*currencies & metals get sold on Wednesday…
*U.S. Treasury Auction goes dismally… Uh-oh!
Good Day… And a Tub Thumpin’ Thursday to one and all! Well, while I’m thinking of this, there will be no Pfennig on Monday, June 3, as I will be seeing my oncologist bright and early that day. My beloved Cardinals are finally back to a .500 team! I sure hope that figure is left in their rear view mirrors from here on out! Now it’s onto Philly, who has the best team in the National League so far this year… The great Percy Sledge greets me this morning with his mega hit song: When A Man Loves A Woman…
On a sidebar here, I saw Percy Sledge on TV a year or so ago, and he still sounded the same, I was amazed that a man at his age could still sound that good!
Ok, we’re back to the dollar being the king of hill again… The 10-year’s yield is on the rise and that is helping the dollar outdistance the rest of the currencies, with the Big Dog euro losing the 1.08 figure in yesterday’s trade that saw the BBDXY gain 5 index points. So, let me get this straight, the dollar rallied on the 10-year’s rise in yield… But, didn’t the auction of Treasuries go horribly yesterday? Yes, they did…
Apparently, no one on one side talks to the anyone on the other side here… This is what I’m talking about: A $39 billion sale of 10-year Treasury notes was met with poor demand Tuesday afternoon, dashing expectations that buyers would continue to step in amid an onslaught of supply. And that was not enough to quell the dollar rally? I’m not getting this one iota, folks… SERENITY NOW! I just went and yelled at the walls, but I’m still fuming…
Gold lost $3 on the day, and closed the day at $2,338.10… Silver, on the other hand gained 24-cents on the day to close at $32.17… Silver is definitely in a bull run right now, and as I’ve explained in previous letters, these bull runs can last up to 17 years… Ok, maybe not that long for this bull run, but a long time nevertheless…
The price of Oil slipped back to a $79 handle yesterday, and here’s Bloomberg.com with their thought on this slippage: “Oil retreated as another weak sale of Treasuries raised concerns about rising yields, stoking a risk-off mood across financial markets.
West Texas Intermediate settled below $80 as equities declined. The drop pared Tuesday’s 2.7% gains, which were driven by renewed geopolitical risks, including ship attacks in the Red Sea and Israel’s advance into the Gazan city of Rafah.”
Chuck again… Well, for those of you keeping score at home, Oil has gained about 14% so far this year…
The 10-year’s yield as previously stated rose yesterday to 4.62%… The bad auction probably caused some of that upward movement…
In the overnight markets last night… The dollar stumbled and tripped, something I know all about personally! The BBDXY is down 2 index points this morning, and the euro has recovered the 1.08 handle. The dollar buying yesterday was overdone, and so a slight correction occurred overnight. Gold is down $6 to start our day today, and Silver is down 80-cents to start our day… So, just when you think an asset like Silver is ready to break out and not look back, it runs into the short paper crowd, and has to start all over again… UGH!
The price of Oil slid another buck overnight and trades this morning with a $78 handle… I just don’t get these Oil traders, they make no rhyme or reason with me regarding their trading of Oil… Need I remind them again, that the summer driving season is quickly approaching? I guess I do, because they can’t decide which way to take Oil these days…
And the 10-year’s yield slid overnight and trades this morning with a 4.60% yield… Talk about not getting what Oil traders are doing, I’m just as confused by the bond boys… That dismal auction yesterday, along with the news that a ton of more bonds are to be auctioned in coming days, would have me, if I were a bond trader, running for the hills… I’m just saying…
You know, when Larry Summer was the U.S. Treasury Sec. I was not a fan, but when you compare him to current Sec. Janet Yellen, he was head and shoulder above her, especially when he makes statements like this: “Former U.S. Treasury Secretary Larry Summers claims that true inflation is around 18% when including financing costs, highlighting a significant underreporting issue.”
A new Mr. Obvious has been hatched… but at least he’s seeing the STUPID CPI for what it is… STUPID!
But don’t tell Atlanta Fed President that inflation is still high… this from Bloomberg.com “Fed’s Bostic Says Many Inflation Measures Moving to Target Range
Says Fed may be in a position to cut rates in fourth quarter”
Oh brother! spare me dime… so I can call Mr. Bostic, and tell him he’s out of his gourde! Oh, wait, what? a phone call isn’t a dime any longer? Well, I think I would be playing a losing game trying to find a pay phone anyway!
Mom…. He’s doing it again! Ok, what is Chuck talking about now? Well, as Russ & Pam Martens reported JP Morgan is paying another fine… Here’s a snippet from their website: www.wallstreetonparade.com : “How does a Wall Street trading firm gain competitive advantage to entice spoofers and high-frequency trading firms to use its trading platforms instead of those of its competitors? How about having its trading compliance personnel wear a blindfold as billions of trades occur over the span of 8 or 9 years?
That is essentially what three of JPMorgan Chase’s federal regulators have suggested is behind the $448 million in fines they’ve leveled against three separate units of the largest bank in the United States.”
