Part IV – 2016 Prescient DC Lobbyists Talk Trump: “the end of life as we know it here”…


…“Literally 30-thousand jobs could be lost if Trump is sworn in. Washington as we know it, and how business is conducted, will change instantly.”… ~DC Lobbyist

Over the past few days we have been providing background explainers on why congressional legislation is frozen.   The lack of legislative action in the era of Trump is one of the least understood political realities.  Corporate media cannot discuss the issue because they are part of the system itself. The election of President Trump threw a wrench into the gears of the entire DC legislative and lobbying machine.

Part I HERE -and- Part II HERE -and- Part III HERE.

The entire political and legislative apparatus is frozen, and it is genuinely impossible to predict what happens next.  Where we stand is the outcome building a very targeted system over the course of three decades.  The entities and institutions which assembled the system became functionally obsolescent overnight on November 8th 2016.

To fully grasp the tectonic shift, and understand the current challenge, it helps to revisit the words by a key DC machine operator, lobbyist Jack Burkman, who was contemplating the unthinkable prior to the unthinkable becoming a reality:

DC Public Relations2016 […]  seismic panic has ensued on K Street as lobbying firms brace for a reality of a possible Donald Trump presidency and what that might mean for them and their futures.

Prominent D.C. lobbyist Jack Burkman said today that he started assembling a delegation of lobbyists and lobbying firms to meet with the New York billionaire and begin building a bridge to the Trump organization.

“Trump is a Washington outsider. We need the outreach now or Trump will bring in a whole new team made up exclusively of New Yorkers, effectively ending our grip on the White House and The Capitol which will bring about the end of life as we know it here,” says Burkman, who represents a diverse set of national and multi-national clients.

Since Trump has no experience as a politician, not a single D.C. lobbying firm has any ties to Donald Trump.

“More than $4 billion in lobbying business could be lost overnight should Donald Trump become president,” says Burkman. “Decades of relationship-building in politics could be lost. And make no mistake every lobbyist in the town is worried.”

Lobbyists routinely use money to gain access and buy influence. They leverage their connections for wealthy clients who want access. But The Donald has said he won’t accept their money.

“Literally 30-thousand jobs could be lost if Trump is sworn in. Washington as we know it, and how business is conducted, will change instantly.”

[…]  “Asking him to accept contributions in the general must be order number one. It is critical to our survival. We must also make him understand that the Capitol city simply cannot be run without us. We, in fact, make things happen.”  (more)

Well, the unthinkable happened.

Think about the institutional shock.  As the 2016 article outlined, 30,000 people who make a living funneling $4 billion of financial influence into the organizational swamp are now doing what?

The media is focused on ‘shiny things’ and ‘palace intrigue’ and no-one is discussing the larger ramifications of the influence machine shutting down.

If you step back and look at the overall direction of action from the White House it becomes evident the first 100 days of the Trump administration can be summed up as: laying out all the tools for a grand dis-assembly.

Using mostly executive orders, the Trump administration is requesting data and ordering reviews of various federal and institutional constructs.  SEE ORDERS HERE

In addition to a review of merit or worth, OMB director Mick Mulvaney has also begun a full-scale review of every sub-agency within the federal apparatus to find duplication of action.  Identified duplicates will either be removed or reassigned.

For all of the aforementioned reasons the legislative side is at a stand still.  There’s nothing to indicate that will change in the foreseeable future.

President Trump needed only three legislative items to fulfill his policy mission:

  • Repeal of ObamaCare.
  • Passage of Tax Reform. -OR- Just the targeted portions of the tax proposal.
  • Passage of a budget.

Despite all the media protestations to the contrary, these are the only three essential ingredients in the President Trump domestic policy agenda.   That said, the larger direction of the agenda can continue even without them.

Passage of legislation for the three initiatives most certainly enhances and amplifies the effects of Trump’s executive action, exponentially so; but passage in-and-of-itself is not mandatory for President Trump’s larger institutional deconstruction to continue.

