Daily Pfennig

2-Day FOMC Meeting Begins Today.

Chuck Butler — Tue, 18 Jun 2013 16:38:42 GMT

.........But First, A Word From Our Sponsor..........

WHY RUSH INTO METALS WHEN YOU CAN WALTZ?

The rarity of precious metals helps drive their value and potential significance to your portfolio. But for those not interested in making a mad rush to metals, EverBank has unearthed an exciting and equally rare investment alternative.

With our automatic purchase plan, you can start mining metals at your pace.

?Fund for as little as $100 a month

?Choose from gold, silver and platinum

?Pay no ongoing fees

Available only with the NON-FDIC INSURED Metals Select Unallocated Account1, this is a rare opportunity to strategically utilize dollar cost averaging to grow your metals ownership from one month to the next.

Start mining at your pace today. Learn more and view IMPORTANT DISCLOSURES at https://www.everbank.com/investing/metals/unallocated?referid=11808. Or call 800.926.4922.

EverBank is an Equal Housing Lender

......................................................

In This Issue.

* Euro rises, A$'s get hammered.

* RBA turns on green lights to A$ weakness.

* Has CNY gone too far, too fast?.

* A$ and C$ grow up to "big boy" currencies .

And, Now, Today's Pfennig For Your Thoughts!

2-Day FOMC Meeting Begins Today.

Good day. And a Tom Terrific Tuesday to you! Speaking of Tom and his dog, Mighty Manfred the Wonderdog. I was a real Crabby Appleton yesterday afternoon. I was glad to see that I woke up this morning with a different attitude! Not sure why I became "rotten to the core" yesterday, I think it was a lack of sleep.

The currencies and metals continued their mixed bag of results throughout yesterday, with the Aussie dollar (A$) losing all the ground it had gained this past week on a report that the Reserve Bank of Australia's (RBA) minutes of their last meeting indicated that the RBA is wanting the A$ to weaken further. Basically when a Central Bank says stuff like that, the markets are more than willing to help them by turning all the traffic lights to green. Especially when you have a currency that has gained so much in the past 11 years, the willingness of the markets to go ahead and play ball with the central bank as long as they can take profits, takes center stage.

Yesterday I told you about the G-8 meeting in Northern Ireland. Just to show you how much these G-8 leaders are out of touch with what's going on in the world today, they issued a communiqué saying that they see the worst is over for the world economy. Really? Let's see, the World's 4 largest economies, The Eurozone, The U.S., China and Japan are all mired in either slowdowns or recessions, and a couple in depressions. The U.S. & Japan are currently in a competition to see who can print more money to buy bonds, and the Eurozone can't squeeze a drop of blood from their economy right now. And then there's China, who by all accounts are slowing down. But the worst is over? Really? Rose colored glasses. note to self. Self, you need to buy some of those rose colored glasses.

Hey. I told you yesterday that I was going out on the big fat limb (to support me, we certainly don't want limbs breaking on the tree or me!) and calling for Big Ben to sound dovish, thus reversing the calls for the tapering of Quantitative Easing (QE) to begin. Well, I found another arrow in my quiver this morning, but you have to stay with me on this, for this borders on conspiracy thinking. This morning the U.S. president said that "Ben Bernanke has stayed in his post longer than he wanted to or was supposed to" OK. that smells of Big Ben slipping out the back door. and that leads me to be more cemented in my call yesterday. Here's the skinny on all this.

I see Big Ben keeping the pedal to the metal on QE. But before he has to announce any type of "tapering" he slips out the back door, and rides off into the sunset, hoping to have put a 100 miles of desert between his hide and the crashing down of the economy when QE gets tapered. He'll be able to say, "hey, when I was there, everything was working" (at least in his mind!)

Well. The FOMC meeting begins today, with the QE announcement tomorrow. It's one of those 2-day meetings, when the board games get taken off the shelves, and you get to hear cries of "you sunk my battleship" coming from the meeting room.

Ok. Enough of that! You know, a couple of weeks ago, I did that interview on the Street.com and in the interview, I talked about the euro briefly. I said that the euro hasn't always had a good economy to underpin the euro's rise. And that's what's happening now. The euro has gained 4% VS the dollar in the past 4 weeks, and all the while having an economy that borders on sinking into a deep dark abyss. Why is the euro stronger? Well. As I always say, when people ask me about the euro remaining strong in the face of turmoil, calls for a breakup, collapse, and sovereign defaults. If the euro can remain strong in the face of all that, what does that tell you about the dollar?

I saw an article on Yahoo Finance yesterday (thanks Ty) that talked about this very thing. euro strength. The article alluded to Emerging markets unwinding and finding solace in the euro. Interesting don't you think? Especially considering all the negativity that surrounded the single unit in the past 3 years?

The euro is attempting another run at 1.34 this morning on the back of a the latest German Investor Confidence as measured by the think tank ZEW, which saw an increase in their index number to 38.5 from 36.4 in May. The 38.5 was better than the forecasts (38.1), and reflects the stronger German Industrial Production than forecast and stronger German economy overall. Remember, Germany is the Eurozone's largest economy, so when Germany is doing better, it gives the euro a boost.

The Big Boss, Frank Trotter, who was in NYC yesterday to do some interviews, face to face, sent me the link to a story in the Economist, regarding the Chinese renminbi / yuan. Here are a couple of snippets from the story in the Economist that I found to be very interesting. "TEN years ago, the yuan made its debut as a global economic bugbear. In June 2003, America's then treasury secretary, John Snow, publicly encouraged China to loosen a policy under which its currency was pegged at 8.28 to the dollar. The next month four senators wrote an angry letter urging Mr Snow to investigate China for "currency manipulation.

A decade later, Mr Schumer and other senators are still bashing the yuan: eight of them re-introduced a bill last week that would slap duties on currency manipulators. But much else has changed. Now allowed to float by 1% a day on either side of a reference rate set each morning by the central bank, the yuan closed trading on May 27th at 6.12 to the dollar, 35% stronger than its June 2003 rate. It has risen more against the dollar since March than it rose in the whole of last year, and its climb against Japan's currency has been even steeper. Since November, when the markets began to anticipate dramatic monetary easing in Japan, the yuan has gained over 20% against a weakened yen." - Economist

Chuck again. Yes, the renminbi's rise this year has been something to behold, but.. one has to wonder if it has been a case of a little too far, and too fast? Especially now that we all agree that the Chinese economy is slowing down. What's the appeal? Apparently the Capitalists are pushing the Communists around here, right? That's where I think the rubber hits the road folks. And we could very well see the renminbi / yuan take a breather here, just so the Gov't can prove to the markets that this is no One-Way Street!

The renminbi / yuan is becoming a "big boy" currency folks, growing up right before our eyes. Speaking of "big boy" currencies. It appears that the IMF is going to actually give the Canadian and Aussie dollars their own buckets in the IMF's next report on currency reserves held by each country's central bank. The next report will come on 6/28 (Alex's birthday, and Dawn & Jerry's 10th anniversary!). Previous to the next report, the IMF only identified, dollars, euros, pounds, yen and francs, and then bunched all other currencies in a category called, well, you guessed it, "other currencies" (very creative of the IMF, don't you agree?) But now, Aussie & Canadian dollars will have their own buckets. I guess they will have become "big boy" currencies!

Speaking of the Canadian dollar / loonie. The loonie received some good M&A news overnight that will help underpin the currency going forward. A Chinese company is taking a 59% stake in a Canadian iron ore company, and valued around C$4 Billion. Let's see that would be, using my new math skills. C$2.36 Billion Canadian dollars that will have to be bought to settle that deal.

Gold is getting drug through the mud again this morning, dulling its shine once again. I think that if Big Ben carries out my call from the big fat limb, that Gold would rebound viciously. well that is until the NY manipulators go to work. Did you hear about the story that came from China last week during the Dragon Boat Festival? The report was about how 10,000 Chinese people stood in line to buy physical Gold. OK, remember how I've always told you to only believe 1/2 of the what the Chinese say their economic data reports? I've got to say that while I believe the line could have been very long, I doubt seriously that it consisted of 10,000 people! Exaggeration is truth that has lost its temper.

For What It's Worth. Always worth a read. the great Richard Russell, gives us some thoughts on Gold manipulation this morning. Here's Richard Russell. "It looks like the great gold rip-off is completed and over. A few of the banks (JPM) spread the rumor that gold was heading for $1,000 and that the bull market in gold was toast. This set off a panic in gold and silver, which served the perpetrators well.

As the metals swooned, the crooks, who had sold the metals short, made a tidy fortune as the metals collapsed. At the same time, they loaded up on cheap gold and silver. In all, quite a play, during which a good many duped investors dumped their silver and gold.

I understand that there is now a huge speculative short position in gold on the Comex. This position will have to be covered. This means driving the shorts out of the market. Thus, the manipulators will have cleaned up -- first by selling the metals short, and then by loading up on the metals at the bottom of the panic in preparation for (hopefully) the ride up.

My guess is that China and Russia soaked up a good deal of the bargain-priced gold near the bottom of the panic. China waits patiently while the US spends its way into bankruptcy. Which reminds me, there's still lots of talk about the true amount of gold owned by the US. Then why the hell doesn't the government or the Fed finally audit our gold holdings and put an end to the rumors? From what I understand, neither the Fed nor the US government want an audit. If the gold is really there, then why don't they put an end to all the rumors? For heaven's sake, let's have an audit -- or is there really something to hide?

I feel we are besieged with rumors, secrets, lies and manipulations. I've felt this way before, but I've never felt this strongly that we (Americans) are being lied to and manipulated. What's to hide? Jesus told us that we must know the truth, and the truth will make us free. Then for God's sake, start telling us the truth! My intuition tells me that if it's a secret, it's probably evil. Ultimately, good or bad, everything comes to light-- although it may take time." - Richard Russell.

Chuck again.. I just love reading Richard Russell's thoughts on the markets.

To recap. The mixed results for the currencies and metals continued throughout the day and in the overnight sessions. The euro is attempting another run at 1.34 on the back of a better than expected ZEW, and the Aussie dollar has given back the recovered ground, on a report that the RBA has turned the green lights on for currency weakness. Chuck highlights the Chinese renminbi's recent run, and asks if this has gone too far, too fast?

Currencies today 6/18/13. American Style: A$ .9445, kiwi .7970, C$ .9795, euro 1.3375, sterling 1.5605, Swiss $1.0855, . European Style: rand 10.0430, krone 5.7550, SEK 6.4855, forint 219.35, zloty 3.1825, koruna 19.2180, RUB 32.06, yen 95.30, sing 1.2610, HKD 7.7580, INR 58.78, China 6.1651, pesos 12.86, BRL 2.1705, Dollar Index 80.77, Oil $97.48, 10-year 2.19%, Silver $21.74, and Gold. $1,373.20

That's it for today. I've been doing so much writing, other than the Pfennig, lately, maybe that's what had me doing my best Crabby Appleton yesterday! Funny, I went back to the NewsMax magazine article from Jan 2011 (written in Dec 2012 of course!) titled: Is Silver The New Gold. I talked about how Silver was below $25, and what a good bargain it was. I guess that still holds true! A nasty rain storm swept through St. Louis last night, causing a 2-hour rain delay for Cardinals - Cubs. So instead of getting to watch 4 to 5 innings, I got to watch 2 innings. My TV in the basement where I watch TV all the time, when not outside, shot craps on me last week. It lasted 10 years, so I guess I'm OK with that, but had to go out and buy a new one, which is not my fave thing to do (talk to salespeople) Cardinals won last night, so maybe that's why I woke up in a better mood today! And Happy Birthday to Paul McCartney who turns 71 today. (could that be right? Sure doesn't seem like it!) Alrighty then. it's getting late! I hope you have a Tom Terrific Tuesday!

Chuck Butler
President
EverBank World Markets
1-800-926-4922
1-314-647-3837

FOMC Dominates News & Markets.

Chuck Butler — Mon, 17 Jun 2013 16:19:00 GMT

.........But First, A Word From Our Sponsor..........

WHY RUSH INTO METALS WHEN YOU CAN WALTZ?

With our automatic purchase plan, you can start mining metals at your pace.

?Fund for as little as $100 a month

?Choose from gold, silver and platinum

?Pay no ongoing fees

Start mining at your pace today. Learn more and view IMPORTANT DISCLOSURES at https://www.everbank.com/investing/metals/unallocated?referid=11808. Or call 800.926.4922.

EverBank is an Equal Housing Lender

......................................................

In This Issue.

* Currencies attempt to gain.

* Pointing out the truth in data.

* Norges Bank & SNB meet this week too.

* What happened in June 1933? .

And, Now, Today's Pfennig For Your Thoughts!

FOMC Dominates News & Markets.

Good day. And a Marvelous Monday to you! I hope everyone enjoyed Father's Day yesterday. The day began with rain here, but by early afternoon, the sun came out, and it turned out to be a glorious day, weather-wise. The older kids with their kids were at the house to celebrate Father's Day with me. Little Delaney Grace was confused when I said Happy Father's Day to her. I explained that it was the day's name. Like I could have say Happy Sunday to you. And I think she finally got it!

There's a G-8 meeting going on in Northern Ireland today. The U.S. president is there. More tax dollars at work, folks. You know this is good, because strong policy usually gets derived from these G-8 meetings. OK, I'm laughing so strongly right now, I can't hold it in. OK. a little humor to start our day and week!

The currencies tried to maintain their focus on Friday. The bias to buy dollars had been chipped away at during the week, and it was time to close the week with some gains. The currency traders weren't in the mood to see too much read into the currency gains for the week, so they were pared back a bit. This morning, we're seeing some mixed trading as the euro is seeing some minor slippage, but the Aussie dollar (A$) is up 1/2-cent.

OK. Well, remember Friday I told you that two of my fave pieces of data would print? And print they did, once again telling me that the economy is barely getting along. Industrial Production for May increased only .1%, following April's -.4% decline, and Capacity Utilization dropped to 77.6%, from 77.8%... I know this doesn't really look like a huge drop, but when the number drops, it's not a good thing for the economy. As a contrast, when the economy was cooking with gas in 1997 this number was 84.9%

Have you been noticing the rise in the price of Oil this past week? Actually the past two weeks has seen the price of Oil rise from $92 on 5/31 to $98.56 this morning. The geopolitical fears from Syria and the weaker dollar last week, were key ingredients to Oil's rally.. And as usual, the petrol currencies that include: Norway, Brazil, Russia, Mexico, Canada, and so on, see some bids tossed their way. Well, that is most of them do. The Brazilian real is the except to the rule here, as the Brazilian Gov't is seeing what happens when they treat the markets like rented mules. (no worries no animals were hurt here!) The markets having been treated badly the past two years, are very leery of the Brazilian Gov't's requests to "come back".

Well. The much anticipated FOMC Fed Meeting takes place this week. There's been so much hype injected into this meeting that the markets are having a difficult time catching their collective breaths. There's been a ton of long dollar positions taken in the past month, waiting for the next Fed Meeting, and if things go the way I suspect them to go this week, we'll see a lot of unhappy long dollar positions holders, who will have to reverse those positions, or hold them with losses until the next Fed Meeting!

OK. so I let the cat out of the bag I guess with that statement. So, here I go out on the big fat limb, and say that Big Ben Bernanke is not going announce Fed Quantitative Easing (QE) tapering. I did an interview on the radio on Friday and I spent a long time talking about the Fed Chairman's statement at the last meeting. that some tapering could be seen should the economic data show improvement. And then I listed the economic data that had NOT improved, and in fact gotten worse since then. So. that's what I'm hanging my hat on with my call for a dovish statement from Big Ben on Wednesday. For if he decides to go ahead and announce some tapering, in the face of all the weak data that has printed the past two months, then I'll be chanting, liar, liar, pants on fire, hang them on the telephone wire!

But as I said, I think Big Ben is a man of his word. (too bad I don't agree with most of his words!) I saw where my friend, John Mauldin, wrote about the legend economist, Hy Minsky, in his weekly newsletter last week. The famous Minsky Moment was on display in his newsletter. let's check out how John interjected Hy Minsky into his letter.

"The longer the Federal Reserve sticks to its current policy, the more likely that policy will end in tears. Call it the Revenge of the Minsky Moment." - John Mauldin

OK. let's talk about something other than the Fed Reserve. The Swiss National Bank (SNB) and the Norges Bank (Norway) will also meet this week. The Swiss franc's strength in recent weeks has coincided with the euro's rise, so the SNB won't be so concerned, although I'm sure seeing the cross to the euro at 1.23, doesn't give them a warm and fuzzy. The SNB has backed off their whispering campaign to implement negative interest rates in an effort to push money out of the franc. I'm not saying that the SNB won't implement negative rates, I mean they already have pushed interest rates to zero, and placed a cap on the franc. But for now, I think they'll pass on the negative rates talk.

The Norges Bank was once thought to be on the rate cut tracks, but that has passed. Although the Norwegian economy is seen slowing as we head to the 2nd Half of 2013. The housing bubble still holds court in Norway, over the slower Oil production and manufacturing sectors. And that's fine with me. keep rates from falling.

The Chinese renminbi continues to defy odds of a halt in appreciation, by continuing to book new record high VS the dollar, after new record high. 6.1598 is the reference (fixing) rate for the renminbi / yuan this morning. On this date in 2010, the rate was 6.8275. That's 9.78% gain in the past 3 years! I know that the daily moves in this currency are not what most investors want to see, as they are slow and methodical, but come on!

I hope you saw Mike Meyer's take on China in the Sunday, Pfennig & Pfriends. For long time readers, nothing there that I haven't said on numerous occasions in the past, but good to get it out there time and time again, just to get it through to some people that just don't believe.

Gold Imports remain a real problem for India's Trade Deficit. May's Trade Deficit rose sharply from $16.4 Billion to $20.1 Billion, and was mostly driven by Gold & Silver imports, which increased 90% year on year. The Indian rupee has recovered a bit from its record low level of a couple of weeks ago, but most of the recovery can be attributed to intervention by the Reserve Bank of India (RBI). I still think that the time to buy something is when nobody else wants it, if only for a tactical holding. And again, Dr. Marc Faber says that India is the best country in Asia for investment. (remember, China is in Asia) So, he must know something that I'm not seeing at the moment.

I see where Apple received U.S. Gov't requests for data on up to 10,000 accounts. Uh-Oh! That's me, folks. I guess I won't be surprised to see the guys with dark sunglasses show up at my house, requesting I go "for a ride" with them. And to all my friends, that I shared my thoughts on stuff, sorry that you're on my contacts list.

I see that sales of the book 1984, are soaring again. Interesting.

Boy, did I really mess things up on Friday. I had made a note to myself to talk about an interview I was doing Friday afternoon, and direct you to the website so you could listen live. But totally forgot about it until it was mid-morning, and the Pfennig had been out for a couple of hours! UGH! So. for those of you who would like to hear what I had to say, you can click here, and then click on the archives and find me from Friday. click here: http://www.yorbamedia.com/ If I can twist a few arms down in Jacksonville, I actually can post the interview on our website. OK. who wants to help me with that, down in JAX?

I just heard the great CSN song: Suite Judy Blue Eyes. "It starts out like this: It's getting to the point, where I'm no fun anymore" Boy does that hit a nerve with me! Oh well. I try.

For What It's Worth. On This Day in 1933, The U.S. Confiscates Gold. I found this on Zerohedge.com this past weekend. For those that like history. here you go!

"Roosevelt had only been in office for 101 days and while there was broad bipartisan support for inflationary policies in Congress, it's safe to say that most of those who voted for FDR never expected him to confiscate private holdings of gold coins, bullion, and certificates.

Roosevelt called the measure a temporary one (it wasn't), and he followed it up by invalidating gold clauses in private contracts that obligated payment in gold dollars, which had the effect of devaluing the assets of bond and contract holders. Many of these hoarders and slackers purchased gold as a hedge against the (Fed-fueled) inflationary boom of the 1920s and then hung on to it during the Hoover years when his crazed and unprecedented interventions in wages and prices caused a normal market correction to devolve into a depression. Why would they trust Roosevelt anymore?

They were smart not to. By January 1934, Roosevelt increased the dollar price of gold from $20.67 to $35, thus devaluing the dollar by 70 percent while increasing the value of gold that the government now owned."

Chuck again. Yes, I'm asked about whether The Gov't would think about confiscating our Gold again, all the time. My usual response is that "While I wouldn't put anything past our Gov't, just as the Chrysler bond holders, I don't think this something that makes sense any longer. You see, in 1933, Gold was a part of our money. The dollar was tied to Gold, and the Gov't wanted to run up deficits, but to do so they needed more Gold. So they confiscated it from the citizens. But Gold, as you know, is no longer a part of our money, if the Gov't wants to run up deficits, and trust me they do, they just do it, without remorse. So, no need to confiscate...

To recap. The currency rally on Friday held on most of the day, but the gains were pared back as we headed to the weekend. This morning is a mixed bag of results. There's not much direction out there, as the markets are all tied to the FOMC meeting this week on Wednesday. Chuck went out on a limb and said that Big Ben will remain dovish this week.

Currencies today 6/17/13. American Style: A$ .9615, kiwi .8075, C$ .9845, euro 1.3345, sterling 1.5720, Swiss $1.0835, . European Style: rand 9.8780, krone 5.7230, SEK 6.4540, forint 217.85, zloty 3.1715, koruna 19.2740, RUB 31.64, yen 94.70, sing 1.2535, HKD 7.776, INR 57.85, China 6.1598, pesos 12.67, BRL 2.15, Dollar Index 80.70, Oil $98.56, 10-year 2.12%, Silver $21.84, and Gold. $1,384.51

That's it for today. Well June is half over now. Soon we'll be talking about the 4th of July. Crazy! The year will have turned the page to the 2nd half of the year, and that's just nuts! But then, it seems to me like eons that I was at spring training! UGH! My beautiful bride and Alex are still gone, so things around the house are different. I just found out that I'll be speaking again at the best conference around, The Agora Investment Symposium in Vancouver, B.C. the last week in July. I totally dislike going there, and coming home, but while in Vancouver, I just love it! The Conference is well worth the travel, folks. If you've never been there, you should look into it right away, this conference sells out! You can check it out here: http://agorafinancial.com/research/html/van_vancouver_043013?code=E400P500

Now let's go out and make this a Marvelous Monday, and Wonderful Week!

