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Chuck Butler’s: A Pfennig For Your Thoughts  Craziness

* Another day of little movement… 

* BOC and RBA to meet this week… 

* Wait till you read about this new craziness!

December 5, 2017  

Good Day… And a Tom Terrific Tuesday to you! I flipped a coin this morning after hooking myself up to my antibiotic… Heads, I go back to sleep, Tails I begin to write the Pfennig.. Well, I guess you’ve figured out that it came up Tails… I don’t mean to be so flippant about whether I write the letter or not, but I have an excuse… Doing these antibiotics through the PICC-line every 6 hours, is like having a baby in the house again, and I’m only getting about 4 hours of sleep at a time… UGH!  But you didn’t click on this email to hear about my problems, so I’ll get to work!  Derek and the Dominoes (Eric Clapton) greet me this morning with their classic rock song: Layla…   

Well, another day, another day of no currency movements, or whatever there is, it’s small… For instance, the Dollar Index yesterday morning was 93.15, this morning it’s 93.11… Whoa better pull back on the reins, that’s to much movement! NOT! The important thing is that the dollar’s rally last week has fizzled out… I guess the PPT has better things to do these days… HA! 

As I look at the landscape for the currencies, it appears to me that currency traders are waiting for “something big” to trade on.. The Aussie dollar (A$) and kiwi are the two best performers overnight, and their moves aren’t anything to get all lathered up about. But… they were positive, so they had that going for them! 

I had to laugh this morning when I was going through the process of obtaining the currency prices… On the Bloomberg site, they had two headline stories highlighted back to back, belly to belly.. One said something about how the pound sterling was rallying on the BREXIT talks, and the other one, right below the first one said something about how the pound can’t rally right now because of the BREXIT talks…  Hello? Is this the Editor’s desk? Good… I want to point out this point, counterpoint thing you’ve got going on this morning… It’s confusing to say the least! What? you don’t care? Ok, I’ll hang up now and go yell at the walls, thank you for taking my call!

Yesterday, I highlighted the craziness of the painting that garnered $127.5 Million… Well, this beats that craziness in the markets, check this out!

Did you hear the news (probably not) that a European corporation, Veolia has issued a 500 million 3-year EUR bond (maturity November 2020) with a negative yield of -0.026 %, which is a first for a BBB issuer, and if that’s not crazy enough for you, the bond was oversubscribed by 4:1! Are you kidding me?  In Grant William’s Things That Make You Go Hmmm…  he quoted the great analyst James Grant, who had this to say about this issue… “Said another way, three out of four investors who wished to lose money on a yield-to-maturity basis were left disappointed.” – James Grant  

WOW! Investors lined up to take negative yields for 3 years in a bond… I told you yesterday about the painting lunacy, well this item and the fact that it was oversubscribe 4:1, is worse, if you ask me! Negative yield has become acceptable by investors… That’s just crazy!   The Craziness is all around us folks…  Stocks that won’t quit moving higher, Bitcoin at $10,000 no, wait is it $11,000 now? Bonds at negative yields, painting that go from $10,000 in 2005 to $127.5 Million now, and the list goes on..  I feel like George Costanza’s dad… Serenity NOW! 

Another example of the craziness in the world today… A dear reader sent me a photo of a man in flood waters, and a CNN reporter asking him what he thought about Melania’s shoes…  Of course that was photo-shopped but I wouldn’t doubt it happening, do you? 

Well, the overseas news isn’t completely void of anything new… The Bank of Canada (BOC), and the Reserve Bank of Australia (RBA) are going to hold meeting this week… But that’s about all they are going to do, as I don’t expect any rate movements from  of the two… 

Gold still can’t find a bid anywhere, and wouldn’t you know it, yesterday I highlighted Palladium, and then the precious metal went about having the stuffing knocked out of it!  Well, I think I mentioned this last week, but the news is gaining more traction this week, and I’m talking about the BRICS (Brazil, Russia, India, China, S. Africa) mulling over whether or not to go at a Gold Trading payment system…  

Why wouldn’t they? They have to be getting tired of the West dominating the price of Gold with their paper trades…  The Shanghai Gold Exchange (SGE) was created as a physical Gold trading system only, so they have a base trading mechanism in my view…  I’m excited about this possibility, so I have to say that I hope that the BRICS do go about implementing a Gold payment system…   

Oh! And did you see/ hear what the former Fed Chairman, Alan Greenspan said about deficits and Gold? Well, first I need to remind everyone that Big Al was a Gold Bug long before he was the Fed Chairman, schooled by Ayn Rand… But as Fed Chairman he forgot all about his lessons about Gold, and started this whole mess we’re in…  Now skip ahead to now, and Big Al is back to being a Gold Bug, and was recently quoted as saying, ” Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process.”

The U.S. Data Cupboard yesterday, had the Rocktober Factory Orders, which printed negative at -0.1%…  I told you that it would probably be a weak report, and there you go! it was exactly that!  Today’s Data Cupboard, has the Rocktober Trade Deficit… Well, in Rocktober, the dollar was fighting back and since it had gained ground, I’m going to say that the Trade Deficit will show it by widening in the month…

Look for the deficit to widen to over $47 Billion, up from the previous month’s (when the dollar was getting sold) $43.6 Billion…  

To recap…  Another day of no movements in the currencies… Well there were some movements but they were small and barely noticeable.. The BOC and RBA meet this week, and Chuck thinks that’s all they are going to do, with no rate movements expected. Chuck also points out some real craziness in the markets… And Gold still can’t find a bid… 

For What It’s Worth… This article is from the Russian Times (RT) and I found it in Ed Steer’s email this morning. Ed has been having some website problems so I forgo the link to his site today. This article is about how Russia and China are moving toward the goal of removing the dollar from their trading… and it can be found here: https://www.rt.com/business/411877-russia-china-bonds-dollar/  

Or, here’s your snippet: “The Moscow stock exchange will soon issue nearly $1 billion-worth of yuan-denominated bonds. It could become the start of a new financial system not based on the US dollar, analysts say.

Russia will issue the 6 billion yuan (about $900 million) bonds with a five-year maturity in December or January. The Central Bank says it is testing the water for future investments.”  

Chuck again…  Hey! we brought this on ourselves, with all the deficit spending through the years, bringing the value of the dollar lower, and giving holders of the dollar a reason to want to remove it from their reserves…  

Currencies today 12/6/17… American Style: A$ .7645, kiwi .6898, C$ .7911, euro 1.1867, sterling 1.3417, Swiss $1.0159, … European Style: rand 13.4888, krone 8.2985, SEK 8.4091, forint 264.59, zloty 3.5424, koruna 21.6216, RUB 58.83, yen 112.50, sing 1.3459, HKD 7.8127, INR 64.40, China 6.6199, peso 18.61, BRL 3.2513, Dollar Index 93.11, Oil $57.17, 10-year 2.38%, Silver $16.32, Platinum $922.26, Palladium $996.36, and Gold… $1,278.40  

That’s it for today…  Last evening I had a visit from former neighbors and good friends, Rick and Laura, and then another neighbor left a plate of homemade donuts at the door for me, saying that she had heard I was having stomach problems again and thought the donuts might help! WOW! Thank you Lynn! What a sweetheart!  I had a doctor appt. yesterday. This doc is always amazed that I keep a smile on my face through everything…  I assured him that there were days when I didn’t smile… He calls me the Energizer Bunny, because I just keep going and going…  And with that… The Michael Stanley band takes us to the finish line today with their song; Rosewood Bitters…  I hope you have a Tom Terrific Tuesday, and be Good To Yourself!

Chuck

 

Chuck Butler’s: A Pfennig For Your Thoughts  

December 4, 2017 

* Dollar rally loses steam…

* Senate passes tax bill…

* Another manipulated asset?

Good day…  And a Marvelous Monday to you ! And welcome to December! Good riddance to November! As it was full of the reasons I do not like the month!  I continue to recover, from my recent surgery, and look forward to the pain going away… I don’t need it to go away mad, I just need it to go away! John Wait greets me this morning with his very apropos song titled: Back On My Feed Again..  

