- Metals attempt to come back from the engineered takedown…
- Oh, those darn downward revisions… Chuck has warned us!
Good Day… And a Tom Terrific Tuesday to you! We start today by saying congratulations to Michigan University for their win last night in the College Football Playoff Championship Game. The game started out like a blowout for Michigan, but Washington fought back, but, by game’s end, Michigan extended its lead and won the game. it’s another overcast day here in the South… UGH! I need the sunshine! C’Mon mother nature, give us some sunshine! The weather down here has not been the same as previous years here, winter does exist down here, and this year, it’s hanging on longer that usual… I still only wear shorts and polo shirts, but at night I have to put on a pullover… Oh well, it’s still warmer than back home! A Flock of Seagulls greet me this morning with their song: Space Age Love Song…
Well, the dollar remained adrift at sea for most of yesterday, only turning downward near the end of the day… The BBDXY ended up 3 index points lower, and the euro climbed higher in the 1.09 handle… I read a report that talked about how traders, etal, are looking at the jobs number from last Friday, more closely… Hey! do you think that they have read the Pfennig enough through the years, that they decided to look under the hood for once? I kid… because where has the looking under the hood been all these years? Why have they decided to look under the hood now? Oh well, they are looking under the hood, and that meant that they didn’t believe the BLS’s jobs report, and that meant sell dollars… The euro, sterling, Swiss, and more all took a flyer to move higher VS the dollar yesterday.
Gold started the day yesterday, down $25, and then began a slow rise to get back to zero… It was a valiant try, but Gold fell short, losing $17 on the day to close at $2,028.17. Silver started the day yesterday down 28-cents and ended the day down just 8-cent… Silver closed at $23.10… Now, we have to wonder if the bold and brazen attack on the metals by the short paper traders is finished now? I sure hope so!
The price of Oil got bad news yesterday, when the Saudis announced price cuts on Oil due to the softness in the demand for Texas Tea… Bubbling Gold… With the advent of electric cars, the price of Oil isn’t held in such high regard any longer… But, here’s a ditty for you… I read a report yesterday that talked about a town in Sweden that had bought all electric buses… And now that the weather has turned so cold, the buses won’t work! How apropos, eh? And… The 10-year’s yield backed off a bit yesterday, and fell from 4.05% to 4.01%…
In the overnight markets last night… The dollar recovered 2 index points in the BBDXY Index last night, and one has to wonder if that will carry over to today’s trading in the West? The Fed Heads have said that they are data dependent, so will the markets follow the Fed/ Cabal/ Cartel? That would make sense to me… Gold has added $7 to its price in the early trading today, and Silver is flat to start the day. The bold and brazen takedown of the metals yesterday has given all of you who have procrastinated about buying metals, the opportunity to buy at a cheaper price… And that’s all I can say nicely about the takedown… I told you yesterday that the Commercial Traders were long to the max with Gold futures… So, either they held on for dear life yesterday, or they added to the selling… We won’t see their positions until later in the week…
The price of Oil remains range bound inching higher this morning to trade with a $72 handle. And bonds are bonds… with the 10-year’s yield inching higher to 4.05% this morning…
I’ve got a real doozy for you in the FWIW section today, regarding the Jobs Jamboree, and all the revisions that go unnoticed by the markets… So, stay tuned, same bat time, same bat channel!
Ok… so what’s going on with bonds these days? since the first week of Rocktober, the 10-year’s yield has dropped from 5% to 3.80% last week… Since the start of the year though, the 10-year’s yield is back on the rise and ended yesterday at 4.01%… To get a better understanding what’s going on in the minds of bond traders, Bloomberg.com has a snippet from Bill Gross, the “Bond King” when he started his bond fund: PIMCO… here’s we go: “Fresh from getting a big call right on yields toward the end of last year, former bond king Bill Gross just signaled he is now steering clear of Treasuries.
Ten-year US debt is “overvalued,” with similar-dated Treasury Inflation-Protected Securities at a 1.80% yield the better choice if one needs to buy bonds. “I don’t,” he wrote in a post on X.”
Chuck again… So, there! I said it weeks ago, that this bond rally was a bear market rally, and now Bill Gross agrees with me…
And I do believe that inflation is going to remain sticky, and rise again in the near future, especially if the Fed Heads do begin to cut rates again…
Traveling down to Australia this morning, we find that Retail Sales in Nov were at a 2% rise, VS 1.2% expected… That was responsible for the A$’s gain overnight… When the U.S. dollar was getting sold at year-end, the A$ had risen to .68-cents, but since, with all the dollar buying early this year, the A$ dropped to .6683… So, this unsuspected rise in Retail Sales has the A$ back on the rally tracks.
Here in the U.S. Consumer Credit (read debt) printed yesterday for November, and here are the numbers from MarketWatch.com : Total consumer credit rose $23.7 billion in November, up from a $5.8 billion increase in the prior month, the Federal Reserve said Monday. That translates into a 5.7% annual rate, up from a revised 1.4% rise in the prior month.
Economists had been expecting an $8 billion increase, according to the Wall Street Journal forecast.
Key data: Revolving credit, like credit cards, rose sharply at a 17.7% rate after a 2.7% gain in the prior month. That was the biggest gain since March 2022.”
Chuck again… here we go with these credit card debts again… Those are scary stuff in my mind folks… 20% and higher interest rates on debts carried over is a real problem for consumers… So… Christmas is over, and now the bills come in the mail… This is real life folks… And now U.S. consumers have to deal with all their Christmas buying!
