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Mike, Mike, Mike What Day Is Today?

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A Pfennig For Your Thoughts November 18, 2020 * Currencies & metals trade in a basic nothing day… * Powell can’t wait to print more currency…  Good Day… And a Manfred the Wonder Dog Wednesday to you! I was watching a clip on the news last night, where people that were minding their own business eating outside at a restaurant, had fireworks thrown at them by the violent mobs we keep hearing are not violent… But they are, we all know that for a fact… I thought to myself, in my younger days I would have confronted them and got a lick in before they got me… Daring, Challenging, and too high strung to save myself… But I sure wouldn’t have just stood by and allowed a mob to disrupt my dinner, and endanger my health, and that of my wife’s…  But not any longer, not since June 2007… And I had

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A Pfennig For Your Thoughts
November 18, 2020
* Currencies & metals trade in a basic nothing day…
* Powell can’t wait to print more currency… 
Good Day… And a Manfred the Wonder Dog Wednesday to you! I was watching a clip on the news last night, where people that were minding their own business eating outside at a restaurant, had fireworks thrown at them by the violent mobs we keep hearing are not violent… But they are, we all know that for a fact… I thought to myself, in my younger days I would have confronted them and got a lick in before they got me… Daring, Challenging, and too high strung to save myself… But I sure wouldn’t have just stood by and allowed a mob to disrupt my dinner, and endanger my health, and that of my wife’s…  But not any longer, not since June 2007… And I had better stop there… Mike and the Mechanics, featuring Paul Carrack, greet me this morning with their song: Silent Running…
I’m going to start today’s letter with a note from the Wall Street Journal (WSJ) here goes… “About 300 companies that received as much as half a billion dollars in pandemic-related government loans have filed for bankruptcy, according to a Wall Street Journal analysis of government data and court filings.”
Well, those were funds well spent, now weren’t they? And to add to the fun and games, the WSJ goes on to explain that there are probably lots more of bankruptcies because the progam they only analyzed the Big Borrowers of the program… And also because when small businesses go bankrupt, they liquidate, they don’t file for bankruptcy…
Now, wouldn’t it have done the business and the tax payers good to just allow the business to fail in the first place? Remember when I talked about zombie Corporations? Well, I would bet a shiny quarter that these were all zombie corporations…   
OK, well there wasn’t much trading that went on yesterday… The currencies slipped a bit, ever-so-slightly, on the day, and Gold held to its $2 early loss, most of the day, until right at the end of the trading day, when it closed down $8.60 to $1,881.00, and Silver lost 27-cents to $24.57… Stocks lost ground yesterday, Oil lost about ½-cent, and Bonds, well, bonds rallied but not by much… So, really, there was no conviction from any of the traders yesterday to do something rash… or bold… 
I used to play a game on the trade desk on days like yesterday, and would say, “OK, we’re going to have a trade-a-thon, everyone raise your hand until your phone lights up”  I had a million of those kinds of tricks up my sleeve for dull days… From 2001 to 2015, there weren’t many of those dull days, instead no one had time to raise their hands before answering another call.. From 2015, on I can’t say what happened because I really wasn’t there any longer… no on the trade desk any way… And now the trade desk environment is not there any longer… Everyone has been sent home to work from home… No comradery, no fun times just being together…
In the overnight markets, There was more drifting in the currencies overnight, but Gold has lost $6.90 as I write in the early trading, and silver is down 11-cents. I checked Ed Steer’s letter this morning quickly to make sure I had my facts straight about Gold & Silver, and lo and behold he thought it was a basically a “nothing day” yesterday too!  
The Dollar Index this morning is sitting at 92.34, the same level as yesterday morning, just goes to prove what I said about yesterday’s trading to be bang on, eh? 
