Non-Farm Friday – The Calm Before the Storm

Certainly Trump needs a distraction after such a terrible week for his Presidency.

"*You guys know what this represents? [Maybe it's the calm before the storm](*"**

That's the word from our President last night as he prepared for a dinner meeting with his military commanders. The press asked him WTF he was talking about – as the President has many enemies he'd like to attack from Kim Jong Un to NBC News - who knows which way the drones are going to fly and Trump, ever the consummate game-show host, left us with a cliffhanger saying "*You'll find out*.**"

Certainly Trump needs a distraction after such a terrible week for his Presidency and he's been working overtime to keep the haters spinning in circles, rolling back environmental regulations, arguing for gerrymandering in the courts, taking away birth control, taking away abortion (the GOP needs more poor babies to vote for them), demanding Congress violate the first amendment while defending the second in the wake of tragedy… Hell, I bet you don't even know the US refused to join the rest of the civilized World in condemning the DEATH PENALTY for LGBT people in other countries.

That's right, the US actually voted AGAINST a UN resolution that condemned the death penalty as a punishment for being gay. This is not fake news, this really happened – in America – in 2017. The fact is that we live in a world where even today gay people are being arrested, tortured and killed because of their sexual orientation. And the United States didn't just let an opportunity to condemn those atrocities pass by - it did much worse. It took a stand against that condemnation.

This latest vote came as a stark reminder that under the current administration, the United States hasn't just given up its commitment to advancing human rights. It has, instead, changed sides in that struggle. The resolution urged countries that have still not abolished the Death Penalty (most countries have) to make sure it is not imposed as punishment for "apostasy, blasphemy, adultery and consensual same-sex relations." That's right, blasphemy too – like speaking out against the Trumpster! Maybe that's why you haven't heard about this from your regular news outlets…

The fact that the United States, the birthplace of the modern human rights movement, has opposed a measure supported by every single Western and Eastern European country in the body, and every Latin American country (only Cuba abstained), and instead sided with Saudi Arabia, Egypt, China and other countries with troubling human rights records, makes it a very dark day for human rights.

Joe Biden made a speech condemning Trump saying the US is "heading down a very dark path” and urged Washington’s foreign policy establishment to take a stand:

I really feel incredibly strongly that the women and men sitting before me, who have been the intellectual backbone of the foreign policy establishment in this country for decades, have to start to speak out. President Obama and I have been very quiet and respectful, giving the administration time, but some of these roots are being sunk too deeply. I believe it’s time to challenge some of the dangerous assumptions that are attempting to replace that liberal world order.”

Acknowledging that many Americans feel left behind by globalization, he said: “The appeal to populism and nationalism is a siren song, a way for charlatans to aggrandize their power, raise themselves up, break down those mechanisms that were designed, whether in our constitution or internationally, to limit the abuse of power, and destabilize the world. It’s not alarmist. We’re walking down a very dark path that isolates the United States on the world stage and, as a consequence, endangers – not strengthens – endangers American interests and the American people.”

He derided Trump’s recent appearance at the UN, where the president emphasized national sovereignty and self-interest. “To stand in the well of the general assembly, and wave the flag of narrow nationalism, while warning of a future vulnerable to ‘decay, dominion and defeat’ marks a dangerous revision of political small-mindedness that led the world to consume itself in two world wars in the last century, and it abandons America’s hard-won position as the indispensable nation, as a leader that inspires more than fear. Trading insults. Deploying taunting nicknames. Promising to ‘totally destroy’ a country of 25 million people. Such erratic action only worsens the crisis and rejects the possibility of diplomacy.”

Sorry if this has "*nothing to do with the markets*" but it has to do with life on Earth and, if you are first hearing about these things from me – you need to wonder what has happened to the once-free press in America that a massive reversal of position on Gay Rights goes unreported and former VP, Joe Biden's criticism of Trump goes uncovered or that the President of the United States hinting of a coming war passes with barely a mention – and the markets march up and up – as if nothing is wrong in the World. We're in for a rude awakening – we just don't know when…**

8:30 Update: Complete and utter disaster on the Jobs Report! Non-Farm Payrolls were DOWN 33,000 jobs (with +100,000 expected by leading economorons) and that's off from August's +169,000 and the first negative number in many years – go Trump! You can't blame this on the Hurricanes: As it turns out, the number of people hired by insurance companies as claims adjusters more than made up for the number of jobs that were displaced by the storm.

Also, from the bureau of fake statistics, July has now been revised down from 189,000, which boosted the Dow 1,000 points that month, to 139,000 the lowest number of jobs added since July (though now trounced by September). Will the market now take back those 1,000 Dow points (5%) and then what about this month's terrible report? Is bad news still good news or is the Fed already locked into a December hike, no matter how crappy the data?

There's nothing good about this jobs report for the markets. Less jobs is less consumers to spend and wages continue to pressure upwards, 0.5% this month on a 6% annualized pace – there's a margin-killer. There are 159,830,000 working Americans who are making an average of $26.55/hr. That's $22.23 for the bottom 99%, "non-supervisory" positions and in order to increase the average by $4.32 by including the Top 1%, we can see that the Top 1% has to average $450/hr – about 20x more than the Bottom 99% make. Yep, that's about right.

So if you hear reports about 6% wage growth and your paycheck isn't moving – now you know where the money is going!

You can't grow an economy by only giving money to the richest 1% of the people. This has been proven over and over again for thousands of years. This is the leading cause of revolutions, for God's sake! At a certain point, it occurs to 99 people that if they kill that one guy and divided his $450 by 99 ($4.55 each), they'd ALL be 20% richer. THAT'S Democracy!

It's not only bad for the continuation of a peaceful nation but it's simply bad for the economy when you pool wealth in the hands of so few people. Businesses that cater to the masses are very vulnerable as the masses run out of disposable income and the GOP's joke of a tax cut (see previous rants) is only going to make things worse, not better. At some point (and we think it's this earnings period, which covers the -33,000 jobs and the -50,000 revision) this will start to show up in the earnings of a lot of companies that are trading at record highs because people don't think about the repercussions of these policies – they simply believe tax cuts are good and buy every stock in sight.

That's how bubbles form. We may soon see how they pop!

Have a great weekend,

  • Phil