Solarbird (solarbird) wrote,
Solarbird
solarbird

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On the dollar

Good morning, Cascadia; good afternoon, points east.

I don't usually link to video, but this thesis laid out by Jim Rickards, Director of Market Intelligence for Omnis, a "scientific consulting firm" (says CNBC), on recent Fed commentary on interest rates - saying that they'll need to hike quickly when they hike and the decision will probably be based on nontraditional metrics - is interesting. Mr. Rickards says it's about managing the transition of the US dollar away from a global reserve currency and maintaining an orderly decline.

Also, you're seeing a lot of charts like this:


USD/CAD with 20/50/100wma


If the USD 20-week ma breaks the 100 week ma as decisively as it broke the 50-week, you're looking at a substantial move down, historically speaking. Really, the USD has fallen sharply over the last few months against everything; the Can$ is no exception. Yen charts aren't that much different, for example. The dollar is down a bit today, but is not in any screaming hurry. Oil is up, like you'd expect. So's gold, she said, with qualms.

Have a bunch of data - the economic calendar is busy this week:

Second-quarter (May-July) economic decline was revised up a bit, against expectations, to 0.7%. That's good, and stocks are higher on it. It's also a backward-looking indicator. More frontward-looking indicators include an entirely unexpected sharp decline in the Chicago PMI, back into recession territory. Mish has commentary here, Karl takes the topline numbers here. Inventories are up, which is normally good, but deliveries are down, which makes that actually kind of bad, and even the bad number artificially high. (But artificially high in a normal, non-manipulation way. This happens at inflection points.)

The ADP job report - a precursor to the official job report, measured differently by different people with different numbers - came out today, showing the private sector shed another 254,000 jobs last month. Marketwatch spins it as good, and noting it was better than last month, which showed "a revised 277,000 jobs... lost compared with the 298,000 originally reported." (And compare nonrevised to nonrevised, of course.) What they don't note, however, Bloomberg does: this 254,000 was much worse than consensus expectation of 200,000.

Second-quarter housing loan nonperformance-rates were really, really bad, as in worse in every category than any quarter in this recession, and reversing the improvements seen in first quarter. There's been a temporary lull in foreclosures (as previously mentioned). It's also important to note that over 50% of "rescued" mortgages - a small number to begin with - are already back in default. Longer-term numbers are worse, of course.

Here's one of the curious components of the stock rally: despite unemployment, slumping sales, and everything else we know, retail apparel stocks are back to pre-crash levels. Neat, huh?
Tags: economics
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