Aussie CPI Rises Above RBA Target.

* Dollar is weaker this morning.
* Canadian Fiscal Budget forecasts a Surplus!
* Japan prints 1st Trade Surplus since June 2012.
* A fun read regarding words we used to use .

And Now. Today’s A Pfennig For Your Thoughts.

Good day.. And a Wonderful Wednesday to you! Where have all the bats gone, long time passing. The “bats” I’m talking about are baseball bats, not the scary winged kind. And I’m talking about the fact that my beloved Cardinals have only three runs to show for their last two games. You won’t win many games only scoring 1.5 runs a game, that is unless you have a Bob Gibson, Sandy Koufax, Don Drysdale, or some other Hall of Famer that can pitch every game! I woke up an hour before my alarm was set to go off this morning, and couldn’t go back to sleep, but now that I’m here, I just want to lay my head down and go to sleep! UGH!

Well, the traders that were selling Aussie dollars (A$) yesterday because they thought it was a “given” that the Reserve Bank of Australia (RBA) would cut rates at their May meeting, had to eat those thoughts in the overnight sessions, as Aussie CPI (consumer inflation) hit an annual rate of 2.4%, which is above their 2% target rate for inflation. The 1st QTR CPI was bang on expectations at .6%… But that annualized rate will be a real road block if the RBA was thinking they would join the rest of the world and cut rates again in a couple of weeks. Sure the RBA could still cut rates, they are the gate keepers of the rates, but why would they? RBA Gov. Stevens said just the night before that the economy would determine whether there is a rate cut or not. So, stick to your word, Gov. Stevens.

This is where I wish the markets would get back to having the swagger they used to have, and when a Central Banker said something that turned out to be Hogwash, the markets would punish that currency, or bond market, etc. But not any longer. They have become big old soft, and squeezable Teddy Bears, who want everyone to like them. Oh, and the A$ is up nearly a full cent overnight on the CPI print.

Well, the other Big News from yesterday, as the Canadian Gov. Fiscal Budget. Remember that I told you yesterday that if by some miracle of bean counting, the Canadian Gov. was able to show a Budget Surplus, even with the price of Oil shock, you could pretty much point to the fact that there will be a federal election in the fall, and the current Gov. needs to show the people that their fiscal restraint since the financial meltdown has paid off, as this would be the first Surplus in 7 years. Well, traders don’t care how or why this happened, just that it happened, and therefore they have pushed the Canadian dollar / loonie higher by ½-cent overnight.

Governments like to forecast things, and there’s no brass ring when they get it right, or no trip to losersville when they get it wrong. For instance, last year, the Canadian Gov’t forecast that they would have a C$1.9 Billion Surplus in 2015. But the Surplus is only going to be C$1.4 Billion. But not to worry the Gov’t says that for the 2019/20 fiscal year, they will be booking a surplus of nearly C$ 5 Billion (C$4.8 Billion)! I read the report that explained all the components and how they reached this C$1.4 Billion surplus. I was going to go through it all, but then thought I would lose you all at the first set of components. Just know that it was some creative accounting, and now we have to see if it all comes true, which I doubt it will!

Al Stewart is playing his song: Time Passages on the iPod right now, what a beautiful song to listen to. This is one of those songs that I don’t sing along with, because I want to hear every note played, and every word.

OK. back to the letter. Well, looky there! Japan printed a Trade Surplus for March! This is the first Trade Surplus since June of 2012. But just here in the U.S. when we saw a huge drop in the Trade Deficit last month, it’s more of a story that the imports dropped by a huge amount, which is not a good sign for the economy. But then when was the last time Japan saw a good sign for their economy? And before you begin to think that PM Abe’s three arrows are beginning to work, you have to think again, because the exports only grew at 3.3%, which is the same rate they were growing when the Deficits began to print in June of 2012. I’ll just remind you that I say that Japan is a basket case, and even something that looks good on the outside isn’t good after all.

Well, the euro is carving out a smallish gain this morning, I guess getting one day closer to the cheese that binds with Greece is not stopping the euro this morning, slowing it down, probably, but not stopping it. Of course, as I’ve explained many a time in the past, this could really be reflective of dollar weakness more than anything. So, I’ll put it down to that, since there’s been no real data or news from the Eurozone, other than the Greek Finance Minister saying that Greece and its creditors are “Narrowing their differences”. Of course he could have been talking about what they were going to order for lunch. HA!

In other news from the Eurozone. The European Union’s regulators have charged Russia’s gas giant, Gazprom, with unfair pricing, and not “playing by EU rules”. As if Russia probably gives a hoot.. In fact if I were the head of Gazprom, I would say, fine, play by this rule. We’re not sending you anymore gas, we have new markets in China and the rest of Asia that will make up the difference.” But, I’m not, but I sure would like to play one on TV! HAHAHA! Remember the old song: Take this job and shove it? I’m sure a variation of that could come into play here. If I were the European Union I would be treading carefully here. I guess the European Union is feeling their oats after announcing they would charge Google with antitrust violations.. Let’s see. Google and Russia. Hmmm.