Then again, didn’t we always know this?...

Part III – Prediction: Jim DeMint Will Join The Trump Administration…


♦In Part-I we explained how legislation is actually constructed in 2017. NOT how most people think it is constructed – SEE HERE

♦In Part-II we explained what that modern reality means with a Trump administration, and what will be needed to overcome the corrupted swamp – SEE HERE

The final paragraphs include accepting the reality and pondering:

[…] President Trump is not going to sit and wait for congress to evolve in their ability to turn away from existing lobbyists hanging around to defend their interests.  Sooner or later President Trump is going to do something dramatic to break the impasse within the broken legislative system.

Considering that Trump is not a politician, that “something” could get rather ugly.

We are not going to get bogged down in the weeds and loose the capacity to see the larger, more consequential, picture.  Staying elevated – However, as if guided by a prescient cue, part of the possible answer to the quagmire becomes evident today:

The controversial president of The Heritage Foundation, former Sen. Jim DeMint, may soon be out of a job, following a dispute with board members about the direction of conservative think tank, according to three people with knowledge of the situation.

Some Heritage board members believe that DeMint has brought in too many Senate allies and made the think tank too bombastic and political — to the detriment of its research and scholarly aims.

[…]  “If Heritage pushes Jim DeMint out, it was because a few board members, who are close to the Republican establishment, never wanted him to be president and have been working to push him out ever since,” said one operative who has worked with Heritage. “DeMint is one of the most respected and selfless conservative leaders in the country and pushing him out would be a big mistake.” (link)

During his keynote remarks at the NRA convention in Atlanta today, President Trump noted the high regard carried for Jim DeMint:

[…] And also from Heritage, Jim DeMint.  It’s been amazing.  I mean, those people have been fantastic.  They’ve been real friends.

Former South Carolina Senator Jim DeMint, now head of the Heritage Foundation has been pushing the organization toward more political activism because it is necessary for the exact reason we have outlined in the previous discussions:  “There are almost zero organizational entities within K-Street presenting any legislative constructs or legislative briefs intended to advance any of Trump’s policy objectives.” (link)

Virtually all of the K-Street policy and lobbying influence is targeted to grow government and present legislation that grows the scale, scope and interests of the financial political class.  DeMint’s efforts toward providing a counter-balance to the influence of the singular policy agenda is exactly what’s needed to begin to deconstruct the UniParty institutions.

The House and Senate, and all of the membership therein, are mired in the swamp by the legislative priorities of the financial influences and lobbyists upon them.  The scale of the lobbying is jaw-dropping when you consider over $3 billion spent in 2016 alone.

The Citizens United SCOTUS decision injected massive fuel into the swamp to expand the scale and scope of multinational corporate influence.   There is now virtually unlimited money pouring in to Super-PAC’S who target politicians for legislative influence.

If President Trump is going to make inroads to advance his America-First agenda, he is going to have to find a way through the financial network pressure now leveraging and choking all members of congress.  The UniParty dynamic cannot be broken without directly confronting this issue.

Senator Jim DeMint, founder of the Senate Conservative Fund (SCF), is the original Tea Party politician who generated support for grassroots conservative politicians.  It was specifically through DeMint’s pre-CU fund many of the modern leaders of conservatism gained their office.

Senator DeMint began slaying incumbent GOPe candidates and raising up challengers to GOPe preferred primary candidates.   He was remarkably successful, and the professional republican class hated him for wiping out their establishment next-in-liners.

However, empowered by the SCOTUS Citizens United decision (2010), the professional GOPe machine changed their strategy and began fighting back against DeMint’s firebrand of conservative primary politics.

The establishment GOP (McConnell, Hatch, Cornyn, Blunt, Thune etc) used the CU decision to coordinate with lobbyists like CoC President Tom Donohue and fund Super-PAC’s with tens of millions of dollars for attacks against republican primary candidates they viewed as outside the party norms.

