
"I warned then that the stock market rally was a house of cards, that would collapse, and thus leaving those who sold yen and bought dollars holding on to losses. That's what we're seeing folks." 05/08/08 - The Dollar Swings a Mighty Hammer
"The euro lost more ground yesterday than it has since the dollar propping days of 2005. So, with the Big Dog getting whipped, all the little dogs were in line for their whipping too…" 05/07/08 - Hoenig Talks Inflation
"Fed Head Hoenig has thrown a cat among the pigeons this morning by stating that 'inflation pressures may spur a rate rise by the Fed.' Hmmm, is he serious, or just blabbering some currency intervention…" 05/06/08 - Aussie Trade Deficit Narrows
"The Reserve Bank of Australia (RBA) met last night and left rates unchanged, which was good… But they tried to throw cold water on the Aussie dollar's rise…by saying they thought that 'demand growth will remain moderate this year'." 05/05/08 - Cinco de Mayo!
"With the carry trade back on the books and the low yielders getting sold again, the high yielders don't seem to be getting the same love this time around. Does that mean the carry trade is buying something else these days?" 05/02/08 - Job Jamboree Friday!
"The dollar is a bit softer this morning going into the Jobs Jamboree, and rightly so, given the forecast. However, the dollar is still swinging a mighty hammer and I'm a bit perplexed by this." 05/01/08 - The Fed Follows Through
"The Fed decided to leave out some language that had the markets thinking they had figured out the Fed… But in reality they know nothing more than they did earlier in the day!" 04/30/08 - FOMC Day
"The Fed will cut interest rates 25 BPS this afternoon - that's a given as far as I'm concerned. And I know that I'm out there on a limb on this one, but I still believe they have more rate cuts in their quiver to use at future meetings." 04/29/08 - A Transparent Fed?
"I'm seeing more and more talk/speculation of the Fed announcing an end to this rate cut cycle after cutting rates 25 BPS. Hmmm… Interesting, don't you think? I mean, come on, when has the Fed ever been that transparent?" 04/28/08 - A Big Data Week!
"With the dollar weakness overnight, gold has bounced back over $5. Oil has pushed back to within spittin' distance of $119. Could this be the beginning of the next leg up for the commodities against the dollar?" 04/25/08 - The Dollar Rallies!
"We've seen this type of dollar frenzy before, but calmer heads have always come back to the table to point out the awful fundamentals that the dollar carries around like an albatross around its neck." 04/24/08 - IFO Pushes the Euro Lower
"German Business Confidence…came out softer than expected in April, falling from 104.8 in March to 102.4. That was quite a tumble in business confidence, and apparently wipes out the previous three months of stronger confidence." 04/23/08 - The Euro Hits 1.60!
"Well, after signing off yesterday morning, the euro began to move higher again, and when the Existing Home Sales data printed and showed more rot on the housing vine, the euro moved like it was shot out of a cannon!" 04/22/08 - More Hawkish ECB Talk
"At best, the ECB doesn't sound like they are ready to CUT rates any time soon… So, the euro gets to hold on to its positive interest rate differential to the dollar…" 04/21/08 - Dollar Rally Fizzles Out
"It certainly looks as though, someone with some brains, decided that the dollar had moved enough! And once the euro buying began, it was a steady climb back to 1.58, and in the overnight market to 1.5870." 04/18/08 - All Shook Up!
"The problem here is that Fed Head Fisher is a Lone Ranger. Big Ben doesn't share his thoughts, and when the Fed meets later this month and cuts rates, Fisher will probably be the lone wolf on dissenting." 04/17/08 - Housing Starts Still Collapsing
"The U.S. rates are going lower, and you can take that to the bank! OK, well… Maybe the legal beagles won't like me saying that, so, let's just say, I think that you should think that U.S. rates are going lower." 04/16/08 - Eurozone Inflation Bumps Higher
"I don't think the ECB is going to go forward with a rate cut in May, or anytime soon for that matter! Recall, that a couple of weeks ago, I pulled the May rate cut forecast because of this nagging inflation, and now it's gone higher!" 04/15/08 - Tax Day!
"German investor confidence, as measured by the think tank ZEW, printed a negative -40.7 versus -32 in March. That whipsawed the euro a bit… But then France printed an inflation report that showed inflation rising at the fastest pace in at least 12 years! OUCH!" 04/14/08 - G-7 Sends a Message
"OK… This could mean a monumental swing… Or, it could be just a short-term sell off of the currencies. I'm thinking it is the latter of the two, but I could be wrong, eh?" 04/11/08 - The Dollar Bounces - But Why?
"So what caused the big turnaround in the dollar? I searched through the news stories and called a few traders to try and figure out what caused the turn around, but no one seemed to have the answer." 04/10/08 - Record Day in the Currency Markets
"The Japanese yen gained 1.6% versus the dollar yesterday and the Singapore dollar was up 1.5%. Both currencies rallied as hedge funds and other highly leveraged traders scrambled to reduce debts." 04/09/08 - FOMC Finally Comes Clean (Sort Of)
"Yes, the minutes of the last FOMC meeting were released yesterday afternoon, and they showed the Federal Reserve officials are now anticipating that the economy would shrink in the first half of the year." 04/08/08 - Big Al Is Upset!
"I find it interesting that Big Al is getting testy about all the fingers being pointed at him for this mess. I believe I may have been one of the first to point a finger at him when the housing bubble was getting bigger and bigger…" 04/07/08 - Jobs Fall 80,000!
"There were no job sectors that showed positive growth. Even the services sector saw negative job growth. This is what I was talking about the other day, when I said that now the U.S. economy is going to have to deal with job losses." 04/04/08 - A Jobs Jamboree Friday
"There was something in the ADP employment report the other day that caught my attention, and that is the fact that NON-Manufacturing jobs (service jobs which had been strong throughout 2007) were weaker, and to me that suggests downside risk." 04/03/08 - Signaling the All Clear Horn?
