That is no doubt what Fabian Cancellara is saying to his team car as the euro is hitting a high against the dollar. Or maybe not since Cancellara is Swiss.But the euro is hitting a high as rates move down today. This has been an ongoing theme for a while and I believe will persist for an extended period.
Even the sickly ISK hasn't been so sickly as the Icelandic is stronger than it has been for quite a long time except for two brief exceptions in 2005.
I think any hint of rate cuts will really take a further bite out of the dollar. That may seem very obvious but I do not think there was ever chance of another hike in this cycle. I think it has always been when will the Fed cut. If that turns out to be correct it will have portfolio implications along the lines of what I have been writing about for a while which is buy more foreign stocks.
I do not think this will devolve into rioting in the streets as some others do.
7 comments:
Roger, you are too sensical.
Rioting in the streets is a much better story.
For what its worth, I am hoping Helicopter Ben will shed some light on Fed thinking this afternoon. I expect no Fed action the rest of the year, but then I also expect to be wrong quite often and I make sure my portfolio can withstand those occasions.
Roger,
With all the doping scandals...how can you even watch the Tour? Or even get excited about cycling events?
It now rates with WWE in my book...
Sorry, just my opinion....
Linda,
I watch for three things the action, the scenery and I think Phil and Paul are very funny to listen to. Those three in no particular order.
While this is far from noble; assuming all of them are doped up one way or another, so what. Its like a steroid weightlifitng contest, no juice they all bench 450, juiced up they all bench more.
The nature of the tour is that there is nothing sacred any of the numbers or times so if they all go faster, I don't really care.
Far from noble, I admit.
I wonder if Linda watches either baseball or football? Can you say BALCO?! LOL!
And I agree that for at least the next few years the money will be made in foreign stocks and in some high yielding US stocks.
Roger: I have to wonder out loud (dangerous thing that is!) that if there is a circumstance that causes the Fed to cut (meaning the Am. Consumer is caught in the vortex of a toilet flush) then that cirumstance will have negative implications for the foreign markets as well.
I'm curious as to the Asian markets' response to our market performance/news of today. If they shrug off today's dismal news, then we may bounce tomorrow. If they do not, I think that we may have another down day. But I'm frequently wrong, and I say none of this emphatically.
I would have preferred to say "with emphaticism", but alas it is not a word. I think that it should be. Emphaticism has a nice ring to it.
It seems to me that we are concretizing (yes, it is a word) some of the fears that have swirling around (sub-prime, consumer, inflation, homebuilders...).
Even if rates are increased...seemingly less likely given Bernake's latest commentary...but if, could the usd still weaken? Shades of stagflation in the wings that could cause this perception? Roger or Lisa, if you're following this...how probable is this scenario which typically is advocated by die hard gold bugs and I don't want to get that rigid in my thinking. But, I do want to be flexible enough to be prepared.
Rate hike will likely be unnecessary with inflation moderating. Continued threat of a hike will persist until inflation is actually under control.
Rate cut unlikely unless equities tank, which actually seems inevitable it is just a matter of when. Unless of course you no longer believe in business cycles.
When equities tank the dollar will go UP. There will still be a rush to safety to the US, Euro, Pound, etc. from secondary markets. Everyone talks about 2050 when China will be a huge market and it is true, but in todays world a rush to safety will mean the dollar goes UP even if rates go down.
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