Chuck Butler
President
EverBank World Markets
1-800-926-4922
1-314-647-3837

BOJ Disappoints.

Chuck Butler — Tue, 11 Jun 2013 20:50:00 GMT

.........But First, A Word From Our Sponsor..........

WHY RUSH INTO METALS WHEN YOU CAN WALTZ?

With our automatic purchase plan, you can start mining metals at your pace.

?Fund for as little as $100 a month

?Choose from gold, silver and platinum

?Pay no ongoing fees

Start mining at your pace today. Learn more and view IMPORTANT DISCLOSURES at https://www.everbank.com/investing/metals/unallocated?referid=11808. Or call 800.926.4922.

EverBank is an Equal Housing Lender

......................................................

In This Issue.

* BOJ between a rock and a rock.

* S&P raises U.S. outlook.

* Canada posts another strong report.

* Chuck wants to ask Central Bankers a question.

And, Now, Today's Pfennig For Your Thoughts!

BOJ Disappoints.

Good day. And a Tom Terrific Tuesday to you! Writing from home this morning, which works out OK, given that I don't have to get in my car and drive to do it! The U.S. received some good news, sort of, yesterday, the euro is pushing the currency appreciation envelope near the 1.33 handle, the Aussie dollar (A$) has dropped another cent overnight, and the 10-year Treasury has hit a high water mark in yield that we haven't seen in awhile. All this and more awaits you this morning in the Pfennig!

Yesterday, the currencies basically traded in the same clothes all day, the euro held steady Eddie, along with Gold, and all the little dogs stayed on the porch, as they were not allowed to chase the dollar down the street. There was little data around the world to trade off, so things remained the rest of the day, as they were in the early morning.

Overnight, we have some movement though. The Bank of Japan (BOJ) decided to leave things as they are last night, and that has triggered some movement in the currencies and Gold. The BOJ decided to stick to their plan to double the monetary base, in an effort to rekindle inflation and wake up economic growth. Recall, that yesterday, I said that I thought the BOJ would think they needed to "fix things" as the volatility in bonds and the Nikkei was really becoming a problem. The BOJ is between the proverbial rock and, well, another rock! You see, they made the mistake back in April of saying that they would do everything available to them to bring about higher inflation and economic growth, and said they would go "all-in" on bond buying.

Well, at first, the sheeple believed the BOJ, and bought Japanese stocks like their brothers in the U.S. were buying stocks, based on the same bond buying scheme. But now, it appears that BOJ Gov. Kuroda, and Prime Minister Abe, are backing off that promise to go "all-in" So. bonds and stocks get sold, and guess what Japanese yen does? It rallies. Yes, all the shorts put on to weaken yen in response to the "all-in" promise are being reversed.. Too soon? I think so. As I said in my video the other day, I think the Gov't will win here, and get yen weaker, which is their main tool in rekindling inflation. So, the BOJ is damned if they do, and damned if they don't. Proves to me that Central Banks need to get out of "stimulating economies". They'll end up messing it up, that's all they do!

So. that news out of Japan set us up for the overnight trading last night and into the European session this morning. As if the Aussie dollar (A$) needed any extraordinary reason to weaken, it found one in the BOJ announcement.. The A$ has dropped 11-cents in the past couple of months, which has to be making the Reserve Bank of Australia (RBA) happy these days, as they have been big babies about the A$ strength, crying and whining about the strong A$... It doesn't make A$ holders very happy though. The currency hasn't been this low (.9345) since September 2010.

I think that the RBA is really going to go for the jugular here, by cutting rates no matter what the economic data tells us, and forcing holders to bail. I used to think that the RBA had their head screwed on straight, but they are just like the rest of the bunch. shame on you RBA.

Well. The U.S. received some good news yesterday, and it didn't come in the form of trumped up or cooked books data. No, this time it was from Standard & Poors (S&P), of whom you may recall, was the only credit rating agency to cut the U.S.'s credit rating from AAA 2 years ago. This time S&P decided to raise its outlook on the U.S. Credit Rating to stable from negative, citing the strength of the U.S. economy.

So the credit rating remains a notch below AAA, but the outlook was raised to stable from negative. This is positive news folks. However, you know me. and I'm going to look at the dark side of the moon on this announcement, and to me, the key here is S&P's view that there's strength to the U.S. economy. I guess if you lower your standards, or the bar, you can get "strength in an economy" that's supposed to be the world's engine, at 1.9%... Which is where 1st QTR GDP stands right now, before the final revision. Oh, and don't let the fact that the strength we do see is mostly generated by Gov't activity. I wonder what S&P will think about this change once the Fed decides to keep Quantitative Easing (QE), and Zero interest rates (ZIRP) because of their fear that the economy doesn't have the strength to run, let alone stand, on its own. Can you say, egg on their faces? I thought you could!

And the A$'s kissin' cousin across the Tasman, kiwi, is also seeing ,major weakness, which is also making the Reserve Bank of New Zealand (RBNZ) Gov. Wheeler, happy as a lark. Recall, that Wheeler, and his predecessor at the RBNZ, Bollard, had long dissed their currency whenever they had the opportunity. So, here's my question I would ask if I had all these knucklehead Central Bank Governors in a room. "So, if you all think that debasing your currency to promote growth is a good idea, what are you debasing it against? If your neighbor is also debasing against your currency, who wins?"

OK. As I said at the top, the euro is pushing toward 1.33. The long awaited German constitutional court hearing on ECB policy begins as I write this morning. I really don't think the court will admonish the ECB for what they have done, nor find any of it unconstitutional, what I do see them doing though is setting boundaries for the ECB to work with going forward. Remember, when the ECB was implementing measures in an effort to keep the Eurozone afloat, it was unchartered waters, and had not been tested or measured against the German constitution. Here's the problem with all this. the decision of the court may not come down for several weeks. By then, we will have forgotten that all this weighed on the euro at some time in the past!

They key with the euro these days is simply that the threat of a sovereign default has passed, the threat of a Eurozone breakup has passed, and the threat of a collapse of the euro has passed. this all goes back to last year, when I started talking about the "relative calm" that had come over the Eurozone. And for all those people that believe the U.S. dollar is "strong" right now, explain to me how the euro, which is the offset currency to the dollar, is rising? What does that really tell you about what the markets think about the dollar?

Well, the S&P news for the U.S. isn't helping U.S. Treasuries this morning. The 10-year Treasury yield has risen to 2.25%... A level we haven't seen in sometimes. (remember, as bond yields rise, the price of the bond goes down, so this rise in yields from 2.05% last Friday, to 2.25% represents losses for holders)

Looks like it's time for the Fed Reserve to buck up, eh? Not that I want the Fed to step in an intervene here to lower yields again, I'm just saying that this has been where the Fed usually steps in.

My friend, Bill Bonner, wrote a very good piece for his newsletter the other day, that reminded me of a speech he made in Vancouver many years ago, called: A Farewell to Arms, which was about the end of adjustable rate mortgages due to what he believed was going to be a mortgage meltdown. Of course the meltdown did happen, and his speech has stuck in my mind all these years. Well, Bill's latest thought could have been called: A Farewell to bonds. For he is of the thought that the great bond rally is over.. .Something that I called for a couple of years ago, but has taken a long time to get here! UGH! If you're interested in reading the whole article from Bill Bonner, click here: www.billbonnersdiary.com you'll have to click on the archives for the story titled: Say "Bye-Bye to Bonds"

Well, yesterday, I told you about the very strong employment number from Canada that printed on Friday. It was the 2nd largest monthly gain in jobs on record! Well, Canada followed that strong report up with another strong report yesterday. Canadian Housing Starts jumped 13.8% in May, which puts the number of starts at 200,200 in May, up from 175,900 in April. Combine these two reports and we should be looking at a stronger Canadian dollar / loonie this morning. ahem. well. that's not to be! The loonie is weaker this morning, but that's OK. We all know the strength in this currency is hidden in there somewhere!

The price of Gold held steady all day yesterday, but is off $16 this morning as the stimulus tapering campers are out in force. The other thing weighing on the price of Gold is the fact that China is on holiday through tomorrow, which eliminates the physical buying that has supported Gold. I really like the idea that my friend Addison Wiggin came up with, calling the separation of the physical price of Gold and the paper price of Gold: Zero Hour. Yes, this is something I would love to see. And it plays well with my call for over a couple of years now that if everyone bought physical Gold, that it would bring the paper Gold price manipulators to their knees. You should check out the Zero Hour scenario that Addison is laying out. He reports on it every day in the 5 Minute Forecast.

A dear reader asked me yesterday why I hadn't commented on the NSA thing. I can't. that's why. And that's all I'll say about that! But. Hey, you knew I couldn't just let this hang out there. But. you have to wonder just what the heck is going on in this country, right?

But I could tie it all in with the dollar's value if I wanted to.. Confidence in the U.S's ability to attract foreign investment to help finance the debt, is a BIG thing, folks. and when things begin to stack up against the country like we're seeing right now, plays into this confidence thing. And that's all I can say about that!

Jen and I were having a brief discussion yesterday about currencies, and I mentioned how far the Indian rupee had fallen. Well, this morning I noticed a story title that recognized that the rupee had fallen to the lowest value on record! Hmmm. And just the other day, I saw an interview with Dr. Faber, who said that India was the best country in Asia. OK, something has to give here. If Dr. Faber is correct, then rupees at these record low levels would seem to be a basement bargain. but if he's wrong, then the basement could go lower, eh?

For What It's Worth. I have a double treat for you this morning. First, Fed St. Louis President, James Bullard talks about extending QE. And then former chief economist at the IMF, Ken Rogoff talks about needing more inflation. they play together very nicely, folks.

From Bloomberg: "Federal Reserve Bank of St. Louis President James Bullard, who has voted this year in favor of maintaining stimulus, said inflation below the central bank's 2 percent target may warrant prolonging the "aggressive" use of bond buying to spur growth and bring down unemployment.

While "labor market conditions have improved since last summer," Bullard said today in remarks during a panel discussion in Montreal, "surprisingly low inflation readings may mean the Committee can maintain its aggressive program over a longer time frame."

The Federal Open Market Committee, which meets next week, is discussing when to slow $85 billion in monthly bond purchases, with San Francisco Fed President John Williams saying last week a "modest adjustment downward" in the buying is possible as "early as this summer." Atlanta Fed President Dennis Lockhart said "very mixed" economic data makes him "more cautious" about a near-term reduction in purchases."

And the Moneynews.com, here's Ken Rogoff. "Instead of dreading inflation, central banks need to learn to love it, advises Kenneth Rogoff, former chief economist at the IMF, in an article for Project Syndicate.

Rather than preparing to take away the punch bowl, central banks should be spiking it, argues Rogoff, a Harvard University economics professor who co-authored the book, "This Time is Different: Eight Centuries of Financial Folly."

The Federal Reserve may soon end quantitative easing (QE) to "take away the punch bowl before the party gets going" and head off inflation before reaching its employment target.

"The trouble is that this is no ordinary recession, and a lot people have not had any punch yet, let alone too much."

Chuck again. Oh, yes, listen to these guys and extend QE, so that inflation can get roaring. Serenity NOW! I'm back now, I had to go yell at the walls, but quietly, I must add, since I'm writing from home, and everyone is sleeping!

To recap. The currencies and Gold held steady Eddie throughout Monday, but overnight has been different, as Gold and the A$ lead most currencies down, except yen and euros. The BOJ declined to fulfill their promise to do everything possible to introduce inflation and economic growth last night, by not doing anything, when the markets wanted them to. The yen shorts are being reversed, as now the markets believe that this has been just another false dawn for Japan. Chuck still believes the Japanese Gov't and BOJ will win, and take yen lower eventually.

Currencies today 6/11/13. American Style: A$ .9340, kiwi .7770, C$ .9760, euro 1.3285, sterling 1.5555, Swiss $1.0790, . European Style: rand 10.2960, krone 5.7855, SEK 6.5870, forint 225.25, zloty 3.22, koruna 19.2850, RUB 32.44, yen 97.05, sing 1.26, HKD 7.7645, INR 58.39, China 6.1620, pesos 13.02, BRL 2.1470, Dollar Index 81.39, Oil $94.60, 10-year 2.25%, Silver $21.66, and Gold .$1,375.35

That's it for today. The sun is coming up and it appears to be a nice day outside. That's great! Hey. I wanted to highlight a story that appeared on the Forbes website that was an interview with Big Boss, Frank Trotter. You can read it here: http://www.forbes.com/sites/tomgroenfeldt/2013/06/10/everbank-uses-technology-and-information-to-help-investors-go-global/

I'm about out of battery on my laptop, and can't find my power cord, so I'll have to get this out the door, before the red light comes on! No. wait! Kathy to the rescue! My beautiful bride, knew where the cord was! YAHOO! OK. Our little Delaney Grace is in the chorus for the summer play production of Annie that starts tonight. Good luck little d! And Alex continues to work out with the Junior Olympics water polo team from this area. He'll be traveling with the team to California at the end of July for games. I'll be in Vancouver.. Alex mentioned the other day that his birthday is coming up. He'll be 18 at the end of this month. I told him that when I was 18, I was traveling around the country in a VW micro-bus playing my guitar with hair down to my shoulders. He just laughed. Oh well.. time to get this out the door. I hope you have a Tom Terrific Tuesday!

Chuck Butler
President
EverBank World Markets
1-800-926-4922
1-314-647-3837

Job. What Job?

Chuck Butler — Mon, 10 Jun 2013 23:05:00 GMT

.........But First, A Word From Our Sponsor..........

WHY RUSH INTO METALS WHEN YOU CAN WALTZ?

With our automatic purchase plan, you can start mining metals at your pace.

?Fund for as little as $100 a month

?Choose from gold, silver and platinum

?Pay no ongoing fees

Start mining at your pace today. Learn more and view IMPORTANT DISCLOSURES at https://www.everbank.com/investing/metals/unallocated?referid=11808. Or call 800.926.4922.

EverBank is an Equal Housing Lender

......................................................

In This Issue.

* Euro, loonies, krones rally.

* Gold tumbles on jobs data.

* China data doesn't meet expectations.

* Canada posts 2nd best monthly employment on record!.

And, Now, Today's Pfennig For Your Thoughts!

Job. What Job?

Good day. And a Marvelous Monday to you! Another colder than usual for this time of year, and wet dominated weekend, although Saturday was sunny, so we had that going for us. Hurry up, get outside, it's sunny, we don't want to miss it! That's what it feels like around here this spring. Not that you give two hoots about all this, just was on my mind, and therefore I share it with you! That's kind-of funny, right? Oh well, time to quit beating around the bush and get to talking about the strength in the dollar.

Someone, I think it was my darling daughter, Dawn, said to me yesterday, "Dad, I just read Chris' Sunday Pfennig, and he's talking about the strong dollar." To which I replied, well, the dollar isn't really strong. It is "stronger" than it was, but when the euro is still around 1.30, and other currencies slipping into the 90% gain VS the dollar, instead of the 105% gain, I think you'll agree. And that brings us to the $64,000 question. Is this just another of the brief dollar rallied that we've seen plenty of during the weak dollar trend that began in Feb of 2002, or. is it a reversal of that trend, to which we will see a multi-year rally in the dollar?

Hmmm. I guess you can never completely rule out the later of those two scenarios, but I have to say that I still believe in trends, what causes them to start, and what causes them to end, and that a trend is not a one-way street, and it can be volatile, therefore I'll stick with the former of the two scenarios, and put the dollar rally down to people having the wool pulled over their eyes.

This morning, the currencies are getting sold again, except the euro, Canadian dollar, and Norwegian krone, but their gains are miniscule at this point. The selling of the currencies not mentioned here, began Friday with the U.S. Jobs Jamboree. I guess we had better cross that bridge now, eh?

Well. Looky there. The BLS said that 175,000 jobs were created in May. Hmmm. Well. I told you on Friday that I believed that April's number would be revised downward, and it was. but that's as far as my Mr. Know-it-all persona took me. I also said that the jobs created in May number would be 135,000, and the BLS said it was 175,000. Go figure. and the BLS did add 205,000 jobs out of thin air, so we have that going for us.

At first glance the markets said, "we don't believe it" and marked down the dollar, against the euro and Gold. But then, it turned on a dime, and they decided it wasn't too much of a stretch. and the dollar rallied.

And let's not get confused here about what kind of jobs the BLS is creating out of thin air. Apparently: 122,000 jobs were low wage occupations. So, they are smart in how they add jobs, folks. For if they decided to add high wage jobs, then wage inflation expectations would take off! And they can't have that! Just for the record, 26,000 jobs were created, according to the BLS, in the temporary jobs section. the lowest of all paying jobs!

And I always ask myself, why the markets don't punish something for downward revisions. I mean the markets got all lathered up last month when they thought the number of jobs created, no matter how they were created, (see BLS and ghost jobs), was 165,000. So, why didn't the markets say, "hey, the tried to trick us again?" Well, anyway, I'm sure this month's number will be revised downward next month, and no one but me will notice.

So. here I am once again. saying: Job What Job?

The global growth currencies like Aussie dollars (A$) are getting whacked again this morning, this time from the weaker than expected data from China over the weekend. Chinese Industrial Output gained less than expected at +9.2% from a year earlier, and China's economic growth outlook was downgraded by Barclays. Just a note on China. You may notice in the currency roundup that the price of the renminbi / yuan doesn't change for the couple of days, and that's because China's markets are closed through June 12th, for The Dragon Boat Festival.

In my monthly Financial Management Service Treasury Bulletin, I found some interesting stuff on foreign currencies held by the Treasury. And of the foreign currencies held, only the Treasury's position in euros has increased this year. Not Canadian dollars, not Swiss francs, and not Japanese yen. but euros. I think I could come up with more than a few reasons why that would be. and a few of them would come from my conspiracy side of the brain, but I think I'll stick with this one. the Treasury is so astute that they saw the potential for a euro rally this year, and therefore backed up the truck. OK, I'm now laughing so hard I can hardly type!

But remember, I always tell you to follow the money.

The U.S. data cupboard is bare today, but it gets restocked tomorrow and will begin to yield some very important data by Wednesday, like Retail Sales for May. I have to say that I tried to do my best to goose up the May Retail Sales figures, and continued that with some purchases in June, but I doubt that it will be enough to push Retail Sales to the "strong Sales" side of the ledger. But we can talk more about that on Wednesday, God willing and the Creek don't rise.

Other data from around the world this week will bring us Aussie May employment, which is something to really keep an eye on, The Bank of Japan (BOJ) and the Reserve Bank of New Zealand (RBNZ) meet this week, and the German Constitutional Court will hold their hearing on the ECB this week. The BOJ meets tonight, and although I don't think we'll see more calls for additional stimulus, I do believe the BOJ will once again stick their hands in the cookie jar, and believe they can "fix things" with regards to the volatility we're seeing in the Nikkei.

I had to laugh out loud this morning regarding a story title on the Bloomberg. The title read: "No inflation as yield rise belies point of no return view". OK. in modern day English, this means that with what the writer believes is very low inflation, and Treasury yields rising, the thought that has lingered in the markets for so long, that there's no "real return" in Treasuries, is being proved wrong. What? Are you kidding me? Ok. sure, as long as you use the Gov't's trumped up CPI numbers, there's "no inflation". But you, me, and the guy down the street waiting for a bus, all know that the Gov't's CPI is a bunch of baloney. And the Gov't isn't finished "adjusting" their inflation numbers either forks. Treasuries are negative real interest folks. And now they are losing money. YIKES!

I mentioned above that the Norwegian krone was eking out a small gain this morning. That gain is coming from the euro strength, and. a report showing that Norway's CPI beat the expectations to the upside, which shows that the upside surprise in CPI from April was not a one-month phenomenon. Two months of rising inflation is a real pain for the Norges Bank (Central Bank for Norway) and them wanting to talk down the krone's value without cutting rates. And therefore this data is krone positive.

Norway's neighbor, Sweden, which has been one of the better performing currencies in the past 12 months, saw some slippage overnight after they reported that Industrial Production for April, declined unexpectedly. As opposed to the Norges Bank's dilemma now with inflation rising, Sweden's Riksbank will view this data as another arrow for their rate cut quiver. And that's not krona positive.

OK. Back to the Jobs Jamboree for another round. So. What do you think the Fed Heads, most importantly, Ben Bernanke, saw from the jobs data last Friday? Was it strong enough for them to begin removing their bond buying? Personally, I don't think it was. First of all, I don't believe the Fed Heads are fooled by the antics of the BLS (Bureau of Labor Statistics), so they, I think, know the real numbers. If that's true, and I believe it to be, then it means there's nothing here that says, "begin tapering". Instead, I think it says, "continue as is till the end of the year before looking at again".

The problem for the markets is that Big Ben Bernanke doesn't come out after a report like the Jobs Jamboree, and say, "here's where we are today, and how we feel about this report". Lacking this "transparency" the markets, and people like me and you, are left to give our best guess as to what Big Ben is thinking. Apparently, the markets think that Big Ben is ready to begin tapering his bond buying / Quantitative Easing (QE), otherwise the markets would be selling dollars like they were funnel cakes at a state fair!

I know I talked earlier about the BOJ, and their feeling that they need to "fix things". Well, I have to say that what I'm seeing with the yen right now, is a failure to believe that PM Abe, has the will to do what he said he would do, which was bring about growth and inflation. That's why the markets are taking yen to levels that just a month or so ago, you would have thought you wouldn't see again for some time. And the repatriation going on, is pushing the envelope of yen appreciation. But what happens when bond yields stop rising, and the Nikkei turns on investors? It could very well end up being the classic bug looking for a windshield that my friend John Mauldin talks about.

