India In “Very Deep Crisis,” Witnessing “Death Of Demand,” Warns Former Indian FM
Former Indian Finance Minister Yashwant Sinha said India’s economy is in a “very deep crisis,” witnessing “death of demand,” and the government is “befooling people” with its economic distortions of how growth is around the corner, reported India Today.
“No matter what the powers that be say, the fact is that we are in a very deep crisis,” warned Sinha.
India’s GDP has been rapidly slowing since peaking in 2016. Official data shows Q3 growth slumped to 4.5%, the lowest since 1Q13.
Sinha was speaking to an audience at the Times Litfest 2019 conference, located at Habitat World Center in Delhi, India, on Sunday.
He warned that President Narendra Modi’s government is attempting to deceive everyone about how growth is coming in the next quarter or the quarter after but cautioned there’s only a crisis ahead.
“They (the government) are trying to fool the people by saying the next quarter will be better…This type of crisis takes a long time like three to four or even five years (to subside). It cannot be resolved at the drop of a hat or by wielding a magic stick,” he said.
He said the economy is experiencing what is called the “death of demand,” and the epicenter of it is the agriculture and rural sector.
“There is no demand in the economy, and that is the starting point of the crisis. They (government of the day) are least bothered about what is happening to our farmers, people living in rural areas, now that is where the death of demand started. The demand first dried up in agriculture and rural sector, then it dried up in the informal or unorganized sector, and ultimately it traveled to the corporate sector,” he said.
Sinha said he’s been warning the government of the crisis that is coming down the pipe.
“In fact, this was something I had done after already warning them (people in the government) personally through letters, personal meetings… it is only when the party’s doors were closed on me that I had to start speaking publicly,” he added.
Though there’s no recession in India at the moment, the warning signs are showing up. Private consumption has plunged, both public and private investments have fallen, exports have dropped in the past quarter, the economy has been decelerating for several years, and there’s zero evidence that the economy has bottomed out.
The bias against those who are not politically affiliated similarily is the last acceptable form of discrimination. It’s now okay and accepted by the masses, to treat other human beings as less than if they disagree with you on politics.
One new study is showing that most are embracing this type of discrimination with extreme fervor.This study shows discriminatory behavior thrives in the one area where it remains socially acceptable to judge people based on shared attributes: political affiliation. Politics remains one of the few personal characteristics not protected by equal opportunity hiring laws, and if this study is any indication, lawmakers will want to get on top of that quickly.
Belief in certain political values is akin to belief in a religion. It’s all based on opinion and discrimination is still discrimination, even if you label it “politics.” We all know the media has been trying to brainwash us with government-approved opinions for years now, and those who don’t accept their brainwashing willingly are being discriminated against.
Shared political ideology outweighs seemingly more important factors like professional qualifications in hiring decisions, researchers from Clemson University and the University of Kansas confirmed in a study published this month in the Journal of Applied Psychology. Unchecked, this kind of discrimination is liable to produce powerful echo chambers, in which groupthink eventually becomes a prerequisite for employment.
Study participants readily picked a job candidate with whom they shared a political affiliation over a more qualified candidate without that affiliation when presented with Facebook profiles containing clear indicators of the prospective hire’s political alignment. These might include statements about leading a campus Democrat or Republican group, or party symbols like the Democratic donkey or GOP elephant. The closer the participant, acting as a recruiter, identified with a party, the higher ratings they gave to candidates who touted their membership in that party – qualifications were nigh on irrelevant.-RT
There is real irony in the mainstream media’s role in pushing for this discrimination too. The media environment has actively encouraged this polarization. It gets clicks as it drives destructive wedges into society while at the same time condemning any other form of attribute-based preference as “unthinkable bigotry.” In other words, while discriminating against different opinions, the media calls those opinions “bigotry” and says that those are the discriminating opinions.
Welcome to the U.S.S.A. Where groupthink is our future.
