Last Monday’s Eurphoria Has Faded Away….

January 13, 2020 

* The dollar comes back with a flurry of punches! 

* 2020 begins with the same “Opposites trading pattern”… UGH! 

Good Day… And a Marvelous Monday to you! Did you watch the Kansas City / Houston playoff game yesterday? WOW! Down 24-0 the K.C. Chiefs came back to win and score 51 points! What a turn around! Before that one, the only one that compares was the old Buffalo / Houston playoff game with Buffalo using their second string quarterback to comeback from a large deficit to win… That was quite a few years ago now… Well, did you hear that the Iranians were blaming the U.S. for them shooting down that passenger plane last week? Strange, but true… Grasping at straws… Oh, I have a correction to something I typed last week, I said that the airstrikes were in Iran, but actually were in Iraq… the late great, and beautiful Dusty Springfield greets me this morning with her song: Son of a Preacher Man…

Well, all the euphoria of Monday last week, that the euro was trading over 1.12, Gold had leaped forward by $28 at the end of the week, and the price of Oil was $63, is all in the past now…

Longtime readers will know what I’m about to say here…. It sure looks as though the Plunge Protection Team (PPT) was out in force last week… For the Economic Data didn’t look good, but the dollar still rallied… Yes, the threat of WWIII faded, and long with it so did the lofty price of Gold and Silver, but still… from what I read, the physical buying of Gold is off the charts these days… The uber rich are storing it in secret bunkers, and Central Banks sans the Fed, are lining up to buy as much physical Gold as they can… But still the price of Gold gets yanked back every time it begins to move upward again… Don’t tell me… I’ve got nothing to do… Counting flowers on the wall that don’t bother me at all… But Gold price manipulation does bother me!

So, there’s my rant/ whine for the day… This will be short-n-sweet today, for I have to drive 50 minutes north this morning to the wound center in Port St. Lucie, as soon as I hit send… I first visited this wound center last Thursday, appt. at 9am, and didn’t get back to home base until after noon! The place was a madhouse! So… well, at least I know the ground rules, and will be prepared for the waits! It was very much like waiting at M.D. Anderson Cancer Center… I’m surprised most people that I talk to that have cancer, have never heard of M.D. Anderson, in Houston Texas… They save my jaw, and have been a great sounding board for me when the current chemo I take begins to lose its effectiveness…

OK.. back to the markets… In the overnight markets last night, and this morning, the euro has held the 1.11 handle, but Gold has been sold off by $10 to trade this morning at $1.551…   The price of oil trades with a $59 handle, barely, that is….  So, the markets had their tizzy fit, and that was it?  It sure appears to be that way…   

But I just don’t get the damage being done to Gold…  And Silver hasn’t escaped unscathed either.  January has been good to Gold the past few years, and so I’m a little concerned that the trading pattern of the past few years isn’t playing out this year…  

Countries all over the world are making their loads of dollars held in reserve, lighter, and we’ve had the Fed printing dollars by the cruise ship loads, and still the dollar remains well bid…  Doesn’t makes sense to me, but then we are in the day of “opposites” right?    I read last week that in 1970 the percent of dollars held around the world was 70%, and in today’s world that percentage has slipped to 62%… Of course in that time we had the introduction of the euro, and the trading ability of the Chinese renminbi added to the mix, but still that’s quite a slip in dollars held, right? 

And these days..  I sit on cornerstones and count the time in quarter tones to ten… No wait!  These days, the U.S. has basically ticked off just about everybody, with our insistence of keeping the dollar the reserve currency, that even the Saudi’s are thinking of pricing their Oil in something other than dollar… 

I used to give presentations around the country and then some, and I would talk about how the Chinese renminbi was signing all these currency swap agreements with countries and that there were talks of them signing one with the OPEC countries, and would say if that happened that would for sure signal the end of the dollar’s reserve status… Well… skip forward to today, it sure appears that it could be coming to fruition, don’t you think?  I do… and to me that’s all that matters! HA! 

OK, let’s do a little math here… You know how I’m always saying that the markets should use the ADP Employment numbers instead of the BLS mumbo jumbo? So, get this… Last week the ADP report said there were 202,000 jobs added in December. The BLS said there were 145,000… But because of their previous month’s indulgences with hedonic adjustments, they had backed out 60,000 that were over reported in previous months… So, add back that 60,000 and the BLS is right in line with the ADP! So, since I always take away the “added jobs” I have to add back the “taken away jobs”, which means the December month, known for added employment saw 205,000 jobs added…

The thing that I still say is not a good thing for these labor reports is that there is no deciphering of what is a good paying job and what is a low paying job… So, the total numbers don’t really mean much to me, nor should they you, but apparently, the markets swallow them hook, line and sinker!

I’ve got to get a better job! This one is driving me crazy folks… OK, I’m kidding… But I do have to admit that there are times that I just want to throw my hands up over my head and say, “I quit!” I can’t keep writing about all these bad things I see and not go crazy! And that leads me to this:

OK… remember last month when I told you that I didn’t think the Christmas shopping season went too well? OK, I came across this Tweet from fave economist, David Rosenberg on Saturday… Let’s listen in to what the econoguy has to say on Twitter: “I keep hearing how wonderful the holiday shopping season was and yet we see the likes of J.C. Penney, Kohl’s and L Brands all report lower sales action for the November-December time frame. Not to mention Macy’s, Urban Outfitters and Bed Bath & Beyond.”

