Author: admin

March 13, 2019

* Currencies, for the most part see some small gains on Tuesday

* Gold closes above $1,300, is this the long awaited breakout to the upside?

Good Day… And a Wonderful Wednesday to you! Well, I finally recovered from my battle with the sun on Monday, yesterday, and actually sat on the beach, under an umbrella with my sun hat on for a couple of hours, with no problems… I still think it was a freak thing, and I’m not going to worry about it… And I was wrong yesterday when I said my next game was a night game, when my next game is tomorrow, a day game… We’ll see how everything works then! I drank plenty of water yesterday (there’s water in beer right? HA!) and I was fine by midday… The Allman Brothers greet me this morning with their song: Southbound…

Well, it was another day without a lot going on in the currencies, the euro gained a small amount again, but Pound sterling got sold off its highs that occurred when traders thought that PM May’s BREXIT deal was going to be a layup… But that didn’t happen, as the British Parliament voted no to May’s plan… So, it’s back to the drawing board once again for the BREXIT negotiators… What a sticky divorce proceeding, eh?

The Aussie dollar (A$) saw some profit taking, while the Canadian dollar / loonie saw some love, along with the Russian ruble and Norwegian krone, for the bump up in the price of Oil… And the fact that the news from Saudi Arabia tells us that the Saudis are holding true to the production cuts they imposed last month to Oil production. So far so good for the Oil producers, but like I’ve explained before, it’s a vicious cycle here, because once the price of Oil rises, it brings the shale producers back on board, and then they flood the market with supply and the brings the price of Oil back down… Rinse, Repeat…

Gold was allowed to breach the $1,300 figure yesterday, with an over $8 gain on the day… But as we’ve seen before, the price manipulators won’t let it get too high before they begin to sell it short on paper again… I’m still of the opinion that Gold will break out on the upside in price… The shiny metal had a good run going there at year-end, and it looked as if that was going to be the break out…  As we all learned, it obviously wasn’t… just a tease, if you will…  

Well, have you heard the news? There’s good rockin’ at midnight! No Wait! That’s not what I was going to say! I was going to talk about the news that ECB President, Mario Draghi, might retire without ever hiking interest rates! Just like his hero, Big Ben Bernanke! Germany, the Eurozone’s largest economy, and main go-to for policy here, are probably saying, “That’s the last time we promote someone from the Bank of Italy to be the President of the ECB” I don’t know who’s “in line” but whomever it is, they have to be able to do a better job than Draghi has, with his constant throwing the euro under a bus, and other crimes!  

On the data front, The Eurozone printed their January and YoY Industrial Production reports today… the January print was up 1.4%, but it failed to bring the year on year (YOY) data into positive territory, and the YOY figure was down 1.1%…  I would point out that the rot on this vine was due to a mid-year slump, and that the recent trend has been positive… Something for the European Central Bank (ECB) to think about… 

Well, we’ll see some stale data today here in the U.S. as the January Durable Goods and Capital Goods Orders will print… I’m thinking that we’ll be adding a couple of new bricks to the wall after they print, as they could both be in negative territory… All in all, it’s just another brick in the wall… 

I really stirred up a hornet’s nest on Monday when I went crazy on the kids and what they were being taught in school these days…  I guess it’s more the Universities fault, but so be it…   How about all those people that formerly lived in NY, New Jersey, and California, moving out of their home states to more tax friendly states like Texas and Florida?   The problem with that is that most people can’t make a move like that, due to kids, work, schools, family, money, etc.    But imagine, if you will, that everyone was able to move… would the last person leaving the state of New Jersey, please turn out the lights?  HA!  

To recap…  The currencies, led by the euro were able to move a little higher on Tuesday, but pound sterling got sold off its highs, after the British Parliament voted No to the BREXIT deal… Back to the drawing board…  Gold gained $8.50 on the day, and closed above $1,300, once again… And the U.S. Data Cupboard will have the Durables and Capital Goods Orders for us today, of which Chuck thinks they both will be negative… 

For What It’s Worth… Have you ever heard of Jeremy Grantham? He’s supposedly the guy that called the 2008 financial meltdown, I’m not saying he didn’t do that, but I’m pretty darn sure I called it before he did, when in 2003, I began talking about the Housing Bubble, and what it would do the economy and the dollar. But anyway, he’s very well respected, and he was talking about the next 20 years for the U.S. stock market, and it can be found here: https://www.marketwatch.com/story/investor-credited-with-calling-the-2008-crisis-says-the-next-20-years-in-the-stock-market-will-break-a-lot-of-hearts-2019-03-07?mod=MW_section_top_stories

Or, here’s your snippet: “Jeremy Grantham, an investor credited with predicting the 2000 and 2008 downturns, told CNBC on Thursday that investors should get inured to lackluster returns in the stock market for the next two decades, after a century of handsome gains.

“In the last 100 years, we’re used to delivering perhaps 6%,” but the U.S. market will be delivering real returns of about 2% or 3% on average over next 20 years, the value investor and co-founder of Boston-based asset manager GMO told CNBC in a rare interview.

Grantham, who has been predicting a meltdown in stocks since last year, said that not even the recent go-slow reversal by the Federal Reserve on rate increases and the European Central Bank’s decision to roll out a fresh batch of bank stimulus will push stocks significantly higher. “You can’t get blood out of a stone,” he told the network.

The famed investor said that he expects stocks to limp along against that backdrop, with major developed banks unlikely to remove stimulus first introduced during the 2007-09 financial crisis.”

Chuck Again… Well, it sounds like he’s on board with my long standing call that we’re turning Japanese, yes, I really think so! It’s been more than 20 years of funk for the Japanese stock market, folks… I’m just saying…  

Currencies today 3/13/19 American Style: A$.7060, kiwi .6840, C$ .7483, euro 1.1305, sterling 1.3133, Swiss $.9946, European Style: rand 14.3484, krone 8.6115,  SEK 9.3370, forint 278.38, zloty 3.8041,  koruna 22.7183, RUB 65.71, yen 111.30, sing 1.3560, HKD 7.8498, INR 69.38, China 6.7090, peso 19.32, BRL 3.8244, Dollar Index 96.87, Oil $57.42, 10-year 2.62%, Silver $15.53, Platinum 839.05, Palladium $1,547.89, and Gold… $1,308.85

That’s it for today… March seems to be slipping by way too fast for my liking! If the days keep going by so fast, It’ll be April before I know it, and then it will be time to start packing up for my trip back to Missouri!  I have doctor appts. and scans all scheduled the 3rd week of April. At this point, this is the longest I’ve gone without a blood draw, a scan, or a visit to an oncologist in 12 years! I’m thinking that my veins have all healed, my stomach isn’t upset from the barium and I don’t like going and stepping on a scale at a doctor’s office!  So, I’m good with this, as long as the wolf remains outside the door!  And with that King Crimson takes us to the finish line today with their iconic rock song: The Court of the Crimson King…  I hope you have a Wonderful Wednesday, and continue to Be Good To Yourself!

Chuck Butler

 

March 12, 2019

* Dollar bugs still hold a spell over the currencies & metals

* Fed Atlanta spills the beans on an economic slowdown forecast… 

Good day, and a Tom Terrific Tuesday to you! Well, something happened to me yesterday that had never happened before… I because ill sitting in the sun at the ballpark… I had to drink a lot of water and sit under the ballpark stands in the shade before I was able to get my wits back about me… I’ve always been told that the sun and chemo aren’t a good mix, but I’ve never had a situation like that in the nearly 12 years of taking chemo before… My head still hurts, so I think I over did it… Lesson learned, you don’t have to tell me twice… Good thing the next spring training game is a night game! I’m treated this morning with a song from The Doobie Brothers, from the Captain and Me album, which was their best, and the song is titled: Dark Eyed Cajun Woman… Love that song!

Well, there’s not much to talk about today… The currencies continued to be under the spell of the dollar bugs, and even the stronger price of Oil can’t seem to help the Petrol Currencies these days… UGH!… The Data in the U.S. continues to be weak, and awful at times (Jobs jamboree is one!) but still the dollar bugs rule the roost… I don’t get it… I doubt I ever will… but it is what it is… right?

The euro gained a small amount yesterday VS the dollar, as did the Aussie dollar (A$) and kiwi, but everything else was held back… except… It was being reported last night that U.K. PM, May had stuck a new BREXIT deal with the EU… It’s now up to the U.K. Parliament on whether it gets passed or not… And the Pound sterling found a bid and rallied on the news… But there’s still a risk out there that the Parliament says, No Soup For You!

Gold followed Friday’s $12 and change gain with a small gain of $2.50 yesterday… But still below the $1,300 level that has been referred to as the Maginot Line… Gold analyst, Egon Von Greyerz (I’m not sure I spelled his name correctly) recently wrote that he believed that the “Maginot Line would soon be breached by Gold”… the price manipulators have dug in at $1,300, and to get Gold past that figure will take a lot of physical Gold buying… Are investors ready for that?

Well, President Trump introduced his new Budget yesterday… And brother is it a doozy!  One thing that jumped out at me was the $750 Billion allocated to the Defense sector… That’s a larger budget than the next 14 countries, combined!  It’s money we don’t have, so, you know me, dear reader, I don’t like spending money we don’t have, it creates problems down the road… 

If you recall the old Sunday Pfennig titled: Chuck’s Debt Solutions, I talked about the military spending, and had the idea that we needed to close all foreign bases, especially in the countries where they don’t want us there to begin with, bring the soldiers home to protect the border, we could save boat loads of money that we don’t have to spend…  Just one of the many ideas I presented in the old Sunday Pfennig… 

I don’t know how you feel about this, but… it really ticks me off when over time we, as a country, have used our military to bail a country out of a bad regime, or invasion by another country, only to have the people we helped turn around and kick us later… If that’s what happens, and it does, then why help them to begin with?  These and many other questions are answered on the Butler Patio, which will be opening up again in the middle of April… 

Well, can you tell that there’s just not much to talk about in the currencies and metals today? I begin throwing out opinions like I had a fistful of Benjamins!  HA!  

The U.S. Data Cupboard isn’t helping me today either, with really only one print today, and that’s the stupid CPI (consumer inflation) for February. This data set has had so many hedonic adjustments to it over the years that it’s no longer recognizable as a reliable piece of data…  And that’s why I call it stupid…  (good thing my grandkids don’t read the Pfennig, because they always correct me when I say something or someone is stupid!) 

In a time when things weren’t so touchy, feely, the Charlie Brown cartoons came to television… The next time one of them is on TV, check out how many times the kids call Charlie Brown, stupid…  I’m just saying… 

OK…  Did you see where Facebook is banning Zerohedge.com?  What? Did my old reviewers go to work at Facebook?  I say that because I remember being told not to use zerohedge.com in the FWIW section…  So, freedom os speech means that as long you say what I agree with it’s OK, but when I don’t agree with something, then no soup for you!  What the hell is going on in this country? 

