A pause for the cause

• The Dollar selling ends on Monday and Monday night.

• Emergency rate cut? no way, Jose!

Good Day.. And a Tom Teriffic Tuesday to you! My poor beloved Cardinals... They can't stand prosperity, and they continue to choose which games they will hit the ball, and last night was not one of those nights, as they lost to the pond scum 6-0! I didn't have to subject myself watching the game, as we, as a family all went out to dinner to celebrate, Delaney's Birthday, Grace's birthday, and Dawn's birthday, which will come in couple of weeks... Happy Birthday to all... The Guess Who greet me this morning with their great 70's song: No Sugar Tonight/ New Mother Nature... 

Well, I was really impressed with how Gold & Silver fought back yesterday... When I left you yesterday morning, Gold was down $75, and Silver was down $1.95... But, as the day went along, the two metals fought off the short paper traders, and didn't get back to even for the day, but took a BIG chunk out of the losses that they have been inflicted with... Gold closed yesterday down -$33, but closed above $2,400 at $2,410.60... And Silver closed yesterday down $1.32 with a price of $27.23... This raid by the short paper traders was egregious once again, and shows they have no mrecy... It's a real shame that Gold & Silver are not allowed to trade without interference... Just imagine if you will, how high the price of these two metals would be if it weren't for the short paper traders... I'm just saying... 

The dollar found a bid yesterday, and the BBBDXY gained 1-index point... The selling of the dollar had gone fast and furious, and probably too much, at one time, and so a breather was in store... Stocks saw a nasty day yesterday with the Dow losing 1,000 points... And here's where I need to put out a public service announcement regarding Gold & Silver going forward... 

If stocks continue to sell, and I don't see any reason why they would stop, Gold & Silver will be subjected to all this stock selling, in that, there two will get sold to offset the losses that the stock jockeys are taking... The margin calls, and other devilish things that investors have been investing in that are now taking on losses... But here's the thing to look for... When Gold & Silver get sold to offset the stock and other stupid investment losses, it will be time to back up the truck, because after the selling is through, I see Gold & Silver taking off for higher ground... 

So, there's your playbook...  are you with me on this? 

The price of Oil gained a bit yesterday, and ended the day with a $74 handle... Maybe the selling was a bit overdone? It sure appears to be the case... And the 10-year's yield saw it's downward trajectory reverse, and the yield gained from 3.67% yesterday morning to end the day at 3.84%... 

You don't think that the bond boys read the Pfennig yesterday, and thought that I made sense, and that they have overbought the bond? Nah, as if, right?  

In the overnight markets last night...The dollar buying continued last night, and the BBDXY gained 3 index points... The currencies have all backed off their highs from a couple of days ago, and the dollar, once again has skirted its destination with the Wiley Coyote cliff... It will get there eventually, folks... All the bad data reports are telling us story, and right now the dollar bugs are refusing to listen to it... 

Gold is down $6 to start the day today, and Silver is down 33-cents... I'm afraid for the short-term levels for these two metals, as they will get used to offset the stock jockeys' losses... UGH! Beep, Beep, Beep, the sound of the truck backing up will be in full force when the dust is clear... 

The price of Oil lost $2 overnight, and is right back to where it was yesterday morning, trading with a $72 handle... There's been no fresh news with regards to the energy market, and so I suspect we'll see Oil trade in a very tight range until there is fresh news... 

The 10-year' yield trades this morning at 3.84%... I guess the talk of an emergency rate cut hasn't swayed the bond boys any... Hmmm....

I talked yesterday about the safe haven buying of the "safe haven" currencies, which include; euros, sterling, Swiss, and yen.. It's all bout what's called "the majors"... For years, these were the only currencies that got bought or sold daily ( the euro took the place of the deutsche mark ) I remember when I first began to trade foreign bonds, and I liked the New Zealand dollar, and one of the mainstays of the foreign desk, told me that the currency was not liquid, and it was too small of a country to make a difference... 

I persisted, and we finally began to sell New Zealand Gov't Bonds... The currency, by the way, doubled in price during the last weak dollar trend... Not that I'm slapping myself on the back here, but I didn't notice this currency and country long before anyone else did!  I'm just saying...

