Big govt, Economy & Investments, Politics

White House Releases US-Mexico NAFTA Draft

The White House is moving ahead with its overhaul of the North American Free Trade Agreement regardless of being unable to reach a deal with Canada for now. A draft of the deal inked thus far between the Trump Administration and Mexico has been submitted to Congress ahead of the Oct. 1 deadline for submission under the “Trade Promotion Authority law.” This comes despite Canada’s best efforts to slow-walk the agreement. According to President Trump, the talks with our northern neighbor have completely broken down. “We’re not getting along at all with their negotiators,” he said. Which means simply that they may get left out in the cold this winter.

Here’s more from Washington Examiner…

The White House will give Congress the full text of its bilateral trade agreement with Mexico on Friday evening, the first step toward getting Congress to approve it.

The deal will be submitted even though the administration has so far been unable to get Canada to reach a new trade deal of its own. Canada’s absence will likely make obtaining congressional approval harder, due to lawmakers’ fears that it could disrupt the North American Free Trade Agreement.

The Trump administration is under pressure to get the deal approved quickly. Oct. 1 is the deadline for submitting the text under the terms of the Trade Promotion Authority law, which is why the White House is about to submit it, according to several press reports.

Any later and the deal would have to be renegotiated with Mexico’s incoming president, Andres Manuel Lopez Obrador, a leftist.

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Economy & Investments, Politics

Trump’s Economy a Win for Blue-Collar America

Blue-collar workers are winning across America even in the manufacturing industries, which are seeing a renaissance after being run into the ground under the Obama administration. According to The Washington Post: “Blue-collar jobs are growing at their fastest rate in more than 30 years, helping fuel a hiring boom in many small towns and rural areas that are strong supporters of President Trump ahead of November’s mid-term elections.” The message to DC is that incentivizing private industry is a win-win-win scenarios both companies, employees and for federal tax revenues. It’s economics 101 at work.

Here’s more from Breitbart…

President Donald Trump has shifted the economy so that once-disregarded blue-collar manufacturing workers are now recovering jobs faster than coastal service-sector employees, the Washington Post acknowledged Sunday.
“Blue-collar jobs are growing at their fastest rate in more than 30 years, helping fuel a hiring boom in many small towns and rural areas that are strong supporters of President Trump ahead of November’s mid-term elections,” said the Post, under the headline “Under Trump, the jobs boom has finally reached blue-collar workers. Will it last?”

According to the Post:

Rural employment grew at an annualized rate of 5.1 percent in the first quarter. Smaller metro areas grew 5.0 percent. That’s significantly larger than the 4.1 percent growth seen in large urban areas that recovered earlier from the Great Recession, according to an analysis by the Brookings Institution’s Metropolitan Policy Program of a separate set of Labor Department data released on Wednesday.

In the past year, the economy has added 656,000 blue-collar jobs, compared to 1.7 million added in the services sector.

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Economy & Investments, Politics

Bernie Sanders and Amazon Fight It Out

Amazon isn’t keen on Sen. Bernie Sanders’ call for its employees to submit videos of poor working conditions as part of a pressure campaign against the Internet mega-retailer. Socialists want to levy taxes against Amazon at a rate of 100 percent. “Amazon founder Jeff Bezos’ wealth increases by $275 million every single day,” Sanders wrote along with a video in his effort to drum up popular support for his tax plan. Amazon is disputing Bernie’s betrayal of its business practices, saying that in the United States “the average hourly wage for a full-time associate in our fulfillment centers, including cash, stock, and incentive bonuses, is over $15/hour before overtime.”

Here’s more from PJ Media…

WASHINGTON — Amazon hit back at Sen. Bernie Sanders’ (I-Vt.) call for employees of the retail giant to submit stories of poor working conditions, charging in a company blog post that the senator “continues to make inaccurate and misleading accusations against Amazon.”

In May, Sanders posted a video online highlighting the company’s wealth in juxtaposition to workers’ salaries, including news clips that detailed CEO Jeff Bezos hauling in within the span of 10 seconds what the average Amazon employee makes in a year as well as the company spending $13 million on lobbying last year.