“The Free State Project is the most recent and successful face of libertarian separatism—or, as some call it, libertarian Zionism. To be sure, many involved in the search for new libertarian communities reject such terms. Roderick Long, a philosophy professor at Auburn University and the brains behind the Libertarian Nation Foundation, a group dedicated to theorizing about the possibilities for libertarian polities, tells me he doesn’t like the term separatist because ‘the attraction is not that I don’t want to live near or interact with nonlibertarians. Most of my best friends are nonlibertarians. We don’t want to live by ourselves but simply want a chance to demonstrate to the world that libertarian principles actually work. We want to escape from government, not escape from ordinary decent people’ who happen not to share their political philosophy.”
Brian Doherty “Revolt of the Porcupines!”
20 Years Ago
December 1999
“There are complications to Net radio, though, that most press accounts ignore, notably the medium’s traffic problem. There’s a finite number of people who can tune to any audio stream at once; if you top that number—which could be as low as 50—no one else will be able to hear you. The techies are working on a solution to this, called multicasting. If and when it’s in place, Internet broadcasting will be ready to bloom. Until then, though, it will be too bottlenecked to be competitive.”
Jesse Walker “Station to Station”
“It might well be that laws like Wisconsin’s eventually backfire by scaring away established companies from working with parole and probation officials to hire released inmates (which seems to be how Waste Management Inc. became the target of Gerald Turner’s unwanted attentions). If you risk legal trouble every time you disagree with a social worker or probation officer on the feasibility of a particular placement, there’s nothing to stop you from joining the majority of companies that don’t actively fish in this particular pool.”
Walter Olson “Felon Protection”
30 Years Ago
December 1989
“We’ve long since given up any real hope that politicians can do us much good, but they can entertain us by being human, by falling from perfection, and by keeping our minds off what matters and our thoughts stuck in the gutters of gossip. Soon, the 21st century. Can you wait?”
David Brudnoy “The Sex of Politics”
“The Democratic reaction was so perfect as to provoke hints of Republican sabotage. No sooner had the president’s trick with the cocaine-filled ziplock baggie faded from the screen than Senator Joseph Biden, himself admittedly well-versed in the evils of narcotic ingestion, and Congressman Dan Rostenkowski (yes, the House Appropriations chair) were giddy with the pronouncement that they were fully backing the president on this crusade—backing him, in fact, 128.2 percent (their price tag divided by his). They argued that the real solution to drugs was…a tax increase.”
Thomas Hazlett “Wartime”
45 Years Ago
December 1974
“Put simply, allowing market forces to determine the allocation of a commodity at a point in time and through time does not increase the demand for bureaucrats. However, the proposals of the bureaucrats—price controls, ‘excess-profit’ taxes, additional regulation, nationalization—all serve to increase the demand for bureaucrats.”
Paul Craig Roberts and N. Van Cott “Bureaucratic Conspiracy and the Energy Crisis”
50 Years Ago
December 1969
“This is a classic example of the fallacy of false alternatives….The issue is invariably presented in terms of ‘Who should control seabed exploitation and how should the resources be divided up?’ rather than asking whether it should be controlled and whether anyone other than the entrepreneur has the right to ‘divide up’ the resources. For in fact there is a third alternative—a libertarian alternative—based firmly on rights, rather than feelings.”
Robert W. Poole “The Wave of the Future; the Future of the Waves”
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via IFTTT
“The Free State Project is the most recent and successful face of libertarian separatism—or, as some call it, libertarian Zionism. To be sure, many involved in the search for new libertarian communities reject such terms. Roderick Long, a philosophy professor at Auburn University and the brains behind the Libertarian Nation Foundation, a group dedicated to theorizing about the possibilities for libertarian polities, tells me he doesn’t like the term separatist because ‘the attraction is not that I don’t want to live near or interact with nonlibertarians. Most of my best friends are nonlibertarians. We don’t want to live by ourselves but simply want a chance to demonstrate to the world that libertarian principles actually work. We want to escape from government, not escape from ordinary decent people’ who happen not to share their political philosophy.”
Brian Doherty “Revolt of the Porcupines!”