I know that I’m beginning to sound a lot like a broken record, when I tell you that there just isn’t anything new in the world of currencies to talk about…  Yes, Bitcoin is soaring to the moon, and congratulations to anyone that bought Bitcoin a few years ago… Shoot Rudy, even if you bought it last year, you’re looking at HUGE gains! And now I read, yesterday, that the Fed might be looking at issuing their own digital currency…  Brother!  This is all madness folks…   

I was also treated to the newest edition of Grant William’s Things That Make You Go Hmmm, yesterday, and so with my continuing to boycott watching NFL games in place, I dived right into Grant’s letter… And talk about madness!  Grant highlighted a recent piece of art auction that proves once and for all that the years of ZIRP (zero interest rate policy) and QE (Quantitative Easing) have caused asset inflation that’s just ridiculous…    A painting of Jesus Crist, that sold for $10,000 in 2005, sold last week for $127.5 Million!   Which was up from a sale earlier in the year for $80 Million!  Are you kidding me? WOW!   That’s all crazy, folks, just like the price of Bitcoin… Remember, thieves, thugs, mobsters, porn kings, and whatever other form of low-life people use Bitcoin… I’ll say this once again, you need to be careful of who you lie down with, for if you lie down with the dog, you’ll get fleas, etc.  And that’s all I’m saying about that…    

The dollar’s rally last week stalled out, which was interesting to me given the momentum that was gathering toward the passage of the Tax Reform Bill, that did get passed on Saturday.  I haven’t had the chance to dive into the new Tax Reform Bill, but I will and when I do, I’m sure I’m going to find that it is 1. NOT revenue /spending neutral as it was billed to be, and 2. that like I’ve said all along, the tax reform was all about corporations, and not about you and me… But I’m sure there’s something in there that is going to hurt you and me, for when have the lawmakers in Washington D. C. been on the lookout for you and me?  Got your back, Jack, is not in their vocabulary when it comes to you and me!   

Whenever Congress does something I’m always reminded of a quote by President Ronald Reagan who said, “nothing lasts longer than a temporary Gov’t program”…  You know, like how the removal of Gold as the backing for the dollar in 1971, was supposed to only be “temporary”…   

Speaking of Gold…  Let me see if I got this right…  N. Korea shoots off another ICBM, last week… The U.S. continues to push the envelope with China’s territorial waters, and the U.S. continues to have military exercises in S. Korea, and on top of all that, Congress just passed a tax bill that will probably add to our national debt by heaps and bounds, and Gold can’t find a bid?  Something’s definitely wrong with this picture folks…

When my kids were little and watched Sesame Street, they would sing a song.. One of these things is not like the other…  And while it’s not the same, I think of this song whenever I list all the reasons Gold should be soaring right now, and it isn’t….   In fact, Gold is down $6 in the early morning trading today… UGH!

Palladium continues to steal the spotlight from the other precious metals, and has booked a 45% return so far this year, and it doesn’t look like it’s going to slow down and it’s certainly not going to have to stop, go to jail and not collect $200!   

Geez Louise I wish there were tons of currency news out there for me to tell you about, but there just isn’t… It’s the same old thing over and over again… The Producer Price Index (PPI- Wholesale inflation) beat the forecasts in Rocktober in the Eurozone printing at .04%, but the euro isn’t able to buy a bid right now, so this data just flows like water off a duck’s back!

I was reading a note from UBS (Union Bank Switzerland) this past weekend and they were talking about how the credit markets around the world, especially here in the U.S. were going to see tightening in 2018…  Hmmm  I guess I’m going to have to do some additional research to prove what I’m thinking is going to come to fruition.. I’m not seeing the tightening, instead I’m seeing Central Banks all scrambling to provide liquidity in the markets, with additional bouts of QE, and lower interest rates… 

Maybe… Maybe I’m wrong… to go on singing, singing this song… But it’s what I saw coming and I haven’t been able to shake that from my mind…   

Well, did you see the news last week about how a Boston Pension Fund is suing the Primary Dealers for Treasuries, saying that they manipulated the prices at the auctions? Oh My!  LIBOR, Swiss Francs, Gold fixing, and now Treasuries… And people still say that the Gold & Silver prices aren’t manipulated…  I shake my head and wonder how they don’t see this all falling into place with one manipulated asset after another being exposed… 

We’ll get a piece of real economic data today, when Factory Orders for Rocktober get printed, and will show that the pulse is faint for this data set…  This will be a BIG week for data, ending with the November Jobs Jamboree on Friday, so buckle yourself in as the currencies could take some wild swings this week… 

To recap… The dollar’s rally has stalled out… The Tax Reform Bill passed in the Senate on Saturday, Gold can’t find a bid, and now the Primary Dealers are getting sued for allegedly manipulating Treasury prices… It’ll be a Jobs Jamboree Friday this week, and Chuck is just really bummed out that the newswires aren’t filled with currency items!    

For What It’s Worth… Well, here we go… This article appeared in my local paper, but I’m sure it was taken from someplace else first! It’s about a speech by Janet Yellen, who is a cheerleader for U.S. growth, and shows her best cheers here: http://www.stltoday.com/business/local/yellen-recovery-increasingly-broad-based-in-both-u-s-and/article_ab64fa1b-a29e-5708-ad62-6726be1138e8.html#utm_source=stltoday.com&utm_campaign=BusinessNewsletter&utm_medium=email&utm_content=A12874506A3B5805DDED6C95AF30D7173DF7C77A

Or, here’s your snippet: “The U.S. economy has gathered steam this year and will warrant continued interest rate increases amid a global recovery, Federal Reserve Chair Janet Yellen told congressional leaders on Wednesday.

“The economic expansion is increasingly broad based across sectors as well as across much of the global economy,” Yellen said in prepared remarks delivered to the Joint Economic Committee.

Stock indexes, bond yields and the dollar were all higher in initial trading.

With weak inflation likely to prove “transitory,” she said “we continue to expect that gradual increases in the federal funds rate will be appropriate.”

Chuck again… She didn’t mention when the next rate hike will be, which everyone except me, thinks it will be in December when the Fed meets 12/13 & 14…  

Currencies today 12/4/17… American Style: A$ .7605, kiwi .6869, C$ .7889, euro 1.1855, sterling 1,3507, Swiss $1.0167, … European Style: rand 13.6738, krone 8.3175, SEK 8.4030, forint 263.96, zloty 3.5439, koruna 21.5744, RUB 58.85, yen 112.90, sing 1.3482, HKD 7.8143, INR 64.42, China 6.6171, peso 18.64, BRL 3.2541, Dollar Index 93.15, Oil $57.69, 10-year 2.40%, Silver $16.34, Platinum $930.6, Palladium $1,018.68, and Gold… $1,276.20 

That’s it for today…  Well, how about those conference Championship Games on Saturday? Not much drama, and the playoff field is set, with Clemson, Oklahoma, Georgia and Alabama… The semifinals will be played on New Year’s eve… My beloved Mizzou Tigers will be playing in the Texas Bowl on 12/27 VS an old Big 12 rival, Texas… It was quite the turnaround season for the Tigers as they started 1-5, and ended up 7-5…  I keep thinking I’m forgetting something this morning… Oh well, it’ll slap me in the face soon, I’m sure! Ok, time to go…  Robert Plant takes us to the finish lined today with his song: In The Mood…  Now, go out and make this a Marvelous Monday, and Be Good To Yourself! 

Chuck Butler

 

 

Chuck Butler’s: A Pfennig For Your Thoughts  

November 29, 2017  

* Tax plan looks good to go… 

* Dollar continues to get bought… 

* Good data from the Eurozone!

 

Good day… And A Wonderful Wednesday to you! We have been treated to some of the nicest weather in November that I can recall… I sat outside for a bit yesterday to get some fresh air, and watch the neighbors come and go… I thought, at the time, that maybe I should get my laptop and do some research… And then another thought entered my brain, and that was to just sit and simply enjoy the day!  I apologize for the tardiness of the Pfennig today, it was a rough morning for me… So, better late than never, I guess, eh?  I’m greeted this morning by The Alan Parson’s Project and their song: Eye In The Sky…

I left you yesterday with the dollar being bought for some unknown reason that only the currency traders would know, and for us to attempt to figure out what’s going on in their collective heads.  Well, the dollar buying continued throughout the day and through the night… The news that the Tax Reform is about to be a real thing, has really lit a fire beneath the dollar. 

I really didn’t think our lawmakers would find a way to get this done before the Christmas break, and that we would go into the new year without one of the pillars of the Trump campaign. And that thought was fueling my call that by year-end the recession would be in place, and the Fed would be revisiting their recent rate hikes. I guess, as always, I’m ahead of the curve in my calls, and we’ll have to wait for the recession, that if you ask me, was helped to that position for the economy by the Fed…   I’ve said this before, so it won’t be new to most people that read the Pfennig.  But you don’t say you want to see inflation, and hike interest rates and unwind your balance sheet of bonds…  But that’s what the Fed is doing, and it makes no sense to me!   