"Seems the markets are getting all pumped up on the Kool-Aid Big Ben is serving up… But these are just words folks… We'll see who's right and who's wrong on this… His track record isn't so good!" 04/02/08 - The Fed Throws Us to the Inflation Wolves
"I know I must sound like a broken record…regarding the Fed's lack of attention to inflation… But mark my word, we'll all regret the fact that the Fed allowed inflation to eat away at our wallets, while they went about 'saving the world'." 04/01/08 - This is Not a Trend Reversal
"Seems the 3.5% inflation I told you about yesterday is beginning to eat away at people's wallets. Retail sales fell 1.6% in February from January, and really put the heat on the ECB to cut interest rates." 03/31/08 - He's Baaaaaack
"I believe the Fed short-circuited the creative destruction process… In other words… Not allowing those that were 'bad' to be punished… I also think that not enough of this bad mortgage paper bubble that had grown was destroyed…" 03/28/08 - The Markets Save it for Today
"It looks as though the weak dollar has done some good, but we'll see if it's enough to offset the slowing economy when the advance reading of first quarter growth is released on April 30." 03/27/08 - Another Day of Dollar Depreciation
"The dollar traded within a cent of the record low against the euro on speculation that the Fed will cut rates to revive the economy, while Trichet's hawkish statements suggests the ECB is more concerned about inflation than growth." 03/26/08 - Not-So-Confident Consumers
"The Conference Board's confidence index fell to a 5-year low of 64.5 from a revised 76.4 in February. A pull back in consumer spending is what many feel will result, especially with a deteriorating labor market and income growth barely keeping up with inflation." 03/25/08 - A Dollar Reversal Morning
"With full trading desks after the two day holiday for some, volatility has certainly picked up as the trading volume gets back to a more normal pace. It looks like Friday and Monday were days to catch our breath before jumping back into the pool." 03/24/08 - The Banks Get Back to Work
"This week appears to be a busy one in the data department, as we will see multiple economic reports released that could send the dollar back down, as most aren't expected to show a pickup in the economy." 03/21/08 - Dollar Continues to Rebound
"The main cause of the drop in commodity prices did not seem to have anything to do with supply or demand, but was a result of traders selling speculative positions as they continue to reduce leverage." 03/20/08 - The Fed's Quiver is Getting Empty
"Commodities sure got whacked yesterday… But once again, I will remind everyone that they went too far too fast, and needed to back off to form a new base before heading higher again…" 03/19/08 - Another Large Rate Cut from the Fed
"There were some in the markets that were expecting the 'Full Monty' 1% rate cut, but that didn't happen, and so there was some disappointment in the markets. But the stock jockeys loved it! When will these guys ever learn?" 03/18/08 - Back to the Days of Volcker
"Paul Volcker was in charge of the Fed the last time we got such a big move back in 1984 and that was from a base of 11.75%. This cut would bring the benchmark interest rate down to just 2%, and doesn't leave much room for further cuts." 03/17/08 - Fed Force-feeds Funds into the System
"Bernanke is trying to force feed funds into the banking system to help loosen up the credit markets. These unprecedented moves are further proof that the Fed is still reactive instead of proactive." 03/14/08 - Is Intervention in the Cards
"The European Central Bank (ECB), The Bank of England (BOE), and maybe the Bank of Japan (BOJ) are being brought together by the Fed to buy dollars and sell their own currency to wrap a tourniquet around the bleeding dollar." 03/13/08 - A Reality Check
"The euro ballooned up to 1.5559… WOW! Euro holders should be jumping for joy and clicking their heels! They also might want to look at their position, and say, 'You know… I've got a lot of profit here!'" 03/12/08 - Let the Money Flow
"More and more economists on Wall Street are coming around to our way of thinking… The economic slowdown in the United States will be deeper, and the recovery will be weaker than previously forecast…" 03/11/08 - Euro Tracks Toward $1.55
"Interest rate differentials alone will help propel the euro to new records over the next few months, and jawboning by the ECB President will have little impact on these moves." 03/10/08 - Employment Data Sends the Dollar Down
"A trader friend told me that as the euro ran up toward 1.55 but then stalled, option traders started covering their positions, forcing the single currency back down to 1.532. Apparently $1.55 on the euro is a big options level…" 03/07/08 - Trichet Dashes Hopes of a Rate Cut
"European Central Bank President Jean-Claude Trichet…continues to keep his eye on inflation. He has been preaching restraint in wage growth, and kept his own pay raise to just 2% for 2007, below the rate of inflation." 03/06/08 - Leaving Rates Unchanged
"Bernanke and his compatriots look like dolts right now, after throwing inflation worries out the window and cutting rates in an attempt to bail out those on Wall Street who made horrible investments." 03/05/08 - A Larger than Expected Cut
"The new BOC governor, Mark Carney, signaled that further reductions would be needed to offset a slump in exports to the United States after announcing the biggest reduction in interest rates since 2001." 03/04/08 - Using Smoke Screens
"As I look at things… I think the only thing the dollar has going for it these days, is the hope that the European Central Bank (ECB) tries to play catch up with the Fed regarding rate cuts." 03/03/08 - Finally, a Breather!
"I know, you're saying, 'But Chuck, you should be happy. This guy is helping your calls come true…' But, I'm not! There's no way, no matter how you twist it, that a country's central banker should be dissing the currency!" 02/29/08 - Another Dollar Rout
"Big Ben also told us that he doesn't see the United States entering a recession. Oh, and we're supposed to believe the man that told us last July that the subprime meltdown wouldn't filter out into the rest of the economy?" 02/28/08 - A Dollar Rout
"The U.S. received more bad data… Some very disparaging words on the economy from Big Ben… And a shot across the bow from former Fed Chairman Big Al Greenspan… There was nowhere to hide for the dollar." 02/27/08 - A Moon Shot!
"In the overnight markets… A moon shot for the euro, as it soared above 1.50! The markets are convinced, (finally), like me, that the Fed will cut rates even further, given the data that printed yesterday." 02/26/08 - A Tale of Two Confidences
"The carry traders have come out of the walls… And currencies that have 'risk' written all over them, like Iceland, South Africa, and Brazil have all seen better performances in the past week." 02/25/08 - Sour Data Sends the Dollar Down
"Fed Head Fisher said last week that he 'saw slower economic growth, but not a prolonged deep downturn'. Hmmm… Like we should even take to heart anything a Fed Head says. They've been so wrong, they are almost right!" 02/22/08 - There Will Be Blood
"Over and over again - from the crash of '87…to the Asian crisis…through the LTCM meltdown…and then the big dot.com crash…followed by the mini-recession of 2001…now the collapse of subprime and the bear market in housing - the Fed reached up its sleeve and slipped out an ace." 02/21/08 - Inflation and Deflation
"When you combine slower growth with rising prices you get STAGFLATION. We wrote about this several months ago (or was it a year ago now?) and have reminded readers several times that this is what the Fed was leading us into." 02/20/08 - $100 Oil Is Here
"We all know these 'official CPI' numbers the government continues to feed us are a bunch of bull, but I guess traders are figuring the government will have a harder time hiding inflation with the prices of oil and food rising so quickly." 02/19/08 - Sour Data Sends the Dollar Down
"We had two consumer confidence indicators both collapse to lows last observed in the 1990's. So… There you go! The week in a nutshell… And the dollar had its worst performance week of the year." 02/15/08 - Bernanke Sends A Warning Signal
"Big Ben made one comment that confirms my thought that another 50 BPS will be cut March 18th… Big Ben said that he pledges adequate insurance against downside risks. That's central bank parlance for, 'We're cutting rates!'" 02/14/08 - Retail Sales Remain Upbeat
"So… If it's not Mortgage Equity Withdrawals or MEW's… It's credit card time… Uh-Oh, what will consumers use next? Maybe we'll see an increase in organ donations! Hey! That would be a wonderful thing right?" 02/13/08 - Jim Dandy to the Rescue
"The markets took the wink and nod from Mr. Buffett that it was OK to take on risk again, and they ran with it!…Mr. Buffett has shown a willingness to take on risk… And that makes it easier for the "little guys" to do the same…" 02/12/08 - Waiting for Data
"Today, Fed Head Janet Yellen will speak about the economy. The last time she gave us her two cents worth, it was quite dovish… I don't expect any change of heart here… I doubt Yellen will upset the Fed's rate cut applecart!" 02/11/08 - Another Event Risk Week
"Fed Chairman Bernanke, and U.S. Treasury Sec. Paulson have a date to speak to Congress this week about the economy… This won't be pretty folks… And if it borders on pretty, then they are BIG FAT LIARS!" 02/08/08 - "Euros Accepted"
"In the latest example that the U.S. dollar just ain't what it used to be, some shops in New York City have begun accepting euros and other foreign currency as payment for merchandise." 02/07/08 - Buffett Says the Dollar is Likely to Decline
"Aren't you glad that productivity rose last month?…I make fun here, because I despise the mere mention of productivity. I've said this for years and I'm not going to change now… Productivity simply means, we all worked longer hours!" 02/06/08 - Recession Fears Clobber Stocks & Currencies
"This was a new breed of carry trades. These are seeking safety… And that safety net was being provided by Treasuries… Geez, Chuck, it took you this long to figure that one out?" 02/05/08 - Increasing the Debt
"President Bush presented the first ever budget proposal that shows the government spending more than $3 trillion in a 12-month period… OUCH! Now that's going to leave a mark!" 02/04/08 - The Dollar Bounces on Bad Jobs Data
"For the record, January's Job creation was a negative 17K. That's right, we lost jobs in January. Now, December's awful number was revised up a bit, but the rot is on the vine here, and it's being exposed." 02/01/08 - Jobs Jamboree Friday
"Is the job loss scenario beginning? Hard to tell with just one report, and the fact that it was a holiday-shortened week. We'll have a better idea today, when the Jobs Jamboree prints January's report card." 01/31/08 - Another 50 Basis Points
"I'm still keeping the flag flying for another 50 BPS cut when the Fed next meets in March. Since there's no meeting in February, the Fed will feel as though they've fallen behind again, and feel the need for speed… I mean, for 50 BPS!" 01/30/08 - FOMC Day
"Last week, I told you that the Fed would cut rates to 2%. I'm seeing some forecasts now calling for rates to fall to 1.25%! Now that would mean serious problems for the dollar, folks." 01/29/08 - Housing Plunges
"The HUGE Data week got off to a bad start for the dollar and U.S. economy yesterday when New Home Sales for December plunged 26%! December's fall put 2007 on the map as the largest fall on record!" 01/28/08 - A HUGE Data Week!