I also talked about the Canadian dollar / loonie posting gains above. Canada received some very good and strong employment data on Friday, which was lost in the euphoria of the media and markets over the U.S. Jobs data. Canada's employment increased 95,000 in May, the second largest one month gain on record! It appears that Canada's labor problems that were accented by a fall in jobs in the first quarter of -25,700, have turned around, and have more than covered that loss.

Gold took it on the chin on Friday after the Jobs data. Losing the $1.400 handle once again. That $1,400 level seemed quite secure on Friday morning before the Jobs data.

And the IMM Futures Positions report from last week, showed that the Net long positions in dollars fell 27,000 contracts, more than unwinding the previous week's increase. Those that hold short positions in euros, reduced their holdings, as did the yen short positions. So, the euphoria that existed for a couple of weeks in building dollar positions here, has faded.

And one more thing before we head to the Big Finish. The number of Americans on Food Stamps has climbed to a new record high of 23,116,441, with each one collecting an average of $274.30 per month. And we as a country wonder why we've lost our "edge"? Debts and Deficits. deal with them, or die from them.

For What It's Worth. You know that things have gone haywire when Big Al Greenspan speaks up and disses the Fed's programs. But that's what he was doing CNBC the other day. So, let's listen in to the former Fed Chairman.

"The sooner we come to grips with this excessive level of assets on the balance sheet of the Federal Reserve-that everybody agrees is excessive-the better," he said in a "Squawk Box" interview. "There is a general presumption that we can wait indefinitely and make judgments on when we're going to move. I'm not sure the market will allow us to do that."

Greenspan said he's not sure the markets will allow an easy exit. "Gradual is adequate, but we've got to get moving."

But if the Fed moves too quickly in reining in its accommodative policies, he added, it could shock the market, which is already dealing with a very large element of uncertainty."

Chuck again. Now, isn't that just like Big Al? He comes out and says that we really need to begin tapering QE now, but.. Then he gives the Fed an out, by saying they can't move too soon. On one hand, do this, but on the other hand don't do this. And you wonder why I used to bang on Big Al like I did?

To recap. It was all about the Jobs Jamboree on Friday, which was trumped up, as far as Chuck was concerned, but overall taken as the BLS presented it, the data was mixed at best, but the markets viewed it as a key to Fed Tapering, which was dollar positive. Canada also printed a strong employment report, posting their 2nd largest monthly gain on record. Gold was the big loser from Friday, and the euro remained well bid.

Currencies today 6/10/13. American Style: A$ .9450, kiwi .79, C$ .9815, euro 1.3220, sterling 1.5540, Swiss $1.0665, . European Style: rand 10.1770, krone 5.7605, SEK 6.5925, forint 225.25, zloty 3.2230, koruna 19.4225, RUB 32.33, yen 98.80, sing 1.2585, HKD 7.7635, INR 58.13, China 6.1620, pesos 12.81, BRL 2.1310, Dollar Index 81.88, Oil $95.67, 10-year 2.16%, Silver $21.80, and Gold. $1,382.85

That's it for today. Eric Carmen's All By Myself, was playing this morning, and I thought, that's what I am here. All By Myself! I was happy to see that my beloved Cardinals won in 10 innings last night. I had gone to bed with the game tied. Taking 2 of 3 from the second place Reds was a good job! Well, today marks the last Monday for my long time friend (back to Mark Twain Bank days) Kathy Glowski. She's leaving us to move to Michigan, where she was originally from, so I guess you Can go back home! Apple is kicking off their developer conference in San Francisco today, I guess they'll introduce the new IPhone. I mean, the "old IPhone" is obsolete now, right? HA! Mine's two -years old, and it does everything I need it to do. Well. I have a bevy of doctor's visits this week, but all should be good, at least that's the attitude I'm taking! And with that. I hope you have a Marvelous Monday!

Chuck Butler
President
EverBank World Markets
1-800-926-4922
1-314-647-3837

A Jobs Jamboree Friday!

Chuck Butler — Fri, 07 Jun 2013 20:02:00 GMT

.........But First, A Word From Our Sponsor..........

WHY RUSH INTO METALS WHEN YOU CAN WALTZ?

With our automatic purchase plan, you can start mining metals at your pace.

?Fund for as little as $100 a month

?Choose from gold, silver and platinum

?Pay no ongoing fees

Start mining at your pace today. Learn more and view IMPORTANT DISCLOSURES at https://www.everbank.com/investing/metals/unallocated?referid=13924. Or call 800.926.4922.

EverBank is an Equal Housing Lender

......................................................

In This Issue.

* Euro finishes its rally week on high note.

* Yen continues to benefit from repatriation.

* Draghi sounds upbeat.

* China prepares its curb appeal.

And, Now, Today's Pfennig For Your Thoughts!

A Jobs Jamboree Friday!

Good day. And a Happy Friday to one and all! What a dolt I was yesterday, not paying attention to the actual calendar. Yesterday, I should have acknowledged that June 6, 1944 was D-Day. What a day in our history! On that day 150,000 allied soldiers landed on the shores of Normandy. Many soldiers died on that beach, but for no reason. Those soldiers made a difference in the world we live in today, and they should be thanked on more days than just Veteran's Day. I read yesterday that 600 WWII veterans die each day. I lost my dad 17 years ago, he was one of the soldiers that fought in WWII.

OK. I apologize to any veteran who thought I had snubbed them yesterday! Sometimes, I come in, see something, and begin to write without checking the calendar. Maybe I won't do that any longer!

The euro is on a roll folks. I haven't seen this type of consecutive day performance to the upside in the euro in a month of Sundays, and probably even longer! Yesterday, I told you how 1.31 had seemed to be tough row to hoe, but that the euro had finally passed that figure. By the time European Central Bank (ECB) President, Draghi, finished talking yesterday, the euro had pushed through the 1.31 handle and took out 1.32 before finally pausing.

So, the markets were all lathered up for ECB President, Mario Draghi, to give the world his thoughts after announcing that rates would remain unchanged yesterday.. Before I go on, speaking of interest rates in the Eurozone, they currently stand at 50 basis points or ½%... Where did the markets think Draghi would take them from here? I said after Draghi made the last rate cut, and I'll say it again. I just don't see where an economy gets any traction from cutting rates when they are already below 1%...

OK. back to Draghi's statement. Apparently, Draghi is upbeat about the Eurozone's recovery. He said that, "the Euro-area economy will return to growth by the end of the year. Euro-area economic activity should stabilize and recover in the course of the year albeit at a subdued pace." There was no mention of implementing negative deposit rates, which was the fear by the markets, going into the meeting.

As Draghi talked, traders began to see where he was going, and began to mark up the euro. Yesterday morning in the currency roundup the euro was 1.3115. But by the time Draghi finished talking the single unit had risen to 1.3190, and it wasn't long into the afternoon that 1.32 was taken out. It's quite a scene, given all the negativity that the euro has had to endure the past 3 years.

For those of you who took the time to click on the link I provided the other day to my video interview, you will recall that I made the point that the euro no longer has to face the questions of a sovereign default, breakup of the Eurozone, or collapse of the euro, and therefore sentiment should improve for the currency going forward. I hesitate to even say that the euro is in rally mode. In fact, I won't say that. We've seen the euro bump up and then fall back down several times in the past couple of years, and I expect this to continue. But, isn't it nice to see the euro on the rise once again?

The Japanese yen is fighting with the euro for best performer, which makes them an odd couple, don't you think? Let's see, yen continues to rally, and the Aussie dollar (A$) continues to get whacked. I HAVE to believe my thought that yen repatriation is what's causing this performance in both currencies. The euro is the Big Dog, offset currency to the dollar, usually, if the Big Dog leaves the porch, the rest of the little dogs can get to chasing the dollar down the street. So that would mean the A$... But, as I watch this yen strength gain momentum, and the whacking of the A$ continue, I would have to be shown that Japanese investors are not repatriating yen from A$'s to believe that it's not the cause of the A$'s problems right now.

Well. As we draw closer to the meeting between the Presidents of China and the U.S. this weekend in California, the Chinese decided to really juice up the appreciation of the renminbi, just for curb appeal. The level this morning in the renminbi / yuan is the strongest reference rate on record! China also granted passports to the mother and eldest brother of a Chinese dissident. Recall that the dissident, Chen, escaped house arrest last year, and fled to the U.S. embassy in Beijing, before being allowed to go to N.Y. So, the Chinese are looking like the good guys before the meeting with the U.S. President. They've put their foot on the gas pedal for currency appreciation, and are allowing the dissident's family to visit him here in the U.S.

Now, if they can only get the U.S. President to believe that they have had nothing to do with the cyber attacks, they'll be golden.

Tomorrow, we'll get the latest Chinese export data, which I told you yesterday is thought by the experts to have really plunged. So, it will be interesting to see what the Chinese do with the renminbi on Monday. My guess is that they will not be so generous with appreciation of the renminbi / yuan.

Have you noticed the creeping up of the price of Oil this week? We began the week with the WTI Crude trading at $91.98, or $92 for GP. And today, the price of Oil is over $95. That's a $3 gain in a week! WOW! So. the rise in the price of Oil should be reflected in the petrol currencies, right? Not so fast! Yes, the petrol currencies of Norway, and Canada seem to be enjoying the rise in the price of black gold, Texas tea. But, I guess the problems in Brazil, Mexico, U.K. and Russia are just too great to overcome with a rising Oil price.

The price of Gold also saw a nice rise yesterday, after the Draghi statement.. But, the shiny metal is searching for a bid this morning, and is being spent by $2 at the moment.

But. all these moves and non moves are subject to change today, as today is the June Jobs Jamboree. We get to see all the book cooking right before our eyes once again. In our little contest we have here each month, I've put in that I believe last month's number will have been revised downward, and May's job creation will print at 135,000. The experts think the number will be more like 163,000, with the unemployment rate at 7.5%...

All this counting and adding in ghost jobs is a bunch of baloney to me. Like I keep telling you, I prefer to point to the labor participation rate, which remains at a 1979 low of 63.3% , and then look at the Avg Hourly Earnings, and Avg Weekly Hours, for any signs of wage inflation.

The markets though, get all tangled up in the web that the BLS and Gov't weaves. The web of deceit and hedonic adjustments. So, we must roll with the punches that the markets delivers when they see the adjusted numbers.

Drive-in movies turn 80 today. We don't have any drive-in movies near us here in St. Louis any longer. But I recall them being a great place to take a date when I was a young man. And when my older kids were young. That was fun! Now. what was I talking about. Oh, yeah, the Jobs Jamboree. oh well, it is what it is, folks. but we all know the truth about employment in this country. just remember the labor participation rate.

With the euro driving higher, the Swiss franc is allowed to run too, and the franc is back to a price of $1.08 this morning. I also read that the Swiss National Bank (SNB) announced that they have reached a record level of currency reserves. Recall how last year, I was telling you about how the SNB had begun to diversify their currency reserves into currencies like the A$... I wonder when the SNB begins to complain out loud about the franc's strength. Should be soon.

And Brazil's credit rating took a hit overnight, as S&P cut Brazil's credit rating outlook to negative, and blamed it on sluggish growth and an expansionary fiscal policy could lead to an increase in the government's debt levels. This might not be that big of a deal with the markets, folks, but it is with me.

For What It's Worth. There's something happening here.. What it is, ain't exactly clear. OK. there's been a lot of talk about manipulation of the metals (Gold & Silver) and I've told you where I stand on all of that. But there are people that don't believe in what they call "such nonsense" For instance, my friend, and investment guru extraordinaire, Doug Casey, has said something to the tune of; that he doesn't believe that the Gov't could be manipulating Gold because they don't have the money to do so, for they are already bankrupt. And that "considering that Gold's been in a bull market for a dozen years, I'm very unconcerned about the fact that it's come off. All the fundamentals that underlie the bull market are still in place."

In addition, my friend Addison Wiggin, thinks that "If we don't think the Fed is competent enough to set interest rates correctly. how the heck could they successfully control a global market? "

So. all the things that I've put before you previously, that draw out pure manipulation, still have me on the manipulation side of the fence. But. one thing that Doug, Addison and I can all agree on is that investors, in our opinion, should be using this drop in the price of Gold as an opportunity to buy at cheaper levels, for things have not changed, in fact they've gotten worse, and therefore the bull market for Gold (& Silver) remains intact.

In addition, remember what we learned about a decade ago, from investment and writer guru, Jim Rogers. That in the history of commodity bull markets, over 400 years, the bull markets last between 17-22 years. We've only passed the 12 or 13th year depending on when you believe the bull market began. And with all the uncertainty in the world today? Shoot Rudy, It's amazing to me that Gold isn't pushing the envelope of appreciation once again.

To recap. The Big Dog euro is back chasing the dollar down the street! Well, at least for this week it is! Remember. the euro may have lots of pimples, but if the markets continue to keep it well bid around 1.30, what does that tell you about what the markets think about the U.S. dollar? Japanese repatriation from A$'s continues, with yen rallying and A$'s continuing to get whacked. It's a Jobs Jamboree Friday, so we get to see the books get cooked once again, and the Presidents of China and the U.S. meet tomorrow in California. Should be interesting.

Currencies today 6/7/13. American Style: A$ .95, kiwi .7955, C$ .9755, euro 1.3250, sterling 1.5570, Swiss $1.08, . European Style: rand 9.9920, krone 5.75, SEK 6.5430, forint 223.85, zloty 3.2555, koruna 19.2765, RUB 32.30, yen 95.30, sing 1.2435, HKD 7.7625, INR 57.06, China 6.1620, pesos 12.85, BRL 2.1290, Dollar Index 81.33, Oil $95.06, 10-year 2.05%, Silver $22.65, and Gold. $1,410.97, . and it's Friday, so let's take a peek at the U.S. Debt Clock by clicking here: http://www.usdebtclock.org/index.html

That's it for today. South City Midnight Lady, by the Doobie Bros is playing right now, and that really mellows me out! I'm a bigger fan of the Doobie Bros, before Michael McDonald, but that later rendition wasn't too shabby either! And now Marshall Tucker! Wow! I'm being treated to some great music this morning! Things are pretty mushy and slushy around these parts, after all the rain we've received recently and will continue to receive this weekend according to the weather reports. UGH! It was payback night at Busch Stadium last night, as my beloved Cardinals blasted 5 home runs! I hope they saved some runs for their weekend series with the Reds. It was pretty quiet at the house for awhile last night, as everyone was gone. Except me of course, I'm always there! Safe Travels to the Gaffney family. And I get to end the week with the Los Bravos singing Black is Black. Not familiar with that song? A classic rock song! And with that I thank you for reading the Pfennig, and hope you have a Fantastico Friday!

Chuck Butler
President
EverBank World Markets
1-800-926-4922
1-314-647-3837

Brazil Drops Tax On Foreign Investment.

Chuck Butler — Thu, 06 Jun 2013 16:24:50 GMT

.........But First, A Word From Our Sponsor..........

WHY RUSH INTO METALS WHEN YOU CAN WALTZ?

With our automatic purchase plan, you can start mining metals at your pace.

?Fund for as little as $100 a month

?Choose from gold, silver and platinum

?Pay no ongoing fees

Start mining at your pace today. Learn more and view IMPORTANT DISCLOSURES at https://www.everbank.com/investing/metals/unallocated?referid=11808. Or call 800.926.4922.

EverBank is an Equal Housing Lender

......................................................

In This Issue.

* Euro rallies, A$ continues to get whacked.

* Yen continues to benefit from repatriation.

* ECB & BOE meet today.

* China braces for weak exports data.

And, Now, Today's Pfennig For Your Thoughts!

Brazil Drops Tax On Foreign Investment.

Good day. And A Tub Thumpin' Thursday to you! It's 6/6! You can get your kicks on route 66! Boy, do I have something for you in the For What It's Worth (FWIW) section of the letter today, but first, a word from our sponsor! No. not really. I wouldn't do that to you! The European Central Bank (ECB) is meeting as I begin to write today, and the Bank of England (BOE) is saying goodbye to their Gov. Mervyn King, who is stepping down, and handing the reins over to former Bank of Canada Gov. Mark Carney. So, we have that going for us today, along with more U.S. data, so let's strap up our boots and get working the garden today!

I wish! The Beach Boys are singing Wouldn't it be nice, right now, and I'm thinking about how wouldn't it be nice to only have to worry about a garden! I used to have a Huge garden, that I planted every spring and fall, and bring grocery bags of fresh vegetables to work. But that was then. Now, I write a letter everyday and bring grocery bags of information to make you think! So, let's quit beating around the bush this morning, Chuck, inquiring minds want to know what's going on!

Well. Front and Center this morning, the euro has finally pushed past 1.31. This level has been a real bear for the euro bulls to get past, but it finally happened yesterday afternoon, and to my surprise this morning, it has remained above 1.31. It is thought by a large majority of economists that the ECB will leave rates unchanged today, and the focus will be on the ECB President, Mario Draghi, and his press statement after the rate announcement. It's here that some movement could come to the euro, as Draghi could be a real Donald Downer and continue his talk about implementing negative deposit rates. I'm going to say that I think that the latest data from the Eurozone has been better, and hopefully he won't resort to negative deposit rates.

If Draghi doesn't go down the negative deposit rates road, then the euro could end up receiving more love today. Oh! Wait!... This just came across the screens. German April Factory Orders erased March's 2.3% gain by falling 2.3%... That's not so good! That means two months of Factory Orders in the Eurozone's largest economy, were a wash. So, that puts the negative deposit rate language back on the possibility table today. UGH!

The Aussie dollar (A$) continues to get whacked, and is now at a level (.9510) that it hasn't seen since October of 2011, and then it was moving the opposite direction! The real mover of the A$ has been the narrowing of its once all-powerful yield advantage. I talked about this a week or so ago, when the Reserve Bank of Australia (RBA) decided to whack away at the A$'s value by lowering their Official Cash Rate (OCR) and thus removing that wide yield advantage. Now the yield advantage is still there especially against the ZIRP countries of the U.S. and Japan, and ZIRP Wannabe, Eurozone. But, this narrowing scares the markets, especially when RBA Gov. Stevens keeps making noisy statements about how he still has the scope to reduce rates.

The A$'s kissing cousin across the Tasman, the New Zealand dollar (kiwi) also gets sold in sympathy trading to the A$... I don't like this type of stuff, because it takes away from each individual country's fundamentals being used as the driver for the currency's value. But it happens, and the markets dictate this, so we must respect what the markets are doing, even though we may disagree. The first person in my life to teach me everything there is about bonds, and bond trading, Ed Bonawitz, taught me early on that the markets are never wrong. That's in relation to you trading against the markets. you will lose. Yes, your fundamental reason for doing what you're doing might be as right as rain, but you will still lose.

One of the things associated to the narrowing of the yield advantage that's weighing heavily on the A$, is the selling of A$ bonds and notes, or just not rolling them when they mature, and repatriating the currency home. In this case Japanese investors. The weekly Japanese Capital Flows showed that Japanese investors sold a net yen 1.2 Trillion of foreign bonds last week. So, those aren't all Aussie bonds, but you can see where that's a real problem for the A$... I would think that a huge chunk of those bonds are Treasuries, and thus the push higher in Treasury yields this past week.

The Japanese investors are drinking from the same kool-aid pitcher that U.S. investors have been drinking from for the past year. The kool-aid pitcher that's full of promises, wishes, hopes, and empty dreams about how everything is going to be just fine. I've told you my thoughts on all this before, but just so we're clear on this. I personally don't see how all this QE, ZIRP, Twist-N-Shouting and other things work out fine for us. Yes, we're in unchartered waters, and no one really knows for sure where this all leads, but. I've put my money down on the idea that in the end, we'll find that this didn't go like the Fed Heads, Gov't and Treasury all thought it would go, and the end results will not be good. But then, that's just little old me talking.. I could be wrong, of course, but I don't think I will be on this.

So, did you see that the Brazilian Gov't has done another mea culpa on running foreign investors out of Brazil. First, they hiked rates 75 Basis Points at their last two meetings, and now they have announced that they removed the tax on foreign fixed income investments that was implemented a couple of years ago. Brazil's Finance Minister, Mantega, tried to get this announcement under the radar, but that wasn't going to happen, and seeing that the press was getting all lathered up with the news, Mantega made quick to announce that he could reintroduce the tax should the markets get out of whack again.

I would have thought that this news would have pushed the Brazilian real back toward 2.05, but that hasn't happened. So, maybe Mantega has the markets scared. Or, better than that, or more likely is that the markets got burned by Brazil with all their moves to weaken the currency, and are now treating the real like "once bitten, twice shy". I don't blame them! I was once an investor in the real, and held it with nice gains, and interest rate flow, until the Gov't decided to get both hands in the cookie jar.

One currency that has held its ground through all these moves back and forth this past couple of weeks is the Canadian dollar / loonie. The Bank of Canada's (BOC) ne Gov. Poloz will make his first public appearance today as he speaks to the Finance Committee at the House of Commons. He could use this to make a HUGE splash, like the kind that is created when someone my size does a cannonball into a pool. but I don't believe he'll do that. I don't think we'd want to see that, and he probably wears a Speedo! HAHAHAHAHAHA!

The Chinese renminbi / yuan was moved down again last night by the Gov't. This time it was in association with the export report that's due tonight. The experts believe that the demand for China's goods has backed off again. Remember that China made a concerted effort to change the makeup of their economy a few years ago, after the financial crisis of 2007-08. The Chinese decided to not depend 100% on exports, and tried to shift to a more domestic demand driven economy. That effort has gone along just fine, but it is slow to implement and take over an economy that was so driven by exports. So, exports are still a Big Deal for the Chinese economy.