And it should make no sense to the markets, but they’ve become sheeple, and obey the Fed’s directions…  Which makes things difficult for a “markets guy” like me, who sees things and applies logic to them, and comes up with a normal “markets call”…  If it just doesn’t seem to add up, then that’s when I point it out… But when the markets can’t see the forest from the trees and trades in a strange manner that has no logic, then we’re all lost…   

And that’s when it’s time to batten down the hatches, and wait for the markets to correct… Or, as I used to hear my former colleague, and friend, Ty Keough, say to clients… “when the currencies are cheaper, you can buy more of them!”    There was some news from the Eurozone this morning, breaking the silence..  Loans to nonfinancial corporations climbed in the 12 months to Rocktober, the strongest figure since June 2009, underscoring renewed confidence in the Eurozone economy.  

But this news isn’t helping the euro recover this morning… In the old days of assets trading on fundamentals, this kind of news would have sent the euro soaring this morning… But in today’s world, sentiment is the King…  

The trading in Gold was crazy wild yesterday with over 505,000 contracts traded, but… it was a rollover day from one month’s contract to the next. So, when this day comes around each month, you have to throw out the volume, because you just don’t know what’s a rollover VS a new trade.  But when the day was through, Gold was up just 60-cents… That’s it, just 60-cents…

We’re getting closer each day to December, which is the month, that James Rickards called for the great Gold price reset, that I’ve talked about before. Remember what I told you… If you hear about a meeting being organized for leaders of countries or finance ministers, at Trump’s Florida humble home, this will be the signal that some BIG news for Gold is coming…    

I’m not one to get all caught up in calls like that, but as Rickards points out, he’s got a good track record on calls that he’s made, so it will be interesting to see how this one plays out… 

OK… The U.S. Data Cupboard had the previously talked about Trade Deficit, but also had the Case/ Shiller Home Price Index show an increase of 6.2% in Rocktober, up from September’s 6% increase. In addition, the Consumer Confidence index rose to an incredible number of 129.5 this month, up from 126.2 last month… 

Today’s Data Cupboard says that the 3rd QTR GDP here in the U.S. was 3.3%… Yeah, right, and I’ve got a bridge to sell you… What a crock! But, like I said above, the markets don’t question anything any longer, and just take things a face value… UGH!  

To recap… The dollar buying continued throughout the day yesterday, and overnight, as it appears that the Tax Reform Bill is growing near to reality…  The Eurozone had some good data this morning, but it isn’t helping the euro turn the tables on the dollar buying.  

For What It’s Worth…  So, here’s something that one could use to debate the 3.3% rise in GDP, and can be found here: http://www.zerohedge.com/news/2017-11-28/recovery-we-have-tripled-number-store-closings-last-year  

Or, here’s your snippet… “

Did you know that the number of retail store closings in 2017 has already tripled the number from all of 2016?

Last year, a total of 2,056 store locations were closed down, but this year more than 6,700 stores have been shut down so far.

That absolutely shatters the all-time record for store closings in a single year, and yet nobody seems that concerned about it. In 2008, an all-time record 6,163 retail stores were shuttered, and we have already surpassed that mark by a very wide margin. We are facing an unprecedented retail apocalypse, and as you will see below, the number of retail store closings is actually supposed to be much higher next year.

Whenever the mainstream media reports on the retail apocalypse, they always try to put a positive spin on the story by blaming the growth of Amazon and other online retailers. And without a doubt that has had an impact, but at this point online shopping still accounts for less than 10 percent of total U.S. retail sales.”

Chuck again… I’m not one to blame all this on Amazon folks… It has more to do with the price structures of malls, and people not wanting to deal with protesters when they go shopping, and most of all consumers getting in too deep with debt..  

Currencies today 11/29/17… American Style: A$ .7561, kiwi .6887, C$ .7775, euro 1.1850, sterling 1.3418, Swiss $.9845, … European Style: rand 13.7035, krone 8.2317, SEK 8.3498, forint 263.09, zloty 3.5455, koruna 21.5060, RUB 58.35, yen 111.90, sing 1.3468, HKD 7.8087, INR 64.34, China 6.6024, peso 18.53, BRL 3.2180, Dollar Index 93.33, Oil $57.82, 10-year 2.38%, Silver $16.69, Platinum $949.47, Palladium $1,018.23, and Gold… $1,286.70   

That’s it for today…  and for this week… sorry, but tomorrow morning I have doctor appts. and my usual Thursday infusion, that is if my oncologist feels as though I’m good to go after my surgery…  College football will have their conference Championships this Saturday… And then the bowl games will be announced, along with the final 4 for the playoffs. So  a BIG weekend for college football.  Our neighborhood Progressive Dinner will be this weekend, and for the first time since Mizzou played in the Big 12 Conference Championship about 10 years ago, I won’t be attending the party.. UGH!  So…  The Babys take us to the finish line today with their song: Back On My Feet Again, which could easily be my theme song right now!  I hope you have a Wonderful Weekend, and Be Good To Yourself! 

Chuck Butler

Chuck Butler’s: A Pfennig For Your Thoughts 

November 28, 2017  

Good day… And a Tom Terrific Tuesday to you!Man I’m still finding it difficult to get back into the saddle and the swing of things! But here I am, and hopefully things will get back to the way they were before my body decided to go all jiggy on me! The visiting nurse yesterday told me that she had read through my medical history the night before, and Kathy, said, “That probably took you all night to get through!” I laughed and said, ” I told you they call me lucky”!   I’m switching things up today and have my IPhone playing Pandora, Jazz holiday station, and I’m greeted with a jazzy version of Home for the Holidays…  

Well, I told you yesterday that the euro was already showing some slippage, not much, but some, and that it would be interesting to see what happened to the euro’s big rally while the PPT was on holiday last week, once they returned… And well, we saw it… The dollar rallied and the euro which at the end of the day on Friday was as high as 1.1948, was knocked down to 1.1900… UGH!   I could easily be saying damned PPT, but I won’t, no wait! I just did! HA!

And this morning, the euro has fallen below 1.19 in further buying of the dollar by somebody that doesn’t see the forest from the trees!  

Of course the dollar could have rallied on its own given the statement from the incoming new Fed Chairman, Jerome Powell, who had this to say… “Our aim is to sustain a strong jobs market with inflation moving gradually up toward our target. We expect interest rates to rise somewhat further and the size of our balance sheet to gradually shrink.”  

Boy, I don’t know that’s going to sit with President Trump, who has let everyone know for over a year now that he prefers low interest rates…  Last February, I wrote in an article about how the President then said that if rates get to 4% we’re screwed…  his words not mine, but I agree, given everything that has gone on and how the economy lives and breathes on  cheap credit.  I don’t want to get all negative already on my attempt to climb back into the saddle, so I’ll just leave that there… 

Besides, it’s far more fun to blame it all on the PPT, isn’t it?   Oh, and as far as my thought on the December rate hike, I’m still of the opinion that there won’t be one… Unless, like I explained in the past that outgoing Fed Chair, Janet Yellen, wants one last taste of being able to stick it to the President. 

Well, it appears that the CFPB (consumer financial protection bureau) is going to get new leadership here in the U.S.  I don’t even want to get started on how I feel about the CFPB, and how they weren’t really out to protect the consumer, but more about sticking it to financial institutions who were doing their best to provide products and services that investors wanted.   So, I’ll just leave that there, and hope that the new leader goes in a different direction!

In other things going on here in the U.S. that should be weighing down on the dollar… A new report from the Federal Reserve Bank of New York last week found that U.S. household debt hit another record high in the 3rd QTR of almost $13 Trillion. The largest increases came in student loans, auto debt and credit cards. 