Before we head to the Big Finish today… I saw this and knew I had to highlight it… Recall me telling you last month that West Virginia had a bill that would end sales tax on the sale of Gold & Silver (and other precious metals)… Well… Sound money advocates rejoiced today as the West Virginia legislature overwhelmingly passed Senate Bill 502 and sent it to Governor Jim Justice for his signature.

State Senator Craig Blair (R-District 15) introduced SB 502 with the goal of encouraging precious metals purchasers to keep their investment dollars in the state rather making investments elsewhere. The bill impacts purchases of platinum, gold, palladium, or silver bullion valued upon its precious metal content, whether in coin, bar, or ingot form.

Chuck again…  Way to go Senator Blair! You da man!  

For What It’s Worth…  Well, in honor of those long gone reviewers that banned zerohedge.com from my Pfennigs, I have something from zerohedge.com for you today, regarding the Fed Atlanta’s forecast for GDP in 2019… and it can be found here: https://www.zerohedge.com/news/2019-03-11/gdp-crash-atlanta-fed-sees-q1-gdp-tumbling-just-02 

Or, here’s your snippet: “While the market was delighted two weeks ago to see a delayed Q4 GDP print of 2.6%, which came in well above the expected 2.2% consensus number, we warned that “while Q4 was clearly a stronger than expected print, the real question is what happens in Q1, when most banks and nowcasts expect GDP to print below 1%, in some cases concerningly so.”

Moments ago we got another confirmation of this, when following the latest retail sales report which saw a dramatic cut to December retail sales even as January surprised modestly to the upside, the Atlanta Fed slashed its Q1 GDP nowcast, and after rebounding modestly from 0.3% to 0.5% a week ago, it has once again slumped, and is now at the lowest recorded level, and just 0.2% away from economic contraction.”

Chuck again… And the only risks to the economy that Fed Chairman Powell sees, is the slowdowns in Europe and China… Yeah, right, and I’ve got some swamp land I’d like to sell Mr. Powell… 

Currencies today 3/12/19 American Style: A$.7075, kiwi .6848, C$ .7461, euro 1.1271, sterling 1.3150, Swiss $.9915, European Style: rand 14.2801, krone 8.6389, SEK 9.3805, forint 279.93, zloty 3.8744, koruna 22.7725, RUB 66.06, yen 111.32, sing 1.3566, HKD 7.8497, INR 69.69, China 6.7208, peso 19.38, BRL 3.8534, Dollar Index 97.06, Oil $57.35, 10-year 2.66%, Silver $15.42, Platinum $831.29, Palladium $1,543.38, and Gold… $1,296.40

That’s it for today…  the sun should be rising in a couple of minutes on another day in S. Florida… I’ve seen my beloved Cardinals win 4 games this spring and in 3 of them they scored all their runs (3) in one inning… That’s not a good thing folks… Your lineup should be a relentless attack, throughout the game, I’m just saying…  Had a good time last night with friends and their families visiting from St. Louis and Oklahoma…   I think I’ll head back to bed after I watch the sunrise on the ocean… My head still hurts a bit…   Steely Dan takes us to the finish line today with their song: My Old School…  I hope you have a Tom Terrific Tuesday and remember to Be Good To Yourself!

Chuck Butler

March 11, 2019

* The dollar rallies despite an awful jobs report!

* Gold is topped at the $1,300 border… 

Good Day… And a Marvelous Monday to you! Well… here we go again… The U.S. Jobs report on Friday was horribly weak, but the dollar rallied… Go figure! I watched my beloved Cardinals win and lose a game since we last talked, and they still can’t, in my opinion, that is, hit the ball… UGH! My wife tells me not to worry, that’s it’s “spring training”… But I know better… this is where hitters get to hit against top pitchers for just a couple of innings, that then the 3rd team comes in, the guys that are destined for the minor leagues… And yet, no hitting… UGH! Oh well, it is what it is… It’s still warm and full of sun here, so I’ll sit there and watch the noodle sticks come up, while basking in the sun! Scott McKenzie greets me this morning with his hit song: San Francisco… If you’re going to San Francisco, be sure to wear some flowers in your hair…

Well, I already told you that on Friday, the dollar rallied in the face of a very weak jobs report… For the month of February, the U.S. only added 20,000 jobs in February… That’s right I said 20,000 jobs… And to make that even more weak… The BLS added 137,000 jobs after the surveys to get to 20,000, jobs… So, in my book, the U.S. lost 157,000 jobs in February… But that didn’t stop dollar bugs from buying dollars… The stock market here in the U.S. has been bleeding badly, and yet, the dollar bugs are dancing on the tables…

So… I would be telling customers of my old place of business that they should be using this drop in the euro, as a buying opportunity… Of course, the legal beagles would make he say, “of course that’s my opinion and I could be wrong”…. Now that I’m no longer associated with anyone with a trading desk… I will just say, that this is just really strange to me… The Gold traders pushed the price of Gold to $1,300, but it just couldn’t get past that figure, and was only able to gain $12 and change on Friday… But still, given the rot on the currencies vine, Gold’s gains were quite impressive, but the price manipulators made sure it didn’t breach $1,300…

When I was a younger man, and my temper needed to be corralled at times, I would have liked to meet a price manipulator in the alley, if you will… But now, I’m an old partially handicapped, chemo filled, fat man that wouldn’t know what to do if that situation presented itself to me!

Can you believe the interview that Fed Chairman Jerome Powell gave on Friday? He said that the only risks to the U.S. economy are the slowdowns in Europe and Asia… Really? Are you blind, Mr. Chairman? Are do the economists that you employ to keep you up to date, feed you nothing but Captain Crunch? (by the way that’s my favorite cereal!, but boy is that sweetened!) If I were in his employ… I would be showing him all the economic reports that I show you, dear readers, on a daily basis that show we are heading to a recession… I can’t believe he said that! My, oh, my, what a tangled web we weave….

I just can’t get past that this morning… I’ll try, but I doubt it will happen… to have a Fed Chairman make a blatantly incorrect statement like that ranks up there with the Bernanke quotes about the housing market not being in any danger of imploding back in 2007…

In fact that was the most imbecile thing I’ve herd since the Bernanke quote that I’m going to just stop writing today, because I’m just all out of sorts, since I heard his words…

OK… I’m trying, but I just don’t have my heart into it… Powell… come, on! Well, the BREXIT talks have come to a standstill (see, Last week I told you the talks weren’t going well! ) Currency traders have finally gotten the message, and pound sterling is getting sold…  

You wouldn’t believe, OK, maybe you would, sorry…  But the number of articles from analysts and economists piling on Australia these days…. It just doesn’t make sense that everyone is piling on the Aussies, but the Aussie dollar (A$) remains well bid… Maybe it’s going to be a case of delayed reaction?  But for now the A$ and kiwi have held their ground while all this green/peachback buying is going on. 

 I would be remis to not mention that the Chinese leader, Xi, announced that China would not devalue their currency to offset tariffs… And a sentence later, he mentioned that the China was going to cut interest rates… Really? And that won’t weaken the currency? I told you all years ago, to always listen to what the Chinese said, because they didn’t say things that they didn’t mean… So, in this case, we have to believe an all -out devaluation of the renminbi is out of the question, but a systematic take down by market forces will be OK… eh?  

Oh, and the renminbi is much weaker at the start of this week, than is was at the start of last week, for those of you keeping score at home… 

So, have you followed the articles talking about the U.S. seizing tons of Gold in Syria, and now Syria claims that the U.S. stole their Gold?  These are quite interesting folks… I’m just saying…  did we take the Gold as payment for all that we’ve done for them? I have no idea, but… Isn’t that they way things should have been all along?  If the U.S. has to be the world police, then when conflicts arise, and the U.S. is called in, they should be paid, or reimbursed for their expenses…  

Boy would we make long last friends that way…. NOT!  OK, this has gone on too long, I need to stop this conversation before I really say what I’m thinking at tick 1/2 the people off! 

Before we head to the Big Finish today, I wanted to mention something that scares the bejeebers out of me… I read last night that a large majority of young voters, are all for a socialist government… How in the world did that happen? What are we teaching these kids these days in school? The parents are to blame too, for not showing their kids that they have things because they worked hard for them in a capitalist economy!  That makes two things that have been said this past weekend that I’m flabbergasted about! I had better quit, and start anew tomorrow… 

To recap… The Jobs report for February was awful at best, but the dollar bugs were dancing on the tables, go figure…  Chuck is flabbergasted by what Jerome Powell said in a speech on Friday… come on Jerome, really? Gold was kept, by the price manipulators, from breaching $1,300 on Friday, and had to settle for a gain of $12 and change on the day.  The BREXIT talks have come to a standstill, and what the hell are they teaching kid in school these days? 

For What It’s Worth… Since the Fed in on my you know what list, as usual, they really got my goat with this announcement about weakening the stress tests for banks… I can be found here: https://www.reuters.com/article/us-usa-fed-stresstests/federal-reserve-scraps-qualitative-test-for-u-s-banks-in-2019-stress-tests-idUSKCN1QN2PX

Or, here’s your snippet: “The U.S. Federal Reserve said on Wednesday it would no longer flunk banks based on operational or risk management lapses during its annual health check of the country’s domestic banks.

The “qualitative” portion of the 2019 test, however, will still apply to the U.S. subsidiaries of five foreign banks subject to the annual exam.

The move, which is a big win for major banks, such as Goldman Sachs Group Inc, Morgan Stanley and JP Morgan, Bank of America and Citigroup, forms part of a broader effort by the Fed to overhaul its annual “stress-testing” process, which the industry has long criticized as too onerous and opaque.

Since the 2007-09 global financial crisis, the Fed has put the country’s lenders through strict annual tests to see whether they would have enough capital to withstand a major economic downturn.

For the largest lenders, that test also included a so-called “qualitative objection,” that gives the Fed the discretion to fail banks due to risk management or operational failures, even if they have sufficient capital.”