"U.S. Treasury Secretary Paulson is hailing this Stimulus Package as the best thing since sliced bread! But then, wasn't he the one telling us back in August the housing meltdown has bottomed?" 01/25/08 - Checks for Everyone
"Did you see the political parade of stars putting on happy faces and telling everyone that the stimulus package is just what we need! HOGWASH! You and I know it too! But, don't let that get in the way of a political grandstand!" 01/24/08 - Hitting the Snooze Botton
"You know, we all had great hopes that the Big Ben Fed would be 'different' from the one of Big Bubbles Al Greenspan… But that dog's not going to hunt folks… Big Ben is into blowing bubbles too." 01/23/08 - The Fed Saves the Day (NOT!)
"The Fed has officially panicked folks… They have raised the warning system to DEFCON 3, skipping DEFCON 1 and 2… Because, presumably, they kept telling us that all was OK! Well it wasn't, now was it?" 01/22/08 - Why Are We Afraid of a Recession?
"Something has changed… And suddenly we are afraid of the 'R' word. And it's to be avoided at any cost (in this case it's $150 billion of more debt on the books). What's wrong with a recession? We've had several of them over the years." 01/18/08 - A Stimulus Package in Our Future?
"It just all adds together doesn't it? The government comes to the aid of this/that/and the other thing, and before you know it, you've got a society that can't do anything for themselves without a helping hand." 01/17/08 - Mersch Upsets the Applecart
"The euro was hanging this town on a corner at 1.48 and change yesterday, when ECB member, Mersch warned about Eurozone growth. The thing that really hurt the euro regarding Mersch's comments is that he's always been considered a Hawk…" 01/16/08 - Roller Coaster
"Once again, a foreign sovereign wealth fund has come to the aid of a U.S. bank. This time $12.5 billion for a cash infusion to Citgroup came from Singapore, and other global investors." 01/15/08 - Stop Your Whining!
"Did you see where IBM is projecting profits to be up and that led to a stock market rally yesterday? Well… I thought to myself, 'This doesn't sound right to me.' But would the media ever stop to ask these questions? Heck no!" 01/14/08 - A Data and Event Risk Week
"I kept trying to tell everyone one that sooner or later love was gonna get them, and that the market participants would grow tired of looking at all this bad data and Fed stuff that would eventually wear on the dollar… Here it is." 01/11/08 - The Three Bears
"Trichet was the man! He stood his ground! And the euro was rewarded for having a Central Bank with credibility! As I saddled up and headed southwest yesterday, the euro had rallied back to 1.48 again… Wow!" 01/10/08 - Another Recession Call
"Oh, one thing that Goldman Sachs did say when they announced their recession forecast that caught my eye, was that they saw interest rates falling to 2.5%… That's 50 BPS lower than my lowest level that I called for four months ago!" 01/09/08 - Rumors
"Yesterday, pending sales of homes fell through the floor, but the previous month's tally was revised up, thus making the two months 'a non-event'. But consumer credit for November jumped up to $15.4 billion! WOW!" 01/08/08 - A New Record for Gold!
"The U.S./Iran confrontation at the Strait of Hormuz yesterday did push gold up to a record high. The confrontation drove oil prices higher, and that alone was enough to put the giddy-up in gold prices for the day." 01/07/08 - When 18K! isn't 18K!
"Oh, and don't look now but the Fed Funds Futures guys are pricing in a 66% probability of a 50 BPS rate cut later this month. Hmmm… If the Fed sees what I see, then that should be a lay-up…" 01/04/08 - A Jobs Jamboree Friday
"The experts believe 70K will be the total… And I'm in agreement with that. In my opinion, this should be a very disappointing number… But, who knows what tricks the Bureau of Labor Statistics (BLS) has up their sleeve!" 01/03/08 - Damaging Data
"Today, we'll see the weekly jobless claims, ADP Employment Report, factory orders, and the petroleum status report…all of them together, make something… And it looks like all of them will be working against the dollar!" 01/02/08 - Happy New Year!
"On Friday, Existing Home Sales nudged up… But the overall picture of the housing market remains bleak, folks. Wanna know how Existing Homes got sold? The prices on these Existing Homes fell 3.3% from a year ago." 12/31/07 - An End to 2007
"And there's further rot on the dollar's vine with news that the dollar's share of global foreign exchange reserves fell to a record low in the third quarter as demand for U.S. assets dropped since the start of the mortgage meltdown." 12/28/07 - A Big Currency Rally
"The United States isn't the only country experiencing rising inflation… But there's one country that I think would surprise you to hear that their inflation is rising… Yes, it's Japan!" 12/27/07 - RIP - The Super SIV
"These guys are calling for a 3.3% rise in the dollar next year. Of course they don't say when that happens… And I, for one, wouldn't be surprised to see a 3.3% rise after the euro hits 1.50!" 12/26/07 - Boxing Day
"The yen will continue to be weak, as low rates in Japan will continue to fuel the 'carry trade'. But I am one of the few that believes we will still see rates rise in Japan during 2008." 12/21/07 - Leading Indicators Slump
"The Conference Board's leading indicator measure dropped 0.4%… So while third quarter growth was surprisingly strong in the United States, the fourth quarter numbers look to come in substantially weaker." 12/20/07 - Slip Sliding Toward Recession
"…as most of you know, we believe the United States is already in a recession, which will continue to deepen. But now even the official numbers are showing the slowdown." 12/19/07 - Figures Lie and Liars Figure
"Ed Bonawitz…sent me an article that appeared in the Investment News yesterday. The article highlights just how questionable some of the government numbers are, and the title should probably have been 'Figures Lie, and Liars figure'" 12/18/07 - Trade Gap Shrinks Thanks to the U.S. Dollar
"This shrinking trade gap is exactly what the Fed has been wanting to see, as the weaker dollar has helped exports. The U.S. dollar dropped 2.6% in October, the biggest monthly decline since May 2006." 12/17/07 - Dollar Continues its Year-End Climb
"The dollar extended its gains against the euro, climbing to the highest in seven weeks. And the euro won't get any help from a report released this morning that suggests Europe's economy is heading for its slowest growth in three years." 12/14/07 - The Dollar Shoots Up On Strong Inflation Numbers
"The U.S. dollar shot up in overnight trading after trending stronger through most of the day. U.S. data releases gave the markets direction yesterday, and the data is pointed toward a surprisingly strong U.S. economy." 12/13/07 - Why Didn't the Fed Tell Us?
"So the trade deficit in the United States for October rose higher than expected to 57.8 billion from $56.5 billion. Imports outpaced exports even with the dollar in the dumps during October!" 12/12/07 - Slip Sliding Away
"Big Ben and the Fed Heads they'll be here all week folks, please try the veal… Seriously, Big Ben and the Fed Heads have kidnapped the stock market Santa…" 12/11/07 - FOMC Day!
"Everybody and their brother knows that the Fed will cut rates 25 BPS… And some believe that by cutting in small pieces the dollar will rally. Come again? Do, we really believe that stuff?" 12/10/07 - Paulson's Fix Missing a 'Silver Lining'
"This week the markets are looking for another 'fix' from the Fed, as they have already priced in another 25 basis point cut in interest rates. I think that word fits the current situation perfectly…" 12/07/07 - A Band-Aid for the Subprime Mess
"After reading more about the government's 'rescue' plan, I liken it to the commercial I have seen on TV lately where the inspector fixes a hole in a massive dam with some chewing gum." 12/06/07 - The Dollar Swings a Mighty Hammer
"The currencies got ambushed in the United States. Simply amazing to me, simply amazing… That people who should know better, would get all caught up in these lies, and videotape!" 12/05/07 - Credit Woes Equal Risk Aversion
"So the loonie's motor has two cylinders missing right now, and its' timing is off with this rate cut. Does this mean the loonie is going down the drain? NOT SO! I'm just pointing out that the peak has been reached…" 12/04/07 - Cutting Rates for All the Wrong Reasons
"Treasury Secretary Paulson believes he has brokered a deal among banks, mortgage services, and securities industry lobbyists to "freeze" these rates…So, watch out folks…you know that taxpayers will end up carrying the weight, eh?" 12/03/07 - Carry Trade Rollercoaster
"The U.S. dollar was mostly up versus the currencies on Friday, with the Australian dollar and pound sterling being the only two currencies that were up. But over the weekend, investors got scared again and the carry trade was back off." 11/30/07 - Bernanke Hints
"Big Ben said that he expects consumers could turn more cautious as they try to cope with all the stresses… Those being… The worsening credit crunch, a deepening housing slump and rising energy prices…" 11/29/07 - Tell It Like It Is
"Nothing's new from my viewpoint… I said three months ago that the Fed would cut three times this year… And three times next year. Now… I'll say that the next three meetings will see a rate cut from the Fed." 11/28/07 - Consumer Confidence is Shaken
"Consumer confidence is finally heading in the direction I believe it should be heading… And that is down! Consumer confidence fell even more index points than the 'experts' forecast it to fall this month." 11/27/07 - Infusing Capital
"I think that the general theme of risk aversion has really settled into the markets. Bond yields are dropping like out of shape marathon runners…" 11/26/07 - It's Alive!
