June 22, 2023
* currencies rally on Wednesday
* Chuck’s crystal ball is hazy…
Good Day… And a Tub Thumpin’ Thursday to one and all! Boy, the week went by fast, for me… One day I was recovering from Father’s Day, and the next day seems to be the end of the week! I did have an interruption yesterday, with me attending the StL City SC soccer game last night in our beautiful new City Park, that the the STL team lost 3-1… UGH! Sat next to by old Big Boss and long time friend at the game last night, Frank Trotter… He tells me eveything is a go, on his new bank, except the green light from the FDIC… They seem to have a bag of bees that their attention has been taken by recently, so maybe sometime soon they’ll get around to giving Battle Bank the green light… The letter is a little tardy today, because I couldn’t answer the bell this morning… I told you all that there would be days like this, and this is one of them… The Doobie Brothers greet me this morning with their song: Another Park, Another Sunday…
Well, the recent buy the dollar in the overnight markets, and do nothing with it in the U.S. markets, didn’t follow through yesterday, and as I had thought and said, it didn’t last long… The dollar was sold throughout the day yesterday, as witnessed by the BBDXY losing 4 index points, and the euro climbing to within’ shoutin’ distance of 1.10… at 1.0993… just when I thought I had the markets pegged on how they would react to Jerome Powell’s testimony before the House yesterday… Powell contradicted himself, when he said that, “interest rates are too high, but they need to go higher”… Wait! What? So, the markets were left without a hard rat hike will happen on “x” date, and they decided to sell the dollar, because why? Because like I told you after the Fed Heads announced their “skip” of rate hikes, that we likely have seen the last rate hike…
So, the currencies all rallied yesterday, along with the price of Oil that bumped higher by a buck. Bond yields reacted as if the Powell told the House that he was cutting rates soon, for they backed off a bit as the day went on, with the 10-year’s yield dropped 2 basis points…
In the overnight markets last night… The dollar got bought again… Seems the foreign markets can’t get enough dollars? This is so contra to what I read and hear on a daily basis, but then it’s so difficult to tell the difference between lies and truth… So, I carry on despite my shortcomings…. HA! The BBDXY has gained 2 index points to start the day today. Gold & Silver just can’t seem to find a bid floating around that they could grab for a minute or two to stop the selling… Gold is down $12 this morning, while Silver is down 18-cents… The dirty deeds boys, still haven’t found their bottom for these two, but one would have to think it’s around here… at least I’m half hoping that it’s around here… The currencies have lost a bit from their lofty figures of yesterday, and the Japanese yen leads the pack of those that are performing badly… And the Hungarian forint leads the pack of those currencies performing strongly…
The price of Oil slipped back into its trading range, after venturing out of it for a brief time yesterday. The price of Oil trades with a $70 handle this morning… And I guess the bond buying by ? (the Fed?) ended yesterday, and overnight the 10-year added 5 Basis Points to its yield. I’ve never seen a time in all my time around bond trading, that compares to the trading these days… That should mean something, right? But I’ll be darned if I can figure that one out… See what manipulated markets do?
I really don’t know what the Fed Heads will do, it’s just that sometimes, it appears as though I have a crystal ball, and hit their moves bang on… So, I say this with a lot of confidence, that once we get down the road a couple of months, without a rate hike, and the stock market is humming once again, the Fed Heads would be upsetting the applecart with violence, if they came back then and hiked rates again…
But what if inflation has taken off again to higher ground, without rate hikes? Oh, you know, they Fed Heads will call their buddies over at the BLS and have them “adjust” the inflation basket so that inflation doesn’t show too big a rise…
The problem with free markets, is that there are no such things any longer… Every market is manipulated. You say you think the markets are free? Well, I say balderdash! The Fed manipulates the bond market, the short paper traders manipulate the metals, and the PPT manipulates the dollar… What’s left? Oh, stocks? Well, the Fed has had their hands on the tiller that controls stocks for years now… Cryptos? Oh, don’t get me started on Cryptos…
OK… well, yesterday, there’s this Jake Sullivan, who works for the Gov’t, and believes that the Gov’t should be the deciders of what we do with OUR money… here’s Bill Bonner, from his daily letter ( Bonner Private Research | Substack) “Let us simplify and clarify. People create wealth by providing goods and services to each other. Neither acts of Congress, agency regulations, or Presidential proclamations add a penny to our prosperity.
Then, after the people have created wealth, they decide what to do with it. Or someone else decides for them. Sullivan is saying that people have failed to use their money the way he thinks they should. From now on, he says, the feds will be the deciders. “
Chuck again… And we all know that the Gov’t will do a bang up job deciding what we do with OUR money, right? NOT!
