Do We Really Need The CFTC?

Rocktober 5, 2020

* Back & forth, up then down trading continues

* Oil slides downward again… 

Good Day… And a Marvelous Monday to you! Well, it was a bad weekend, sports wise, for me this past weekend, as both my beloved teams lost… My Cardinals forgot how to hit a baseball again on Friday night, and they were ushered out of the playoffs, after such a promising Game 1 victory… UGH! And then on Saturday, my Missouri Tigers forgot how to play defense in their loss at Tennessee, so I sat a sulked all day on Sunday! I’m only on page 600 of a 965 page book, so I did some reading, not making much of a dent in those remaining 365 pages!  I hope you have a relaxing, fun, whatever weekend, for mine was a bust! Big Head Todd & The Monsters greet me this morning with their song: Bittersweet…

Well, On Thursday last week, I talked about how the back and forth in markets were really giving me a rash… But Friday was more of the same…. On Thursday Gold closed up $21 to $1,906, and Silver was up 79-cents to $23.79, but on Friday, Gold gave back $7.60 to close $1,898.80 and Silver gave back 10-cents to close $23.69…  In the currencies, the traded stronger on Thursday, only to see about ¼ of a cent was taken from its value on Friday… The Aussie dollar (A$) also gave back ¼ of a cent, on Friday…

OK, it’s a new day, and since Friday was a down day for Gold & Silver, that must mean that today will be an up day… And as I look at the early morning trading in those two metals I see that’s exactly what’s going on, as Gold is up $6, and Silver is up 30-cents… 

And in the overnight markets the euro has regained its mojo, and is pushing higher in the 1.17 handle. The price of Oil has slipped downward again, as it is trading this morning with a $38 handle…  Which can’t be a good thing for the Petrol Currencies….  However, there is one Petrol Currency that has not gotten caught up in the Oil price slide… And that currency is…. drum roll please…. The Canadian dollar/ loonie…  Must be from all that tourism…. HAHAHAHA! As if! 

While I was sulking, yesterday, I got caught up on email.. And that includes watching some videos from Prager U…  And then I thought… why don’t I read some articles that have been sent to me from readers that want my opinion on them…  One of them was about Bitcoin… The reader wanted me to include the price of Bitcoin in the Market Prices roundup…. And…. Talk about Bitcoin on a regular basis….  Basically, I’m going to say the same thing I’ve said before about Bitcoin….  And I’m saying this knowing that many people have made beau-coup bucks in the cryptocurrency… I believe that Bitcoin is a scam…. There’s nothing there folks… I fear about computer hacking, and the thing I think about the most is that Gov’t is going to develop their own digital currency, and when they do that, all other forms of digital currency will most likely be outlawed…. Fed Head Brainard recently mentioned that the Fed is well into their work on their own digital currency…. 

So, I won’t be putting Bitcoin in the roundup, and I won’t be talking about it, that is if I can get away with that, I won’t!

OK…. So, last week I went all bananas on JPMorgan and their 2 new felony counts of price manipulation that gives them 5….   And the wrist slap for their illegal trading wasn’t enough…. But….  I wasn’t aware that the bank now is operating under a “deferred prosecution agreement” with the Justice Department and isn’t likely to mess with the gold and silver futures markets for a while.   JPMorgan is the ringleader of the price manipulation games they play, so… without them in the game….  Maybe, just maybe we can get back to a real price for Gold?   I sure hope so!

And while we’re talking about the revelation last week that JPMorgan received 2 more felony counts of price manipulation, I have a question for the mass media…. “Where has this story been on the 5 or 6 or 10 o’clock news? Local news, national news, cable news? No where! Crickets! And why is that? Because this news doesn’t \no, wait Chuck, don’t go there… You already had a reader tell you to stay out of politics when you said something about the Veritas finding of bundled mailed votes…  So, I know why the mass media has been absent in reporting about these felony charges at the U.S. ‘s largest bank, but that’s going to have to be a discussion on the Butler Patio….

And then there’s this final thing here….  I know in my heart of hearts that this slap on JPMorgan’s wrist and their “deferred prosecution agreement” isn’t going to be the end-all of price manipulation… There’s just too much money involved to these price manipulators to go Cold Turkey and quit….

