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Earthquake Hits the Kiwi

Chuck Butler (July 15, 2009)

Wednesday, July 15, 2009

What to Expect Next Down Under…

By Chuck Butler Another All-Star Game, another win for the American League… I truly believed that with Tim Lincecum going for the National League that we would win this year. But that didn’t work out…

I did truly enjoy the game though, and got to experience it with sons, Andrew, and Alex, with Darling Daughter Dawn’s husband, Jerry. A truly memorable night…

The currencies slowly moved a bit higher yesterday, and the euro is back to 1.40 this morning. The move came as stocks rebounded some, after reports of a better than expected earnings report for Goldman Sachs.

Hmmm… Now, doesn’t that just tick you off a little? Just a couple months ago, Goldman changed to a Bank Holding Co., so it could take TARP money.

Then Goldman paid it back a month ago. Now, the company prints a Moon Shot profitable earnings report.

I guess I should be happy for them. Unfortunately, I smell a rat…

It’s as if the risk aversion crowd just took their dollars and yen and went home! They are nowhere to be found this morning! The euro is pushing toward 1.41 again, which lately has been a tough row to hoe for the euro. Every time it gets close to 1.41 or even past it, albeit briefly, it comes back… So, it will be interesting today to see if the euro can add to the overnight gains.

The negativity toward the U.S. dollar and the so-called green shoots is really building steam once again.

Speaking of green shoots, we saw Retail Sales for June yesterday.

The “experts” believed the report would print at a positive .4% gain, following up May’s .5% gain. And that’s exactly what it did! Just goes to show you that no matter how bad this recession/depression is and no matter how many people are unemployed consumers will still spend!

In New Zealand: An Earthquake and an Interest Rate Guarantee

Reserve Bank of New Zealand (RBNZ) Governor Bollard just gave a speech last night.

As far as I’m concerned, his speech pretty much drives the final nail in the New Zealand rate cut coffin. Bollard’s speech was titled, “Savings, Investment, Funding Markets Are Key to Recovery.“

In the speech, Bollard really made a point of expressing his fear of reigniting the housing market. Therefore, I was sure after reading the speech that the RBNZ will NOT cut rates further, since the governor fears reigniting the housing market!

And we all know those low interest rates ignite housing bubbles!

Meanwhile, there are reports this morning of a major earthquake hitting New Zealand… 7.8 magnitude.

Once again, currencies are the great “shock absorber” market, so we’ll see this quake hit the kiwi’s price in the short-term. But afterward, it would probably be a springboard for the currency, given the re-building needed.

Aussie dollars are back to 80-cents again this morning. I’m sure there were some moves from kiwi to Aussie on the earthquake news.
The Washington Post

That’s it for today… Back to the All-Star game last night: A great moment by our catcher, Yadier Molina, getting a two-out RBI hit. And some spectacular defense by all-world player, Albert Pujols. But that was after a first inning error. Ugh! Okay. It’s over… The All-Star week is over.

OK… Then let’s make this a Wonderful Wednesday!
Chuck Butler

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