What the current deficit does is make the dollar vulnerable. It means we could see a vicious cycle, where a declining dollar makes U.S. assets less attractive to foreign investors, which weakens our assets further, which puts further pressure on the dollar.

I think a lot of gloom still exists about the size of the deficit and the market is punishing the dollar for that.

Everyone is waiting for an end to the tightening cycle, so that's why the dollar is vulnerable.

The bin Laden tape has led to some dollar selling. The tape fits with the view of those who think the U.S. economy is at risk of falling into a sinkhole.

This shows our big reliance on imports and foreign capital. As the dollar weakens, that becomes a more and more expensive habit. It makes our imports more expensive, makes the trade deficit wider, makes us even more dependent on foreign capital, weakening the dollar, on and on -- it's a vicious cycle.

The markets have probably been too quick to connect the dots from the current slew of good data straight to a Fed rate hike,