And heading north from Australia, we somehow get to China… China’s debt has gotten very high, and some people may be thinking that I would be harping about their debt too… But, in this case, China is doing something about their debt, they are thinking of ways to grow to offset the debt… I’m talking about the Silk Road project that China has taken on… I’ve not talked about the Silk Road for some time now, as it continues to head west… But it’s a still a viable project for China, and Russia to that end, because it helps to spread the de-dollarization message. I just wonder how this will all turn out… I saw this quote yesterday from Pepe Escobar, “Or to put it in Silk Road terms: while the dogs of war bark, lie, and steal, the Russia-China caravan strolls on.” About says it all, eh?
The U.S. Data Cupboard today has the Nov. Trade Deficit for our viewing… Yesterday, Fed Head, Bowman, said that she didn’t have a problem with rate cuts as long as inflation is under control…. See what she did there? She opened a door and left the door cracked open… Control… that’s the key word here… That’s a judgement call on what the Fed Heads call Control… So… she didn’t really say anything yesterday, other than she’s for a rate cut… More Stupid Fed Speak… Why can’t they just say what’s on their collective minds? Oh, we know why they can’t, but C’mon give us a break here!
To recap… The adrift at sea dollar finally took on some water yesterday, with the BBDXY losing 3 index points on the day. The euro climbed higher in the 1.09 handle, and all the rest of the currencies participated in gaining VS the dollar. Bill Gross tells us what he thinks of the 10-year Treasury’s yield… And chuck talks about inflation… again! Aussie Retail Sales surprised the markets, and U.S. consumer debt is soaring!
For What It’s Worth… Longtime readers know that I’ve pointed out the irregularities of the BLS Jobs Jamboree each and every month that print these false reports… This article talks about how so many initial reports are revised downward but under the cover of darkness, and it can be found here: US Jobs Report: The gig is up! | Ainslie Bullion
Or, here’s your snippet: “Last Thursday’s US jobs report caused quite a stir – with the DXY at first rising to 103.1 on a figure of 216,000 against the 170,000 estimated. It was the reaction that followed, however, that is garnering the most attention. After 11 months of revisions in 2023, 10 of the 11 have been revised down. Statistically there is a 1 in 1000 chance of this occurring, so when the DXY collapsed 2 hours later to 101.9, it appeared that traders were finally starting to question the legitimacy of US numbers.
Revision, Revision, Revision
In a recent post from End Wokeness they have broken down the current job market numbers, showing the specifics of the revisions. Thinking in probabilistic terms this is like getting 10 out of 11 heads in a game of heads and tails. As this data is assumed to be non-biased, you should be as likely to get a revision up as a revision down. Now the probability of this happening is 0.1%, a statistical unlikelihood which can only lead any logical person to one of two conclusions. Either Biden is one very lucky President with his Bidenonomics policies able to move unemployment numbers at will, or someone is cooking the books.
Breaking down the data
So why was the reaction so negative 2 hours after the report? The numbers showed firstly the following:
November revision of -27,000 jobs and October revision -45,000
1.5 million loss in full time roles (you read that right!)
676,000 people leaving the labour force (labour rate has never recovered since Covid)
52,000 out of 216,000 government jobs created (24%)
8.6million (a record) number of people with 2 jobs which skews the unemployment rate with double counting
So nutting this out in plain speak… with 216,000 jobs created and 72,000 revised down, actual job gains were 144,000 – well below the 170,000 estimate. 1.5 million people lost their full-time job. These jobs were replaced with 1.644 million part time jobs, with 8.6 million people in the US currently willing to fill these jobs as a second job, skewing the unemployment rate of 3.7% but not being measured or reported. In fact reviewing a recent Biden tweet – “A record breaking Biden Economy in 2023” 2.7 million jobs were created… It appears in December 1.7 million of those were part time, meaning no more than 1 million full time jobs could have been created in 2023 (but I’m sure there’s a revision in that…)”
Chuck again… I know, that’s a long snippet, but… I thought that since I’ve harped and yelled at the walls about the false numbers that the BLS prints each month, that some further proof was needed to be shown…
Market Prices 1/9/2024: American Style: A$ .6696, kiwi .6243, C$ .7480, euro 1.0934, sterling 1.2721, Swiss $1.1735, European Style: rand 18.6734, krone 10.3615, SEK 10.2917, forint 346.36, zloty 3.9645, koruna 22.5528, RUB 89.85, yen 144.10, sing 1.3305, HKD 7.8148, INR 83.11, China 7.1624, peso 16.83, BRL 4.8745, BBDXY 1,223.78, Dollar Index 102.14, Oil $72.07, 10-year 4.05%, Silver $23.11, Platinum $947.00, Palladium $997.00, Copper $3.81, and Gold… $2,035.07
That’s it for today… Well, our place down here grew very quiet once out guests left yesterday, and it seemed empty… So, I reclined in my chair, and fell asleep for 4 hours! Crazy, eh? We’re off to get a global entry status for Kathy this morning, I go in February to get mine. 37 days till pitchers and catchers report… I’m just saying… This coming Friday is my oldest son’s birthday… He was born during a snowstorm in 1982… And has grown to be a very well-respected gentleman… An early Happy Birthday, Andrew! Neil Young takes us to the finish line today, with his song: Harvest Moon… I hope you have a Tom Terrific Tuesday today and will Be Good To Yourself!
Chuck Butler