• Treasury yield curve inverts, causing mass stock selling

  • Gold fights back after the Engineered selloff on Tuesday...

Good Day... And a Tub Thumpin' Thursday to you! I'm not sure I should be participating in any Tub Thumpin' except from my chair... UGH! Well... well, well... what have we here? As Bloomberg put it yesterday, "U.S. stocks on Wednesday suffered one of the biggest sell-offs of the year. The S&P 500 sank almost 3% and the Dow plunged 800 points. The yield curve inverted for the first time since 2007, in an ominous sign of a looming recession. Even cryptocurrencies got clobbered." Nothing like telling people one day that all's well, and then the next day that all's not so well, eh? Oh well, we have that to talk about today, along with some Data that your one-eyed writer, didn't see as being printed on Thursday, but saw it printed on Wedensday... I goofed that one up! Oh well, life goes on... Edwyn Collins greets me this morning with his song: A Girl Like You...

OK... Why on earth were the TV commentators acting so surprised yesterday to hear that the stock were getting taken to the woodshed? Did I not tell them yesterday that the Fear / Greed Index had gone to "extreme fear"? they say it took the bond market yield curve to invert for the first time since 2007 to get everyone scrambling about... The yield curve had a small section inverted already, and now the whole shootin' match is inverted! For those of you new to class, an inverted yield curve is a strong indication that a recession is coming... Or, Could be already here... 800 points? Yikes!

Do you recall 1987? Rocktober 1987 to be concise... And everyone thought the sky was falling? Well to take you back for comparison purposes... The Dow lost 528 points or 22% of the total Dow that day... Yesterday, the DOW lost 800 points, or 3.5% of the total Dow... Hmm... A Big difference, eh? So, in reality, yesterday's plunge in stocks was not that Big of a deal, right? Ahhh, grasshopper, come sit by and listen to story about man named Jed... No wait! Not that story, but this one... the President's Plunge Protection Team was organized after that 1987 "Crash", and still exists today... They will attempt to stop this plunge right here, right now... But as 2007 showed us, the PPT's finger in the dike didn't hold back the flood of sellers, I'm just saying...

Gold didn't have a bad day... Gold gained $15 on the day... after falling in the early part of trading yesterday, it soared back, and was the apple of everyone's eye, for they sought safety... hey, Mark Cuban, bet you didn't think of that did you? HA!

The currencies on the other hand didn't fare so well VS the dollar... Ok, I have a question for you to ponder... Because I pondered this one all last night... Stocks got shot-gunned, the crypto-currencies got hammered, and yet currency traders bought dollars... As if the dollar would be considered a safe haven any longer, after the Fed lost the last of their credibility when they reversed their rate hikes last month... But, it is what it is... but that doesn't mean I have to accept it! The only thing I'm thinking of here is that the currencies are cheap... Cheaper than they've been in a while... Beep, Beep Beep... You know the sound that a truck makes when it's backing up?

Inflation in the U.K. shot higher (2.1%) in June, and that got the sterling traders all lathered up, to push sterling higher on the day... But folks, I doubt this can last... The euphoria of seeing inflation higher (I know that's sure a perverse way of looking at it but that's where we are these days) will wear off soon, and then the traders will be looking at the no BREXIT deal once again, and things will fall apart for sterling once again.

The price of Oil slipped backwards again yesterday, and that really took a chunk out of the Petrol Currencies... The Russian ruble didn't get hit too badly, but the Norwegian krone did, and the Brazilian real did, and even the previously steady Eddie loonie did... I'm worried about the krone, as it is within spitin' distance of the 9 figure... A weak figure that the krone hasn't seen since the sell off of the currencies in the 2011 discovery of the PIIGS's debt... But as long as the euro struggles, along with Oil, the krone will be at their mercy...

Well, it's a religious holiday in parts of Europe and South America today, as today is Assumption Day... The Blessed Mary ascended into heaven... So, all the Catholics around the world I hope you have a Blessed day...

OK, now back to our regular program! HA! Well, as I mentioned above, Gold had a good day yesterday, after suffering though a engineered sell off on Tuesday... I know one thing, folks... And that all this Trade War/ Tariffs, BS is going to push inflation higher... I can see it coming, it's like when I sit on the deck at my place in S. Florida. I can see the lights of an incoming plane for 20 minutes before the plane appears overhead, heading to PBI... The first time I sat out on the deck at night, and saw the light, it appeared to stationary... And I joked that we were seeing a UFO... So, now when the lights appear, I say, "here comes another UFO"...

