February 24, 2022
* It’s all about buying safe havens today
* A short-n-sweet Pfennig today…
Good Day… and a Tub Thumpin’ Thursday to you! Well, the inevitable finally became reality yesterday, as Russia has invaded Ukraine… This throws Europe into the worst debacle sine WWII… Sorry to start the letter with such disparaging news, but it is what it is, and now we sit back and await the U.S.’s response, for wasn’t it just a week ago that the VEEP told Ukraine that the U.S. “had their backs”? I don’t like the direction this is taking, folks… But if there’s a silver lining in every story, this one has to be Gold… More on that in a minute, but first Styx greets me this morning with their song: Too Much Time On My Hands
This news isn’t good for the currencies, except the dollar, as there is a flight to safety, which is ironic isn’t it? But I digress here… The flight to safety includes buying dollars, Oil, Treasuries, and Precious Metals… Gold is up $60 this morning, after rising $10 yesterday… Silver is up 89-cents this morning, after rising 44-cents yesterday…
The BBDXY is up to 1,185.23 this morning that’s more than 10 index points from where it closed yesterday… In yesterday’s markets, the rumors of an invasion were creeping into the markets, and that had boosted the dollar to close yesterday at 1,175.42, after starting the day at 1,172.47… So, all this dollar buying began yesterday, and reached a crescendo this morning. The Aussie dollar, and its kissin’ cousin across the Tasman, New Zealand kiwi, both have lost 1-cent from their values yesterday morning…
The price of Oil this morning is trading with a $99 handle… That’s right I said $99… I can hear the late great Mogambo Guru yelling from his grave that “this investing stuff is easy… wheee! Buy, Gold, Silver, Oil, you moron!”
U.S. Treasuries were being bought like funnel cakes at a State Fair, and the 10-year’s yield has dropped to 1.87%… Recall that just last week the 10-year’s yield hit 2.03%… So, there are your safe havens this morning folks… Dollars, Gold, Silver, Oil, and Treasuries…
There’s only one currency of the whole lot of currencies that found a way to rally yesterday and overnight, and that is the Brazilian real… The Russian ruble is the new whipping boy for currency traders, and I sit here thinking: “all the hard work that the Russian Central Bank put in, in an attempt to right the economy in the face of economic sanctions, and provide price stability in the currency, has been throw out the window”
What on earth are the price manipulators in Gold & Silver going to do while this flight to safety is going on? I’ll tell you what they are doing… They are sitting around sweating bullets, and worrying about what their next bonus will look like… And they’re not good worries…
The Petrol Currencies aren’t able to take advantage of the sharp rise in the price of Oil, because of the strong dollar, which makes the performance of the Brazilian real even more impressive…
In recent trading sessions, the Chinese renminbi was getting bought as a safe haven, but that stopped last night, and the renminbi was sold, and marked down for the first time in a month of Sundays…
So, we’ve been here before with the currencies, folks… It’s time to batten down the hatches and wait this storm out… And if you haven’t already provided protection for your investment portfolio with an allocation to Gold or Silver, I won’t say it’s too late, but you sure did miss an opportunity to buy at cheaper prices… I’m just saying…
Today’s Data Cupboard has the usual Tub Thumpin’ Thursday fare of: Weekly Initial Jobless Claims, which last week jumped higher to 248,000. One would think that rise would have continued last week , but again this is the Gov’t pushing out these reports, so we don’t know for sure what the real numbers are…
Speaking of suspicious Gov’t reports… the revised 4th QTR GDP will print today… With all the Gov’t spending, I wouldn’t be surprised to see the previous 6.7% rate be revised higher…
To recap… Russia did indeed invade Ukraine last night, and sent the markets into a tizzy, with the safe havens of dollars, Gold, Silver, Oil and Treasuries all being bought like funnel cakes at a State Fair… Only one currency got out unscathed and even the Chinese renminbi saw weakness overnight. Chuck is worried about the U.S.’s response to this invasion that puts Europe right smack in the middle of a HUGE conflict for the first time since WWII…
For What It’s Worth… Ok, to get your minds, and mine off of the Russian invasion, I thought a little: “get back to reality” article would help… So this is something that I saw come across the screen yesterday, and thought then, that it could be the FWIW today, but after the Russian news, I knew it had to be the FWIW today! This is an article about mortgage applications, and it can be found here: Mortgage Applications Collapse Most Since March 2020 COVID Crisis | ZeroHedge
Or, here’s your snippet: “Mortgage applications collapsed 13.1% week-over-week, the worst drop since the heart of the COVID lockdown crisis in March 2020…
As MBA reports, the Refinance Index plunged 16% from the previous week and was 56% lower than the same week one year ago.
But most notably, the seasonally adjusted Purchase Index tumbled 10% from one week earlier – after holding up for a few weeks amid rising rates. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 6 percent lower than the same week one year ago.
Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, warned:
“Purchase applications, already constrained by elevated sales prices and tight inventory, have also been impacted by these higher rates and declined for the third straight week. While the average loan size did not increase this week, it remained close to the survey’s record high,” adding that “higher mortgage rates have quickly shut off refinances, with activity down in six of the first seven weeks of 2022. Conventional refinances in particular saw a 17 percent decrease last week.”
Chuck again… Well, we all knew this was bound to happen once there was talk of higher interest rates by the Fed/ Cabal/ Cartel, right?
Market prices 2/24/2022: American Style: A$ .7163, kiwi .6700, C$ .7790, euro 1.1172, sterling 1.3390, Swiss $1.0829, European Style: rand 15.2820, krone 9.0593, SEK 9.5893, forint 327.90, zloty 4.1539, koruna 22.3235, RUB 83.56, yen 114.73, sing 1.3544, HKD 7.8092, INR 75.63, China 6.3308, peso 20.45, BRL 5.0063, BBDXY 1,185.23, Dollar Index 97.19, Oil $99.12, 10-year 1.87%, Silver $25.51, Platinum $1,122.00, Palladium $2,730.00, Copper $4.57, and Gold… $1,970.00
That’s it for today… Not a long one today, I’m just not feeling it today, and besides I wouldn’t want to make it seem like I saw shrugging of the Russian invasion… Man, was it ever beautiful here yesterday, warm to where it actually felt hot, full sunshine, and a nice sea breeze blowing to keep me from getting too hot…. Our Blues come home tomorrow night to play the Sabres. Let’s Go Blues! My beloved Mizzou Tigers play again on Saturday this week, while the St. Louis U. Billikens play tomorrow night at Richmond… Hall & Oates takes us to the finish line today with their song: She’s Gone… And yes, I do have a couple of Hall & Oates songs on my iPod… I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow, and Please Be Good To Yourself! Be Positive, Test Negative!
Chuck Butler