Chuck Again…  So, do you see what I see here? A return to pre-2007 for banks… Will this mean that in the next financial crisis, that taxpayers will have to bail them out again?  I think so, folks…  shameful, simply shameful

Currencies today 3/11/19 American Style: A$.7045, kiwi .6811, C$ .7454, euro 1.1248, sterling 1.2981, Swiss $.9914, European Style: rand 14.3737, krone 8.6887, SEK 9.4180, forint 280.56, zloty 3.8211,  koruna 22.8157, RUB 66.32, yen 111.23, sing 1.3586, HKD 7.8498, INR 69.85, China 6.7198, peso 19.48, BRL 3.8651, Dollar Index 96.30, Oil $56.51, 10-year 2.64%, Silver $15.32, Platinum $814.02, Palladium $1,575.37, and Gold… $1,296.57

That’s it for today…  Well, we “sprang forward” an hour this past weekend, which means the sunrise here is later in the morning, which means that I either need to write longer, or later to see the sunrise while I write!  Darling daughter, Dawn and her family will be here on Saturday to spend their spring break with us, which means I get hugs from my little d… (Delaney Grace!)  Two birthdays this past weekend, (Gus and Rick) and this week we have Kathy’s mom’s birthday… And then finally, mine!  more on that when we get there…   Shooting Star takes us to the finish line today with their song: Last Chance…  I hope you have a Marvelous Monday and remember to Be Good To Yourself!

Chuck Butler

 

 

March 7, 2019

* Despite tariffs, The Trade Deficit explodes higher!

* Currencies and metals trade in very tight ranges on Wednesday…

Good Day… And a Tub Thumpin’ Thursday to you! Well, it looks as though we will get to have spring-like weather another day here today, before the heat returns for the weekend, and the coming week. My beloved Cardinals beat the evil empire, the Yankees yesterday in Spring Training in Tampa. I kid about the Yankees being the evil empire, because, well, that’s what I was taught as a kid… That the “coast teams” were never to be trusted and always rooted against! My dad was a Midwestern farm boy, who never trusted anyone that wasn’t from Missouri! So, he was no fan of the Yankees, and therefore I wasn’t either! HA! Jack Johnson greets me this morning with his song: Drink The Water…

Well, after Tuesday’s whacking, the currencies traded in tight ranges yesterday, with the euro remaining above 1.13 as the day went along. I told you yesterday that Australia had received some softer than expected growth numbers, and the Aussie dollar (A$) was getting whacked, but the A$ staged a comeback of sorts yesterday, when the U.S. data didn’t look so hot… In fact there were a couple of bricks added to the wall yesterday, so let’s stray from our normal pattern and get right to the data yesterday, because well, it sure doesn’t print a pretty picture…

Front and center, we had the ADP Employment report for February, and it showed that 183,000 jobs were added during the month… Now, in my book, this is the employment data that we should use and NOT the data that the BLS serves us each month… So, is 183,000 jobs created in February good or bad? Well, it’s certainly not the 300,000 jobs ADP said it created in January, now is it? So, it’s not bad, but it’s not good… Moving on we find the Trade Deficit…

Here’s where the going gets sticky, folks… Remember that we started a trade war with China because the Trade Deficit had been out of control for decades now… Well, even with the tariffs added to Chinese goods, the December Trade Deficit was more than $59 Billion dollars! And for the year 2018, the Trade Deficit soared to a $891.2 billion merchandise trade deficit, the largest in the nation’s 243-year history. The trade gap with China also hit a record $419 billion….

As you can imagine, and not very long either, the media is not allowing this data to slip under the covers of darkness, because it makes the President, who uses the Trade Deficit as a guage to tell how American exports are being treated in other countries, look bad… I’m just saying… That’s what I’ve viewed and that’s how I see it… no excuses from me!

The President tried to head this news, about the Trade Deficit, off at the pass this last weekend by talking about how the strong dollar is hurting exports… While he’s correct in that statement, it’s not all that plays into the Trade Deficit… The playing field is not even, folks… Here in the U.S. workers demand higher wages, with benefits and pensions, etc. So, it should come as no surprise that American Goods cost more… And that plays more into what causes the Trade Deficit than most people even stop to think about…

But look at Germany… Here we have a country that has to deal with high wages, benefits, etc. like U.S. workers, and they have to deal with a currency that’s even stronger than the dollar, but… They lead the Eurozone and most of the world in exports… Why? Value of their goods… If you make something of value, that other people want and demand, you can get away with charging higher prices… I would say, that’s a lesson we could learn, but… I would need to schedule a flight on a pig over town if we did!

And finally, Factory Orders for January gave us a head fake, and refused to print yesterday, so we wait for the January report to be massaged by the bean counters, before being presented to the public…

I read on Bloomberg last night that the recent data from the Oil reserves showed a glut of reserves, and the headline title on Bloomberg.com said, “Oil weakens on supplies worries” So, I went to check the price of Oil to see just how badly the price of Oil had weakened… And when I got to the screen that showed the price, I found that the price of Oil had not weakened at all, and in fact it was up about 40-cents in the past 24 hours! Those wild and crazy guys at Bloomberg, throwing me a curve!

All in all it’s just another brick in the wall… Family Tree, which owns Family Dollar stores announced yesterday that they were closing 390 Family Dollar stores here in the U.S. OK, this is significant folks, think about this for a minute before you shrug this off… When the economy slows, consumers usually switch to the Walmarts, and dollar stores… But what is the economy telling us when the dollar stores are closing? Uh-oh! Better call Maaco!

So, speaking of the slower than expected Aussie GDP, for those of you keeping score at home, the figure was 1% growth… But it’s not just Australia having problems, folks… Yesterday the OECD joined the IMF in slashing its 2019 global GDP forecasts from 1.8% to just 1% and warning the “outcome could be weaker still if downside risks materialize or interact.”.

I’ll just point something out here… 1% global growth means that there will be countries with negative growth… (did I just say the U.S. out loud?) Oh, and one more thing… 1.2% is the growth rate of the population of the world, which means that economic global growth will be less than the population growth… Can you say, that’s unsustainable? I knew you could!

OK, this next paragraph is going to get my dander up Big time! Fed Head Kaplan, was out on the road again, speaking to whomever would listen to him, and this is what has me up in arms… Kaplan said that the reason the Fed Heads are pausing the rate hike cycle is because of the concerns with Corporate Debt…   Well, Mr. Kaplan,  would you like to take any of the blame for Corporate Debt being so large and uncontrollable? Why not? For it was the Fed that cut rates to zero, held them there for nearly a decade, and implemented 3 rounds of bond buying, and 1 round of something called Operation Twist and Shout!  THIS is why Corporate Debt is so large and uncontrollable! You set the table and invited the Corporations to dinner, Mr. Kaplan, and the Corporations came to eat dinner, now you can’t complain about the mess they made at the table! 

I’m so mad, right now… To think that this guy takes no blame for this mess just gets my goat!  UGH!  

Today’s U.S. Data Cupboard, has the stupid 4th QTR Productivity report, which will show us that Productivity dropped in the quarter to 1.8% from 2.2%…  We’ll also Unit Labor Costs for the 4th QTR, which given all the reports that wages have grown recently, should show an increase in Labor Costs, which is a good and bad thing… Good for the worker, bad for the inflation numbers. 

Tomorrow, we’ll see the February Jobs report at the Jobs Jamboree thrown by the BLS… (Bureau of Labor Statistics) I prefer to leave out the “L”, when I refer to them! HA!  And for once in a blue moon, I think the ADP report will be in line with the BLS report, which will mean a large reduction in jobs created from month to month… 

I know, at this point, you’re wondering if I’m ever going to talk about Gold today… Well, wonder no more! Gold lost $1.90 yesterday, in a ho-hum day of trading that saw less than 200,000 contracts traded…  The $1.90 loss brought Gold to a low price for this round, which could be significant…  

What I’m saying is the price manipulators take Gold & Silver down to a level, the cash in their shorts, and then allow the metals to move higher until they reach a point that the manipulators enter the market with their arms full of short paper trades, and then systematically take the price back down so they can collect their profits…  But, yesterday, I told you that the GATA folks had a memo that explained how the COMEX and the LBMA were out of physical metals, and therefore they wouldn’t accept anymore paper trades…  Hmmm…  So, if yesterday was the low… wink, wink… 

A dear reader asked me to talk about the old ratio of 16:1 for Gold to Silver… this figure was blasted out a few years ago, and I just don’t see it as relevant going forward…  However, I do believe that once the metals get on their rally horses for a long ride, that Silver will outperform Gold on a percentage basis… And that ratio might come back into play, but by no means will it be the anchor it once was…

To recap…  Still no Trade Agreement, Still no traction with tariffs, as witnessed by the December Trade Deficit that was a “blown out of the water” number! The yearly Deficit in Trade was a record!  Global Growth is faltering as we watch… Chuck takes the paddle to a Fed Head, and the currencies and metals trade in very tight ranges on Wednesday.

For What It’s Worth…  In perusing Bloomberg last night, I came across an article that was FWIW worthy, that plays well with the debt reports in the sandbox, and can be found on Bloomberg.com

Or, here’s your snippet: ” U.S. credit card debt hit $870 billion — the largest amount ever — as of December 2018, according to the data from the Federal Reserve. Credit card balances rose by $26 billion from the prior quarter.

“The increase in credit card balances is consistent with seasonal patterns but marks the first time credit card balances re-touched the 2008 nominal peak,” according to the report.

Nearly 480 million credit cards are now in circulation — up by more than 100 million since hitting bottom after the recession a decade ago.

At the end of last year, credit cards were the fourth-largest portion of consumer debt in the U.S. after mortgage, student loan and auto debt. But the quarterly increase in credit card debt was faster than the other categories. Overall debt reached a record $13.5 trillion.

About 37 million credit card accounts had a 90+ days delinquent mark added to their credit report last quarter, an increase of about two million from the fourth quarter of 2017. These 37 million accounts hold roughly $68 billion in debt that is 90-plus days delinquent.

In aggregate, credit card limits rose for the 24th consecutive quarter, with a 1.5% increase in the fourth quarter of 2018.”

Chuck Again… Debt is everywhere folks… The problem with credit card debt is that it is so darn difficult to pay off, and eventually the holder just cuts up the card, or one day the cashier doesn’t give it back and that debt gets written off, causing the next person to apply for a card to pay even higher interest rates to pay for the debt that was written off…  It’s a vicious circle folks… 

Currencies today 3/7/19 American Style: A$.7048, kiwi .6790, C$ .7478, euro 1.1315, sterling 1.3150, Swiss $.9960, European Style: rand 14.3340, krone 8.6648, SEK 9.3315, forint 278.74, zloty 3.8005, koruna 22.6233, RUB 65.85, yen 111.70, sing 1.3571, HKD 7.8495, INR 69.91, China 6.7078, peso 19.30, BRL 3.7918, Dollar Index 96.82, Oil $56.66, 10-year 2.66%, Silver $15.11, Platinum $826.11, Palladium $1,545.59, and Gold… $1,286.62

That’s it for today, tomorrow, and this week…  The Sunrise this morning has sun’s rays coming through the clouds, and looks very cool…  OK, visitors begin to arrive and the weekend will be filled with baseball games and conversations!  Not much going on today though… no baseball, but the weather will be warmer…  In 9 days, Delaney Grace and Everett will be here, along with their parents of course! I miss their hugs!  Saturday, I do believe is my good friend, Martini Gus’s, birthday! Happy Birthday Gus! Drink a martini for me! The Beatles takes us to the finish line today with a song from their acclaimed album, Sgt. Peppers Lonely Hearts Club Band, titled: With A Little Help From My Friends, which Joe Cocker redid at Woodstock, and people fell in love with the song all over again!   I hope you have a Tub Thumpin’ Thursday, and continue to Be Good To Yourself!

