October 2008 Monthly Archive

Federal Reserve and IMF are Getting Good with Handouts.

Does the ‘establishment of temporary reciprocal currency arrangements’ mean anything to you? Yeah, it kind of went by me in a blur the first time I read it. Basically, this has become one of the side shows for the Federal Reserve. Read more

Correction Upon Us? AUD/JPY Bounce Is Due!

Buy the rumor of a 1% Fed Funds and sell the news? Hmmm….Maybe today’s better than expected US durable goods orders will neutralize that in here. Read more

Kookburger Time! A rant it is!

The conspiracy crowd is working overtime these days. Many “deep thinkers” among the gold crowd still spout conspiracy stuff on a regular basis to help explain why their beloved metal is not now sitting at least $2,000 an ounce. Read more

And the Beat(Down) Goes On…

Ahhh, let’s see … recent buzz words in the investor vernacular have been risky assets, subprime, inflation, decoupling, current account, globalization … and the list goes on. The newest buzz word to make the list: deleveraging. Read more

Just when it started to look safe for a dollar correction

Though we luckily have not had the experience, and the physical pain is obviously different, this move in the dollar today seems to us the psychological equivalent to being chomped on by a 20 ft. long white shark. Blam! Read more

Central Bank Interest Rate Decisions Back On The Radar

If you’re a currency trader that became tired of only hearing about interest rates … or tired of only hearing about the carry-trade dynamic … or tired of only hearing about yield differential as the primary force impacting the foreign exchange market, then the global lending crisis and impending economic meltdown has offered a refreshing change of pace! Read more

An Attack On Friedman From The PC Crowd

I received an email yesterday, from a very smart man who happens to be a professor of sciences in one our top institutions. He wrote: “Been stunned by the number of free market folks who squeal for interventions. Read more

The Dollar’s Side of the Teeter-Totter is Least Heavy

So what’s changing? Well, credit market indicators have improved. The first signs of improvement came as last week finished up. And so far this week the improvement has stuck. Read more

Can You Say Asian Financial Crisis Redo?

Interesting! It seems the chances for another Asian-style financial crisis lingers and is rising (we are already seeing it in S. Korea; chart below). This is surprising since it appeared the entire region was well position to whether a downturn in the major economies–at least the view before the downturn morphed into an all out assault on all the ties that seem to bind the global financial system together. Read more

Hodgepodge

Global shift in consumer sentiment and an unknown quantity of toxic paper still buried make us believe any recession will be more L-shaped rather than V-shaped recession. Read more

Currencies Feel The Flow…of Capital Rushing In and Out of Global Stocks

Looks like someone popped the champagne cork too early. I say that because stocks made short order of Monday’s record climb. On Wednesday, the Dow dropped the most in 21 years. The plunge of over 700 points erased over a trillion dollars in market capitalization – only the second time that’s happened … ever. Read more

Is the dollar due for a correction?

Of course we wouldn’t ask the question if we didn’t believe the chances are good. But, the major caveat is the same we’ve shared before–in a fundamentally-driven market (or major event-driven) the technical analysis takes a back seat. Read more

New Global Intervention and Our Technical Analysis Might Signal Rest

Last week there was a huge cooperative among the world’s central banks to cut interest rates. Central Banks in the US, UK, Sweden, Eurozone, Switzerland, China, South Korea, Taiwan and Hong Kong all got involved. Read more

Will Our Hero Engender A Bounce?

I guess that little coordinated interest rate cut thing didn’t do the trick. But don’t despair citizens. Right now he’s strapping on his cape to prepare for yet another episode of “The US Treasury Saves the World” news conference to explain why the latest scheme hatched in the last 15-minutes will be just the ticket. Read more

Can It Be This Simple?

As the stock market goes, so goes the euro against the US dollar. Can it be that simple? Short answer is yes. Risk aversion right now is dollar positive. And falling stocks are the best general definer of a risk adverse environment Read more

Central Banks Get Out The Butcher’s Knives

The Federal Reserve cut their benchmark interest rate by 50 basis points today.And so did the European Central Bank …And so did the Swedish Riksbank …And so did the Bank of England …And so did the Bank of Canada … Read more

Time to look in the other direction–at least for short-term bounce?

We saw a significant degree of real and psychological capitulation yesterday in favor of the dollar. Read more

ECB Policy Still Standing Still, Euro Losing Its Footing

After pumping tens of billions of euros and dollars into its financial system over just the last two weeks, the ECB couldn’t muster up enough energy to cut rates today. The ECB left their benchmark lending rate sitting at 4.25% after they concluded their policy meeting this morning. Read more

Stronger Dollar simple logic we think!

We are guessing the “momentous historical development” that launches the US dollar into a new multi-year bull trend was the credit crunch. It is a game changer on risk appetite and correlation of every asset class (but the dollar) going up at the same time, as the dollar credit was the driver Read more