June 18, 2020
* it was a nothing day for the currencies and metals…
* Chuck wants to know why we are erasing our history?
Good Day… And a Tub Thumpin’ Thursday to you! Once again, on a Tub Thumpin’ Thursday, my visit to the wound center is later in the morning, which gives me plenty of time to get this out before getting ready. So, good morning to you! I’ve always feared there be a day like today, when the markets didn’t move the previous day, and nobody said anything that would qualify them as dolt. No wait! Fed Chairman Powell spoke yesterday, so I get to nit pick his words, but other than that, nothing, absolutely nothing else to talk about today… that has always been in the back of my mind, when I reported to work early in the morning, and pulled up my screen and saw a blank page… I would fear that one day, I wouldn’t have anything to say… Then what? Well, I could be like CNN, and make stuff up… And then apologize for my error the next day, as if it was no big deal. I chose CNN randomly it could have been any of those news stations! So, I’ll give it my best attempt… I’m greeted this morning by Van “the man” Morrison, with his song: And It Stoned me…
OK… well like I said above, the markets didn’t move but an inch and an inch there yesterday… The Aussie dollar (A$) did love about 1/2-cent, so if that gets your motor running this morning, so be it! Gold didn’t really move much either… And in the overnight markets things didn’t change…
Gold has dropped $3 in the early trading today, and the stock futures are down big, so this could end up being an ugly day, for market prices…
We have N & S. Korea eyeing each other at the DMZ, we have India and China shooting at each other in a border war, we have the whole world in deep dookie after shutting down their collective economies. The IMF actually called the current recession, “not anything ever seen on earth previously”, and I sit here and watch Gold tick downward… Makes no sense to me whatsoever…
So, yesterday, I lobbed that grenade from left field for you to read and get hopping mad about… And said that I would pay good money to be at the committee meeting on the Hill yesterday, where Fed Chairman Powell was to testify… Well, things were going along as usual yesterday, with softball after softball being pitched to Powell… But then… Sen Pat Toomey, a Republican of Pennsylvania, said the Fed’s corporate bond purchases were unnecessary and were distorting market signals.
“I don’t see us as wanting to run through the bond market like an elephant…snuffing out price signals and things like that,” Powell said. “We just want to be there if things turn bad for the economy,”
Wait! What did he say? He’s buying Corporate Bond Fund ETF’s, and now Corporate Bonds and he doesn’t see this a distorting the market? Corporations that would have been filing bankruptcy about now, get life breathed into them, curtesy of the Fed printing press, and tax payers of course!
I think we’ll be able to come back in a few months maybe sooner, and see these same Zombie Corporations that took the money, still have to file bankruptcy, and then, will Powell admit their mistake? I doubt it… Later, Powell said the central bank wasn’t buying asset to make it easier for the U.S. Treasury Department to sell the increased debt. This is known as “monetizing the debt.”
“That is certainly not our intention,” Powell replied.
Yeah, right, and I have a pig that flies…. That’s all I’m going to say about his not intending to monetize the debt… In 2009, when the Fed first began to buy bonds, that’s exactly what I called then, and what I’ll continue to call it!
And then he probably got the whole shootin’ match of traders and economists laughing until they cried, when he tried to make us believe that the Fed does not focus on moving asset prices in either direction…
So, all in all, it was just another day of lies, and deceit… I’m not calling Powell a liar, per se… But… “Just because something isn’t a lie does not mean that it isn’t deceptive. A liar knows that he is a liar, but one who speaks mere portions of truth in order to deceive is a craftsman of destruction.” ― Criss Jami
The U.S. Data Cupboard has the Thursday Weekly Jobless Claims for last week, today… And they will show us the color of the May Leading Indicators Index, which in April was negative -4.4%… This piece of data, along with Capacity Utilization are the only real, forward looking, pieces of data that we see…
Friday’s Data Cupboard will really only have the 1st QTR Current Account Deficit for us… This one really will set up the 2nd QTR when all the money / debt creation began… So, to end the week, the markets will not be depending on the data to give them any indication which way to go….
Before we head to the Big Finish today, I have something I need to get off my chest… I want to know what’s with all the clearing out of our history? We are a country of people that are descendants of immigrants. Now those immigrants weren’t perfect. They made mistakes, but those mistakes led to us not making them ever again. And many years ago, people erected statues of men that they believed led us to a better life, or at least a better understanding of what not to do. And now all these younger people that have been brought up to not respect anything or anyone but themselves, are ridding the country of our history… The reason this is on my mind, is that the other day, the very first statue of Christopher Columbus was taken down here in St. Louis’s Forest Park. Like I said, he made mistakes, but they were mistakes that we learned from, right? And he was credited with being the first to find our country (the truth is out there). And we no longer can take our kids to the park and say, this is Christopher Columbus? Shame, on everyone that’s a part of all these statues being taken down. It’s our history, it may not always be the best example of what we came to be, but it’s our history! And now I hear that people want to take down the Abe Lincoln statue? God help us if we resort to that!
