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Yes, Liars Figure, and Figures Lie

jhaddock (March 13, 2009)

Issue #410: Thursday, March 12, 2009

But Still, I’ll Trust the Figures First

Also In Today’s Letter…

Chuck Butler Image

By Chuck Butler It was a wonderful Wednesday yesterday for the currencies and gold, after seeing them back off earlier this week! I’m still in Jacksonville for a company event, but tomorrow I’m heading south to start my spring vacation!

It was 29 degrees in St. Louis when I got in the car to leave for the airport yesterday morning. And it was 77 degrees when I finally arrived here in Jacksonville. Yahoo! But even as loud as I can say yahoo for the warm weather (which I’ve said over and over since I got here), it’s not as loud as currency investors yelled yesterday, as the euro led the currencies higher and higher all day long.

And the gold holders weren’t far behind, as the shiny metal got back to US$900, after seeing three days of selling in a row! A lot of the people here asked me about gold yesterday.

Naturally, I had to tell them the same thing I’ve been writing to you dear readers for some time. I said, “These are uncertain times, and in uncertain times, it calls for the “uncertainty hedge!” That’s exactly what happened today. Stocks, which had rallied on the Citicorp news the day before, failed to follow that up.

Now as you know, I’m no stock jockey, but I still like to give my two cents on this rally since it affects currencies.

As I told the Vice-Chairman last night, do you believe that Citicorp really had a profitable first two months? I mean, just a couple of weeks ago they were begging for more TARP money!

Keep in mind that liars figure, and figures lie… Not that it wasn’t true, but come on! They were begging for money just a couple of weeks ago when they supposedly were booking profits? Then why were they knocking on TARP’s door looking for more handouts?

So currencies finally broke from stocks for the first time in months. Yes, I know stocks gained a tiny bit on the day, but not the kind of gain that would match the rally in the currencies!

But it was a short-lived event. It seems traders and investors couldn’t stand to see the euro reach 1.28. They started taking profits in the overnight markets and brought the single unit back below 1.28. It’s trading about at the same level as yesterday morning.

So, all that hoopla yesterday, gone down the drain overnight. The Spinners had a great song titled, “It’s A Shame.” Appropriate here…

Obama Wants the IMF to Sell Their Gold? Not Good.

And in something you may have missed, because the media certainly missed it…

U.S. Treasury Sec. Geithner said that the Obama administration will press Congress for legislation to allow the IMF to sell some of its gold. Uh oh! If the IMF is going to resort to selling gold, then you-know-what is about to hit the fan!

Speaking of Geithner, yes, I listened to those of you who threatened me with physical harm if I kept calling him “the cheater.” As you see, I’m now calling him by his name. (You’re lucky you didn’t make such threats when I was a younger man…I would have just doubled the insults. But today, as I’m an old, crippled, cancer-fighting man, I’ll let you win this round.)

But, I digress. So speaking of Geithner, the Wall Street Journal had a great piece on him yesterday…

“Obama and Geithner are failing in their efforts to revive the economy, according to participants in the latest Wall Street Journal forecasting survey.

“A majority of the 49 economists polled is dissatisfied with the administration’s economic policies. On average, they gave the president a mark of 59 out of 100, and although there was a broad range of marks, 42% of respondents graded Mr. Obama below 60.”

So apparently, it’s not just me who’s a bit disgruntled.

Does Mr. Yen Have More Connections Than We Thought?

Just a few days ago, the Japanese yen looked like it was on shaky ground, but now it has put in two days of stellar performances. That makes one wonder if what “Mr. Yen” had to say the other day is working its magic with the yen. Recall, I told you that the former currency guru of Japan, Sakakibara, (known as “Mr. Yen”) said the yen could rise to 70 vs. the dollar. The yen was supposed to trade in a range between 70 and 100.

At the time, I disagreed with the 70, but thought 100 might hold.

But I didn’t wonder too long here on this subject, because I know in my heart of hearts that the yen does not have the intestinal fortitude to climb past 85. (Remember, the yen is a European priced currency, so as the price goes down, the more value it returns in dollars.)

That’s it for today… As I said at the beginning, the trip here was somewhat uneventful. I didn’t have anyone drop their hard case luggage on my head or anything. The plane out of St. Louis was delayed because of a “maintenance issue.”

When I got here, I told my colleague Kristin that I wish they wouldn’t tell me these things! Just say, “we’re waiting for a passenger to board,” or something. One time, years ago, the Big Boss, Frank Trotter, and I were looking out the window of a plane, and saw what appeared to be oil pouring out of the plane’s wing. We were just about to get up and get off the plane, when a maintenance truck pulled up to stop the bleeding. Things you wish you didn’t know about, for sure!

Okay, I give a presentation on World Markets this morning, so I have to look sharp, feel sharp, (well at least, look sharp). Haha!

Time to go… I hope you have a Thunderin’ Thursday!
Chuck

EDITOR’S NOTE: Our publishers, Erika Nolan and Shannon Crouch just released the definitive work on investing abroad and protecting your assets at all cost. This book is already being called “Wall Street’s Worse Nightmare,” and “the LAST book the IRS wants you to read.” And naturally, this book features an entire section on currency investing. Please read on for a FREE excerpt from this just released work…

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