The Dow Jones industrial average moved up 132 points on Tuesday and all major indicators rose more than 1% as the Australian central bank’s decision to raise interest rates boosted optimism about the world economy.   Investors' show of confidence ahead of a flood of corporate earnings reports came as Australia became the first major country to raise interest rates since the onset of the financial crisis last year.  The move signals that policymakers see that country's economy as strong enough to withstand higher borrowing costs. That touched off hopes that other economies might also be growing.

Australia's decision dented demand for the U.S. dollar, which, in turn, raised commodities prices.  US energy and materials stocks moved up, oil also rose, and gold reached a record high.  Stock investors cheered the drop in the dollar because it boosts corporate profits by making U.S. goods cheaper for overseas buyers.

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This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy.

• Michael Ehrmann and Panagiota Tzamourani (European Central Bank): Memories of high inflation, September 2009. Inflation has been well contained over the last decades in most industrialized countries. This implies, however, that memories of high inflation are likely to fade, because over time larger parts of the population have never experienced high inflation, whereas those who have might forget. This paper tests whether memories of high inflation affect agents’ preferences about the importance attached to price stability, using a large database covering over 52,000 survey responses from 23 countries over the years 1981-2000. It finds that memories of hyperinflation are there to last, whereas those of less drastic inflation experiences tend to erode after around 10 to 15 years. The recent decline in

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Currencies rally on Retail Sales! China likes investments in Canada…Big Ben the “inflation fighter”…Gold climbs to $1,018! And Now… Today’s Pfennig!

Good day… And a Wonderful Wednesday to you! Good news for me this morning, the pain in my left knee has subsided… Now, If I could just get that swelling to go down, I’d be in tall cotton! This has been quite the ordeal on the old Pfennig writer, and one that I will be glad to put in the rear view mirror!

Well… When I turned on the currency screens this morning, the euro was trading with a 1.47 handle! WOW! It just skipped to my Lou right through the 1.46 handle, eh? It began yesterday afternoon, the dollar was getting sold on the news of a strong Retail Sales figure, more on that in

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For Immediate Release

Chicago, IL – July 27, 2009 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Exxon Mobil (XOM), Chevron (CVX), Travelers Companies (TRV), Verizon (VZ), Walt Disney (DIS), Apache (APA), Corning (GLW), Life Technologies (LIFE) and Western Digital (WDC). To see more earnings analysis, visit http://at.zacks.com/?id=3207.

Every day, Zacks.com makes 4 stock picks available, free of charge. To see them, go to http://at.zacks.com/?id=5612.

This Week's Events

Nearly 750 companies will report, of which 144 are in the S&P 500. Dow components include Exxon Mobil (XOM), Chevron (CVX), Travelers Companies (TRV), Verizon (VZ) and Walt Disney (DIS).

The energy sector will be prominent with 57 oil and gas firms releasing

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The markets had a good day as all three major indexes were up over 2%, with the Dow up 2.08% to finish at 8472.40.  The NASDAQ and S&P were up 2.08% and 2.14% respectively, closing at 1829.54 and 920.26.  The 10-year saw price climb over a dollar as the yield ended at 3.544%.  Crude oil saw prices rise, settling at $70.23, with August gold also seeing prices head up as the dollar weakens, settling at $939.50. 

American International Group [AIG: 1.46, 0.00 (0.00%)] and the Federal Reserve Board of New York agreed that AIG can repay $25 billion that they owe the New York Reserve through initial public offerings of the two of its international life insurance units.  AIG will put equity from American Life Insurance Co. and American International Assurance Co. into vehicles and receive preferred and common interest in exchange.  AIG will hold the common interest while

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I found this by chance on CNN. It’s just plain scary to me. What do you think? Adam Troubled ASSET RELIEF PROGRAM Financial rescue plan aimed at restoring liquidity to the financial markets Program Committed Invested Description American International Group * See complete AIG bailout below $70 billion $69.8 billion $40 billion in preferred shares were converted to so-called non-cumulative shares that more closely resemble common stock. Treasury later offered another $30 billion in preferred shares for up to 5 years, in return for a 10% dividend. AIG: Where your money is going Asset Guarantee Program Citigroup Bank of America $12.5 billion $5 billion $7.5 billion $5 billion $5 billion $0 Funds set aside to backstop potential losses to government from Citigroup and Bank of America loans. Auto Supplier Support Program GM Supplier Receivables Chrysler Receivables $5 billion $3.5 billion $1.5 billion $5 billion $3.5 billion $1.5 billion Program to help stabilize ...

Banks aren’t getting out of the TARP as easy as they got in. According to Bloomberg, the feds have demanded that banks “raise specific amounts of new capital before repaying taxpayer funds, applying a more stringent assessment than the stress tests in May.”

JPMorgan Chase & Co. and American Express Co. were told they need to boost common equity, less than four weeks after being informed they had enough to withstand a deeper economic slump. Morgan Stanley was directed to raise more funds after already selling stock to cover its stress-test shortfall. One firm was told June 1, people with direct knowledge said.

This means two things. 1) That the government’s stress tests were indeed a sham designed to coax investors back into bank stocks. 2) That the government expects more pain for the banking sector and isn’t

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For Immediate Release

Chicago, IL - June 1, 2009 - Zacks.com releases the list of companies likely to issue earnings surprises. This week's list includes Shanda Interactive (SNDA) and Layne Christensen (LAYN). To see more earnings analysis, visit http://at.zacks.com/?id=3207.

Every day, Zacks.com makes 4 stock picks available, free of charge. To see them, go to http://at.zacks.com/?id=3567.

The Week's Events

Ciena (CIEN) is the only S&P 500 (SPX) member reporting this week. Forecasts call for the company to have lost 15 cents per share last quarter.

Joining CIEN will be 73 other companies.

The light earnings calendar will make way for a fairly packed economic schedule. We'll get the latest ISM surveys, more housing data and May employment numbers.

Monday: May ISM manufacturing survey, April construction spending, April personal income and spending Tuesday: April pending home sales, May auto sales Wednesday: ...

Ciena (

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By Peter D. Schiff
Guest Columnist
Money Morning

[Editor’s Note: Peter D. Schiff, Euro Pacific Capital Inc.’s president and chief global strategist, is a well-known author and commentator, and is a periodic contributor to Money Morning. Schiff is the author of two New York Times best sellers: “The Little Book of Bull Moves in Bear Markets,” and “How to Profit from the Coming Economic Collapse.” For a more-detailed analysis of the nation’s financial problems, and the inherent dangers that these problems pose for both the U.S. economy and for dollar-denominated investments, click here to download Euro Pacific’s new financial-research report, “The Collapsing Dollar: The Powerful Case for Investing in Foreign Securities.”

In the midst of an ongoing financial crisis that’s eradicated trillions of dollars in shareholder wealth, the profit search facing U.S. investors is tougher than ever. The uncertainty surrounding the economic-stimulus and …