You've got to give the Chinese leaders credit here, they saw how vulnerable their economy was depending 100% on exports, and they decided to change it. The only problem is that the financial meltdown of 2007-08, still is hanging on in the U.S. and Eurozone, and China's plans to be domestic demand driven just haven't had enough time to develop. So. in the end, after all this carrying on by me about China, the renminbi / yuan is weaker today, because of the fears that exports will have been cut in half. YIKES! But what does that tell you about the economies of the U.S. and Eurozone?

Well. When I came in this morning, and turned on the screens, Gold was being spent again to the tune of $5, pulling the shiny metal back below $1,400. But, after I have emptied my wind bags on China, Gold has bounced back above $1,400.. Yesterday, I told you about the Reserve Bank of India (RBI) taking steps to curb imports of Gold, as the imports were causing major problems for the RBI with regards to trade deficits. Well, the RBI increased the tax, since the first edition of the tax was having no effect on Gold imports. The RBI is hoping that this increased tax would 1. Reduce the trade deficit, and 2. Reduce demand. But, you and I know about how all the plans of mice and men or Central Bankers in this case, don't turn out like the authorities had planned.

This $1,400 level in Gold has been a real bear for the shiny metal. I would think that if the Gold bulls want to really make a statement, that they would push as hard as they can to get Gold well into the $1,400 handle and have it remain there for a few days, so that the public can see that Gold is on the rise again, then and only then can the Gold bulls set their sights on moving to the next level of $1,500.

Before I head to the data and the Big Finish. Yesterday, I rolled my chair over to talk to our metals trader, Tim Smith, and I noticed that he had a currency returns screen up and the top three currencies in the past 12 months are in order by rank: Sweden, Norway, euro. WOW! All this talk of dollar strength this past year, and not only were these three in the black VS the dollar for the past 12 months, but you can add in Denmark, New Zealand, and Switzerland with currencies that have returned positive gains VS the dollar in the past 12 months.

I know I talk about diversification all the time, and the need to diversify to reduce the overall risk of an investment portfolio using currencies and metals. So, every now and then, I like to show that the diversification tools can be profitable too!

On the data front. The Non-Manufacturing ISM for May printed yesterday, and you may recall me telling you that it's always good to see the "employment component" of the report. And yesterday was no exception, as the employment component was the only component of the report that declined. That's not a good indicator for the Jobs Jamboree, but then, we can't get too caught up in this data, because the largest portion of the U.S. economy (non-manufacturing) showed that it was doing just fine. That includes business activity, supplier delivery and new orders.

Factory Orders for April only recovered 1% of the nearly -5% loss in March. And the all-important (now that is) ADP Employment Change showed an increase in jobs created in May of 135,000, and April's number was revised downward to 113,000 jobs created. I've told the people on the desk and Pfennig readers for some time that it seems to me that the ADP report would be the most accurate form of reporting job creation, given that they are involved in creating the pay checks for most companies in the U.S. And if that's all true, and I believe it to be, then 135,000 jobs created is OK. not good, not great, not the stuff that recovering economies are made of.

For What It's Worth. When will we ever learn? When will we ever learn? Ahhh. the words of Pete Seeger kept going around in my head when I read this story yesterday. It takes me back to 2007-08, when it seemed the whole world's economies were about to collapse, because of CDO's. For those of you new to class, a CDO is a "collateralized debt obligation" I'll do some explaining as to how they work, and are created here, so it could become tedious, so if you want to skip ahead, no worries.

From the WSJ. "CDOs give investors a chance to bet on the creditworthiness of a basket of companies. Basic CDOs pool bonds and offer investors a slice of the pool. Synthetic CDOs pool, instead of the bonds themselves, insurance-like derivative contracts on the bonds.

Like their crisis-era predecessors, the new CDOs would be sliced up into different levels of risk and returns. Investors who want a chance at the highest returns would have to buy the riskiest slice.

While spreading risk in some ways, synthetic CDOs also can multiply the financial damage if companies fall behind on their debt payments. During the financial crisis, CDOs pegged to soured mortgage loans caused losses to careen around the world. Their catastrophic impact was denounced by many lawmakers and investors, and the market for all kinds of highly engineered financial instruments evaporated.

Chuck again. OK, so why in the world am I carrying on about "When will we ever learn?" Well. as reported by the WSJ. JP Morgan and Morgan Stanley are moving to assemble so-called synthetic collateralized debt obligations.

And here's a tid-bit that every investor should ask about. JP Morgan and Morgan Stanley aren't expected to invest in their own deals because of post crisis rules that require banks to set aside large amounts of capital against possible losses on these types of investments.

The problem here is that these firms wouldn't be creating these new CDO's unless there was demand from investors for "higher yield". And Wall Street will always create new, more complex, more risky structures to satisfy that demand, folks. be careful out there!

What's needed in the world today is a good MarketSafe investment that has the potential for high returns but insures the principal 100%... You know, like the stuff we used to put together that had the underlying assets of like Gold, Silver, commodities, etc. Well. believe or don't. We're putting together another of these CD's. It will be new and improved, and coming to a store near you soon! Actually, next month. So, there! Who needs a risky old CDO when they can have a MarketSafe CD?

To recap. The euro has finally moved past $1.31, and is waiting for new s from the ECB meeting this morning. Had to stop to sing along with the Drifters. Under the Boardwalk. OK, back to the recap. The A$ continues to get whacked as Japanese investors sell foreign bonds and repatriate yen. China weakens the renminbi / yuan on the fears that exports have plunged, due to the state of the U.S. and Eurozone economies.

Currencies today 6/6/13. American Style: A$ .95, kiwi .7955, C$ .9685, euro 1.3120, sterling 1.5465, Swiss $1.0630, . European Style: rand 9.9380, krone 5.7965, SEK 6.57, forint 226.45, zloty 3.2575, koruna 19.6450, RUB 32.11, yen 98.95, sing 1.2490, HKD 7.7630, INR 56.82, China 6.1737, pesos 12.85, BRL 2.1260, Dollar Index 82.41, Oil $94.19, 10-year 2.08%, Silver $22.65, and Gold.. $1,404.75

That's it for today. What is Life, by George Harrison from his All Things Must Pass album is playing now. George Harrison was always one of my fave musicians, for his music. Everything else was his business not mine.Cardinals got their butts kicked by the Diamondbacks last night, in the rain. So not only did fans have to sit through a rains soaked game, but they also had to endure a butt kicking. UGH! I turned off it was 2-1, but got ugly from there. Another rainy, foggy day here today. The rivers around St. Louis have flooded, which means my little river town is under siege from the Meramec river, which means the creek behind my house that empties into the Meramec is backing up. The coldest, rainiest, spring I can ever remember here in this area of the country. Little Everett was at home with us last night as his parents and sister were gone. He's a different kid when they're gone. We played most of the night, and shared crackers, no screaming or crying when he didn't get his way. A fun night with the little guy. OK. time waits for no one, and it won't wait for me! I've got to get this out the door! I hope you have a Tub Thumpin' Thursday!

Chuck Butler
President
EverBank World Markets
1-800-926-4922
1-314-647-3837

U.S. Manufacturing Sinks.

Chuck Butler — Wed, 05 Jun 2013 15:53:00 GMT

.........But First, A Word From Our Sponsor..........

WHY RUSH INTO METALS WHEN YOU CAN WALTZ?

With our automatic purchase plan, you can start mining metals at your pace.

?Fund for as little as $100 a month

?Choose from gold, silver and platinum

?Pay no ongoing fees

Start mining at your pace today. Learn more and view IMPORTANT DISCLOSURES at https://www.everbank.com/investing/metals/unallocated?referid=13924. Or call 800.926.4922.

EverBank is an Equal Housing Lender

......................................................

In This Issue.

* Trading in same clothes as yesterday.

* Except the A$ that continues to get whacked.

* Fed heads talk about tapering QE.

* China's President meets with U.S. President.

And, Now, Today's Pfennig For Your Thoughts!

U.S. Manufacturing Sinks.

Good day. And a Wonderful Wednesday to you! Not much has happened in the currencies and metals since yesterday, and U.S. Treasury yields are holding on by the skin of their teeth, but holding on nonetheless. The Fed Heads all tried to paint a tapering picture yesterday, but, what does Big Ben Bernanke think? The U.S. President will have talks with China's President, Xi in a couple of days, and I'll start the day with a funny line from Jay Leno, who said: "President Obama says he is renewing his efforts to close Guantanamo Bay. How about closing the IRS? Why don't we do that? How about shipping the IRS to Guantanamo Bay?"

OK. I turned on the currency screens this morning to find that the currencies are trading in the same clothes they wore yesterday. There really hasn't been any market moving data or news the past 24 hours, so it makes sense that we're here this morning. Yesterday, however, was a different story. Recall that I told you yesterday morning, that the dollar was reversing its losses from Monday.

Our Tom Terrific Tuesday turned out to be a Turn-around Tuesday for the dollar, and at the end of the day, the dollar had indeed reversed those previous day's losses. It's a good thing too! What are you talking about now, Chuck? Ahhh grasshopper, think about what was going on during Monday's trading. We had U.S. Treasury prices dropping (yields rising) and the dollar getting taken to the woodshed. At one point on Monday, one could really begin to have the bejeebers scared out of them, for a fleeting time, the confidence in the U.S. and the dollar was getting deep sixed.

But the Spin Doctors, and not the ones that sang, Little Miss Can't Be Wrong. But the ones that make us all feel better every time things begin to unravel here in the U.S. Yes, those Spin Doctors! Well, those Spin Doctors went to work to correct the sinking confidence in the U.S. and the dollar, and they did great work!

Speaking of Spin Doctors. The Fed Heads were out on the road yesterday, giving command performances to audiences full of believers. One particular Fed Head, Mr. Fisher, called for a reduction in Quantitative Easing (QE) by focusing on mortgage backed bonds (remember the Fed now buys $85 Billion per month in mortgage backed and Treasury bonds). Mr. Fisher said that he believed that the housing market is in a good state, with construction on the rise. He went on to say that he also believed that he's seeing the end of the 30 year rally in bonds.

In Japan overnight, (recall I told you that PM Abe would be announcing plans to promote growth) PM Abe, announced plans to deregulate business in Japan. WOW! Now that's what the doctor ordered! You've got to get all lathered up when you hear something like that, eh? Ahem. I doubt he really hit on the real meat of deregulation, but hey! The markets liked what Abe had to say, and the yen has rallied back below 100! (remember, yen is a European priced currency, so as the price falls in number, the value increases VS the dollar)

Hey! Isn't this going the wrong way? Well, yes. But, you can't stand in front of a run-a-way bus, folks. As I said, the markets liked the message, so there you go! Yen rallies. Is it a new trend? I doubt it. But for now, it is what it is. A yen rally, so if you missed your chance to unload yen before it climbed over 100, this could be an opportunity.

I see the Chinese renminbi / yuan was marked down last night by the Gov't. But overall, the recent trend has been good for the currency, as it has been allowed to appreciate VS the dollar. The U.S. President and Chinese President, Xi, will meet this week. And you know what I always tell you about these meetings. History will prove that the Chinese allow appreciation ahead of the scheduled meetings, so when the U.S. representative begins to bang on them, the Chinese can easily point to their currency's appreciation, and smile.

But after the meetings, history again will show us that the pace of appreciation stalls. So, get prepared for that, especially given the recent general direction of the world's currencies. The one thing that could buck this historical pattern, is the thing I talked about yesterday (I think), and that is the continuing Capital inflows to China, that the People's Bank of China (PBOC) have to deal with. These inflows have been a BIG reason the renminbi / yuan has appreciated at the rapid pace is has shown in recent months.

Gold also gave back a large piece of the gains it booked VS the dollar on Monday, and continues to be spent this morning. So, Monday, all was looking bleak for the dollar, and suddenly not so bleak. Does that make any sense, given there was no data, other than a widening of the Trade Deficit, or news from the Eurozone? No, it doesn't, folks.

Speaking of Gold. Ok. Remember a couple of weeks ago when I talked about what I told the audience in Las Vegas regarding Gold being viewed as a commodity in the West and as a store of wealth across the rest of the world, especially in Asia? Well, a dear reader pointed me to this story that pretty much says the same thing. This is Alasdair Macleod who runs Finance and Economics.org, which is dedicated to sound money and demystifying finance and economics.

"It is clear that Western capital markets no longer generally regard gold as money. It has been relegated to the status of a risk asset, useful collateral, or simply a commodity with a history of being used as money. This is a mistake."

I was reading one of my new fave letters to read, that I don't get to read every day, but when I do, I usually find something that interests me. The Gartman Letter. Dennis Gartman is an excellent writer, and an intelligent mind. Today he was talking about the decision by the Reserve Bank of India (RBI) to take tough measures to curtail Gold imports here. Let's listen in to what Dennis Gartman has to say this morning on this.

"Indians, as everyone should already know, are the world's biggest buyers of bullion and in May they bought 162 tonnes of Gold. This is twice the normal pace of Gold buying there and the RBI is not happy and is making its unhappiness well known. India is, on average, importing about 104 tonnes of Gold each month, outpacing even the record levels of 2011. To combat this, the Bank increased the import duty on Gold, and that has had little if any effect." - Dennis Gartman

Let's hope this "little if any effect" continues!

OK. Yesterday, I mentioned that the Reserve Bank of Australia (RBA) had left rates unchanged and had basically left future rate moves tied to data. Well, while that was true, it didn't really mention that RBA Gov. Stevens had torn a page out of the Reserve Bank of New Zealand (RBNZ) Gov. Wheeler's book on dissing the home currency. While Stevens didn't outright diss the A$, he did say that "the inflation outlook gives him scope for further easing and the exchange rate remains high" See there, he just casually mentions that the A$ is too high, in his opinion..

This statement has really deep sixed the A$ even further. I hope Stevens is happy. He has taken a currency that investors have relied on as a steady force and a key diversification holding, and trashed it. All for a pickup in growth. I hope he has to pay for this like Mr. Tombini over in Brazil is paying for his rate cuts and currency trashing the last two years.

We're seeing quite a few investors bailing out of A$'s here on our trading desk, and I have to think that unless they are recent purchases, there should be some nice returns in those sales, considering the long rally that the A$ has had.

The U.S. data cupboard begins to unload a plethora of data today. The ADP Employment Change report for May prints today. And while once we used to just shrug off this report for it was not a good indicator of the Jobs Jamboree, we can no longer do that. The ADP report is a good indicator now, so the report will be looked at closely by me and the markets this morning. We'll also see Factory Orders, which if you recall, in March were down nearly 5%... And then the non-manufacturing piece of the ISM that contains some good employment data. The Fed also releases their Beige Book this afternoon. no biggie.

For What It's Worth. I found this in the Wall Street Journal (WSJ) this morning. and once again, something has ticked me off with regards to what our Gov't / Fed has done. Let's listen in to what the WSJ has to say. "The Federal Housing Administration's projected losses over 30 years could reach as high as $115 billion under a previously undisclosed "stress test" conducted last year to determine how the agency would fare under an extremely severe economic scenario, according to documents reviewed by a congressional committee.

The forecast was significantly worse than the most severe estimate included in the government mortgage-insurance agency's independent actuarial review released last November. The FHA's outside actuaries modeled the analysis along the lines of the annual stress test employed by the Federal Reserve Board, which gauges how the nation's largest financial institutions would fare in the event of a significant economic shock. The FHA isn't required to use the Fed test."

Chuck again. Remember, the FHA doesn't make loans, but insures lenders against losses on mortgages that meet its standards. And if you want to see a graph that will send chills up your spine. I've got a corresponding graph on the default rate on FHA backed mortgages. You can see the graph by going to the Pfennig Blog at: www.dailypfennig.com

To recap. No news is good news I guess. The currencies and metals are basically trading in their same clothes as yesterday, except the A$ which continues to get whacked from comments made by RBA Gov. Stevens. The Fed Heads all spoke about tapering QE, but again, what does Big Ben Bernanke think? And Our President, and China's President, Xi, will meet this week, China makes sure that currency performance isn't on the agenda!

Currencies today 6/5/13. American Style: A$ .9560, kiwi .7995, C$ .9665, euro 1.3065, sterling 1.5360, Swiss $1.0465, . European Style: rand 9.9240, krone 5.8170, SEK 6.5915, forint 225.75, koruna 19.7950, RUB 32.09, yen 99.55, sing 1.2490, HKD 7.7610, INR 56.73, China 6.1757, pesos 12.73, BRL 2.1235, Dollar Index 82.76, Oil $93.80, 10-year 2.13%, Silver $22.45, and Gold. $1,398.44

That's it for today. I almost just nixed coming in today. I didn't want to wake up, and my energy level is very low. But then I thought to myself, Chuck, your dad would have gotten up and gone to work, and. so then too, did I! In a couple of weeks it will be Father's Day, I'm just saying. My beloved Cardinals lose in 14 innings last night, as their young pitching prodigy proved to be human. Dusty Springfield is singing to me this morning. Now that will make me feel better! Chris came in the other day, and was making fun of the music that was playing on the IPod. I reminded him that it was the Cyrkle. He was not impressed. Youngsters. what are you going to do with them? They grew up on disco. enough said! OK. time to go. I hope you make this a Wonderful Wednesday!

Chuck Butler
President
EverBank World Markets
1-800-926-4922
1-314-647-3837

U.S. Manufacturing Sinks.

Chuck Butler — Tue, 04 Jun 2013 16:49:00 GMT

.........But First, A Word From Our Sponsor..........

WHY RUSH INTO METALS WHEN YOU CAN WALTZ?

With our automatic purchase plan, you can start mining metals at your pace.

?Fund for as little as $100 a month

?Choose from gold, silver and platinum

?Pay no ongoing fees

Start mining at your pace today. Learn more and view IMPORTANT DISCLOSURES at https://www.everbank.com/investing/metals/unallocated?referid=11808. Or call 800.926.4922.

EverBank is an Equal Housing Lender

......................................................

In This Issue.

* Currencies & metals rally on weak U.S. ISM.

* But dollar rallies back in the overnight markets.

* China deals with Capital Inflows.

* RIP Deacon Jones.

And, Now, Today's Pfennig For Your Thoughts!

U.S. Manufacturing Sinks.

Good day. And a Tom Terrific Tuesday to you! What a difference a day makes. They tell me it's only 24 hours! HA! I'll get to that in just a minute, but first I want to take the people at the top of the food chain with my beloved Cardinals to the woodshed. I came to find out yesterday, that the Cardinals leaders knew the game on Friday was getting cancelled at least ½-hour before they told the people in the stands. 1/2-hour earlier, would have put me and tens of thousands of people at home, inside, and safe from the devastating storms that ripped through the area Friday night. What were they thinking? They put me and my beautiful bride, my darling daughter, Dawn, Jerry and grandkids in harm's way, so they could sell a few more concessions? Shame on you!

OK. Now that I've gotten that off my chest we can get to the regular programming. Well, what a difference a day makes, only 24 hours. Yes, when I packed up to leave yesterday, the currencies and metals were taking liberties with the dollar. The Aussie dollar (A$) had gained nearly 2-cents, and the euro was knocking on the door to 1.31, and Gold was up $25! The dollar was on the run and getting chased by the Big Dog and all the little dogs. Why? Ahhh grasshopper, it was a case of more weak data that sent the dollar to the woodshed. Here's the skinny on the data.

Well. for once the regional manufacturing reports DID give us an indication of the national manufacturing report! May's ISM Manufacturing Index fell below 50 to 49. It was expected to rise to 51, and failed to do so. This is yet another piece of data that has failed to meet expectations on the downside this month. and the list just keeps growing. Sure a slip below 50 one month isn't exactly something to hang your hat on that the economy is faltering. But. Let's for fun go back to January of this year. And just like every year since 2005, we began the year with high hopes, like the ant trying move that rubber tree plant, that this was going to be the year that the economy stood on its own. The ISM for January was 53.1, and for February it was 54.2. And then the rug was pulled from under the sector.

So, the markets reacted in a way that was in line with reacting to fundamentals, and long time readers know that whenever the markets react in line with fundamentals, that makes me happy! The markets saw this drop in manufacturing in the U.S. as a HUGE reason why the Fed Heads are NOT going to be able to taper off Quantitative Easing (QE) or their zero interest rate policy (ZIRP). And all those trades to buy dollars that were put on when the markets allowed the Fed Heads to pull the wool over their eyes, were reversed. With vengeance!

So. I come in this morning, expecting to see more rot on the dollar's vine exposed, only to see the dollar reversing the losses it took yesterday following the weak ISM report. Huh? Why? Didn't the fundamentals tell the markets that the Fed Heads won't be able to taper off QE? Yes, they did. but apparently, that old lack of an attention span for traders is back! The A$ has given back 1-cent, and the euro is down slightly as I write. And Gold is down $7. So, the dollar hasn't totally reversed its losses from yesterday, but has pushed back for sure!

The Reserve Bank of Australia (RBA) met last night. That kind of sprung up on me. But, the RBA left rates unchanged, and said, "the stance of monetary policy remained appropriate for the time being." Which is their explanation as to why rates were left unchanged, but what about going forward? Inquiring minds need to know! Well, the easing bias remained in place, so it will be up to the data to determine whether or not rates go lower from here, or remain steady Eddie. I guess the markets believe that Australia's data is not going to be anything exciting going forward, and that has led them to sell the A$ to the tune of down 1-cent this morning.

I saw that China had allowed a nice-sized appreciation of the renminbi / yuan overnight. That stronger move in the currency was followed up by some words from the People's Bank of China (PBOC) Gov. Zhou who said that "The central bank will not intentionally depreciate the renminbi / yuan to boost competitiveness." Capital Flows into China continue to be strong. and last night I was reading some research on China and read something that makes abundant sense to me. Here's the skinny.

The analyst came to the conclusion that because of the Huge Capital Flows into China, the PBOC HAD to continue to accommodate the appreciation of the currency because if they don't then the PBOC will be forced to intervene in the market, and take on huge amounts of foreign exchange reserves. And we all know that China's foreign exchange reserves are already more than they need. But for those of you keeping score at home, China's total FX reserves are in dollar terms, $3.44 Trillion. Of which, a ton of that total is represented by dollars. You know, that China just has to be happier than a lark knowing that. NOT!

