- Gold & Silver rally on Monday
- What on earth is the Fed/ Cabal/ Cartel up to now?
Good Day.. And a Tom Terrific Tuesday to you! We had a wonderful dinner last night, with our next door condo friends, Johnathan, and his wife… He’s owned the unit next door since 1988! So, it was interesting hearing stories about the beginning of this building… That made two nights in a row that we didn’t eat dinner here in the condo! YAHOO! I know this isn’t “vacation”, but it’s darn close! And I love to treat our time here as such! I sat outside in the sun yesterday for about 1.5 hours, and my face got a little red, no biggie… I had my baseball cap on to protect my bald head for sure! It was very pleasant in the sun yesterday, but if you were in the shade, I would call the weather, tepid water, not hot, not cold… or as baby bear said, “Just right”! Mamma bear, baby bear, one of the two… I know I’ve highlighted this song before, but it’s come up again, and is playing while I write… Stan Getz, and Joao Gilberto greet me this morning with their mega hit song: The Girl From Ipanema… (I love this song!)
Well, the dollar has briefly ventured out of the 1,236 hole it was stuck in for a while yesterday, but by the end of the day, the BBDXY was back 1,236… That marks 3 trading days where the dollar hasn’t moved, except if you count intra-handle moves… Gold gained on the day $13, to close at $2,033.90, and Silver gained 37-cents to close at $23.28… Nice day for the two metals… So, this has to be the time when the short paper traders allow the metals to rise, and then just when it hits somebody turned around and shouted, short that Gold & Silver, and take your profits… This is what they do… The sell it short until the bleeding stops, then they buy it as those cheaper levels, and watch as it goes higher, only to decide to sell short once again, when the profits are there…
Each time the short paper traders go to work, and begin to take the two metals down, they do so to get short term owners of the metals to sell, and scare the bejeebers out of those thinking about buying the metals… What they don’t see here is the resolve by metals investors to keep buying, and not get discouraged… That has to just about kill the sort paper traders, but while it may come close to killing them, it doesn’t change their resolve, because this is a method that has worked for decades now… And they don’t want to kill the Golden Goose…
The price of Oil slipped a buck yesterday and ended the day trading with a $77 handle… And I’ll bring this up once again, and that is that I read over the weekend that the writer said about rising 10-year’s yield… “the Fed Heads won’t stand for that too much longer”… I don’t know for a fact that it was the Fed buying that brought the 10-year’s yield down to 4.10% (from 4.16% yesterday morning) … But it sure has their fingerprints all over the evidence… And there’s no OJ Glove to try on either…
In the overnight markets last night…. Guess What? The dollar didn’t budge again! The BBDXY is sitting at 1,236 this morning, once again… I don’t believe that I’ve ever seen the dollar not move one way or the other for 4 days in a row! (excepting holiday weekends, etc.) But, it is what it is, and while I’m not complaining, I would like to see some movement, otherwise, I have nothing to talk about! Gold is up $3 in the early trading this morning, and Silver is down 10-cents… The price of Oil slipped another buck overnight and trades this morning with a $76 handle.
And bonds… What and who is doing all the buying right now? The 10-year’s yield dropped another 4 basis points overnight and trades this morning with a 4.06% yield… Ok, so you’re with me that someone or some body is doing what they can to keep the yield from continuing to rise… My guess is, that the Fed Heads are behind this move… And I’ll leave that there…
OK… So, what’s going on with the dollar that it can’t get out of the 1,236 handle in the BBDXY? While the euro doesn’t hold as big of a piece of the pie in the BBDXY, as it does in the old Dollar Index, I would have to think that the recent euro softening would show up in an increased BBDXY number, and it hasn’t… The euro came under pressure late last week, after the European Central Bank (ECB ) left rates unchanged, and then said something that make the markets think that the ECB was turning dovish… Here’s ECB President’s own words, “The consensus around the table was that it was premature to discuss rate cuts,” ECB President Christine Lagarde told her regular news conference following the decision, insisting that future decisions would depend on incoming data.
Now what in those words spell dovish to you? None of them to me, but apparently the ECB has the same problem as our Fed Heads do… Getting the markets to understand and accept that interest rates are NOT coming down soon, when the Central Bank hasn’t even begun to discuss a rate cut!
So, getting back to what’s up with the dollar? There’s nothing out there to tell us the reason for the dollar’s stickiness… And to me this spells trouble… trouble for the dollar, because there are things that are mounting up regarding the dollar that will weigh it down… The Fed Heads’ pause in interest rate hike… We all know that the next move from the Fed Heads is down, but the timing on that downward move is going to be delayed… But the point is the Fed Heads have paused, and that’s no longer the impetus behind a strong dollar… I also believe that the U.S. economy is going to slow down tremendously, and that won’t be a friend to the dollar… And all the “refunding” that will have be done, is going to be a drag on the dollar… So, add ’em up and you see what I see…
You know, this may be low on the Totem Pole now, but eventually it will rise to the top. What I’m referring to is the state of Texas defying the Gov’t’s fall to remove the razor wire from the border… And that got me thinking about the book on Thomas Jefferson that I read, and his call to the people at the time that the States have their rights, that they had not given them up to join the Union of states…. One of those rights is to secede… And IF Texas were to go down that path, I don’t see that as good for the dollar in any way possible… So, I’ll keep that one on the back burner for now…
OK, let’s move on… The FOMC meets this week (tomorrow) and they will have the markets as a whole, tuning in, to see if Jay Powell makes a mistake and uses words to describe a rate hike… I personally, don’t believe he will fall for any such shenanigans… But… We all have to wait-n-see, eh?