“Amazon founder Jeff Bezos’ wealth increases by $275 million every single day,” Sanders wrote along with the video. “Meanwhile, Amazon workers have to rely on food stamps and public assistance just to survive.”

Last week, Sanders sent out an email to supporters asking them to sign a petition that declares in part, “I don’t believe that ordinary Americans should be subsidizing the wealthiest person in the world because you pay your employees inadequate wages.”

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Big govt, Economy & Investments, Politics

A Business Lesson for Socialists

As a career academic who teaches entrepreneurship, I am very familiar with the anti-business sentiment that pervades so much of higher education and the public discourse about policy in this country. It is a spreading plague grounded in infuriating ignorance.
So when I run across articles like “A Time to be Bold,” in Jacobin magazine, I want to pull my hair out.
The article, proclaiming the advantages of socialism over capitalism, features sweeping generalizations like these:
–“Capitalism is the chief source of human suffering today and a system that promotes the worst of human behaviors.”
–“Because a small number of people own the productive assets of society, most people have to seek out these businesses for work.”
–“Socialists believe that people should care about and care for each other. Capitalist markets, on the other hand, divide.”
The authors insist that society’s ills can be resolved with state ownership of all private property, redistribution of all wealth and collective decision-making about what to build, make, produce and sell.
What a prescription for disaster! (And how many times do we have to see these ideas fail?)
The article is constructed on one flawed assumption after another.
First, the authors seem to be equating business with huge multinational corporations. But most businesses in the U.S. are small. The U.S. has approximately 28 million firms. Of those, about 21 million — nearly 80 percent — employ no one but the owner(s). Of the remaining 7 million companies, the vast majority employs fewer than 20 people. Further, most businesses in the U.S. aren’t incorporated, but of those that are, fully 80 percent are small, closely held corporations owned and operated by families.
Second, millions of people — not a small handful — own their own businesses and the property in them. Hundreds of thousands more start new businesses every year.
Third, most entrepreneurs fund their startups with savings — not daddy’s trust fund.
Fourth, it takes a lot to grow an idea into a successful business of any size — much less a multinational corporation. A lot of what? Not money. Not power. Satisfied customers.
Far from being exploited victims, we as the consuming public weigh in on what we want from businesses every single day. Don’t think so? I’ll bet that wired-telephone manufacturers, camera filmmakers, newspapers, bookstores and record companies would love to have the business they had in the 1980s. But they don’t.
Why? Because inventors and entrepreneurs have developed something new. And we — the public — decided we liked it better.
What you get with “democratic socialism” is a state bureaucracy or some “people’s collective” deciding what products and services are available. Why should I have to settle for what the majority wants, if I want a niche product?
But this isn’t just a question of a handful of disgruntled connoisseurs. Virtually all radically successful innovations (automobiles, the internet, smartphones) started as niche products, precisely because “most people” wanted what already existed. The companies that had become successful producing the status quo had no incentive to change. But some entrepreneur thought, “I want something different. Maybe others do, too.”
Not only do entrepreneurs have to spend their own money to fund their ideas but they also then have to persuade you to part with your hard-earned cash for their product. If it’s completely new, that task is even harder; why try Y when you’ve always used X? But if Y is good, people start to buy it. Small numbers, at first. Then more. And eventually, lots of people want this new thing.
That’s how innovation works. That’s how new businesses become big businesses.
Democratic socialism — like all collectivist systems — kills innovation, precisely because the objective is to produce what “the majority” already wants.
So, how do we get the things no one’s ever heard of?
We don’t.
Under the socialists’ dream, you can kiss entrepreneurship and disruptive innovation goodbye. Top-down economic decision-making is structurally and systemically antithetical to innovation not only because it is majoritarian (at best) or authoritarian (at worst) but also because it is not user-centric. That’s the kiss of death for both startups and established businesses. Once you think you know what your customers need better than they do, you’re already dying, whether you know it or not.
The reason American businesses are so much more responsive to our needs than government is because businesses know (even if socialist writers don’t) that the public does control business; make customers unhappy and in no time, they have gone to your competition, and you’re out of money.
Of course, this assumes that the public has competitors to choose from.
Governments, by contrast, have no competition and no incentive to satisfy the public. They extract money from you by force (it’s called taxation) and assume that the money will never run out. That isn’t true, as citizens of Detroit, the state of Illinois or Venezuela can tell you with painful clarity.
The key is not to have businesses run like government (or, God forbid, by government). The key is to make government as responsive as the best-run businesses.
(Note that I said “the best-run businesses,” not ALL businesses or BIG businesses.)
This is the polar opposite of what the collectivists are clamoring for. But I’m right, and they’re wrong. How can I be so sure?
Because entrepreneurship produces what the people want. And collectivism fails every time.