Fed Head Williams spoke yesterday, and called for a tapering off of QE. That's all nice, and tidy, but, come on Mr. Williams. What does Big Ben think? He's the straw that stirs the drink. I told you yesterday that we'll see several Fed Heads speak this week, yesterday it was Williams, and today, Fed Heads, Raskin, George, and Fisher will all speak at different venues. Raskin on Employment in Washington, George on the economy, and Fisher on Monetary Policy. All these guys will eventually be asked about QE, and all will spew out their opinions, but in the end, it matters not what they think, unless they agree with Big Ben Bernanke.

So, yesterday, the U.S. ISM fell below 50. and that sent the dollar for a ride on the slippery slope. Today, the U.S. data cupboard only has the U.S. Trade Deficit for April, which is expected to bounce higher than the March deficit of $38.8 Billion. Traders and investment analysts have become Comfortably Numb on these deficit numbers. So, it won't make much difference if the Trade Deficit widens or narrows today. I'm sure it will widen though. And IT IS still a Big Deal to me!

I told you earlier in the letter, that Gold was down $7. Well, make that $11 now. I was searching for some news on Gold's downward move this morning, after gaining a huge chunk yesterday, and I came across the same old stuff. You know, the stuff about how equities are taking the crown away from Gold, and there's no need for Gold any longer, with the stock market going hog wild. I would say, that whoever writes that stuff must be lighting up. Light up, everybody. Gold's no longer needed! Of course I'm being facetious here.

Gold may be on every stock-jockey's s-list right now. but that doesn't mean it's not of any use any longer. My friend, and writer, par-excellence, David Galland, wrote about Gold this past week in his letter. If you don't get it, you should check it out at: www.caseyresearch.com

For those of you that don't have the time to go visit David's letter, his three reasons with tons of information about each reason, are: 1. Opposition to Austerity 2. Declining Gold Production, and 3. Physical Demand

I'm going to speak to you about one of these reasons. The Opposition to Austerity. When I was in Las Vegas last month, I spoke about this with hopes that it would not come to fruition. What I'm talking about here is the Eurozone's Austerity, which is working, but now becoming an "evil thing" among some Eurozone leaders. Why would they mess with something that's working? Sure, the Eurozone's economy is slow, and that is expected to happen given the austerity measures put in place to help the countries that had forgotten what fiscal conservatism was. But, now that the calls for a break-up of the Eurozone, the collapse of the euro, and overall devastation for the Eurozone, isn't going to happen, some of the leaders are wanting to ease up on the austerity measures. I shake my head in disgust. They had it all working for them, and like I keep telling people, that in 3 to 5 years, all this debt, bad times, and a bleak future will be put behind them, and the euro will be a currency that everyone adores once again.

So. hopefully, the smart people in the Eurozone can make these leaders that want to water down their austerity measures, see the light. For I saw the Eurozone in 3-5 years being the poster child and blueprint for the U.S. to use to help them straighten out their deficit spending, and get on with debt reduction. I know that's all wishful thinking, but. it's better than thinking of what's going to happen if we don't do something soon.

Before I head to the Big Finish. yesterday I told you about how Goldman Sachs had come out with a call to sell Treasuries, that the bond bubble was about to pop. Well, get this message from Bank of America. "Risks of a bond crash are high". And that "Investors should sell U.S. Treasuries and buy bank stocks because bonds may be headed for a crash" And then Bank of America's chief investment strategist, Michael Hartnett, had this to say. "It's hard to believe that the greatest bond bull market will end without some bloodshed."

OK. I guess more Big names are jumping on my bandwagon that the next bubble to pop will be bonds.

And in a follow up from yesterday. It wasn't 5 minutes after I hit the send button on the Pfennig yesterday that I saw a note on the screens about the S. African mining leader getting shot. I had just spent a lot of space on the S. African rand, and its troubles. But, the rand has rallied the past two days, so that just proves that even a blind squirrel can find an acorn..

For What It's Worth. Today's piece comes from MarketWatch and is about the short positions in Silver. I thought the article was pretty good, and here's a snippet from it.

"Now, from a pure trader's perspective, there's an interesting phenomenon taking place in silver. We've noticed recently that the Commitment of Traders report, or COT, in silver continues to signal that there is no real risk of an impending washout in the price of the metal going forward.

As of May 14, the "net long" position of speculators in silver was just 3,785 contracts. That's extremely low by historical measures, although not nearly as low as the -2,497 net longs we saw prior to that April plunge. The current net longs are about 10 times below the net long high of nearly 36,500 set in November.

On the short side, the COT reveals that the last time the number of "contracts sold short" was at current levels for more than just a week or two was in July 2012. Yes, there was a spike in short positions during that April decline, but now the shorts are back to their July levels.

The high number of short contracts, and the corresponding levels of net longs, we witnessed in July 2012 pretty much marked the low in silver for 2012. Interestingly, within eight weeks of the high mark in the shorts, silver prices rose some 30%.

Of course, we don't know if this can happen again, but from a historical perspective, when the silver market gets this short, the chances of a continued decline are quite small. And while we did see a decline in silver prices in April despite the high level of shorts, that anomalous decline was more the result of a mass race to the exits in the precious metals space, along with a breakdown below previously held support levels.

Finally, ask yourself this question: When it comes to silver, who is left to sell?"

Chuck again. Pretty interesting, eh? Yes, there's something happening here, what it is isn't exactly clear.

To recap. The U.S. ISM Manufacturing Index printed very weak yesterday, and with the index falling below 50, to 49, the dollar was sent to the woodshed. The A$ gained nearly 2-cents and the euro was knocking (we need to ask Jen to say that!) on the door of 1.31. But the traders' attention spans couldn't hold that currency and metals rally, and the dollar is reversing those losses this morning. The Chinese renminbi is about the only currency to book strong gains VS the dollar in the overnight markets.

Currencies today 6/4/13. American Style: A$ .9680, kiwi .8040, C$ .9695, euro 1.3090, sterling 1.5305, Swiss $1.0570, . European Style: rand 9.6730, krone 5.8085, SEK 6.5485, forint 222.80, zloty 3.2355, koruna 19.6555, RUB 31.86, yen 100.05, sing 1.2520, HKD 7.7615, INR 56.42, China 6.1735, pesos 12.70, BRL 2.1235, Dollar Index 82.67, Oil $92.90, 10-year 2.13%, Silver $22.51, and Gold. $1,399.45

That's it for today. I heard this morning that David Deacon Jones, the "Secretary of Defense" has died. He was a member of the Rams' Fearsome Foursome of the late 60's.

It was a beautiful, but chilly for this time of year, evening last night. I sat outside with a neighbor friend watching my beloved Cardinals play baseball. Little Delaney Grace came out and showed us some of her dancing moves. She's so darn cute! Thanks to all who sent along notes telling me to keep doing what I'm doing. I got a kick out of a note I received yesterday, the sender wanted to know why I was not at the Bilderberg Conference. "Seems you all at EverBank have a unique insight into the world today". WOW! Now that's high praise! So. thank you! I hope you all enjoyed the Big Boss, Frank Trotter's Sunday Pfennig. Frank is an excellent writer, and I tell him all the time that he's welcome to write the Pfennig, the Review & Focus, or anything else I write!

Speaking of Frank's writing. here's a short message from the Big Boss: It's great to get to see clients and friends as we travel around the country and the world. This time Frank Trotter will be hosting a reception in Phoenix on June 20th joined by Infinity Banking Director Jack Stapleton, members of our local mortgage team, and others. If you are in the area and want to be included check out the information on our Google Plus posting at https://plus.google.com/u/0/events/c7qg0toce84q3tjctsofkiqq318. Keep and eye on us by "following" on Google Plus at https://plus.google.com/u/0/+everbank/about.

OK. Mike's here, time to go. I hope you have a Tom Terrific Tuesday!

Chuck Butler

President

EverBank World Markets

1-800-926-4922

1-314-647-3837

Global Manufacturing Rises.

Chuck Butler — Mon, 03 Jun 2013 16:17:00 GMT

.........But First, A Word From Our Sponsor..........

WHY RUSH INTO METALS WHEN YOU CAN WALTZ?

With our automatic purchase plan, you can start mining metals at your pace.

?Fund for as little as $100 a month

?Choose from gold, silver and platinum

?Pay no ongoing fees

Start mining at your pace today. Learn more and view IMPORTANT DISCLOSURES at https://www.everbank.com/investing/metals/unallocated?referid=11808. Or call 800.926.4922.

EverBank is an Equal Housing Lender

......................................................

In This Issue.

* Chinese play games with exports and imports.

* Strong Chinese PMI pushes currencies higher.

* IMF says Swedish krona not hurting economy.

* Chuck on The Street.com.

And, Now, Today's Pfennig For Your Thoughts!

Global Manufacturing Rises.

Good day. And A Marvelous Monday to you! And, welcome to June! In keeping with Pfennig Tradition Here's the way we start June.. June is busting out all over, all over the meadow and the hill, Buds are bustin out of bushes, and the rompin' river pushes every little wheel that wheels beside the mill! - Carousel, in case you're a youngster and were not familiar with that song!

Well, my Friday was going along just fine until a reader decided that he'd had enough of me, and decided to take me to the woodshed, for what he called, "bad reporting, bad grammar, and too many song lyrics. and then the piece de resistance. He said he had had it with my "talking my book". I reminded him that there was an "unsubscribe" feature of this FREE letter! But, this guy really ticked me off, which is what he was trying to do, so he succeeded! He said I wouldn't talk about something that didn't fit "my book". Hmmm. I wonder how he found what "my book" consists of? The legal beagles are now running around in a tizzy trying to figure out if they ever said it was OK for me to have a "book". HA!

I don't want to give this guy more credit than he deserves, which is none, but. he did bring up something that basically proved what I had been telling you dear Pfennig Readers for years now, and that is to simply only believe 1/2 of what the Chinese say about their economic data. But, this reader believed I wouldn't talk about this, so. here goes. Remember the other day when I told you about how I had read that deposits of renminbi in Hong Kong had soared? Well, apparently, the Chinese have learned to do all this with smoke and mirrors, setting up shell companies in Hong Kong and then exporting from China to the company in Hong Kong, thus shipping to themselves, but blowing up the export and import numbers. So, see. what I've told you for years, to only believe 1/2 of what the Chinese say about this stuff, holds true here.

The currency rally that we had seen for two days in euro, tripped up on Friday, but appears to be back in black again today, with the euro above 1.30 again, and the Aussie dollar (A$) up 2/3-rds of a cent this morning. Speaking of Chinese data. The Official PMI (manufacturing index) that the Gov't prints came out stronger than expected at 50.8, which is above the line in the sand at 50 that determines if a manufacturing sector is contracting or expanding. This data, which you can choose to believe or not, was well received by the markets this morning, and is helping the A$ move higher, along with the other global growth currencies.

The euro received its own bit of good news from a PMI this morning. The Eurozone area manufacturing index rose to 48.3 in April from a 46.7 in March, still below 50, so still in the contraction zone, but. stronger, and a surprise, which gives the boost to the euro even more strength. The European Central Bank (ECB) meets this week on Thursday (6/6), and even thought ECB President Draghi, said at the last meeting that he would cut again if data worsened, I think he'll keep his rate powder dry this week. Data has been mixed at best, but this manufacturing index really places the dust covers over the rate cut machine this week.

The end of this week will bring us the June Jobs Jamboree. The markets are so into the numbers that they refuse to look under the hood. Reminds me of a song: I am so into you, I can't think of nothing else. That's the markets singing to the BLS. The reason I'm talking about this now is that the experts are looking for 175,000 jobs created in May. How many "real jobs" is the question the markets don't want to ask or know, so. the talk after such a number will probably turn to more discussion about the Fed tapering off their Quantitative Easing (QE), or their zero interest rate policy (ZIRP). Well, I don't know how many times I have to say this, but here goes again. I think all that talk is premature.

Well, before we get to the Jobs Jamboree, we'll have other stuff that's just as important to the markets, like the ECB meeting, and the speech by Japanese Prime Minister (PM), Abe, on Tuesday night (Wednesday for them) His speech will about growth strategies. This ought to be good, folks. Let's hope it's new stuff, and not just recycled stuff, we certainly don't want to have the feeling of: been there, done that, bought the T-Shirt, after he talks!

On Friday, I told you about how the Brazilian Central Bank (BCB) had surprised the markets with a 50 basis points rate hike, but the markets were not impressed and continued to sell the real pushing it to 2.10. The BCB President, Tombini, believes that the real's weakening has been "moderate" and won't have any effect on inflation, which is what the BCB is attempting to stop rising, but hiking rates at their last two meetings. Hmmm. let me see if I get this right. the real falls over 4% VS the dollar last week alone, and Tombini doesn't think this is a big deal? Hello, McFly. anyone home? No wonder the markets have decided to take the real to the woodshed and leave it there. The BCB, the Gov't, and anyone else that has had their hands in the cookie jar, are all in a competition to see who can put more fear in the markets' drive.

I had a reader send me a note over the weekend, asking me to talk about the S. African rand. YIKES! Long time readers know that I've always said that the rand was too volatile for my blood and that I wouldn't touch it with someone else's ten foot pole. But all the while that I was saying those things, rand was gaining in the long run. Well, those days have seemed to pass the rand by, folks. The S. African Gov't has done just about everything they can to mess with the Goose that laid the Golden Egg here. And now with the mining strikes that seem to pop up as often as pimples on a teenager's complexion, there's just no shortage of fears about what's going on in S. Africa.

And now, with the rand on the slippery slope, inflation is soaring once again in S. Africa, which cries out for huge rate hikes. But I don't think we'll see them, at least not at this point in time. So, there's just too many questions out there about rand right now folks. and right about the time that I stopped typing that last sentence I see a story go across one of my screens that basically says that rand is the "most oversold currency and it is poised for gains". Well, which way it goes from here is anyone's guess, but I'll stick with my thought that there's just too many questions right now.

Sweden also printed a manufacturing index this morning, and it too beat the expectations, rising to 51.9 in May, from 49.6 in April. I also noticed a story going around this morning, that the IMF issued a statement regarding the Swedish krona, saying that it's strength was not hurting Swedish exports or the Swedish economy. Well, that's all good, but at this point of the proceedings, I have to question whether the IMF carries a big stick with mature countries like Sweden. The IMF is still probably the king of the hill when it comes to Emerging Markets Countries, but beyond that I have to question their need. But. maybe, just maybe, the Swedish leaders listen to the IMF, and if they do, then they're probably feeling better about themselves, and the krona.

The Japanese yen is in the same clothes it traded in on Friday at 100.50. I expect yen to be very volatile this week, as the U.S. data will be volatile and we have the PM Abe talking mid-week.

The U.S. data cupboard is chock-full-o-data this week, and Fed Head speeches! We start today with our own version of a manufacturing index, which should improve, just like everyone else's that has already printed. My problem with this report is that it never reflects the regional reports. The Regional reports have all been negative leading up to the national report. But the national report will be positive. OK. if that's the case once again, then I make a motion to drop the reporting of the regional reports.. They are useless in this case!

We'll end the week the Jobs Jamboree, and the rest of the week will be filled by a plethora of data. Speaking of data. remember when I told you how 65% of the economic data prints in April missed their targets to the downside? Well, to date, it's been about the same kind of count for May. So far, we've had the housing data and leading indicators print the only positive reports, while everything else has been to the downside. You know, you can put lipstick on a pig, but you still have a pig. And you can put all the lipstick you want to put on this so-called recovering economy, but when you count the downside reports, the economy is still weak.

Gold is up $7 this morning, after getting spent on Friday. This up $20 one day, down $15 the next is enough to make someone dizzy. I saw some numbers from our metals trader, Tim Smith, the other day. His reports showed the same thing I've been saying since April. that the paper trades are sells, and the physical trades are buys. According to Tim, " It looks like demand for physical is as strong as ever." So, there! I'm not talking "my book". I'm telling you the skinny from a metals trader who sees every trade!

The thing that gets me about the paper trades is that when you're talking about "pooled Gold or Silver" that's not really a paper trade. Sure you don't have the physical metal in your hands, but. unlike an ETF, you CAN get the physical metal from your pooled account at any time. You just have to pay for the fabrication fees, and whatever it costs to ship it to you. So, it's important to keep that in mind, don't be confused! (in my best Steve Mizerany voice! For non-St. Louisans that won't be funny)

Well. did you see the quick interview that I did on the Street.com last Friday? I was asked about yen and euro VS the dollar. I think I made my points, kept the pace, and didn't trip up. I wasn't aware that the interview would only be 10 minutes, as I was led to believe it would be 30 minutes, but that's OK. this way it doesn't take up everyone's bandwidth to watch it. which you can do here: http://www.thestreet.com/video/11938553/how-to-trade-euro-yen-in-summer.html

A lot of you have never seen me or heard me talk before, so here you go. For the guy that blasted me last week, maybe you can get a still out of this, print it, post it, and throw darts at it. that'll make your day!

I hear that not everyone received the Pfennig last Friday, and for that I apologize, and. to make matters worse, the Friday Pfennig wasn't posted the blog, even though I sent it to the blog master for posting! There's a glitch in the process.

For What It's Worth. I saw this on the Bloomberg last Friday and even mentioned it to the desk. For now Goldman has told their clients to sell Gold, and Treasuries. Hmmm. Let's listen in.

"With yields on government bonds jumping in the past week, Goldman Sachs has warned that a widely predicted bond sell-off is finally happening, while a major U.S. asset manager has warned investors to move out of long-duration bonds to avoid heavy losses.

Pessimistic growth targets, a fear of the Federal Reserve curtailing asset-purchases, and uncertainty over Japan's "Abenomics" policies are the three key reasons that Goldman Sachs cited for the move higher in yields.

"The bond sell-off: It's for real," Goldman's fixed income analysts said in a research note released on Friday. "Our end-2013 forecast for 10-year U.S. Treasuries remains 2.5 percent, above the forwards, and we will be looking for other opportunities to trade the market from the short side."

Chuck again. this was a good For What It's Worth, for there is something happening here, and what it is, ain't exactly clear. On one hand I like it that someone besides me is clanging the triangle for the bond bubble popping, but on the other hand, did it really have to be Goldman? I've been on the opposite side of the fence from them for most of my life. Oh well. I still don't believe the Fed Heads are going to allow the Bond Bubble to pop just yet.

To recap. The currencies sold off halting their two day rally on Friday, but are back on the rally tracks this morning, after a stronger than expected manufacturing report from China, and then the same from the Eurozone, lit up the currencies. The U.S. will also print a manufacturing report today that is expected to be strong, which is opposite from the regional reports that leading up to the national report have been negative.

Currencies today 6/3/13. American Style: A$ .9655, kiwi .7985, C$ .9660, euro 1.3015, sterling 1.5250, Swiss $1.0430, . European Style: rand 9.9820, krone 5.8470, SEK 6.5950, forint 226.75, zloty 3.2780, koruna 19.8090, RUB 31.92, yen 100.50, sing 1.2590, HKD 7.7640, INR 56.76, China 6.1806, pesos 12.79, BRL 2.1395, Dollar Index 83.13, Oil $91.98, 10-year 2.16%, Silver $22.47, and Gold. $1,393.70

That's it for today. We broke the curse! For once the EverBank night at the ballpark was a winner! Well, sort of. The Friday night game was cancelled, and so about ½ the crowd from Friday night returned Saturday afternoon to watch our Cardinals beat up the Giants. Saturday night I attended a charity dinner auction for the St. Patrick's Center here in St. Louis, I was there as a guest of my friends, Gary and Dianne Schuette. A very fun night was had by all! Congrats to our colleague Mike Harrell and his wife, on the birth of their third child, little Ava checked in on Saturday, mom and baby are great! My two grandsons were about to drive me nuts yesterday, as the two-year olds are going through the "mine" phase. OK. time to go.. I hope you have a Marvelous Monday, and Wonderful Week!

Chuck Butler
President
EverBank World Markets
1-800-926-4922
1-314-647-3837

IMF Says Yen Is Undervalued

Chuck Butler — Fri, 31 May 2013 16:01:00 GMT

.........But First, A Word From Our Sponsor..........

WHY RUSH INTO METALS WHEN YOU CAN WALTZ?

With our automatic purchase plan, you can start mining metals at your pace.

?Fund for as little as $100 a month

?Choose from gold, silver and platinum

?Pay no ongoing fees

Start mining at your pace today. Learn more and view IMPORTANT DISCLOSURES at https://www.everbank.com/investing/metals/unallocated?referid=11808. Or call 800.926.4922.

EverBank is an Equal Housing Lender

......................................................

In This Issue.

* Euro's two day rally ends.

* Record renminbi deposits in Hong Kong.

* U.S. GDP revised downward.

* Gold's $23 rally is halted overnight.

And, Now, Today's Pfennig For Your Thoughts!

IMF Says Yen Is Undervalued.

Good day. And a Happy Friday to one and all! Using your best Rocky the Flying Squirrel voice. And now a word from Mr. Know-it-all! HA! As if! Right? I say that in jest, because I called one thing right yesterday, that led to another thing I've been saying to be right. Want the skinny on all this? Ahhh grasshopper, you need to be patient, for good things come to those who wait! Ok. that's enough waiting, let's get to the skinny of all this!

So. Did you see the rally in Gold yesterday? At one point of the day Gold was up $23. Why? Well, it's sort of like the thigh bone is connected to the knee bone, the knee bone is connected to the shin bone, etc. etc. First, as I said yesterday would happen, 1st QTR U.S. GDP was revised downward from 2.5% to 2.4%... you may also remember that I went out on the fat limb and said when it's all said and done 1st QTR GDP will be below 2%... OK, so with the downward revision, traders and investors quickly came to the realization that the U.S. economy ISN'T on a strong recovery path, and that will lead the Fed to back off their mentioning that they might be removing stimulus. And Gold soared! So. I'm on a roll here. what should I talk about that I believe is going to happen next now? Oh, be serious Chuck, a blind squirrel can find an acorn! So, quietly go back to your Mogambo Guru style bunker and be quiet!

