The Boys Are Back In Town…

Chuck Butler’s: A Pfennig For Your Thoughts 

November 28, 2017  

Good day… And a Tom Terrific Tuesday to you!Man I’m still finding it difficult to get back into the saddle and the swing of things! But here I am, and hopefully things will get back to the way they were before my body decided to go all jiggy on me! The visiting nurse yesterday told me that she had read through my medical history the night before, and Kathy, said, “That probably took you all night to get through!” I laughed and said, ” I told you they call me lucky”!   I’m switching things up today and have my IPhone playing Pandora, Jazz holiday station, and I’m greeted with a jazzy version of Home for the Holidays…  

Well, I told you yesterday that the euro was already showing some slippage, not much, but some, and that it would be interesting to see what happened to the euro’s big rally while the PPT was on holiday last week, once they returned… And well, we saw it… The dollar rallied and the euro which at the end of the day on Friday was as high as 1.1948, was knocked down to 1.1900… UGH!   I could easily be saying damned PPT, but I won’t, no wait! I just did! HA!

And this morning, the euro has fallen below 1.19 in further buying of the dollar by somebody that doesn’t see the forest from the trees!  

Of course the dollar could have rallied on its own given the statement from the incoming new Fed Chairman, Jerome Powell, who had this to say… “Our aim is to sustain a strong jobs market with inflation moving gradually up toward our target. We expect interest rates to rise somewhat further and the size of our balance sheet to gradually shrink.”  

Boy, I don’t know that’s going to sit with President Trump, who has let everyone know for over a year now that he prefers low interest rates…  Last February, I wrote in an article about how the President then said that if rates get to 4% we’re screwed…  his words not mine, but I agree, given everything that has gone on and how the economy lives and breathes on  cheap credit.  I don’t want to get all negative already on my attempt to climb back into the saddle, so I’ll just leave that there… 

Besides, it’s far more fun to blame it all on the PPT, isn’t it?   Oh, and as far as my thought on the December rate hike, I’m still of the opinion that there won’t be one… Unless, like I explained in the past that outgoing Fed Chair, Janet Yellen, wants one last taste of being able to stick it to the President. 

Well, it appears that the CFPB (consumer financial protection bureau) is going to get new leadership here in the U.S.  I don’t even want to get started on how I feel about the CFPB, and how they weren’t really out to protect the consumer, but more about sticking it to financial institutions who were doing their best to provide products and services that investors wanted.   So, I’ll just leave that there, and hope that the new leader goes in a different direction!

In other things going on here in the U.S. that should be weighing down on the dollar… A new report from the Federal Reserve Bank of New York last week found that U.S. household debt hit another record high in the 3rd QTR of almost $13 Trillion. The largest increases came in student loans, auto debt and credit cards. 

I’ve been saying for months now that I believed the U.S. consumer had “tapped out”, but when it comes to adding to debt, they appear to have found a second wind!.  Now, there will be the smarty pants guys with the propeller head hats that will tell you that this data means nothing, because the population has grown…  Well, take  it with as many grains of salt that you wish, I’m just saying that in my opinion, this is bad…

And now, it’s Christmas shopping season, I would only think that the $13 Trillion will only go higher… And then January comes and the bills begin to show up in one’s mailbox and they get deep sixed, because there ain’t no way in hell they can pay them…   I shake my head and wonder if their parents ever sat them down and explained money, savings, spending, etc. to them… I would think not!  Oooh, I’ve gone deep and dark there, haven’t I?  I had better stop before I really turn dark…  But before I leave this thought…  

The Fed also reported that, as of September, 4.9% of outstanding household debt was in some stage of delinquency. More specifically, of the $630 billion of debt that is delinquent, $408 billion is seriously delinquent (90 days late or longer), the Fed said.   Wait until January/ February’s figures…   

I forgot to highlight the move higher  in the price of Oil yesterday… Oil is now trading with a $57 handle…  Our friends at OPEC (NOT!) will meet with Russia this week to discuss production… Recall that the Oil ministers thought that by cutting production months ago that they could get the price of Oil back to $60…  Well, $57 isn’t $60, so I expect to hear OPEC announce further cuts this week at the meetings. What say you?   The price of Gold saw a ” good day” yesterday and added $6.10 to its price. At one point of the day I saw Gold at $1,299, but that was short-lived, as the “boys in the band” didn’t like the looks of that!  