To find out more about Laura Hollis and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

COPYRIGHT 2018 CREATORS.COM

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Big govt, Economy & Investments, Politics

Canadians Boycott American Food Products

In an ironic twist, Canadians attempting to boycott American-made foods are facing a dilemma: A LOT of Canadian food products are made in America. This is resulting in quite an epiphany for the #TradeWarriors to our north who are determined to play petty politics rather than rationalize a deal with President Trump. The unfortunate boycott attempt is part of an effort to retaliate against new tariffs levied on Canadian steel and certain other exports to the U.S. What may end up being a principled victory for Canada could, in the end, result in higher costs for food imported from other countries and in the black market trade.

Here’s more from Hot Air…

A funny thing happened along the way as Canadians decided to start a boycott against American-made groceries. It turns out that so many Canadian food products are made in America that consumers don’t even realize how much is actually coming from their neighbors to the south.

A perceived one-two punch to Canadians delivered from the Trump administration has the “Canada-nice” reputation in jeopardy. The usually easy-going Canadians are downright angry about the tariffs levied on Canadian steel and other products. Then, adding insult to injury, President Trump mocked Canadian Prime Minister Justin Trudeau as “very dishonest and weak” at the G-7 summit in his own country.

A hashtag-worthy movement began as Canadians began calling for consumers to #BuyCanadian, #BoycottUSProducts, and #BoycottUSA.

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Big govt, Economy & Investments, Politics

Senate Reveals Sanctions Package Against Russia

A bipartisan group of U.S. senators revealed a massive legislative package last week designed to slam the Russian government for interference in the 2016 presidential election along with their role in aiding opposition forces in Ukraine and Syria. The package is a combination of economic sanctions and shoring up of resources to NATO, which would include critical aid to Eastern Bloc nations. The group demanded demonstrable changes in Russia’s behavior both with the U.S. and its allies before a trade group is normalized. It’s the first legislative response from Congress since the investigation into Russia’s activities began.

Here’s more from PJ Media…

A bipartisan group of senators introduced deep sanctions on Russia today in response to the Kremlin’s continued interference in the 2018 campaign cycle and nefarious activities in Syria and Ukraine.

The Defending American Security from Kremlin Aggression Act of 2018 is sponsored by Sens. Bob Menendez (D-N.J.), Lindsey Graham (R-S.C.), Cory Gardner (R-Colo.), Ben Cardin (D-Md.), John McCain (R-Ariz.) and Jeanne Shaheen (D-N.H.).

“Unless Russia fundamentally changes its behavior, we must not repeat the mistakes of past Administrations of trying to normalize relations with a nation that continues to pose a serious threat to the United States and our allies,” said Gardner.

It rolls in another bipartisan bill from Gardner, McCain, and Sens. Tim Kaine (D-Va.) and Jack Reed (D-R.I.) that would require two-thirds of the Senate to approve any presidential effort to withdraw from NATO. It also includes provisions “expediting the transfer of excess defense articles to NATO countries to reduce some NATO countries’ dependence on Russian military equipment.”

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Economy & Investments, International

Art of the Deal: China Flinches First in Trade War

Last week President Trump made good on promises to force the Chinese into a position of better trade balance after years of currency manipulation and tariffs on US exports.

