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* Fed cuts rates 50 BPS! * Currencies rally Big! * 3rd QTR GDP to go negative? * I.O.U.S.A. ** Heading Towards Zero... Good day... And a Tub Thumpin' Thursday to you! It certainly was a Tub Thumpin' Wednesday for the currencies, foreign stocks, commodities, and the Philadelphia Phillies! This by no means that the deep dense fog that has hung over the markets for 3 months has lifted for good... It did, however, lift for one day, and what a day it was! Oh, and the Fed did indeedly do cut their Fed Funds rate to 1%, which works out great since Fed Funds had been trading at 1% anyway! I had a reported from Dow Jones call me a few minutes after the rate cut and ask me my opinion on what the dollar was doing, which at the time was rallying back a bit... I said it looked like a classic case of buy the rumor sell the fact, that enough speculators were pushing the dollar lower ahead of the rate cut in hopes that a larger cut would be made. That, however, was not the case, and the dollar rallied... But only for about 20 minutes, and then it took a rid on the slippery slope, with the euro pushing to the 1.29 handle as I left for the day....

* Bernanke gets help opening the spigot... * Euro and Pound rally... * Yen to continue to benefit from carry reversals...* Aussie $ rallies... ** Fed floods the markets with US$... Good day...and happy Columbus day! This is an official bank holiday here in the states, so all of the banks are closed, but the stock markets are open. We will have a half day here on the desk to try and catch up with all of the work which has been piling up the past few weeks. The phones are turned off, since it is an official bank holiday, but we will be checking messages and try to get back to everyone as quickly as possible. It is a very unusual holiday, as the banks are all closed with no funds transfers possible, but the stock markets are open. Currency desks are lightly staffed, so we will have to really work to get the trades done this morning. These strange holidays usually can lead to some real market volatility, and with today will probably be another rollercoaster. In an all out effort to ease the credit freeze, the Federal Reserve recruited help from the ECB, Bank of England, and the Swiss central bank to flood the market with US$. These central banks will auction unlimited dollar funds with maturities of seven days, 28 days, and 84 days at a fixed interest rate. This move is unprecedented, as all previous dollar swaps were capped at a maximum amount while these auctions will be for unlimited funds....

* Currencies see some healing... * $1 Trillion and counting... * Gold and Silver rebound! * The Currency Capitalist... ** Goldman and Morgan Stanley Are Now Banks! Good day... And a Marvelous Monday to you! Someone along the road last week stopped by to tell me that I was too "Cheery" each morning with my salutations! He laughed, because of course he was kidding... But as I told him... If you're told what I was told last summer, each and every day is a day to be cheery about, no matter what's going on in the markets! Well... That was quite the trip last week, 3 cities in one week... In October I do 5 cities in 10 days... And then of course we had the goings on of last week... I really was upset and angry last week when I sent those notes to Chris for Friday's Pfennig. Our Gov't has spent 100's of Billions of dollars, and looking to spend more to avert a crisis... Yes, it was a Crisis, and something had to be done, but the way we did it, wreaks of socialism... My good friend, John Mauldin, whom I spent some time with last Friday, said, "I would sure like to see some regulation in Credit Default Swaps for all the money we spent!"...

* The euro runs into a summer storm... * Plosser wants higher rates... Yeah, right! * Aussie dollar strength to return... * Canadian inflation pops higher than expected! ** A Perfect Storm... Good day... And a Wonderful Wednesday to you! A great day yesterday, as I was able to meet up with old friends, readers, and well wishers... So many people were just glad to see me here! I told them it was good to be seen! Looks like the oil rigs dodged a bullet with Dolly in the Gulf Coast, and that's a good thing! But Dolly will still hit South Padre Island today, please keep that in your thoughts today... Well... You know how I explained on a couple of occasions in the past couple of weeks, a Perfect Storm for the dollar? Well, those never materialized due to a number of reasons... Yesterday, we finally got that Perfect Storm, but it wasn't for the dollar... You know those Mid-Western summer storms, when in the middle of the day, it turns pitch-black, and the trees all begin bowing from the wind, and then the rain comes down hard? Well, that's much like what happened yesterday with the euro... Here's the skinny......

* Mexico's rate goes higher! * A 100 Billion dollar note? * Euro rates to go higher? * Oil's sell off might be short-lived... ** Taking On Risk Again! Good day... And a Marvelous Monday to you! All my bags are packed, I'm ready to go, the taxi's waiting, he's blowing his horn... Yes, I'm off to Vancouver this morning... This becomes a labor of love for me especially today, with Chris taking off the same week I'm in Vancouver, I'm writing the Pfennig on my way to the airport! Graham Nash wrote a song about that... But I won't go there after the intro! Oh, what the heck! Just a song before I go... This will be short-n-sweet this morning, as I've got to get to the airport! Friday, saw the currencies range bound once again, as the data cupboard was empty. And... We didn't have any major losses print, or we didn't have any news at all about all the rot on the U.S. economy's vine. The Biggest mover was... Drum roll please... The Mexican peso! Yes, the Mexican peso outperformed all other currencies last week, reaching a 5-year high VS the dollar after the Mexican Central Bank raised interest rates 1/4% (25 BPS) to 8%, pushing the peso to its highest level VS the dollar since 2003!...

* The U.S. economy in a wreck! * More problems to come... * Funky accounting at the Fed... * SNB leaves rates unchanged... **Paulson Speaks With A "Double Tongue" - Good day... And a Tub Thumpin' Thursday to you! I was alone last night, and decided to write... Oh Boy! Are you, dear reader, in trouble when I begin writing at night for the next morning! My Cardinals were losing again, so my attention turned to putting down all these thoughts that keep coming into my head... Like Michael Keaton in Night Shift (what a great movie!) I need a recorder to put all these thoughts down... Like... Feed the mayo to the tuna! OK... Front and Center this morning, the euro's rally that went on all day yesterday and into the early Asian session (all the way to 1.5580) ended this morning... Someone, somewhere decided that the U.S. will be able to squeeze by this slowdown... Unfortunately, I don't agree! I see the U.S. being involved with the multi-car accident on the highway... But as Pfennig readers you already know that... However, instead of just hearing from me all the time about this meltdown of the U.S. economy, let's hear from an organization that tracks these things......

* TIC's look funny... * Germany's ZEW is weaker... * A note from the Washington Post! * Tons of data today... **Calling Out The Fed... Good day... And a Terrific Tuesday to you! Well... Someone from the Washington Post is a Pfennig Reader (I think!), as there was a great article in the paper calling out the Fed on their "rate hike" rhetoric... I'll give you snippets of that, and a snippet from my friend, the Mogambo Guru, along with the usual currency talk, on this Terrific Tuesday... Ready, set, let's go! Front and Center this morning is the dollar getting sold all day yesterday, as the euro recovered all the way to 1.5515 in the overnight markets. Unfortunately, the single unit was stopped in its rally tracks by an awful printing of German Investor Confidence, as measured by the think tank ZEW... German Investor Confidence dropped to the lowest level in 15 years this month, as rising inflation is eating away at the economy. I don't expect this report to put too much a dent in the single unit's performance today, but for now it has slipped back below 1.55......

* Questioning the Fed's moves... * Euros slow down... * Aussie hits 25-year high... * Oil hits $135!...