"There's a story going around this morning that the dollar has become the new "funding currency" for the carry trade. With rates falling, the dollar becomes even more attractive as a funding currency." 11/23/07 - Turkey for Me, Turkey for You
"The shoppers are out in force this morning… It's one thing that I would rather be doing… Work… Than shopping… At least today! Later I love to buy gifts for people, but as we get closer to Christmas…" 11/21/07 - The Big Dog is Off the Porch!
"The rebound in housing starts likely represents only a technical rebound after we saw a 134K drop in September. Building permits however, dropped like a rock, and more than expected." 11/20/07 - Another Asian Ambush
"The Asian traders figure that the housing starts report this morning will be so bad…that it will lead the Fed back to the rate cut table, thus deepening the interest rate differentials in favor of many currencies." 11/19/07 - Failing to Be Attractive
"Remember when I told you about how the Treasury people wanted to put lipstick on the dollar to make it attractive? Ahhh, but we all know you can put lipstick on a pig… And… It's still a pig!" 11/16/07 - The Dollar's "Uncool"
"Gisele Bundchen decided to…kick sand in the dollar's face… Well… This week, we see in a video clip, rapper Jay-Z flaunting euros instead of dollars. So… The dollar is now not only weak, it's also uncool!" 11/15/07 - Big Ben Just Doesn't Understand
"The price of oil jumped three bucks yesterday and overnight. The U.S. reports on its petrol supplies later today. Hey Rocky, wanna see me pull a rabbit out of my hat?" 11/14/07 - Carry On
"A dramatic slowdown in the US economy will not have the impact on global growth that it once had. This is a good thing for the global economy, but not such a good thing for the status of the US$ as the world's reserve currency." 11/13/07 - Blue Light Specials Are Over
"It almost seems like the markets are trying to set us up for a surprise. The expectations for these numbers are so bad, the risk is probably that at least one of the pieces of data comes in above expectations…" 11/12/07 - Happy Veteran's Day!
"The big benefactor of these carry trade reversals? The Japanese yen!! Yen moved 3 whole figures on Friday and continued to strengthen over the weekend to trade below 110 this morning." 11/09/07 - Happy Days for Chuck
"Just what do you think would happen to the greenback if the Chinese listened to Paulson and stopped their purchase of dollars? Believe me, it wouldn't be good for Paulson's 'strong dollar' policy!!" 11/08/07 - Fear Overrides Fed Speak
"Yesterday, we had just about every Fed Head, save Big Ben, out on the speaking circuit… And not one of them could muster up the words to save the dollar. Instead, they allowed the markets to continue their fear of credit…" 11/07/07 - An Asian Ambush on the Dollar
"The dollar has fallen, no collapsed in Asian trading. The euro is trading at 1.4670! That's right! A 1.46 handle - a full unit overnight! I was shocked when I turned on the screens this morning! Oh My!" 11/06/07 - Model Behavior
"Supermodel Gisele Bundchen has decided that she wants to remain the world's richest model by insisting that she be paid in almost any currency but the U.S. dollar! OK… Now the dollar has been officially dissed!" 11/05/07 - Gripped by Fear
"I believe the markets are coming around to seeing these lies and videotape that the BLS uses as just that. Because the dollar did not rally one iota after the number was announced… And proceeded to lose ground all day." 11/02/07 - The Return of the Credit/Liquidity Crunch?
"I'm wondering if the credit crunch and liquidity problems aren't returning to the markets. The Fed had to inject $41 billion of liquidity into the banking system, a single-day high since 9/11." 11/01/07 - The Dirty Deed is Done
"The Fed did cut rates, as Big Ben Bernanke allowed the markets to twist his arm until he said Uncle… What does that say for our Fed Chairman? I think it tells the markets that he's weak, and won't stand up to the markets." 10/31/07 - Happy Halloween!
"How about a 47-year high for the loonie! The dollar took one to the mid-section when the latest consumer confidence index fell, no collapsed, from 99.5 to 95.6 (consensus 99.0), a low since the immediate aftermath of Hurricane Katrina." 10/30/07 - The Madman Across the Water
"Inflation is pushing the envelope in the Eurozone, and with oil trading in the $90 range, it is wise to have inflation fears. Here's where the strong euro can really help the ECB out of a jam with rising inflation." 10/29/07 - Bewitching the Dollar?
"The Fed's FOMC meeting takes place on Wednesday… That's right Halloween. Will it be the bewitching day for the dollar with another Fed rate cut? Well… The markets…are now pricing in a rate cut of 25 BPS…" 10/25/07 - We're Already in a Recession
"This housing report paints a dark picture for anyone thinking the housing meltdown was near a bottom… The downward trajectory of not only home sales, but home prices is staggering." 10/24/07 - Debasing of the Dollar - Out of Control
"The Canadian loonie is within spittin' distance from its all time record versus the green/peachback… That is post Bretton-Woods. The Bank of Canada doesn't like this one bit, but what are they going to do about it?" 10/23/07 - A Huge Dollar Rally
"G-7 was so adamant about renminbi weakness… I have to wonder if there are plans being hatched to organize some sort of retaliation against China for not allowing the renminbi to strengthen." 10/22/07 - G-7, Schmee Seven
"These guys and gals really had a lot of hoopla going into this meeting… And for what? Nothing… Absolutely nothing… That is unless you say their lack of action is a green light to sell dollars and that in itself is an action…" 10/19/07 - A New Record for the Euro!
"The long awaited G-7 meeting starts today… It looks like the scenario I went through is going to play out. The Eurozone minister, Christine Legarde, has decided to go after China, instead of picking a fight with the United Stats." 10/18/07 - Guess Who's Selling Treasuries?
"I don't think this is the 'rush to the exit door' that even thinking about scares the bejeebers out of me… Otherwise we would have heard about it! And the dollar would be circling the bowl right now!" 10/17/07 - The TICs Data Goes Negative
"CPI continually prints little or no inflation results, which you and I know is garbage… So… With some hard facts on skyrocketing inflation in hand, we had better see it reflected in the report." 10/16/07 - Jim Dandy To The Rescue
"Late yesterday there was an announcement by three large banks that they are going to shore up the commercial paper market. Sort of like, Jim Dandy to the rescue! Go, Jim Dandy, go!" 10/15/07 - The Budget Deficit to Swell
"And how about Chinese renminbi? The renminbi/rupee story is all about Asian strength. The Chinese story continues to be one that borders on amazing… Economic growth continues to soar, and the currency continues to be undervalued." 10/12/07 - A Retail Sales Rally!
"Here's some more ammo for the boys and girls attending the G-7 meeting next week… China reported overnight, that their trade surplus through September had already out-paced last year's record! WOW!" 10/11/07 - Currencies Rally!
"The currencies…traded in a very tight range on Wednesday for most of the day, and then the switch was turned on and dollars got sold… The next thing we saw was the euro blasting through the 1.41 handle on its way to 1.42!" 10/10/07 - A Green Light to Risk Taking
"There was also a report on Tuesday calling for higher heating costs this winter… Hmmmm, rising energy costs. That should be huge for Canada, the United Kingdom, Norway, and Australia." 10/09/07 - Barking Up the Wrong Tree
"Just because the Eurozone ministers are calling out the weakness in dollar, yen, and renminbi, they aren't saying, 'We want them to get strong versus the euro!' They want the Central Banks of those currencies to get a backbone…" 10/08/07 - 110K is NOT Enough!
