Good day… and a Tub Thumpin’ Thursday to you! I feel like doing some Tub Thumpin’ today, so watch out! HA! Well, I have to start today’s letter with two HUGE apologies… (3 actually, but 2 are HUGE!) My good friend, Duane, has a saying that fits the bill here, when he’s done something, well, let’s just say wrong… He says, “I’m going to have to smoke a turd in Hell for this”… And so that’s where I am today, because… I TOTALLY forgot that yesterday was Alex’s Birthday, and the 14th wedding anniversary of daughter Dawn and husband Jerry! I guess, I just didn’t realize that it was the 28th… And I didn’t have infusion confusion to blame it on either! So… Happy (belated) 22nd Birthday Alex… And Happy Anniversary Dawn and Jerry! The Moody Blues greet me this morning with their song: I Know You’re Out There Somewhere…
Looky, looky, what have we here? The euro trading like it remembers what it feels like to gain VS the dollar? Well, that’s what we have, and boy did I hit the nail on the head last week, when I said that I thought the sentiment toward the euro had moved from the dollar to the single unit.. After trying 6 times in the past month to move past 1.13, the euro finally did so, and this morning it has climbed further to trade in the 1.14 handle!
I’m told by traders that 1.1428 remains one of the last lines of defense for the euro and IF it can take that figure out, the next stop is 1.17!!!!! My Thursday column for the www.Dowtheoryletters.com I talk exclusively about the euro, where it’s been, what it’s doing now, and where I think it’s going… I really think that should you want to read about other things besides currencies, metals, economies, and dolts, that you might want to sign up and send your payment to the Aden Forecast people, because that’s where my weekly articles are going to print folks… And like I told you last week, that I’m sure not many of you saw, because it was only on the www.dailypfennig.com website… The Aden Sisters have given me a lot of rope to talk about just about anything I want that has to do with global economics… I still can’t believe I’ve been given that freedom!
The Dollar Index has fallen to 95.83 this morning, and it’s all about the euro’s move, folks… But there are other currencies moving higher VS the dollar this morning too… The Norwegian krone has been awakened from its slumber, as the krone is getting a double shot of energy this morning. The price of Oil is nearing $45, and the euro is on the rally tracks, which is HUGE for the krone… And the krone’s kissing cousin neighbor, the Swedish krona is tagging along.
I said yesterday that the currencies of Australia and New Zealand, A$’s and kiwi respectively, had seen some profit taking the night before, and now they had to pull themselves up from the canvas and mount a charge to get back to 76 & 73-cents respectively. Well, that’s exactly what these two did yesterday, and in last night’s trading. The A$ is well into the 76-cent handle, and kiwi is smack dab on 73-cents as I write.
Well, the Big News besides the euro’s move this morning, is the word going around the globe that “borrowing costs are going higher”… Get this… Bank of England (BOE) Gov. Mark Carney, he of the promises to remove accommodation in both Canada and England in the past, but never did, told reporters yesterday that “the time is nearing for a rate hike”… Really? You want the markets to believe you, because “this time is different”? Just LAST WEEK you said that “zero interest rates were appropriate”
Pound sterling is climbing steadily again but I think most of its move has come from the euro’s rally, and not Mark Carney crying wolf again…
In Canada, Bank of Canada (BOC) Gov. Stephen Poloz, told reporters that “he might be considering a rate hike” Really, Stephen? I’ve been yelling at you since you took over the BOC to hike rates to snuff out the housing bubbles in Toronto and Vancouver, but nooooooooo! But when everyone else is doing the rate hike shuffle, you decide to join in? Now? I don’t get it folks… These Central Bankers have gone bonkers!
But the loonie is enjoying both the rise in the price of Oil and the comments by Poloz… Don’t look now but the loonie is zeroing in on 77-cents!