I’ve been saying for months now that I believed the U.S. consumer had “tapped out”, but when it comes to adding to debt, they appear to have found a second wind!.  Now, there will be the smarty pants guys with the propeller head hats that will tell you that this data means nothing, because the population has grown…  Well, take  it with as many grains of salt that you wish, I’m just saying that in my opinion, this is bad…

And now, it’s Christmas shopping season, I would only think that the $13 Trillion will only go higher… And then January comes and the bills begin to show up in one’s mailbox and they get deep sixed, because there ain’t no way in hell they can pay them…   I shake my head and wonder if their parents ever sat them down and explained money, savings, spending, etc. to them… I would think not!  Oooh, I’ve gone deep and dark there, haven’t I?  I had better stop before I really turn dark…  But before I leave this thought…  

The Fed also reported that, as of September, 4.9% of outstanding household debt was in some stage of delinquency. More specifically, of the $630 billion of debt that is delinquent, $408 billion is seriously delinquent (90 days late or longer), the Fed said.   Wait until January/ February’s figures…   

I forgot to highlight the move higher  in the price of Oil yesterday… Oil is now trading with a $57 handle…  Our friends at OPEC (NOT!) will meet with Russia this week to discuss production… Recall that the Oil ministers thought that by cutting production months ago that they could get the price of Oil back to $60…  Well, $57 isn’t $60, so I expect to hear OPEC announce further cuts this week at the meetings. What say you?   The price of Gold saw a ” good day” yesterday and added $6.10 to its price. At one point of the day I saw Gold at $1,299, but that was short-lived, as the “boys in the band” didn’t like the looks of that!  

I don’t know if you’ve been following/ tracking the price of Palladium but I sure have!  Recall when I was doing a daily report on the spread in price between Platinum and Palladium, with the later overtaking Platinum a couple of months ago, and hasn’t looked back since!  Supply and demand is driving this price higher folks…  Just like things should be without outside interference! Supply is lacking and demand keeps getting stronger for Palladium…  

The U.S. Data Cupboard didn’t come into play yesterday, and today we’ve already seen the results of the dollar rally in Rocktober, as the advanced Trade figure rose to $68.3 Billion, when it was only forecast to be $65 Billion… This figure will get whittled down when all the beans are counted, and the final will be lower when it prints in a week or so.  The Case/ Shiller Home Price Index is scheduled to print today, and if my thoughts on this are correct, we’ll see and increase in the Home Price Index number, as the madness continues.. 

To Recap…. The boys were back in town (great song by Thin Lizzy) yesterday after their 4 day holiday weekend, and immediately the euro’s gains got whittled down throughout the day and overnight markets. Gold rallied but is getting sold off this morning, and the price of Oil has moved upward and waits for the results of the OPEC meeting in Russia this week.  

For What It’s Worth… Well, we’ve all heard for years that we shouldn’t rely on Social Security for our retirement funds… Well I found this on MarketWatch and it’s just another analyst’s opinion on where Social Security is going, and can be found here: https://www.marketwatch.com/story/warning-social-security-faces-a-23-cut-2017-11-27?link=MW_popular 

Or, here’s your snippet: “If you think you can count on Social Security to prop up your retirement than the joke may be on you. The news media’s been so busy covering President Trump 24/7 that a really big story slipped through the cracks this summer: Social Security will begin paying out more than it takes in by 2021 — just three years from now, and come 2034 or so — just 16 years away — payouts could be slashed by about 23%, unless tough steps are taken to bolster the rickety program.

Based on a projected U.S. population of about 370 million in 2034, that would mean drastically smaller checks for some 87 million Americans, the trustees estimate. How small? Try $5,969 a year in today’s dollars, according to the Peter G. Peterson Foundation, a think tank that focuses on fiscal matters.

That’s nothing less than devastating for the estimated 60% of retired Americans who rely on Social Security for at least half their monthly income.

What’s going on? You can read the whole government report here (if you like long, dense, boring bureaucratic language), but you probably know what the problems are; they’ve been obvious for years.”   

Chuck again… That would be my luck, right? Reach the age to received some of the money I put in the program since I began working when I was in the 6th grade, and have them tell me, sorry, but we spent it all on someone else…  UGH! It’s not that I need it, it’s that it’s mine!  

Currencies today 11/28/17… American Style: A$ .7604, kiwi .6923, C$ .7812, euro 1.1886, sterling 1.3272, Swiss $ .9828, … European Style: rand 13.6965, krone 8.1992, SEK 8.3239, forint 261.76, zloty 3.5345, koruna 21.4178, RUB 58.29, yen 111.30, sing 1.3449, HKD 7.8022, INR 64.37, China 6.5979, peso 18.62, BRL 3.2265, Dollar Index 93.05, Oil $57.89, 10-year 2.32%, Silver $17.09, Platinum $ 948.56, Palladium $1,017.89, and Gold… $1,295.00  

That’s it for today… It’s beginning to look a lot like Christmas… Our house is getting decorated, Alex hung the outside lights for us on Sunday, and the kids and grandkids all went to the tree farm to cut down their Christmas trees this past weekend. I was not able to go with them, and it saddened me so, because I was the one that always spearheaded the tree cutting down day! Oh well, maybe next year…  Longtime readers know that I simply adore Christmas, and love it when the house is all gussied up… Hopefully by Christmas I’ll be back on my horse!  And being a kid again, full of anticipation, and excitement…  Fingers crossed! OK, Beggie Adair takes us to the finish line today with his jazzy version of the Christmas Song… I hope you have a Tom Terrific Tuesday, and remember to be Good To Yourself!

Chuck Butler

 

 

Chuck Butler’s: A Pfennig For Your Thoughts  

November 27, 2017

Good day… And a Marvelous Monday to you!  The last week of November! Woo Hoo!  This has been an interesting month for me, for sure! I did miss writing each day to you all, my journey through this latest health setback has been tough, very painful, and well… not fun… And if there’s anything anyone knows about me, it’s that I love to have fun! So, add another reason for me not liking the month of November to the list!  The great Johnny Rivers greets me this morning with his song: Baby I Need Your Loving…    

While Chuck’s away…

At my old job, the folks on the trading desk used to have a saying that whenever Chuck’s away, the currencies rally… Well, it’s nice to see some things didn’t change while I was away. I had some very nice notes sent to me regarding my surgery, recovery, etc. And I thank everyone from the bottom of my heart for their concern, and uplifting thoughts. As most readers know, I was first diagnosed with metastatic renal cell carcinoma otherwise known as kidney cancer that had already spread. I was diagnosed as stage 4… And within a two week period June 2007, I had two major surgeries to remove cancer from my body. The problem with this kind of cancer is that you live with the chance that it comes back in a different part of your body the rest of your life. And in 2010 it did come back… This time in my left eye, and after many treatments to the eye, I had to have the eye removed.. I’ve dealt with a tumor in my right jaw (mandible) since 2011… 3 different chemo drugs have been used in that time. The cancer in me is resilient, and so while the treatments work for awhile, they eventually begin to lose their ability to fight the cancer, and I have to move on to a different drug.

Well, when I began having pain my reconstructed right hip again, I immediately began to think that cancer had returned to me … But… Thank God, it wasn’t cancer, instead it was an infection of two different names that had developed around the prosthesis that I have in my hip and femur… Where did this infection come from? Well, I’m told that 90% of infections that form around metallic prosthesis comes from infection in one’s mouth…. And so, now I self-administer a specialized antibiotic through a PICC-line in my arm every 6 hours (even through the night) for 6 weeks, in hopes that it clears up the infections. So while it wasn’t new cancer causing me problems it was old cancer… One of these days there will be a personalized cure for cancer… At least that’s my hope!

My new bosses, Mary Anne and Pamela Aden, were asking me when I thought I would be writing again, and I told them that honestly I hadn’t been keeping up with the markets during my down time with surgery, recovery and these antibiotics. So, I spent a day reading emails, news articles, etc. and learned a couple of things… That not only does the old saying on the trade desk still hold true, but that while the PPT (plunge protection team) is away, the currencies can rally!

And rally they did on Friday, with the Big Dog euro, leading the way. It will be interesting to see how the HUGE rally stands up once the U.S. comes back from a long 4-day holiday (for most that is)…  I’m already seeing some minor slippage in the euro this morning, nothing big, just some profit taking, I would think. 

There hasn’t been any new revelations in the markets while I was gone, just hashing out and rehashing out of old stuff over and over again… I don’t know about you, but if I hear one more report on the TV about “Russiagate” I’m going to lose my mind!  (some say that’s already occurred, but I would argue with them on that!)  

Speaking of Russia, I have seen a ton of reports lately about how the BRICS (Brazil, Russia, India, China, and S. Africa) are mulling over a way to introduce their own Gold payment system… Hmmm… Now THAT would be interesting to see reported on the nightly news, eh?  One would think that having stories like that circulating would light a fire under the price of Gold, right?  But, Gold has struggled to get back to the $1,300 level since I’ve been gone… The currencies may have rallied, but Gold has seen good and bad days for the last two weeks, and continues to be held down by unknown forces… 

Things have been quite quiet in the Eurozone… The European Central Bank (ECB) has been working in the background, attempting to figure out how they can begin to unwind all their stimulus that they have applied to the economy for the last 6 years… I’m sure they’ll fumble the ball on this, just like they have just about everything else in the past 6 years, but for now, the ECB looks better than the Fed, in the eyes of currency traders, otherwise we wouldn’t be seeing the euro working it’s way back to you babe, no wait! Working it’s way toward 1.20! 