Chuck again… will that be enough of a fine to get JP Morgan to stop all their price fixings? I doubt it… To them, it’s just a “cost of doing business”, and not until the regulators shut them down will they stop…
Circling the wagons, and coming back to Gold… I’m really not seeing the demand for physical Gold coming from Western Investors… The major push in Gold so far this year has come from Central Banks, and Chinese buying, both Gov’t and individuals… Notice I didn’t say, U.S. buyers? That’s because the only U.S. buyers are Gold bugs, and not your average Joe six pack… My friend, Rich Checkin, he of Asset Strategies, Inc. tells me that premiums are not a problem in Gold & Silver right now, but should the U.S. investors begin to chase the prices of these metals, those premiums that are paid on fabricated metals would rise…
And did the Bank of Japan intervene with yen again last night? Yen did improve a bit, overnight… The reason I bring this up, is that yen reached a level yesterday that brought about intervention from the BOJ, the last time it reached that level… here’s my memo to the BOJ… Don’t do it! It will proved to be waste of money!
And the day after The People’s Bank of China (PBOC) said, “Don’t Worry, Be Happy”, the renminbi gains vs the dollar… Hmmm… You don’t think the PBOC had anything to do with that gain do you? You should! This is what I was hinting at yesterday…
Before we head to the Big Finish today, let me go over what I’m thinking, regarding the markets take on the data that will print today. We also have a gaggle of Fed heads speaking today, who knows, maybe they’ll come out with something fresh, but I doubt it… So, the revision of 1st QTR GDP will print today, and I’m sure that it will revised downward, and when that happens the calls for a rate cut will be hollered from the back of the room, and that won’t be good for the dollar, but it will be good for the currencies and metals.. So, there you have my thoughts on what could happen today after GDP prints…
The U.S. Data Cupboard today finally has something for us to view… Like I told you on Tuesday, today we’ll see the next revision of 1st QTR GDP, of which has already seen a major downward revision.. And will most likely see another major downward revision today… You know, that the majority of whatever is left of GDP is government spending, right? And we all know that the Gov’t spending is completely out of control!
To recap… The dollar rallied on Wednesday in a big way, and it was because of the rising yield in the 10-year Treasury… Chuck points out that the Treasury Auction was dismal at best, and that should have weighed on the dollar, but didn’t… Gold lost some minor ground on Wednesday, while Silver continues to kick some tail and take names later!
For What It’s Worth… Oh say it ain’t so, Joe! Don’t tell me that once again mortgage companies are going to do something stupid… Well, unfortunately, they are, and here’s the story: “Zero Percent Down Mortgages Return, What Can Go Wrong? – MishTalk
Or, here’s your snippet: “It’s a perfect time to do something really stupid, like offering zero percent down payments on mortgages.
Home buyers will be able to buy a home without putting any money down under a new program launched by United Wholesale Mortgage, one of the largest U.S. mortgage lenders.
The Pontiac, Mich.-based company’s new program will be available to first-time home buyers and people earning at or below 80% of an area’s median income, the company said in a press release.
UWM (UWMC) will give eligible buyers a second-lien loan of up to $15,000, in the form of down-payment assistance, for 3% of the home’s purchase price. The loan will not accrue interest or require a monthly payment.
“Homeownership is something we’re very passionate about,” Melinda Wilner, chief operating officer at UWM, told MarketWatch.
The company had previously allowed buyers to put down as little as 1% on their homes, but it wanted to go further to help home buyers, she said. The lender is anticipating a higher volume of borrowers with its new zero-down program, Wilner added.
Poor underwriting practices were a key driver of the subprime-mortgage crisis in the U.S., the International Monetary Fund wrote in 2008. But unlike the low- and no-down-payment loans that proliferated during that time – when lenders made loans to people who eventually were unable to pay them and lost their homes – UWM’s program is different, Wilner said.
“The aspect of this program that makes me nervous is the silent second mortgage,” Anneliese Lederer, senior policy counsel at the nonprofit Center for Responsible Lending, told MarketWatch in an interview. “It’s great that there’s no interest on it, but it’s a balloon payment, and borrowers need to understand what a balloon payment is.”
Chuck again… returning to the scene of the crime, that’s what this mortgage company is doing, now it’ll be interesting to see if other mortgage companies follow suit… I’m thinking that maybe, just maybe these other mortgage companies see this for what it is… STUPID, and RISKY, and you can’t tell me that this won’t turn to tears…. I’m just saying…
Market Prices 5/30/ 2024: American Style: A$.6615, kiwi .6104, C$ .7287, euro 1.0813, sterling 1.2715, Swiss $1.1003, European Style: rand 18.6517, krone 10.5657, SEK 10.6494, forint 360.28, zloty 3.9690, koruna 22.0261, RUB 89.96, yen 157.10, sing 1.3574, HKD 7.8181, INR 83.31, China 7.2365, peso 17.07, BRL 5.2056, BBDXY 1,254.31, Dollar Index 104.90, Oil $78.87, 10-year 4.60%, Silver $31.37, Platinum $1,034.00, Palladium $946.00 Copper $4.66, and Gold… $2,332,82
That’s it for today… I had to get this oncologist appt. scheduled on 6/3, because that’s the date the heart folks want the blood work done… So, as I said above, no Pfennig on Monday… 2/3rds of our lunch group, will get together tomorrow, I can taste a fried baloney sandwich as I type! Kathy is doing much better, she actually came out of her room yesterday, not while I was around, and did some outside work… I still won’t go around her… and so far, so good, with me not getting sick… Alvin Lee and Ten Years After, take me to the finish line today with his great song, and best performance at Woodstock: Goin’ Home… We lost the great Alvin Lee too soon… I hope you have a Tub Thumpin’ Thursday today, and please… Be Good To Yourself!
Chuck Butler