It Wasn’t All Great News: Multiple Jobholders Soar To Record High

Source: Zerohedge

While the headline payrolls number was stellar, coming in higher than even the most optimistic Wall Street forecast, one aspect of today’s jobs report that will likely become a major talking point for Democrats and other critics of the Trump economy, is that the number of multiple-jobholders soared from 7.855 million to 8.156 million, a monthly surge of 301,000 – the biggest since July 2018, and an indication that the jobs number was far weaker than the headline represents if one excludes all those workers who represented two jobs to the BLS’ various surveys. Yet even this number had its silver lining, because while the Establishment Survey’s 224K increase was impressive, and the best monthly print since January, at the same time the BLS reported that the number of Full-Time workers soared by 453K, a dramatic reversal to the trend so far in 2019, where 218K full time jobs had been lost in the January – May period. At the same time part-time jobs tumbled by 174K in June, sending the part-time total for the first half to -187K, with most of the improvement thanks to the June number. To summarize: June saw a surge in full-time jobs, as total US employment hit a record high of 157 million workers, however virtually all of this increase was due to workers being forced to get a second (or third, or fourth) job, double- (and triple-)counting those who can no longer make ends meet on one job alone.

In other words, enough ammo for both Republicans and Democrats to praise/slam the Trump economy.

 

“Nothing Was Solved In Osaka – The US And China Remain On Collision Course” Source: Blain/Zero Hedge

“Trump vs Xi agreed to resume trade negotiations. No more tariffs, but the old ones still in place. Huawei ban to be reconsidered. Trump also met Kim in the DMZ. It was also the end of H1 2019, with stock markets posting their most impressive gains since 1997 even as bonds proved the top returning assets – which should have everyone wondering and worrying how! I reckon that puts us in a very interesting position for the next 18 months. Trade wars will remain a major distraction and concern – whatever happened in Osaka over the weekend, about the only thing we can confirm is nothing is really fixed! Instead, the dominant factor in coming months could be the US Federal Reserve – and how it is likely to come under increasing pressure from Trump….The renewed trade negotiations between China and US will have little effect on market direction. The news will decrease expectations of an imminent global recession, but it also reduce the pressure on the Fed to cut US rates. Hence it is Market Neutral….Both Trump and XI were playing for time – Trump’s demands about opening up China to US agri-goods is simple play for an electoral boost. XI needed the promise of no further tariffs and a Huawei rethink as a sign he’s got concessions. Neither side has much to gain politically from pushing swift agreement, (economically is a very different matter, both China and US will still suffer), meaning trade doubts drag on and remain a major market concern through rest of year…The big danger is that market believes Fed is going to deliver, and it doesn’t. That’s why I think it’s all about how Powell stands up to Trump in coming months.”

 

Capitalism Is Broken

Source: Daily Reckoning

“No rate hike last week. Jerome Powell has decided to sit on his hands — for now. In his very words: “It’s important that monetary policy not overreact to any one data point… The FOMC will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion.’…The 10-year versus 3-month yield curve recently inverted to its lowest level since April 2007. Meantime, 10-year Treasury yields hover at two-year lows — 2.04%. One Bloomberg opinion piece instructs us to prepare for 1% yields. As the old-timers know… the bond market gives a truer economic forecast than the chronically dizzied stock market. Meantime, the New York Fed’s recession model reveals a 30% probability of recession within the next year.  It last gave those same odds in July 2007 — merely five months before the Great Recession was underway. JP Morgan places the odds of recession in the second half of this year at 40%. And Morgan Stanley gives a 60% likelihood of recession within the next year — the highest since the financial crisis. Conspicuously absent from [last week’s] statement was the word “patient.” Thus Mr. Powell telegraphs that he is ready to move. Federal funds futures presently give nearly 90% odds of a July rate cut. The market further expects as many as three rate cuts by this time next year — perhaps four. We are compelled to restate the blindingly obvious: The Federal Reserve has lost its race with Old Man Time. The opening whistle blew in December 2015… when Janet Yellen came off the blocks with a 0.25% rate hike. If the Federal Reserve could cross the 4% finishing line in time, it could tackle the next recession with a full barrel of steam. Alas… it never made it past 2.50%. The Federal Reserve cannot return to “normal.”…Wall Street has Mr. Powell in its hip pocke…But it is not only the Federal Reserve… Last year the world’s major central banks were pledging to “normalize.”But now they are in panicked retreat… All have taken to their heels, hoofing 180 degrees the other way…Yet the central banks have only themselves to blame… They grabbed hold of the poisoned apple during the financial crisis.  They gulped… and took the first fateful nibble. It proved nectar to the stock market. Encouraged by the results, they soon munched the full dose… and later went plowing through the entire tainted orchard: Zero interest rates, QE 1, 2 and 3 — Operation Twist — the lot of it. Even with trade war raging and recession hovering, stocks are within 1% of record heights. And so the banks are too far gone in sin to turn back now. Their greatest casualty? Capitalism itself… The Federal Reserve’s fireworks will land as duds against the next recession. Cries will then go out for the artificial savior of government spending — Modern Monetary Theory (MMT). Free college tuition… universal Medicare… jobs for all… a $15 minimum wage…a possible Green New Deal… These and more will be in prospect. Politicians will go running through the Treasury as a bull runs through a china shop… and leave the nation’s finances a shambles. Only then — too late — will they discover that debt and deficits matter after all..”