I did tell you all earlier this year that the sentiment toward the dollar had changed and therefore I truly believed the strong dollar trend was beginning to come to and end…  But there were these things out there that the markets kept hoping would materialize to help the dollar maintain its strength… Tax Reform…  Trade agreements, etc.   It appears that the Tax Reform might, get completed before year-end… But who knows? Our lawmakers are so dysfunctional right now, I doubt they could agree that winter is on its way!   And Trade agreements are about as likely to happen as my beloved Cardinals obtaining Giancarlo Stanton to fill the gaping hole in their lineup!   

So… I’m getting back into this slowly and later in the  morning today, as I was busy with my antibiotic infusion, and a visit from the home visiting nurse, who had to get labs, etc. today.  And so, I’ll end this here… I told you up top that I was “sort of back”…    Thanks again to everyone that sent along a note to me… I love all you dear Pfennig Readers!  

To recap…  Chuck is back, but not completely in the saddle just yet… The currencies led by the Big Dog euro rallied while he was away, but Gold floundered below $1,300…  The ECB has been quiet, and the Fed, well… they seem to be as dysfunctional as our lawmakers are right now!  

For What It’s Worth…  I mentioned above that there are stories out there about a new Gold system for the BRICS.. One of those stories was sent to me from the good folks at GATA… and was can be found here: http://tass.com/economy/977276  

Or, here is your snippet:” BRICS countries are discussing the possibility of establishing a single gold trade system, First Deputy Chairman of Russias Central Bank Sergey Shvetsov said Friday.
“The traditional (trade) system based in London and partially in Swiss cities is becoming less relevant, as new trade hubs are emerging, first of all in India, China and South Africa.” Shvetsov said. “We are discussing the possibility to establish a single (system of) gold trade both within BRICS and at the level of bilateral contacts.”

He added that this system may serve as a basis for further creation of new benchmarks.

According to Shvetsov, the Bank of Russia has already signed a memorandum on development of bilateral gold trade with Chinese colleagues. The regulator plans to take first steps toward formation of a single trade system with the Peoples Republic of China in 2018, he added.”

Chuck again…. This could spell a spiraling down for the dollar folks… I’m just saying…  

Currencies today 11/27/17…  American style: A$ .7622, kiwi .6920, C$ .7863, euro 1.1922, sterling 1.3344, Swiss $ .9810, … European Style: rand 13.7374, krone 8.1392, SEK 8.2920, forint 260.82, zloty 3.5247, koruna 21.3209, RUB 58.35, yen 111.06, sing 1.3452, HKD 7.8008, INR 64.37, China 6.5740, peso 18.50, BRL 3.2375, Dollar Index 92.77, Oil $57.74, 1o-year 2.33%, Silver $17.15, Platinum $948.60, Palladium $ 1,005.00, and Gold… $ 1,299.40   

That’s it for today…  A GREAT BIG HAPPY BIRTHDAY to my grandson, Everett…  Longtime readers may recall me referring to him as Everett, the Everbaby… But he’s 7 today, and just cute as can be.  Where did those 7 years go? it seems like yesterday that we were at the hospital on the day my beloved Missouri Tigers were playing hated rival Kansas… and beating them of course! How about the turnaround for my Missouri Tigers football team this year… 1-5 to 7-5!    I want to send a bit thank you to my doctor/ surgeon, the infectious disease doctor, nurses, Jessica and Fawnya, and assistants, Cheyanne and Sam… They took great care of me in the hospital, and now my lovely bride, who I’m not supposed to talk about in the Pfennig any longer (her rules) is taking over the job of taking care of me… Alrighty then, here’s the deal for now… The Pfennig will be off and on for awhile, as I get through this recovery, and the administering of the antibiotics…  But today it’s on! Game on Garth!  The Hooters take us to the finish line today with their song: All You Zombies…   80’s rock, that I’m sure my good friend, Rick will get a kick out of…   I hope you have a Marvelous Monday… Be Good To Yourself! 

Chuck Butler

Dear Daily Pfennig Readers,

We hope this finds you well.

Many of you have written asking how Chuck is doing… So here’s the latest…

Since writing to you last week, Chuck’s terrible pain and immobility has continued.

Late last week, he went to see the orthopedist who did his surgery 10 years ago. The end result is that Chuck has to have another major hip surgery this Friday.

This means he’ll be out of touch for at least the next couple of weeks.

We will all miss Chuck. But please send him your best wishes and prayers  on Friday for a positive outcome and a speedy recovery… We know he’ll appreciate it.

Thank you and all the best,

Mary Anne & Pamela Aden

November 7, 2017      

Good day…  I just wanted to drop you dear Pfennig Readers a line and let you know what’s going on, with the non-delivery of a Pfennig the last two days…  I woke up from my nap after my infusion on Thursday, took a step and nearly fell to the floor…  I didn’t thank goodness!  But the pain coming from my reconstructed hip was excruciating…  And soon I had to have Kathy go into the attic for my walker I used after the reconstructive surgery over 10 years ago.   I had to cancel my trip to S. Floriday and then had to live with excruciating pain all weekend.  Yesterday, I went to the hospital to find out what was wrong, and they put me through the wringer, and hurt me badly, but they had to find out CT’s, X-rays, dopplers, you name it they put me through it, and at the end of the day… The could confirm two things… 1. I had no blood clots, and 2. no sign of cancer, which is the thing I feared, since every time in the pat 10 years that I had tremendous pain like this it turned out to be the same damn cancer… But not this time!  So, what could it be?  I’m sitting here in pain, trying to move a little this way or that way to lesson the pain.   They sent me home with pain medicine that’s stronger than the Tylenol I was taking, but they don’t seem to be doing much for the pain.  I’m heading to the orthopedist that did the surgery 10 years ago on Thursday, maybe he has an answer…   Until I don’t have this pain that brings me to near tears at time, I won’t be writing a Pfennig…   I hope you understand that this is important to me… And in the past I’ve never shied away from bringing you up to date with my health, so here you go… other than the pain in my right leg, I’m fine!    

Thanks for reading the Pfennig, even when I drop the ball and don’t answer the bell…    

Chuck Butler

November 2, 2017  

* 3rd Consecutive day of little movement in the currencies

* Eurozone PMI prints strong again!

* Palladium knocks on the $1,000 door!  

 

Good Day… And a Tub Thumpin’ Thursday to you! As usual, you’ll have to pick up the slack from me having an infusion today, for Tub Thumpin’! Congratulations to the Houston Astros, who beat the Dodgers in Game 7 of the World Series last night… I tried to stay awake for the end, but just couldn’t, as the game dragged on with all the pitching changes. I was glad to see that nothing happened after I went to bed!  Head East greets me this morning with their song: Never Been Any Reason…  My good friend, Duane and me have breakfast now and then at the Olivette diner, where the picture of Head East members sitting at the counter was taken many years ago…   

Can you say, three days in a row? I knew you could! HA!  But that’s what we had yesterday, a third consecutive day of little or no movement to speak of in the currencies…   the early morning gains in Gold couldn’t be held onto by the shiny metal, and the price of Oil slipped for the first day in a week. The Dollar Index moved 2 ticks in the past 24 hours, and there you have it. I’ll Talk to you Monday…  Just kidding…  I can write for hours about things on my mind, if that were the charge…    

The Fed left rates unchanged as suspected they would, but changed one word in their statement that got the markets all riled up… The Fed decided to change their outlook for growth from “moderate” to “strong”…  Makes sense given the fact that Fed Chair, Janet Yellen has used the phrase “strong and robust” to describe the economy in the past.  The Fed had two other points for us… “Inflation on a 12-month basis is expected to remain somewhat below 2 percent in the near term but to stabilize”, and :  “Near-term risks to the economic outlook appear roughly balanced”   

The Fed sure sounds like a Central Bank that’s hell bent and whiskey bound to hike rates at their next meeting in December…  But something about that just doesn’t feel right to me, and I’ve said it for several months now that the Fed is finished hiking rates in this cycle…   Two years ago all points were directed at a Fed rate hike in December, and I held my ground on no rate hike, and had to wipe the egg off my face after the Fed hiked rates for the first time in a decade…  I sure don’t want to have to go through that again, and I truly don’t believe I’ll have to!  