But the Dow dropped like a rock after fears that US exporters would be hit hard with the negative effects of a trade war with China.

Then came Monday and China flinched. Rather than responding with reciprocal import tariffs on US products, Chinese leaders offered to negotiate better trade deals to avoid a massive fight.

That was likely the entire motive behind Trump’s announcement in the first place.

And the Chinese bit hard.

Here’s more from Newsmax…

Following Friday’s massive losses on Wall Street amid reports of a trade war between the United States and China, the market bounced back Monday after China signaled it is willing to negotiate better trade deals with the Trump administration.

The Dow’s point increase was the largest single-day gain since 2008. The Financial Times reported early Monday morning that China is offering to buy more U.S.-made semiconductors to help reduce the $375 billion merchandise trade surplus it has with America.

Gordon Chang, an expert on North Korea and China, told Newsmax TV Americans shouldn’t worry about a trade war anyway because it would be a one-sided affair.

“Everyone has been worried about a trade war, but we shouldn’t because we hold most of the high cards,” Chang said. “And the Chinese really have no way to win a trade war with the United States if they face a determined American president.”

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Economy & Investments

Winning: Unemployment Lowest Level Since 1973

There’s a curious phrase we’re not hearing much at all now that the Campaigner-in-Chief is playing golf full-time: ‘jobs saved’.

That faux statistic from the Obama administration was part of the so-called ‘shovel-ready’ stimulus that never really stimulated much of anything.

But with a pro-growth, pro-free market administration in place, Wall Street is responding and salaries, investments and jobs are on the rise…actually.

In the midst of the longest growth trend in a generation, jobless claims are now lower than they’ve been since before the Carter administration.

That means more than half of all Americans haven’t seen economic growth like this in their lifetimes.

That’s not fake news.

Here’s more from Washington Examiner…

New applications for unemployment insurance benefits plunged by 41,000 to 220,000 in the second week of 2018, the Labor Department reported Thursday, the lowest level in nearly 45 years.

The report easily beat forecasters expectations for new jobless claims to drift down to around 250,000.

Low jobless claims are a good sign because they suggest that layoffs are relatively scarce. Federal Reserve officials and investors watch the numbers because they come out weekly, providing an early warning sign of any trouble.

New claims, which are adjusted for seasonal variations, are well below the mark that would suggest that unemployment is going to rise. Over the past year, new claims have scraped multi-decade lows as the jobs recovery has steadily reduced the number of unemployed workers.

The total number of people receiving unemployment benefits, which are available for up to 26 weeks in most states, stayed below 2 million, also near the lowest levels since the 1970s.

And at 4.1 percent in December, unemployment is as low as it has been since the dot-com bubble.

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Economy & Investments, Politics

Yuge: Trump Opens Up Offshore Waters to Drilling

Even before Obama’s war on fossil fuels, offshore drilling has been severely curtailed for decades.

That is until this week after the Trump administration announced authorization of new offshore drilling, including a billion acres in the Arctic.

What’s most significant about this is that the oil bust from a few years ago forced efficiencies among American exploration companies that has them now running lean and efficiently.

And it’s on that premise that many analysts expect American shale to destroy OPEC finally.

That’s BEFORE the offshore drilling option which, when added to the existing shale plays, represents an American energy independence explosion.

Winning.

Here’s more from Hotair…

“Energy superpower” is the same term an S&P analyst used today to describe America’s exploding shale industry, predicting that the U.S. will be a top-10 global oil exporter by the end of Trump’s term. Today’s decision makes that even more likely. The catch: Although righties love the idea of more drilling, voters in coastal states like North Carolina and Florida tend not to because it poses environmental risks (right, BP?) and damages tourism.

A 2016 poll of Florida found support for offshore drilling at 32/47, a steep decline from the 44/39 split of two years earlier. Rick Scott, normally a Trump ally, put out a statement today noting that “I have asked to immediately meet with Secretary Zinke to discuss the concerns I have with this plan and the crucial need to remove Florida from consideration.”

