Here We Go Again, With Fuzzy Numbers…

September 8, 2020

* The dollar bugs start the week with the conn… 

* Unemployment Rate drops, but Continuing Claims rise? 

Good Day… And a Tom Terrific Tuesday to you! It was a real Chamber of Commerce weekend here for our Labor Day Holiday weekend, and all I could think about Saturday, was that it would be have the perfect day for the Annual (no more) Butler Labor Day BBQ & Pool Party…. Cards took 3 of 5 from the 1st place Cubs, who seem to be stumbling… Cards come home after a 5-3 road trip, which in baseball is a big thing to win road games… I’m just saying!  I made my Big Green Egg, work overtime on Friday and Saturday, and now we have tons of food to eat the rest of the week! The late great Otis Redding greets me this morning with his classic song: The Dock of the Bay…

Well, as we start this shortened holiday week, the currencies and metals have had two fair-to-middling days of trading, that took place with most trading houses at the Hamptons starting noon on Friday last week…. And yesterday, the U.S. didn’t participate at all…. Without the price manipulators I would have thought Gold to have a better day than just trading flat to down a few bucks on the day…. The euro rallied above 1.18 again, but who knows just how long the PPT will allow that keep, given their propensity to jump in and buy dollars, whenever the dollar looks iffy….

In the overnight markets…. there’s been a renewal of dollar buying, so we start the week with the dollar bugs dancing in the streets… Gold is down $10.50, and Silver is down 30-cents this morning… And the euro is hanging onto the 1.18 handle by the skin of its teeth…  And the price of Oil has really dropped since last week…. This doesn’t look like it’s going to be a good day for the anti-dollar assets…. 

I saw where the tech stocks got the stuffing knocked out them late last week, and when I checked this morning the futures for the tech stocks are way down, indicating more selling here today…. Kind of reminds me of the sell off, starting slowly and then breaking through the dam and destroying wealth like a river floods a town… 

Speaking of stocks… I see that today is the day that Apple has announced their dog and pony show. Probably to introduce a new iPhone and iPad, and I get the feeling there will be something else announced today, as there are rumors flying all over, so we’ll see, eh? 

OK, I’m going straight to a list of topics that I want you to know about this morning….  These are important or else I wouldn’t waste my time with them… And don’t forget that I promised you last Thursday that the FWIW article today is a doozy, so let’s see what’s on Chuck’s mind today…

Get this…. Last week it was revealed that the BLS (you know the knuckleheads that give us the hedonically adjusted Jobs Jamboree each month) they have changed horses in the middle of the stream once again, and have changed their seasonally adjusted methodology which, and you guessed it, allows the unemployment numbers look better than they really are…  Why doesn’t someone in Washington just stomp their foot down and so “no mas”!  This is getting ridiculous… and to show just how much the new methodology comes into play… changed seasonal adjustment method on Unemployment data (using additive instead of multiplicative factors) Differences are considerable. Old method would have given 1010K claims, new method gives 881K…    That just gets me in a tizzy folks! But it is what it is, and the Gov’t apparently is ok with them changing the horses in the middle to the stream, so we’re stuck with trying to figure out what the real numbers are each month…. UGH!

Well, I cam across this article on this past weekend, and it’s quite scary, check this out: “China To “Gradually” Sell 20% Of Its US Treasury Holdings, May Dump It All In Case Of “Military Conflict. “ and that got that from the Chinese State Dept….  So, it wasn’t fake news! 

About 10 years ago, at the old Everbank World Markets Desk , we had a guest for lunch one day, and it was the famous Jim Rogers… I laid out a scenario I had in my mind for him and he agreed 100% with what I was thinking…. And it was that all the Asian leaders were in a room and sweat was beading off their foreheads, as they waited for the first one to head for the EXIT door, (selling their Treasuries) and then all of them run to the door at the same time, getting all clogged up in the doorway…  This is something that I’ve worried about for many years, as our debt just continued to grow, and we continued to get by on the help of strangers….

Can you imagine what kind of QE / Bond Buying program The Fed would have to come up with, if China started selling their Treasuries?   Just something to think about this fine morning, eh?

And not finally, because I still have the FWIW article today…. But I read this article by David Stockman on the   site, and I told good friend Dennis Miller that this guy sounded like me on the Butler Patio!  Here’s just a little snippet to whet your whistle….  If you want more click on the link above….

“We have never heard more gibberish, double talk, and lies from one podium than we have from Fed Chairman Powell. There is no other way to say it: The Fed has become a dangerous rogue institution that has usurped plenary power over the financial system.” – David Stockman

OK… The data late last week was interesting no doubt….  The Weekly Initial Jobless Claims came in at a lower 881,000 which the Gov’t popped champagne corks over…. But think about this for a minute…. 8881,000 new claims is still larger than any previous number in the history of keeping this data… And here’s an enigma for you…. How could the weekly numbers go down, and the Continuing Claims rise?  Continuing claims were 29.22 Million VS the 27.03 the previous week….  Must be some more funny accounting of the jobs numbers, eh?