Chuck Butler

 

March 6, 2019 

* U.S. ISM jumps higher and the dollar bugs celebrate… 

* U.S. Budget Deficit sees reductions in receipts… uh-oh! 

Good Day… And a Wonderful Wednesday to you! Spring has come to S. Florida, as the temps have dipped and will only be in the 60’s today… but spring won’t last long, as the sunny and 80’s will be back in a day or two… The new hitting coach for my beloved Cardinals has received a rude awakening to the major leagues, as his batters can’t seem to find a groove early in spring training… UGH! One of these days I would love to put together a lineup for a major league baseball game… Now, that would be a hoot! I’m going to attempt to be upbeat today, but with what’s going on with the currencies and metals, it will be difficult at best! Jethro Tull greets me this morning with their song: Locomotive Breath… Old Charley stole the handle and the train it won’t stop going no it won’t slow down…

That’s basically how it feels for the currencies and metals these days, as if someone stole the handle, and they’re on a runaway train going south… UGH! The euro fell below 1.30 yesterday, In Australia they reported softer growth numbers, and the Aussie dollar, (A$) got whacked… And Gold.. eked out a small gain, but in reality, these small gains should be much larger… But they aren’t, and the old saying about it is what it is, holds true here…

Speaking of Gold… and Silver, of course… I read where the COMEX and the LBMA are out of physical metals… The paper trades should be drying up soon, folks… I’ve always told you that when enough physical Gold & Silver was being bought by the masses, that the paper trades would be squelched, and it looks like we could be heading there… That is if the communique from the GATA folks, is bang on with their call…

So, yesterday, the dollar rallied because the ISM Manufacturing Index rose after a few months of slippage… The reading was for January, which is pretty stale in my books, but traders found the data to be of their liking, and rewarded the dollar for the stronger print… I find the print questionable at best… All the data from late November though today, has been weak and getting weaker all the time… Shoot Rudy, the CAPEX (Capital Expenditures) have been negative 4 of the last 5 months… So, doesn’t that make this report on manufacturing suspicious? I’m just saying…

The Bond guys didn’t fall for the old (pump up the data trick) and bond yields dipped a few basis points yesterday. I keep telling you that I learned very early in my career to pay attention to what the bond guys are telling us… Hint, hint… 

On a note where it will lead to another brick in the wall… The Bank of International Settlements, issued a warning yesterday regarding Corporate debt… The FT.com reported this… “Under reasonable assumptions, a return to 2009 downgrade rates could force portfolio rebalancing in excess of daily turnover in corporate bond markets.” – BIS

What they’re saying here folks, is that with the debt pile up that the Corporations have made that downgrading their bonds could lead to a HUGE selling by funds, etc. that need to hold higher rated bonds in their respective portfolios…

I’ve ben talking about these leveraged loans that Corporations have made into bonds, and it’s quite scary, especially if such bonds begin to get downgraded… 

But apparently, only a handful of analysts, including myself, are worried about this developing into the snowflakes that would cause an avalanche on the U.S. economy… The markets don’t care, traders don’t care, investors don’t care, they are all wearing rose colored glasses, and allowing the bad data prints to roll off their backs…  And that’s what makes this all so scary folks… Like I said, only a handful of people are looking at this and placing it on the worry wall, so that when the avalanche occurs, all those people that didn’t pay attention to this snowflake, will be hurt financially…  I sure hope I’m wrong on that one…  It is just my opinion, folks, and I have been wrong before, but usually I’m right, eventually… 

Well, the Trade Talks continue, and now there are things being leaked about the agreement that don’t sound like China took too big of a hit… I’m so pessimistic about these Trade Talks, folks, that I get jaded about them… Maybe they’ll be everything the U.S wanted, and more…  Maybe… But I doubt it, and in fact, I’m going to go out on a limb here and say that the 200 pound gorilla in the corner of the Trade Talks room is “Intellectual Property”, of which is the main reason we’ve gone down this rabbit hole of a Trade War…  And here where I go out on the limb, so pay attention… Intellectual Property won’t be a part of the agreement… 

OK… remember the first summit between the two leaders of the U.S. and N. Korea ended with a verbal agreement to shut down N. Korea’s nuclear facilities, and I made a BIG Deal about how nothing was signed? That it was just a verbal agreement?  Well, here we are some months after the summit, and guess what I read yesterday?  That N. Korea was rebuilding their nuclear facilities…   I’m not one to say, I told you so… but I did tell you so!

But this news failed to get Gold on a roll, as it should have, and the shiny metal was only able to eke out a 90-cent gain on the day.  So, after over 215,000 contracts were traded, and the sawdust fell on the floor, Gold eked out 90-cents for the day…  

The U.S. Data Cupboard will have a delayed report from January, in Factory Orders, the December Trade Deficit, and the ADP Employment Report, which lately, because of no fault of theirs, hasn’t been the indicator to the BLS jobs report that it’s supposed to be… I say no fault of the ADP folks, because The BLS has so many hedonic adjustments to the surveys they take that the BLS jobs report doesn’t look anything like what people expect… 

I told you, dear readers, months ago that I was giving up on the BLS jobs report, and that I didn’t care about it any longer, it was dead to me…  So, I’m glad I don’t get all involved in the BLS jobs report any longer, I smile more often now… HA!

To Recap…  The ISM report surprised investors with a jump higher after months of losing ground, and that got the dollar bugs to come out of the wall boards in bunches, and the currencies got sold, VS dollars on the day. The BIS issued a ratings warning on Corporate Debt, that’s very scary to Chuck, but apparently not everyone else…  And Gold was able to eke out a 90-cent gain on the day… Big Whoop, right? 

For What It’s Worth…  Another Brick in the Wall was added yesterday in the form of the U.S. Budget Deficit…  and this report from Zerohedge.com has it for you today, and can be found here: https://www.zerohedge.com/news/2019-03-05/us-budget-deficit-soars-77-interest-expense-hits-record-high

Or, here’s your snippet: “Another month, another frightening jump in the U.S. budget deficit.

According to the latest Treasury data, the U.S. budget surplus in January – traditionally one of the few surplus months of the year due to tax receipts vs refunds timing – was only $9 billion, badly missing the $25 billion surplus expected, and far below the $49 billion surplus recorded last January; it was the smallest January gain since 2015.

As a result, the budget deficit for the first four months of the fiscal year, widened to $310 billion, a whopping 77% higher than the $175.7 billion reported for the same period last year, largely the result of the revenue hit from Trump’s tax cuts and the increase in government spending. The deficit was the result of a 2% drop in fiscal YTD receipts to $1.1 trillion, while spending jumped 9% to $1.4 trillion.

The jump in the deficit was despite the bump in customs duties, which almost doubled to about $24.5 billion this fiscal year from $12.6 billion a year ago, reflecting the Trump administration’s tariffs on Chinese imports.

What was more concerning perhaps is that rolling 12 month receipts declined 1.5% Y/Y, after posting a 0.4% drop last month which marked the first decline since March 2017. Worse, the absolute drop in tax receipts, which declined for both corporations and individuals, was the biggest since the financial crisis; and, every time that receipts have posted an annual decline, a recession either followed shortly or had already arrived.”

Chuck again… Let me emphasize something from that report here for you… So get a fresh cup of coffee, and you might want to add some Bailey’s to it to get through this…  No? Ok, but put away the sharp objects, please…   “Worse, the absolute drop in tax receipts, which declined for both corporations and individuals, was the biggest since the financial crisis; and,  every time that receipts have posted an annual decline, a recession either followed shortly or had already arrived.”  

Currencies today 3/6/19 American Style: A$.7030, kiwi .6775, C$ .7476, euro 1.1305, sterling 1.3143, Swiss $.9955, European Style: rand 14.1894, krone 8.6884, SEK 9.3310, forint 278.99, zloty 3.8030, koruna 22.6405, RUB 65.73, yen 111.87, sing 1.3575, HKD 7.8497, INR 70.20, China 6.7022, peso 19.26, BRL 3.7757, Dollar Index 96.91, Oil $56.00, 10-year 2.71%, Silver $15.11, Platinum $831.56, Palladium $1,513.64, and Gold… $1,285.64

That’s it for today… The sun just rose above the clouds on the ocean, and is shining brightly in my eye right now… Where are my shades? I love mornings here… While I was on vacation, we finished our construction project, and moved… It sure took much longer to complete than I thought it would…  OK… I know I’m early, but… this will happen on the weekend, so… Happy Birthday to my good friend, Rick…  I used to buy him a veggie pizza to split on his birthday and we would eat it in my old office… I sure hope you have a grand day, Rick!   And with that, Donnie Iris takes us to the finish line with his song: Ah! Leah!  I hope you continue to Be Good To Yourself!

Chuck Butler

 

 

March 5, 2019

* Currencies and metals get sold again on Monday

* Eurozone Retail Sales beat expectations! 

Good Day… And a Tom Terrific Tuesday to you! Well, day one back in the saddle didn’t have too much excitement for me… I did received quite a few emails welcoming me back, and for that I’m truly appreciative… I do believe my beloved Cardinals are going to have to make a Big Trade by the end of Spring Training this year, to shore up their lack of hitting… And if management truly believes that our pitching rotation is set this year, then I have some swamp land they need to buy! The Cardinals have a plethora of young pitchers that need to grow up fast, and it looks as though, to me, so far that is, that some have and some have not… The great Stevie Wonder greets me this morning with his song: My Cherie Amour… What a beautiful song!

OK, another day, another day of hearing that the Trade talks are near an end, and that everyone is going to be pleased as punch with the agreement… But after the rest of the world sees what kind of deal it is that the U.S. and China agreed to, won’t they too want the same deal? I’m just asking…

And it was another day of currencies trading in very tight ranges, and not moving much, and another day of selling  Gold & Silver … Don’t get me wrong here, the slippage is noticeable in the currencies and metals, and is not what I would expect with what’s going on… 

The Data here in the U.S. continues to be very weak… and when I saw some of the prints yesterday, I quickly turned to famous economist, David Rosenberg, who had a few things on Twitter to say, that I think I’ll highlight here:

“By my estimation, the Fed took the funds rate 75 bps above neutral, caused several parts of the yield curve to invert and real M1 growth to completely vanish. Recession odds this year are at 80% “ (I’m not stopping here, there’s more from David Rosenberg!)