That run up in the price of Gold was fun to watch yesterday, for it hasn't happened very often lately! Gold is being spent by $3 this morning, so no big shakes. I guess the overnight markets were of the opinion that the move during U.S. trading hours was enough for one day. But nothing changes folks. Just because the markets have short attention spans, you and I know that the U.S. economic recovery is all smoke and mirrors, and eventually, the Fed Heads will acknowledge that. Of course they can't go all-in on acknowledging that, for if they did, they would be admitting that their 3 rounds of Quantitative Easing (QE), zero interest rate policy (ZIRP), and everything else they have thrown at this stuck in the mud economy, hasn't worked.

You and I know it hasn't worked to the degree the Fed Heads billed it, but that's being picky right? As I gathered up my stuff to go home yesterday, I said to anyone that was listening to me on the trading desk, (which is something they all used to do like the old E.F. Hutton commercials, but nowadays they try not to make eye contact with me in fears that they'll have to hear me go on and on about debts, deficits, dolts, and sex, lies and videotape), that the euro had put in two consecutive days of nice performance, gaining 2-cents the past two days.

But that was yesterday. Oh here I go with the Foreigner song again, I can feel it coming. Whew! I'm glad that passed! Yes, yesterday afternoon the euro was the cat's meow, but this morning, it's yesterday's newspaper, which is used to wrap fish! The euro has given back ¾'s of a cent this morning on the back of a weak German Retail Sales report and an edging up of Eurozone unemployment. But more than the weaker than expected reports, the markets are little skittish on the news that European Central Bank (ECB) President, Draghi, has been invited to attend the constitutional court hearing on the ECB's intervention. But why would that make the markets a little skittish toward the euro, Chuck? (I hear you asking!)

Well. The markets are afraid that Draghi has been invited to attend, because the German Constitution Court is going to drag him through the mud, or even say what he did was unconstitutional, which would really put the euro into a tailspin. I doubt that this is what's going take place, but you can see now why the markets are a bit skittish toward the euro this morning.

After a day of good performances for most currencies VS the dollar, the day after is giving us reversals of those good performances. Take the Aussie dollar (A$), which saw some love finally yesterday, but has been left at the doorstep by its lover once again in the overnight markets. And so, it is with the remainder of the currencies this morning, except, Japanese yen, and Chinese renminbi / yuan. These two currencies are pushing the rally envelope against the dollar this morning, so let's talk about both of these Asian currencies.

First, the Japanese yen, is back below 101 this morning, on the IMF's latest assessment of the currency, saying that yen is "undervalued". ARE YOU KIDDING ME? What in the world are these IMF people smoking these days? Yen is undervalued like I am a studly young man with a full head of hair, and six-pack abs! HA! Well, the Japanese leaders had to scramble after the IMF report, and I'm sure that soon they'll get this yen rally straightened out.

In China, the People's Bank of China (PBOC) pushed the appreciation of the renminbi / yuan below 6.18 (remember renminbi is a European priced currency, so as the price number goes down, the greater the value VS dollars of the renminbi). The move was in reaction to the flows that continue to come to China on speculation that the trading band for the renminbi is soon to be widened. In addition, there was a report overnight that renminbi / yuan deposits in Hong Kong reached a record level in April. In April, renminbi / yuan deposits in U.S. dollar terms rose $1.5 Billion to nearly $110 Billion.

Switching gears out of Asia. Canada posted a narrowing of their 1st QTR Current Account Deficit yesterday. The narrowing was a modest $500 million to $14.1 Billion. And this follows the downward revision of the 4th QTR Current Account Deficit to $14.6 Billion from the previously reported $17.3 Billion deficit. You've gotta give some love to a country that works at narrowing their Current Account Deficit!

I had a dear reader ask me yesterday when the changes to the calculation of GDP were going to begin. That was a great question, because I had forgotten that I had talked to everyone about that change. Recall that I told you a couple of months ago that the U.S. was changing the way it calculated GDP and the changes would add up to 3% to the growth figures. Let's go back to the archives and find where I talked about this. "In March 2013, the U.S. government invented a new way of calculating GDP. The Financial Times reported that starting from July 2013, U.S. GDP would become 3% bigger due to a change in statistics. [GDP] now includes R&D spending, art, music, film royalties, books, theatre. This change in GDP statistics has not been implemented elsewhere in the world. So the U.S. is the first to accomplish this rewriting of the GDP number."

You may recall that I said that this was just another trick that the Gov't would use, since they couldn't get the real GDP number higher, they just move the goal posts, and voila! So, there you go. Starting in July, we'll have to back out 3% every time the Gov't prints GDP, just so we can see real growth.

OK. I haven't made a Big Deal out of our debt for a couple of weeks, as I thought I would give you all a break from all the debt stuff I talk about on a regular basis. But yesterday, I was looking for something in all my old presentations, and I came across a slide that I used in Vancouver in 2009. That's right, this July will mark 4 years ago. The slide simply had in large numbers: $37,000 . I explained then that according to the Debt Clock, that number represented each person's share of the debt. And of course asked the crowd there if they were ready to write the check for their share.

4 short high school years later, that number is now $53,306. Is that not incredible to you or what? But here's the number that really makes more sense, for using every person in the country really dilutes the number. Instead let's only use tax-paying citizens. in that case, each tax-paying citizen's share of the debt is currently $148,149.

Add another 4 years, and we'll be talking about $68,000 per citizen, and $181,700 per tax payer. It just keeps growing and growing. And no one, at the helm of this ship, wants to do anything about this . They figure that they can raise taxes, and devalue the dollar until it all goes away. I say, yes, that's what they'll attempt to do, but in the end, the U.S. will be forced to default, and the dollar system will possibly crash. Oh, that's too whacky a scenario for you? And you think I finally need to be fitted for a white suit? Well. I'm sure you've heard of James Rickards, right? I've quoted him several times in the past couple of years. Well, James Rickards also believes this scenario is possible. So, it's not just Chuck, crying wolf here folks.

OK. Geez Louise, Chuck, couldn't you wait until a Monday to start talking about that stuff? It IS Friday. Don't you always try to end the week on a Happy note? OK. sorry, but I just got on a roll there. See, how it would be out on the patio?

My darling daughter Dawn's husband, Jerry, asked me last night if I thought mortgage rates were going to continue to go higher. (remember, they are looking for a house to buy) I said, "Well, not right now, I don't think so, but eventually they will so don't dawdle, find that house and buy it!" I said that the mortgage rates were bumping higher because of the run up of Treasury yields, but that the Fed would see to it that those yields came back down, and so too will mortgage rates. But one day, Alice.. To the Moon! Yes, one day low mortgage rates won't be low any longer. But that day isn't today. And oh. remember earlier in the week when the 10-year Treasury yield bumped up to 2.19%, well as of this morning, it's back down to 2.07%...

OK. Then There Was This. a dear reader made a suggestion to me yesterday that I found to be perfect! He said that he love the TTWT section, but thought in keeping with my penchant for intertwining song lyrics, that I should call the section: For What It's Worth: Because there's something happening here, and what it is ain't exactly clear!

So. Here's today's: For What It's Worth. The Wall Street Journal (WSJ) ran a story yesterday about the rising Treasury yields. Let's listen in to what the WSJ had to say on this. "Analysts differ on whether a sharp May rise in long-term interest rates signals a bursting bond bubble, the aftereffect of clumsy Fed communication or a welcome sign the U.S. economy is on the mend.

One camp sees the recent fall in bond prices, which move inversely to yields, as confirmation of a bond-market bubble fueled by the Fed and bound to end badly, retarding an economy whose growth is already painfully slow. In this view, "the Treasury market is a beach ball being held under water, and the second the Fed lets go [interest rates] are going to shoot up," said Dan Greenhaus, chief global strategist at brokerage firm BTIG LLC.

Another camp sees the same trends as a welcome move toward more normal interest rates and a signal of better times ahead. The anomaly isn't the recent rise, but the drop in yields at the end of April to levels lower than those recorded during the Depression."

Chuck again. So, see there are "others" that think the bond bubble could pop at any time, but in fairness I must say that I've been so wrong about when it was going to pop, that I'm almost right! So, much for Mr. Know-it-all! HA!

To recap. A great day put in price-wise for the currencies and Gold yesterday. But most of those gains in the currencies has been wiped out in the overnight markets. Gold on the other hand is holding to most of its $23 gain yesterday . The IMF said that Japanese yen was "undervalued", and Chuck almost went into convulsions. And China acknowledged that renminbi deposits in Hong Kong soared last month. And then Chuck got on his soapbox once again.

Currencies today 5/31/13. American Style: A$ .9602, kiwi .8005, C$ .9675, euro 1.2995, sterling 1.5205, Swiss $1.0485, . European Style: rand 10.1295, krone 5.8680, SEK 6.6085, forint 227.70, zloty 3.2930, koruna 19.7950, RUB 31.88, yen 100.45, sing 1.2620, HKD 7.7640, INR 56.48, China 6.1796, pesos 12.90, BRL 2.1105, (apparently the markets were not impressed with the 50 basis points rate hike in Brazil yesterday), Dollar Index 83.25, Oil $92.87, 10-year 2.07%, Silver $22.55, and Gold.. $1,411.70, and it's Friday, so here's your chance to take a peek at the U.S. Debt Clock, by clicking here: http://www.usdebtclock.org/index.html

That's it for today. OK. I actually put on an EverBank logo shirt today, to do my live interview on the Street.com at 10:30 CDT this morning. I usually don't wear EverBank logo shirts because they don't fit me! But I asked Omar The Tent Maker to make one special for me. HA! Frank Sinatra is singing, The Way You Look Tonight on the IPOD, which reminds me this is the song that my darling daughter, Dawn and I danced to on her wedding, which next month will mark their 10th anniversary. Dawn got married on Alex's birthday, he was only 8 then, which means he'll turn 18 soon. Things were much better in 2003, given I was 4 years away from being diagnosed with cancer, and the debt in this country was only about $7 Trillion! Gotta give the Royals, Missouri's other baseball team, some love, as they won last night, beating my beloved Cardinals 1 of the 4 games the two teams played this year. It's Baseball night at EverBank, St. Louis, as the office gets together for a night at the Cardinals game VS the Giants. We have been bad luck for the Cardinals over the years, as I don't believe we've seen a winner in all the years that we've done this. UGH! Hopefully that changes tonight! I do believe that an original EverBank St. Louis, employee is celebrating her birthday today. Happy Birthday Cheryl Harper! And with that, I thank you for reading the Pfennig, and hope you have a Fantastico Friday!

Chuck Butler
President
EverBank World Markets
1-800-926-4922
1-314-647-3837

China To Add Another Country To Its Roster.

Chuck Butler — Wed, 29 May 2013 16:09:02 GMT

.........But First, A Word From Our Sponsor..........

WHY RUSH INTO METALS WHEN YOU CAN WALTZ?

With our automatic purchase plan, you can start mining metals at your pace.

?Fund for as little as $100 a month

?Choose from gold, silver and platinum

?Pay no ongoing fees

Start mining at your pace today. Learn more and view IMPORTANT DISCLOSURES at https://www.everbank.com/investing/metals/unallocated?referid=11808. Or call 800.926.4922.

EverBank is an Equal Housing Lender

......................................................

In This Issue.

* A$'s and euro reverse places.

* IMF lowers Chinas economic growth outlook.

* No love for the A$.

* Gold rallies close to $1,400 again.

And, Now, Today's Pfennig For Your Thoughts!

China To Add Another Country To Its Roster.

Good day. And a Wonderful Wednesday to you! My beloved Cardinals come home and start a home stand after a 6-2 road trip out west. That's a great trip! This team reminds me of the 2004 team that won 105 games. I know all too well that we're still in May, with 4 months to go, but I do like what I'm seeing night-in and out.

I don't like what I'm seeing night-in and out in Gold & Silver. Every time Gold gets to within spittin' distance of $1,400, it gets slapped back down. It's all a game being played by the price manipulators, and every day that it goes by without regulatory enforcement, I grow more disenchanted with our Gov't. (Some might say that they didn't think that to be possible!) Hey, think about it for a minute. If the Big Banks can manipulate interest rates (LIBOR) and then have a judge absolve them from any wrongdoing, the price manipulators have nothing to worry about!

This morning, Gold is up $6, after spending most of yesterday going back and forth from a small rally to a huge loss and then rinse and repeating.

Yesterday, the euro was down while I wrote, and the Aussie dollar (A$) was up. That's reversed this morning. The A$ just can't seem to find any love lately. In fact the overnight level of .9536 was the lowest level for the A$ since October 2011. (it has since come back a bit) Now, we've seen the A$ fall below parity a few times in the past couple of years only to rebound and push past the parity once again. But this time walks, talks, and smells different to me.

Remember what I told you yesterday that the First QTR CAPEX (capital expenditures) will print tonight, and will hold a few aces in the hand that will determine if the Reserve Bank of Australia (RBA) comes right back to the rate cut table after last month's rate cut.

And the IMF cutting China's growth outlook doesn't help the A$ one bit! The IMF issued a statement about China saying that China's economic growth will "slip to" 7.75% from 8.2% this year and next. Here's what the first deputy managing director of the IMF, David Lipton, had to say. " While China still has significant policy space and financial capacity to maintain stability even in the face of adverse shocks, the margins of safety are narrowing." In addition, he said that, "Chinas current monetary and fiscal policies are appropriate and the IMF isn't suggesting they change anything now"..

Whew! I bet the Chinese are breathing a sigh of relief (NOT!) Do you really think the Chinese leaders give two hoots about what the IMF has to say? I don't. So, it's a good thing the IMF didn't waste their breath talking about what they think China should do! I think that Mr. Lipton, has it right with the first part of his statement.. That China has significant policy space and financial capacity to maintain stability even in the face of adverse shocks.

I know I spent an unordinary amount of time talking about China yesterday, but they are in the news a lot recently, so I always believe that stuff going on in China is important for us to consider. And today is no different. Yesterday, I saw a report from Barclays that highlighted the news that China and New Zealand are ready to agree to exchange each other's currency in the terms of trade. OK. This agreement won't have the rebar behind it like the one with Australia, but still New Zealand's dairy exports to China are very strong. And, this just adds another country to the roster of countries that have signed currency swap agreements with China. Here's my wink and nod folks. China is removing the dollar's relevancy in the terms of trade around the world. Uh-Oh.

In the Eurozone this morning, there was a survey by Commerzbank that found the percentage of companies in Germany are expecting the euro to advance against the dollar . The survey showed that 26% of companies in Germany are bullish on the euro, VS just 18% in March. Take with this survey the fact that the German Business Confidence as reported by the think tank IFO, was positive this month (I told you about it last Friday), and I think that the outlook for the euro is looking brighter all the time. I mean, when was the last time you heard someone talking about the breakup of the euro? Sure it takes more than surveys and good reports for a currency to get wind in its sails, the main thing is that the market sentiment has to change in its favor. And right now it's all about the dollar and U.S. stocks.

Sentiment would be good. and would outweigh the reports like this morning that showed unemployment in Germany rose more than 4 times the estimate by economists (the so-called experts!) . Unemployment climbed 21,000 in May to 2.96 Million people the Unemployment Rate held at 6.9%...

OK. I had to stop to sing out loud, along with Spirit's great song, Nature's Way. Never heard it? Go to the ITunes store. If you're a classic rock lover, this is one for your collection! I personally identify with the song's lyrics. It's nature's way of telling you something's wrong. That was me in 2007.

Yesterday, I got Chris thinking, when I talked about Russia's Gold production. He asked me, "how's Russia doing these days?" Well, I said that Russia was doing OK. But then I realized that it had been a month or so since I last researched what was going on in Russia. After a quick review, I stand by my initial reaction of Russia doing OK. The have a Current Account Surplus in dollars of $81.9 Billion or 4% of GDP. Add to that their Trade Surplus. But, in the end, the ruble is an "oil play". If Oil can get back above $100, the ruble will reverse its recent weak trend.

When I went to the Treasury screen this morning to get the yield for the 10-year, I was surprised to see how much it rose yesterday, when the yield was 2.04%, and this morning it is 2.19%! WOW! OK... We've seen these moves higher in the 10-year's yield in the past, with the moves only proving to be false dawns. Have you ever attended one of my presentations and I show the cartoon of the guy sitting at his desk with his head banging on the desk top? I always say that's Chuck wishing he had never called for the pop in the Treasury Bubble. Of course I go on to say that little did I know that when I made that call, that the Fed would end up buying 76% of the Auction that year (2011). But with all of the stock buying going on right now, and the green lights for the economy turned on by economists and government shills, the sheeple are selling their Treasuries and buying stocks. The same is happening with Gold & Silver.

Actually, the 10-year yield touched 2.23% overnight. So, is this the beginning of the POP in the Treasury Bubble? It's too early to tell. A year ago, yields reached this level, only to be brought back down by Fed buying. So, to me, I would have to think that the Fed is not ready for yields to begin to rise this quickly, and they will feel that they need to "fix things" again.

The Bank of Canada (BOC) will meet today, and it will be outgoing BOC Gov. Carney's last meeting. I doubt he'll do anything to upset the applecart in his last meeting. In fact I would bet a dollar to a Krispy Kreme that he'll just repeat what he's been saying for a over a year now, just for GP (General Practice) and Old Times. In case you've forgotten his standard line after rate meetings it goes something like this: " some modest withdrawal of stimulus will be required"

The markets are quite perturbed with Mr. Carney, for he never delivered on that statement, and the markets have long given up on the Canadian dollar / loonie, moving it below parity a couple of months ago and keeping it there. I don't believe the new BOC Gov. is going to deliver on that statement either. My dad used to tell me, Chuck, money talks, and bull.. Walks. I think that applies to the BOC and Mr. Carney.

The Japanese yen has rallied a full figure again overnight. After seeing it lose 1 full figure the night before, the yen rallied back. I don't put too much into these rallies in yen. Seems like it's a case of too much, too little, too late.

And in following up on something I first reported to you about a month ago. The WSJ rand a story on the increase in margin debt that I find interesting in that it reminds me of what was going on the last time the stock market crashed. According to the WSJ, margin debt increased to $384.4 Billion in April, which exceeds the previous record high of $381.4 Billion in June of 2007. The 384.4 Billion in April represents a 29% increase from a year ago. OK. I once ran a margin dept at Stifel Nicolaus and I can tell you while the brokerage houses love margin dept for a number of reasons, like interest rate spread, and the ability to use the stock that has margin on it in stock loans, when things go south in the markets, the customer holding that margin debt isn't so lucky.

Did you see the S&P/ CaseShiller Home Price Index report yesterday? WOW! Home Prices jumped 10% in the 1st QTR VS a year ago. And Consumer Confidence surged higher to 76.2 from 69 the previous month. It's all good in the U.S. right? Oh, there's those picky little regional manufacturing indexes that continue to grow warts. Richmond's was a negative -2, and Dallas' was a negative -10.5 both in May. And rail shipments keep getting softer and softer folks, so it's not all seashells and balloons for the economy just yet.

Speaking of not being seashells and balloons. I saw this in the 5 Minute Forecast yesterday, that my friend Addison Wiggin wrote. "A McKinsey & Co. study of 5,000 graduates, mostly from the classes of 2009-12, finds 42% of them holding down jobs that do not require a college degree. Little wonder, then, that a report from the Department of Education says 11% of student loans are at least 90 days past due."

And then, I wanted to mention that I was doing some reading on Sunday, yes, Sunday. and came across some data that got me thinking, which then now you get to read about! Ok so remember when I explained to you about one of the adjustments that were made in the mid 90s to the way CP I was computed.Well, back then they decided that substitution could take the place of a fixed basket of goods. They said well if steak got too expensive people would substitute hamburger. This where substitutions became the norm for CPI calculations, which is one of the reasons I call CPI stupid. But, getting back to the report I read. According to a report I read beef prices are going to record levels.... And since the T-bond steak that used to be in our constant basket of goods, was already substituted for with hamburger. What will the substitute for hamburger be now?

Alrighty then. Seems like I've written quite a bit this morning, so it's probably time to go to the Big Finish!

Then There Was This. As I usually do whenever I see the great Richard Russell quoted, I use that quote here. Today, Richard Russell is talking about gold manipulation. Let's listen in. "Some of the big hedge fund managers took early, large positions in gold and gold ETFs. They got whacked by the latest smash in gold, and I presume that only the most fervent of the true believers are still in gold. The first sign of a real recovery in gold would be its hitting the 1500 level. And that's going to take some doing.

And gold, or I should say "paper gold," is manipulated nightly by whoever is dumping those gold futures. So far, the manipulations of paper gold have not completely screwed up the price of actual physical gold. And here's an e-mail from a subscriber in Singapore who is telling the real story of gold, first hand. It seems as though physical gold is being gobbled up by gold-philes all over the world."

He then talked about a letter he received from a reader in Singapore, talking about his experience in going to a bank in Singapore to buy physical Gold. He waited 45 minutes in a long line to get to the Gold window, only to be told that 100 gram and 50 gram bars of Gold were sold out. Just more proof that physical Gold buying is still going on with heavy volumes.

Chuck again. That was a great story about the guy in Singapore. He said that people brought suit cases with roller wheels to the bank to take their Gold purchases home in, for they bought so much they couldn't carry it by hand. One of these days, Alice.

To recap. The euro and A$ reversed positions overnight, with the A$ taking a hit and the euro rebounding a bit. Chuck talks about how things are looking brighter for the euro these days, but sentiment still resides with dollars and stocks. The IMF lowers China's economic growth outlook, and China is close to adding New Zealand to its roster of countries that have removed dollars from the terms of trade with China.

