Black Swan Capital

[B]Thursday 14 June 2007 6:00 a.m. EDT [/B]
[B]Key News[/B]

  •      [B]China[/B][B]'s industrial production rose 18.1 percent  in May[/B] from a year earlier, the National Bureau of Statistics said today,  after gaining 17.4 percent in April. (Bloomberg)
  •      [B]U.K.[/B][B] retail sales climbed[/B] 0.4 percent after  a 0.1 percent decline in April. (Bloomberg)
  •      Key  Reports Due (WSJ):[B]  [/B]

[B]8:30a.m. Initial Jobless Claims.[/B] Expected: +6K. Previous: -1K.
[B]8:30a.m. May Producer Price Index. [/B]Expected: +0.6%. Previous: +0.7%.
[B]8:30a.m. May PPI, Ex-Food And Energy.[/B] Previous: Unch.
[B]10:00a.m. DJ-BTMU Business Barometer.[/B] Previous: Unch.

“Before you embark on a journey of revenge, dig two graves.”


[B]FX Trading - Helen Keller Lives [/B][B][/B]

It is to laugh! This from Reuters yesterday after the US Treasury report that failed to label China as a currency manipulator:

"The US Treasury noted China’s currency was ‘undervalued,? but said it was ‘[U]unable to determine that China’s exchange rate policy was carried out for the purpose of preventing effective balance of payments adjustment or gaining unfair competitive advantage in international trade[/U].?

What a joke? It?s not even a question whether or not China manipulates its currency. The only question is whether or not a revaluation of the yuan is good for the “global” economy. US policy is effectively about the “global” economy, not necessarily what?s good for the US. Everyone is “global” now?don?t you know. I think we can all understand. Mr. Paulson and Co. know it?s not time to rock the boat when there?s $415 trillion of derivatives it the market, predicated on low volatility and smooth sailing in the “global” economy.

We all must bow down to the “global” economy and bend over to the mantra of “free trade.” No matter that China restricts all kinds of access to Western goods and services?and counterfeits the heck out of those it lets in. It?s “free trade” don?t you know. Yes, I know it?s impolite to criticize China for they are all goodness and light in the eyes of the intelligentsia who are already well ensconced with real asset there and have many other major deals pending. After all, it?s about the “global” economy and “free trade.”

Was news the US Treasury Helen Keller is alive and well and running the US Treasury a green light to sell yen? If China isn?t manipulating its currency, than any angst over the Japanese yen is completely unjustified. After all we know China builds massive reserves during its currency manipulation process. So much so that it has plenty left over to place with a key intelligentsia member named Blackstone?and maybe some others we don?t know about. There are no signs the Bank of Japan has entered the market for a very long time?it hasn?t needed too.

We noticed $-yen held very firm in the midst of some very heavy volatility last week. Did someone know then about Helen?s new role at Treasury? No?we?re sure nothing like that happens in this world where information flows freely?almost as freely as trade flows out of China.

Jack Crooks
Black Swan Capital