“Fed took the funds rate to 2.5%. Economy can’t handle it – even with tax cuts!! China tried to slow down the debt treadmill – economy can’t handle it. All ECB did was stop QE, and its economy can’t handle it. What a bullish global backdrop!!”

“A global recession without the USA? That’s what I’m hearing. Reminds me of the clowns who were talking about decoupling back in 2008. No such thing. Sorry to be the one to tell you.” – David Rosenberg from his Twitter handle…

Chuck again… Well, I consider David Rosenberg to be a guy that has his finger on the pulse of the economy, and when he says stuff like that, you, me and the guy down the street that cuts the grass with his shirt off, need to stop and listen… Sort of like those old E.F. Hutton TV commercials…

But the sheeple don’t know any better, and continue to think that the U.S. / China Trade talks will be the cure to all that ails the U.S. economy… Here’s something for you to put in your pipe to smoke…

Fed rate movements take about 6 months, maybe longer before they begin to filter through to the economy… So, if the Fed is talking about pausing and maybe even cutting rates next year, that’s NOT going to stop the U.S. economy from its appointed rounds with a recession! And again thinking about the lag in time from Fed rate movement to economic reaction, All these weak economic reports are a result of the Fed’s first hikes, 3 years ago… Imagine how slow the economy will be when the Fed’s rate hikes of from just last year enter into the economy… I’m just saying…

Longtime reader, Bob, sent me a note yesterday that had a headline title that read: 465 store closures here in the U.S. took place in 48 hours last week…  I’ve got the full story for you in the FWIW section today, so stay tuned, for that!

Well, it’s not all gloom and doom for the Eurozone economy just yet… According to the bean counters, Eurozone Retail Sales for January were up 2.2%, beating the estimate for the month of 1.9%…  and China announced that they were forecasting GDP for 2019 at 6% to 6.5%…   For all of the problems that everyone seems to think that China has, they are still growing their economy 3 times faster than here in the U.S. and 6 times that of Japan and the Eurozone…  I guess when you’re the lead dog, everyone tries to find weak spots in your armor…  It’s always been that way… 

If you think about it in a sports-wise scenario… in the late 90’s and early in the new century, the Yankees were disliked by fans everywhere but NYC, because they won very often. From 2004 to 2016, my beloved Cardinals had darts thrown at them for winning consistently, and don’t forget those Patriots, I even fall into the mix in not liking them because they win very often… 

So, what’s up with Gold’s latest round of selling? Wasn’t it just a couple of weeks ago that we were seeing Gold nearing the $1,350, level? And now it struggles each day and has fallen to $1,285… UGH!  I was very leery of Gold’s move higher weeks ago, because every time it has gotten close to $1,350, it gets whacked, and this time was no different, as much as we all would have liked to believe that this time would be different… (I totally dislike that saying, but it sure does tell it like it is with Gold, eh?) 

All I would say to those of you who think the end is near for Gold… Hogwash! And in my humble opinion, which could be wrong, but I’ll give it anyway… I think this latest slippage in the Gold price is flashing a blue light special to everyone, bargain prices here…  

OK, switching gears here…Longtime readers will recall me saying over and over again, years ago, that We’re turning Japanese, yes, I really think so… Well, nothing’s changed, except time… So, let me bring you up to date… The U.S. reached $22 Trillion in National Debt a couple of weeks ago… Now, longtime readers know that I’ve explained before that the U.S. finances its debt by selling U.S. Treasury bonds… Well, I read last night that foreigners sold U.S. Treasuries at a record pace in December… Foreigners sold $77.35 billion in U.S. Treasuries in the month, after net sales of $13.2 billion in November. December’s outflow was the largest since the U.S. government agency started recording Treasury debt transactions in January 1978…. Uh-oh…

So, while we have been tracking the Japanese with regards to debt accumulation, and economic slowdown (we’ve averaged just 2.2% GPD since 2008, VS 3.2% avg.) But… for the most part that’s where we split up… The Japanese, for the most part own their debt… While the U.S. farms it out to foreigners, for the most part… So, when the foreigners start to dump Treasuries like they did in December, or back away from the auction window, then Houston, we have a problem here in the U.S….

Now, to keep this from imploding the economy and the financial system, the Fed, in all their mental genius, will begin to just print millions and millions of dollars to pay for the Treasuries that are issued, and we’ll be back to Quantitative Easing… You know that this would be bad for the dollar, in more than one way, folks…

To recap…  The currencies continue to trade in tight ranges, but the slippage Vs the dollar is noticeable, and has Chuck scratching his balding head…  The talk about the Trade War nearing an end continues to drag on, and hold the carrot on a string in front of traders and investors… The Eurozone economy isn’t quite dead in the water just yet, as Retail Sales in January beat expectations, and China anted up and placed a bet on their GDP for 2019 at 6-6.5%… 

For What It’s Worth… Well, I did tease you with this earlier in the letter today, so with no further delay, here is the Retail Armageddon article I promised you… It can be found here: http://www.fox5ny.com/news/gap-jcpenney-victoria-s-secret-foot-locker-465-store-closures-in-48-hours

Or, here’s your snippet: “ 

The ‘retail apocalypse’ is alive and well this week with major chains such as Gap, JCPenney, Victoria’s Secret and Foot Locker all announcing massive closures, totaling the death of more than 465 stores over the last 48 hours.

All four companies reported its fourth quarter results this week during the critical holiday period, with three of them (Gap, JCPenney and Victoria’s Secret) reporting declining in same-store sales, while Foot Locker reported growth that more than doubled expectations.

Still, despite the good news. Foot Locker announced Friday that it plans to close around 165 stores across the country, during its investor call.

That comes less than 24 hours after Gap announced it would close 230 of its namesake stores over the course of the next two years after the brand’s same-store sales fell 7 percent during the holiday quarter. It also announced that it will separate its sister company Old Navy into its own publicly-traded company and create a new firm to house its remaining brands.”

Chuck Again…  Tell me again, Fed Heads, how the economy is so strong and robust… I love fish stories! HA!

Currencies today 3/5/2019 American Style: A$.7080, kiwi .6796, C$ .7492, euro 1.1325, sterling 1.3165, Swiss $.9992, European style: rand 14.1387, krone 8.6625, SEK 9.3337, forint 278.54, zloty 3.7972,  koruna 22.6112, RUB 65.73, yen 1111.95, sing 1.3552, HKD 7.8499, INR 70.44, China 6.7001, peso 19.28, BRL 3.7721, Dollar Index 96.75, Oil $56.31, 10-year 2.73%, Silver $15.11, Platinum $838.19, Palladium $1,514.82, and Gold. … $1,284.64

That’s it for today…  It’s a cloudy day here, so no sunrise to be seen yet… You’ve got to have days like this, to make the beautiful days even more enjoyable…  Things here are back to normal, with the return of my wife on Saturday…  On Sunday night, I had a hankering for some chicken fried rice, and so that’s what I had! Strange fare for me down here, where seafood is the norm… I seem to be doing OK… I get beat down easily, and I mean easily… but when you take chemo every day, those things happen…  OK… The Five Americans take us to the finish line today with their song: Western Union… Bet that one takes you back!  I hope you have a Tom Terrific Tuesday, and continue to Be Good To Yourself!

Chuck Butler

 

 

March 4, 2019

* Currencies trade in tight ranges for a week!

* Gold stumbles, but Palladium runs with the ball! 

Good day… And a Marvelous Monday to you! Well, I’m back! I wasn’t ready to come back, but the calendar said 3/4 and I told you would return on 3/4, so here I am… Welcome to March too! One of my fave months, because prior to last year, March was the beginning of Spring Training… I heard that a deadly tornado ripped through Alabama this weekend… So sad, that Mother Nature, takes lives… ☹… Well, did you miss me? I sure had more fun than a barrel of monkeys… I watched 5 baseball games in 5 days with my friends, and 2 more over the weekend by myself… Apparently, back in St. Louis, a winter storm hit there this past weekend… It was sunny and 85 here… I’m just saying… My good friend Kevin (Webbie) asked to hear a Nilsson song this past week, and I forgot to play it for him, and guess what comes up as the song to greet me this morning is? Nilsson, sings his song: Without You…

Well, the old saying that the folks on the trading desk used to say, that “When Chuck’s away, the currencies rally” didn’t hold true… And much like all my securities licenses that will expire in June, because no one has picked them up for 2 years… The old saying will too be retired… The euro is basically trading in the same clothes as when I left 10 days ago… The Trade Negotiations to date, have gone nowhere, the President’s summit with the N. Korean leader went bust… The National Debt keeps rolling along at an unprecedented speed… And guess what’s coming up on the horizon?

The Debt Ceiling was passed this last Saturday, and it wasn’t scheduled to be passed, for a couple more months! When will the finger pointing and blame game begin?

I read on the RT this past weekend that Russia had posted a $212 Billion Trade Surplus for 2018… That’s right I said Trade Surplus! Both the Budget and the Current Account Surpluses are at record levels, folks… I don’t see how currency guys and girls can ignore that fact much longer… But I guess when the major media is blaming everything on Russia these days, it clouds the sunny skies shining over Russia right now…

China has a HUGE Trade Surplus, but has a Current Account Deficit… The Eurozone has a Trade Surplus, but a major Current Account Deficit, and here in the U.S. we have both sitting in the red, and have been for some time now…

I had a reader once ask me, why it seemed I was always negative about the dollar… And I think I responded that the U.S. has the largest economy in the world, and was supposed to keep the dollar strong, so that other countries that took them in didn’t have to worry about holding them. But we’ve done a p&p job of keeping the dollar strong through the years… And since the dollar was removed from the Gold standard in August 1971, the weak dollar trends have caused larger losses for the dollar’s value than the strong dollar trends have recovered…

We’re the U.S. of A! And we should not be dealing with debt ceilings, and $22 Trillion in national debt, and we should not have had years of corp. corruption, and Politics that that can’t seem to agree on the time of day! And there’s so much more than I can even shake a stick at!  I look at what values currencies, and in my book, none of these things, plus, dozens of other things, add up to the value that is placed on the dollar right now. And that, my friends, is a good enough reason to bang on the dollar as any… 

OK… back to the regularly scheduled programming… Gold hasn’t had a good week while I was gone either… Gold is back below $1,300… And as Ed Steer of edsteergoldandsilver.com , said last week, “Da Boyz Were Out And About On Tuesday”… In layman’s terms… The price manipulators were sending the price of Gold downward on Tuesday… In fact he could have titled every letter he wrote last week the same! 