20 Years Ago
December 1999
“There are complications to Net radio, though, that most press accounts ignore, notably the medium’s traffic problem. There’s a finite number of people who can tune to any audio stream at once; if you top that number—which could be as low as 50—no one else will be able to hear you. The techies are working on a solution to this, called multicasting. If and when it’s in place, Internet broadcasting will be ready to bloom. Until then, though, it will be too bottlenecked to be competitive.”
Jesse Walker “Station to Station”
“It might well be that laws like Wisconsin’s eventually backfire by scaring away established companies from working with parole and probation officials to hire released inmates (which seems to be how Waste Management Inc. became the target of Gerald Turner’s unwanted attentions). If you risk legal trouble every time you disagree with a social worker or probation officer on the feasibility of a particular placement, there’s nothing to stop you from joining the majority of companies that don’t actively fish in this particular pool.”
Walter Olson “Felon Protection”
30 Years Ago
December 1989
“We’ve long since given up any real hope that politicians can do us much good, but they can entertain us by being human, by falling from perfection, and by keeping our minds off what matters and our thoughts stuck in the gutters of gossip. Soon, the 21st century. Can you wait?”
David Brudnoy “The Sex of Politics”
“The Democratic reaction was so perfect as to provoke hints of Republican sabotage. No sooner had the president’s trick with the cocaine-filled ziplock baggie faded from the screen than Senator Joseph Biden, himself admittedly well-versed in the evils of narcotic ingestion, and Congressman Dan Rostenkowski (yes, the House Appropriations chair) were giddy with the pronouncement that they were fully backing the president on this crusade—backing him, in fact, 128.2 percent (their price tag divided by his). They argued that the real solution to drugs was…a tax increase.”
Thomas Hazlett “Wartime”
45 Years Ago
December 1974
“Put simply, allowing market forces to determine the allocation of a commodity at a point in time and through time does not increase the demand for bureaucrats. However, the proposals of the bureaucrats—price controls, ‘excess-profit’ taxes, additional regulation, nationalization—all serve to increase the demand for bureaucrats.”
Paul Craig Roberts and N. Van Cott “Bureaucratic Conspiracy and the Energy Crisis”
50 Years Ago
December 1969
“This is a classic example of the fallacy of false alternatives….The issue is invariably presented in terms of ‘Who should control seabed exploitation and how should the resources be divided up?’ rather than asking whether it should be controlled and whether anyone other than the entrepreneur has the right to ‘divide up’ the resources. For in fact there is a third alternative—a libertarian alternative—based firmly on rights, rather than feelings.”
Robert W. Poole “The Wave of the Future; the Future of the Waves”
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This Is The Chart Albert Edwards Is Watching To Decide When The US Becomes “Japanified”
Last week, in order to help the Fed find some of that oh so “mysterious” inflation it has been so powerless in tracking down for the past decade, we showed a chart of healthcare inflation which is now soaring at a record 20% (for a complete discussion of soaring US healthcare costs, see here).
Commenting on this particular surge in health insurance premiums, SocGen’s restless permabear said that such inflation “proves temporary.” Which, coming from Albert, is to be expected: while some say the world will end in fire, to Edwards it will be ice as far as the eye can see – after all, it was Edwards who first coined the term “ice age” some two decades ago to explain the deflationary singularity that will consume everything, and as such it is understandably why to him any surge in inflation is a one-time event.
There is another reason why Edwards dismisses any incipient signs of inflation in the US: his latest piece is titled “Japanification of the US beckons”, in which he writes that despite the Fed’s recent announcement of a halt to further rate cuts, “GDP growth looks fragile and there is good evidence to suggest that core CPI inflation is set to collapse towards zero. In fact, a resumption of Fed easing on the back of recessionary data and sliding inflation is likely to accelerate the convergence of US yields towards negative eurozone and Japanese yields.”
Hence, the Japanification of the US, and as he further notes, if the US economy slides into recession, it is clear that “inflation will likely fall ever closer toward Japanese-style deflation. But a rapid decline in key inflation measures, like core CPI, may be beginning to unfold already, irrespective of whether a recession is about to start or not.”