Currencies today 5/29/13. American Style: A$ .9625, kiwi .8125, C$ .9635, euro 1.2950, sterling 1.5090, Swiss $ 1.0370, . European Style: rand 9.7945, krone 5.8765, SEK 6.6465, forint 223, zloty 3.2680, koruna 20.00, RUB 31.51, yen 101.30, sing 1.2670, HKD 7.7640, INR 56.16, China 6.1856, pesos 12.67, BRL 2.0745, Dollar Index 83.60, Oil $94.60, 10-year 2.19%, Silver $22.37, and Gold.. $1,390.92

That's it for today. Long time readers know how I have a love of cooking outdoors. In the summer I like to smoke meats for multiple hours and then watch them get devoured by family. Well, I bought a new smoker this past weekend, and it was delivered yesterday! I'm as excited as a kid at Christmas! I did some chickens in the new smoker last night, boy did they taste great! Little Everett is coming around, and getting used to living with us, we had a good night last night! And Delaney Grace is ready to move in for good, and kick us out! I reminded her that her mom and dad are looking for a new house! The Godfather of Soul, James Brown was just singing on the iPod. I'm sure Mike was dying over there having to listen to that! So, with that, I hope you have a Wonderful Wednesday!

Chuck Butler
President
EverBank World Markets
1-800-926-4922
1-314-647-3837

China Sneezes, The Rest Of The World Catches A Cold!

Chuck Butler — Tue, 28 May 2013 15:31:35 GMT

.........But First, A Word From Our Sponsor..........

WHY RUSH INTO METALS WHEN YOU CAN WALTZ?

With our automatic purchase plan, you can start mining metals at your pace.

?Fund for as little as $100 a month

?Choose from gold, silver and platinum

?Pay no ongoing fees

Start mining at your pace today. Learn more and view IMPORTANT DISCLOSURES at https://www.everbank.com/investing/metals/unallocated?referid=11808. Or call 800.926.4922.

EverBank is an Equal Housing Lender

......................................................

In This Issue.

* Currency rally, Friday has no oomph.

* China slow down again.

* Yen returns to underlying weak trend.

* Gold is spent by $14 this morning.

And, Now, Today's Pfennig For Your Thoughts!

China Sneezes, The Rest Of The World Catches A Cold!

Good day. And a Tom Terrific Tuesday to you! Geez Louise, what a wet and stormy Holiday weekend for us here in the St. Louis area. And in keeping with the theme for this spring, it was a little chilly on Saturday to boot! But, I didn't let the rain and cooler temps, ruin my 3-day weekend! Thanks to all that sent me good notes on my report of my visit to Houston last week. That's a great way to start the week!

Friday, saw a currency rally that really had nothing behind it, as the markets were quite thin after the boys and girls in London headed to the pubs. So, there just wasn't enough oomph to sustain the currency rally on Friday. This morning, the currencies are a mixed bag of nuts, with the euro down by a shade, and the Aussie up by bigger shade. Gold is being spent to the tune of $14 this morning, so that's not direction I would think it would be going, given all the uncertainty about how all this Quantitative Easing (QE), ZIRP, stimulus, and what have you, is going to play out. The markets at this point are taking the bait, hook, line and sinker from the Fed Heads who believe they can elegantly step away from all this stimulus. I think not, but then that's just me, looking at things from the logical point of view, that has served me well in the markets for a long time!

OK. stop right there! Before you go any further, Chuck, you might want to slow down, for this is a marathon not a sprint, and going for the jugular so early on a Terrific Tuesday could put you in a tailspin that you are not able to get out of!

On Friday, before the NY traders headed to the Hamptons for the Holiday weekend, we saw the color of the April Durable Goods Orders. Recall on Friday, I told you that the "experts" were expecting growth in April VS the awful negative number that printed in March, and lo and behold, that's what we saw! April Durable Goods Orders increased 3.3% VS March's negative -5.9%... But, there was something about this report that smelled like three day old fish, and it didn't take me or anyone else very long to discover the origin of the smell. There it was right before my eye. The Capital Goods shipments in April fell -1.5% VS March. Now, you may be saying, "so what, Chuck, who cares about this stuff?" Well, grasshopper. go ahead and think that way, but without shipments what good is it to make stuff?

Today, we'll get the S&P/ CaseShiller Home Price Index for March, which is expected to continue the recent trend of seeing the home price index increase. We'll also see Consumer Confidence for May, which is really expected to jump higher, which makes sense given the stock market performance of the past month, but still gives me the willies given what has primed the pump for the stock market rally. This is a case, in my opinion, of a gap that is widening between financial hope and economic reality.

So. we could see the markets drift today, given the lack of real-meat data, and the feeling that the boys and girls in NY haven't made their way back from the Hamptons yet.

Remember last week when I told you about the People's Bank of China (PBOC) allowing the renminbi / yuan to appreciate to a 19-year high. I had a dear reader ask me why the link in trading performance between the renminbi and Singapore dollar (S$) had broken down. I told him that I believed that the renminbi's recent run has been driven by speculation and excitement about the possibilities of a floating renminbi, but that should soon wear off, and the two currencies will once again be in lock-step with each other, trading performance-wise.

The reason I believe that the speculation will soon wear off is that China is experiencing another economic slowdown. Remember when the saying in the markets was, "When the U.S. sneezes the rest of the world catches a cold"? That was simply saying that the U.S. economy was the straw that stirred the world's economic growth drink. Well, in an another baby step, guess who has taken that position away from the U.S.? If you guessed China, you would be correct.

Think about that for a minute. Sure, the U.S. still holds a strong-hold on the reserve currency, but China continues to take baby steps toward taking that away from the U.S. And here's one item that proves they have moved past the U.S. when it comes to affecting the rest of the world's economy. Just last week, I reported to you that China's manufacturing was lackluster in terms of performance, and that sent a message of slowdown in China around the world, and thus sparking nervous sell-offs in countries around the world. (recall Japan's Nikkei fell -7.3%?)

So. I think a slowdown in China is going to send ripples around the world (remember China is the third largest destination for U.S. exports). I don't get all lathered up about a Chinese slowdown, and neither should you. As economies mature, they all experience booms and busts, and if they don't, like here in the U.S. because the Fed "knows how to keep that from happening" (NOT!) then they'll have even bigger fish to fry down the road.

Oh. and the renminbi / yuan did back off the appreciation tracks last night. And I think we'll see more back and forth from the PBOC with the currency going forward, for a couple of reasons. 1. To keep the markets from thinking this is a one-way street of appreciation, and 2. To signal to the rest of the world that things are not all seashells and balloons in China right now.

The news from Sweden this morning is good, which is about time, after a run of weak data, the Swedish Trade Surplus for April was stronger than expected at SEK 8.8 Billion (SEK 6 Billion was expected) This is the first positive bit of data news that Sweden has received in a couple of weeks, and has pushed the krona into gains VS the dollar this morning.

I had a young man ask me about Japan's stock market the other day. I said, "WOW! What a move this stock market has made. But here's the kicker. For everyone else outside of Japan that buys into the Japanese stock market, they have to convert their base currency for yen, and then buy the stocks with their yen. And the yen has lost 25% in value in the past 6 months, so, the stock market has to gain more than 25% to offset the loss of the yen." The young man looked at me, and said, "my broker didn't tell me that".

And yen weakness is very real, and in my opinion, which could be wrong, will continue to remain in the underlying weak trend. Especially, when yen has to deal with the comments last night from an advisor to Prime Minister Abe, who said that the Bank of Japan (BOJ) can add to its unprecedented stimulus if necessary to support an economic revival. I think that the advisor made this statement because a BOJ board member made a statement earlier in the day about how the BOJ had taken all necessary steps for now. Soon, the BOJ board member will receive a memo from the Prime Minister, reminding him that the goal is promote inflation and economic growth, not to step on the PM's toes.

The Aussie dollar (A$) continues to get sold, and is now trading at a 1 and 1/2-year low. The Chinese data isn't helping the A$ either. The A$ is up though today, snapping a 4-day slide. Later this week a very important report with regards to rate cut prospects will print. The First QTR CAPEX report, which is Capital Expenditures. So, we need to watch for that on Thursday for them Wednesday night for us!

And, like I said above, Gold is being spent by $14 this morning. Every morning, it's something else with regards to the price of Gold. This morning, it's the markets thinking that the data in the U.S. this week will continue the spark that started last week for better data, and with better data, the markets believe the Fed Heads when they say they can elegantly remove stimulus. And if that's the case, there's no need for Gold, so says the sheeple. But, I already began my rant this morning on not believing this bunk, so if you are so inclined, today, you can buy Gold cheaper by $14 than you could on Friday!

I read an interesting report this weekend on Russia and their Gold producing prowess. The report talked about how Russia, once the number 2 producer in the world of Gold, behind S. Africa, had seen Australia and Canada and the U.S. pass them up.. But no longer! Russia could very well be on their way to passing the U.S. and Australia and the great thing about that is that a country that produces Gold, doesn't have to import it!

Then There Was This. OK. you know how I always say that if everyone and I mean everyone bought physical Gold instead of paper Gold, the price manipulators would be put out of business. I read this report by my friend, Addison Wiggin, and got all lathered up that it almost happened. Let's see what Addison has to say.

"As you'll recall from these pages in March, "Zero Hour" is the name we give to the moment when the price of real, physical gold in your hand starts to break away from the quoted price on the commodities exchanges.

That is, the "physical price" becomes much higher than the "paper price" on CNBC's ticker. The catalyst, we suggested, would be when a major metals exchange defaults on a gold or silver contract - settling in cash, instead of metal.

To be clear, Zero Hour did not take place when gold's paper price plunged $150 in only two trading days - Friday, April 12, and Monday, April 15.

But what happened after that plunge hints at what the aftermath of Zero Hour would look like. Real metal suddenly became very hard to come by. We chronicled the worldwide scramble, in real-time, in The 5 Min. Forecast.

. The Chinese Gold and Silver Exchange nearly ran out of bullion on Friday, April 19

. There were reports of a "massive wave of physical gold buying" in Dubai

. Monthly sales of U.S. Gold Eagles fell just short of a 26-year high during April.

Result: If you wanted real metal, you paid a substantial premium over the paper price. In silver, these premiums were off the charts. On Thursday, April 25, spot silver was $23.94. but a Silver Eagle from a major online dealer would set you back $29.54 - as high as the paper price before the mid-April crash!

The April gold crash," sums up Agora Financial's own Byron King, "was the beginning of emancipating real gold from paper gold. We're about to see a 'real' price for gold, coming from the bottom up, not the top down. I suspect that we'll see a solid price rise for gold over time. The market bullies who deal in paper products have just punched themselves in the nose."

Chuck again. Yes. that's what I would love to see! The market bullies punching themselves in the nose! And to have physical Gold win this battle!

To recap. The currencies rallied on Friday, but had no oomph to the rally as the markets thinned out quickly ahead of the Holiday Weekend. This morning, the currencies are a mixed bag of nuts, with the euro down a shade and the Aussie up a bigger shade. Chuck goes on and on about China and Japan this morning, and how he's not letting the Fed Heads pull the wool over his eye, like they have the markets.

Currencies today 5/28/13. American Style: A$ .9690, kiwi .8120, C$ .9675, euro 1.2940, sterling 1.5120, Swiss $1.0335, . European Style: rand 9.7025, krone 5.8375, SEK 6.6370, forint 220.95, zloty 3.2290, koruna 19.9910, RUB 31.37, yen 102.05, sing 1.2635, HKD 7.7635, INR 55.96, China 6.1818, pesos 12.46, pesos 2.0565, Dollar Index 83.72, Oil $94.78, 10-year 2.04%, Silver $22.35, and Gold. $1,379.87

That's it for today. I hope you had a fun Holiday Weekend, but didn't forget what the holiday was all about. I drove an hour west to put a flag on my dad's grave site. He fought in WWII, and I looked around the cemetery and there were very few flags. It made me sad. Our Memorial Day cookout that I had planned was washed out by rain. Oh well. My beloved Cardinals are on a roll, and will come home after tonight's game in Kansas City, with the best record in baseball! Injuries to the pitching staff, haven't bothered them yet. And if you get Sports Illustrated, the pitchers are on the cover this past week! It's titled: The Cardinals Way. The story had a bit of interesting information in it. they said that no child born since 1902 has gotten to their 25th birthday without witnessing a World Series Championship parade. WOW! Talk about the Cardinals Way! OK. sorry, my good friend, Dennis Miller is probably getting very hot under the collar, so I'll end that there! I hope you have a Tom Terrific Tuesday!

Chuck Butler
President
EverBank World Markets
1-800-926-4922
1-314-647-3837

Markets Take What Big Ben Said Hawkishly?

Chuck Butler — Fri, 24 May 2013 03:11:23 GMT

.........But First, A Word From Our Sponsor..........

WHY RUSH INTO METALS WHEN YOU CAN WALTZ?

With our automatic purchase plan, you can start mining metals at your pace.

?Fund for as little as $100 a month

?Choose from gold, silver and platinum

?Pay no ongoing fees

Start mining at your pace today. Learn more and view IMPORTANT DISCLOSURES at https://www.everbank.com/investing/metals/unallocated?referid=11808. Or call 800.926.4922.

EverBank is an Equal Housing Lender

......................................................

In This Issue.

* Nikkei plunges 7.3%..

* Chinese manufacturing contracts.

* Two handed economists.

* Gold rebounds.

And, Now, Today's Pfennig For Your Thoughts!

Markets Take What Big Ben Said Hawkishly?

Good day. And a Tub Thumpin' Thursday to you! What the heck was I thinking, was running through my mind when the alarm went off this morning. In an attempt to relieve Chris from having to write the Pfennig this morning, I told him not to worry about it, I would write it.. All the time knowing that my flight from Houston wasn't getting in until very, very late.. And that was before all the cancellations! What the heck is going on with the aviation sector? It's a very long story, so I won't bore you with the details, but just know that I was ready to raise the white flag and say "you win, you've beaten my will". Darn airlines!

OK. The Big news overnight came from China, where the Chinese Purchasing Managers Index (manufacturing) fell to a seven month low of 49.6, which is obviously below the line in the sand demarcation of 50. Any number below 50 represents contraction in the sector. This comes as a bit of a surprise to me. Sure I saw the tea leaves on China's economic slowdown, but didn't think it would show such a cooling off of domestic demand. I did think that the external headwinds that face China every day, like Europe and the U.S. would play badly with this data, but the slowdown of domestic demand was a surprise..

This news sent the Japanese Nikkei to the woodshed. The Japanese stock market plunged 7.3% overnight. The Nikkei had been the darling of stock markets ever since the new PM Abe, made his announcement about promoting growth and inflation. Since China is Japan's biggest trading partner, the Chinese slowdown in manufacturing, really sunk the Nikkei's battleship. The Nikkei's plunge is weighing heavily in Europe this morning, and will probably hang like a dark storm cloud over the U.S. stock market too.

The other Big news overnight, has been the decision by the Eurozone leaders to cut austerity. the leaders apparently are receiving too much complaining and such, and see their ability to get reelected diminishing. I say that in complete disgust, because the austerity was working. and now when things get tough, the though roll over and look for their bellies to be scratched! Sure the Eurozone economy had contracted since the 3rd QTR of 2011, did these "leaders" really think it wouldn't, given the massive cuts to spending that they implemented? Well, at least the leaders didn't say, "we raise the white flag on austerity, and pin our colors to the "stimulus" mast." At least that's for now.

So. With the weak manufacturing report in China, the plunge of the Nikkei in Japan, and the Eurozone leaders rolling over to get their bellies scratched, the currencies are not having a good day. However, as I write, Gold is up $21 this morning. Of course that's before the NY boys and girls arrive at their desks and decide whether to play their shell game with Gold again or not. The bias to buy dollars is back on the table after a couple of days of not much movement either way.

Yesterday, we had Big Ben Bernanke giving his testimony to the lawmakers on the state of the economy. For us "old timers" this trek to the "hill" by the Fed Chairman used to be called the Humphrey-Hawkins testimony. But that bill requiring the Fed Chairman to make this trip expired many years ago, and since it made so much sense for this to happen twice a year, it has continued. We usually get some real interesting quotes from Big Ben, and yesterday was no exception.

Speaking from both sides of his mouth, Big Ben threw a cat among the pigeons by saying, "The Fed could take a step down in our pace of purchases in the next few meetings." But then threw cold water on that by saying, "A premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further."

So. What do you think? Sounds like he was waffling to me. Trying to please everyone with a little bit of this, and little bit of that. it started with a kiss, now we're up to bat. and so on. These guys like to speak out of both sides of their mouths for sure. My dad used to say they were "two handed economists". They would say, "on one hand, we could see. , but on the other hand we could see this." Never really saying what they thought for sure!

And the markets' reaction to the statement by Big Ben? Well, now there you've got another pot to stir. You never know how the markets will take something like this, and yesterday was no different, as the markets decided to forget Big Ben's waffling, and go with a "hawkish" view of his testimony. That was good for the dollar in the immediate reaction to the statement, but has since dissipated a bit.

The euro is attempting to eke out some small gains this morning, after getting walloped yesterday. The Eurozone saw some better readings of their latest manufacturing with the index ticking up to 47.8 from 47. Still contraction territory, but an upside surprise should be enough to kick start a currency, as it has this morning with the euro.

I told you above about the Nikkei's plunge, and in the never ending attempt by the Japanese to move in opposite directions than other markets. The Japanese yen is rallying on the Nikkei news. Strange eh? But remember, all the time the Nikkei was rallying the past 3 months, yen was getting passed around like a pack of cigarettes at a prison, and now that the Nikkei has plunged overnight, yen recovered. I really don't expect much more to come of this scenario, so don't get all lathered up and go out and back up the truck with yen. But then, that's just my opinion, and I could be wrong!

The Aussie dollar (A$) is getting sold again this morning. This time, the selling, is tied to the announcement by Ford Motor Co. that they will close down their Australian local car production, along with two manufacturing plants. That's not a good sign folks.

The New Zealand dollar / kiwi, is getting sold alongside the A$ this morning. Sentiment toward these two is really plunging. And it started with a kiss. no wait.. it started with a rate cut in Australia and news of the Reserve Bank of New Zealand (RBNZ) announcing that they were sellers of kiwi.

The Swiss franc is having a couple of good days of trading, a couple of days that it hadn't seen in some time. No worries, the franc is very weak VS the euro, compared to a year ago, when it was bumping up against the 1.20 floor that the Swiss National Bank (SNB) put into place in September of 2011. Today, the cross to euros is trading around 1.2470. So, the franc could use a little strength, eh?

I had a reader send me a note and say that he noticed that Japan had booked a Trade Deficit for 11 months now, and since I always say that "We're turning Japanese" what did that mean for the U.S.? Well. In the case of Trade Deficits. The Japanese are actually turning American, for the U.S. has long dominated the Trade Deficits. But, to the Japanese, this booking of Trade Deficits is a real psychological problem, for they were the captains of trade surplus, long before the Chinese awoke from their slumber.

I told you above that Gold was up $21 as I was writing. Gold and other metals were also pushing higher yesterday before the Big Ben statement. And then they weren't. So, this recovery this morning is warranted, in my opinion. For in my opinion, Big Ben didn't' tell us anything that we didn't already know. Sure we all know that he could decide to end stimulus any ole time he wants to, but when is he going to want to? That's the question, and as long as there are questions, the markets should take the dollar to the woodshed.

I've told you before, and I tell crowds whenever they come to listen to me talk, that I wouldn't be surprised to see QEnterity. You know, 10 years from now, someone from EverBank will be up on the stage talking about QE 22, or 23, or 24.

As Chris told you earlier this week, I get the honor of talking about a boat load of economic data the next two days. First, we have Fed St. Louis President, James Bullard speaking today. then we'll see the usual Thursday fare of Weekly Initial Jobless Claims. In addition, New Home Sales, and the latest PMI Manufacturing Index, and Bloomberg Consumer Confidence.

Then There Was This.Since the markets were so moved by Big Ben's talk yesterday, I thought that this comment by Fed Head William Dudley that I found on Moneynews.com played well with my thought that Big Ben is not ready to scale back his bond buying stimulus.. Let's listen in to what Mr. Dudley had to say..

"Federal Reserve Bank of New York President William C. Dudley said policy makers will know in three to four months whether the economy is healthy enough to overcome federal budget cuts and allow the central bank to begin reducing record stimulus.

"I don't really understand very well how the tug-of-war between the fiscal drag and the improving economy are going to sort of work their way out," Dudley said in an interview with Michael McKee airing on Bloomberg Television. "Three or four months from now I think you're going to have a much better sense of, is the economy healthy enough to overcome the fiscal drag or not."

Dudley's remarks underscore that Fed officials have yet to reach consensus on when or how to dial back their $85 billion monthly bond-purchase program designed to spur growth and lower unemployment. Philadelphia Fed President Charles Plosser has called for reducing stimulus at the Fed's next meeting in June, while St. Louis's James Bullard said Tuesday the purchases should continue.

Chuck again. OK. these guys are all over the place with their forecasts, pretty soon, they'll talk and no one will pay attention. Of course I wish that were the way it was now! Anyway, the markets react and we have to shuffle through the mess they leave each and every time they think the Fed Heads are ready to pull the plug on stimulus. I tell them each time, but they just don't listen that it's print or suffer the consequences of a deeper depression than the one we're in.

To recap. Big Ben speaks out of both sides of his mouth, and the markets think he means he really is ready to remove stimulus. Chuck says hogwash to that! The bias to buy dollars that entered the markets after the Bernanke speech, reversed a couple of days of healing in the currencies. The Nikkei plunges 7.3% overnight, and China posts a manufacturing index that showed contraction, sending the Asian markets reeling.