But Palladium is the cat’s meow of precious metals these days, as it has traded over $1,500 !!!!   That’s amazing to me, as all of the move to these lofty grounds for Palladium has come from what traders call a “shortage” of the metal, VS the demand…  There’s no question that this is how it’s supposed to be in the world, but… when does the curtain come down on this trade?  Palladium has proven a thought that my dad used to tell me all the time… There’s no such thing as a shortage of an item, the item is only in need of a price adjustment…   And Palladium has seen its price adjustment for sure!

This week, the Data reports will be flying in from all over the world, and here in the U.S. the Data Cupboard doesn’t have much today, but it builds a crescendo that comes on Friday with the Jobs Jamboree…  I have to say that in the past it made sense to report on the data of countries because it held a very important place among the things traders used to value a currency, but these days it’s just not the same…   For instance, look at all the weak and negative data reports we’ve seen here in the U.S. but did it hurt the dollar?  And look at all the bright shiny economic data reports we’ve seen print in Russia, and has it helped the ruble?  See, what I’m talking about? 

I just can’t get my arms around this article that came across Bloomberg this morning, that in the U.K. PM  May, paid for BREXIT votes…  I don’t know she escapes that one, unless it’s not true… You know, false news, and all…  

President Trump was dissing the dollar again this past week, saying that the strong dollar was hurting exports, and causing the large Trade Deficit…  He banged on Fed Chairman Powell, not by name, but by saying, “we have a Fed that… ” and so on…  I think the Fed should be banged on, as they’ve done an awful job of shepherding the economy and forward…  Beginning a rate hike cycle so late in an economic expansion, was their first mistake this go-round, and their 2nd mistake was deciding to reduce their balance sheet at the same time they were hiking rates…  They HAD to know that combining those two would be like hiking rates on steroids, and that would hurt the economy, eventually, didn’t they?  They DO have tons of economists that work for them, and one of them had to have come up with this idea don’t you think? 

I do…  and much like in the book by Danielle Di Martino Booth, Fed Up, when she would explain how the regional presidents would receive recommendations from his advisors, to present to the board…  

I read this morning that the U.S. and China are nearing an end of their Trade Talks, and will have an agreement in the end…  The stock jockeys should be happy about that… I’m just saying… 

I’m sitting here, looking straight out at the ocean, and the sun is rising over the ocean this morning, and it’s quite beautiful, and just exudes peace, and brotherhood…  Too bad that all gets lost on everyone… 

To recap…  The currencies haven’t rallied while Chuck was away, and so like all good theories die off… so does this one…   The currencies are basically in the same clothes as they wore when I went on vacation, and Gold got whacked a few times by the price manipulators, while Palladium continued to rally by large margins each day.  President Trump banged on the dollar and the Fed, and Chuck explains why he bangs on the dollar… 

For What It’s Worth…  Well, while I was away, my good friend, the Retirementor, Dennis Miller printed an interview he did with me, a couple of weeks ago… I had given you the heads up on this printing last week, before I went on vacation… But since Ed Steer printed it, I thought, I would too! Blow my own horn if you will…  So, this can be found here: https://milleronthemoney.com/dont-get-caught-in-the-fed-trap-again/

Or, here’s your snippet: “The Government surprised the world in 2008 when the Fed bailed out the banks at the expense of seniors and savers.
The Fed dropped interest rates to historic lows while buying U.S. treasuries and bad loans through their Quantitative Easing (QE) program. Seniors and savers lost over $4 trillion in interest income they would have normally received.

The stock market tanked. Investors, desperately searching for yield, redeployed their money into the market and higher risk bonds. Retirees had to take on more risk in order to survive.

Former Fed Chair Ben Bernanke called the consequences “collateral damage”. Seniors and baby boomers called it “catastrophic damage” as they downsized and altered their retirement plans.

Since the 2016 election the Fed raised rates 8 times. In January 2019 they held rates, but continue to sell off mortgages and treasuries. It appears the Fed is starting a U-Turn and we could soon see more QE.”

Chuck Again…  I hope you get an opportunity to read the whole interview, you’ll probably hear a thing or two that you hadn’t heard before…  and while you’re there, I would suggest you sign up for Dennis’ letter!

Currencies today 3/4/19 American Style: A$.7085, kiwi .6806, C$ .7568, euro 1.1340, sterling 1.3216, Swiss $1.0009, European Style: rand 14.2470, krone 8.6110, SEK 9.2980, forint 278.62, zloty 3.7910, koruna 22.6020, RUB 65.85, yen 110.85, sing 1.3545, HKD 7.8491, INR 70.81, China 6.7044, peso 19.35, BRL 3.7717, Dollar Index 96.59, Oil $56.29, 10-year 2.74%, Silver $15.14, Platinum $845.36, Palladium $1,546.54, and Gold… $1,287.23

That’s it for today…  Well, my beloved Cardinals don’t look good so far, but then it’s early in spring training… Pitching is good, hitting is bad, and fielding still needs work… I sit across the aisle from the Cardinals GM and the President of operations, and they get to hear my comments about plays all game long… I get in trouble at times from my wife when I say things… But when I’m alone like I’ve been the past two games… Watch out! I’m not one to hide my feelings or thoughts!  OK… lots of things going on this week here in S. Florida for me, with visitors, ballgames, inspections and so on, so I had better button this up and get going… I hope you have a Marvelous Monday, and remember to Be Good To Yourself!

Chuck Butler

 

February 21, 2019 

* Currencies can’t find a bid on Wednesday… 

* Palladium sees major profit taking… 

Good Day… And a Tub Thumpin’ Thursday to you! What a beautiful moon last night on the ocean! WOW! I sat out there in amazement at the beauty in our world, when you put all the other stuff on the back burner, and just concentrate on the beauty in our world. I had a great dinner with good friends at the oldest steakhouse in Florida… The Okeechobee Steakhouse… If you’re ever in this neck of the woods, you should try it! America greets me this morning with their song: Tin Man… Oh, Oz never did nothing for the Tin Man, that he didn’t already have…

Well, the march the currencies went on VS the dollar during Tuesday, didn’t continue on Wednesday, in light of the Fed sounding very dovish in their meeting minutes… I’ll get into the Fed’s meeting minutes in the FWIW section, so stay tuned for that!  It made no sense to me that traders didn’t take the meeting minutes for what they were… and sell dollars… But… I can’t have everything…

The euro traded in a very tight range on Wednesday, and in the overnight markets it was much of the same. And what did I tell you yesterday about those BREXIT talks? That they weren’t going well, right? Late yesterday, it was reported that the pound was weakening on news that some negotiators have quit the BREXIT talks… Don’t ask me how I knew these talks weren’t going well, I just knew… had that 6th sense, if you will…

Palladium saw some profit taking yesterday, and closed down $15 and change on the day… I guess reaching $1,500 was just too juicy of a price to not take profits, eh? Oh, and a longtime commodities guy, sent me a note yesterday, and told me that Palladium had never reached $1,500… And asked me where I got my prices… Well, I get my prices on Bloomberg.com… And I don’t use futures prices, they are the “spot” prices for precious metal that I report each day.

I don’t try to paint pretty pictures for currencies and metals in the currency roundup, they are what Bloomberg says they are, and that’s that! And from the looks of trading so far this morning, Palladium is off another  $24 in the early trading, so maybe the bloom is off the rose, here?

In Australia last night, some good labor reports, showed that 65,400 jobs were created in January, VS a negative 3,000 in December… So, a very nice rebound, eh? The Aussie Unemployment Rate remained at 5% in January, same as December. But with the euro being tightly traded in a narrow range yesterday, the Aussie dollar (A$) couldn’t find any terra firma to rally on these employment numbers… Hmmm….

What the hell was on Trader’s collective minds yesterday? The Fed sounds dovish, and talks about the idea that no new rate cuts will be needed in 2019, and the Australian Employment numbers are very good, and neither currency found a bid all day… What gives?

OK… I won’t get any answers here… So, I’ll have to wait to see if any of them  (traders) are interviewed so I can hear their excuses…

The U.S. Data Cupboard has some old “delayed” economic prints for us today… First we’ll see Durable Goods Order for December… I’m sure that by now, the boys and girls that do these dirty deeds done cheap, have had plenty of time to massage the numbers, so I won’t be surprised to see them stronger that what we would expect, given the nature of other December prints… And Capital Good Orders for December will also print… We may see a negative number here, only because those same boys and girls that are going to massage the Durables, think that most people don’t know what CAPEX is… But you… Dear Pfennig Reader, know all too well, what CAPEX is… and if it does print negative, that’s a bad sign, and another brick in the wall…

Dirty deeds, done dirt cheap… (AC/DC) that’s the boys and girls that massage the numbers before allowing the world to see them…

The price of Oil jumped to a $57 handle in the past 24 hours…  Supply and Demand, they are supposed to reveal price, right?  Well, with the price of Oil, it sure seems to be in play, at least right now, as our friends (NOT!) at OPEC are apparently going through with their production cuts, thus reducing supply… And demand is still strong for fossil fuels, so there you go! 

Just what U.S. consumers need right now, is a higher price for the gas they put in their monstrous SUVs…   Or whatever Beemer, Audi or Benzie they drive!   Down here I drive a Honda…  And it takes regular gas, and they like to charge more for gas down here than in Missouri, so this bump up in price will only hurt me a little bit… 

The U.S. Data Cupboard yesterday had a third tier data print that almost got past me…  The U of Michigan does a confidence report, and they also do an inflation report, and their inflation report for January hit an all-time low!    I sure hope the Fed Heads get this data in front of them…  As I understand, from Danielle Di Martino Booth’s book, Fed Up, these Regional Fed Presidents get a lot of their data from the economists that they employ…  So… let’s hope that somebody with an ounce a gray matter decides to put this data in front of his boss!

An old friend, not that he’s old, but our friendship is old, Steve Sjuggerud, is all over the internet these days with his latest call on stocks… Steve believes that the stock market bubble will pop, but before it does, he believes stocks are going to hog wild on the upside (my words not his) And looking at stock performances it appears that he may be correct… 

But the Bond Boys are having nothing to do with this stock market talk, as the yield of the 10 year Treasury remains around 2.65%, and apparently is well bid at that level…  I have to admit that I tend to agree with the Bond guys… 

To recap… The currencies rally of Tuesday, couldn’t be repeated on Wednesday, and they look pretty much like they’ll trade in the same clothes today too…  The Fed’s Meeting Minutes were quite interesting, in that they sounded pretty dovish, for a group of people that hiked rates at the same meeting in December… And Australia printed a strong Employment report, but none of these things could get the dollar bugs to give an inch on the day… 

For What It’s Worth… Bloomberg had a good article on the Fed’s Meeting Minutes last night, and I pulled it so everyone could see what was on the Fed Head’s collective minds, back in December… Remember the FOMC hiked rates 25 Basis Point (1/4%) at that meeting but has since done the old two steps backward, and here are the 5 takes on what the Fed Heads had to say, and I found it on www.bloomberg.com

1. Or, here’s your snippet: “There was widespread agreement for the FOMC to end shrinkage of the $4 trillion balance sheet by the end of the year. The timetable ends uncertainty over whether shedding assets would further tighten financial conditions.
2. The FOMC essentially said it is throwing out the December forecasts for two rate hikes this year, and instead “many” on the committee were unsure whether any adjustments would be needed.
3. The committee is taking a patient approach in light of increasing downside risks, notably slowing global growth and turmoil in financial markets. Some FOMC participants were cutting their estimates for 2019 U.S. growth.
4. The Fed was becoming more dovish in its view on inflation, noting the outlook had become more muted compared to last year even though the U.S. labor market has been tightening.
5. U.S. stocks were mixed, while Treasuries edged lower after release of the minutes, indicating not a big surprise from investors.