By the 2012 election the GOPe strategy was working and most of the incumbent republicans were considered safe and secure.  The defeat of Mitt Romney didn’t matter to the UniParty republican leadership; what mattered most was their ability to remain in power.

If the UniParty republicans lose an election to a democrat nothing changes; the leadership remains in power and influence regardless of the flag color atop the spire.  However, if the UniParty republicans lose an election to a real conservative their power is threatened; this is why the professional GOPe attack their own.

For all of these reasons it just makes sense for Jim DeMint to join the Trump administration.  DeMint could be a great Chief-of-Staff replacement for Priebus, or DeMint could be the COO inside DC to guide the architecture of legislative constructs that are in line with Trump’s policy objectives.   Jim DeMint and Mike Pence are strong allies and good friends from all earlier battles on Capitol Hill.

Jim DeMint would be a natural asset to the administration because the battle has now evolved beyond party affiliation; and the UniParty, including the GOPe, must be confronted if any success is to be achieved.

To fight this:

…You Need This:

….Because ultimately the battle looks like this: 

.

Advertisements

Part II – Why President Trump Has Not Received Legislative Action From Congress – and What Can Be Done…


In Part I we explained why President Trump has not received any legislation:

To Wit: President Donald Trump winning the election threw a monkey wrench into the entire DC system…. The modern legislative machine is frozen in place.

The “America First” policies represented by candidate Donald Trump are not within the legislative constructs coming from the authors of the legislation.   Congress has no bills to advance because all of the myriad of bills and briefs written are not in line with President Trump policy.

That’s why congress has not passed any legislation for President Trump to sign.

There’s no entity within DC writing legislation that is in-line with President Trump’s economic and foreign policy agenda.  Exactly the opposite is true.  All of the DC pipeline legislative briefs and constructs are antithetical to Trump policy.

There are almost zero organizational entities within K-Street presenting any legislative constructs or legislative briefs intended to advance any of Trump’s policy objectives.

Think about how much money is behind the legislative business when those who control the legislation are willing to spend $3.1 BILLION in a single year to achieve their needs.

♦The “Associated American Southern Border Wall and Security Builders” – special interest and lobbying group – simply doesn’t exist. Nor are there any entities creating legal briefs (bills) to facilitate the southern border wall construction.

♦There is no “Associated Illegal Immigrant and Deportation Enforcement” group lobbying for the removal of undocumented illegal aliens; or writing legislation to fast-track deportation of illegal aliens.

♦There’s also no official corporate political action committee or group office on K-Street creating legislation to repeal ObamaCare, or lobby for the removal of government interventionism into the healthcare system.  etc.

The DC legislative pipeline is devoid of any bill, brief or construct for any of the platform priorities of the Trump administration.   Quite the opposite is true.  Almost all of the K-Street institutions -which create the legislative priorities- are capable of producing a product that flows in one direction.

This reality is the epicenter of the UniParty problem.

Voters can demand change and switch the House of Representatives from Democrat to Republican control, but politicians don’t actually write legislation.  The legislative product coming through the system remains the same regardless of which party is in control of the House of Representatives.

Voters can go further and change out the Senate from Democrat to Republican control; but again, you find little difference because the legislative product hasn’t changed.  K-Street may (usually they don’t) modify the special interest ingredients a little – but the progressive sausage is still a progressive sausage; it’s not a hamburger.

Voters go one step further and change the Executive Branch away from progressive control.  However, there again, the legislative product has not changed.  The DC system is creating the same ideological product regardless of the dynamic of party affiliated politics.

The problem in 2017 is systemic because there’s no counter-balancing legislative or lobbying enterprise within the epicenter of the DC Swamp, K-Street.  There’s virtually no alternative legislative product being generated which would coincide with the change in representative political ideology.

