This is another one of the rare interviews where an American CEO calls out the specifics of how Wall Street greed created the China problem that pummeled Main Street.

Cambria CEO Marty Davis discusses the root of the trade issues with China and President Trump’s efforts to address the problem.  He accurately calls attention to the origin of the issue; and then brilliantly explains the current consequences of decisions made by an alignment of Wall Street interests and powerful U.S. politicians.

CTH readers will notice a significant amount of similarity in the words and phrases Mr. Davis uses to describe the issues. This guy gets it.

This is well worth nine minutes of your time.  Mr. Davis really gets it, and is not afraid to call the baby ugly. His criticisms are so spot-on accurate they made Maria Bartiromo uncomfortable in broadcast. These things are usually not said.  Must Watch:

Boy howdy if ever there was an article that showed the layers and ramifications of President Trump’s global trade reset, this is a good one.   The multinational media do not want American voters to understand the dynamic, because if we did people would catch-on to how the global economy was structured upon removal of U.S. wealth…

(Tweet Link)

Reuters is reporting on a significant drop in German industrial orders, and they specifically point to diminished orders from the U.K (small part) and China (big part) as the cause.  However, the analysis stops at the part where China’s lack of industrial orders is the leading contribution to retraction in the German export sector.

What the financial analysis does not approach (ie. the third rail of multinational corporate admission that must never be outlined), is the reason why Chinese orders for German industrial goods have dropped.

The problem for China, and ultimately for Germany, is that Trump’s trade reset has stopped a big amount of U.S. wealth from arriving in Beijing. Simultaneously, Beijing is countering Trump’s tariffs by devaluing their currency.  The rebound economic impact is doubled. China has: (1) less income; and (2) less value within their own currency.

Where does this dynamic show up?…. Anytime China is going to buy something.

China’s currency devaluation makes their exports cheaper; however, at the same time it makes any of their imports more expensive.  As a consequence China buys less… and that now exhibits in lower purchases of German stuff.  See how that happens?

So yeah, the ramifications for Merkel’s German economy -twice as bad as originally forecast- are based on China fighting Trump.  The fact that China is bleeding cash, and has simultaneously dropped the value of their currency, means China can’t buy stuff.

All of those nations who were counting on Chinese purchases are now going bananas.  This is why the multinationals blame Donald Trump… and to make matters even worse – the U.S. economy is thriving, while they watch from the sidelines.  It’s a delicious dynamic.

For more than three decades global economies have grown by removing wealth from the United States.  The U.S. multinationals have countered the economic arguments by claiming those global economies have purchased U.S. treasuries; but that means we trade our current wealth for future debt.

President Trump has reversed this dynamic.  We are repatriating our national wealth through new trade policies, and will pay for any incurred foreign debt by expanding our own economy and controlling our own destiny.

Here’s Reuters article (emphasis mine):

BERLIN (Reuters) – Weaker demand from abroad drove a bigger-than-expected drop in German industrial orders in July, suggesting that struggling manufacturers could tip Europe’s biggest economy into a recession in the third quarter.

Germany’s export-reliant economy is suffering from slower global growth and business uncertainty caused by U.S. President Donald Trump’s ‘America First’ trade policies and Britain’s planned, but delayed, exit from the European Union.

Contracts for ‘Made in Germany’ goods fell 2.7% from the previous month in July, data showed on Thursday, driven by a big drop in bookings from non-euro zone countries, the economy ministry said. That undershot a Reuters consensus forecast for a 1.5% drop.

“The misery in manufacturing continues. The decline in new orders significantly increases the risk of a recession for the German economy,” VP Bank analyst Thomas Gitzel said.

Germany’s gross domestic product contracted by 0.1% quarter-on-quarter in the second quarter on weaker exports, with the decrease in foreign sales mainly driven by Britain and below average demand from China.

“The danger is great that negative growth will also be recorded in the third quarter,” Gitzel added. (read more)

CTH readers are well versed in the dynamics of the Panda mask -vs- Dragon motives of China.  Therefore we are able to discuss events without the MSM financial filter; which is narrated specifically to the benefit of multinational interests.  Always keep that in mind.