Currencies today 5/23/13. American Style: A$ .9695, kiwi .8095, C$ .9675, euro 1.2880, sterling 1.5080, Swiss $1.0320, . European Style: rand 9.590, krone 5.8395, SEK 6.6675, forint 226.35, zloty 3.2625, koruna 20.2390, RUB 31.40, yen 101.70, sing 1.2645, HKD 7.7625, INR 55.58, China 6.1947, pesos 12.47, BRL 2.05, Dollar Index 83.95, Oil $93.36, 10-year 2%, Silver $22.40, and Gold. $1,390.20

That's it for today. A great Big Happy Birthday today to my grandson, Braden Charles Butler.. Braden turns 2 today. It's great having two grandsons that are close in age, watching them learn to interact with each other is a treat! Kathy says when they turn 5 she's taking them to Disneyworld. I tell her, I bet she changes her mind in 3 years! Well, this weekend will be Memorial Day Weekend. The Backyard grills will get fired up, the public pools will open, and the old brickyard gets a workout in Indianapolis. But let's not forget what the holiday is really about. And with that. here we go! Let's make this a Tub Thumpin' Thursday!

Chuck Butler

President

EverBank World Markets

1-800-926-4922

1-314-647-3837

Both Consumer Confidence and Leading Indicators surprise on the upside.

Chuck Butler — Tue, 21 May 2013 05:47:21 GMT

.........But First, A Word From Our Sponsor..........

WHY RUSH INTO METALS WHEN YOU CAN WALTZ?

With our automatic purchase plan, you can start mining metals at your pace.

?Fund for as little as $100 a month

?Choose from gold, silver and platinum

?Pay no ongoing fees

Start mining at your pace today. Learn more and view IMPORTANT DISCLOSURES at https://www.everbank.com/investing/metals/unallocated?referid=11808. Or call 800.926.4922.

EverBank is an Equal Housing Lender

......................................................

In This Issue.

* US data sends the dollar higher...

* Could the Fed begin the end of bond their bond buying???

* Chinese home prices rise.

* Gold continues to see selling .

And, Now, Today's Pfennig For Your Thoughts!

Both Consumer Confidence and Leading Indicators surprise on the upside.

Good day. Storms knocked the power out at my house last night, so I woke a bit later than I wanted to and had to scramble to get ready by the light of my phone (yes, I have finally caught up with the rest of my family and have become dependent on my phone for more than just phone calls). I saw a number of branches littering the roads on the drive in, so the wind must have been pretty strong. The weather man said we will be getting more storms this morning, I hope Chuck was able to sneak out of here down to Houston for his 'regularly scheduled maintenance' with his docs down there.

The dollar continued to power its way higher on Friday as both the confidence report and Leading Indicators showed the US economy will continue to improve. As both Mike and Chuck suggested last week, the markets have been all about the growth story here in the US and that has boosted the dollar. Friday's data supported the recent 'love fest' for the US$ as the U of Michigan Confidence reading came in at 83.7 compared to expectations of 77.9 and substantially higher than last month's reading of 76.4. This was the best reading since the summer of 2007 and shows the resiliency of Americans as they have faced down a combination of higher taxes and federal spending cuts. Many believe the increase in confidence is a direct result of the record levels of the US equity markets and the beginning of a housing recovery. I guess all the work the Fed has been doing in keeping the printing presses in overdrive is beginning to show up in the attitudes of US consumers. But I still worry about the labor market here in the US, and while confidence can certainly be pushed higher along with the stock market, you can't 'spend' confidence at the store, so we continue to need to see more improvement in the labor markets.

The leading indicators were also released on Friday and painted a fairly rosy picture for the near term future of the US economy. The Conference Board's gauge of the economic outlook for the next 3 to 6 months climbed .6% in April, a big turn-around from a .2% drop in March. Economists had predicted the leading indicators to come in at a .2% increase so the markets were surprised by the strength of Friday's data. This strong reading supports the thought that the US economy will start to pick up steam in the second half of this year which could mean an early end to the quantitative easing efforts of our Federal Reserve.

This thought is what has been rallying the dollar over the past few weeks, as more Fed heads have been talking about beginning an exit from the $85 billion monthly bond buying program which began in September of last year. Fed Bank of San Francisco President John Williams made the speaking circuit rounds at the end of last week suggesting the central bank may begin to taper the bond buying sooner rather than later. This is a big change for Williams who is generally seen as a dove when it comes to monetary policy. Williams joins three other Federal Reserve regional bank presidents who have been calling for phasing out the month purchase of mortgage backed securities. Dallas President Richard Fisher, Philadelphia President Charles Plosser, and Richmond President Jeffery Lacker have all been calling for an end to the bond buying. "It's not good for the bank to be holding lots of mortgage paper" Plosser said on Friday. Fisher warned that if the bond buying continues at the current levels, the Fed could eventually be buying up to 100 percent of the MBS issuance which is "not only excessive, but also potentially disruptive to the proper functioning of the MBS market." The FOMC will release minutes of its April 30th meeting on Wednesday, and traders and economists will be looking for indications that an end of QE is starting to come into focus.

We won't have any big data releases here in the US today, nor any tomorrow so the markets will have to look overseas for any news on the global economy. Fed Chairman Ben Bernanke will testify before the Joint Economic Committee this Wednesday which could produce some good 'Pfennig pfodder' as our congressional leaders push him for more information on when he plans on ending QE. Chuck should have plenty to write about as the end of the week will be chock-full-o data. We get the existing homes data on Wednesday followed by the weekly jobs claims and some more housing data on Thursday. These housing numbers have taken on an even greater importance with the positive data we saw on Friday. If the housing data comes in strong, it would support the thought that the US economy will be able to withstand the reduction of federal spending which will accompany the end of QE. And Friday we will close out the week with April's reading of durable goods orders which are predicted to show a positive 1.5% increase after a fairly large drop in March.

In Europe, car sales rose in April for the first time since September of 2011 adding to signs that the latest recession in Europe may be short-lived. Another report showed consumer confidence in Europe increased in April to the highest level since July of last year. Last weeks trade data showed European exports expanded 3.4% from a month earlier as the EU trade surplus widened to 8.1 billion euros from just 1.6 billion euros in February. German auto sales finally showed an increase, jumping 3.8% in April ending five consecutive months of falling sales. The largest increases were in the UK where registrations increased 15% and in Spain where they were up over 11%. Both France and Italy showed drops in the number of cars sold. Interest rate reductions by the ECB were given some credit in turning around the auto data, and ECB President Mario Draghi said he is still considering further cuts if the economic outlook deteriorates. But with rates near zero, any additional cuts could move rates some rates below zero, and the overall impact of negative interest rates is still largely unknown for an economy the size of Europe.

The Japanese yen finally strengthened a bit after Japan's economic minister Akira Amari warned that further losses in the currency could negatively affect Japanese citizens. Amari suggested that the dramatic drop in the value of the Japanese yen has already corrected a lot of the imbalances in the Japanese economy. This was the first indication from a Japanese leader to suggest the Japanese yen is getting close to where they would like to see it. I guess the 20% move of the yen over the past six months is just about what the Japanese leaders were wanting, and they apparently would like to see the yen take a breather while the markets digest this huge move.

Staying in Asia, China's housing inflation accelerated to its fastest pace in two years. Average new home prices rose almost 5% from a year ago after a 3.6% increase last month. The rising prices add complexity to the job of Chinese leaders who would like to be able to spur a stronger overall economic recovery. These leaders have been trying to cool the housing market with measures aimed directly at this sector, but many thought these moves weren't broad enough to have a meaningful impact. Home prices continue to move higher in the large Chinese cities, with prices in Beijing rising 10.3% and Shanghai prices up 8.5% both of which were the fastest YOY gains since January of 2011. With property inflation edging higher, Chinese leaders will have less room to enact measures to try and stimulate their economy.

Closer to home, Mexico's peso fell again on Friday heading for its worst week since last June after data showed GDP rose at the slowest pace since 2009. GDP rose just .8% in the first quarter from a year earlier, much slower than Mexico's leaders would like to see. The data may force Mexico's central bank to cut rates which would definitely be a negative for the Mexican peso. Holders of the peso have enjoyed a nice 12% increase in the currency over the past year, partially due to the higher rates available to investors. A cut in rates, which could be seen to be necessary to stimulate the Mexican economy, would definitely be a negative for the Mexican peso.

And the Canadian dollar continued to get beat up on Friday as inflation data bolstered recent calls for relaxing monetary policy. Consumer prices in Canada rose just .4% in April down from a 1% increase the month before. This was the slowest pace of price increases in Canada since October of 2009. As Chuck suggested on Friday, the new Prime Minister Stephen Poloz has supported trade policies in the past which would seem to indicate he may reverse outgoing BOC Governor Mark Carney's bias toward higher interest rates. While most investors felt the BOC's next move would be higher, the change in leadership along with softer inflation data has many thinking rates could be headed lower.

Commodity currencies were softer across the board, as the Australian dollar, New Zealand dollar, and South African rand all followed the Canadian dollar down over the weekend. The slower global inflation is what seemed to be weighing on all of these currencies. A consumer confidence measure in New Zealand helped put a floor under the kiwi, showing confidence 'down under' climbed to a three year high. And another report showed producer prices in New Zealand rose .8% in the first quarter, the most since June of 2011.

Gold had another off day, dropping nearly $30 on Friday and another $10 over the weekend. With the dollar rising to nearly a 3 year high (according to the dollar index) there continues to be increased selling pressure on the precious metals, which have had an inverse relationship with the greenback. Talk of an exit from QE programs here in the US has added to the selling in gold, as inflation expectations seem to be softening. I still think these levels represent a great place to add or better yet start the accumulation of a position in the precious metals.

To recap. Data released on Friday sent the dollar higher as both the consumer confidence and leading indicators surprised on the upside. Fed heads are starting to discuss the exit from QE, and some believe we could now see a reduction in bond buying in the next few months. No data here in the US today or tomorrow, but the end of the week will bring Chuck plenty to write about. European car sales increased, perhaps the recession will be short lived? Chinese home prices shot higher, but Chinese leaders still want to stimulate their economy. And the commodity currencies all fell over the weekend as global inflation expectations caused a sell-off in precious metals and raw materials.

Currencies today 5/20/13. American Style: A$ $.97746, kiwi .8140, C$ .9723, euro 1.2859, sterling 1.5192, Swiss $1.0327. European Style: rand 9.4649, krone 5.8355, SEK 6.6724, forint 225.95, zloty 3.2522, koruna 20.3023, RUB 31.2895, yen 102.56, sing 1.2554, HKD 7.7622, INR 55.1062, China 6.1998, pesos 12.3216, BRL 2.0352, Dollar Index 84.042, Oil $95.53, 10-year 1.95%, Silver $21.685, Gold. $1,354.16, and Platinum $1,445.55.

That's it for today. Congratulations to all of the new graduates! I attended the high school graduation of my niece (and goddaughter) Meaghan yesterday evening. The event was held outdoors under the massive oak trees in front of her high school, and the weather cooperated to make it a wonderful event. Unfortunately the weather prediction isn't so good for the second phase of her graduation, the beautiful 'Maypole' dance which all of the senior girls are scheduled to perform this evening. They have been practicing for months now, and there is no 'indoor option' so I really hope the storms move through quickly and leave them a window of opportunity this evening. Meaghan graduated with honors, and is now on her way to Rhodes College where she will play field hockey and study psychology and art. Next week her twin brother will graduate and then head off to Georgetown University. I am extremely proud of both of them, as they have worked hard in high school and have set themselves up to be a success in life. Time really flies, it seems like I was holding the twins in my arms just a few years ago! I'll get this out the door now, and call home to check and see if the power is back on. Thanks for reading the Pfennig, and I hope everyone has a Marvelous Monday!

Chris Gaffney, CFA

Vice President

EverBank World Markets

1-800-926-4922

1-314-647-3837

The dollar kept going and going...

Chuck Butler — Mon, 13 May 2013 16:46:33 GMT

.........But First, A Word From Our Sponsor..........

WHY RUSH INTO METALS WHEN YOU CAN WALTZ?

With our automatic purchase plan, you can start mining metals at your pace.

?Fund for as little as $100 a month

?Choose from gold, silver and platinum

?Pay no ongoing fees

Start mining at your pace today. Learn more and view IMPORTANT DISCLOSURES at https://www.everbank.com/investing/metals/unallocated?referid=11808. Or call 800.926.4922.

EverBank is an Equal Housing Lender

......................................................

In This Issue...

* April surplus

* Dollar tops all

* Aussie falls below parity

* Will the yen remain weaker than 100

And, Now, Today's Pfennig For Your Thoughts!

The dollar kept going and going...

Good day...and welcome to Monday morning. I'll be taking you through the first half of the week while speaking engagements take both Chuck and Chris out of town. It was a busy weekend so it was a little tough to get the wheels spinning for me this morning, but what at first looked to be a washout actually turned into chamber of commerce type of weather. Well, there is plenty to talk about so let's jump right in.

The dollar buying that Chuck was talking about on Friday remained in place all day long and left no stone unturned. The stock market was just about the only thing to turn in a positive return as every major currency went into the weekend underwater. The more people that I speak with, the more I hear about how they are going all in on the equity market. I certainly understand the temptation since it has been doing well and its pretty much the only thing everyone is talking about on tv, but in my opinion, this type of scenario can be telling. I usually keep an attentive head when the one way street mentality begins to boil over.

Chuck sent me some words, so let's take a look. OK...I've been talking a lot recently about how it seems we just have this axe to grind to revisit the problems of the financial meltdown...So there I was on Friday, reading stuff, and I came across this story in the WSJ, titled: Investors Rediscovering Margin Debt...and it goes like this: "driven by a combination of rising stock values and rock bottom interest rates, margin debt is increasing." It goes on to say..."Small investors are borrowing against their portfolios at a rapid clip."

So...did I ever tell you about my time, many years ago, as the head of the margin dept at Stifel Nicolaus? Oh, I remember those days like they happened just a few years ago. I remember having to call people and tell them they either need to fund their account immediately, or have the account liquidated, which would have resulted in huge losses, and a negative balance on their account. Those same calls had to be made in 2007 & 2008, folks, as stock prices crashed...And when the house of cards that is the stock market right now, collapses, it will be déjà vu all over again...And these people can't look to the Gov't to bail them out...Oh, they'll be looking, but no bailout will follow...I'm reminded of a song by Jethro Tull...the lyrics go like this: We'll go walking out. While others shout of war's disaster. Oh, we won't give in, Let's go living in the past.

Now...back to Mike!

Thank again Chuck. This is where diversification and not keeping all or most of your eggs in one basket comes into play.

Moving on to US economic data, Friday brought us only one report with the April monthly budget statement. As expected, we saw the largest surplus since April 2008 as the tax payments came rolling in. As Chuck pointed out on Friday, this isn't going to be the start of a new trend so there's no need to spend much time on this. It is, however, going to be a busy one in the data department as our plate will be full for most of the week. While the sheer number of reports are limited today, we do have one that packs a punch with the April retail sales numbers.

If you recall, the March results were disappointing as they fell 0.4% and was the biggest drop in nine months. The April figures aren't expected to show much in the way of improvement as the headline figure is forecast to fall 0.4%. McDonalds drops angus burger from menu as customers favor dollar menu was a headline from Bloomberg that really caught my attention. While there are several other reasons for the decision, I thought it played well with the idea that consumers are still strapped even though stocks are flying high and home prices continue to rise.

As we progress through the week, we'll get a plethora of April data that includes inflation reports, regional manufacturing, and leading indicators. In taking a glance over the various reports, the experts are calling for them to be a non-event as most are expected to match previous results. The housing numbers are expected to be a mixed bag as starts should show a moderation and permits to be higher. If expectations are correct, we shouldn't see too much that would rock the boat.

As I mentioned earlier, it was another rough day for the currency market on Friday as every currency we follow, including the Chinese renminbi, finished the day in negative territory. The dollar buying came to a crescendo late in the morning and ended the day in the same neighborhood as what Chuck posted in the currency roundup. Commodities got pounded as well but silver actually made a last minute run and turned in a 14 cent increase as I headed home for the weekend. At one point, silver was down $0.50 and knocking on the door of the $22 handle, but it was nice to see it buck the trend.

The Norwegian krone was the best performing major currency with a 0.25% loss on the day as the higher inflation report poured water over those calling for an imminent interest rate cut. The New Zealand dollar finished at the bottom of the barrel by losing over 1% as the central bank's intervention efforts paid off, at least for now. The rest of the currencies finished the day with between 0.50% and 1% losses, so not exactly a good way to end the week. Unless we see retail sales disappoint by a significant margin, there isn't much today that would turn the positive market sentiment about the US economy.

The Mexican peso fell nearly 1% as March industrial production decreased 4.9% and marked the biggest decline since 2009. The disappointing report fueled the fire for those in the rate cut camp, so traders were getting anxious and bailed on the day. Mexico usually isn't a destination for core investment funds, so a strong yield differential is needed in order to attract that hot money. I thought the bigger story wasn't about yield, but instead, the destination of most Mexican exports. That's right, the US buys about 80% of Mexican output so to me, this is just another indication the US economy may not be hitting on as many cylinders that some claim. I know this is old data, but its consistent with the slower March numbers in the US.

The Australian dollar did end up falling below parity for the first time in more than 10 months, but was trading just over $1.00 when I was packing by stuff to go home on Friday. The rate cut last week didn't help matters, but the central bank's reduction of both the inflation and growth outlook for the remainder of the year was the main culprit. The RBA said the outlook for non-mining business investment remains relatively weak over the next few months.

They went on to say an approaching peak in resource investment, the high level of the Aussie, and ongoing fiscal consolidation are all likely to weigh on growth over the next year or so, while at the same time, the low level of interest rates are helping to support demand. Australia still has a two speed economy as the mining regions show continued expansion while the manufacturers remain hampered by a strong currency. The central bank will also need to keep an eye on the housing market since prices have been on the rise, so any additional rate cuts will need to be studied carefully in order to avoid unintended consequences.

The Canadian dollar finished on the lower end of the Friday losses as Canadian employment, as expected, increased by 12,500. The rise was marked by the largest rise in manufacturing over the past 11 months, but a look under the hood suggests that things are still a little soft. Private companies cut about 20k jobs while govt hiring increased by 13,200, so most economists had a muted response. The Canadian finance minister was interviewed last week and when he was asked about exporters concern of the loonie, he said that most anticipated the currency around par and have based their business plans around that.

I saw another headline on Bloomberg that actually made me laugh out loud. It was titled Kuroda says BOJ easing isn't aimed at manipulating rate of yen and it basically said this policy maker thinks the yen is weakening on the back of the US recovery story and not a direct result from the Bank of Japan's actions. That's like saying pushing your gas pedal to the floor won't make your car go 100 mph. Anyway, the yen did fall past the 101 handle for the first time since April 2009 and Deutsche Bank seems to think the currency will stay on this side of 100 going forward.

In looking at a couple more currencies, the Swiss franc and South African rand finished toward the bottom of the pile. There really wasn't anything new from the Swiss, so it was a direct result of a stronger dollar. A Swiss policy maker was interviewed last weekend and said the cap remains essential and a change of course in the short term was highly unlikely. The rand was not only impacted by the fall in commodity prices, but also from their ongoing labor issues. There was yet another group of miners threatening to strike so just another example of instability. Not only that, but rumors are circulating that the central bank could soon cut rates again.

As I came in this morning, the dollar has retained its strengthening bias with both gold and silver down over 1%. In fact, gold is having its worst yearly start since 1982 as investors continue bailing on exchange traded products. At the same time, I saw a report that citizens in India, which represents the world's largest consumer, are lining up to buy gold at cheaper levels. Gold imports are expected to rise 47% in the second quarter compared to last year as lower prices entice more buyers. Other than that, we're just waiting for retail sales to come out in just a bit.

Then there was this...The Bond King himself, Bill Gross, said the bull market for bonds has probably ended as yields have reached a low and prices peaked. He's quoted as saying that you need to look at an amalgamation of Treasuries, mortgages, as well as corporate and not just Treasuries. He went on to say measures on that basis, 4/29/2013 has been the price high and yield low up to this point. I thought he summed the overall picture nicely as he said current policies come with cost, even as they magically float asset prices higher. Negative real interest rates, inflation, currency devaluation, capital controls, and outright defaults are among the costs or haircuts from global central banks' unprecedented monetary stimulus.

To recap...The dollar buying bias remained intact all day long and the equity market was just about the only thing in positive territory on Friday. The April monthly budget came in at the largest surplus in 5 years as tax receipts were making their annual flight. There will be plenty of economic data to look at this week starting with retail sales this morning. There was not a single currency in positive territory on Friday and commodities got smacked around as well. The yen traded into the 101 handle and the Australian dollar fell below parity for the first time in 10 months.

Currencies today 5/13/13. American Style: A$ $.9976, kiwi .8291, C$ .9892, euro 1.2984, sterling 1.5372, Swiss $1.0466, European Style: rand 9.1106, krone 5.8041, SEK 6.5962, forint 226.27, zloty 3.1996, koruna 19.8735, RUB 31.31, yen 101.58, sing 1.2398, HKD 7.7614, INR 54.76, China 6.2072, pesos 12.1117, BRL 2.0204, Dollar Index 83.13, Oil $95.17, 10-year 1.89%, Silver $23.68, and Gold $1,431.82

That's it for today...Hopefully you were able to enjoy the weekend and wish that mother in your life a happy Mother's Day. The weekend was filled with work and running around so there wasn't much relaxing going on but I was able to see the Cards beat the Rockies on Friday night. Unfortunately, our St. Louis Blues got knocked out of the playoffs on Friday night as well, so my playoff beard is no more. I still can't believe Memorial Day is right around the corner since it seems like yesterday we were doing the countdown to 2013. It's shaping up to be a busy week as we have some visitors to the office and a short desk. So on that note, it's time to get Monday morning started. Until tomorrow, Have a Great Day!

Mike Meyer
Assistant Vice President
EverBank World Markets
1-800-926-4922
1-314-647-3837