- the dollar gets sold, and then bought with no change?
- soft landing my petunias!
Good Day… And a Tub Thumpin’ Thursday to one and all! My beloved Cardinals got another well-pitched game and this time they scored enough runs to win, and reward the pitcher with a W! This will be the last Pfennig until next Wednesday, as I will be out of pocket Monday and Tuesday next week… Might as well get used to it, as in a couple of weeks I’ll be gone for 14 days, on my sojourn to Ireland… The world’s finances could go to hell in a handbasket during that time, but I’m not taking my laptop with me, so you’ll have to wait until I return to know the skinny… Chris Stapleton greets me this morning with his big song: Tennessee Whiskey…
I know, I know, you’re thinking, but that’s not rock and roll, Chuck! No, it isn’t, but it’s a song that I like and therefore it’s on my iPod!
OK… Well, the Fed Heads left rates unchanged yesterday, and told the markets that they are only looking at one rate cut in 2024, and left the question of when that rate cut might come, open for the markets to figure out on their own…
Here’s the chief Fed Head and his thoughts on rate cuts: ” Federal Reserve Chair Jerome Powell noted at the press conference that the central bank does not yet have the confidence to cut rates, even as inflation has eased from its peak levels.”
A new Mr. Obvious! We have a Wiener! I’ll say no more!
Well, first of all yesterday, we saw the May STUPID CPI, and it had inched downward, to 3.3% from 3.4%… Not the kind of movement in inflation that would warrant a rate cut… So, immediately after the report printed, and revealed such, the dollar began to get sold… And then when the Fed Heads said “no rate cut”, the dollar tried to come back, but at that point of the day, the “sell-the dollar” trade was the cat’s meow, and the BBDXY ended up losing 10 index points on the day… The euro returned to trade above 1.08, and the rest of the currencies took their small advances VS the dollar in stride…
Gold also rallied yesterday, gaining $14 to close at $2,325.50, and Silver gained to close at $29.85… Now, we’ll have to see how the short paper traders see these gains… The price of Oil remained trading with a $78 handle yesterday, and the 10-year saw its yield drop again this time down to 4.31%… What on earth are the bond boys thinking?
In the overnight markets last night… Well, taking that last statement about how the short paper traders saw the move yesterday, brings us to this morning, where Gold is down $25, and Silver is down 79-cents… The dollar has rebounded and is back to where it was before yesterday’s shenanigans… The euro slipped back below 1.08, and the only currency that shows a gain this morning is the Russian ruble…
I guess the answer to the question above, is that the short paper traders didn’t like the upward move too much, and have decided to take action…
The price of Oil slipped barely below the $78 handle this morning at $77.97, so no biggie move there, and the 10-year trades with a 4.32% yield this morning.
I read on Reuters this morning that they feel like the markets are happy with the Fed Heads, and that a “soft landing” has occurred for the U.S. economy, and that they have inflation “under control”… Hmmm… Do you call 14% inflation “under control”? I don’t, I also don’t call it a “soft landing”, when manufacturing is still in a contraction area, and all the Special Oil Reserves have been drained, and, oh stop Chuck, these dear readers have read your rants every day, they know what’s going on here, it’s all window dressing for the election…
So, did you know that there will be a “blackout period of stock buybacks?” I was just made aware of this and it will arrive tomorrow… here’s the skinny: “this week is the final week ahead of the estimated blackout period. We estimate the upcoming blackout period will run 6/14 – 7/19.” And while as of Monday, Goldman estimates that around ~20% of stocks are in blackout ~50% are set to be prohibited from repurchasing their shares once the blackout period begins on Friday, June 14.”
That was taken from zerohedge.com…
No wonder the stock market has been soaring in recent weeks, eh? I find these Corp buybacks, as something that should be banned outright… To me, if Corporations have money to spend, why aren’t they putting it back into their Companies? Expand, hire, build, etc. And it’s another reason that I won’t touch stocks that don’t have anything to do with mining and shipping… For all those stock valuations that are being driven by stock buybacks, are not real values, in my mind… You can tell me I’m wrong, but I won’t listen, so don’t even try!
The blackout period should become a real thing, and not for just a period of time… That would be down on the list of what I would decree if I were King… I’m just saying…
I wonder how the dollar bugs will take this news that came to me via the good folks at GATA: “”Due to the introduction of restrictive measures by the United States against the Moscow Exchange Group, exchange trading and settlements of deliverable instruments in U.S. dollars and euros are suspended,” the central bank said.”
