It Was A Turn Down Day….

March 19, 2019

* currencies fail to add to gains from Friday

* I guess now, All Central Banks are turning dovish?


Good Day… And a Tom Terrific Tuesday to you! The Cyrkle sang it best all those years ago, when they sang… It’s a turn down day… For those of you who’ve never heard of the Cyrkle, they were the warm up band for the Beatles! My Beloved Cardinals finally found their bats yesterday VS the Phillies, but it still wasn’t an awesome offensive display! But a 4-1 win is a win… The long awaited deluge of rain has finally arrived in S. Florida, and I’m glad there isn’t a game today for me to go sit in the rain and then have it called off! Delaney Grace surprised everyone yesterday, when we heard the rain in the forecast, Daughter Dawn asked what we did when the day is washed out by rain, and I replied, “well, your mom goes shopping”… And Delaney spoke up and said quizzically: “Shopping?” The Fabulous Temptations greet me this morning with their song: Papa Was A Rolling Stone…

Well, our turn down day, applied to the currencies, on Monday, as they failed to add to their gains from Friday and in the overnight markets, and lost a little ground… Not much to talk about but a little ground nonetheless… These aren’t the days of wild moves in the currencies… Instead these are days when if a currency moves more than a quarter, the confetti begins to fall, and ticker tape parade is had! In fact, I’m really getting tired of saying that there wasn’t much movement in the currencies and metals yesterday… I was thinking that I would go on a mini-vacation to get away from the markets and so I wouldn’t have to say, “The currencies and metals didn’t have much movement yesterday, anymore this week!

I’ll play it by ear, but if I sit down at my computer tomorrow night to check on things and they’re still stuck in the mud, then I’m calling it quits for this week! Nobody wants to hear the same thing over and over and over again from me…

Hey! And we can all rest easily now, Goldman, aka Lola, tells their clients that there’s no risk of a recession this year… Thanks for calling me out on that Lola… As I’ve said that most economists believe the recession will come next year, but I have said over and over again, that I believe it will begin this year, and I have until 12/31/19, for that to come true!

We won’t be putting / adding any bricks in the wall today, as the Data Cupboard here in the U.S. is basically emplty, with only Housing starts to print today… I have seen quite a few articles in the past few days that are talking about how all Central Banks, including the Fed, have turned dovish…  Well, now isn’t that just special, as the church lady used to say, back when SNL was funny…  

Our friends at OPEC, NOT! had a special meeting that concluded yesterday, in which the members made public comments about how they were holding true to the production cuts, and that news pushed the Price of Oil to the $59 handle in the past 24 hours!  Next stop is $60… And then the vicious cycle for the price of Oil kicks in again… Or does it?  One has to wonder how long this cycle for the price of Oil can continue?  Well, as long as it takes for the shale oil to dry up, which I’ve read many an article about it doing so, recently…  Hmmm….

When the recession hits the U.S. that would most likely be a bad time for the Oil drillers… As demand for gas in the U.S. would stumble… So, think about that for a minute…  But for now, the price of Oil is on the rally tracks, and that’s a good thing for currencies like the Russian ruble, the Brazilian real, the Canadian dollar / loonie, and others that qualify under the heading of Petrol Currencies… 

Last week, after I had signed off for the week, the U.S. had a very interesting data print, that most people glossed over.. The  NY Fed manufacturing  index slipped to a two-year low in March. Factory output -0.4% in Feb after a 0.5% slide in January.  All three bricks in the wall, but I bet you didn’t see that data reported on your evening or cable news, did you?  

Gold was able to eke out a $1 gain yesterday… That’s it… $1…  not a fiver or a sawbuck, but a $1 gain…  In the early morning trading today, Gold is up $3… not “Palladium type moves” but gains, nonetheless, of which we are grateful for! 

The move that Palladium has been making for months now is something to be awed about… They say that the soaring price is a result of a shortage VS the demand… Now, I’m not doubting that, but what I will say  is that there’s been a shortage in Silver for a couple of years now, and we haven’t seen price moves like Palladium has pulled off!  I’m just saying… 

To recap… I know this is shorter than usual, but there’s just not much to talk about these days… It’s the same old song and dance every morning, of which I’m growing tired of talking about, as you are reading about! The Fed’s FOMC meeting is tomorrow afternoon, so we might not have much to talk about tomorrow either!  UGH! the price of Oil continues to gain and it’s all about the production cuts. And Gold eked out a $1 gain yesterday… 

For What It’s Worth…  Well, I get so focused on the debt here in the U.S. that, at times, I forget what’s going on elsewhere with debt…  This article is about the debt in Japan and it can be found here:

Or, here’s your snippet:Santa Claus territory.” That is how Charles Gave of Gavekal Research views renewed debate about how a concept known as “Modern Monetary Theory” can save capitalism.

There’s nothing modern, of course, about the idea that a government can borrow with abandon in its own currency, unconstrained by deficits. It’s not just that its origins can be traced back 100 years – some argue 1,000. It’s that Japan has been toying with MMT for two decades now.

In 1999, the Bank of Japan became the first major authority in modern history to drive interest rates down to zero. A couple of years later, it pioneered the quantitative-easing that peers from Washington to Frankfurt would eventually adopt.

What’s truly astounding is the docility of bond yields. Try as they may, punters haven’t been able to set Japanese government bond prices in nearly 20 years. That’s because the central bank dominated the bond market.

Japan proves that so long as a government borrows at home, and does so skillfully, the laws of financial gravity lose relevance. Yet it also stands as a cautionary tale for other developed economies scurrying down the MMT rabbit hole.”

Chuck again… Well, I’ve explained this before, but I’ll do it again… The major difference between the debt in Japan and the debt in the U.S. is that most of the debt in the U.S. is financed with the kindness of strangers, while most of Japan’s debt is self financed by the people of Japan… Not that by doing it that way it doesn’t mean debt of 250% of GDP is a good thing, because it’s not! 

Currencies today 3/19/19 American Style: A$.7098, kiwi .6860, C$ .7536, euro 1.1352, sterling 1.3270, Swiss $1.0002, European Style: rand 14.3725, krone 8.5436, SEK 9.2270, forint 276.25, zloty 3.7812, koruna 22.5520, RUB 64.50, yen 111.30, sing 1.3567, HKD 7.8497, INR 68.89, China 6.7103, peso 19.04, BRL 3.8073, Dollar Index 96.39, Oil $59.22, 10-year 2.60%, Silver $15.38, Platinum $841.32, Palladium $1,593.27, and Gold… $1,306.40

That’s it for today…  We all were tired last night from the game yesterday, and it was a turn down night to go along with our turn down day…  I heard the rain in the middle of the night, so it’s finally here… Now, let’s get it over with so the sun can come back out! I’m hobbling along these days with plantar fasciitis that will be taken care of starting today…  Jerry and I were walking yesterday from the ballpark, and he asked me if I was OK, and I said, sure, I’m in pain, but I’ve dealt with pain every day of my adult life, so carry one… And on that fine note…  Cat Stevens takes us to the finish line today with his song: If You Want To Sing Out…   I hope you have a Tom Terrific Day, and remember to Be Good To Yourself!

Chuck Butler