The BLS Upsets The Applecart!

A Pfennig For Your Thoughts
 
June 4, 2020
 
* Gold & Silver get whacked on Friday… 
* The Recent currency rally gets derailed on Friday… 
 
Good Day… And a Marvelous Monday to you! What a wonderful chamber of commerce weekend for us here in the Midwest!! We had all kinds of different people here to swim this week, but none made my heart open up and sing joyous songs, than my 8 month old granddaughter, Evie May… That child’s smile can make a mean old man wilt… Not that I’m a mean old man, but if there was one around he would be wilting! Like I said last week, this little girl will be able to call me whatever she wants, and she’ll get whatever it is that she wants. Not that I want a spoiled granddaughter, but I’m afraid that she’ll have me wrapped around her finger… The Allman Brothers greet me this morning with their song titled: In Memory of Elizabeth Reed… There’s a story behind this song if you ever have the time to be on the Butler Patio, I’ll share it with you!
 
Well, Friday, was a day for the ages… The BLS’ version of a jobs report was something to write home about, and that pushed the markets to believe that the worst of the pandemic shutdown is over, and up went Bond yields, up went stocks, and down went the currencies, and metals, which got whacked as if they had done something bad… So, since Friday’s markets reaction was in response to the BLS jobs report, let’s go to it and pick apart with a fine tooth comb!
 
Well, weren’t you happy as a lark that the Unemployment Rate here in the U.S. dropped in May from 19% in April to 13% in May? Remember last week when I showed you the numbers? Didn’t I say then that I doubted that the BLS would show the same Unemployment Rate as the numbers should have shown? I showed that the number should be 27% Unemployment, but the BLS and their bag-o-tricks said it was just 13%…. Now, here’s a real kicker… The BLS added 345,000 jobs out of thin air for their report… Of course 345,000 jobs won’t make up the difference between 27% and 13%, but it gets us on the road of discovery… The numbers are what they are, folks… My dad used to tell me that “figures lie, and liars figure”.. I would have to put the BLS in the category of “liars figure”…
 
Now, you may ask why I get so frustrated with the BLS’s bag-o-tricks? Basically it comes down to honesty, and real markets…. We haven’t had “real markets” in so long now that I’ve forgotten what a real market is…. And when you have dishonest people issuing reports that gets people all wound up and they begin to forget about what’s real and what isn’t real, you get days like we had on Friday, when Gold was sold like funnel cakes at a state fair, and the dollar bugs danced in the streets…. That’s what you get when reality gets chucked to the road, and fantasy takes its place!
 
The Bureau of Lying Statistics… That’s my new name for the BLS… They are as worthless as pay toilet in a diarrhea ward! I’m sorry but I’m so fed up with their B.S. that I have to call them out for what they are! And that’s a lying bunch of Government accountants! What a farce! And to have the markets take that hook, line and sinker, is just what I’ve been talking about all these years with these BLS reports, and how they move the markets so falsely…
 
So,, the currencies rally was derailed for a day, and the dollar bugs were dancing in the streets once again… Gold hot wacked! Along with Silver, but let just focus on Gold right now… Gold lost $28.90 on Friday, and closed at $1,684 on Friday… It’s so sad to me that these price manipulators keep getting away with murder, because that, to me, is exactly what they are doing… Of course, on Friday, the BLS was an accomplice to the murder, but they won’t be anywhere around the body when the CSI guys show up….
 
On Thursday last week, pre BLS, the currencies were the ones dancing in the streets, as the euro traded through the 1.13 handle, the A$ through the 69-cent handle and so on… This misrepresentation of reality even fooled the bond boys, who are usually on top of things and act coolly during times like this, but this time they suckered into the cry of the day… The 10-year Treasury’s yield rose from .69% to .91% in one day! That’s a huge move for bonds folks.
 
In the early morning trading today, Gold is up $8, and things seemed to have calmed down. I guess we’ll have to get through today to know for sure! 
 
The price of Oil has risen to a $39 handle, and that has the Petrol Currencies all lathered up and ready for the dance! Shoot Rudy, this morning is the first time I’ve seen the Brazilian real trading below 5! And the Mexican peso is trading with a 21 handle… These are numbers that we haven’t see in a month of Sundays, folks.. 
 
In my usual review of what’s being said on Twitter, I came across this excellent, albeit sarcastic, quote from my fave economist, David Rosenberg, who said on Twitter: “Americans pay $2T of taxes yearly. Equal to 9 weeks of Fed balance sheet expansion. So as Dr. Powell medicates the patient with unprecedented machinations, why not print the money and pay the IRS our taxes? Surely taxpayers deserve as much support as HY bond fund managers, right?”
 
I read that and said, OMG! What a great idea! If the Fed really wants to help the economy, get back on its feet…. Why don’t they offer to the Treasury to pay the taxes of the citizens of this country? Why not? He, Jerome Powell, has paid for the bad decisions, bad loans, bad everything of these Companies, thinking that’s the way to help the economy… Why not pay us for our having to deal with no savings rates, no real markets any longer, and being on house arrest for the last 3 months!
 