Chuck again… Yes, dollars will still be able to be traded in Russia in the Over The Counter markets, but not being on the exchange should hurt the dollar’s exposure…
And remember when the U.S. announced 100% tariffs on Chinese EV’s? Well, now the Eurozone has decided to place a 38% tariffs on Chinese EV’s… Citing that China has had excessive subsidies, and that needed to be changed… You know how I see this right? it’s like the U.S. and E.U. Are poking a stick at the Big Bear… This doesn’t turn out good for the folks poking the stick, in my opinion… I’m just saying
Circling the wagons and coming back to the STUPID CPI print yesterday… For a comparison, John Williams at www.shadowstats.com has CPI at around 14%… The U.S. Gov’t and all their hedonic adjustments, have CPI at 3.3%… Now that’s a HUGE differential there isn’t it? I’ve said this before, and I don’t change my mind very easily, But I’m pinning my colors to Shadowstats.com’s flag…
Before we head to the Big Finish today, i wanted to note that the great Jerry West died at 86 the previous day… When I was a very young man, I got to go to a St. Louis Hawks NBA game, and saw Jerry West play, and was awestruck at how good he was… Yes, the Atlanta Hawks, used to be the St. Louis team… So, now we’ve had 1 basketball team leave, 2 football teams move, and we almost had our hockey team leave years ago… What’s up with that?
The U.S. Data Cupboard was a real bummer yesterday, as it contained no fireworks… And the Data Cupboard today, is basically empty, with only the weekly Initial Jobless Claims, and PPI for May (wholesale inflation). I will admit that watching PPI is something that I do, for, as I’ve explained in the past, we’ll see consumer inflation from PPPI… I’m just saying…
To recap… The dollar got sold, and then got bought right back again, as somebody got a wild hair, and thought that what the Fed Heads did, was bad for the dollar… No worries, everything is back to normal this morning… Chuck questions Reuters thoughts that the U.S. has reached a “soft landing” and that the Fed Heads have defeated inflation… Yeah, right, and I’ve got a bridge to sell you!
For What It’s Worth… I found this yesterday, and thought to myself… If this isn’t FWIW worth, nothing is! It’s an article about the coming crash and it can be found here: Top economist predicts ‘crash of a lifetime,’ worse than 2008 (nypost.com)
Or, here’s your snippet: “Harry Dent, the outspoken financial author and economist, isn’t reversing course from his bold “crash of a lifetime” declaration this past December.
Speaking in an updated interview with Fox News Digital, Dent cautioned that the “everything” bubble still has not burst, and it may be a bigger crash than the Great Recession.
“In 1925 to ‘29, it was a natural bubble. There was no stimulus behind that, artificial stimulus per se. So this is new. This has never happened,” Dent said Tuesday. “What do you do if you want to cure a hangover? You drink more. And that’s what they’ve been doing.”
“Flooding the economy with extra money forever might actually enhance the overall economy long-term. But we’ll only see when we see this bubble burst,” he added. “And again, this bubble has been going 14 years. Instead of most bubbles [going] five to six, it’s been stretched higher, longer. So you’d have to expect a bigger crash than we got in 2008 to ’09.”
“I think we’re going to see the S&P go down 86% from the top, and the Nasdaq 92%. A hero stock like Nvidia, as good as it is, and it is a great company, [goes] down 98%. Boy, this is over,” Dent stressed.
“We have never seen [the] government sustain a totally artificial bubble for a decade and a half, and see what happens after that,” he continued. “But I can tell you, there has not been one bubble, and this is far larger and longer, one major bubble in history that has not ended badly, period.”
Chuck again… I worked with Harry Dent for a short while when I was writing for the Sovereign Society… Man, that was a long time ago! Some you may recall the Currency Capitalist, and my weekly video rants I would send out to subscribers… I thought Harry Dent was “out there” back then, and it’s good to see that he hasn’t changed!
Market Prices 6/13/2024: American Style: A$ 6643, kiwi .6172, C$ .7272, euro 1.0789, sterling 1.2776, Swiss $1.1155, European Style: rand 18.3753, krone 10.6150, SEK 10.4080, forint 367.43, zloty 4.0304, koruna 22.9106, RUB 88.08, yen 157.20, sing 1.3497, HKD 7.8106, INR 83.54, China 7.2526, peso 18.67, BRL 5.4140, BBDXY 1,264.74, Dollar Index 104.78, Oil $77.97, 10-year 4.32%, Silver $29.06, Platinum $949.00, Palladium $846.00, Copper $4.52, and Gold… $2,309.94
That’s it for today… And this week… Well, one week on the new chemo, and while I feel fine, I can’t stay awake during the day, the new chemo has really knocked me for a loop… I’m hoping that I get used to the new chemo and eventually all this sleeping goes away… My beloved Cardinals play a day game at Busch today, and then head to Chicago to play the Cubs this coming weekend… Cards/ Cubs are always good baseball games! England Dan & John Ford Coley take us to the finish line today with their great 70’s song: I’d Really Love To See You Tonight… I hope you have a Tub Thumpin; Thursday today, and please Be Good To Yourself!
Chuck Butler