I don’t know if you’ve been following/ tracking the price of Palladium but I sure have!  Recall when I was doing a daily report on the spread in price between Platinum and Palladium, with the later overtaking Platinum a couple of months ago, and hasn’t looked back since!  Supply and demand is driving this price higher folks…  Just like things should be without outside interference! Supply is lacking and demand keeps getting stronger for Palladium…  

The U.S. Data Cupboard didn’t come into play yesterday, and today we’ve already seen the results of the dollar rally in Rocktober, as the advanced Trade figure rose to $68.3 Billion, when it was only forecast to be $65 Billion… This figure will get whittled down when all the beans are counted, and the final will be lower when it prints in a week or so.  The Case/ Shiller Home Price Index is scheduled to print today, and if my thoughts on this are correct, we’ll see and increase in the Home Price Index number, as the madness continues.. 

To Recap…. The boys were back in town (great song by Thin Lizzy) yesterday after their 4 day holiday weekend, and immediately the euro’s gains got whittled down throughout the day and overnight markets. Gold rallied but is getting sold off this morning, and the price of Oil has moved upward and waits for the results of the OPEC meeting in Russia this week.  

For What It’s Worth… Well, we’ve all heard for years that we shouldn’t rely on Social Security for our retirement funds… Well I found this on MarketWatch and it’s just another analyst’s opinion on where Social Security is going, and can be found here: 

Or, here’s your snippet: “If you think you can count on Social Security to prop up your retirement than the joke may be on you. The news media’s been so busy covering President Trump 24/7 that a really big story slipped through the cracks this summer: Social Security will begin paying out more than it takes in by 2021 — just three years from now, and come 2034 or so — just 16 years away — payouts could be slashed by about 23%, unless tough steps are taken to bolster the rickety program.

Based on a projected U.S. population of about 370 million in 2034, that would mean drastically smaller checks for some 87 million Americans, the trustees estimate. How small? Try $5,969 a year in today’s dollars, according to the Peter G. Peterson Foundation, a think tank that focuses on fiscal matters.

That’s nothing less than devastating for the estimated 60% of retired Americans who rely on Social Security for at least half their monthly income.

What’s going on? You can read the whole government report here (if you like long, dense, boring bureaucratic language), but you probably know what the problems are; they’ve been obvious for years.”   

Chuck again… That would be my luck, right? Reach the age to received some of the money I put in the program since I began working when I was in the 6th grade, and have them tell me, sorry, but we spent it all on someone else…  UGH! It’s not that I need it, it’s that it’s mine!  

Currencies today 11/28/17… American Style: A$ .7604, kiwi .6923, C$ .7812, euro 1.1886, sterling 1.3272, Swiss $ .9828, … European Style: rand 13.6965, krone 8.1992, SEK 8.3239, forint 261.76, zloty 3.5345, koruna 21.4178, RUB 58.29, yen 111.30, sing 1.3449, HKD 7.8022, INR 64.37, China 6.5979, peso 18.62, BRL 3.2265, Dollar Index 93.05, Oil $57.89, 10-year 2.32%, Silver $17.09, Platinum $ 948.56, Palladium $1,017.89, and Gold… $1,295.00  

That’s it for today… It’s beginning to look a lot like Christmas… Our house is getting decorated, Alex hung the outside lights for us on Sunday, and the kids and grandkids all went to the tree farm to cut down their Christmas trees this past weekend. I was not able to go with them, and it saddened me so, because I was the one that always spearheaded the tree cutting down day! Oh well, maybe next year…  Longtime readers know that I simply adore Christmas, and love it when the house is all gussied up… Hopefully by Christmas I’ll be back on my horse!  And being a kid again, full of anticipation, and excitement…  Fingers crossed! OK, Beggie Adair takes us to the finish line today with his jazzy version of the Christmas Song… I hope you have a Tom Terrific Tuesday, and remember to be Good To Yourself!

Chuck Butler