 

Why the Gold Rally Is Set to Run 

Source: Constable/The Street

“It’s all systems go for gold investors. The bullion market is stirring from a multiyear slumber and looks set to enter a sustained rally, experts say. Double-digit increases within the next 18 months may be only the start of the price surge. ‘[W]e believe there is a very good chance that this marks the beginning of a new gold bull market,’ says gold market veteran Joe Foster, portfolio manager for the VanEck International Investors Gold Fund. Foster says the run is ‘likely to last several years.’ With that in mind, smart investors should consider buying a heftier than usual helping of gold…Swiss bank UBS now sees the potential for the price to rise as high as $1,580 by the end of next year. That’s around 14% higher than its current price….Negative yields mean that investors are guaranteed to get back less money than they put in, and that is a game changer for the gold market…’Negative yields remove the opportunity costs from holding gold,’ says Milling-Stanley….Continued geopolitical uncertainty around the world is making investors nervous, and they want to invest in something that they can count on, like gold.”

 

The Economic Bubble Bath 

Source: Zero Hedge

“At the end of a long, tiring day, we may choose to treat ourselves to a soothing bubble bath. Surrounded by steaming water and a froth of sweet-smelling bubbles, it’s easy to forget the cares of everyday life….We’re presently seeing an economic anomaly – a host of bubbles, inflating dramatically at the same time. The Stock Market Bubble – Only a decade ago, stocks plummeted and billions were lost by investors. But then, before the system could be cleansed of the detritus, more money was artificially pumped into the system and stocks began to rise again. Margin debt is now at an all-time high and complacency is at a maximum. The present condition looks quite a bit more like 1929 than 2008, and the stock market is overdue for a crash. This time, it promises to be much greater than before, as the debt that’s fueling the bull market is at a level that’s historically unprecedented. The Bond Market Bubble – This bubble could just as easily be termed a ‘debt bubble,’ as bonds are simply a promise to pay a debt at a future date…By far, the largest portion of the bond market is that of Treasuries, or government-issued bonds…Bonds are presently in a bubble of epic proportions, and with every month, the foundation underneath them is crumbling more, due to ever-increasing dumping. The Real Estate Bubble – In 1999, the Fed, then under Alan Greenspan, convinced the US president to repeal the Glass Steagall Act, freeing the banks to create the types of loans that helped cause the Great Depression. This, of course, led to the real estate crash of 2007, but instead of the banks going belly-up, they were rewarded for their misdeeds through bailouts that were paid for by taxpayers…Prices have once again risen and, at this point, are overdue for a major correction. That correction is now well under way….The present bubble bath is an anomaly without precedent and, as such, promises to result in a crash of unprecedented proportions.”

 

For 2020 Democrats, It’s ‘Ignore The Economy, Stupid’ 

Source: Issues Insights

“How do Democrats sell their policies when the economy is doing well and unemployment is at 50-year lows? By avoiding the subject. At least, that’s what Democrats did during the two nights of debating. The very first question asked in the first debate, by Savannah Guthrie, was about whether the Democrats’ far-left agenda would risk the economic growth we’ve been enjoying. ‘Seventy-one percent of Americans say the economy is doing well, including 60% of Democrats,’ she said. ‘What do you say to those who worry this kind of significant change could be risky to the economy?’ Sen. Elizabeth Warren, the first to answer, pretended not hear the question. Instead, she went on a rant about how the economy is ‘doing great for a thinner and thinner slice at the top.’…And when Democrats did talk about the economy, it was in grim, Dickensian terms. Cory Booker said, ‘I see every single day that this economy is not working for average Americans’…For Kamala Harris, ‘this economy is not working for working people.’….Democrats instead debated about how much free stuff they would give people, including health care to illegal immigrants. The economic discussion, when it occurred, focused mostly on redistribution and class envy….Ignoring the solid gains that families are making right now won’t make them go away. And constantly portraying the economy in the grimmest light only makes Democrats look out of touch.”

