U.S. Dollar At A Crossroads

Technically speaking, I believe that the U.S. dollar (Dollar Index – DXC) is in the process of moving higher as seen in the chart below.

Given that EUR/USD has been the most highly correlated pair with DXC in the last few days (it normally is anyways), I expect EUR/USD to fall lower towards 1.5404 and 1.5275 in the days ahead.

However, I found these comments from Deutsche Bank FX today rather interesting as it realtes to all asset markets and the U.S. economy in general.

“The ‘strong dollar policy’ has been empty rhetoric
during the George W. Bush years. Indeed, under no other presidency
has the US-currency lost more of its external value despite having an
illustrious string of Treasury Secretaries to utter this hollow phrase.
Some US politicians had talked about a ‘competitive dollar’ some
years ago. The current levels must represent the kind of value that
they had in mind because US export performance has been the one
redeeming feature of recent data releases. But now the Fed has
shown its hand. In a surprise move, Ben Bernanke talked about
monitoring FX developments and sent the euro skidding sharply lower.
We suspect that Bernanke’s comments, like those of other Fed
governors of late, is motivated by concern about rising US bond
yields. Bail-outs, whether for Bear Stearns or for US homeowners,
cost money. Tax hikes are not feasible; rebates are the order of the
day. So the US must borrow money – principally from abroad. The
latest Treasury auction did not go too well and overseas participation
was low. Ten-year yields might have topped 4 percent but this is not
going to attract foreigners if the dollar is in free fall. These high yields
are also problematic for borrowers. How can one hope to pick a
bottom for the housing market (still one of the main downside risks to
growth according to the Fed chief) if mortgage rates are on the rise?”

Are All Contractors Morons?

I gotta tell ya, if there is a business that is ripe for a top to bottom makeover it is that of the contractor. Where else can you find such poorly run businesses?

Let’s face it, the construction market is in the toilet – regardless of what the spin meisters at COBA tell you. That being said, you would think that contractors would be anxious to take on any new jobs. While I can tell that most contractors have more free time then they did a year or so ago, they still do not have the common business sense to follow-up up with phone calls, send out estimates or show up on time.

I called 6 contractors recently to have some deck and stone work done, while most of them were quick to get out to survey the job (cause most are not working), only 2 followed up with a quote while the other 6 seemingly vanished into thin air.

My Dad had a similar story with a landscaper. This particular landscaper took the time to distribute flyers for a special offer for a spring yard clean-up. The price was right so he called. Not only did the guy fail to show up, but when my Dad called him to find out what happened, he could not even get my Dad’s last name correct. My Dad, being a far more generous person than myself, allowed him to re-schedule for the next day. Guess what? He never showed. What a clown.

So, if there are some contractors out there that have keen business sense, or essentially, the ability to return a phone call, show up on time and provide a bid – Central Oregon is a fertile territory as far as I can tell.

Until that time, I will view all contractors with a healthy dose of skepticism.

Dollar Bears Back in Control

The daily chart of the Dollar Index (DXC) appears to have completed the nearly 2-month tortuous sideways chop/profit destroying mode.  Click link below for video.

http://www.aspentrading.com/video/may9.swf

Rodney Holmes

Drummers, here is what we all aspire to play like.