And Oh, I do have another thought here….  Why did it take the DOJ to find these unlawful trades, and file felony counts? Where was the CFTC? Aren’t they supposed to be the regulator of commodities?  What the hell do we need the CFTC for, when they failed miserably at their jobs?

Well, I had a lot of pent up thoughts on all that as you can tell….  So, as the day went on yesterday, and I’m looking at stuff, I see a headline that says that the “dollar soared back on Friday”…. Really? You call a ¼-cent move “soaring back”?  I wanted to fire off a response but couldn’t find a place to click to respond! Just shows to go ya that you have to be careful who you get your news and market updates from… 

The other misleading headline was this on Thursday… “Jobs come roaring back in Sept”….  Really? Let’s see the previous week 840,000 people filed for Unemployment and last week the number was 837,000… So, I’m to believe that these days, we think 3,000 is to considered “roaring back”? 

And also on Thursday, the Continuing claims increased from the previous week when they were 26.04 Million, last week they were 26.53 Million…. So, once again I can eyeball that and say that more people are staying on Unemployment!    So, then I did a quick computation on the back of a napkin, and came up with an Unemployment Rate of 8.8%…  The BLS said on Friday that the Sept. Unemployment Rate was 7.9% down from 8.4% in August….   

Riddle me this Batman….  The Continuing Claims are still high… And the monthly jobs created by the BLS were 661,000 in Sept, when the jobs created in August were supposedly 1.489 Million… So, take those two things into consideration, and you get a…..  lower Unemployment Rate?  Only the corrupt BLS could compute that, folks…  I’m just saying…

OK, enough of all that jobs talk… It’s all a bundle of confusion about the real number as far as I’m concerned… And really, I have no idea why I spend so much time on it, other than I have this inner drive to prove the BLS and ever other Gov’t report wrong! 

OK, enough of that too…. I’m just going to get myself all riled up and being to yell at the walls, it’s ok, I’m here alone..  No one will hear me, and then it all be me getting my blood pressure rising, when the walls don’t yell back!

Well, The GATA Folks let me know this weekend that this year’s New Orleans Investment Conference, to be held Wednesday to Saturday, October 14 to 17, and will be a “virtual” conference!  The New Orleans Conference is the granddaddy of conferences, and I was always very delighted to be chosen to speak there…. One year, it was held over Halloween…. And if you’ve never been to New Orleans, you would not be aware of the love the people of the are have for Halloween…  Frank Trotter, David Galland and I walked down Bourbon street,  and were amazed at the costumes the people walking up and down the venerable street were wearing…  I haven’t spoken at the NOLA Conference for a number of years now… I remember the crowds there being very lively!  If your interested in logging in to your computer to watch some of the presentations this year, you can click here to find out more:

The U.S. Data Cupboard last week had some other prints besides the labor reports….  Personal Income & Spending for August showed that Income was down -2.7%, and Spending was up 1%… Uh-oh… Mom, they’re doing it again!  Doing What?  Spending more than they take in…. Doesn’t that indicate that either savings or a credit card were getting used?  Yes…. It does…. Good boy!

There were a couple more prints on Friday… The ISM Manufacturing Index slipped in Sept from August, but my a miniscule amount, and Core Inflation remained at .3% for September…  Both of these reports are simply what the Gov’t wants you to see…  Nothing more, nothing less… 

To recap… The up one day down the next day for Gold & Silver continued through to the end of the week, and is looking as if today will be another run upward…  The currencies also saw some up one day and down another day, but this morning the euro is moving higher in the 1.17 handle, and taking the other currencies along. The price of Oil has slipped to a $38 handle, and all but one Petrol Currency is feeling the heat from this slippage…  Hey! you’ll have to read the letter to find out which currency that is! 

For What It’s Worth….  OK, I’ve got another article from Pam and Russ Martens from their web site for you today… This one really hit a nerve with me, so it’ll be interesting to see if it does the same with you… It’s about the Fed NY and their repos, which by the way have gone over $9 Trillion that they’ve doled out to the primary dealers (Casino Banks) since they began this last September… So, this article gets into the meat of what’s going on, and it can be found here: 

Or, here’s your snippet: “

The New York Fed, the unlimited money spigot in times of need by Wall Street’s trading houses, has been conducting meetings with hedge funds to get their input on the markets. More on that in a moment, but first some necessary background.

