Hopes for a DOLLAR SAVING "FAKE RALLY" are fading.
For central bank action to work, it has to be "unexpected" to catch the speculators off gaurd. Also, there should to be some data points that are "spin-able" in favor of the dollar bulls. Not all of this macro economic gloom and doom!
With so much going wrong all at once, it's nearly impossible for central banks to get any traction for a much needed head fake dollar rally.
For that reason, I think the G-Man MUST GO 50 bp in December.
A 50 BP hike in rates WILL catch the dollar speculators off their gaurd.
THEN AND ONLY THEN, central banks can move to wipe out the dollar bear's positions.
STILL, THE CONSTANT NEGATIVITY FROM IRAQ AND WITH THE US & GLOBAL ECONOMY IS MAKING "DOLLAR SAVING" MORE DIFFICULT THIS TIME AROUND.
News that Snow is staying on as Secretary of Treasury was deemed to be "dollar negative" I didn't see it that way.
I thought perhaps, The Rovian White House considered replacing Snow, after all the other cabinet carnage, would be a sign of weakness, or confusion, or chaos about what to do next?
Retaining Snow, a sign of stability? Alas, Snow is not Rubin! And it's a little late for happy talk and "mantras" to work now.
Anyway, the market saw Snow as "more of the same" weak dollar notions.
Sorry Carl, it didn't work........ Maybe next time....? ....Nah. Not even then.
Finally, the news that Sistani has his new hand picked Shia government selected should be joyous for democracy-lovin' Dubya & Co.
At last, Iraq will have the democratic Shia Theocracy that it wants; at least in the South.
And the Northern Kurds, already a defacto break-away Nation, will have more US backing for de jure independence.
But did it cost 1000 American combat deaths to establish a MUSLIM THEOCRACY in Iraq? Well, that's how it looks....at this point.
But wait a minute.....a Muslim Theocracy is not what the Pentagon Likud went into Iraq to achieve.
Will democracy-lovin Dubya obey a New Shia Government in Iraq if they say: Leave Now! Lock Stock and Barrel! Just leave!
Hmmmm.......after the election, Americans could be fighting along side our new good old buddies the Sunnis! Save Sunni Minority Rights!
Anyway, with all this confused and amorphous geopolitical background.....?
IT'S NO WONDER GREENSPAN HAS LOST CONTROL!
Euroland seems amused by it all. And Japan is merely confused.
