Got Glasses?

Chuck Butler’s: A Pfennig For Your Thoughts 

August 21, 2017 

* It’s Solar Eclipse Day!

* Currencies stuck in the mud… 

* A ton of overseas data this week!


Good day… And a Marvelous Monday to you! Well, today’s the day… The day the Solar Eclipse will take place across the U.S. Here in my little river town, we are in what’s called the “the path of totality”, which means we’ll get a good look at it… That is, as long as we have protective glasses to wear. I was very upset to read last week that there were glasses being sold as “protective” but weren’t… If I were king, I would put that CEO in jail and throw away the key, just to show Corporate America that we aren’t going to stand for that kind of greed, any longer! 

The day will turn to night, and the temps will drop, it will be very eerie… If you’re wanting to witness it, I hope you’re in a place that will allow you to see it today.  OK… now onto other things… But this Solar Eclipse is a BIG DEAL today, so that’s why I’ve taken up so much time with it to start the week.  

  Friday was a typical Dog Days of Summer trading wise in the currencies, as there was just no movement, to speak of, and little conviction of traders to make a call.  The euro is trading in the same clothes it has been in for a few days now, and I’m sure they are beginning to get a little rank! Time to change clothes, if you ask me! But there’s just nothing out there to move the currencies one-way or another right now… We went through the gauntlet of U.S. Data prints last week, and nothing… And now the Jackson Hole boondoggle will attempt to rattle the cages of currency traders… 

The Jackson Hole boondoggle won’t get started until Thursday this week, and this COULD be an important boondoggle, as both Fed Chair, Janet Yellen will attend, along with European Central Bank (ECB) President, Mario Draghi…   Both of the Central Banks that these two attendees represent, are looking at the unwinding of their balance sheets in the coming months, and either of these two, or maybe both will lay out plans for doing so at this meeting.  

You know… while Quantitative Easing (QE) / bond buying to this degree, has been done for some time by the Japanese, no Central Bank has ever gone through the unwinding of balance sheet… Think about that for a minute, and then come back… Ok, now doesn’t that scare the bejeebers out of you? It does me!  So, other than the presentations of these two Central Bankers, the rest of boondoggle will take a back seat and a nice ride through the Wyoming countryside!  

We will see a ton of overseas data this week, that could at least budge the currencies from the muck they’ve been stuck in for the past week…  But most of it doesn’t get printed until Wednesday and Thursday, which will still be before the JH Boondoggle, but it will seem like an eternity in the currency markets…  But here’s a roll call of the data print this week in places other than the U.S.   

Aug. 23:  Japanese Aug. Prelim. PMI (manufacturing index)… Considering how strong the 2nd QTR GDP in Japan was, this should be an interesting print, to see if the momentum is continuing.    Also on 8/23, we’ll see the color of Norway’s Unemployment Rate, which is expected to remain unchanged…   And the Eurozone’s Flash PMI’s for the month… And finally on 8/23, S. Africa will print their latest CPI report…   

Aug 24: Norway will lead us off on Thursday morning with their 2nd QTR GDP print, which is expected to have grown 0.6%, VS 0.2% in the 1st QTR, and that could add some flavor to the krone on Thursday…  Sweden will join the economic data prints party on Thursday with their July Unemployment Report, which is expected to see a HUGE drop from 7.4% to 5.9%!  And that could add some spice to the krona…  And then we’ll see the color of the prelim. 2nd QTR GDP report from the United Kingdom (UK) and here they are expecting 2nd QTR GDP to print at 0.3%, and the annual rate to be 1.7%…   Not a very good annual rate for the U.K.

And  that’s it, which is enough as far as I’m concerned! Too much data makes for a very boring letter, Chuck! I know, I know, but I had to find something that could shake the currencies out of these Dog Days of Summer! 

Well, I guess my fears on Friday morning about Gold climbing to $1,300 were not misplaced, as the “boys in the band” made sure that the shiny metal did NOT close at $1,300… Instead it fell to $1,292, which is where it starts the day today, as the early morning trading in Gold has not moved the price very much. OK, I don’t recall if I told the DTL (Dow Theory Letters) readers this, or I told you… So, if it’s new to you, we know which one it is… But unwinding the balance sheets is like raising interest rates, so keep an eye on that… 

So, why on earth did you decide to say that in the middle of a discussion on the price of Gold, Chuck? Ahhh grasshopper, come, sit and you’ll hear why…  You see, I’m darn sure stuck on proving that Gold can thrive even with higher interest rates, and so if the unwinding of the balance sheet is like rate hikes, then we’ll have to see how Gold reacts… And I’m about as sure as this as I am that the Cardinals are NOT going to the playoffs this year, that Gold will perform just fine with higher rates! 