And in a not so publicized data print… The August Trade Deficit soared to $63.6 Billion  VS July’s 53.3 Billion…  Now, this can mean a couple of things… Either U.S. consumers were spending more than they have in a long time on foreign goods, or…. And most likely is the case, That foreigners aren’t buying much U.S. Goods….   There have been white papers and theories written about how the Trade Deficit isn’t important…. But I believe it is, and tells a story or paints a picture if you will of how the world is functioning…. And right now, I would say, not very well…

On Friday, there was the Jobs Jamboree… In all its glory…. The BLS told us that 1.37 Million workers went back to work in August, which was a drop of the numbers of folks that went back to work in July which was 1.73 Million….  But the Unemployment rate dropped anyway to 8.4% VS 10.2%… Of course my back of the napkin calculations come up with a different number….  I say the number is probably 9% or worse, because I don’t use the jobs that the BLS adds out of thin air…. Which for those of you keeping score at home is equal to 1,035 Million, since April….  Shoot Rudy, no wonder the Unemployment rate is falling!

This weeks Data Cupboard doesn’t have much to look forward to seeing…. The only real piece of data will be the Weekly Initial Jobless Claims on Thursday… and for those who give two hoots… CPI (consumer inflation) will print on Friday this week…

To recap…. Late last week, there was some fair-to-middling trading and gains in both the currencies and metals, but nothing really to write home about…. And in the overnight markets last night and early this morning, the anti-dollar assets, Currencies, Metals, and Oil, are all getting sold so the start to the week will be a downer… 

Before we head to the Big Finish today… There’s another quote I wanted you to hear and this one is from Ron Paul, who doesn’t pull any punches when talking about the Fed, the economy and so on… here’s Ron: “Once the lockdowns end, the Fed’s actions may lead to a short-term boom. However, the long-term effect will be even more debt, continued erosion of the average American’s standard of living, and the collapse of the fiat money system and the welfare-warfare state. The crisis will likely be brought on by a rejection of the dollar’s reserve currency status. This will be supported both by concerns about the stability of the US economy and resentment over America’s hyper-interventionist foreign policy.

Yes, just like I keep saying about our financial System collapsing under the weight of all this debt…

For What It’s Worth…. Well, I left you on Thursday wondering what I had up my sleeve, ala Bullwinkle, for today in the FWIW section… As promised this is Pam and Russ Martens from with a little ditty that should send a chill up everyone’s spine, and have them wanting to yell at the walls…. Trust me, that’s Ok… go ahead and yell…. This article can be found on their website, but here’s the link any way!

Or, here’s your snippet: “Members Exchange (MEMX), a brand new stock exchange, has announced that it will begin live trading of select stocks for the first time on September 21 with a full phase-in on September 29.

Criminal histories are, apparently, no barrier to running a stock exchange in the United States to the deeply conflicted way of thinking of the Securities and Exchange Commission (SEC), which issued its approval to operate the exchange on May 5.

Investors in the new stock exchange are some of the most serially-charged Wall Street banks, including JPMorgan, Goldman Sachs, and UBS, along with the hedge fund, Citadel Securities. BlackRock, which is up to its neck in the Federal Reserve’s deeply conflicted bailout programs, is also an investor, as is the high-frequency trading firm, Virtu Financial, and others.

JPMorgan Chase has been criminally investigated by the U.S. Department of Justice at least four times in the past seven years. A criminal probe in 2013 looked at how the bank had used bank depositors’ savings to gamble in exotic derivatives in London, eventually losing $6.2 billion. That case was known as the London Whale and ended in the bank paying $900 million in fines. No criminal charges were brought against the bank.

In 2014, JPMorgan Chase was charged with two criminal felony counts for how it mishandled the business account of Ponzi mastermind, Bernie Madoff. JPMorgan’s compliance staff looked the other way at screaming red flags of money laundering in the Madoff account for decades. Bank employees told authorities in the U.K. that it thought Madoff might be running a Ponzi scheme. It filed no such concerns with U.S. regulators. The bank pleaded guilty to both felony counts.”

Chuck Again…  Yes, there’s much more in the article that I don’t room for here, but you get the gist of what I’m so upset about…. And if you want more, then click the link above and have at it!

Market  prices 9/8/20: American Style: A$ .7248, kiwi .6665, C$ .7597, euro 1.1803, sterling 1.3048, Swiss $1.0905, European Style: rand 16.9380, krone 9.0397, SEK 8.7949,   forint 305.45,  zloty 3.9647,    koruna 22.4545, RUB 75.65, yen 106.25, sing 1.3690, HKD 7.7502, INR 73.78, China 6.8304, peso 21.79, BRL 5.2999,  Dollar Index 93.27,  Oil $37.55,   10-year .69%, Silver $26.68, Platinum $900.00, Palladium $2,331.00, and Gold… $1,919.00

That’s it for today…. Lot’s to think about today….   You know… You dear Pfennig Readers, get to read all this stuff here first…. And even if I am wrong about the financial system collapsing, it’ll come so close that it might as well go the whole nine yards!  Well, College Football got of to a small sample start this past weekend…. My beloved Mizzou Tigers don’t play until September 26, and then they have to play the might Alabama team in the first game of the year…. Little Evie stayed with us Saturday night, and we had a great time! We played, we danced, she tried to walk, and then I must have wore her out, because she slept all night! Andrew & Rachel (Evie’s parents) say we must have some magic dust that makes her sleep all night, because for them, that doesn’t happen!  Ok, a friendly Spiderman neighborhood reminder that there will only be two Pfennigs this week, today and tomorrow… Del Shannon takes us to the finish line today with his rock classic song: Runaway…. As I walk along I wonder, what went wrong with our love, a love that was so strong….  Only the folks my age and older will be humming that song the rest of the day now…. And with that I hope you have a Tom Terrific Tuesday, and please Be Good To Yourself!

Chuck Butler