Boy did I get off base there or what? Sorry... But higher inflation is going to help the price of Gold... Remember what I told you a couple of days ago, about what Lola, aka Goldman Sachs, was telling its clients... That Gold was going to be $1,575 in 3 months, and $1,600 in 6 months... What do you think their researchers were seeing that made them make those forecasts? Higher inflation... is the answer... And for once Lola and Chuck are on the same page...

The U.S. Treasury 10-year continues to slide down the slippery slope of yield, and trades this morning with a 1.54% yield... As I've said many times before, so that I begin to sound like a broken record... The Bond Guys Know... I'm not just saying this folks, I'm shouting it from the rooftops!

OK, I'm positive about this! Today, is the Big Data print day for the U.S. Data Cupboard... I have no idea why I thought the data prints were listed under Wednesday... But I was wrong, E-Chuck... So, today, is the day that we'll see the color of the most recent Retail Sales, Industrial Production, Capacity Utilization, and Productivity... There will be some other not so important data prints there today, but our focus should remain on those 4 I just listed.

I'm still of the opinion that Retail Sales will look healthier than it has recently, as the back-to-school sales will be in the July number, because... School starts so darn early these days... In fact, Delaney, and Everett start school today, and Braden started two days ago! August 15th, when I was in school was the day we started football practice with our eyes on the Labor Day weekend, when we would start our season... Nowadays kids start school on August 15th... That's crazy!

To recap... Stocks got whacked badly on Wednesday, but looking back it's really not that big of a deal, as long as it's confined to one day... Gold has a spectacular day, gaining $15 after suffering through an engineered sell off on Tuesday. Where's the PPT? Aren't they supposed to keep days, in stocks, like Wednesday from happening? The currencies continue to be held under the spell of the dollar... And today, is the day, the data prints will be spilled out on the table like a shrimp boil... I was so confused yesterday!

Or, here's your snippet: "Serious auto-loan delinquencies - 90 days or more past due - in the second quarter, 2019, jumped 47 basis points year-over-year to 4.64% of all outstanding auto loans and leases, according to New York Fed data released today. This is about the same delinquency rate as in Q3 2009, just months after GM and Chrysler had filed for bankruptcy. The 47-basis-point jump in the delinquency rate was the largest year-over-year jump since Q1 2010:

But this time there is no economic crisis. The unemployment rate and unemployment claims are hovering near multi-decade lows, and employers are griping about how hard it is to hire qualified workers without having to raise wages. So, unlike during the Financial Crisis, this surge in the delinquency rate has not been caused by millions of people having lost their jobs. It's not the economy that did it. It's the industry.

Of those $1.3 trillion in auto loans, 4.64%, or a record of $60.2 billion, are 90+ days delinquent, which gives the chart below quite an amazing trajectory. But this is not an employment crisis, when millions of people lose their jobs and cannot make the payments on their auto loans. What will this chart look like when the economy turns, and unemployment surges again, and people cannot make their car payments?"

Chuck again... The thing here is this... Subprime auto loans could all go bad, and it wouldn't be but a blemish on the size economy that we have... But physocologically it would be bad, and if we think back to 2007, thinking bad about things caused more selling... I'm just saying...

Currencies today 8/15/19 American Style: A$.6772, kiwi .6435, C$ .7508, euro 1.1155, sterling 1.2111, Swiss $.9735, European Style: rand 15.3108, krone 8.9911, SEK 9.6171, forint 292.16, zloty 3.9287, koruna 23.1998, RUB 65.50, yen 105.85, sing 1.3898, HKD .7.8423, INR 71.72, China 7.0268, peso 19.62, BRL 3.9938, Dollar Index 97.85, Oil $54.28, 10-year 1.54%, Silver $17.23, Platinum $841.67, Palladium $1,434.25, and Gold... $1,519.91

That's it for today, and this week... I have to go see my heart doctor today, as a follow up to the hospital stay I had last month... I look like hell these days, I sure hope they're nice to me... Well, my beloved Cardinals are back in 1st place after a beating up on the under .500 teams... That's what the Cardinals have in their favor the rest of the season, they play the majority of their games against under .500 teams... And they have 7 games left with the Cubs... Those will be the deciders as to who wins the division... Next week will be the lead-in to Labor Day Weekend... Wow! The summer went by in a heartbeat! Time to gear up for the Annual Butler Labor Day BBQ! Chris Stapleton takes us to the finish line with his song: Tennessee Whiskey... I hope you have a Tub Thumpin' Thursday, and Fantastico Friday, and that you will please Be Good To Yourself!

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