To make his point, Edwards points out the October CPI data which “shocked” him, but not for the surprisingly high 0.4% headline rise M/M, but because of a specific data set that he will now be watching very closely to determine if US inflation is indeed converging with that of Japan: shelter CPI.
it was this key component of the CPI basket that last month collapsed to almost zero. And since shelter has a very heavy 33% weighting in the overall CPI and an overwhelmingly dominant 42% weighting in the closely watched core CPI (ie ex food and energy), it’s only a matter of time before the decline in shelter hits the broader inflation basket.
There is another reason why Shelter is such a key inflationary metric: as the next chart shows, inflation for core CPI has exceeded the Fed’s preferred inflation measure, the core PCE deflator, since 2014, largely because the dominant shelter component has been running around 3½%, pulling up core CPI sharply. Without shelter, core, core CPI has been running just above 1% (blue line in chart below)
The SocGen strategist then notes that if, as he believes, the recent burst of rapid shelter inflation is ending, this will reveal core, core CPI inflation only just above 1%, especially if and when the abovementioned burst in healthcare inflation fades.
Finally, to determine in which direction shelter inflation is headed in the future, Edwards looks at the price of new homes, which suggests that shelter and rent inflation may now be falling away rapidly: “This will come as a surprise to investors, as even without a recession, core CPI could quickly head towards zero. The markets will then embrace the Japanification theme in the US, just as they have done in Europe.”
Putting it all together, Edwards concludes that “I had been waiting for a while for the shoe to drop and now it has started to fall towards the floor, revealing that core CPI inflation in the US is closer to zero than many assumed. And the obvious question arises that if this is all the consumer price inflation that the US economy can produce at the end of the longest cycle in history, what will happen when it falls into recession?”
His rhetorical answer: “The Japanification of the US awaits”, but just in case he is wrong – something even Edwards admits to being more often than not – keep an eye on that shelter inflation chart…
I stood outside the safe house, in a road I cannot name, in a major European city I cannot identify, not sure what I might find inside. I had no way of being sure.
I had travelled a long distance by train to an address I had been given over an encrypted email.
I was nervous that the meeting might be some sort of trap. Leaks from inside arms verification organisations are very sensitive matters. Powerful people mind about them.
I wasn’t sure whether to be afraid of being followed, or to be worried about who might be waiting behind the anonymous door on a dark afternoon, far from home. I took all the amateurish precautions that I could think of.
As it happened, it was not a trap. Now, on carefully selected neutral ground, I was to meet a person who would confirm suspicions that had been growing in my mind over several years – that there is something rotten in the way that chemical weapons inspections are being conducted and reported. And that the world could be hurried into war on the basis of such inspections.
Inside the safe house, I was greeted by a serious, patient expert, a non-political scientist whose priority had until now always been to do the hard, gritty work of verification – travelling to the scenes of alleged horrors, sifting and searching for hard evidence of what had really happened. But this entirely honourable occupation had slowly turned sour.
The whiff of political interference had begun as a faint unpleasant smell in the air and grown until it was an intolerable stench. Formerly easy-going superiors had turned into tricky bureaucrats.
The Organisation for the Prohibition of Chemical Weapons (OPCW) had become so important that it could no longer be allowed to do its job properly.
Too many of the big powers that sponsor and finance it were breathing down its neck, wanting certain results, whether the facts justified them or not.
My source calmly showed me various pieces of evidence that they were who they said they were, and knew what they claimed to know, making it clear that they worked for the OPCW and knew its inner workings. They then revealed a document to me.
This was the email of protest, sent to senior OPCW officials, saying that a report on the alleged Syrian poison gas attack in Douma, in April 2018, had been savagely censored so as to alter its meaning.
In decades of journalism I have received quite a few leaks: leaks over luxurious, expensive lunches with Cabinet Ministers, anonymous leaks that just turned up in envelopes, leaks from union officials and employers, diplomats and academics.
But I’ve never seen one like this. It scared me. If it was true, then something hugely dishonest and dangerous was going on, in a place where absolute integrity was vital.
If bodies such as the OPCW cannot be trusted, then World War Three could one day be started by a falsehood.