I know everyone is not going to agree with me on this, but this is how I feel, and that’s that!
To recap… it was a “nothing day” as far as the markets were concerned yesterday, no real movement in the currencies or metals, it is a day that Chuck always feared he would have to write about! Chuck dissects some of the Powell testimony yesterday, in today’s letter, and then Chuck decides to get something off his chest…
For What It’s Worth… Recall last week when I told you how Hertz’s stock was soaring after they had announced Bankruptcy? I just couldn’t believe that was happening, and that people were drawn to buy that stock. Well, this article plays with that thought, as Hertz pulled the plans of a new stock offering, while they are in receivership, and can be found here: https://www.zerohedge.com/markets/bankrupt-hertz-kills-plan-sell-500-million-worthless-stock-following-sec-review
Or, here’s your snippet: “As if millions of Jefferies bankers suddenly cried out in terror and were suddenly silenced.
When last week Hertz announced its plans to sell up to $1 billion in bankrupt stock (subsequently trimmed to $500 million) to Robinhooders in an “At The Money” offering from its existing Shelf, there were two reactions i) this is the most insane thing ever attempted, although if it gets done it will be a truly historic outcome, one in which a bankrupt company will have turned over the bankruptcy process on its head funding itself in Chapter 11 not with a super-secured DIP loan but with worthless equity, and ii) where the hell is the SEC on this?
Finally addressing point 2, earlier today SEC chairman Jay Clayton told CNBC that the regulator was actually involved, and contrary to widespread expectations hadn’t decided to ignore what many said was clear daylight robbery from manic Robinhood investors. Moments later Hertz stock was halted for hours.
And now we know why: in an 8K published moments ago, the bankrupt car rental giant said that, following communication with the SEC, Hertz was “suspending” the $500 million offering and as a result “the Company is not currently offering any shares under the ATM Program.”
And so what would have been the greatest ever feat pulled off by a company and its aspiring investment bank, has been shelved indefinitely, as has Jefferies 3% underwriting fee… at least until Chesapeake or someone else tries to pull this magic trick all over again.”
Chuck again… You know, when I first began putting articles that made you think differently about stuff, in the Pfennig, this is the type of article that would have been front and center… The absurdity of this whole idea just sends me off the cliff!
Market prices for 6/18/20 American Style: .6870, kiwi .6444, C$ .7375, euro 1.1242, sterling 1.2572, Swiss $1.0537, European Style: rand 17.3607, krone 9.4935, SEK 9.3648, forint 306.75, zloty 3.9741, koruna 23.7140, RUB 69.62, yen 106.98, sing 1.3926, HKD 7.7499, INR 75.94, China7.0862, peso 22.37, BRL 5.2398, Dollar Index 97.13, Oil $38.30, 10-year .71%, Silver $17.54, Platinum $821.90, Palladium $1,924.32, and Gold… $1,723.17
That’s it for today… There you go! The long awaited Shorter Pfennig! I can hear the shouts from the mountain top! HA! Well, this Sunday is Father’s Day… On Saturday, Chuck and his two sons, Andrew and Alex are heading to Columbia for the day, I believe that some burgers at Booches, and pizza at Shakespeare’s is on the docket! That’s their Father’s Day present to me… Longtime readers know that I learned a ton from my dad, as I quote him quite often in the Pfennig… I get a chill thinking about him… And Pfennig Tradition calls for a Father’s Day poem at the end, so I’ll carry that tradition on today… The band, Poco, takes us to the finish line today, with their song: Bad Weather… I’ve always enjoyed the sound of the band Poco… Ok, with that, I want to hope that you’ll have a Tub Thumpin’ Thursday, and will Be Good To Yourself!
I love you and I miss you, Dad,
and though you’ve passed away,
you’ll never be forgotten,
for I think of you each day.
If heaven celebrates this day
how special it will be.
A gathering of the many dads
upon our family tree.
Your father and grandfather
and great grandfather too.
How wonderful it is, if they
can spend this day with you.
May you know how much I love you
though I’m here and you are there.
Happy Father’s Day in heaven
to the best dad anywhere!
~ By Ron Tranmer