I had a dear reader send me a note about the Russian ruble, she pointed out that the price of Oil has risen since spring, and there’s been no positive movement in the ruble… Yes, that’s true, I responded… But the economic sanctions remain, dragging the Russian economy through the mud. That, and the COVID hasn’t done Russia any favors… You know in the beginning when they said that alcohol would kill the virus, I thought shoot with all the vodka they drink in Russia, their bodies should be immune to the virus! HA! Well that was wrong… I still believe in the Russian ruble, and its ability to get stronger… If we could only get the U.S. and EU to drop those darn sanctions…
Speaking of the price of Oil… for the first time in a week, the price of Oil has climbed higher in the past 24 hours, and trades this morning with a $42 handle… There certainly seems to be a line in the sand drawn on the price of Oil too, much like the euro… I’m just saying… 
After a couple of days last week where the Japanese yen weakened VS the dollar, the yen has rebounded nicely… I’ll point out my thought that the major currencies/ offsets to the dollar rally when the dollar gets sold… Euros, yen, francs, sterling and throw in the A$, have all moved upward VS the dollar in the last week…
And the best performing currency overnight has been the New Zealand dollar/ kiwi… Kiwi crossed the 69-cent level overnight… And that news got me thinking about how in the last week dollar trend 2002-2012, the best performing currency was kiwi… 
Ok… I’ve been dissing negative interest rates for some time now, and I don’t think the Central Bankers of the world give two hoots… Except for one that has spoke out against Negative Interest Rate Policy (NIRP). I found this on Twitter yesterday, and Peter Boockvar posted it… “Polish CB comment “NIRP economically unjustified & bad for financial system stability…could even be questionable in light of constitution & CB charter” 
And then Peter said, “I’d like to get this guy in a room with Draghi and Kuroda for a debate”… 
Chuck again… Yeah, I would pay good money to see that !
This’ll be the day that the Tech giant CEO’s go to the Hill and will be asked questions about censoring discussions and banning people for their political bias…  Missouri’s Senator Josh Hawley, said that he had info from a Facebook whistle blower, and will be not throwing softballs to the Tech Giant CEO’s that include Google, Facebook and Twitter…  Come on Josh, be a big man and put these guys in their places!
Mike, Mike, Mike, what day is it? It’s Huuuummmpp Day! Man that’s still my fave GEICO commercial of all time… And it is Hump Day! Whenever I get to Hump Day, I think of that commercial, and how when Mike Meyer would walk into the office, on Wednesday, I would say, “Mike, Mike, Mike What day is it? HAHAHAHAHA!
Yesterday’s U.S. Data Cupboard didn’t have anything to write home about, or get the dollar bugs all lathered up… Rocktober Retail Sales only grew 0.3% VS 1.6% in Sept. So that data played out just like I thought it would thanks to the BHI! Rocktober Industrial Production rebounded in the month growing 1.1% VS the negative -.4% in September… And Capacity Utilization is a real head scratcher to me as it grew to 72.8%, from 72.00%… I just don’t see Companies making Capital expenditures (CAPEX) with all the questions regarding new lockdowns coming down the pike, do you? 
In a talk to a business group in San Francisco, Powell said “Congress’ tax and spending powers can directly target income support for groups that really need it, in a way that the central bank cannot.
“There hasn’t been a bigger need for it in a long time,” Powell said.
So, Powell is still banging the drum for more stimulus… I think he just needs to be patient, for more is coming, just wait until the new year… do worry Jerome, keep your pants on! You’ll get your chance to print more currency in due time…
Today’s Data Cupboard just has a couple of housing data prints to offer for viewing… But there will also be 4 different cartel, I mean Fed Head speakers on the circuit today… Bullard, Williams, Kaplan and Bostic will all be out begging for more stimulus today… Hey! I just had a thought! These Cartel, I mean Fed Heads could be the new Salvation Army bell ringers! Now, I’m going to be thinking that it’s James Bullard ringing the bell when I go to the grocery store! No wait, I don’t go to the grocery store or inside the grocery store any longer, so when will I see a bell ringer this year?