Well, the Russian ruble is back on the rally tracks today, after getting whacked the last couple of days on the silly calls by global banks for the CBR (Central Bank of Russia) to stem the rally in the ruble, for it had gone too far, too fast. But as I reminded everyone yesterday. The ruble, while stronger than it was in December is still a long way from where it was before the conflict with Ukraine started last spring, and the economic sanctions were placed on them for defending their border. That level was 35, and like I said yesterday, I don’t recall anyone saying that the ruble was too strong then, so why now at 53? (Remember, the ruble is a European Priced currency so as the price drops, the greater the return in dollars)

Chris sent me a note yesterday, that I was already reading, and I thought, well, this is probably something I should talk about, you know, an omen. It was a research piece from Morgan Stanley regarding the ruble. They first went through the risks, of more oil price shocks, and that there are 6 more meetings by the CBR this year, that could produce much lower rates. And then they went through they went through the good things that could help the ruble rise. (now don’t think they read the Pfennig just because these are the same things I keep pointing out to you) Higher Oil prices, the peace in Ukraine holding, and the fact that some are still bearish. I would add to that, the possibility of sanctions being removed would be a HUGE lift for the Russian economy and the ruble.

So. Did you see or hear that U.S. Regulators are working on a list of “too big to fail” institutions, and if you end up on that list, you’ll have to pony up more capital to cover potential losses during a crisis? Well the Bank of England (BOE) seems to think that the U.S. regulators have forgotten a HUGE institution. Warren Buffet’s reinsurance business is not on the list. Well, right now reinsurance firms – companies that provide insurance for insurers have avoided this designation so far. I find it interesting that the BOE decided to point out this case of being overlooked. Don’t you? What has Warren Buffet ever done to the BOE?

I got some of the info for that last piece from the 5-Minute Forecast, and MarketWatch. While I’m talking about the 5-Minute Forecast. they ran a story yesterday that I had seen earlier in the day, and thought, “I wonder if I should write about that?” When the “5” wrote about it, I said, “then it’s settled, if it’s good enough for the “5”, it’s good enough for the Pfennig! And the piece I’m talking about is the news that Jon Corzine, who was the head of MF Global (remember them? And the mysterious case of missing client funds?) is looking to launch a hedge fund. This was in the Wall Street Journal (WSJ).

So, did you hear the latest from a Fed member? Boston Fed president Rosengren has this to say about rate hikes the other day: “we’re not there yet, but hopefully over the course of this year we will be.” Hmmm. And then after that was said, Fed Dallas president, Dudley, added that “economic performance will determine when the Fed Reserve finally raises rates.” Well, if that’s the case, then we now know with 100% certainty that rates will not be hiked in June for the economic performance has not been good.

The U.S. Data Cupboard has Existing Home Sales for March today, and that’s about it. It has been like pulling teeth to get some U.S. Data this week! Tomorrow will begin to pick up the pace, and then Friday will begin a week of data prints that leads to the Jobs Jamboree. But that’s next week.

Well, Gold, after two days of trading below $1,200 finally moved above the figure yesterday, but only be a couple of bucks. And this morning, when I came in Gold was up a couple more bucks but now it has turned negative on the day. without data, Gold also lost without data. And like I said yesterday, no news is good news for the U.S. economy and dollar.

Ok.. no errors or faux pas yesterday, whew! I have a special treat this morning, as the legal team that reviews the Pfennig before it can be sent out, is here in person today.

To recap. Aussie CPI printed at a 2.4% annual rate last night, and it sent the rate cut bugs back into the wall boards, and has pushed the A$ to nearly a full cent rally this morning. the Canadian fiscal budget did show a Budget Surplus for the fiscal year. I told you it would be given the federal election later this year. The C$ / loonie is up about ½-cent. Japan prints their first Monthly Trade Surplus since June 2012, but it’s not a good thing in the end. Who’s reading the Pfennig? Maybe the research folks at Morgan Stanley? Nah.. They don’t need me to figure this stuff out!

