The Anti-Perfect Jobs Report
So many people may have exited the labor force in May that the unemployment rate dropped to just 4.3% even though headline payroll gains were once again lackluster. The last time the ratio was this low George W. Bush was just a year into his first term, no one had yet much idea of the housing bubble because at that moment in May 2001 of greater concern was the dot-com bubble and its related recession that had yet to be realized in effect. It was then the last hurrah of the nineties economy.
The Next Recession And The “Great Reset”
Sometime this year, world public and private plus unfunded pensions will surpass $300 trillion. That is not even counting the $100 trillion in US government unfunded liabilities. Oops. These obligations cannot be paid. A time is coming when the market and voters will realize this. Will voters decide to tax “the rich” more? Will they increase their VAT rates and further slow growth? Will they reduce benefits? No matter what they decide, hard choices will bring political turmoil. And that, of course, will mean market turmoil……We are coming to a period I call “the Great Reset.” As it hits, we will have to deal, one way or another, with the largest twin bubbles in the history of the world. One of those bubbles is global debt, especially government debt. The other is the even larger bubble of government promises. The other is the even larger bubble of government promises.
The Nation’s Longest War—Haven’t We Had Enough Of Afghanistan?
Will there ever be an end to the war in Afghanistan? Apparently not if our generals have anything to say about it – and they do. President Trump has turned over the prosecution of our perpetual “war on terrorism” to the Pentagon, claiming that they’ve been held back by previous administrations. The new policy is to turn them loose. We saw what this means when the so-called “Mother of All Bombs” was dropped in a remote location where ISIS was said to be hiding: 92 “militants” were said to have been killed. Contrary to the triumphalist reports in US media, the biggest non-nuclear bomb ever deployed in combat had a minimal effect. And the cost, at $16 million for a single MOAB, came to around $174,000 per “militant.”
Covfefe Land
The extraordinary thought disorders of this moment in history are equally distributed across the political spectrum…..The old middle, or center, is imploding both economically and psychologically, concentrating distortions of reality at each end, Left and Right….The thought disorders among Trump’s adversaries interest me more, because they emanate from the far more educated ranks of society, the place where rational leadership is supposed to spawn. If you can’t depend on those people to think straight in difficult times, then it raises the question of what exactly is the value of an advanced education? For instance: the incredible new idea put out by CNN that it is verboten for officials in the government — the president especially — to meet with the Russian ambassador to the United States. I’ve asked this question before, but obviously it needs to be repeated in the face of this persistent nonsense: why do you think nations send diplomats to other lands if not to meet with and communicate with.
Haunting Photos of #Carmageddon: Hyundai Gets Crushed, as GM, Ford, Others Struggle
Industry experts had lowered their forecasts for May auto sales, having been overoptimistic every month this year, always figuring that there would be a year-over-year sales increase, when in fact sales fell every month. So for May, they became practically gloomy, but not gloomy enough. J.D. Power and LMC Automotive forecast that new vehicle sales in May would inch up 0.5% year-over-year to 1.54 million cars and light trucks. Edmunds predicted that sales would edge up 0.3% to 1.53 million units. And Kelley Blue Book forecast that sales would be essentially flat year-over-year at 1.525 million…But what happened is: Total new vehicle sales fell 0.5% in May to 1.519 million light cars and trucks, according to Autodata (number of vehicles sold and delivered by dealers to their customers, or delivered by automakers to their large fleet customers). The fifth month in a row of year-over-year declines.Year-to-date sales are down 2%.
How To Drain The Swamp: Abolish The Department Of Homeland Security
Created in the wake (or panic) of post-9/11 America, DHS took the problem of entangled domestic security apparatuses — of which some blame for the intelligence failures leading up to 9/11 had been laid — and made it far worse. Calls to “Do Something, Anything!” led to the birth of a bureaucratic behemoth that combined 22 federal agencies – including those with such disparate missions as the Secret Service, Coast Guard, Federal Emergency Management Agency……In real life, that hasn’t happened. The Department of Homeland Security’s annual budget has increased since its debut in 2002 from $20 billion to approximately $60 billion this year, and a 2011 report from John Mueller of Ohio State University found – surprise! – that DHS senior officials had failed to apply standard cost-benefit analysis and “have engaged in various forms of probability neglect by focusing on worst case scenarios; adding, rather than multiplying, the probabilities.”
The Cascade Of Bad Economic News Accelerates in Worsening April Trade Balance—The Donald Will Howl!
The International Trade in Goods and Services report shows the trade deficit widened to $47.6 billion in April from $45.3 billion in March. The April deficit was greater than any Econoday economist’s prediction. In addition, the Census Department revised the March deficit from $43.7 billion from $45.3 billion. The bad news is accelerating for the second quarter. The trade deficit widened in April to $47.6 billion from a revised $45.3 billion in March. This opens the quarter on yet another defensive front.
Ghost Collateral Haunts Loans Across China’s Debt-Laden Financial System
The trouble had begun in 2012, after CITIC loaned the money to Shanghai Hanning Iron and Steel Co Ltd, a privately held steel trader. Hanning failed to meet payments, according to a mediation agreement reviewed by Reuters, and CITIC took ownership of the steel. It was when CITIC moved to retrieve the collateral that the banker visited the warehouse and discovered that the 291-tonne pile of steel was no longer there, Wang said. The bank is still in court trying to recoup its losses. The missing collateral is a setback for CITIC. But it is indicative of a much wider problem that could endanger the health of China’s financial system – fraudulent or “ghost” collateral. When bank auditors in China go looking, they too often find that collateral recorded on the books simply isn’t there.
Nipponese Lunacy—–BOJ’s Balance Sheet almost as big as Japanese Economy
At around 93%, the scale of the Japanese central bank’s assets in proportion to GDP has no close match. Latest data shows that the U.S. Federal Reserve held roughly $4.5 trillion in assets, which is equivalent to 23% of the country’s GDP. The European Central Bank’s balance sheet, at about 4.2 trillion euros ($4.71 trillion) is larger than the BOJ’s, but it still sits at around 28% of the eurozone GDP.
S&P, Moody’s Downgrade Illinois to Near Junk, Lowest Ever for a U.S. State
Illinois had its bond rating downgraded to one step above junk by Moody’s Investors Service and S&P Global Ratings, the lowest ranking on record for a U.S. state, as the long-running political stalemate over the budget shows no signs of ending. S&P warned that Illinois will likely lose its investment-grade status, an unprecedented step for a state, around July 1 if leaders haven’t agreed on a budget that chips away at the government’s chronic deficits.