Currency traders are fickle people... I was once at a conference in Arizona, and the speaker before me went all off on traders talking about how they were fickle and that they weren't the kind of people you would have to your house for dinner...  i then got up on the stage an ad=libbed a bit, and said, "Well, I'm a trader, and people like me, and I think you would be lucky to have me over for dinner"...  

I said all that to tell you that the Swiss franc saw some profit taking yesterday, and saw its 1.18 handle reduces to a 1.17 handle...  Most times, things go too far one way, and have to be brought back to reality... And the franc fits that description perfectly! 

Well, why is everyone all keen to the threat of a recession now, but all along when the yield curve was inverted, and the economic data kept showing cracks, no one noticed? The Sahm Rule that I explained to you about yesterday, is probably one of the reasons... And the economic data can't be ignored any longer... When you have an economy that's on tinter hooks, you get reports like this one: Red Lobster, Pizza Hut, Boston Market, TGI Fridays, Popeyes, Tijuana Flats, Cracker Barrel and Applebee's have all shuttered locations due to financial issues... And there are a tone of local restaurants in areas around the country that have closed their doors forever... But, hey! Listen to the wonks that are running for office anywhere in the country and they'll tell you how great the economy is! Lies, lies, and more lies... 

Yesterday was very eerily akin to what is called "Black Monday" , which took place on Rocktober 19th, 1987... And saw the first time that the Fed, Cabel, Cartel, under Big Al Greenspan, came in to intervene and attempt to save the stock jockey from further losses... I was glad that the Fed, Cabal, Carel, under Jerome Powell, didn't make the same mistake that Big All did all those years ago... I remember that day like it happened last month! The Friday preceeding Black Monday, was a ominous sign, in that it sold off a huge chunk... So, didn't the same things happen this time around?  I recall my sister, Barbara, calling me on the phone that weekend, and asking me if she should sell her stocks in her IRA, and I told her " well, are you able to tap your IRA yet? And if you can't, how long until you can? She told me it was quite a few years, so I told her to hang tough that they would be back before she needed to sell them..."  

Of course, today is a different story... I doubt I would be alive to see the next stock recovery that recovered all these losses... And the losses that will come when we are really in a recession, and not one that people are just talking about right now... 

I know, I shouldn't be wasting my time talking about the stocks... But yesterday was so eerily familiar with that fateful data in Rocktober 1987... 

And now, the markets are calling on the Fed, Cabal, Cartel, to do an "emergency rate cut" before they meet in Sept. Here's the skinny from CBSnews.com "Given the dim economic data, some analysts and investors said they believe the Fed should undertake an emergency cut before their next rate decision, scheduled for September 18.

"Some analysts are even suggesting an intra-meeting emergency cut is warranted," noted Seema Shah, chief global strategist at Principal Asset Management, in an email. "

To that, I say "hogwash"! There's nothing in the Fed, Cabal, Cartel's mandate that says they need to adjust interest rates in order to make stocks comfortable! This is NOT Big Al Greenspan's Fed, Cabal, Cartel, folks... We all know that Big Al had an affection for having the markets adore him... Jerome Powell, is NOT Al Greenspan, and therefore, I would say that there will not be an "emergency rate cut" before the Sept. Meeting of the FOMC... Of course, if there is an "emergency rate cut", then the markets and their bothers will all know that it was done to save stocks, an that wont' be a good thing... I'm just saying... 

And one more thing, I told you the other day that the Aussie dollar (A$) was getting clobbered, and with a little research I found out that it was a result of the "Carry Trade" being reversed... With yen's rally going on, that makes abundant sense to me... The "Carry Trade" was made by those seeking to gain interest rate spread, and as long as the currency (yen) that gold sold stayed steady Eddie, then everything was hunky dorey...  So, when the trade is unwound, the currency that got bought (A$), now gets sold, and the currency that was sold short, (yen) now gets bought... A farewell to the Carry Trade... Bye, bye... You worked well for a very long time! 

