Good day. What a weekend here in St. Louis. I spent a majority of it outside, and we even ate dinner last night out on our deck, something that is not normal during the month of March. I enjoyed the scent of my wife’s lilac bushes as I was sitting outside last night, reading up on the currency markets. The research pointed to poor housing data Friday morning as the reason for the drop in the US dollar on Friday.
[Read more...]ECB Turns Into the Fed
February 29, 2012 By Leave a Comment
The big news this morning is all about the European Central Bank (ECB) and their LTRO (long-term refinancing operation). I told you the skinny on what was going on yesterday, so I’ll give you the results today. Yesterday, I told you that if the eurozone banks requested around 400 billion euros (EUR) of loans, that would be bullish for the euro. And if they asked for more than 500 billion euros, it would be bearish. Well, they allocated 6.5 billion for three-month loans and 529.5 billion for three-year loans.
[Read more...]Of Fat Tails and Fashionable Gloom and Doom
February 9, 2012 By Leave a Comment
“Worried that the Federal Reserve and the U.S. dollar are on the brink of collapse,” says a report at CNNMoney, “lawmakers from 13 states… are seeking approval from their state governments to either issue their own alternative currency or explore it as an option.”
“In the event of hyperinflation,” warns Glen Bradley, who has sponsored one such proposal in North Carolina “depression, or other economic calamity related to the breakdown of the Federal Reserve System… the state’s governmental finances and private economy will be thrown into chaos.”
[Read more...]Creating More Debt to Solve the Crisis
February 1, 2012 By Leave a Comment
Readers who expect an early end to this Great Correction are going to be disappointed. There is no sign of it reaching its conclusion anytime soon. Just the contrary…there’s no end in sight.
The Great Correction seems to be going along just as you’d expect. Or, just as we’d expect.
[Read more...]Manufacturing Growth Continues
February 1, 2012 By Leave a Comment
I have to tell you what’s on my mind this morning after watching the price action again yesterday… I know, it’s just me, and no one else in the writing/analyst world will tell you this, because they have no proof… I don’t either, but that never stops me from saying what’s on my mind regarding these markets now, does it?
[Read more...]Demand Fears in a Consumer-Based Economy
January 25, 2012 By Leave a Comment
Yesterday, Europe was back in the news. Whenever Europe is in the headlines, the headlines are bad. And the ideas behind the headlines are absurd. In fact, it is amazing how many crackpot ideas the press can throw at you in a single day.
The immediate problems in Europe were two:
First, it looked like Portugal was going the way of Greece. It would soon need another bailout, said the papers.
[Read more...]The Real Crisis in Capitalism
January 11, 2012 By Leave a Comment
The Financial Times led off its series on ‘Capitalism in Crisis’ with a wandering piece that attempted to outline the problem. Unfortunately, the FT writers don’t seem to understand what capitalism is, let alone what is wrong with it. They say they are “rethinking capitalism.” But it doesn’t appear that they ever thought about it the first time.
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EU Finance Ministers to Double Bailout Fund
Good day. The dollar traded in a fairly tight range most of the day, holding on to earlier gains. But just after lunch, sentiment shifted and the dollar started to drop, closing U.S. trading below the level it opened. And the fall accelerated as Asian traders entered the markets, pushing the euro (EUR) back above $1.335 and Aussie (AUD) over $1.04.
[Read more...]