Yes, the real facts, and not the ones that get spewed on the TV / cable/ news… The term “fake news” became something we all talked about in recent years, but…. Longtime readers will recall me talking about fake news with regards to economic reports for years!

The fires are still burning out of control in Australia… I sure hope any readers I have down under are safe, as well as anyone else that lives there! There’s a slew of economic data that will print this morning in the U.K., but will most of it be forgotten about as the country comes to grip with the latest news from the royal family? I kid, but it all fairness, this royal family thing is big news in the U.K.

Here in the U.S. the Data Cupboard is basically void of any “real economic data” until Thursday when December Retail Sales will print… It will include the Christmas sales season, and from what I saw getting left on our front porch last month, the BHI tells me that we should see a mediocre Retail Sales print for December, which the “spin doctors” and not the ones that sang Two Princes, but the ones that put their spin on things, will be out in force saying that the Retail Sales figures shows that there will be no recession in 2020…

I don’t believe it…. Not for a minute… You’re under the gun so you take it on the run! No wait! What? You have a problem with a little REO Speedwagon this morning? But basically what I’m saying is that everyone that reads the letter knows that I said last year that we would be in a recession before year-end… And maybe we would have been had the Fed not decided to start pumping 100’s of Billions of dollars into the banking system…

I’m still miffed and mad as all hell, that the Fed doesn’t have to tell us to whom they are giving these funds away to, and for what purpose… And you should be too! So, pick up a pen and a piece of paper, or better yet write to your representative in an email, and tell them that you as a citizen of the U.S. demand that the Fed come clean on this ponzi scheme they’re running…

To recap… The euphoria of the currencies, metals and Oil last Monday has faded away, and we’re right back to where we were before everyone was on the edge of their collective seats waiting for Iran to retaliate… There’s not a lot of data this week that’s worth looking at until we get to Thursday, but in the U.K. today they will print a slew of data, but Chuck wonders if anyone will notice?

For What It’s Worth… Last week I talked about the Baltic Dry Index dropping like a rock, and that had followed up the Cass Freight index also dropping quickly… Well this week it’s the truck orders data that’s falling out of the sky, and that article can be found here:

Or, here’s your snippet: “The painful decline in Class 8 orders that we have been documenting on a month-by-month basis has resulted in truck manufacturing orders hitting a decade low in 2019, according to Americas Commercial Transportation (ACT) Research Co., a leading publisher of commercial vehicle industry data, market analysis, and forecasting services for the North American market.
Full year volume for Class 8 orders was 181,000 for the year, compared to 490,100 units in 2018.

Sales in December followed the year’s trend, ticking lower on a year over year basis despite showing a 14% sequential rise.

Federal tax rate cuts in 2018 encouraged carriers to expand their fleets, resulting in major backlogs and tough comparable numbers for 2019, according to the Triad Business Journal.
In addition to the tough comps, ACT President and Senior Analyst Kenny Vieth also blamed the issues on “lower freight demand” in 2019.

Vieth said: “Overbuying through 2019 and insufficient freight to absorb the ensuing capacity overhang continued to weigh on the front end of the Class 8 demand cycle in December. Recalling July and August, orders were down 80% from the corresponding months in 2018.”

As we have documented throughout the year, some truck manufacturers, like Mack Trucks and Volvo Trucks, announced layoffs. Volvo announced last year that it would lay off 700 people at its Dublin, Virginia plant. Daimler laid off 900 workers in October 2019 and Navistar will lay off 1,300 workers this month.

Some trucking companies that we have profiled, like Terrill Transportation, have closed down entirely.”

Chuck again… I want to thank friend, Ed Steer, for pointing me to this article in his Saturday letter at But isn’t it interesting that you didn’t hear about this news on the TV or radio? Does the fact that you didn’t hear it make it any less true? It had better not! I’m just saying!

Currencies today 1/13/20 American Style: A$ .6900, kiwi .6630, C$ .7660, euro 1.1122, sterling 1.2988, Swiss $1.0282, European Style: rand 14.3580, krone 8.9070, SEK 9.5176, forint 300.90, zloty 3.8107,    koruna 22.6991, RUB 61.00, yen 109.89, sing 1.3471, HKD 7.7220, INR 70.76, China 6.9183, peso 18.78, BRL 4.0934, Dollar Index 97.51, Oil $59.09, 10-year 1.84%, Silver $17.97, Platinum $969.70, Palladium $2,133.50, and Gold… $1,551.29

That’s it for today, as discussed last week, I believe I’ll be getting back to my regularly scheduled programming this week, as my appt. at the wound center is an hour later in the morning, which gives me time to write before I go…  So… I’m here all week… Try the veal and tip the waitresses! HA! It was a “full moon” weekend… I always get a kick out of watching the full moon rise over the ocean… Cool beans in my book!  Happy Birthday to my oldest son, Andrew, who celebrated his day yesterday in N. Carolina coaching water polo… I’m so proud of both my boys, as they work diligently at “giving back to their game”…  In Alex’s spare time, he coaches the pre-high school kids…   I always told them to “give back to the game they love”…  OK… got to get going, the traffic in Stuart, Fla. is a real bear to get through… Tod Rundgren takes us to the finish line with his song: It Wouldn’t Have Made Any Difference…  I hope you have a Marvelous Monday, and will Be Good To Yourself! 

Chuck Butler