August 9, 2023
* currencies & metals rally a bit on Tuesday
* Moody’s does Fitch one better!
Good Day… And a Wonderful Wednesday to you… My beloved Cardinals played on the East Coast time last night, which meant that I was able to watch the entire game without falling asleep during it! I chose not to sit outside last night to watch the game, and basically, I thought that if I was going to watch the game by myself, I might as well stay indoors… Long ago, in a galaxy far away, I went to my first spring training game at Al Lang Stadium in St. Pete, which is the same area as Tampa Bay… I fell in love with spring baseball, and Al Lang Stadium… A few years ago, I was speaking at a conference in St. Pete, and my hotel room looked out at Al Lang Stadium, pretty cool I thought… That was the conference when the great Mogambo Guru, came and picked me up and we went to lunch… I miss the Mogambo Guru tremendously… Uriah Heep greets me this morning with their song: Stealin’
Well, the dollar buying took a pause for the cuase yesterday, and the BBDXY lost 2 index points… Monday’s buying spree was a little too much, I would presume… The currencies didn’t gain very much, as the gains were wide spread, and not concentrated on an area, etc. I had an awful night of sleep or better lack of sleep last night, and so at this point, I’m going to go back to sleep, for a little while, and when I awake, I’ll finish the letter… OK? Well, then I’ll be back in a bit…
OK, this is much better… thanks for your patience… I would like to say that yesterday’s data caused the dollar to slip, but I can’t… The U.S. Trade Balance, (read deficit) wasn’t as bad as previous months, and it wasn’t because our exports were kicking tail and taking names later, it was because the U.S. consumer is running out of cash… but don’t tell Janet Yellen that, because she’s under the idea that the U.S. economy is strong…
Gold started the day losing ground, and it continued throughout the day, with Gold loss at $11.40, While Silver’s loss was 32-cents to close at $ 22.85… I don’t know what to tell you about these daily attacks to the metals (even Copper is gett sold) If I were a jaded person, that knows that the short paper traders were responsible for these daily losses, I would say, Well, you know, in the past, the summer months are not kind to the metals, and this summer is no different… There, now you have two thoughts on why metals are getting beaten around the head and shoulders daily, you can pick which one that suits you… I know which one I will choose, immediately, without meaningful consideration…
The price of Oil, ran right back up to $82, after spending Monday getting sold, to $80… And the 10-year’s yield climbed back to 4.0%… Monday is all forgotten to these two assets…
In the overnight markets last night, there was little to no movement once again… In the past, I’m talking 10 years ago or so, there was rarely a night of trading that made a difference and was worthy of even talking about, But through the years things have changed… The price of Oil did gain $ 2 more dollars overnight to trade this morning with an $84 handle!
The BIG NEWS from yesterday came from China, who’s data rocked the markes all over the world… here’s Reuter’s account of the news: “China’s consumer sector fell into deflation and factory-gate prices extended declines in July. Anxiety is rising that China is entering an era of much slower economic growth akin to the period of Japan’s “lost decades”.
Whoa, there partner!… Who said anything about China entering a slower economic growth akin to Japan’s? Well, I guess someone suggested it, and I for one think they are one loafer short of pair of shoes! China has been at this economy thing far longer than anyone else, and I think they know how to keep from falling down the rabbit hole that Japan fell into in the 90’s, and hasn’t climbe out of yet… But that’s how I view it…
The Consumer Credit (read debt) printed on Monday, and it contained some interesting tidbits… And here’s one of them, from zerohedge.com, “Americans increasingly turned to their credit cards to make ends meet heading into the summer, sending aggregate balances over $1 trillion for the first time ever, the New York Federal Reserve reported Tuesday.
Total credit card indebtedness rose by $45 billion in the April-through-June period, an increase of more than 4%. That took the total amount owed to $1.03 trillion, the highest gross value in Fed data going back to 2003.”
Like I said above about the Trade Deficit, the U.S. Consumer has run out of cash, and now are turning to credit cards… I don’t see this ending in anything but tears…
In other news… telling Fitch, “anything you can do, I can do better, neener, neener, neener”… Moody’s Investors Service, took more sweeping actions in the U.S. banking sector.
Moody’s cut the ratings of 10 banks by one notch, placed six banks on review for potential downgrade, and changed its outlook to negative on 11 other banks.