Millions of Americans have seen the movie The Big Short, based on the Michael Lewis bestselling book by the same name. A key character in the movie is Mark Baum, played by Steve Carell. The character is based on Steve Eisman, who, during the financial crisis of 2008, was employed at FrontPoint Partners LLC, a hedge fund unit of Morgan Stanley. As widely acknowledged, FrontPoint was shorting subprime residential mortgages that were packaged into CDOs (Collateralized Debt Obligations). Shorting means to make a bet that a financial instrument will lose value. FrontPoint was, in fact, hoping American homeowners would be foreclosed on and their subprime mortgages would become worthless.

But here’s what else FrontPoint was shorting. Lewis writes in his book that during the financial crisis Eisman, while at FrontPoint, “shorted Bank of America, along with UBS, Citigroup, Lehman Brothers, and a few others.” Lewis notes further that “They weren’t allowed to short Morgan Stanley because they were owned by Morgan Stanley, but if they could have, they would have.”

The New York Fed was in charge of almost all of the secret $29 trillion in bailouts during the 2007 to 2010 financial crisis. Congress never approved these loans or was even aware of where the money was going. After the Fed lost a multi-year court battle to keep its bailouts a dark secret from the American people, we learned that Morgan Stanley was one of the largest recipients, receiving a cumulative total of $2.04 trillion according to the audit conducted by the Government Accountability Office (GAO).

Buried deep in the GAO audit is this bombshell:

Morgan Stanley funds include TALF borrowing by funds managed by FrontPoint LLC, which was owned by Morgan Stanley at the time TALF operated.

TALF was one of the Fed’s bailout programs. Which means the Fed was subsidizing FrontPoint with super cheap funding as it was shorting the hell out of the very banks that the Fed was desperately attempting to prop up with trillions of dollars in secret loans.”

Chuck again…  Sure that makes abundant sense doesn’t it? The Gov’t was bailing out a company that was shorting banks the same banks the Gov’t was trying to prop up?  I shake my head in disgust at all this…  Oh, and there are more goodies like that in this article, so if you have the time, check it out! 

Market  Prices 10/5/20: American Style: A$ .7185,  kiwi .6648, C$ .7535, euro 1.1770, sterling 1.2960, Swiss $1.0911, European Style: rand 16.4152, krone 9.2545, SEK 8.8940,  forint 304.28,  zloty 3.8227,   koruna 23.3216, RUB 78.10, yen 105.60, sing 1.3602, HKD 7.7498, INR 73.09, China 6.7899, peso 21.45,  BRL 5.6828,  Dollar Index 93.54,  Oil $38.72,  10-year .71%, Silver $24.09, Platinum $889.00, Palladium $2,357.00, and Gold… $1,905.80

That’s it for today…  I think that I’m going to boycott Twitter… I only use the social media site to see what the economists that I follow have to say, but every now and then a rogue post hits my screen, and there was one Friday that said, “The President has the virus, I hope he dies”….  What? You hope someone dies? What have we become? First it was “death to America” and now it’s “death to the president”?  The Twitter folks should track down this person and ban them from the site! But that won’t happen, it’s freedom of speech, right? I’m just going to choose not to see their freedom of speech! I use Parler now more anyway!  It’s 36 degrees outside this morning! BRRR!  I had to make the switch from Cool to Heat on the thermostat over the weekend, as the house was getting too cold for me! I used to have a rule of no A/C before May, and no Heat before Nov. But I guess I broke that rule!  This is day 15 of being alone… Oh! no Pfennig this Thursday, it’s my monthly visit to my oncologist…  Bill Withers takes us to the finish line today with his song: Lovely Day, which I hope it turns out to be… I heard this one on a Commercial recently, and thought… I guess I’ll have to delete it from my songs, now…  HA!  I hope you have a Marvelous Monday, and Please Be Good To Yourself! 

Chuck Butler