Oh, there will be knee-jerk reactions to higher rates, but in the long run, they won’t matter… So, hear me now, and listen to me later about this…

 Longtime Pfennig readers, JMR Doug, recently sent me the latest print of the Great Mogambo Guru, and after I read it, I said, “darn, he’s not lost a beat, he’s still as good as he ever was”…  Should you ever want to read his stuff, which I’ll warn you hits on the Fed quite hard, simply go to:  

The U.S. Data Cupboard is going to go on a mini-vacation this week with only some housing reports to print until Friday when two real pieces of economic data, Durable & Capital Good Orders will print…  Friday’s Data Cupboard saw the U. of Michigan Consumer Confidence Index soar to a 97 handle from a 94 handle… What are all these people so confident about? 

Before I head to the Big Finish today, I have to make an IMPORTANT ANNOUCEMENT…  From now on the Fridays after my infusions, there won’t be a Pfennig… I used to have a bullpen of writers to fill in for me on those days, as Frank Trotter coined it: Infusion Confusion… But now it’s just me at my writing desk in my basement, with my IPod playing music and my fat fingers flying across the keyboard!  So… we’ll begin this new set up this Friday…  I hope you understand.  

To recap…  Today’s the Solar Eclipse, do you have glasses? The currencies are stuck in the Dog Days of Summer, and my fears about what the “boys in the band” would do to the price of Gold that had climbed to $1,300 on Friday morning we’re bang on, as Gold saw a ton of selling on Friday… We’ll see a ton of economic data print from overseas this week, and maybe there’s something there to rattle the cages of the currency traders… And the Fed’s Jackson Hole, Wyoming boondoggle starts this week…  

For what it’s worth…  One would think that I would be loaded for bear with FWIW articles today, but that’s not the case, but I did find this that I found interesting, and it’s in the NY TImes to boot! I’m no fan of the NYT, but every once in a while they have something FWIW worth, and you can find this one here:…

Or, here’s your snippet: “Many Americans can’t remember anything other than an economy with skyrocketing inequality, in which living standards for most Americans are stagnating and the rich are pulling away. It feels inevitable. But it’s not. A well-known team of inequality researchers … has been getting some attention recently for a chart it produced. It shows the change in income between 1980 and 2014 for every point on the distribution, and it neatly summarizes the recent soaring of inequality. The message is straightforward. Only a few decades ago, the middle class and the poor weren’t just receiving healthy raises. Their take-home pay was rising even more rapidly, in percentage terms, than the pay of the rich. The post-inflation, after-tax raises that were typical for the middle class during the pre-1980 period – about 2 percent a year – translate into rapid gains in living standards. At that rate, a household’s income almost doubles every 34 years. In recent decades, by contrast, only very affluent families … have received such large raises. Yes, the upper-middle class has done better than the middle class or the poor, but the huge gaps are between the super-rich and everyone else. The basic problem is that most families used to receive something approaching their fair share of economic growth, and they don’t anymore.” 

Chuck again… you should really hit the link above and see the graph/ chart they have on the site… OMG! no wonder the U.S. Economy can’t get off the canvas!  

Currencies today 8/21/17… American Style: A$ .7926, kiwi .7312, C$ .7760, euro 1.1749, sterling 1.2890, Swiss $ .9677, … European Style: rand 13.1557, krone 7.9062, SEK 8.0970, HUF 258.08, zloty 3.6376, koruna 22.1927, RUB 59.02, yen 109.13, sing 1.3624, HKD 7.8236, INR 64.07, China 6.6701, peso 17.69, BRL 3.1521, Dollar Index 93.49, Oil $48.63, 10-year 2.19%, Silver $16.99, Platinum $981.87, Palladium $933.40, and Gold… $1,292.30  

That’s it for today… Well, Jerry Lewis dies this weekend, as did Dick Gregory, a St. Louis native.. I know Jerry Lewis did stuff with Dean Martin early on, but all I can think about is his Muscular Dystrophy Telethons… He’ll be missed for sure…  Well, yesterday, was my darling daughter Dawn’s birthday! Happy Birthday scrawnie! I call her scrawnie, Dawnie, because she’s so tiny! 3 doctor visits, two scans and one infusion for me this week… Gee, I know how to have all the fun, eh? HA!  It was great seeing: Aaron, Mike, Christine, Jen, and Danielle on Friday afternoon, as they came to my little river town to see me! And then I participated in our Fantasy Football league draft… I don’t like me team already! UGH!   The Searchers take us to the finish line today with their song: Love Potion #9…   And with that I hope you have a Marvelous Monday and Solar Eclipse!  Be Good To Yourself!