It’s a real problem that’s going on with the Petrol Currencies of Norway, Russia, Brazil, Canada, and few others. I told you yesterday, that the Petrol Currencies hadn’t been able to rally with the rise in the price of Oil…  But boy did they sure get sliced when the price of Oil slid lower yesterday… The slicing was done thinly, so the losses to the Petrol Currencies was not much to speak of, but it was a loss nonetheless. 

Have you been tracking the price of Palladium in the past week? Letting Gold get all the headlines, Palladium has moved, stealthlike, up the $900 handle with ease, and is knocking on the door of $1,000 this morning. Remember last month when Palladium passed Platinum in price, and reached levels it hadn’t seen in 16 years, only to have the rug pulled out from under it, by “the boys in the band”?  It takes about 100 days of production of the this metal to meet the short positions that have been taken in the metal…  I’m just saying…   But will they leave Palladium alone to rally this time?  I doubt it…    

Boy, you sure sound negative this morning Chuck! Sorry, I’ll try to do better..  This morning, Eurozone PMI printed for Rocktober. For all of you new to class, the PMI is a Manufacturing Index that has a line of demarcation between expansion and contraction at and index number of 50…  PMI actually stands for Purchasing Manager’s Index…   Well, the Eurozone’s Rocktober PMI remained strong at 58.5, the same figure that printed for September.  But the euro can’t seem to find a bid to move higher this week, even with a strong economic print like this!  

Today is the day the U.S. Tax Reform bill is supposed to be made public, which means the clock is ticking for a passage of the bill before the lawmakers leave for their Thanksgiving break. That’s less than 10 days as I see it, and given the battles that go on in Congress, I just don’t see it happening…  And the longer it goes on without any resolution and vote, the pressure will begin to build against the dollar… 

This is why I believe we’re seeing the no or little movement in the currencies each day… Traders don’t want to make a call on the direction of the dollar, until this Tax Reform thing gets settled…  And we also have the nomination of a new Fed Chairman that’s supposed to be done before the President heads to Asia next week.  Will it be Jerome Powell, or Kevin Warsh?  Either one is a dove, and will keep rates low..    it sounds like it will be Powell, and it will be announced today… 

So, that’s one of the things that was helping the dollar along that will be out of the way…   The saber rattling with N. Korea has been put on the back burner for now, and as I see it, the dollar should be getting back to the underlying weak trend soon..   

The Swiss franc is at parity with the dollar this morning, trading at 1.00…  This move in francs has nothing to do with things in Switzerland…  It’s all about the cross with the euro, and with the euro weaker, the franc gets stronger, and then that carries over to the franc / dollar cross…  The Swiss National Bank (SNB) has stated over and over again that they want a weaker franc… Negative deposit rates, haven’t done the trick for the SNB…  If that’s the case then forget about a weaker franc and embrace a stronger franc with positive deposit rates! 

I’ve not been a fan of the SNB since they put that floor on the euro/ franc cross years ago, and then removed it to everyone’s surprise (except the wife of the SNB president! HA!) a few years later… The SNB has tried everything under the sun, moon and stars to weaken the franc, and that immediately gets you put on Chuck’s list…  Which is someplace you don’t want to be!   

As I said above Gold wasn’t able to hold on to its early morning gains of $9.40 yesterday morning…  the “boys in the band” were working hard and saw to it that 363,000 contracts were traded in Gold yesterday…  That’s right I said 363,000 contracts….  That’s crazy folks!   The price of Gold flip-flopped a couple of times yesterday, as the short sellers would bring it down every time the shiny metal would mount a rally…  Gold did end the day on a positive note, but up only $3.90 to close at $1,274.30 on the day. 

The U.S. Data Cupboard has the stupid Productivity report for Rocktober this morning, along with the Unit Labor Costs…  These are interesting data prints but not market moving, even though the Fed members have been making a BIG Deal about the lack of productivity…  Yesterday’s Data Cupboard has the ADP Employment Report for Rocktober, and it showed that 235,000 jobs were created in Rocktober..  WOW!  The ADP report is more reliable than the BLS report which will print tomorrow…  

I of course will be resting and not looking at the markets at all tomorrow morning…  

To recap… Another day of little or no movements in the currencies… Gold couldn’t hold its early morning gains but ended the day up nearly $4, and the price of Oil slipped.  Eurozone PMI was strong for Rocktober, but wasn’t able to give the euro the traction it needs to move higher. The Swiss franc is at parity to the dollar this morning, and it’s all about the euro/ franc cross, nothing that the SNB has done.   

For What It’s Worth…  You’ve got to love it when a plan comes together right? Well, the plan in Russia was to make doing business easier, and they have done just that!  This is where you can find the article:http://russiafeed.com/russia-soars-global-ease-business-rankings/    

Or, Here’s Your Snippet: ”  Russia has jumped five spots to 35th in the World Bank’s annual Doing Business Report that evaluates the ease of doing business in a country.

The Doing Business survey ranks 190 national economies based on 11 areas of business regulation. Russia’s new ranking places it ahead of many Western countries such as Belgium and Italy, and just behind Japan.

Last year, Russia ranked 40th based on categories evaluating the ease of starting a business, registering property, getting loans, paying taxes, and enforcing contracts.

Russia has steadily risen in the overall “Doing Business” rankings over the years. After the country had ranked 120th in 2011, President Vladimir Putin signed a “100 steps” decree the following year with the goal to reach 20th place by 2018.”   

Chuck again…. WOW! Now that’s the way to set a goal and then go about achieving or meeting that goal!    

Currencies today 11/2/2017… American Style: A$ .7706, kiwi .6916, C$ .7787, euro 1.1638, sterling 1.3250, Swiss $1.00, … European Style: rand 13.98, krone 8.1437, SEK 8.3915, forint 266.85, zloty 3.6390, koruna 21.96, RUB 58.19, yen 114.05, sing 1.3603, HKD 7.8014, INR 64.66, China 6.6136, peso 19.05, BRL 3.2690, Dollar Index 94.66, Oil $54.24, 10-year 2.37%, Silver $17.10, Platinum $931.15, Palladium $995.75, and Gold…. $1,277.10…

That’s it for today, and this week, as today is an infusion day, and tomorrow is Infusion Confusion…  I had a great lunch yesterday with some friends from high school, and with a 3 month old baby girl, named Poppy..  One of my friends was on grandma duty so she brought the baby to the lunch, and we all loved it! I was happy with the Astros winning the World Series, good thing for Houston. My two sisters live near Houston, so I’m sure they were excited!  Next week I’ll be writing to you from S. Florida…  And I’m sure to be in a better mood each day!  Depeche Mode takes us to the finish line today with their song: Personal Jesus…  And with that, it’s time for me to reach out and touch faith, and send you on your way to a Tub Thumpin’ Thursday! Be Good To Yourself! 

 

November 1, 2017    

* Another nothing day in the currencies… UGH

* U.S. Consumer Confidence Soars higher!

* A Like it never happened day for the FOMC…  

 

Good day…  And a Wonderful Wednesday to you! And Welcome to November…  How was your Halloween?  Mine was good, as a few neighbor friends sat around a fire that I built in the driveway, and gave out candy to the Trick-R-Treaters…  It was cold out, but not around that fire pit! Then we folded everything up, and went inside, and I watched the last few innings of the World Series Game 6, thinking that the Astros would build a come back rally like they had in previous games, but that was not to be last night and so we’ll see a Game 7 tonight! Game 7’s are very special… Who will blink?  One of my best memories is Game 7 of the 2011 World Series, when I was at the ballpark with my sons, Andrew, Alex and Jerry to watch our beloved Cardinals win the Series.  Supertramp  greets me this morning with their song: From Now On…    

Oh, and I stayed up way too late watching the baseball game last night, which means this morning I almost didn’t answer the bell! But like I’ve told you before, whenever I’m laying there thinking that discretion would be the better part of valor, and go back to sleep, I think about my dad…  Who had all kinds of ailments through the years, but got up and went to work driving a truck, every day! And so… here I am! Aren’t you glad? HA! All my clothes last night smelled of wood smoke, they went straight to the washing machine room!  

