In This Issue Greece completes homework assig

first_imgIn This Issue. * Greece completes homework assignment. * N.Z. inflation expectations slip below 2%. * China to accumulate more Gold than world produces! * Gold and Oil both slip below psychological figures! And Now. Today’s A Pfennig For Your Thoughts. It’s The Janet Yellen Show, Today. Good Day!… And a Tom Terrific Tuesday to you! The Eagles song: Wasted Time greets me this morning. I hope that’s not an omen for today’s letter. HA!  I’ve been up a few times during the night, so right after I finish this, I’m going back to bed. The trials and tribulations of your Pfennig scribe is not what you signed up for, so I’ll cut to the chase and get with the task at hand! Speaking of hands, mine are better this morning. I apologize for scaring anyone yesterday, I should have been more upfront with what I was dealing with. I do believe my hands had an allergic reaction to special cream that Kathy gave me to put on them because they were all dry and cracked. A couple of days, and they should be back to their normal fat fingers and hands! Well, it appears that Greece passed their homework assignment, and has gone home now with an extension of 4 months to their current loan agreement, with their tails between their legs. All that talk about, “no more austerity” got shoved down their throats, and they had to accept it, or go home broke with the only prospect to leave the euro. I’ve said this before and I’ll say it again, Greece, along with Spain, Italy and Portugal (Club Med) probably get down on their knees at night and thank their lucky stars they are a part of the euro. To leave the euro would be a mess of biblical proportions, and I’m sure the Greeks now know that because if it were going to be an easy process, they would have opted for the easy process long ago! The currencies pretty much all fought back VS the dollar as yesterday went along, but have given up the fight overnight, and gone right back to doing the rope a dope in the ring with the dollar. It’s all about Janet Yellen’s testimony on the economy today, folks. And right now, those that are making the calls on how the currencies trade, are of the belief that Yellen will snuff out those dovish thoughts from last week’s Meeting Minutes, and sound very hawkish today. That will be, as far as I’m concerned, a good trick, given how dovish those comments were last week. But, she’ll paint a pretty picture for labor, the cheap price of Oil fueling the economy, and sprinkle some magic dust on the lawmakers and they’ll all leave with smiles on their collective faces. When I just typed those words, magic dust, my mind did a flashback to the old Cheech and Chong skit about Santa Claus, and how he sprinkled magic dust on the reindeer to make them fly, and he would sprinkle some on the reindeer, and some for himself, and some more for the reindeer and a little more for himself. Funny stuff! So, in case you were wondering. that was my changeup this morning, for I was beginning to get all heated over the Yellen testimony today. But I’m calmed back down now, so we carry on, my wayward son. A couple of weeks ago, when I wrote the Sunday Pfennig, and we brought back the Currency of the Month, I received quite a few email responses and blog site responses with requests for the next Currency of the Month. I was surprised by one person’s request to highlight the Malaysian ringgit.  I don’t believe I’ve talked about that currency, since the early 2000’s when the Malaysian Gov’t put currency controls on the ringgit. Same scenario for the Indonesian rupiah.  And since these currencies are not liquid, and have controls placed on them, we don’t deal in them, and if we don’t deal in them, I don’t talk about them.  You see, over the years, I’ve found it very frustrating when a pundit would write about an investment, but when you called your investment house, they wouldn’t do that asset, or trade, or strategy, etc.  So, what good was it to write about it?   I wouldn’t want anyone to be confused. One of our old colleagues, Ann Hopkins, used to love to hear me do my Steve Mizerany voice. Steve was an old appliance store owner that did TV and radio commercials and had this very distinctive voice, and he would say, “don’t be confused!”  And that’s why I talked about this, tying back to not wanting anyone to be confused!  If you’re from St. Louis, you are probably laughing right now, hearing Steve say, “if you ain’t sleeping on water, you oughta” A few months ago, I read a short book on Myanmar, which used to be Burma, and how the country was opening up. I thought to myself, “self, this looks like an opportunity to get in on the ground floor”..  So I sent out feelers for trading opportunities in the currency, the kyat. But I was told by the currency dealers I dealt with that I was too early to the party, that there was no official liquid market there. Darn the luck!  Just another example of an illiquid market that would round out our Asian offerings just fine! Well, China is still on Holiday for their Chinese New Year celebrations. They end today, but for us, there’s still no movement in the renminbi / yuan with the country closed for the celebrations. It seems quite strange not having news stories and economic data, and updated numbers on Chinese physical Gold accumulation every day. I did see an article that was written about how China is now accumulating on an annual basis, more physical Gold than what the world produces. You may recall me talking about this possibility last week, and then this story came to me from dear reader Bob, and I thought. Hmmm, somewhere out there, is someone that read the Pfennig, and decided to do some investigative homework. Good for you, whomever you are! So, if that thought is true, and I have no reason to believe it isn’t, how is China doing that? Well, they simply are buying supply from other holders that has been held for years, to add to the amount of physical Gold they import and produce themselves. One of these days, Alice, it’s going to come to light what their intentions were, accumulating all this Gold. And they have to be smiling like the Cheshire Cat these days, with Gold cheaper again. Yes, Gold remains below $1,200 this morning, and the price of Oil has slipped below $50 again, thus highlighting the fact that traders are all on board with thinking Yellen will be able to reverse the damage of the dovish minutes last week. So. all the risk today is on her testimony and the idea that she might now swing so hawkish. What happens if she reinforces the dovish thoughts from last week’s minutes?  