February 6, 2019
* Dollar buying continues
* Time to buy a car?
Good day… And a Wonderful Wednesday to you! An awful night for yours truly last night, so this is going to be short-n-sweet this morning, so I can attempt to get some sleep! The President finally got to have his State of the Union Address last night, and he called for the two parties to work together for the country… I thought to myself, yeah, that’s not going to happen… We’re in for gridlock and finger pointing, folks… Might as well get used to it… The Grassroots greet me this morning with their song: Let’s Live For Today… A good idea, for today is promised, tomorrow is not…
So, traders didn’t get what they were expecting from last night’s SOTU Address. We talked yesterday about how traders were expecting the President to announce a new Trade Agreement with China, and all they got was more talk about what the President wants to see in the Agreement. But the dollar buying traders were doing in anticipation of the announcement that never came, didn’t stop… Yes, that’s right… Strange as it might seem, Traders kept buying dollars…
The euro slipped back below 1.14, the Aussie dollar (A$) finally saw some selling on the news from the other day, and the price of Oil slipped by $2 in the past 24 hours… Only Gold was able to eke out a $2.90 gain on the day, but unfortunately, Gold has given it back in the early trading today…
This dollar buying in spite of a report yesterday that showed more weakness in the economy. The ISM nonmanufacturing (Service sector) Index fell by 2 points in the past month. You know… one doesn’t have to look to strenuously or long in time to find articles that are about how the economy is weakening with each passing day. Yesterday, it was in the WSJ, of all places!, that I found this little diddy: “ Car dealers are beginning 2019 with a heavier inventory of unsold vehicles on their lots, a situation that some analysts say will put pressure on them to cut factory output as U.S. auto sales are expected to cool this year.
There were 3.95 million vehicles on dealership lots at the end of January, a 4% increase from December and up nearly 3% from the prior-year January, according to data released Monday by WardsAuto.”
I would have to think that having all the supply would bring down prices on cars… But as my history with buying cars tells me… That never happens! You wait, and when you think the buyer has the conn, you’re shown that the dealer always has the conn… I’m just saying…
… There was a discussion on Twitter yesterday, where someone highlighted a reported by the Fed Reserve that their economists believe that the economy would be better off at this point, IF they had implemented negative deposit rates, instead of Quantitative Easing…
I agree with one responder that said, “sure since negative rates have worked so well in Japan and Europe, why not spread the misery?” I laughed out loud! That guy sure sounds like me, I said, for I would probably said it laced with curse words on the Butler Patio! Negative Rates! What a crock! And that was the Fed’s own PHD economists with that statement… Either QE or negative rates were not the way to move the economy from where we were in 2009 to today! I shake my head in disgust at this thought of negative rates… And think… Why come out with that now? Oh… I think I get it… They’re just greasing the tracks for what’s coming folks… Mark my words…
Well, I promised at the top that this would short-n-sweet, so here we go on our way to the Big Finish…
To Recap… The dollar buying didn’t stop when traders didn’t get what they were looking for in the SOTU Address. The euro has fallen below 1.15, the A$ selling is playing catch up, and the price of Oil slipped $2. Only Gold was able to eke out a gain VS the dollar yesterday, and in the early morning trading today Gold has given back that gain. Chuck is sick, so the letter is short-n-sweet today… Think of it as a gift of time…
For What It’s Worth… Well, to make your time here with the Pfennig even shorter this morning, I don’t have a web site for you to visit… Instead the FWIW piece is from the GATA folks, and you have to be on their list to receive it, but I will post it in its entirety… It’s about a Congressman grilling the CFTC about Silver manipulation… So, here you go…
“Congressman Demands CFTC Explain Its Failure to Find Silver Market Manipulation Where Justice Department Did
WASHINGTON — A member of the U.S. House Financial Services Committee today pressed the Commodities Futures Trading Commission on its conspicuous failure to uncover the very silver market manipulation now being prosecuted by the U.S. Department of Justice.
In a probing letter dated today to CFTC Chairman J. Christopher Giancarlo, Rep. Alex X. Mooney, R-West Virginia, writes:
“The U.S. Justice Department obtained a guilty plea from a former commodities trader for JPMorganChase & Co. to charges of manipulating the gold and silver markets between 2009 and 2015, and its investigation into the actions of related parties is ongoing.
The period at issue substantially overlaps the time during which your commission was investigating complaints of manipulation of the silver market — 2008 to 2013. However, in 2013 the commission announced that it had closed its investigation without finding any wrongdoing.
“Why did the commission fail to find the wrongdoing the Justice Department has confirmed and continues to investigate? Also, will the commission now be re-opening its investigation into silver market manipulation and opening an investigation into gold market manipulation? If not, why not?”
Meanwhile, Rep. Mooney asks about the CFTC’s recent refusal to answer questions posed by a non-profit watchdog group called the Gold Anti-Trust Action Committee (GATA) that investigates government interventions in gold and silver markets:
Rep. Mooney’s letter seeks answers from the CFTC about its apparent reporting discrepancies, the unusual correlation between the Chinese yuan and the gold price, and whether the CFTC believes it has jurisdiction over gold market trading by the U.S. government or foreign governments.
“Congressman Mooney understands that a lack of transparency in the gold and silver markets not only undermines confidence, but also enables governments and powerful financial interests to manipulate currencies and asset prices to Americans’ great detriment,” said Jp Cortez, policy director for the Sound Money Defense League.
“Gold and silver are true money, and the CFTC has a responsibility to expose and punish those who seek to secretly manipulate its value.”
Chuck Again… These are the questions I kept asking former CFTC commissioner Bart Chilton, when he said that the CFTC couldn’t find any evidence of price manipulation… Yeah, right… And my first wife was a young Elizabeth Taylor, yeah, that’s the ticket!
Currencies today 2/6/19 American Style: A$.7131, kiwi .6850, C$ .7575, euro 1.1385, sterling 1.2950, Swiss $1.0008, European Style: rand 13.4790, krone 8.5177, SEK 9.1562, forint 279.82, zloty 3.7705, koruna 22.6381, RUB 65.54, yen 109.75, sing 1.3543, HKD 7.8460, INR 71.55, China 6.7431, peso 19.12, BRL 3.6688, Dollar Index 96.22, Oil $53.22, 10-year 2.69%, Silver $15.73, Platinum $816.42, Palladium $1,368.17, and Gold $1,312.15
That’s it for today… A mixed bag-o-results last night for my teams, as my Missouri Tigers lost their basketball game, but our Blues came on late to win… The Blues in recent games have shown some life for the first time this season… Could they be putting together a run? What the hell is Virginia thinking? I’m shaking my head in amazement that the fabric of this country is being thrown out with the bathwater… I’m just saying… The Eagles take us to the finish line today with their song: On The Border. I hope you have a Wonderful Wednesday, and Be Good To Yourself!
Chuck Butler