Well, I’ve beaten around the bush enough today…  It was another “nothing day” for the currencies yesterday, and through the overnight sessions. Gold lost $5.60 but is up $9.30 in the early morning trading today… But this non-movement in the currencies is beginning to give me a rash! I mean this is like its the Dog Days of Summer, and we’re way past that!  The Dollar Index moved 1 tick in the past 24 hours, as yesterday morning it was 94.63, and today it is 94.64…

The best performer overnight is the New Zealand dollar/ kiwi, which has really spent an inordinate amount of time in the woodshed, folks… but it escaped last night, and found its way back to the 69-cent figure… That’s about a 1/2-cent move for kiwi, and that’s a good thing.. I think, and I believe I said this last week here, that kiwi has been oversold, and a reversal of that overselling should be on the way…   So, there you go! Now, if kiwi can just keep the pedal to the metal here…   

The U.K. pound sterling is also stronger this morning and is up one full cent to trade in the 1.33 handle. Over and over again, pound traders continue to believe that Bank of England (BOE) Gov. Mark Carney is going to hike rates here… The economic data in the U.K. is a mixed bag-o-nuts and then the U.K. has the BREXIT negotiations hanging over it like the Sword of Damocles…  I would use these “run ups” in sterling as an opportunity… wink, wink…    

The price of Oil moved higher again in the past 24 hours, and now trades with a $55 handle… But the Petrol Currencies are not getting any traction from this move in Black Gold, Texas Tea… 

Here in the U.S. it’s an FOMC Day today…  And this meeting by the Fed will be lile ServPro  “like nothing happened!”  The fed will meet, they’ll leave rates unchanged, and make that announcement, and that’s it. No press conference with Janet Yellen, no statement at this time…  The minutes of the meeting will print in a few weeks, but until then we’ll have to think that Fed is still trying to come to grips with a rate hike in December… 

Of course I’ve said over and over again since April that there will be no rate hike in December… And maybe the FOMC meeting minutes will give us a clue when they print in a few weeks… By then, we’ll be stuffing ourselves with great Thanksgiving fare!  The weeks all begin to meld together from here on out folks… Thanksgiving will be here before we know it, and then it’s into December and Christmas!  

I talk about this  because I’m looking at the Tax Reform Bill which has still not made itself public… and when it does, there will be little time before the Thanksgiving Break to get it done, and then, well, like I said above, it’ll be Christmas!  And this Tax Reform Bill is what has the dollar so perky these days… As the Bill is supposed to remake the American economy…  and no one knows when it will be presented to the American public… Hmmm…    

I hear that part of the TBR (tax reform bill) is a provision to reduce the amount of money investors can deposit to the 401K’s on an annual basis…  I have loved the idea of the 401K through the years, but now that I’m sort-of retired I don’t contribute to my 401K any longer, so I won’t be affected…  But my kids will be! But my two older kids are teachers, so they have their own retirement plans, and Alex still has 2 1/2 years to go through college… 

But I see this as a real dud for other people…  No, not a real dud, a real bummer, as they used to say back in the 70’s…    

Boy the U.S. Data Cupboard yesterday, Consumer Confidence saw a moon shot higher moving to 125 from 119…  Again, they don’t call me for my opinion, so I just move along here for these are not the droids we’re looking for!   And today’s Data Cupboard is all about the FOMC meeting this afternoon…   

As I said above Gold lost $5.60 yesterday to close at $1,270.40, but is up $9.50 this morning, so this morning its trading at $1,279.90…  Yesterday, I told you about the story going around about the Canadian Royal Mint stamped wafer turning out to be fake…  Well, the Canadian Royal Mint issued a statement yesterday that claimed the wafer not to be one of theirs…  So, if that’s the true, then someone out there has a Mint stamp and using it for no good…   I’m thinking of Dudley Do-Right, and Snidely Whiplash, right now…  

To recap…  It has been a nothing day for the currencies in the past 24 hours, kiwi was the best performer and it only gained 1/2-cent! The Dollar Index moved one tick from 94.63 yesterday to 94.64 today…  Gold though sold off by $5 and change, and is up $9 and change this morning… The price of Oil is now trading with a $55 handle… But that hasn’t helped the Petrol Currencies…  And the Fed’s FOMC meets today, to announce that they are keeping rates unchanged…    

For What It’s Worth….  The FWIW article came courtesy of dear reader Bob, who seems to know exactly what i’m looking for in these articles! this is about small community banks getting swallowed up by the Big Banks and it can be found here: https://www.globalresearch.ca/selling-out-to-americas-megabanks-regulation-is-killing-community-banks-public-banks-can-revive-them/5615902    

Or, here’s your snippet: “At his confirmation hearing in January 2017, Treasury Secretary Stephen Mnuchin said, “regulation is killing community banks. If the process is not reversed, he warned, we could “end up in a world where we have four big banks in this country.” That would be bad for both jobs and the economy.” He goes on to say… 

“I think that we all appreciate the engine of growth is with small and medium-sized businesses,” said Mnuchin. “We’re losing the ability for small and medium-sized banks to make good loans to small and medium-sized businesses in the community, where they understand those credit risks better than anybody else.”

The number of US banks with assets under $100 million dropped from 13,000 in 1995 to under 1,900 in 2014. The regulatory burden imposed by the 2010 Dodd-Frank Act exacerbated this trend, with community banks losing market share at double the rate during the four years after 2010 as in the four years before. But the number had already dropped to only 2,625 in 2010.  What happened between 1995 and 2010?”   

Chuck again… Yes, the times they are a changing… eh? This is a good article just to give you a heads up of what to expect coming down the line with banking…    

Currencies today  11/1/2017… American Style: A$ .7682, kiwi .6913, C$ .7767, euro 1.1638, sterling 1.3303, Swiss $1.003, …  European Style:    rand 14.1235, krone 8/1326, SEK 8.3806, forint 267.55, zloty 3.6388,  koruna 21.9620, RUB 58.18, yen 114, sing 1.3602, HKD 7.8019, INR 64.62, China 6.6327, peso 19.14, BRL 3.2799, Dollar Index 94.64, Oil $55.04, 10yr 2.39%, Silver $16.98, Platinum $928.41, Palladium $994.10, and Gold… $1,279.90  

That’s it for today… I heard some good jokes last night… And was amazed at a kids magic tricks with cards… So… why don’t you grab a ghost from behind…   Give up?  Because you get a handful of sheet!  Again, I had you going there didn’t I?  So it’s November, my most hated month, and to attempt to make it go fast, I’m heading to S. Florida for 12 days this Friday after my infusion on Thursday.  No Worries, I’ll be writing from there… But no Pfennig on Friday, right? Correctomundo! I’ve got a real oldie spooling up for the last song this morning… Barbara Lewis takes us to the finish line today with her song: Hello Stranger…  Don’t know Barbara Lewis? She was huge in the 60’s… You should check her out on YouTube…  And with that… I had better send you on your way to having a Wonderful Wednesday…  Be Good To Yourself! 

Rocktober 31, 2017  

* Eurozone data is mixed…

*  U.S Consumer Spending soars!

 * But is it a one and done event? 

 

Good day… And a Tom Terrific Tuesday to you! It’s Halloween! And it’s cold outside! And that means most little kids, the ones I really want to see, will have their costumes covered up with coats. UGH! Tradition has me sitting on the front porch to give out candy the Trick-or-Treaters, but the last couple of years have seen the number of Trick-or-Treaters dwindle, and so I doubt I’ll sit outside tonight…  Our kids used to bring the grandkids here to Trick-or Treat, but they have their own neighborhoods now, and so life goes on…  Am I a bit melancholy today? You bet I am!   Jack Johnson greets me this morning with his song: Posters…   

There wasn’t much movement in the currencies and metals yesterday. the U.S. Data was interesting (more on that later) but failed to give the dollar any fuel to strengthen, and so we sit here this morning trading in about the same clothes as we traded in yesterday.  Stocks even failed to make a 1% intraday move, for the first time in a month of Sundays! Gold added a couple of bucks, and that left the price Oil to carry the flag for rallying assets…   

The price of Oil traded through the $53 handle in the past 24 hours to trade this morning with a $54 handle! That’s a $2 move in the past couple of trading sessions! I told you yesterday that it appeared to be a case of traders taking the Saudi’s seriously, regarding their announcement late last week to cut Oil production even further, and that thought is still prevalent in the markets this morning.

Earlier this morning we saw some data print in the Eurozone…  Eurozone 3rd QTR GDP was 2.5%..  And CPI for September was 1.1%…  So the Eurozone is seeing economic growth across the board, but inflation is lagging still…  And so this data wasn’t able to light a fire under the euro this morning. 

