a house divided
market vibes
February 25…)
In my opinion
The State of the Union is a political oxymoron that makes a strong case for the previous 18th and 19th century custom of sending a written report to Congress. From 1790 to 1800, Presidents George Washington and John Adams delivered it in person as a spoken address to a joint session of Congress. However, in 1801, Thomas Jefferson switched to a written message sent to Congress (to be read aloud by clerks), viewing in-person delivery as too monarchical. This written format became the norm for over a century.
Wilson delivered his report “in person” in 1913 to rally his agenda and Coolidge made the first radio broadcast in 1923. Roosevelt popularized the term “State of the Union Address” and Truman made the first televised State of the Union address on January 6, 1947. Johnson moved it to prime time in 1965. Each step amplified the use of media to gain political power.
Abraham Lincoln spoke on June 16, 1858, when he accepted the Republican nomination for the U.S. Senate from Illinois. “I believe this government cannot endure, permanently half slave and half free. I do not expect the Union to be dissolved. I do not expect the house to fall, but I do expect it will cease to be divided. It will become all one thing, or all the other.”
In the news
Elsewhere in finance, Russia and Iran are cutting their discounts for delivery to China, and as oil is fungible China can either re-export it as is or as refined products. There’s no hard data but estimates are around 1.5 mm bpd to 2 mm bpd of Chinese refined products and or crude are sold into the global market every day.
in the markets
Silver futures have completed a perfect 50% Fibonacci retracement in monthly data. I am using a monthly chart to display the relative plunge in open interest as the March deliveries are about to become spot on first notice day.
Although forwards, lease rates and roll contango all indicate there will be no stress on the Comex, the data implies the supply of available silver is still extremely tight. The difference today is the short who had been contributing immense paper supply to defend his position is gone and with him the extant supplies of silver are that much lower.
The melt is still a known unknown and refineries are still backed up according to what I think are very credible sources. From here on we’re going to have to adjust to a more normal market and let prices be the trusted voice. Beyond that I expect exchange data to normalize soon and add to the choir of reliable information.
In daily data (next chart)…