The markets, especially the bond boys, made strong calls a couple of months ago, that the Fed Heads were ready to cut rates as soon as March… That got the yield on the 10-year to drop from 5% to 3.94%… Bonds were flying off the shelves of the bond boys… So, now you have to wonder if, they really thought that, or… were they just saying it to spur bond sales? I guess that only the bond boys know the truth to that, and the Shadow knows…
The U.S. Data Cupboard gets back in the scheme of things again today, with the Nov. Case/ Shiller Home Price Index (HPI)… Let’s see, rates had stopped rising by Nov, so I would think that Home Prices would rally from many months of negative numbers…
We’ll also see the STUPID Consumer Confidence for this month… When are people going to finally get the message that the stock market is NOT the economy? The stock jockeys like to point to Consumer Confidence and say, “the economy is doing great”…. When we all know, because we’ve seen the data prints that show otherwise that the economy is NOT great… So, please folks, can we all agree that this data print is nothing but the pulse of the stock market?
To recap… The dollar closed once again yesterday at 1,236, thus marking 3 consecutive days at that figure. Gold & silver had nice rallies yesterday without interference and Chuck explains how the short paper traders make their profits… And why they might be sitting out this next move up in Gold…
For What It’s Worth…. Ok, yesterday’s FWIW was about how the Fed /Cabal/ Cartel was preparing banks for hard times, while telling us everything is peachy… Today’s is about how the same Central Bank is allowing banks to do something that should be unthoughtful! And it can be found here: The Fed Has a Dirty Little Secret: It’s Been Allowing the Wall Street Mega Banks to Calculate their Own Capital Requirements (wallstreetonparade.com)
Or, here’s your snippet: “On July 27 of last year, the Vice Chair for Supervision at the Federal Reserve Board of Governors, Michael Barr, made the following statement as part of the proposed new capital requirements for mega banks in the U.S. – revealing the stunning news that the serially-charged mega banks on Wall Street have been allowed to use their own internal risk models to tell the Fed how much risk-weighted assets they have and, thus, how much capital they need to hold. Barr stated:
“For a firm’s lending activities, the proposed rules would end the practice of relying on a bank’s own individual estimates of their own risk and instead use a standardized, but risk-based measure of credit risk. Standardized credit risk approaches do a reasonably good job of approximating risks, while internal models are prone to underestimate such risks.
“Second, for a firm’s trading activities, the proposed rules would adjust the way that the firm is required to measure market risk, which is the risk of loss from movements in market prices. These changes are intended to correct for gaps in the current rules.”
Relying on the mega banks that have been regularly charged with criminal acts and manipulating markets and who brought the U.S. economy to its knees with their financial crash of 2008, because their risk models were as helpful as a row boat in a tsunami, is yet one more clear indication that federal banking regulators have been completely captured by the Wall Street mega banks.
Two economists are now calling out this insanity in a new academic paper. Anat Admati is the Professor of Finance and Economics at Stanford Graduate School of Business. Martin Hellwig is a German economist. The two are co-authors of the newly released and expanded book The Bankers’ New Clothes: What’s Wrong with Banking and What to Do about It. To call attention to the lies that bankers and their lobbyists perpetuate to get watered-down or gutted rules from their regulators, Admati and Hellwig have released a paper debunking the 44 flawed claims that bankers have been getting away with. One of those flawed claims goes to the heart of this debate on required capital. The pair write:
“Flawed Claim 29: Assigning risk weights to assets when determining required equity [equity capital] is a way of bringing serious quantitative analysis to bear on bank regulation…”
Chuck again… WOW! I love that Pam and Russ Martens get in the dirt and bring us these pieces of information… This one takes the cake though, and I can’t believe that Congress is allowing this to happen… There’s got to be somebody in Congress that sees this for what it is… Please! Serenity NOW!
Market Prices 1/30/2024: American Style: A$.6592, kiwi .6125, C$ .7450, euro 1.0846, sterling 1.2672, Swiss $1.1591, European Style: rand 18.8775, krone 10.4104, SEK 10.4434, forint 358.30, zloty 4.0235, koruna 22.7733, RUB 89.49, yen 147.43, sing 1.3397, HKD 7.8159, INR 83.11, China 7.1792, peso 17.20, BRL 4.9486, BBDXY 1,236.31, Dollar Index 103.45, Oil $76.40, 10-year 4.06%, Silver $23.18, Platinum $932.00, Palladium $997.00, Copper $3.89, and Gold… $2,036.30
That’s it for today… Yesterday was my longtime friend, and former colleague, Chris Gaffney’s birthday! And today is my former right-hand assistant on the trading desk, my little Christine’s Birthday! I hope both of you have or had grand days! Yes, my little Christine, I watched here get married, have 3 kids (sons), and become a great employee and friend… Betcha thought that I forgot about you, didn’t you, Christine? HA! I used to have a memory like an elephant, then I got as big as an elephant, and then got smaller… People kept throwing me peanuts, and when I was on the beach, people would attempt to roll me back in the ocean… When I sat around the house, I SAT AROUND THE HOUSE! I’m sure glad those days are over with… Now, if I could only lose 50 more pounds… I would be back to high school weight! Ok… The late great Alvin Lee, and his band Ten Years After take us to the finish line today with their song: I’d Love To Change The World…. Brother I hear ya! I wish I could change the world too! I hope you have a Tom Terrific Tuesday today, and please, oh please Be Good To Yourself!
Chuck Butler