"It seems the Bureau of Labor Statistics (BLS) forgot to check the teachers that went back to work! WOW! What a screw up! But what else would you expect from the people that bring you the birth/death model?" 10/05/07 - Dollar Rally Fizzles
"'Yesterday…euro gained back ground almost all day to end the day at 1.4135. I've said all week that the dollar rally should be short-lived, and if the jobs data doesn't help the dollar, then the rally will fizzle out!'" 10/04/07 - Preparing for G-7
"'If I were a Eurozone minister I would be screaming at the top of my lungs about the weakness of yen (JPY), renminbi (CNY), and the dollar! I wouldn't whine about how strong my currency is… I would talk about how weak theirs is!'" 10/03/07 - Housing Continues to Slide into an Abyss
"'Pending home sales imploded in August. This housing sector meltdown just keeps going deeper and deeper into a dark abyss, and this will most likely go on and on like the Energizer Bunny for some time to come!'" 10/02/07 - Much-Needed Rest
"The National Association of REALTORS' index of signed purchase agreements will likely drop to the lowest level since record keeping began in 2001. This housing slump is far from over, and will extend well into 2008." 10/01/07 - Turning Dovish
"Wasn't it the Fed in their previous meeting's minutes that stated that job growth was strong? Were they blind to the problems that were quite evident, as I said at the time, or were they just not smart enough to see it?" 09/28/07 - Home Sales Collapse
"New home sales had collapsed 8.3%, not the 10% rumored. So it was a 'sell the rumor, buy the fact' morning, and the dollar was released from the woodshed. But why? Isn't a fall of 8.3% bad enough?" 09/27/07 - Chuck On Film
"The Finance Minister of the largest economy of the European Union says there's no problem with the euro strength… And that's one BIG FAT GREEN LIGHT to euro bulls to take the currency higher!" 09/26/07 - More Bad Data for the U.S.
"The IMF is putting its own two cents toward analyzing the U.S. housing meltdown. Let's listen in to see what this group, which has long been a 'believer' of the Fed and Treasury's 'feel good' propaganda, has to say…" 09/25/07 - Game Off!
The minutes of their last Central Bank meeting tells a story of the Bank of Japan holding back a rate hike because of all the market turmoil in August. Hmmm… I wonder if that's really true…" 09/24/07 - The Loonie Hits Parity!
"The Canadian Finance Minister held a press conference on Thursday night to discuss the loonie's looming parity. I was half expecting some jawboning down of the currency to keep it from reaching parity… But I was wrong." 09/21/07 - A 28-Year High for Gold
"The question is… Will gold reach its all-time high of $850, which was set in January of 1980? Well… If it adds another $90 in the next 30 days (like it did the previous 30 days) it has one heck of a chance, eh?" 09/20/07 - Celebration Time, Come On!
"Housing starts for August were weaker than expected, dropping 2.6%. A sharp 5.9% drop in permits does not provide much reason for optimism that housing activity is poised to turn around." 09/19/07 - The First Cut is the Deepest
"The wheels are already in motion for that major slowdown/recession, and there are a few things that really scare me about this rate cut. But first, I have to tell you that the currencies went hog wild after the news of the cut…" 09/18/07 - The Day We've All Been Waiting For!
"You all know that I've said for four months now that the Fed would begin to cut rates in the fall… And here we are. The days are crisp, the sun doesn't pack the punch it did a month ago, the kids are back to school, so it must be fall!" 09/17/07 - FOMC Week!
"Well… What's good for the goose… Is good for the gander! If Big Al feels the need to diversify the currencies in which he holds his assets, then that should be good enough for all investors!" 09/14/07 - A Focus on Retail Sales
"I saw a report that tells me why the carry trades are seeing another go around the block. Commercial paper issuance is on the rise again, and buyers are entering this market once again…" 09/13/07 - Some Words of Wisdom from the Good Doctor!
"My colleague, and long time friend, Ed Bonawitz and I were having a discussion yesterday, and we agreed that interest rate cuts are not going to do anything but feed more inflation, and rev up those mortgage 'products' again." 09/12/07 - A New Record!
"The euro has just crossed its all time level of 1.3853! A NEW RECORD LEVEL! How does that sound? Well, it sounds pretty darn good to me!" 09/11/07 - Open Mouth…Insert Foot!
"We had some Fed Heads out on the speaking circuit on Monday, and man… These guys and gals would be far better keeping their mouths shut, because that way they wouldn't be able to put their feet in their traps!" 09/10/07 - Jobs Collapse!
"Recall on Friday I said that the forecasters call for 100K jobs was going to be disappointed… Well, I would say that a -4K in jobs created is called disappointing!" 09/07/07 - Who's Selling Treasuries?
"Data from the New York Federal Reserve revealed that since late July, central banks around the world have pulled $48 billion from U.S. Treasuries, with a $32 billion fall in the last two weeks. Could this be China dumping Treasuries?" 09/06/07 - Pending Home Sales Collapse!
"Oh… And here's a memo to the Fed Heads. Since the trend in pending home sales tends to lead existing home sales by two months, the renewed collapse suggests another leg down in the pace of sales." 09/05/07 - A Self-Fulfilling Prophecy
"I've been talking about a recession for the U.S. ever since the mortgage meltdown began. So far the economy is singing, 'Everybody's talking at me, I don't hear a word they're saying.' But that's where investors get into trouble!" 09/04/07 - Bailing Out Wall Street
"President Bush announced his plans to help out homeowners that face foreclosure… While I'm sure that this is just peachy dandy with the homeowners… I wonder what size of hickey the balance sheet takes for being such 'good folks'?" 08/31/07 - Waiting on Big Ben
"Big Ben Bernanke is scheduled to speak at the Jackson Hole boondoggle today. The markets are frothing at the mouth thinking that he will give an indication of the Fed's next move, which they are hoping is a rate cut…" 08/30/07 - More Recession Talk
"The former head of Barclay's European collateralized debt obligations, Edward Cahill has gone missing. Cahill resigned from his post last Thursday and has not been seen since, by anyone associated with him!" 08/29/07 - The Fed Heads Just Don't Get It!
"After the U.S. close, S&P reported that Cheyenne Capital Mgmt. Ltd., a $20 billion commercial paper program, might liquidate due to losses. Uh-Oh… This is looking like it's all going to unravel soon." 08/28/07 - 1991 Revisited
"The point I'm trying to make here is that we could very well be heading in the same direction as in 1991. In fact, I'm convinced we will be heading there. But in reality, that's all yet to be seen." 08/27/07 - New Home Sales Soar?
"New home sales surprised everyone by not falling again; instead they gained. I find that report to be totally a sham… I'm not kidding. And who are they trying to kid?" 08/24/07 - The Negative Sentiment Returns
"The negative sentiment toward the dollar is really gearing up again. Goldman Sachs issued a new forecast for the currencies, and here you can really see the negative sentiment coming through." 08/23/07 - Not Their Job!
"The Fed's job is to keep a lid on inflation, and maintaining an environment for healthy employment… It is not, and I repeat, not their job to bail out Wall Street, every time they get greedy and overexposed." 08/22/07 - Have No Fear
"Canadian retail sales decline after surging in May. Retail sales declined 0.9% in June, below market forecasts for a 0.5% drop. In May, sales were up 2.6%. Looks like the Canadian consumers were all spent in May, eh?" 08/21/07 - Who Got Bailed Out?
"I believe the Fed has done it again. They have stepped in and 'fixed' the financial markets (that is…for now) when I don't believe that's what would help the markets the best. That's it… I'll get down from my soapbox now!" 08/20/07 - The Fed Cuts the Discount Rate
"Normally, if you need to borrow from the discount window, the Fed doesn't take kindly to this… Well, this time, the Fed said, 'Come on, borrow. And do it at a cheaper rate. We understand.'" 08/17/07 - Unwinding the Carry Trade
"Yesterday, I said that I needed to see more evidence that the 'carry trade' was indeed unwinding. But I think I've seen enough! The high-yielders are getting the stuffing knocked out of them, and the low yielders…are gaining ground." 08/16/07 - Japanese Yen on the Loose!
