Obama and Rudd in the Same Boat on Economies

Australia – a country made famous to the United States thanks to Outback Steakhouse, Foster’s beer and the Crocodile Hunter…and of course, The Black Swan.

Beyond my research on Australia’s economy (as it pertains to the markets), I can’t claim any other awareness of the land down under. But Barack Obama and Prime Minister Kevin Rudd are seeing to it that Americans and Australians become accustomed to similar styles of government.

alt

Published: 12 March 2009
Written by Editor
Forex  

Has a dollar correction arrived?

Our story, as you know, is not a positive one when it concerns the future of the euro. But, that is our story, and it may at times have little to do with the true story—price action! Mr. Price Action is always the final arbiter.

Watching the euro of late, and the continued ugly news in the background (evaporating German exports, no real cohesion on Central/Eastern Europe rescue, and ECB looking to go lower on rates, the euro has acted very well relative to the news, i.e. old timers might say “the tone of the euro has been good.”

alt

Published: 11 March 2009
Written by Editor
Forex  

Topping‐Off Jack’s Monday Missive; Plus, Dollar Correction Time?

I threw in the Lewitt quote above as a sort of extension to Jack’s Currency Currents missive yesterday. As much as we’re told we need a quick‐fix to get the American economy back on its feet, that idea is wrong.

It’s not going to be a quick‐fix that sufficiently rids us of our economic woes. It’s not going to be a government policy of demand‐stimulation that rights our wrongs. That approach is not the means towards long‐term, healthy economic growth.

alt

Published: 10 March 2009
Written by Editor
Forex  

Economic thought is becoming an oxymoron

If you have been following this morning missive for awhile you know we’ve been expecting export models to be crushed on the major secular theme of global imbalances starting to balance i.e. overconsumption in the West being balanced against overproduction in the East.

Thus, higher savings in the West means lower demand for imports and the specter of positive current account surpluses. The lower exports from the East raises the specter of current account deficits ruling the day (Japan posted its first current‐ account deficit in 13 years in January after exports collapsed) and shrinking that hoard of foreign exchange reserves that were indicative of the East winning all the chips to many. The game is changing.

alt

Published: 09 March 2009
Written by Editor
Forex  

Jobs Friday – Crap shoot of expectations

This is that time when we try to evaluate the expectations about the expectations, i.e. will the jobless number guess prove too low, high, or be about right. This morning it seems the number is supposed to come in worse than expected. And according to headlines this morning, that is why the dollar is lower. So one could say the expectation of the expectation is already in the price. But of course, that is no help whatsoever.

Why? Well the worse the news has been, the better it has been for the dollar on the risk aversion trade. So, the fall in the dollar this morning should reflect a jobs number that will come in better than expected, i.e. the risk appetite trade back in play. So why is worse than expected jobs supporting the dollar according to the headline writers? Who knows?

alt

Published: 06 March 2009
Written by Editor
Forex  
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