Ok, I’ve said enough there… no reason to continue, right? Oh, darn it, I’m on a roll let’s keep the ball rolling, keep the ball rolling, girl the name of the game is love… Wait!, no time for Jay and the Techniques this morning, I’m tring my best to be serious here!
 
So… what we have here is a bunch of liars, cheaters, and just all around bad guys and gals… I still can’t believe the gullibility of Traders, and how they took this data hook, line and sinker… And since I’m so upset by all this maybe I had better head to the Big Finish, eh?
 
The U.S. Data Cupboard has nothing for us today… and as the week goes on, there’s not much, but on Wednesday, there will be a FOMC Meeting Announcement… I truly don’t believe that the Fed heads have a rate movement on their minds at this time… We will get a press conference by Fed Chairman Jerome Powell on Wednesday, but if he has anything to say about this meeting it will all be lies, and make believe scenarios…
 
We’re in the middle of a recession, when will Powell and his merry band of Fed Heads realize this, and call a recession a recession?
 
To recap… The currencies got smacked, Gold & Silver got whacked, and it was tied to a erroneous Jobs Jamboree report that print last Friday… I went out of my way to explain how erroneous this report by the Bureau of Lying Statistics tried to throw out there to see how the markets would react… And they reacted by swallowing the BLS BS hook, line and sinker… Chuck is so upset by this misrepresentation by the BLS that he’s beside himself today!
 
For What It’s Worth…. I just talked about how ridiculous the BLS jobs report was, but Dave Kranzler, who used to bust my chops for stuff I wrote about nearly every day, is still writing, just like me, and he has some choice words for the BLS and it can be found here: https://investmentresearchdynamics.com/through-the-looking-glass-employment-report-fraud/
 
Or, here’s your snippet: “ The employment report is a complete fraud. But as long as the market and it’s army of mainstream story-tellers focus just on the headline number, unicorns do exist. But the Devil is in the details:
However, there was also a large number of workers who were classified as employed but absent from work. As was the case in March and April, household survey interviewers were instructed to classify employed persons absent from work due to coronavirus-related business closures as unemployed on temporary layoff. However, it is apparent that not all such workers were so classified. BLS and the Census Bureau are investigating why this misclassification error continues to occur and are taking additional steps to address the issue.
 
If the workers who were recorded as employed but absent from work due to “other reasons” (over and above the number absent for other reasons in a typical May) had been classified as unemployed on temporary layoff, the overall unemployment rate would have been about 3 percentage points higher than reported (on a not seasonally adjusted basis). However, according to usual practice, the data from the household survey are accepted as recorded.
 
To Beyond that, there’s not much to say about this report. The numbers as presented are astonishingly implausible. It’s an insult to everyone’s intelligence for the Government and the main stream reporters and analysts to think that anyone with two brain cells to rub together would find this report believable. Ultimately, this attempt by Trump to stuff the ballot boxes early in the election cycle will back-fire – badly. maintain data integrity, no ad hoc actions are taken to reclassify survey responses.”
 
Chuck again… Dave had a great line for the BLS… Bureau of Lying Statistics… So I’m sticking with that from now on! I just can’t get over how suckered the markets were taken by this BLS report, but it is what it is, and now Gold needs to work to comeback from a large selloff because of the false number!
 
Market prices today 6/8/20: American Style: A$.6984, kiwi .6526, C$.7901, euro 1.1275, sterling 1.2660, Swiss $1.0386, European Style: rand 16.8038, krone 9.2674, SEK 9.2226, forint 304.93, zloty 3.9290, koruna 23.5610, RUB 68.64, yen 109.45, sing 1.3913, HKD 7.7498, INR 75.31, China 7.0809, peso 21.55, BRL 4.9575, Dollar Index 97.05, Oil $39.31, 10-year .91%, Silver $17.66, Platinum $837.31, Palladium $1,955.43, and Gold… $1,693.86
 
That’s it for today… Not as long and wordy for Monday as usual… You can tell that I spent most of the weekend outside and not at my computer, reading and researching! I’m almost finished reading my book “Dis United Nations”… Man, Peter Zeihan, sure put some research into this book, and I guess it won’t be too much of a spoiler alert, to say that in the future, he sees The U.S., Argentina, France, Turkey, and Japan as the major countries in their respective regions… Notice he didn’t say China, but said Japan instead? He thinks China has a real BIG problem that can’t be fixed… My new book should arrive today, which is the history of Sam Houston… With no new Harry Bosch, or Jack Reacher books, I’ve had to diversify my reading! HA The Alan Parsons Project takes us to the finish line today with their song: I wouldn’t Want To Be Like You… And with that, I’ll say that I hope you have a Marvelous Monday, and well continue to Be Good To Yourself! 
 
 
Chuck Butler
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A Pfennig For Your Thoughts