"Everywhere I look I see more and more talk about "unwinding carry trades". The trading pattern sure looks like that could be happening, given the strength of the yen, and the weakness of the New Zealand dollar/kiwi." 08/15/07 - More Scary News
"The Fed injected another $2 billion into the markets yesterday just for 'good measure'. I guess they must have made an error on Friday when they injected $38 billion. The $2 billion yesterday was just to round off Friday's effort!" 08/14/07 - Shootin' Up Some Crude
"If oil is 'black gold', then milk must be 'white gold'! Recall about a week ago I told you that the price of a gallon of milk had surpassed the price of a gallon of gas here in St. Louis, and wondered if we should begin to drink gas!" 08/13/07 - An Unhappy Ending
"I have to tell you I just don't have good news for us U.S. investors. I'm going to spend a lot of time at the beginning talking about the subprime meltdown and what's going on. Get ready, strap yourself in, this is scary stuff!" 08/10/07 - Feeling Stronger Every Day
"Firms and banks that package the debt for investors are taking big hits to their bottom lines, and the housing slowdown is being blamed for earning shortfalls across industries." 08/09/07 - China Threatens 'Nuclear Option'
"Unlike our own Fed, the ECB didn't stay on the sidelines. They issued a statement that said it 'stands ready to act' to assure 'orderly conditions' in the euro money market." 08/08/07 - Bernanke's Hands Remain Tied
"ECB President Trichet has already signaled that the central bank will raise rates again next month, so we will have to see if this latest data will stop Sarkozy's whining." 08/07/07 - FOMC to Hold Rates
"I would imagine that, given the recent market turmoil, the Fed will discuss the recent volatility of the credit markets and start to lean over toward the dovish side of the argument. If this occurs, the dollar will get hammered." 08/06/07 - The Newest Pfennig Reader
"Rhetoric won't rescue the U.S. dollar this time, and unless he makes a suggestion that they are getting very worried about the subprime mess, look for the dollar to continue to slide." 08/03/07 - Grandpa Chuck
"The U.S. interest rates will remain where they are, while rates throughout the rest of the world will be rising. Interest rate differentials were one of the props on our strong dollar, and that prop is being kicked out from under it." 08/02/07 - The View from Fenton
"The Bank of England was first out of the interest rate announcement gate this morning and, as predicted, kept its benchmark interest rate at a six-year high." 08/01/07 - Data Scorecard "Chuck Style"
"Everyone wants to blame the carry trade for just about every market movement we have; either the carry trade is going back on, or it is coming off. It's hard to keep track." 07/31/07 - Steady Hands Prevail
"I'm not saying to just ignore market movements, and if the opportunity to sell something you have wanted to dump comes up, go ahead and take it. But don't make irrational decisions based on one or two days of volatile markets." 07/30/07 - Volatility Drains Liquidity from the Markets
"Since the mortgage approval rate is a forward looking number, the markets fear that the housing market in the U.K. will remain overly hot; and the BOE will have to raise rates again to keep inflation in line." 07/27/07 - Everything Gets Sold
"Yesterday we saw volatility move back into the world's markets in a huge way. Another bad housing number simply added fuel to the fire and everything got sold. And I do mean everything!!" 07/26/07 - Housing Blues Continue
"The rebound in the U.S. dollar versus the euro and pound was a normal reaction in a market that had been going one direction for too long…this dollar rally had all the signs of normal profit taking." 07/25/07 - Dollar Gains Versus Pound and Euro
"I find it strange that currency traders picked this morning to rally the dollar, but it happened, and the euro and pound sterling are both off about a cent in early European trading." 07/24/07 - Subprime Woes Go Global
"Basis Capital Fund Management Ltd., an Australian hedge fund, is hiring Blackstone Group LP to advise the fund on limiting its losses…an interesting twist to the mortgage mess, as foreign investors are starting to feel the pain." 07/23/07 - Housing Data to Continue Dollar's Slide
"The euro was supported after ECB executive board member Lorenzo Smaghi indicated he sees no reason for concern about the currency's appreciation, saying it reflects the strength of the 13-nation region's economy." 07/20/07 - Leading Indicators Predict a Slip in U.S. Growth
"The Conference Board's index of leading economic indicators declined 0.3% after rising a revised 0.2% in May. The reason given for the fall? The housing slump!" 07/19/07 - The Time to Buy is Now
"The trends right now are with the currencies and against the U.S. dollar! You can't deny it. Just pull up charts of any of these currencies and you will see that the trend is still in place." 07/18/07 - Mixed Bag of Data
"There was no surprise in the housing numbers, as confidence among U.S. homebuilders fell to the lowest level in 16 years, signaling the housing market will continue to tumble." 07/17/07 - The Data Cometh
"Treasuries slowed to a net increase of $376 million in April, the weakest demand since investors sold a net $3.5 billion of bonds and notes a year earlier." 07/16/07 - The View From Chuck's Easy Chair
"International investors bought a net of $16.2 billion a month of U.S. treasuries on average in the first four months of this year, compared with $28.2 billion a month in 2005." 07/13/07 - Trade Gap Widens But Does Anyone Care?
"Reports released yesterday showed the trade deficit increased to $60 billion in May. As we expected, exports increased to record levels but were offset by a jump in oil prices." 07/12/07 - BOJ Leaves Rates Unchanged
"The dollar fell to another record low against the euro… Signs of a housing slump will deepen reinforced expectations that the Fed will keep interest rates unchanged this year, adding to the dollar's decline." 07/11/07 - Euro Hits a New Record High
"Driving home last night, I listened to interviews with two separate economists who predicted we won't see the worst of the housing market downturn until this time next year, and that the recovery would take at least 2.5 years." 07/10/07 - Subprime Collateral Damage
"While Bernanke may say something hawkish, I wouldn't expect him to move the markets. As I have said before, the current state of the economy has tied the FOMC's hands with regard to interest rates." 07/09/07 - Back to Interest Rate Expectations
"Interest rate differentials have returned to be the top story in the currency markets. I guess you can't blame investors for moving toward currencies whose economies are so good the central banks have to raise rates to cool them off." 07/06/07 - No Surprises
"The Bank of England raised its main interest rate to a six-year high as the fastest economic growth since the start of the decade is fueling inflation." 07/05/07 - Waiting on the Central Banks
"With all of the economists predicting no change in rates, the risks are that the ECB goes ahead and moves rates up now which would send the euro up another couple of cents." 07/03/07 - Interest Rate Differentials Dominate Trading
"I sometimes feel like Chicken Little regarding the Japanese yen and carry trade reversals. I have written at length about the massive short positions and the global imbalances that have built up as a result of the undervalued yen." 07/02/07 - Vacation Week
"The euro and pound sterling both held onto their recent gains over the weekend and look set to appreciate further as we await Thursday's rate announcements." 06/29/07 - FOMC in Fairytale Land
"This is what has been termed a 'Goldilocks' economy, not too hot, but not too cold. I would agree only to the point that our current FOMC seems to be living in a fairytale land!" 06/28/07 - Waiting on the Fed
"With the disappointing data released lately, the FOMC will have to keep rates right where they are. While this rate decision is widely expected, the accompanying statement will be scrutinized as usual." 06/27/07 - More Bad News for Housing
"The reports released yesterday also show that home values in 20 U.S. metropolitan areas fell the most in at least six years, weakened by a record supply of properties for sale." 06/26/07 - Housing Continues to Slow
"The Fed policy makers continue to be more sanguine on the outlook for housing and the economy. Fed Chairman Ben S. Bernanke said earlier this month that restrictions on the availability of mortgage credit will slow housing demand." 06/25/07 - Subprime Mess Claims Another Victim
"I don't want to belabor the very obvious point, but the effects of the housing slowdown are just beginning to show up. Unfortunately we will continue to see more fallout from the subprime mortgage mess." 06/22/07 - Summer Days Are Here
"The Swiss government's economic experts raised their forecasts for growth and inflation this year and next, saying their predictions are based on the central bank continuing to raise their main interest rate." 06/21/07 - Paulson Drinks the Kool-Aid
"I find it a little funny that while U.S. Treasury Secretary Paulson states that the mortgage mess is 'no problem', others who are obviously more removed from the situation see it as a ticking time bomb." 06/20/07 - Worst Housing Market Since the Depression
"The markets seem to be waking up to the fact that the housing market is nowhere near the bottom. Borrowers are being squeezed by the treasury markets' recent sell off, which has increased 30-year mortgage rates the most since 2004." 06/19/07 - Home Builder Confidence Sinks
"Italy, Spain, and the countries of the former Soviet Block will benefit from the economic policies, which the ECB will force on them. The euro is here to stay, and will continue to chip away at the 'reserve status' of the U.S. dollar." 06/18/07 - U.S. Dollar Moves Back Down
"San Francisco Fed President Janet Yellen seems to agree with my view of the current risks to our economy. In a speech over the weekend, Yellen said she is concerned that investors are underestimating risk…" 06/15/07 - Dollar Trades in Tight Range
"Unfortunately, the Fed's beige book only had it partially right. The housing market may be turning a corner, but it is the continuous corner of a death spiral." 06/14/07 - The Resilient U.S. Consumer
"As with the retail sales number, the producer price number is being driven by the jump in fuel costs, which trickle down to drive up the prices of just about every item we buy." 06/13/07 - Greenspan Is At It Again
"So the markets still pay attention to the former Fed chief's views. But what is Greenspan really saying? He is telling us that emerging market debt is currently overpriced, and that inflation will cause U.S. interest rates to have to move up." 06/12/07 - Range Bound in the U.S.