That’s when reporters and writers and TV guys all start calling Chuck and asking for an interview, because I was one of the few that said there would be no rate hike in June. As If!  Reporters don’t call me any longer, they have fresh minds to pick these days. I don’t mean to sound bitter there.. no wait, maybe I  am!  Oh well, move along Chuck, you don’t want to get caught up in the quagmire that this could create.  So, speaking of the price of Oil slipping again. I read an article in the local paper here on Sunday, and of course forgot to talk about it yesterday, so here I am today with it. the article talked about the Oil Refinery strike at the largest refinery in the U.S., located in Port Arthur, TX, that started last Friday, was going to lead to other refinery strikes. So, that could be a real road block to cheap gas prices folks. not as if the cheap gas prices were the manna from heaven to the economy that everyone thought they would be. But, eventually they would be, I think. just maybe too little too late.. The New Zealand dollar / kiwi is getting whacked this morning, as overnight the latest survey of businesses put the inflation expectations at its lowest reading (1.8%) since 1999. In the second QTR of 2014, N.Z. inflation reached a cyclical high of 2.36%, but it’s been a downward slope since. But isn’t that why the Reserve Bank of New Zealand (RBNZ) hiked interest rates in 2013 and 2014? 2% IS the target for the RBNZ.  and apparently, those rate hikes worked! But now, with inflation below the target, the rate cut campers are crawling out of the floorboards  and spreading all over, and that has spooked kiwi holders and traders.  This is crazy folks! The RBNZ works to get inflation below the 2% target, and achieves that goal, only to have rate cut campers explode on them. UGH!  If it’s not one thing it’s another thing with the poor beleaguered kiwi.. Well, did you hear the news? There’s good rockin’ at midnight!  No wait!  The news I’m talking about came courtesy of the WSJ last night and talks about how JP Morgan Chas is preparing to charge institutional customers for some deposits. The bank talks about how new rules make holding money for the clients as too costly.  Uh-Oh. first it starts with “some deposits” for “institutional clients” and eventually it trickles down to “all deposits” and then “all customers”. I sure hope this kind of thing doesn’t catch on with other banking institutions. Another WSJ story overnight was about how U.S. officials are investigating at least 10 major banks of possible rigging of precious metals markets. You may recall that the European officials began a project like this only to scrap it after finding no wrongdoing.. So, I’m sure this will be much like that outcome. no harm, no foul. but then the officials in Europe were the 3 blind mice! HA! In another follow up from my Sunday Pfennig of two weeks ago on the pound. One of the Bank of England’s (BOE) members and their most hawkish member, Weale, was talking about interest rates and all that, when he calmly mentioned how” the risk of a fall in the pound because of the concern for the balance of payments remained substantial” That’s one of things I focused on in my Sunday piece. the Debt problems in the U.K. weighing on the economy and their ability to administer normal monetary policy.   The pound has perked up a bit in recent days, but its ability to move higher now might have had a roadblock placed in front of it, by Mr. Weale’s comments.Gold is still trading below $1,200, and doesn’t look like it has the Oomph to mustard a rally. But, if Yellen goes dovish on us today, Gold could rally again. Otherwise, it’s another Turn down day. Do you remember that song by the Cyrkle?  It’s a turn down day, and I dig it.   Here’s some cocktail party trivia for you. The Cyrkle was the opening band for the Beatles! The U.S. Data Cupboard is chock-full-o-data today. It all gets started with the S&P/ CaseShiller Home Price Index. That is followed by the Markit Composite PMI (services and manufacturing), and then the relatively stupid Consumer Confidence Index. and a regional manufacturing index from Richmond.   And that’s all followed by the Yellen Testimony. Yesterday’s Data Cupboard, had some very weak Housing Data. Existing Home Sales fell 4.9% to a nine-month low of 4.82 million units in January from a revised 5.07 million units in December.. The markets had expected 4.95 million units in January, so not only did the January number of units sold disappoint VS December, but also disappoint VS expectations. And the Feds are thinking of hiking rates? Seriously, right? For What It’s Worth.  This past Sunday, we posted titled: What’s Going On With Oil? And in it we made an error, so here’s our mea culpa. In this past Sunday’s edition of the Daily Pfennig® newsletter, “What’s Going On With Oil?”, we erroneously reported that most shale producers needed oil to be above $140 a barrel to make shale drilling worthwhile, and our loyal readers let us know about our mistake. We apologize for the inaccuracy and did additional research. Citing information obtained from the industry source (” alt=”last_img” />

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