Last week, somehow this slipped past me, so better to report it later than never, right?  Russia’s 3rd QTR GDP was 2.4% beating the expectations for 1.9% and bettered the previous quarter’s 2.3% print…  The Central Bank of Russia (CBR) met on Friday, and kept rates unchanged, and so, if you take these two things and add in the jump in the Oil price, then you have a Russian ruble that’s on the rally tracks!  OK, settle down Chuck, the positive move in rubles is very small, so put down the vuvuzela horn and cowbell, Chuck…  Awe, Shoot Rudy, I wanted to party!     

Speaking of cowbells, there used to be a group of parents at the water polo games for the team my son, Andrew, coaches, that would ring their cowbells whenever the my son’s team scored a goal… I found the noise they created to be obnoxious, and couldn’t wait for their kids to graduate! I hear that the state of Missouri has banned any kind of noise maker other than people’s voices and hand clapping at high school games.  Too late to have saved my ears from all that cowbell ringing!  

OK, getting back to work here  I see that the 10-year Treasury’s yield, which last week hit 2.45%, has been slipping lower again and this morning is trading at 2.37%.. Remember when I told you that the 2.45% had moved higher too fast, and I expected to see this come back down? Of course with all the supply that’s going to be hitting the bond market, from the Fed no longer buying Treasuries, and the Treasury Dept. having to issue more debt, one would think that the yield on the 10-year will be heading higher again… 

But that’s only if you don’t believe my scenario that by yearend and into next year, the Fed will be announcing another round of QE/ bond buying…  That’s my story and I’m sticking to it!  You might be wanting to ask me how I can be saying something like that, when the U.S. economy, is strong, as witnessed by the 3rd QTR GDP of 3%?  Because it’s all done with smoke and mirrors folks.. If GDP doesn’t add up to what you want to see, you just add a few items to the calculation and see what that does to the final number, and so on…   I’m not buying the strong and robust economy, and neither should you! But like the horse that you lead to water, I can’t make it drink, and I can’t make you think like me, I can only present you with the facts…  

Have you ever noticed how when Fed Chair, Janet Yellen, talks about how the economy is strong and robust, that she never gives us any details as to how she came to that decision?  I’m sure there are details that prove that to the Fed, right? Details? Come on they’re here somewhere! I saw them yesterday by the copy machine.. No, I saw them over by the candy bar dispenser… Oh, they’ve got to be here somewhere!  We’ve got to produce them, because there’s this country bumpkin in St. Louis, that wants to see them.    

Oh, stop it, Chuck! Move onto something else quick, before you lose your dear reader!   The price of Gold saw some choppy trading yesterday, but by the end of the day, the shiny metal has gained $2.80, to close at $1,276.00…  The early morning trading is pretty flat this morning, so we’ll have to wait-n-see how “the boys in the band” feel about the level for Gold & Silver this morning.   So, did you read about the apparent fake Gold 1 oz. bar that was discovered in Canada?  This whole story seems fishy to me, but here’s the link to the story should you want to read it, and decide for yourself…  http://www.zerohedge.com/news/2017-10-30/could-be-huge-gold-bar-certified-royal-canadian-mint-exposed-fake     

My friend, and former colleague, the metals guru, Tim Smith , sent me that link yesterday, and I responded to him that I hope that the two guys that supposedly discovered the fake Gold bar, are given the Gestapo interrogation because they seem to be prime suspects to me…  Hey! I’m that kind of person, always looking around the corner, or under the hood for the real story!   

The U.S. Data Cupboard saw a strong Personal Spending print for September yesterday… But I’m sure hoping the markets and the Fed realize that this was a one and done deal for spending in that it contained all the hurricane relief spending… Personal Income was up 0.4%, which was fine… And Personal Spending was up 1.0%, which if it were for “real” (and I know it’s for real, I mean spending that will continue) then you would see the Personal Consumption Expenditures rising at a fast pace… But that didn’t happen! The PCE was up just 0.1% and remains well below the Fed’s 2% target at 1.6%… And the Core PCE (minus food and gas) is only 1.3%… Retailers couldn’t raise prices during the Hurricane relief, because that just wouldn’t have the right thing to do… So, all this spending and no inflation increase? Crazy, eh? 

I read this morning that the U.S. economy hasn’t seen a month of consumer spending like this since the “Cash for Clunkers” deal… Remember that boondoggle to get consumers spending? it lasted a month… that’s it! And so too, I expect this September Spending print to last just one month…  

I was also reading this morning on the Bloomberg website an article about how local governments are stepping in to help save retail malls in order to preserve tax revenue they received from the mall. I find this to be a really dumb idea… But then I thought Cash for Clunkers was dumb too…  The government, whether it be the national or local or state, just doesn’t see the forest for the trees…  I’m just saying…   

To recap…  It was a day of plugging holes and repairing cracks in the foundations yesterday, as the dollar backed off after putting in its best week of 2017 last week. The currencies and metals hardly moved, Gold added $2.80, but that’s it… The price of Oil continued to climb higher after the Saudi’s announced they would cut Oil production further, and Russian interest rates remained unchanged on Friday, giving the ruble something to gain on.  

For What It’s Worth… I had quite a few FWIW articles to choose from this past weekend, as dear reader Bob, sent me quite a few (Thanks!)  And I found this one to be the best, given that it talks about Germany and Russia getting together, thus turning another ally of the U.S. into a Russian friend..  And you can find the article here: http://www.informationclearinghouse.info/48100.htm  

Or, here’s your snippet: “The visit to Moscow this week by German President Frank-Walter Steinmeier heralds a growing rapprochement between the two countries. That’s not just good news for bilateral business ties. It is key to unlocking the dangerous East-West crisis.

“I‘m convinced we need to resist the alienation that has grown up between our countries in recent years,” said Steinmeier at the talks with Russian President Vladimir Putin. The two leaders held wide-ranging discussions beyond narrow bilateral interests. Both reportedly exchanged views on “pressing global issues” including Syria, Ukraine, North Korea and Iran.

Putin said of his meeting with Steinmeier: “I want to voice hope that your visit will help us to make a contribution to developing our bilateral relations and strengthening our interstate ties.” The German president’s role as head of state is largely ceremonial. Formally, he doesn’t have political power, which rests with the country’s chancellor, Angela Merkel. Nevertheless, the symbolism of Steinmeier’s visit to Moscow carries enormous significance.

This week was the first visit to Russia by a German president since 2010. Steinmeier’s predecessor, Joachim Gauck who was in office from 2012 until this year, was renowned for having a “frosty” view of Russia. Under Steinmeier the relationship is not just thawing, it is warming rapidly.” 

Chuck again…  I can hear Putin saying under his breath, “can you do something about the Eurozone’s economic sanctions on us?”  With Germany being the largest economy in the Eurozone, one would think that their opinion weighs heavily on the decisions of the Eurozone, eh? but one never knows…   only the Shadow knows!  

Currencies today 10/31/17… American Style: A$ .7670, kiwi .6845, C$ .7787, euro 1.1632, sterling 1.3207, Swiss $ .9984, … European Style:   rand 14.1040, krone 8.1741, SEK 8.3717, forint 267.62, zloty 3.6518, koruna 22.0495, RUB 57.90, yen 113.25, sing 1.3615, HKD 7.80, INR 64.80, China 6.6488, peso 19.24, BRL 3.2530, Dollar Index 94.63, Oil $54.12, 10-year 2.37%, Silver $16.88, Platinum $919.32, Palladium $974.08, and Gold… $1,276.50   

That’s it for today… Boo! Did I scare you? HA!  OK, so tomorrow I’ll have some Halloween jokes for you… I still remember the one my oldest son, Andrew told when he was a kid… What do you do with  the Elephant with three balls? You walk him and pitch to the giraffe!   Had you going there, for a second didn’t I?  How about our Blues? They beat the LA Kings last night, in a battle of the two of the three best teams so far this year! I watched the whole game, and came away with new respect for Jake Allen the goalie..  We no longer have a little one to dress up for Halloween, so the day is just like any other day it seems…  Hopefully the little kids can cheer me up tonight!  And with that, Eddie Floyd takes us to the finish line today with his song: Knock On Wood..  I recall playing that song in the “Soul Wonders Revue” band I played in, with our shiny gold pants and gold shirts doing the dance steps while we played..  May, that was a long time ago!  And with that, I hope you have a Tom Terrific Tuesday, and great all Hallow’s eve..   Be Good To Yourself! (but don’t eat too much of the Halloween candy!)