Last week I reported on the first episode in this story. Within days the OPCW had confirmed that the email I leaked was authentic.
Nobody followed me home or threatened me. A few silly people on social media told blatant lies about me, insinuating that I was somehow a Russian patsy or a defender of the disgusting Syrian regime that I have been attacking in print for nearly 20 years. That was what I had expected.
But there is much more to come. And, as it grows harder for everyone to ignore this enormous, dangerous story, I suspect I shall be looking over my shoulder rather more than usual.
Gloves Come Off: China “Insists” Existing Tariffs Must Be Scrapped For “Phase 1” Trade Deal
Until now, China had largely kept the key hurdles in the ongoing US-China trade talks close to the vest, fearful that “breaking the embargo” so to speak on what have been confidential talks so far, could anger the US side. Now in a surprise diplomatic reversal, one which has the intent of signaling to the world that China will no longer play by Washington’s unspoken if assumed rules, overnight China’s nationalistic Global Times tabloid reported that Beijing now “insists” that existing tariffs must be removed as part of a “Phase 1” trade deal, well beyond the US “ask” of merely scrapping those tariffs which are set to kick in on December 15.
“Sources with direct knowledge of the trade talks told the Global Times on Saturday that the U.S. must remove existing tariffs, not planned tariffs, as part of the deal,” said the report.
Global Times, which is published by the official People’s Daily newspaper of China’s ruling Communist Party, also cited another unidentified source close to the talks as saying U.S. officials had been resisting such a demand because the tariffs were their only weapon in the trade war and giving up that weapon meant “surrender.”
Which is precisely what we said last night, when we noted that by going public with its demands, it would make Trump look even weaker, as the US president can no longer spin the outcome of negotiations as one where he proposed the removal of existing tariffs, but rather such an act would be seen as caving to China.
Here we go: China breaks the negotiation embargo and goes public with its deal demands, insisting rollback of existing tariffs. Trump now can’t concede or will be seen as caving to China https://t.co/h4ZnFa8Q0Q
Of course, by eliminating existing tariffs, the US would lose any leverage it currently has as it is only the current tariffs squeezing Chinese exporters that make the current situation unpalatable for Beijing, and any roll back to a status quo would mean that China can now indefinitely delay any further concessions toward a bigger trade deal.
Needless to say, should Trump agree, he would be squeezed by both parties as having capitulated to Beijing after a year and a half, with absolutely nothing to show for it besides the S&P at all time highs, of course, which however is not his but rather the Fed’s doing.
On Tuesday, Trump said Washington was in the “final throes” of a deal aimed at defusing a 16-month trade war with China, a few days after Chinese President Xi Jinping had expressed his desire for a trade agreement. Top trade negotiators for both countries also spoke again and agreed to continue working on the remaining issues.
Trade experts and people close to the White House told Reuters last month, however, that signing a phase one agreement may not take place until the new year as China pressed for more extensive rollbacks of tariffs, with US trade hawks led by Peter Navarro, refusing to concede realizing well that such an act would be a surrender by the US.
Last Tuesday, Senate Finance Committee Chairman Chuck Grassley told reporters that Beijing invited U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin for in-person talks in Beijing. Grassley said Lighthizer and Mnuchin were willing to go if they saw “a real chance of getting a final agreement.
A source familiar with the trade talks also told Reuters that U.S. officials could travel to China after Thursday’s Thanksgiving holiday in the United States.
It is unclear if Trump will comply with China’s demands and roll back all existing tariffs just to avoid any market turbulence in the critical, for his re-election, year 2020.
Between Black Friday and Cyber Monday, Pope Francis Warns “Consumerism Is A Virus That Corrodes Faith”
During Sunday Mass, Pope Francis bashed Black Friday and Cyber Monday and urged people to resist consumerism leading up to the Christmas holiday season. The Pope called consumerism a virus and said it hurts the poor, Reuters reported.
This isn’t the first time Pope Francis spoke negatively of the biggest shopping holidays of the year. Last year he delivered a message on the dangers of consumerism.