Currencies today 4/22/15.. American Style: A$ .7785, kiwi .7715, C$ .8170, euro 1.0755, sterling 1.5075, Swiss $1.0445, . European Style: rand 12.1295, krone 7.8440, SEK 8.6410, forint 279.25, zloty 3.7220, koruna 25.5285, RUB 52.80, yen 119.60, sing 1.3455, HKD 7.7500, INR 62.82, China 6.1290, pesos 15.41, BRL 3.0210, Dollar Index 97.74, Oil $56.12, 10-year 1.89%, Silver $16.84, Platinum $1,142.25, Palladium $ 767.50, and Gold. $1,200.42

For What It’s Worth. This is quite long but it’s a fun read so I hope you stick with it to the end.

by Richard Lederer
About a month ago, I illuminated old expressions that have become obsolete because of the inexorable march of technology. These phrases included don’t touch that dial, carbon copy, you sound like a broken record and hung out to dry. A bevy of readers have asked me to shine light on more faded words and expressions, and I am happy to oblige:

Back in the olden days we had a lot of moxie. We’d put on our best bib and tucker, and straighten up and fly right. Hubba-hubba! We’d cut a rug in some juke joint and then go necking and petting and smooching and spooning and billing and cooing and pitching woo in hot rods and jalopies in some passion pit or lovers’ lane. Heavens to Betsy! Gee whillikers! Jumpin’ Jehoshaphat! Holy moley! We were in like Flynn and living the life of Riley, and even a regular guy couldn’t accuse us of being a knucklehead, a nincompoop or a pill. Not for all the tea in China!

Back in the olden days, life used to be ‘cool’, or swell, but when’s the last time anything was swell? Swell has gone the way of beehives, pageboys and the D.A.; of spats, knickers, fedoras, poodle skirts, saddle shoes and pedal pushers. Oh, my aching back. Kilroy was here, but he isn’t anymore.

Like Washington Irving’s Rip Van Winkle and Kurt Vonnegut’s Billy Pilgrim, we have become unstuck in time. We wake up from what surely has been just a short nap, and before we can say, “I’ll be a monkey’s uncle!” or “This is a fine kettle of fish!” we discover that the words we grew up with, the words that seemed omnipresent as oxygen, have vanished with scarcely a notice from our tongues and our pens and our keyboards.

Poof, poof, poof go the words of our youth, the words we’ve left behind. We blink, and they’re gone, evanesced from the landscape and wordscape of our perception, like Mickey Mouse wristwatches, hula hoops, skate keys, candy cigarettes, little wax bottles of colored sugar water and an organ grinder’s monkey.

Where have all those phrases gone? Long time passing. Where have all those phrases gone? Long time ago: Pshaw. The milkman did it. Think about the starving Armenians. Bigger than a bread box. Banned in Boston. The very idea! It’s your nickel. Don’t forget to pull the chain. Knee high to a grasshopper. Turn-of-the-century. Iron curtain. Domino theory. Fail safe. Civil defense. Fiddlesticks! You look like the wreck of the Hesperus. Cooties. Going like sixty. I’ll see you in the funny papers. Don’t take any wooden nickels. Heavens to Murgatroid! And away-a-ay we go!

Oh, my stars and garters! It turns out there are more of these lost words and expressions than Carter had liver pills.

This can be disturbing stuff, this winking out of the words of our youth, these words that lodge in our heart’s deep core. But just as one never steps into the same river twice, one cannot step into the same language twice. Even as one enters, words are swept downstream into the past, forever making a different river.

We of a certain age have been blessed to live in changeful times. For a child each new word is like a shiny toy, a toy that has no age. We at the other end of the chronological arc have the advantage of remembering there are words that once did not exist and there were words that once strutted their hour upon the earthly stage and now are heard no more, except in our collective memory. It’s one of the greatest advantages of aging. We can have archaic and eat it, too.  See ya later, alligator!

Chuck again. Now wasn’t that fun? I still use a lot of those sayings, in fact just a couple of months ago, I used “heavens to murgatroid” in a Sunday Pfennig. But did we really say some of that stuff? Yes we did!

That’s it for today. It’s Earth Day today.. Right arm, farm out, and out of state! Have I told you lately how much I totally dislike having to deal with insurance companies? You can imagine with my cancer and other ailments, how much I have to fight with insurance companies all the time. They just don’t get it, do they? You have someone that’s fighting for his life and they make things difficult for you when instead they should be finding ways to help make things easier for you! Sorry for that vent but I’m having to deal with the stupid insurance company again over my chemo medicine. What? Would they rather I died? Then they wouldn’t have to pay for the medicine! That’s what I think every time I have to go to battle with them! Well, to calm me down America is playing their song, Tin Man, on the iPod right now, and it’s doing the trick! That’s followed by the Rolling Stones song: Wild Horses. So, now I’m back in a mellow mood that is until I have to get on the phone again with the insurance company today! I went to son Andrew’s / coach of the Lindbergh Water Polo team game last night, and ran into a colleague who has a son playing on the opposing team. Andrew has a powerhouse team this year, and won a tournament this past weekend. Little Braden Charles was at the game and hung out with me for most of the game. He’s so darn cute! And with that, I’ll get you going on your way today, and hope you have a wonderful Wednesday!

Chuck Butler
Managing Director
EverBank Global Markets
Editor of A Pfennig For Your Thoughts