To recap… it was a kind of nothing day for the most part yesterday, with no convictions being taken by traders… The currencies slipped a bit, Gold lost $8 on the day, but most of that loss came at the end of the trading day.. Stocks lost some ground as the virus vaccine news from the weekend faded into the background. Oil slipped by 50-cents, and bonds rallied a bit…  Chuck talks about the Russian ruble, and begins the day with a ditty about how the zombie corps that took money are still filing bankruptcy…
Or, here’s your snippet: “Last Thursday, during the House Financial Services Committee hearing with federal regulators of banks, Congresswoman Katie Porter of California told the Vice Chairman for Supervision of the Federal Reserve, Randal Quarles, that the Fed has a “big problem.” Porter has a Harvard Law degree and was previously a law professor at the University of California Irvine School of Law. If Porter believes the Fed has a legal problem, it is highly likely it does.
Here’s how the exchange between Porter and Quarles went:
Porter: “The Fed is largely responsible for dispensing the $500 billion Congress provided as a bailout for corporate America – the biggest bailout in our country’s history, potentially. Using taxpayer dollars to buy bank debt was never part of that plan. In fact, the Federal Reserve stated explicitly in this document [holds up document] that it would not be purchasing bank debt. What happened?”
Quarles says he doesn’t know what document Porter is holding up.
Porter says it’s the Fed’s own “Frequently Asked Questions” on the terms of their corporate bond buying program, which specifically states that the Fed will not be buying the bonds of any “insured depository institution,” i.e., a bank. Here is a link to that document.
Quarles: “I understand the question. We haven’t bought bank debt in those facilities.”
Porter: “What’s an Exchange Traded Fund, Mr. Quarles?”
Quarles: “As I was getting ready to say. We have purchased Exchange Traded Funds at the very beginning of the process in order to jumpstart the reignition of the economy and we stopped purchasing Exchange Traded Funds several months ago.”
Porter: “Exchange Traded Funds, for everyone who is watching, those are just baskets of stocks [or corporate bonds] issued by a variety of companies. And, is it not correct that the Fed bought $1.3 billion in ETFs.”
Quarles: “That number sounds right.”
Chuck again… Man she really nailed Quarles to the floor with her questioning… As Pam Martens said in the letter, “Its nice to see the Fed in the crosshairs of a legal pro.” So, if you get the chance read the rest at the link above, to get the “rest of the story” ala Paul Harvey…
Market Prices 11/18/20: American Style: A$ .7315, kiwi .6922, C$ .7650, euro 1.1867, sterling 1.3278, Swiss $1.0976, European Style: rand 15.4025, krone 9.0264, SEK 8.6043, forint 303.45,  zloty 3.7678,  koruna 22.2380, RUB 76.31, yen 103.90, sing 1.3410, HKD 7.7523, INR 74.10, China 6.5604, peso 20.24, BRL 5.3852, Dollar Index 92.34, Oil $42.31, 10-year .85%, Silver $24.46, Platinum $932.00, Palladium $2,360.00, and Gold.. $1,874.10
That’s it for today… Thanks for all the notes I received yesterday on the news that youngest son Alex just bought a house… I guess my ramblings about fatherly advice, hit home with a lot of people… It was a nice sunny day yesterday, but pretty chilly, so I couldn’t go outside to read… UGH! At the end of December when I head south for the winter, I’ll be able to go outside to read nearly every day! When I was a young man, in school, I never enjoyed reading, and did just enough of it to get good grades, but when I began my career in the foreign bond trading arena, I had to read a lot of research, and that led to newspapers, and books… the poor newspaper business… My wife cancelled my paper delivery last year, and that broke my heart… Now I have to go online and fish out what I want to read, it’s just not the same… UGH!  The Byrds take us to the finish line today with their song: Eight Miles High… A classic 60’s song, and featured Roger McGuinn and David Crosby… I hope you have a Manfred the Wonder Dog Day Wednesday, and will Be Good To Yourself!
Chuck Butler
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A Pfennig For Your Thoughts

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