The Bad Weather Excuse Club Rules!
February 21, 2014 · by Chuck Butler
Good Day! And a Happy Friday to one and all! This will be short-n-sweet this morning, as Chuck is tired, he overslept, is an hour late, and he’s ready to end the week! Besides, I’m in a foul mood, given the way the U.S. Women’s Hockey Team lost the Gold Medal game yesterday! UGH! I know, I mixed the first and 3rd person speaking in the same paragraph, but Shoot Rudy, that’s what makes this so much fun to read! HAHAHAHAHA!
After the overnight beat down on Wednesday night, the currencies and metals traded in tight ranges yesterday… The underlying bias is to buy dollars to end the week… I think the spin doctors have done a very good job to making sure the markets know that “this is not the real U.S. economic data you are seeing, but that of badly influenced by bad weather”… But what if it isn’t? What if, sure some of the data was badly influenced by bad weather, but not to the degree of rot that we’re seeing? What if, this is just the beginning of a rough spell for the economy? No wait! I’ve to restate that last line, as it wouldn’t be the beginning of a rough spell, it would be the continuation of the depression!
I’m putting my money on the 2nd thought… And I guess we’ll have to wait-n-see, eh? The late great Dan Fogelberg sang a song that reminds me of me… The words went like this… I used to think of myself as a soldier, holding his own against impossible odds. Badly outnumbered and caught in a crossfire of devils and Gods… All I ever looked for was what was within my eyes to see… Yes, that’s me, fighting against impossible odds on all fronts! But the front you mostly care about is this fight that I wage against the people that won’t see things for what they are, and instead attempt to twist and turn them until they are unrecognizable!
OK… Enough of that! The Biggest Loser overnight has been the Canadian dollar / loonie, which had recently climbed back to 90-cents and remained there well over a week, but saw tons of selling overnight, with sellers piling on all night long. Today, you see, Canada will print two biggie reports, CPI and Retail Sales… These are the last two major data prints before the Bank of Canada (BOC ) meets the first week of March, and will leave a lasting impression on the BOC… The markets took this as a reason to sell loonies, on their thoughts that the lasting impression will be one of weakness…
I would tend to disagree with the markets on this, as I think the BOC is all about the weak inflation, and a need to lower rates, and the value of the loonie, to promote inflation and trade competition… Remember, I warned you all many moons ago that the new BOC Gov. Poloz, came from the Trade side of the Gov’t, and remember what these Trade guys are always complaining about, the strong currency, and the need to weaken the currency to promote competition in trade… I warned you then that Poloz meant bad things for loonies… And he’s not disappointed…
In the U.K. this morning, January Retail Sales printed and showed a different picture of the English economy than what has previously been pictured… Retail Sales fell -1.5%, and made the extraordinary strong December Retail Sales look like a one and done report… But that hasn’t stopped the pound sterling Bulls, who think that January’s report is the one that will be proved to be “one and done” , and have chosen to ignore the report and mark up the currency! I have to question their ignoring this report…
But if you look at the landscape of currencies this morning, the pound sterling is the only one moving in the right direction this morning, so bully for the traders ignoring the Retail Sales report!
Both the Aussie dollar (A$) and New Zealand dollar / kiwi, are down slightly this morning… The Big news out of these two is that the G-20 meeting gets started today in Sydney… I mean, that’s not exactly Big news, but it’s all that’s happening downunder…
The euro is down this morning, but only slightly at this point… It looks like it traded in a very tight range overnight, which means there wasn’t anything with any meat to it to move the single unit… Austria saw Fitch reaffirm their triple A rating, which was good, and we also saw Fitch reaffirm Ireland’s BBB+ rating, with a stable outlook… Not that I put a lot of stock in what the ratings agencies say anymore…
Gold is pretty much flat this morning, after eking out a gain yesterday… It was back and forth trading all day, but in the end, it was a gain… So we had that going for us! I would think that The data that will print today in the U.S. (Existing Home Sales for Jan) printing negative, that Gold will push the envelope on a gain today to close the week… But then, we have the bad weather excuse club that will try like hell to spin this report in their favor.
U.S. data yesterday was once again put under the microscope for signs of weakness due to bad weather… But just to prove the “bad weather” excuse club members wrong, Initial Jobless Claims fell 3,000, and the stupid CPI inched up .1%… But, about the time the “bad weather excuse club members were about to fall on a sword, they were made happy again by the poor showing in the Philly Fed Index (regional manufacturing) which fell -6.3% this month VS last month. I tell you that the regional manufacturing indexes are becoming irrelevant in the overall picture of manufacturing… For a couple of years now, I’ve tracked the monthly regional reports and they normally suggest a bad number for the overall index, only to see the overall index rise… Put that down to things that make you question data!