Chuck again… Well, it’s all coming back to me now said the blind man as he spit into the wind… The Fed is turning dovish, and choking on their previous statement of how the economy was strong and robust! But traders didn’t see this as a reason to sell dollars? Strange, eh?

Currencies today 2/21/19 American Style: A$.7110, kiwi .6817, C$ .7580, euro 1.1345, sterling 1.3070, Swiss $1.0015, European Style: rand 13.9050, krone 8.6215, SEK 9.3468, forint 279.67, zloty 3.8190, koruna 22.6213, RUB 65.69, yen 110.75, sing 1.3525, HKD 7.8476, INR 71.11, China 6.7212, peso 19.21, BRL 3.7198, Dollar Index 96.54, Oil $57.34, 10-year 2.66%, Silver $15.86, Platinum $823.70, Palladium $1,438.10, and Gold… $1,338.40

That’s it for today, tomorrow, and next week! Yes, for all of you who have not paid attention this week, I’m going on my annual spring vacation starting tomorrow, and won’t be back in the saddle until 3/4…   My first Spring Training Game is Sunday… Every year when I walk into the stadium and see the field for the first time, I get chills, and tear in my eye, because, if cancer had had its way with me, I would no longer be able to enjoy these trips to heaven on earth…   Our Blues go for their 12th win in a row tonight in Dallas… Let’s Go Blues!  Cardinals already reported a pitcher with arm problems… Every year, it’s something at spring training!  I would go on about how this shouldn’t have happened to this pitcher, but you don’t want to hear that, so that’s all I’ll say about that!  R.E.M. takes us to the finish line today with their song: Drive….  I hope you have a Tub Thumpin’ Thursday, and remember to Be Good To Yourself!  bye~

Chuck Butler

 

February 20, 2019

* Currencies trade stronger on Tuesday VS the dollar

* Gold has a good day, but gets outshone by Palladium… 

Good Day… and a Wonderful Wednesday to you… We have an early morning appoint with a lawyer this morning to close on our condo unit that we just sold… Great stuff for me, that we didn’t own two Condos too long… And a great thing for my retirement account too! HA! I got an opportunity to watch our Blues on TV last night…  And they won their 11th game in a row! Man have I been a dolt lately, reporting their winning streak, and each time cutting them short a win! Billy Joe Royal greets me this morning with his song: I Knew You When… Ahhh… The 60’s… what a great decade of music…

The currencies, led by the Big Dog euro, continued their march forward yesterday, after spending a couple of days, dawdling, and waiting for the U.S. trading desks to be fully manned. More and more I’m seeing reports from economists around the world saying that the dollar’s days as the king of the hill are numbered… I love it when “other economists” get on my bandwagon… Of course my bandwagon has hit a pot hole or two along the way, lost a wheel a couple of times, and had to have lead horses changed, but eventually the trend will catch up with the dollar, and when it does, you’ll rarely see the dollar bugs running around when the lights get turned on…

I also refer to a couple of economists that always seem to have a data report in their back pocket for slow days, and yesterday was no different for economist David Rosenberg, (one of my faves!) who had this little ditty for his Twitter followers: Restaurant sales have declined in four of the past five months and at a pace we haven’t seen in 25 years. That means worse than the depths of the 2001 and 2007-09 recessions. Remember — they are a leading indicator.

Chuck Again… All in all, it’s just another Brick in the wall…

If you’re new to class or have been living under a rock for the last week, I sing that song by Pink Floyd every time we see a data print here in the U.S. that tells us the recession I keep talking about is on its way… with each weak or bad report being “another brick in the wall”…

And Gold had another good day gaining $11, and is up another $4 in the early morning trading today… But the show horse of the precious metals is Palladium, which found a way to add another $18 to its price yesterday, and was within spitting distance to $1,500  at the end of the day yesterday, and has gone over that figure in the early morning trading today…  

Palladium traders claim that there is a shortage of the metal and that’s why the prices are soaring every day…  Hmmm… but what about the shortage in Silver?  I told you yesterday about the problems for Silver in that there are just too many short positions on the books… But… Silver did climb above $16 last night, and that in itself is a major move for the Silver… 

Oh, and I was a day early with my thought yesterday, that the Fed’s Meeting Minutes would print on Tuesday, when it’s really a Wednesday afternoon thing… So, we have that going for us today, eh? I also made a faux pas yesterday adding up the ticket costs to my spring training buddies, and giving them some bad numbers! It just wasn’t my day to be smart… HA!

The Fed’s about face about two weeks ago, with Jerome Powell, sounding very dovish, has been the catalyst for the currency rebound, and now Treasury yields are continuing their decline, and that is really going to add problems for the dollar going forward… Right now, you can center on a handful of currencies jumping on the rally tracks VS the dollar, but more will join them once a clear weak dollar trend is evident to the markets. Currencies like the Swedish krona, which is still having to deal with negative deposit rates in Sweden, is having problems garnering any interest from investors to buy the krona…

And while the pound sterling is enjoying another bump up in price, because traders are wearing rose colored glasses and think that the BREXIT plans are going nicely… Well, I have news for them, they aren’t going well… and this brief bump in the pound, will be short-lived… at least in my humble opinion, which could be wrong!

Even with the Reserve Bank of Australia (RBA) doing their best Eeyore imitation about 10 days ago, the Aussie dollar (A$), is joining the euro on the rally tracks VS the dollar, and dragging the A$’s kissing cousin across the Tasman, kiwi along for the ride… At least the Reserve Bank of New Zealand (RBNZ) wasn’t following the RBA down the “oh woe is me” rabbit hole, last week when they met… but they also didn’t hike rates… UGH!

My publishers, Mary Anne and Pamela Aden asked me about 10 days ago, if I thought the yen would be the key currency in a run VS the dollar… And I said no… I don’t like yen, and haven’t for a long time… I don’t get the “safe haven currency” claims, and I don’t get why currency traders don’t take the demographics problem in Japan seriously… For if they did yen would be nowhere near 110, and it would be more like 120! Ok, I know, I’m a little hard on the beaver there, but June… the beaver should have known not to spread its wings! HA!

That was not to say that Mary Anne & Pam were of a different opinion than me, they just thought they would ask which currency will be the lead dog in a weak dollar trend… And they asked, me! I was honored to answer their question for them! But the 2nd most traded currency in the world is the euro… The offset currency to the dollar is the euro… and even if things aren’t all peachy in the Eurozone, it won’t matter, if the dollar is deeply entrenched in a weak dollar trend…

Of course I’m talking about what happened in the last weak dollar trend, and I see no reason to believe it won’t happen again in the next weak dollar trend!

You know, things like I’m going to talk about don’t make me happy to have to talk about them,….  I read a report last night that said the President (Trump) was telling the Chinese to keep their currency stable…  Wait, wait, What?  Yes, now we’re telling countries how to manage their currencies, as if we had a clue how to manage our own, for if we did, the dollar wouldn’t be, on an overall basis, 90-something percent lower in value than when the Fed was forced down our throats by that awful president Woodrow Wilson, in 1913… 

The housing reports that were supposed to print today will be delayed, and the only thing the U.S. Data Cupboard has to offer us is the Fed’s Meeting Minutes…  Given the abrupt turnaround that Jerome Powell made since that last meeting in December, when rates were hiked, I would think that the minutes will reveal some real sawdust left on the floor… 

To recap…  The trading desks are back to normal and the currencies took this as a sign to move forward with their march on the dollar yesterday. The thought that interest rate hikes are a thing of the past here in the U.S. and Treasury yields continuing to decline, has economists lining up to give their two -cents worth, and talk about how the dollar’s days are numbered…  We add another brick in the wall today… 

For What It’s Worth…  These kinds of articles/ stories really get to me folks… It’s just not right, and that’s all I’ll say about that…   This is a report that talks about the amount of tax that Amazon will pay this year and it can be found here: https://www.blacklistednews.com/article/71112/amazon-will-pay-0-in-taxes-on-11200000000-in-profit-for.html

Or, here’s your snippet: “While some people have received some surprise tax bills when filing their returns, corporations continue to avoid paying tax — thanks to a cocktail of tax credits, loopholes, and exemptions.
According to a report from the Institute on Taxation and Economic Policy (ITEP), Amazon (AMZN) will pay nothing in federal income taxes for the second year in a row.

Thanks to the new Tax Cuts and Jobs Act (TCJA), Amazon’s federal tax responsibility is 21% (down from 35% in previous years). But with the help of tax breaks, according to corporate filings, Amazon won’t be paying a dime to Uncle Sam despite posting more than $11.2 billion in profits in 2018.

How is that possible?

“It’s hard to know exactly what they’re doing,” said Steve Wamhoff, ITEP’s Director of Federal Tax Policy. “In their public documents they don’t lay out their tax strategy. So it’s unclear exactly which breaks [the company is taking advantage of]. They vaguely say tax credits. One could think of many different ways a corporation could do this, like the depreciation breaks which were expanded under TCJA.”

Chuck Again… thanks to longtime reader Bob, for sending me that link… 

Currencies today 2/20/19 American Style: A$.7156, kiwi .6867, C$.7585, euro 1.1345, sterling 1.3033, Swiss $.9991, European Style: rand 14.1235, krone 8.5797, SEK 9.3052, forint 280.02, zloty 3.8267, koruna 22.6365, RUB 66.05, yen 110.76, sing 1.3514, HKD 7.8489, INR 71.09, China 6.7626, peso 19.18, BRL 3.7245, Dollar Index 96.54, Oil $55.88, 10-year 2.63%, Silver $16.07, Platinum $824.82, Platinum $1,501.66, and Gold… $1,344.99

That’s it for today… 11 in row! WOW! And I got to see the Blues play last night VS the Maple Leafs! Looks like rain outside, I heard last night that early morning rain wouldn’t last, and the sun would make an appearance mid-morning! YAHOO! Well, we’re getting down to the day I take my traditional spring vacation… And it will start on Friday this week, and I won’t be back in your hair until 3/4…  I know, I know, you’ll miss me, and I’ll miss you… But I have to have these times to recharge…   While I’m out on vacation, my good friend, the Retirementor, Dennis Miller at www.milleronthemoney.com  will run an interview with me… so, if you’re having withdrawal pains from not reading me, there you go!   Besides, if you’re not signed up with Dennis’s letter, you aughtta! My St. Louis friends will get a kick out of that line, since it’s an old TV commercial…  Sly and the family Stone take us to the finish line today with their song: If You Want Me To Stay…  I hope you have a Wonderful Wednesday, and remember to Be Good To Yourself!

