Buffett Books A Billion!
"Amazing isn't it? When Europeans feel that the economy isn't up to standards, they hunker down, and save. When we experienced a recession in 2002, what did we do? We went out and used our houses like ATM's and spent like there was no tomorrow!"
by Chuck Butler In This Issue… - A Nice Currency Rally!
- Buffett looks long term…
- Europeans hunker down…
- Aussie & Kiwi get on the love train!
--- Advertisement --- Not sure which currency is right for you? Visit the Currencies Research Center at www.everbank.com for handy research tools. Or, give the Everbank World Currency Desk a call at 800.926.4922. --------------------- And now…today's Pfennig! Buffett Books A Billion! Good day. Hope you all enjoyed that currency rally on Friday. In case you missed it, the Jobs Jamboree came out kicking some tail and taking names later, but the dollar got sold, and sold, and sold! The reason? Well, the markets were looking for something way over the wall of 225k. They thought, given the data this week that 300+ was in the cards! And when it wasn't it was just like when we saw the euro go down for no reason, but for short covering on the dollar. This move higher has caused a squeeze in short covering on the euro. And voila'! We had a euro rally! And it wasn't confined to the euro/dollar pair either. Pound sterling lifted to 1.9175, and kiwi soared over the 73-cent level! Japanese yen even got into the mix; although it has been sold again overnight…I'll get back to that in just a minute. But first, I need to talk about the report that came out on Friday evening regarding the 40% jump in Berkshire Hathaway's profits in the 4th quarter. Why does this concern us? Well, as I've been reporting here for over a year, Berkshire's Chairman, Warren Buffett has been buying currencies, and those currency holdings were a big part of that 30% jump in profit, or in dollar terms: $1.63 billion! The report also tells us that he's hasn't stopped with his dollar selling as Berkshire's total non-dollar holdings now tip the scales at $21.4 billion! Oh, and there was even a quote from Mr. Buffett, "Our country's trade practices are weighing down the dollar. The decline in its value has already been substantial, but is nevertheless likely to continue." Yes, he went onto quantify that "continue" as a "for the next few years." Amazing, isn't it that your humble scribe and Warren Buffet think along the same terms on this subject? Un-be-leave-a-bull! Okay, I need to get my boots out, it's getting deep in here! HAHAHAHA! I think this story on Berkshire Hathaway is very important, in that Mr. Buffett has made a choice to buy currencies and hold them for a long-term investment. Something that I adhere to, and if followed since the beginning of the weak dollar trend in Feb 2002, the returns would spin your head faster than Linda Blair's! The euro did see some selling and profit taking overnight after it was announced that Eurozone Retail Sales experienced a fall in February that marks the largest fall for this data in nine months. Amazing isn't it? When Europeans feel that the economy isn't up to standards, they hunker down, and save. When we experienced a recession in 2002, what did we do? We went out and used our houses like ATM's and spent like there was no tomorrow! Hey, it worked, right? There won't be consequences from that will there? HAHAHAHAHAHA! You and I know there will be down the road… My beautiful bride accompanied me on my trip to San Diego, and really laid the lumber to me yesterday, telling me that I've been wrong about the housing bubble in the United States. Of course I said, "Yes, dear," and proceeded to eat my breakfast! Okay, I'm still waving that housing bubble flag. Yes, maybe baby it won't happen in the Midwest…but from the prices of beach property I saw in a realtor's window in La Jolla, watch out California! But this too appears to be something down the road. So, how about that Aussie and kiwi? A week ago, there were so many scare stories being bandied about the Aussie dollar. And what did I tell you? That soon people would forget about them, and the Aussie and kiwi would get back on the rally tracks. Yes, people all over the world, join in, start a love train. I used to use this phrase in 1998, for Aussie and kiwi, and I'm digging it out of the back of the closet for a re-run! The data cupboard is fairly empty the early part of this week, with only Consumer Credit on the docket today, and little else until we get to Thursday and Friday, back to back, sort of like Pujols and Rolen! Yes, on Thursday we get the Monthly Budget Statement, and on Friday we get the Trade Balance, which I've stated should be renamed the Trade Deficit, then we wouldn't have to deal with minus signs in front of the number, everyone would know it was deficit, no minus signs necessary! In something that disturbs me, but apparently not the rest of the world, or markets - Consumer Credit is expected to rise in January to $5.1 billion! Don't get me started on this one… The Monthly Budget Statement is expected to come in at $98 billion for Feb. OUCH! And the Trade Deficit is expected to be $56.5 billion…double OUCH! The Twin Deficits front and center, and after Friday's data, I will continue to wonder why the markets, speculators, and investors don't see this as the reason the dollar should continue to get weaker and quit messing around with short dollar rallies on SIRT! On that note, I better get to the Big Finish! Currencies today: A$ .7915, kiwi .7350, C$ .8125, euro 1.3220, sterling 1.9160, Swiss .852, rand 5.878, krone 6.222, forint 183.10, zloty 2.9360, koruna 22.36, yen 104.90, baht 38.4, sing 1.63, pesos 11.03, and gold… $434.28 That's it for today. San Diego was a blast! A great crowd, and all new people to talk to. There were only a few "Pfennig Readers" in the crowd, so what I had to say, was brand-new to them! Thanks to Chris for filling in on the Pfennig, and Jennifer for trading in my absence. Now, I can't wait, two weeks, and I'm off to spring training! Have a great Monday and week! |