Causing particular alarm on Wall Street was the fact that four of the six banks that Moody’s put on review for potential downgrade rank among the 15 largest banks in the United States. I can’t wait to hear what Janet Yellen says about these downgrades… For sure she’ll deny their worthiness… What else can she say, she’s already gone down this road about how the U.S. economy is strong, she can’t retract now… She should, but she won’t!
The U.S. Data Cupboard today, still is not worthy, in fact, it’s empty today, no data scheduled… They propeller heads are gearing up for tomorrow’s Stupid CPI print… I wonder what lies the Gov’t will tell us this month?
To recap… the dollar buying ended on Tuesday and last night, but the turnaround to dollar selling was watered down, with the BBDXY losing just 2 index points. Gold & the other metals got sold once again yesterday, while the price of Oil rebounded. Moody’s went whole hog on the banking sector, and downgraded a slew of banks…
For What It’s Worth… This came to me from longtime reader, Bob, who is always sending me stuff to keep me informed of what’s going on… This is from Lew Rockwell, and it’s the 7 trends that a disaster is coming, and it can be found here: 7 Trends Which Indicate That Economic Disaster Is Approaching Very Rapidly – LewRockwell
Or, here’s your snippet: “#1 When economic activity slows down, less tax revenue comes in. Right now, federal government and state government tax revenues are declining precipitously…
US state and local governments just experienced the worst decline in income tax revenues ever recorded.
This was the second steepest year-over-year percentage decline in history, with only the GFC having a worse outcome.
Note that Federal tax receipts are also dropped again, now at recessionary levels and approaching -10% on a YoY basis.
#2 When the economy slows down, trucking companies see less demand for their services. So it is deeply alarming that truck freight volume and spending absolutely plummeted during the second quarter…
Truck freight volume and spending in the second quarter of 2023 declined by the highest levels since the early days of the pandemic, the latest U.S. Bank Freight Payment Index revealed. Spending by shippers dropped 10.9% compared to the second quarter of 2022 while shipment volume dropped 9%, according to a statement from the Minneapolis-based bank.
#3 Employment is supposed to be the “bright spot” for the economy, but the latest employment report shows that the U.S. actually lost 585,000 full-time jobs last month…
Well, one look at this month’s adjustment and it’s literally a shocker: you will not hear anyone from the Biden admin or associated economist cheerleaders mention this, but the BLS reported that in July the number of full-time jobs plunged by 585,000 to 134.274 million, the biggest monthly drop since record covid crash of 14.7 million jobs!
#4 U.S. employers have already announced more job cuts this year than they did in all of 2022, and the hits just keep on coming…”
Chuck again… And excellent viewpoint and one that I’m sure Janet Yellen would have a different view of. I could only get you 4 of the points, to get the rest, click on the link above…
Market Prices 8/9/2023: American Style: A$ .6535, kiwi .6058, C$ .7446, euro 1.0980, sterling 1.2738, Swiss $1.1407, European Style: rand 19.0092, krone 10.2237, SEK 10.6902, forint 353.39, zloty 4.0720, koruna 22.0971, RUB 97.54, yen 143.40, sing 1.3457, HKD 7.8207, INR 82.82, China 7.2071, peso 17.08, BRL 4.9036, BBDXY 1,230.69, Dollar Index 102.40, Oil $84.03, 10-year 4.0%, Silver $22.80, Platinum $896.00, Palladium $1,236.00, Copper $3.75, and Gold… $1.922.81
That’s it for today… Thanks for your patience this morning, those extra 2 hours of sleep really helped me get going this morning… Well, when Goldy and Arenado don’t hit consistently, the Cardinals lose… And they lost again last night, UGH! The rest of the season, is nothing more than an early audition for next year’s team… That’s what it comes down to, when you’re so far behind and trade away star players… The three amigos will ride again today… (inside thought) … the pain in my wrist continues to keep me from doing a lot… It’s going to be a rainy day today, so get your Golashes out, and your slickers, and don’t forget the rain hat! When I was a young boy, I loved it when it rained because then I could go out and jump in the puddles! I taught all three of my kids to do that! Jethro Tull takes us to the finish line today with his rock classic song: Aqualung… I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!
Chuck Butler