North Carolina and Florida are both crucially important to Trump in 2020 and he has no margin for error in the latter given the influx of Democratic-leaning Puerto Ricans after Hurricane Maria. Maybe it won’t matter, as the new drilling policy is still 18 months away from being finalized and many years away from drilling actually beginning in the new waters given the lack of infrastructure out there right now. But it’s a risk politically.

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Economy & Investments

Mike Galiga: Black Monday Cometh Again

One crucial task of the agile trader is keeping up with market-moving news. One little event anywhere in the world can throw gasoline on the hottest bullish fire OR send it plunging like a barrel over Niagara. In fact, in this ever-more-connected world, hot news- good or bad- may be the biggest catalyst for short-term gains or losses- bigger than traditional fuel like earnings reports, new product announcements and perhaps even FED decisions. Every day I’m consuming headlines like most people consume air. It’s a relentless global hunt for new, short-term profit opportunities that (sometimes distant) world events are presenting to stock & options traders.

To these well-seasoned, “been there and done that” eyes, the pile of evidence in support of the forecasts I’ve been sharing with you keeps building. And note: I work d*mn hard to keep subjectivity & bias out of such reviews, striving very hard to avoid the terrible amateur trap of seeing only what I want to see. I know compromising one’s objectivity is a massive killer of any good trading discipline, so I probably look for counterpoint harder than I look for point.

Nevertheless, I see it unfolding more & more… like the old tv shows & movie prop crystal balls going from smoky & foggy to an ever-clearer picture. Markets are predictable. Markets repeat events again and again and are driven by the same catalysts again and again. The trick to convert market smoke & fog to clarity or even near-certainty is knowing where to look, recognizing the patterns of the past and weaving that with the group sentiment of the present. Big volatility is coming… probably more than we’ve ever seen before. It’s going to be a wildly exciting ride to my medium-term forecast target of DOW 30K. Knowing when to profit on the big bull plays AND, perhaps more importantly, when to profit (not run & hide) on the big bear slides and you can make a fortune… FAST.

Haven’t we seen this movie before?

Yes! Yes we have. During the 1980s, we saw a similar boom in stock values with investors getting hyped up on the apparent record growth rally in the markets. And it was welcomed news after a dismal environment of stagflation with mortgage interest rates in the stratosphere.

But what happened toward the end of that movie? We experienced one of the worst stock market corrections in our nation’s history, second only to the crash that preceded the Great Depression. We remember that day as Black Monday when the Dow Jones dropped nearly 25% in a single day. That crash was precipitated by some market trends that are eerily similar to what we’re seeing today. You might be thinking, “Such as?..”

The Dow’s explosive growth had risen to over 2,700 that summer (remember when DOW 2,700 was a sky high measure of market success?), having closed at its height to a gain of 44% over the previous year. Similarly, we saw the crash presiged by unrest in OPEC with a bust in the oil markets of 50% the previous year. And of course there was unrest in the Middle East and elsewhere, which made market prices highly volatile.

Looking back at those events today, it’s a classic version needing to see the (catalyst) news in all of the right places… and separating noise from the news that would make- or shake- the markets. Does any of that sound familiar? It should because we have much the same conditions setting up here- in late 2017. And that’s why I perked up to the headline that trumpeted David Stockman’s criticism of President Trump’s new tax reform package.

Stockman was the Director of the Office of Management and Budget under the Reagan administration. So he knows what a Black Monday scenario looks like… because HE WAS THERE. And he’s doing the craziest of crazy things in modern politics: he’s calling a spade a spade. That’s something almost no other public figure dares to do: say what he REALLY foresees instead of spinning some almost canned PR message hoping the herd will keep right on ignoring reality. Just ignore that spade. Just keep throwing your money into the same pot. Just keep kicking that can a little further down the road. Oh boy! Haven’t we all seen this movie too many times before?