Everything needed to understand the latest panda narrative from Beijing is identified in this simple paragraph:

(Beijing) […] The talks were supposed to have resumed this month but China’s commerce ministry said Vice Premier Liu He, Beijing’s pointman on trade, agreed to October in a phone call with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Thursday. (more)

First, anything from Vice Premier Liu He is panda-speak; he is a tool in the process of Chinese narrative engineering.  All former trade negotiation authority held by Liu He was stripped by Chairman Xi Jinping.  Commerce Minister Zhong Shan is the real voice of Xi and the Beijing authority.

Second, what exactly is Beijing selling?  An “October phone call”…. and that manipulates markets for the multinationals on Wall Street.  A friggin’ announcement of a phone call?

Beijing is attempting to stop the financial bleed; the organization and planning of exits from the Chinese manufacturing system.  Notice the U.S. media ran to the typeset pushing quoted reports from Beijing, not quoting reports from the USTR office or U.S. trade team.  Again, the quote from the Associated Foreign Press (AFP):

…”China and the United States will resume trade talks in Washington in early October, Beijing said on Thursday”…

President Trump will not block, refute or diminish, this specifically sold Beijing narrative because it increases the U.S. stock market valuation.  However, no-one who really pays attention to the dance should put any weight behind the announcement.  It’s pure panda.

The U.S. position is the same.  U.S. interests doing business in China should ‘get out’.  Those who choose to remain in China; and/or those who choose to join with Beijing in selling false-hope in a temporary effort to prop up their multinational stock values; will eventually run into the brick wall of reality.

We can discuss this here, because the dance has been so visible for so long we know the music before it plays…. ie. ‘conduct your affairs accordingly’.

Today’s jump in the stock market; the part centered around this announcement from Beijing; is based on a false premise.

Beijing is bleeding cash.  Beijing is attempting to get to 2020 and will deploy all resources to eliminate President Trump.  Beijing is trying to save their economic model and stop the exodus from their manufacturing base.

There will be no U.S-China trade deal.

Any U.S. corporation who makes a decision based on the false-hope implied in the Chinese messaging is going to hit a world of hurt when it all comes crashing down.

Don’t expect any sympathies from these pages.

ADP Payroll analysis for August reflects continued strong gains in the jobs market beating all expectations from the financial pundits.   The official government stats will be released tomorrow (private and public sector); in the interim the ADP payroll of private sector job creation shows that Main Street continues to be very strong.

(Reuters) U.S. private employers added 195,000 jobs in August, above economists’ expectations, a report by a payrolls processor showed on Wednesday.

Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 149,000 jobs, with estimates ranging from 110,000 to 175,000.

Private payroll gains in July were revised down to 142,000 from an originally reported 156,000 increase.  The report is jointly developed with Moody’s Analytics.

The ADP figures come ahead of the U.S. Labor Department’s more comprehensive non-farm payrolls report on Friday, which includes both public and private-sector employment. (more)

CTH would advise not to place too much emphasis on negative ISM manufacturing order index statistics now that a complete U.S-Global trade reset is underway.

Right now global supply chains are in a state of flux as manufacturers are moving production based on tariffs and geopolitical issues.

As the component manufacturing is moving from one place to another; and as manufacturers evaluate their supply chain stability; there are going to be swings in purchase orders based on shifts in production facilities.  This is an expected dynamic that is necessary if President Trump is to succeed in pressuring product manufacturers to move operations.

The multinational Wall Street media will hype any downward component manufacturing fluctuation during this process, but the fluctuation itself doesn’t speak to any lessening of demand; merely shifted operations and shifting contracts (ie. purchase orders).

The internal U.S. economy is very strong.  It’s the U.S. companies, multinationals, that rely on external operations for their end-product production income that are tentatively positioned.

Main Street is thriving; Wall Street is in flux.  This is the exact opposite of two prior decades where Wall Street was thriving and Main Street was in flux.  Why?…

Because Trump!