In 2015, Pope Francis warned the world’s 1.2 billion Roman Catholics not to be “intoxicated by consumerism.”
He has also warned about the “throwaway culture” and the “dictatorship of an impersonal economy.”
This holiday season, he said: “When you live for things, things are never enough, greed grows, other people become obstacles in a race,” he said at a Sunday Mass, criticizing the West where “consumerism reigns supreme.”
The Pope added, “consumerism is a virus that corrodes faith” because it clouds the minds of many who forget “the brother who knocks at your door.”
He urged people this Sunday to “resist the blinding lights of consumerism, which will shine everywhere this month,” leading up to Christmas.
The Pope has pointed out before, the abusive advertising and consumer brainwashing techniques by mega-corporations have become very sophisticated. Advanced marketing techniques have sucked in broke consumers, buying products they can’t afford, nor do they need with credit card rates at 25-year highs.
After months of speculation, former New York City Mayor Michael Bloomberg formally announced a high-profile, big-money campaign to become the Democratic Presidential nominee on November 24.
The 77-year-old former Republican has decided that he is the perfect candidate to prevent the president from achieving a second term. Bloomberg has a long history of support for conservative positions, including endorsing George W. Bush’s War on Terror and defending Israel’s 2014 assault on Gaza.
In 2014, Michael Bloomberg went so violently right wing, that the White House’s Valerie Jarrett had to stop him and say that Israel’s bombing of 500 sleeping Palestinian children was inexcusable. He defended it.
The primary reason why the self-described conservative has the ability to credibly enter the race at such a late date is his financial clout. Bloomberg is the world’s ninth richest individual, enjoying a net worth of nearly $55 billion and he owns a huge eponymous media network, one of the largest in the world.
His recent entry into the ring has proven controversial with many who see the plutocrat’s power and influence as an unfair advantage. Sawyer Hackett, the National Press Secretary for his Democratic nomination opponent Julian Castro noted that if someone had made half a million dollars per day since the United States’ founding in 1776, they would still be far poorer than Bloomberg himself is. Hackett concluded, “that kind of wealth shouldn’t be allowed to leverage success in our primaries.”
Writer and former New York Times columnist Anand Giridharadas pointed out that Bloomberg’s pitch to the American people, that his wealth makes him incorruptible and therefore more trustworthy, was illogical, given that the Democratic Party is currently attempting to impeach a billionaire president on corruption charges, arguing that “being very rich gives you more interests, not less.”
It is for this reason that Elizabeth Warren has accused him of trying to essentially “buy the nomination.”
“Someone who can’t be bought.”@MikeBloomberg is running on the idea of the ultra-rich being especially incorruptible — at the moment we are impeaching a rich president, who said he’d be incorruptible, for corruption. Turns out being very rich gives you more interests, not less. https://t.co/mKPHYhKLSi
Yet Bloomberg’s run for President highlights another danger: that of freedom of the press. As the New Republic warned, the 2,700 journalists working directly under him in his extensive media network are in an impossible position. Can they truly report fairly and in an unbiased manner on the presidential race when their owner has such an obvious and important stake in its proceedings? If history is any judge, the answer to that will be “no.” Silvio Berlusconi, for instance, used his vast media empire to propel him and keep him in power as the Prime Minister of Italy for nine years.
Bloomberg Editor in Chief John Micklethwait announced a series of top-down measures attempting to head off this problem, instructing the company to simply not cover their boss or any of the other candidates in the Democratic primaries. How a major news outlet is going to ignore such an important ongoing process was not explained.
Yet the company appears to already be breaking this promise. The organization ran three negative stories on Elizabeth Warren in a 24-hour period earlier this week. Was this as a response to her criticism of his actions or an attempt to undermine one of the most popular rival candidates’ chances? That is a question that arises uniquely in a situation where a politician owns the means of communication.
Bloomberg the billionaire has muddied the waters between his political interests and his media empire even further by hiring David Shipley and Tim O’Brien, Executive Editors from his news outlet, to key positions in his presidential campaign.