Chuck Butler

February 19, 2019

* December Retail Sales print negative… 

* Currencies rally on the bad data in the U.S. … 

Good Day… And a Tom Terrific Tuesday to you! What a great weekend here in S. Florida, weather-wise, and perfect for a 4 day weekend for yours truly! There were tons of data releases on last Friday, so we’ve got to talk about those, the National Emergency , and more bricks in the wall… All that and more in today’s Pfennig! Our Blues are really playing some very good hockey these days, having won 9 in a row, and haven’t lost in February, so far! I’m thinking that it could be a case of getting hot, too early, and I sure hope I’m wrong, but the playoffs don’t start until the second week of April… I’m just saying… Not that I’m complaining about their winning streak! Bob Marley greets me this morning with his song: Three Little Birds…. People don’t worry, about a thing, cause every-little-thing is gonna be alright…

Sounds like some of the economists, that keep saying that debt doesn’t matter… Last week, the President announced a National Emergency as the border situation got worse. I’m wondering what happened to calling a National Emergency on the debt… We have reached $22 Trillion and it took only 10 months to gain the last $1 Trillion… And if you ask me… we have 2 National Emergencies… But since Trump has added to the debt party, he can’t be excluded from the former presidents that added to the debt in a Big Way, and failed to call if a National Emergency… That’s all I have to say about that today, for I’ve been beating the drum, and calling out the National Debt as a problem for a long time… Oh, and now there are something like 16 states trying to block the President’s National Emergency… Didn’t I tell you a couple of months ago, that nothing was going to get done in the next two years? I’m just saying…

The currencies on Friday, held on to the moves they had made on Thursday, and with the U.S. out yesterday, the currency market was thinly traded, with little movement. So, the majority of the move by the currencies against the dollar, came on Thursday, the day that December Retail Sales finally saw the light of day, and they were as bad as the BHI had indicated they would be, with Core Retail Sales down -1.8%….. In December… in the month that we shop till we drop… Retail Sales were a negative -1.8%… When you add in car sales they got better, but not by much, falling -1.2%…

All in all, it’s just another brick in the wall…

And to add insult to injury for the dollar bugs….. Our friends at OPEC (NOT!) have cut production of Oil again, and those curbs on production, has pushed the price of Oil above $56…

So, there’s been a ton of data in the past few days, And we’ve added quite a few bricks to the wall of bricks that represent economic data reports that are pointing to a recession in the future… We might as well go through them… First of all on Thursday, PPI (wholesale inflation) printed for January was -0.1%… So, no increase of inflation in the pipeline, which should be on the Fed Head’s minds as they prepare to shut down the rate hikes next month…

On Friday, it was more of the same, and more bricks in the wall… Industrial Production in January printed negative -0.6%… The decline was driven by an 8.8 percent decline in motor vehicles and parts, with assemblies falling from the best pace in more than two years to the weakest reading since May. The year has started out in the red as far as economic data is concerned and the markets are beginning to notice… (a note to them from me… Hi guys, glad you could join in the discussion)

For all those that keep saying this is nothing, it’s going to get better, and this is the best time…I have this to say… What we have here is a failure to understand… To not see the trees in the forest, and to have drank the Kool-Aid…

Gold had a good day on Friday gaining more than $9, and yesterday even without the price manipulators at their desks, Gold gained $3 more dollars on the day…  And is up another $3 in the early trading this morning…

Speaking of Gold… Last week I highlighted an article in which metals company, Johnson-Matthey commented on the supply and demand of Platinum and Palladium as being the reason they’ve done well…. I then received an email from a dear reader asking to ask Johnson – Matthey to also comment on Gold & Silver… Well, I guess if I had their email address I would… But to put it to the test on the number of short trades on the books, Silver continues to be the number 1 metal that has the most short sales, so much so, that it would take 185 days of Silver production to match the number of ounces of Silver that have been sold short…

Palladium continues to soar higher and higher each day… Friday, it was up $25 and yesterday it was up $24, and is working up a sweat in the early morning trading today… Heavens to Betsy, what on earth has gotten into Palladium traders?  Palladium has outperformed everything in the past two years… Everything! stocks, bonds, commodities, other precious metals, cryptocurrencies, and whatever investment invention that the propeller heads have come up with now…  I guess, I should have listened to myself, when I wrote about how I agreed with a metals company CEO, who said that Palladium was going to bypass Platinum… It has done that, and much, much more!

Well, the U.S. / China trade talks continue past last Friday’s original deadline, as an extension was granted, and there were “leaks” from the negotiators, that things were going smoothly..  Hmmm… I’d say hogwash! If things were so hunky dory, why did you need an extension of time?  All these bad economic reports from January and late last year, are showing that I was correct in saying that the Trade War would hurt both countries, the U.S. and China…  

And over in the U.K. BREXIT talks continued, but there’s nothing here to report, as I doubt little progress has been make… This is going nowhere folks, and pretty soon, there will be calls to end it all, and go back to the way things were before the BREXIT vote… At least that’s how I see it happening… 

But, pound sterling is held hostage to the BREXIT happenings, so if I see the whole thing collapsing, then I would steer clear of pound sterling, but that’s just me… 

I had a dear reader ask me to talk about the Singapore dollar (S$), so I would be happy to do so, as I’ve not mentioned it in a long time… My bad, I guess…  As I’ve talked about in the past, the S$, moves in tandem with the Chinese renminbi, as the two respective countries compete for exports, and neither country can afford to allow their currency to get out of whack with the other…   

Keeping that thought in mind… The Chinese renminbi has actually been better in recent weeks, which means the S$ is also performing better VS the dollar…  I’ve talked about this in the past, but for new readers… In Singapore they do something that I believe all countries should adopt… Their Monetary Authority of Singapore (MAS) uses a band that the currency trades in that’s tied to inflation… The only move the currency’s trading  range in the band if inflation moves…    They use the currency’s strength to fight inflations, an not willy nilly interest rate moves! 

There’s not much in the U.S. Data Cupboard today, except for the Fed’s Meeting Minutes (FMM) from their last meeting that will print this afternoon…  In December, the Fed hiked rates, and ever since they talk as if they were sorry they did so… And the Data reports from the last quarter of 2018, and into 2019, have reflected that there is a problem, Houston…  So, it will be interesting to see if the Fed Heads were talking about these problems last month when they hiked rates, or if they were still looking at the economy though rose colored glasses…  I’m thinking that they still ahd their fashionable rose colored glasses on in December, and the FMM will show that to be the case…  

• To Recap…  The currencies rebounded last Thursday, and have been trading in a tight range since, as the markets have been thinly traded since… But all that changes today, and the only piece of data today is the Fed’s Meeting Minutes.  Last week, December Retail Sales were negative -1.8%… Yes, that’s in December…  That’s not a good thing folks, and Industrial Production fell out of bed in January!  Our wall of bricks that represent bad economic data reports, received quite a few bricks in the past week…  

For What It’s Worth…   I received this email from the GATA folks over the weekend, and then Ed Steer highlighted it, so the double shot of this report was enough for me to make it my FWIW article today. It’s about how since Glass Stegal was abolished, Banks are falling by the wayside, and can be found here: http://wallstreetonparade.com/2019/02/4823-u-s-banks-have-disappeared-since-1999/

Or, here’s your snippet: “At the end of 1999, the year that President Bill Clinton and his Treasury Secretary Robert Rubin brokered the deal to repeal the Glass-Steagall Act of 1933 and allow the casino investment banks on Wall Street to gobble up deposit-taking banks, there were 10,220 federally insured banks and savings institutions in the United States. Today, that number stands at 5,397, a decline of 47 percent according to the Federal Deposit Insurance Corporation (FDIC). What exactly happened to those disappeared banks?

We examined FDIC data to see if the sharp falloff in bank numbers was from failures or mergers. We found that the vast majority of the decline resulted from banks being absorbed in mergers. By the end of 2005, six years after the repeal of Glass-Steagall, the U.S. still had 8,832 federally insured banking institutions. But in just that year alone, 315 banks were lost to mergers. By 2010, the number of U.S. banking institutions had dropped to 7,657 with 197 institutions absorbed that year through mergers. In years 2015, 2016 and 2017, there were a total of 786 federally insured banking institutions absorbed through mergers.

The loss of competition in banking services has unleashed an unprecedented concentration of the life savings of Americans being held as deposits at a handful of behemoth Wall Street banks which simultaneously engage in high risk securities and derivatives trading – the very combination that led to the epic Wall Street banking collapses in 2008 and the 1930s.”

Chuck Again….  Well, let’s see… I’ve worked at 4 banks in my life and none of the 4 are still in business…  Maybe I was to blame? HA! As if…  I know the last place I worked, I was responsible for keeping the lights on in 2008…  But that’s all in the past…  in other words, nobody remembers, or cares… 

Currencies today 2/19/19 American Style: A$.7117, kiwi .6826, C$ .7550, euro 1.1310, sterling 1.2932, Swiss $.9960, European Style: rand 14.1573, krone 8.6152, SEK 9.3627, forint 281.50, zloty 3.8300, koruna 22.7467, RUB 66.20, yen 110.80, sing 1.3563, HKD 7.8485, INR 71.40, China 6.7638, peso 19.25, BRL 3.7161, Dollar Index 96.88, Oil $56.13, 10-year 2.66%, Silver $15.83, Platinum $811.81, Palladium $1,483.46, and Gold… $1,330.19

That’s it for today…  Just watched the sunrise over the ocean with a cloudless sky… simply beautiful…  We’re in our new digs here, but the window coverings haven’t arrived yet, so the sun shines through…   I’m going to head over to Roger Dean stadium today, to watch some spring training drills by my beloved Cardinals… You would be surprised to see how many people will be there… I guess there are more baseball nuts like me around!  Dave Loggins takes us to the finish line today with his 70’s song: Please Come To Boston…   I hope you have a Tom Terrific Tuesday, and continue to Be Good To Yourself!

Chuck Butler