Speaking of Central Bankers going bonkers… Yesterday in the 5 Minute Forecast (www.agorafinancial.com) Dave Gonigam, wrote about a town hall meeting he went to the previous night to hear Neil Kashkari, the Minneapolis Fed President speak…
Yesterday I told you about how Fed Chair, Janet Yellen, had spoken and given me and anyone else that would believe her a warm and fuzzy about how the Fed had come to the rescue and saved the world, and made the Banks better for it all, and that we would never see another “financial crisis” in our lifetime… OK, I’m kidding when I say I believed her…
Instead, I would rather believe Fed Minneapolis President, Neil Kashkari, who had a slightly different viewpoint on where we are… let’s listen in as he spoke at a town hall meeting on Tuesday night, which was AFTER Yellen had spoken in London… Here’s Mr. Kashkari…
“There’s no question the banking regulators blew it leading up to the [2008] financial crisis. And the problem is we’re gonna blow it again… Human societies are prone to mass delusion .” – Neil Kashkari
Now, that’s what I call being transparent! And I also like the fact that he’s been on a crusade since his first day in the office to break of the Big Banks… In his first speech as Fed president, he said, “I believe the biggest banks are still too big to fail and continue to pose a significant, ongoing risk to our economy.”
I’d say that there will be some friction at the next meeting in the Eccles Building (Fed Headquarters) the next time these two (Yellen and Kashkari) meet face to face… I had to laugh out loud there, because I got this flash in my mind of those two meeting face to face, and it being like the old Chevy Chase/ Jane Curtain skit on SNL Point/ Counterpoint… Now that’s funny stuff!
Of course, all this Central Bank craziness isn’t funny, because they are messing with your money, folks… I received a bank statement yesterday, and saw the interest that was added to my balance, and had to laugh, because if I didn’t laugh, I was going to cry!
So, the price of Oil is on the rebound? Well, sort of.. late last week, the price of Oil had slipped to a low $42 handle and the slide didn’t look like it was going to stop there… But then a funny thing happened on the way to the forum, and the price of Oil turned on a dime, and this morning it’s knocking on the door of a $45 handle. I warned you about overcrowded trades the other day, and the short trades in Oil were a prime example of an overcrowded trade…
Usually, I don’t need to check the price of Oil once I look at how the Russian ruble is performing, but that wasn’t the case this morning. The price of Oil is rebounding, and the ruble is not… The Norwegian krone, Canadian loonie, the Brazilian real are on the rally tracks but not the Russian ruble… Maybe it will be a delayed reaction? HA!
Once again yesterday, the price of Gold saw an early morning trading bounce, only to have it cut down by “da boyz” as Ed Steer calls them… Gold was able to eke out a $2.10 gain on the day, to close the day at $1,248.80… But is down $2 in the early morning trading today… I’m really confused by this trading in Gold… The Dollar Index is dropping like a rock, and yet Gold can’t seem to find a bid that lasts longer than a NY Minute…
One of these days, Alice… To the Moon! That’s what I always think of when I see trading in Gold that doesn’t make sense to me… One of these days, Alice… To the Moon!
The U.S. Data Cupboard yesterday, saw the Advanced Trade Balance, which I explained previously, is simply the goods traded to and from the U.S. and in a few days the actual Trade Balance prints, when all the other stuff gets added in… And the Advanced Trade Balance was a $65.9 Billion deficit for May… The dollar was still wreaking havoc on trade in May, so this certainly makes sense to me…
On Tuesday, the U.S. Data Cupboard showed that Consumer Sentiment had risen this month from an index number of 117.6 to 118.9… I guess consumers are drinking the Kool-Aid that the Fed keeps dishing out, that all this economic weakness is just transitory, and the good times are about to hit us… Now, had they called me and asked me about my sentiment, I would have given them an earful of weak data reports, a Central Bank that’s hell bound and whiskey bent to hike rates in the face of all these weak data reports… Like the one that will print tomorrow that will most likely show Personal Spending dropping like a rock in May…
So, one has to wonder just what questions are asked when taking these Confidence/ Sentiment surveys, because if consumer are so confident, why then aren’t they spending money? I shake my head in disbelief that this stuff goes on…
Oh! I almost forgot to report this data… Existing Home Sales are seeing some real problems folks… This from zerohedge.com:
After modest bounces in existing and new home sales (despite weakness in starts and permits and mortgage application declines), pending home sales in May tumbled 0.8% MoM and were revised even lower (-1.7%) in April. This dismal print was below all economists’ expectations, missing by 4 standard deviations.