"The pound sterling rose versus the dollar yesterday after BOE governor Mervyn King signaled that he might raise rates again this year. King said late yesterday that the BOE 'may need to take further action' to contain inflation." 06/11/07 - The Loonie is Hot
"Sitting here looking at the news stories, I can't help myself but to keep looking for stories on Canada. The Canadian economy and fundamentals have really been hot recently, and that has pushed the loonie higher and higher." 06/08/07 - Investors Move to U.S. Cash
"Investors are using the dollar as a parking spot while they are waiting to see where to invest next. Europe and Asia continue to grow at a better pace than the United States, so I believe investors will be returning to these markets." 06/07/07 - New Zealand Surprises with a Rate Increase
"In a move that surprised the markets, New Zealand raised interest rates to a record 8% due to increasing inflationary pressures. Housing demand and consumer spending continue to cause the central bank to keep a vigilant eye on inflation." 06/06/07 - ECB Lifts Rates
"Trichet's recent comments indicate he will sound hawkish in his speech today, which should give the euro further strength and put it back on the road towards $1.40." 06/05/07 - When Is Money Supply Not Inflation?
"The press conference following the ECB rate hike will be interesting. I think ECB President, and former Governor of the Bank of France, Trichet, will have to choose his words carefully to keep the markets guessing." 06/04/07 - Loonies to Parity?
"Gold and copper have seen some nice gains since Thursday, and that helps the other base metals get back on the rally tracks, which also helps the 'commodity currencies' Australia, New Zealand and Canada." 06/01/07 - A HUGE Data Day!
"The Eurozone had their GDP for the first quarter print this morning, and it was quite impressive considering the fact that the Eurozone's largest economy, Germany, took on a VAT (new tax) in January!" 05/31/07 - Hy Minsky on a Thursday
"What I got from the minutes shouldn't have helped anything or anyone, except those of us who have diversified our investment portfolios! The Central Bank admitted in writing, that they acknowledged underestimating the U.S. housing recession!" 05/30/07 - The Bank of Canada Sounds Hawkish Again!
"The BOC really surprised me, in that they hadn't been very hawkish, leaving rates unchanged for almost a year now. I think that weak kneed stance is going to get them in deep water with regards to fighting inflation." 05/29/07 - Existing Homes and Prices Fall Again!
"Don't get me wrong here, the ECB has done a wonderful job of providing price stability to date, but with energy prices going through the roof, they had better remain ahead of the inflation 8-ball…" 05/25/07 - Don't Forget Those Positive Balance Of Payments!
"Before the streamers and confetti can be brought out to celebrate an end to the housing debacle, let's look at home prices. The sales gain was helped by a record price drop!" 05/24/07 - Big Dog For a Day!
"German business confidence as measured by the think tank IFO remained high this month, near the record level established last December. This is the second report this week that is flashing a great big green light on the Eurozone economy." 05/23/07 - Putting the Soapbox to Work Today!
"I fully expect, in my opinion, the pound sterling to get back to the lofty '2' level and beyond… But it will take strong growth reports and another BOE rate hike to do the heavy lifting." 05/22/07 - German Business Confidence Soars!
"I keep telling you that the Eurozone economy, led by Germany, is enjoying its best economic growth in years, which is nothing but manna from heaven for the euro." 05/21/07 - The Loonie Hits 92-Cents!
"Also on Friday, we saw the U. of Michigan consumer confidence rise. What? Oh well… I guess people are feeling pretty good about paying over $3 a gallon of gas, eh? I wonder what they will say when it gets to $4 a gallon?" 05/18/07 - China Makes a Change
"The second fastest economic growth in the world resides in India. Interest rates are at good levels, and their relative attractiveness as a country is high, and therefore investors are willing to invest in India." 05/17/07 - Another Dollar Mini-Rally
"China and India are still growing like weeds in spring, and until they stop growing, they will continue to need raw materials, which brings us…back to base metals moving higher, and fueling currencies like Australia and Canada." 05/16/07 - Playing Games
"China and India are still growing like weeds in spring, and until they stop growing, they will continue to need raw materials, which brings us…back to base metals moving higher, and fueling currencies like Australia and Canada." 05/15/07 - Inflation Abating? NOT!
"Yes, the stock market is soaring higher, every day, and that should help attract foreign investment. But what happens when that rally is over? Yields on bonds are not particularly attractive. Uh-Oh." 05/14/07 - U.S. Retail Sales Collapse in April
"You just can't ignore the weakness in retail sales. The higher energy prices, and the housing debacle, brought about this weakness…and this weakness in retail sales will bring about weakness in corporate profits, etc." 05/11/07 - Trade Deficit Grows 10.4%!
"I have to tell you that I filled my gas tank yesterday and I remember when I could have a great night out on the town for what it cost to fill my gas tank! Oh, and it's just going to get worse folks." 05/10/07 - Moderate Growth? (I Have to Laugh!)
"While we only created 88K jobs in April, and first quarter GDP fell to 1.3%, the Fed said in the statement that they still they look for the economy to expand at a moderate pace going forward. Maybe 1.3% is 'moderate' to them, eh?" 05/09/07 - FOMC Dominates the Day
"Yesterday, Australia announced that March retail trade rose stronger than expected, at 1.1%, thus putting the year on year rise at 7.8%, the strongest annual growth in retail trade since 2004. Good Show!" 05/08/07 - Top Ten Stories of the Week!
"Placing a ceiling on inflation rates doesn't do you any good if you are not prepared to do the things that are needed to keep the ceiling from collapsing!" 05/07/07 - The Bermuda Triangle of Weak Data
"The Fed will also meet this week, on Wednesday, and with the Bermuda Triangle of weak GDP, weak personal consumption, and weak jobs, I just can see them doing anything besides remaining on the sidelines with rates remaining unchanged." 05/04/07 - U.S. Data Baffling
"I don't have the figures handy this morning, but I have got to believe the United States has the world's worst savings rate. Deficit spending is rampant, from the government right on down to the consumer." 05/03/07 - Manufacturing Continues to Surprise
"Each time the currencies have been run up, they have moved ever so slightly through their previous highs. This is what we call 'establishing a base' and can take several weeks to work through." 05/02/07 - Dollar Rallies On U.S. Manufacturing Data
"Putting the best spin possible on the day's data, economists said strength in U.S. manufacturing would pull the economy through the 'slow patch' that is being caused by the downturn in housing." 05/01/07 - Risk Aversion Disappears
"I have to say that I'm surprised that the risk aversion campers didn't come crawling out of the walls after the military coup in Turkey this past weekend. Risk aversion just isn't in the vocabulary of traders these days." 04/30/07 - GDP Soars!
"The currencies had a nice Friday, taking liberties with the dollar after all that data was printed. Oh, and get this… The U. of Michigan Consumer Confidence number was stronger!???? What are those people smoking?" 04/27/07 - Eurozone Retail Sales Soar!
"I was disappointed to hear that Norway's Norges Bank left rates unchanged on Wednesday. The markets had counted their eggs already on this rate hike, and thus were disappointed to see the Central Bank not come through." 04/26/07 - Currency Markets Take a Rollercoaster Ride
"The report by the Fed's district banks showed a 'slow pace in manufacturing in most areas, while the housing market continued to restrain the expansion'. Expansion?!? In their dreams!" 04/25/07 - Existing Home Sales Plummet
"The strong housing industry and bubble in housing prices was what kept the U.S. economy growing over the past few years, so a reversal in this industry will have to have an offsetting negative impact on our economy." 04/24/07 - Home Resales to Drag Down the U.S. Economy
"None of the data due out this morning will be dollar positive, so we will likely see the two-day rally by the dollar come to a screeching halt. I think this morning's prices will look like good bargains next week." 04/23/07 - Will China/U.S. Relations Upset the Applecart?
