caseyresearch.com / By Chuck Butler / December 7, 2012 2:01pm GMT
In This Issue.
*ECB & Bundesbank pull rug from under the euro.
*Relative calm over Eurozone is lifted, again.
*Sandy to affect jobs report.
*The debt ceiling revisited.
And, Now, Today’s Pfennig For Your Thoughts!
A Jobs Jamboree Friday!
Good day. And a Happy Friday to one and all! I have a couple of things to discuss front and center this morning that don’t have anything to do with currencies, commodities or economies. First, I want to apologize Big Time, for the error I made yesterday talking about the elimination of the penny and nickel. That turned out to be nothing but a hoax. Of course, we all know that the day is coming that those are eliminated, just not now. And then today is our first day of infamy. Pearl Harbor Day. If the movies that were made about that day are even close to what it was really like, I shudder. And then finally, today is also, EverBank Employee Appreciation Day. more on that in the Big Finish.
Well, I told you yesterday that the euro had been stuck in the mud for two days. But then along came the European Central Bank (ECB) meeting, which was nothing, really. but, then the statements began to spew out of the mouths of Euro-leaders. Geez Louise! What? The guys didn’t like the direction of the euro, so they decided to bash it with words? That’s the way it looks to me. And the euro took a quick ride on the slippery slope, losing 1- cent in value. and dragging all the other currencies down, was the call to order.
This morning, The Bundesbank (Germany’s Central Bank) announced that they were cutting their forecast for the German economic growth in 2013. The Bundesbank or Buba as I used to call them, “back in the day”, cut their 2013 growth forecast from 1.6% to .4%… That’s awful folks, and has caused another ½-cent loss in the euro this morning. Well, that and the surprise that came from the printing of October German Industrial Production, which fell -2.6% from September. This data is in exact opposites with the Factory Orders data I told you about yesterday, so the German economy is mixed for sure.
But one thing that looks to be the case for sure in Germany, is that the Eurozone’s largest economy is suffering right now. I read a story that talked about how the analyst didn’t think the Bundesbank was as negative as their growth rate forecast cut would indicate. Hmmm. OK. had to stop to sing along with John Waite’s song Midnight Rendezvous. That song will get your heart pumping in the morning! Ok, where was I? Oh, yeah, I was questioning the analyst that thought the Bundesbank was as negative as their growth rate forecast. What indicator would he use to say that? Well, the fact that Bundesbank is actually forecasting most of that cut early in the year, and a recovery late in 2013 and leads to strong growth in 2014. Ok. I’ll give him that!