Yet another important danger to media freedom is the fact that Bloomberg is promising to lavish enormous amounts of money to corporate media outlets in the form of political advertising. Even before he had officially announced his candidacy, he already spent $33 million in television advertising alone, beaming his message nationally and in 98 local markets. With the prospect of a bonanza of a seemingly bottomless pile of advertising money, will corporate media outlets, under intense financial pressure, be influenced in their coverage of the billionaire’s activities? There is always a quid pro quo when one accepts funding from any powerful person or organization.
The billionaire already has a list of ringing media endorsements from some of America’s most influential media figures. The New York Times’ Thomas Friedman claimed as President he would “forcefully put a Democratic pro-growth, pro-innovation, pro-business agenda on the table” in a column entitled “Why I like Mike.” His colleague Bret Stephens cheered him on. His article “Run, Mike Run!” argued that the wonderful thing in choosing a conservative Republican as Democratic candidate was that all the usual Republican talking points about the Democrats being too liberal would not work on Bloomberg. Meanwhile, one New York Post commentator saidhe was “delighted” that the plutocrat was “saving the party” from out-of-touch socialists like Warren.
The uber-conservative Bret Stephens came out to bat for Bloomberg in the New York Times
Can we be sure that these are genuine expressions of support, or merely a calculated quid pro quo? This is again a question that only arises in a corporate, advertiser-dominated media ecosystem. Corporate media have every reason to prop up the multi-billionaire’s campaign, keeping him in the race as long as possible, knowing that the money will continue to flow, as long as they do not portray him poorly. (Rest assured that MintPress News has not been approached to carry water for his campaign).
The New Yorker’s presidential bid highlights the contradictions between both extreme wealth and a for-profit, corporate advertiser-driven media landscape and democracy and freedom of expression. Any expansion of democracy and solution to these dilemmas requires seriously questioning whether either of the first two are legitimate. As Bernie Sanders said, “Billionaires shouldn’t exist.”
Why The US Job Market Is About To Crack In 8 Charts
With the US economy once again rolling over, as various Fed nowcasts see a sharp slump in Q4 GDP and the Citi economic surprise index slumping from a nearly two year high hit at the start of September…
… while real GDP growth is tracking the ISM lower month after month…
… the one part of the US economy that has proven remarkably resilient to the US-China trade war, now in its 553rd day, has been the US jobs market; so resilient in fact, it was an embarrassment to the Fed to have to explain why it is cutting rates with US unemployment at 50 year lows (we will have more to say on the quality vs quantity of US jobs in a subsequent post).
So as we await this Friday’s jobs report where consensus expects another solid 188K job gains for the month of November, it appears that the US labor market is finally starting to crack. Below we present some recent empirical evidence that confirms the growing downside risks to US employment, starting with the recent plunge in percentage of firms who are planning to increase their employment according to NFIB. As this is a leading indicator to nonfarm payrolls, it suggests that the US may be facing a -100K print in the near future – if confirmed, it would be the worst number since the financial crisis.
It’s not just the NFIB: the drop in the ISM employment similarly has held a strong correlation to payrolls. Unless this series stages a powerful rebound in the coming months, it is only a matter of time before the US job market dives.
There has been recent notable weakness in the BLS’ other key labor market metric, the JOLTS job openings, long a favorite of Janet Yellen. Here, too, we find an ominous sign as the 3 month moving average in job openings has posted the most negative print since the financial crisis. This, too, leads broader payrolls data:
But it is probably the composite PMI employment index, which recently suffered its biggest drop since the financial crisis, that offers the most ominous picture yet:
For those asking what may catalyze this coming swoon in the jobs market, blame US companies’ eagerness to repurchase their stock (boosting management comp and stock prices) instead of investing in growth: as the next chart shows, rising capex tends to lead hiring, and by extension, a drop in capex would lead to job cuts.
But the biggest red flag comes from the unprecedented divergence between CEO/corporate confidence and consumer confidence. While the latter is no doubt a function of the record highs in the stock market and the historical near record unemployment prints, when it comes to the future, it is what CEOs think that matters, and according to the chart below, they are only seeing red.