"Last week's fantastic GDP of +11% in China has really stirred the pot on the relations. I guess the question in all of this is how does a strained relationship between the U.S. and China affect the markets?" 04/20/07 - Dollar Negativity Builds Steam
"The carry trade lives - and as I just said, it will continue for some time, in my opinion. But that doesn't mean it's a ONE-WAY street. There will be bouts of volatility, and false dawns on the end of the carry trade." 04/19/07 - China's GDP Soars!
"Overnight, China posted their first quarter GDP. I'm chuckling right now, because once again the economists, and market observers got China all wrong!" 04/18/07 - Dollar Negativity Gets Strong
"The dollar doesn't have much going for it these days. The negativity is really building once again, and it finally looks as though the dollar has returned to the depths of the weak dollar trend." 04/17/07 - The Tax Man's Day
"The pound sterling is trading just below the 2 figure, but in overnight trading, it did hit 2. But since no one saw it here, I wonder if I still have to wear the lampshade?" 04/16/07 - U.S. Trade Gap Narrows
"Up until last month, the U.S. had imported more goods from our neighbor to the north than from any other country. But with $48.7 billion worth of goods sold to the U.S. in February, China has overtaken Canada as our biggest shipper." 04/13/07 - Friday the 13th for the Dollar?
"Trichet didn't use the 'vigilant' word, so that probably means no rate hike in May, as I suspected earlier - waiting, for June. But he did tells us that rates were still 'accommodative' and that growth in the Eurozone will continue to run hot." 04/12/07 - Some Confusing FOMC Minutes
"The Fed is in a pickle here, and they know it, even though the minutes didn't indicate it. Or, maybe they don't know it, and they are clueless. OK, I'll put my money on the latter!" 04/11/07 - Reaching a 17-Year High?
"Didn't I say that once it reached the psychological 80-cent level that it wouldn't stop there? I even said that 85-cents looked about right. Well… The 17-year high for the Aussie dollar was reached last night…" 04/10/07 - Severely Damaging Trade Relations?
"And this just in, as the United States heads to the World Trade Organization with their complaints, China's commerce ministry has issued a statement that says the U.S. complaints will 'severely damage' trade relations… Uh-Oh!" 04/09/07 - Creating Lots of Jobs?
"'Why isn't the economy growing when the jobs market seems so tight?' BECAUSE IT ISN'T! I truly wish someone in the media would get their head out of the 'feel-good sand' and talk about this discrepancy!" 04/06/07 - Jobs Jamboree Friday!
"The euro hit a 2-year high yesterday! That followed Aussie dollar's 10-year high and Singapore's 9.5 year high booked the previous night. The U.S. dollar is really taking it on the chin these days from a host of currencies…" 04/05/07 - More Disappointing U.S. Data
"The report's components showed weakness in all areas from the employment index to prices paid. There was nothing any dollar bull could take from this report that would give them a warm and fuzzy…" 04/04/07 - Fundamentals Remain Weak
"The European Central Bank (ECB) is still waging a war of words to engage the markets in the thought that they will be raising interest rates again soon…and they have to do this because the markets have ADD." 04/03/07 - G-7 To Discuss Yen
"What, do the markets believe the discussion will involve? Exchanging cookie recipes? Not hardly! They are going to discuss why the currency is still crazy after all these years…I mean still the most undervalued, and manipulated currency!" 04/02/07 - Protectionism Hurts the U.S. Dollar
"Currency markets sell the currencies of nations engaged in protectionism, and the U.S. dollar got sold as soon as the announcement was made. As an email sent to me on Friday pointed out, the recent peak of the U.S. dollar occurred in February of 2002." 03/30/07 - Finally Some Good News for the U.S. (Sort Of)
"Today is a big data day in the United States, as we will get reports on inflation, consumer confidence, and spending. This data will be closely watched, since it will provide indications on the outlook for the FOMC's interest rate decision next month." 03/29/07 - U.S. Data Continues to Disappoint
"Usually after every day of data you will get at least someone who creates a positive spin on the numbers, but these numbers were so bad there was no way to spin them. Instead, the news media just kind of ignored them and moved on to today's GDP numbers." 03/28/07 - U.S. Consumers Running Scared
"Yes, the pull back in consumer spending would be a short term negative for the U.S. economy, but the borrow and spend tradition of our consumers has landed us into the predicament that we now face: An economy with way too much debt…" 03/27/07 - Bad Day for the Housing Market
"Adding to the mortgage problems, there will be a massive amount of adjustable rate mortgage resets coming in the next few years. More than $2.28 trillion worth of ARMs were originated in 2004, 2005, and 2006, at the peak of the housing boom." 03/26/07 - Home Sales Give Support to the Dollar
"Friday the dollar rallied as reports showed housing had rebounded and traders reduced bets that the Federal Reserve will cut interest rates. However, this latest dollar rally will likely be short lived." 03/23/07 - Data Confirms U.S. Slowdown
"The housing slowdown is going to really start impacting the employment picture as we move into what is usually a strong construction season. Compared with the same time last year, initial claims are up about 4%, while continuing claims are up about 3%." 03/22/07 - Another Rock/Hard-Place Situation
"In the statement released at the conclusion of its two-day meeting, the FOMC acknowledged recent data that shows both higher inflation and a weaker economy. This is pretty much a worst-case scenario for Bernanke and his boys (and girls)." 03/21/07 - Spring Has Sprung
"Did you see the housing starts data for the United States yesterday? Amazing! Astounding! And Incredible! Housing starts rose 9.0% in February to an annualized pace of 1.525 million units…" 03/20/07 - 80-Cent Currency
"I've long said that Aussie was an 80-cent currency, and I noted to the people on the desk yesterday that it was oh-so-close to that level, and I hoped it didn't disappoint us like sterling did when it got oh-so-close to the 2.00 level." 03/19/07 - Caught Between a Rock and a Rock
"You know me… I don't agree with the results of this data due to the moving goal posts inside the data configuration. And furthermore, I do not care what "core" inflation is. Give me the whole picture, because that's what I have to live with every day!" 03/16/07 - The Markets Become Myopic
"The data in the United States was mixed yesterday with PPI moving higher, which should have supported the dollar. But the markets have become very myopic at this point, and the only thing they see is the subprime meltdown." 03/15/07 - The Ides of March
"This year, I'll have to change that a bit, and wonder if this will be an Ides of March for the housing market, with the subprime meltdown as housing's Brutus… Once a close friend of the housing market boom, but now the thing that brings it down." 03/14/07 - A Rock and a Hard Place
"And since the Fed CANNOT, let me repeat, CANNOT afford to raise rates right now with the subprime mortgage meltdown going on…guess what gets discounted? The dollar! 03/13/07 - Retail Sales Today
"This is a little different way to think about it, but the way it works is that, as jobs are created and not filled, it creates a vacancy. So, to think about it further, it means the Australian economy is creating jobs faster than they can be filled!" 03/12/07 - The Carry Trade Returns
"Japanese yen has given back three whole yen, while the high yielding currencies like New Zealand, South Africa, Iceland, Mexico, and even the United States (to a degree) have come back with a vengeance!" 03/09/07 - A Jobs Jamboree Friday
"The Bank of England (BOE) kept the dust covers on their rate hike machine yesterday… But don't think for a minute that they're finished either! I would have to believe that BOE Governor King is chomping at the bit to get rates higher." 03/08/07 - A Fair Currency Act?
"Great… Here we go again, throwing out the protectionism shields and swords. It's all fun and games with these guys until somebody loses an eye! Here's the skinny…" 03/07/07 - David Walker on the "Truth" Campaign Trail
"Mr. Walker was on TV to tell the U.S. voters that he is going on the campaign trail to let every voter know the perils we are facing as a country. But Walker doesn't need, or want, your vote in the next general election." 03/06/07 - Big Al's Talking Recession…Again!
"All this yen strength lately put a smile on my face… And why not? I have taken it on the chin with yen for two years! Yen still has quite a ways to go before it really makes me smile, but Asian currency strength is hitting on all eight right now…" 03/05/07 - Carry Trade Continues to Unwind
"The yen continues to strengthen, approaching the next big resistance level of 114.60. If we see it trade through this level, the next stop is a test of the 110 level." 03/02 | 