The U.S. Data Cupboard today has the June Trade Deficit... In May the Trade Deficit was $75 Billion, and since May the dollar has gotten a bit weaker, so I expect the June Trade Deficit to come in much less than $75 Billion... But that's about it for today on data prints, as I told you yesterday, the Data Cupboard doesn't have much for us this week... 

To recap... The selling of the dollar took a pause for the cause yesterday, and the BBDXY gained back 1 index point, after losing more than 20 index points in the last month... The euro stopped moving higher in the 1.09 handle, and the rest of the currencies backed off their gains from last week. Chuck talks too much about stocks today, not individual ones, of course, but the stock market as a whole... This reminds me of a saying that i use the time... Ahhh, said the Blind man as he spit into the wind, it's all coming back to me now... I'm just saying... 

Here's your snippet: "That two-by-four upside our country’s head you’ve been waiting to get whomped with? Looks like it’s landing now. We got a banger in 2008, but it didn’t make as much of an impression. Maybe you don’t even remember these people, but then Treasury Secretary Hank Paulson and Fed Chair Ben Bernanke came in like a code blue squad and hooked up the banks to an IV-drip speedball of cocaine and heroin, i.e., “money” that didn’t actually exist (a.k.a. “liquidity,” hallucinated capital), and that crew kept it coming for years.

And then Janet Yellen and her posse kept it coming with never-ending zero interest rate policy (ZIRP) until the national debt canceled America’s future. And that left Jerome Powell pretending there was a way out of this doom-loop. Then came the repo market spasm in September 2019 that freaked out the blob so badly they shut down the whole world with Covid and locked-down economies. And everything since then has been waiting game. The financial world was in hospice.

The wait is over. Everything that can break is breaking: stock markets, bond markets, the galaxy of derivatives — bets on this and that, which will never be honored. Banks are next. Gold and silver are hanging in there for dear life just now, because they’re actually worth something. (And because they are worth something, they‘ll eventually sell off some too, to cover margin calls on other stuff hemorrhaging value. But they will not go to zero like a lot of other stuff, and they’ll come back stronger.)

You understand this can’t play out like it did in 2008-9. The authorities are out of tricks and out of fake money. They can try the emergency interest rate cut, but it won’t change what is actually happening: the epic revaluation of everything humans make and own — with much of it losing value and quite a bit losing all value because it never really had any. The spooky catch is that there will be an attempt in this wild and terrifying process, for certain devious, unprincipled parties to take possession of many things shaking loose — what remains of collateral. . . real things. . . commodities. . . facilities. . . properties. . . chattels. . . artworks. . . and, of course, whatever securities still have a relationship to realities of production."

Chuck again... Well, sometimes it's nice to hear someone echo what you've been saying...  

Market Prices 8/6/2024: American Style: A$ .6483, kiwi .5923, C$ .7228, euro 1.0912, sterling 1.2680, Swiss $1.1710, European Style: rand 18.4737, krone 10.9990, SEK 10.5899, forint 364.32, zloty 3.9507, koruna 23.1922, RUB 85.85, yen 145.80, sing 1.3770, HKD 7.7920, INR 83.96, China 7.1525, peso 19.26, BRL 5.6746, BBDXY 1,249.70, Dollar Index 103.15, Oil $72.79, 10-year 3.84%, Silver $26.93, Platinum $914.00, Palladium $857.00, Copper $3.99, and Gold... $2,404.06.

That's it for today... Well, my blood levels haven't recovered, and in fact they were lower yesterday than when I left the hospital two weeks ago... My doctor told me that it could take 8 weeks before they returned to normal... I told her I didn't think I could deal with feeling this weak for 6 more weeks... I can't climb the stairs from our basement to the main floor, without sounding like a ran a marathon, and feeling like I had too! Oh well, it beats the alternative, pushing Daisys... So, quit your complaining, Chuck! Suck it up buttercup! Quit your sitting on the sofa eating chocolate bon-bons! Ok, Ok, I get it! I go to the heart doctor that performed the operation on my heart in June, next week, to see if everything worked out perfectly, for if it did, then I can get off blood thinners... So, fingers crossed... Jr. Walker and the All-Stars take us to the finish line today with one of my all-time fave songs: What Does It Take?  I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!