The U.S. Data Cupboard has the usual Weekly Initial Jobless Claims, which have ratcheted up to 262,000 the previous week… just last month in the middle of May they were 225,000… So, I expect this number to continue to move higher each week. We’ll also see Housing Starts for May, and then the piece de’ resistance” Leading Indicators, which have been negative for a few months now, will most likely go even more negative…
To recap… The shrugging off of the dollar the last two days, ended yesterday with the dollar getting sold in the U.S. markets by 4 index points in the BBDXY, and the euro climbing to 1.0993… Head Fed Head, Jerome Powell, kind of got his words mixed up yesterday, in my opinion that is, and left the markets wondering … And that’s not a good thing… Chuck believes that we may well have seen the last rate hike…
Before we head to the Big Finish today I want to ask the question… What the heck is going on here? What am I talking about? I’m talking about the POTUS and his comments about China and its leader, after an envoy was sent to China to smooth out relations… Here’s Reuters: “after US President Joe Biden referred to President Xi Jinping as a “dictator”, saying the remarks were absurd and a provocation, in an unexpected spat following efforts by both sides to lower tensions.”
What are we trying to do, play good cop, bad cop with China? Aye, aye, Aye… I shake my head in disbelief…
For What It’s Worth… Well, this article is a little off the beaten path, and it doesn’t come back to the markets, but what it does do is highlight the kind of world we live in today, and it can be found here: ‘I Can Go Into Anyone’s House At Any Time’: Judiciary Committee Investigates IRS Agent Threatening Taxpayer | ZeroHedge
Or, here’s your snippet: “An IRS agent used a fake identity to approach and threaten a taxpayer, following which House Judiciary Committee chairman Rep. Jim Jordan (R-Ohio) sent a letter to IRS Commissioner Daniel Werfel seeking further information on the incident.
The incident occurred on April 25, 2023, when an IRS agent identifying as “Bill Haus” with the agency’s Criminal Division visited the home of a taxpayer residing in Marion, Ohio, according to the June 16 letter (pdf). The agent initially lied to the taxpayer that he was visiting with regard to her improper estate filings and that she owed a “substantial amount” to the IRS. Before his visit, the taxpayer had not received any notification from the tax agency regarding unpaid dues on the estate.
After the taxpayer showed proof that she had paid all taxes for the estate, agent Haus then said that the true purpose of his visit was not related to the estate but that the taxpayer allegedly had several delinquent tax return filings. He then proceeded to provide documents for the taxpayer to fill out—including submitting sensitive personal information.
The taxpayer immediately called her attorney, who asked Agent Haus to leave her home. The agent responded aggressively, insisting that “I am an IRS agent, I can be at and go into anyone’s house at any time I want to be.”
Before leaving her home, Haus “threatened” the taxpayer that she had one week to pay off her dues, failing which he would freeze her assets and put a lien on her home, the letter notes. In May, the taxpayer contacted Haus’ supervisor, who subsequently resolved the matter. On May 30, she received a letter from the IRS stating that her case had been closed.
The committee asked the IRS commissioner to provide certain documents so that it could examine “how to best protect Americans’ fundamental freedoms and to assist the Committee in its oversight.” The documents are to be submitted by June 30.”
Chuck again… scam? could be, IRS overstepping their authority? Probably… I’m just saying
Market Prices 6/22, 2023: American Style: A$.6764, kiwi .6190, C$ .7593, euro 1.0975, sterling 1.2745, Swiss $1.1160, European Style: rand 18.5109, krone 10.6077, SEK 10.6935, forint 336.83, zloty 4.0363, koruna 21.5775, RUB 83.78, yen 142.24, sing 1.3427, HKD 7.8283, INR 81.91, China 7.1795, peso 17.17, BRL 4.7676, BBDXY 1,224.95, Dollar Index 102.26, Oil $70.64, 10-year 3.77%, Silver $22.57, Platinum $944.00, Palladium $1,352.00, Copper $3.90, and Gold… $1,921.00
That’s it for today… and this week… Boy getting out of downtown St. Louis after the game last night was difficult at best… Especially, when the driver doesn’t follow the navigator’s instructions… I’m just saying. But Hey! I got home safely, and that’s all that matters! My next game is 7/15… I originally thought that Lionel Messi, the great soccer player that recently signed with the Miami team, could play in that 7/15 game, but people tell me now that that’s not going to happen, so it’ll be just another game… My beloved Cardinals showed that they can’t play like ducks in the rain yesterday, and lost 3-0, and now head to London… I don’t have much planned for the weekend, my darling granddaughter, Delaney Grace, will be in a play tomorrow night, that I will attend, but besides that nothing! And I like it that way! Next week I’ll be all alone again for a week to 10 days…. So, we’ll talk about that when it happens… The Beautiful Dusty Springfield takes us to the finish line today with her song: Son of a Preacher Man… I love her voice in the songs she sings… I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow! And while you’re at it, don’t forget to Be Good To Yourself!
Chuck Butler