In a recent CNBC piece, Stockman is quoted with a prediction of as much as a 70% drop in stock prices. SEVENTY PERCENT! If that actually plays out, the DOW would be much closer to that record back in 1987 than the record in 2017. Take a moment and do the math yourself. Where is the DOW today? Multiple that by 0.3. Look at that result. Think about that result. Impossible? Where was it just about 10 years ago when we had the last market meltdown? Is the result and that reality really so far apart one could see it as an impossibility now?

Stockman explained that the economy sees a major correction around every eight years, give or take. It’s been more than that since the Great Recession. He detailed, “There is a correction every seven to eight years, and they tend to be anywhere from 40 to 70 percent. If you have to work for a living, get out of the casino because it’s a dangerous place.”

In the interview he explained the factors that might be creating an inevitable drop in the market. He goes on, “This is a bubble created by the Fed. We’re heading for higher yields. We are heading for a huge reset of pricing in the risk markets that’s been based on ultra-cheap yields that the central banks of the world created that are now going to go away because they’re telling you that they’re done.”

Perhaps worse than that is this other somewhat quiet discussion about unwinding the FED balance sheet. While that could mean a lot of things, I suspect a massive big buyer- perhaps the default buyer that has thrown much of the money at this market to drive it up to these incredible records is now wanting to STOP BUYING and start selling. What happens to any market when enthusiastic buyers become sellers? Only one thing happens there. You can count on it.

If that sounds familiar, it should. It’s essentially what I’ve been saying for months now. The prices of major stocks are hitting records every week which is creating artificial paper wealth that isn’t backed up by anything tangible. I really don’t think it’s the traditional buyers doing all this buying to push the markets higher & higher. I increasingly think it’s mostly ONE buyer- a holy mother of all buyers if you will- and even “she” has now formally communicated that “she” wants to wind down “her” purchasing and flip into selling off some of “her” holdings. Where does that go? Where is the only place that can go?

Yet market records are being realized almost on a weekly basis… and touted hard in every way they can be heard. The herd doesn’t (maybe can’t) listen that attentively… or doesn’t remember the past or recognize how the past repeats again and again… until… in hindsight, the “shoulda, coulda, wish I hads” are flying near the tail end of a swift crunch… or crash. The herd may hear a little bit of such warnings before the event… but fall prey to the much louder allure of “another record day…” perhaps throwing even more money into the pot to try to capitalize on the endless record days that are certainly going to come after this one. How often has ANY stock market gone up and up and up indefinitely? Exactly. “But it’s different this time.” Watch out!

Many people may discount this warning as just another conspiracy theory. Others will freak out and start pulling their investment dollars from the market. But the smart money sees such scenarios as opportunities. Agile investors will make the most of bull & bear by taking advantage of the tools that make money on BOTH. A great tool is also a dirt-cheap one: options. A call option buyer is making a relatively cheap, leveraged bet on a rising stock or market. A put option buyer is making a comparably cheap, leveraged bet on a falling stock or market. A shrewd & agile investor will buy & close call & put options interchangeably… like one is just as good as the other (and it is when used at the right time and in the right way).

Most investors & traders only see the markets through a singular (always bullish) lens. In other words, the only way they see to make money is on the rising side: buy a stock, stock moves bullishly, sell the stock & book a profit. There’s almost a dependency on a perpetual bull market for most people. However, the few that make the MOST money investing & trading work the other side too. They are not OUT doing nothing when the bull cedes the stage. A roaring bear is just as lucrative- often even more in many cases- when one is positioned to make money on such a move.

Do you know how? Do you have a good feel for vehicles like call & put options and how to use them to make money as this market rises AND when it’s falling too? Maybe you think you know a little but are not confident you know enough to actually put such knowledge to good- and profitable- use? If any of that resonates for you, speak up… right now. Email me at Mike@MikeGaliga.com. My team & I are hard at work developing some major new goodies to help individual investors just like you take full advantage of the wild volatility rapidly approaching all of us. Email me letting me know you want to learn and you’ll be the first I alert when our work is ready to be utilized. Don’t be a “shoulda, coulda, wish I had” ever again. My team & I are here to help. Let us.

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