Well… The Fed’s Monetary Base is nearing $4 Trillion dollars, folks… the current graph that the St. Louis Fed produces only goes to $4 Trillion, so they’re going to have to go back and expand their graph! I tell you about the Monetary Base nearing $4 Trillion, because, here I am holding my own against impossible odds… The markets are all focusing on the Fed’s Tapering, but while that Tapering is going on, the Monetary Base is still rising. I’ve explained this Monetary Base and Money Supply to you before, so I won’t go into again this morning, besides I’m tired, and want to go home! HA!
But before you think you are free to move about the country and not have to listen to me carry on about the velocity of money and hyperinflation, just remember, I’ll revisit this all again at sometime in the future, when you’re least expecting it!
For What It’s Worth… I pulled this from the Bloomberg this morning… Because I think it plays well with what I’ve been telling you for some time now… That besides being the number one producer of Gold in the World, China continues to hoard as much Gold as countries will ship to them… This story’s headline was: Switzerland Sent 80% of Bullion Exports to Asia in January… You knew that would catch my eye!
“Switzerland sent more than 80 percent of its gold and silver bullion and coin exports to Asia last month, the Swiss Federal Customs Administration said today in an e-mailed report. It imported most from the U.K.
Hong Kong was the top destination at 44 percent on a value basis, with India at 14 percent, the Bern-based customs agency said in its first breakdown of the gold trade data since 1980. Singapore accounted for 8.6 percent of exports, the United Arab Emirates 7.9 percent and China 6.3 percent.
Switzerland imported 4.32 billion Swiss francs ($4.87 billion) of the metals from the U.K., or 60 percent of total inbound shipments, according to the report. The U.S. was second at 4.9 percent, Italy at 3.8 percent, Germany at 2.8 percent and Thailand at 2.5 percent, the data show.”
Chuck again… You know, any shipments to Hong Kong, usually end up in China, so take the exports to Hong Kong and add them to the exports to China for the total… This phenomenon of The West sending their Gold to the East, continues folks, and should scare the bejeebers out of you… I won’t go into all that here, because I’m tire and want to go home! HAHAHAHAHA! Just kidding… I won’t go into it, because I’ve done so many times before, this should all be ingrained in your minds by now!
To recap… Not much going on overnight, the currencies and metals trade in tight ranges, with only the pound sterling eking out a gain VS the dollar this morning. G-20 begins today in Sydney, as I told you yesterday, I expect the Emerging Markets to put the U.S. on the defensive because of their tapering… The U.S. printed some more bad data yesterday, that immediately saw the bad weather excuse attached to the data. Gold pushed the gain envelope yesterday afternoon, and is flat this morning. And Chuck is ticked off about the way the USA Women’s Hockey Team lost yesterday!
Currencies today 2/21/14… American Style: A$ .8990, kiwi .8285, C$ .8955, euro 1.3710, sterling 1.6675, Swiss $1.1235, … European Style: rand 11.0310, krone 6.1095, SEK 6.5620, forint 227.50, zloty 3.0405, koruna 19.9710, RUB 35, 85, yen 102.50, sing 1.2670, HKD 7.7555, INR 62.14, China 6.1176, pesos 13.28, BRL 2.3705, Dollar Index 80.36, Oil $101.49, 10-year 2.76%, Silver $21.78, Platinum $1,423.13, Palladium $738.19, and Gold… $1, 322.50
That’s it for today… See? I told you.. Short-n-sweet… My good friend Kevin, gives me trouble all the time when I say the Pfennig will be Short-n-sweet, and then goes on to its normal length! So this one is for you Webs! HEY! Here’s some fun stuff… Tomorrow is National Margarita Day! My beautiful bride loves a good Margarita. I myself have never had one… So, maybe tomorrow is the Day! Nah, I like saying that I’ve never had one! The USA Men’s Hockey Team plays Canada today to remain in the hunt for a Gold Medal… GO USA! The Grass Roots are singing a great old song, Let’s Live For Today on the IPod, and the words are something that we should all strive to do… Sha, la, la, la, let’s live for today, and don’t worry about tomorrow.. I love having my IPod on while I write in the morning, sometimes I don’t even hear the music, as I’m so focused on what I’m thinking and writing, but most of the time, I’m bopping in my seat, singing along, and seeing if the lyrics can be used in the letter! And with that, I’m going to live for today, and no worry about tomorrow, and hope to have a Fantastico Friday! I hope you do too!
EverBank World Markets
Editor of A Pfennig For Your Thoughts
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