This is the 3rd straight monthly drop and 2nd straight annual decline in pending home sales.
YIKES! Are we beginning to see the Housing sector in reverse? It sure seems that way to me, folks…
To recap… The euro is leading the charge VS the dollar, and the Dollar Index has fallen to 95.83, after trading 97.70 just a week ago. Yellen, Carney and Poloz all tell reporters that “borrowing costs are going higher” Chuck points out that Carney has made promises to remove accommodation at both the Bank of Canada and now the Bank of England, and the boy who cried wolf, has yet to make a move… The price of Oil has seen a mini-rebound, and the Petrol Currencies are in rally mode, except the Russian ruble, who for some reason unknown to Chuck, this morning, can’t find a bid…
Before I head to the Big Finish this morning, I came across this, and thought long about it, and remembered telling you, dear reader, a very long time ago, that our personal freedoms were being taken away… and then this printed… According to a new Gallup Poll, more Americans see their liberties in decline in the US. U.S. freedom ranking in the world has declined as well. What’s going on here and why? I saw this and had to pose the question to you dear reader, is this what you feel too?
For What it’s Worth… Well, when all the talk was about raising the minimum wage to $15 per hour, I talked about how that would like shooting these minimum wage employees in the foot, for employers would find ways to circumvent this increase in costs… And then I saw this on G. Edward Griffin’s website. if that name is familiar to you, he’s the author of the great book: The Creature From Jekyll Island… a book about how and why the Fed began, and where its gone from its early days… it’s a long book, but one I truly believe anyone would need to read… Anyway, you can find the article here: https://needtoknow.news/2017/06/seattles-15-minimum-wage-law-caused-workers-wages-drop/
Or, Here’s your snippet: “Seattle passed a law setting the minimum wage at $15 per hour, which is a 3% increase. This caused many employers to cut the hours of their unskilled workers by 9% in order to stay in business. [9% rather than 3% is because, when the minimum wage goes up, it forces other wages up also to keep skilled workers at a higher pay scale than minimum. There is a ripple effect all the way up to middle management. To cover this extra cost, employers were compelled to cut back the working hours of unskilled workers by 9%. Working fewer hours caused a lower income of minimum-wage workers by $125 per month.”
Chuck again… The actual full article is somewhere else, but you can get there from Mr. Griffin’s website, that I’ve given you above.
Currencies today 6/29/17… American Style: A$ .7671, kiwi .73, C$ .7678, euro 1.1407, sterling 1.2965, Swiss $.9580, … European Style: rand 12.9376, krone 8.3842, SEK 8.5140, HUF 271.70, zloty 3.7165, koruna 23.0560, RUB 59.34, yen 112.80, sing 1.3788, HKD 7.8056, INR 64.56, China 6.8007, peso 17.85, BRL 3.3020, Dollar Index 95.83, Oil $44.96, 10-year 2.24%, Silver $16.84, Platinum $919.26, Palladium $860.35, and Gold… $1,247.00
That’s it for today… My beloved Cardinals tried to give another game away last night in the 9th inning, but held on this time for the win… Most of the family came to the house last night for Alex’s Birthday dinner, and Alex brought 3 of his roommates along… You should have seen those boys eat! I guess when you live frugal college life you take advantage of a home cooked meal when you can find one! And I said “boys” I meant young men… I feel like I’ve been doing more reading and research now that I’m “semi-retired” than I did before! I spend a good portion of the day at my writing desk, reading… I’ve got to get out more! But I don’t have anyone to “play with”… HAHAHAHAHA! And with that thought, Cat Stevens takes us to the finish line today with his song: Peace Train… I hope you have a Tub Thumpin’ Thursday, and Be Good To Yourself!
Chuck Butler