 

Healing the Divisions in Our Country 

Source: New York Times

“Love your enemies? In this America? ‘Maybe this seems impossible to you,’ writes Arthur C. Brooks in Love Your Enemies: How Decent People Can Save America From the Culture of Contempt. ‘You might say: ‘There are some people who are simply beyond the pale. There are millions of awful people in this country who advocate ideas we cannot tolerate. They deserve our contempt, not our love!’ I have heard this sentiment from serious journalists, respected academics and mainstream politicians. I have thought it myself….Brooks beholds America’s 21st-century tribal feuds – which on a national scale add up to nothing less than a religious war, a clash of faiths and value systems – with a clear, intelligent eye and a hospitable attitude that is rightly focused on the spiritual dimensions of the problem: Only transcendence can open the way to better solutions down the road. The real swamp just now is in the American mind….Brooks is the outgoing head of the American Enterprise Institute, an influential conservative think tank in Washington, he is an advocate for free enterprise and a serious Catholic (a convert in his midteens) who has gone up into the foothills of the Himalayas to seek counsel from his friend the Dalai Lama. He draws not only upon neurology and behavioral science but also upon the ideas of Dale Carnegie’s ‘How to Win Friends and Influence People.’ The essence of our woes, according to Brooks, is that ours is a ‘culture of contempt.’ ‘My point is simple: Love and warmheartedness might not change every heart and mind, but they are always worth trying, and they will always make you better off.’….Brooks suggests, America’s path forward lies in its learning to transcend self-destructive, obsessive politics in order to think clearly and to use the intelligent competition of ideas to advance the country.”

 

Why Both Political Parties Favor Inflation 

Source: Bonner/Bonner And Partners

“We’ve been pulling on threads for the last two weeks. Today, we try to knit them together. First, we observed that ‘stimulus,’ no matter what they call it, is really just a form of inflation. Whether the feds run deficits, push rates down, offer tax cuts, or buy bonds – the idea is always the same… to put more money in play…When the president says the Federal Reserve should cut rates, for example, he is just calling for more inflation. Without it, he believes, bad things will happen….Republicans, Democrats, socialists, conservatives, communists, Bolsheviks, and Trotskyites – now, everyone seems to believe it… and they’re even ready to rig the most important price in capitalism – the price of capital itself – to prove it….Second, we realized that inflation – whether in the financial economy or the Main Street economy – has more or less the same effect. It makes a helluva goulash out of the crucial price signals. Then, nobody knows anything. They get confused. They make mistakes. Prices rise, but GDP falls. People have more money, but they get poorer. This process is undeniable in consumer price inflation. Just look at those in Venezuela…Less obvious is what happens when asset prices are inflated. The Fed lowers rates. More money flows into asset prices (inflation)….Third, once inflation gets going – whether asset prices or consumer prices – the authorities have only two choices: Inflate or Die….America’s insiders, elite, movers-and-shakers, and Deep Staters have made about $30 trillion from unearned stock market gains. That ill-gotten wealth will disappear if the feds stop inflating…The value of all the publicly traded companies in America is about $30 trillion. But they owe $15 trillion, thanks largely to the $15 trillion they spent buying their own overpriced shares. And now, a 50% drop in the stock market would make the whole kit and caboodle insolvent. Both political parties favor more inflation. Without it, they think we are doomed. They’re right. And they’ll inflate. And then, we will be even more doomed.”

 

Financial worries keep most Americans up at night 

Source: BNN Bloomberg

“People tumble into bed each night across the U.S., hoping for pleasant dreams. Most would likely settle for no dreams at all, just as long as they can get some rest. But more than half of Americans toss and turn because of money issues, according to a new survey. Bankrate has found that 56 per cent of Americans lose sleep over at least one money issue, with nearly a third worried about everyday expenses. Those most likely to lose sleep over money included Northeasterners, low-income earners and parents with children under 18, the survey found. Gen X (aged 39-54) lost the most shuteye at 64 per cent, followed by millennials (aged 23-38) at 58 per cent and baby boomers (aged 55-73), who clock in at 54 per cent. The problem doesn’t affect only those with lower incomes. More than half of those making over $80,000 reported losing sleep on financial issues, compared to 63 per cent of those who make less than $30,000, according to the study. ‘When you’re wrestling with a big issue, it’s important to break it into manageable chunks’ said Bankrate analyst Ted Rossman. ‘Simply getting started should help you begin to feel better and settle your racing mind.'”

 

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