This UniParty system is why Paul Ryan and Mitch McConnell voted to fund and approve every one of President Obama’s priorities.  Omnibus, Bailouts, Porkulous, DACA, Healthcare Exhanges, Stimulus etc. are the only game in town with support – there simply are no alternatives being pushed by interest groups.

Yes, there are a few modestly sized groups like Heritage Foundation who can generate alternate legislative products and some advertizing. But for every one of them there’s a hundred going in the other direction.

When you think about it, it simply makes sense.  It’s a self-fulfilling prophecy. Why would there be an organizational entity inside the system whose primary purpose would be to spend money in order to generate less spending or smaller government?  They would essentially be advocating against their own interests.

Remember the grand fiasco that was the 2013/2014 Comprehensive Immigration Reform bill (Gang-of-Eight)?

That Go8 bill was an outcome of the same lobbying process, same K-Street legislative construct etc.  The controversial bill was not majority supported outside the beltway.  Despite the electorate lack of support it passed the Senate and Speaker Boehner, Paul Ryan, Eric Cantor and Kevin McCarthy were only two days from a vote in the House when Cantor was primaried.

When ObamaCare was passed on December 23rd at 1:38am a full 70% of the country when polled did not support it.  But the DC lobbying and legislative system created it and found a way to get it passed.

Jump to 2017 – President Trump takes over the White House in January, and there’s really no Pro-Trump legislative product from congress because there’s no Pro-Trump legislative construct coming from the people who write legislation, K-Street.

Instead, crickets.

The only special interest group that President Trump advocating for him are the voters.

The DC swamp (writ large) is a singular organism with multiple visible components that seem disconnected; but in direction or pathway they are not dissimilar.  Under the visible surface the UniParty roots are all intertwined and connected around principles of self-sustaining common interest.  Their commonality lies in growth of government.

President Trump’s fiscal and economic policies are adverse to those UniParty interests.  President Trump’s first full-year budget proposal was a trillion dollar reduction in spending.  As a consequence the combined weight of all visible DC interests immediately aligned toward diminishment of the proposal.

Within the DC Swamp the flow of legislative interest travels in only one direction.  Albeit there are multiple organizations able to construct legislation for sale; the direction of the product they are producing is going in one progressive direction.

There are no K-Street lobbyists demanding smaller/lesser government.  There are no lobbyists walking in to House and Senate offices and asking for representatives to spend less money.  The only people doing that are voters.   How do reps generally deal with those annoyances?  They turn off the phone, disconnect the fax machine and ignore the emails.

Accepting the reality of who controls legislative constructs also helps to understand why those same entities will not allow prior legislative accomplishments to be undone.  Modern K-Street considers prior legislation ‘paid-for investments‘, they will not allow removal.

Retention priorities:

♦Retention of ObamaCare. ♦Deep Federal Spending. ♦NO border wall. ♦Open-ended immigration until congress delivers comprehensive immigration reform to include amnesty. ♦Tax Cuts (corporate revenue enhancements) are permitted.

They did however suffer defeats on legislation that had not yet passed, but were prepped for Hillary Clinton, like: Trans-Pacific-Trade (TPP) and Common Core federalization of education.

So the next obvious question is: what can be done about it?

The only viable solution, under the current system in place, is for the Trump Administration to generate their own legislative product to deliver to congress for passage.  It sounds weird, but essentially that appears to be what is taking place right now with the White House staffing up with their own groups of bill authors, constructionists and administration lobbyists.

President Trump’s team will create the legislative product, and hopefully the republican controlled house and senate will pass it.

However, even this process also runs head first into the positions of the UniParty.

Example: Commerce Secretary Wilbur Ross sends the Senate Committee on Commerce, Science and Transportation a statutorily required “letter of intent” to renegotiate NAFTA (North American Free Trade Association) mid-March, and the Republican Committee Chairman John Thune doesn’t accept it. (Today is 4/28/17).

Now what?  The GOP wing of the UniParty is beholden to lobbying interests (U.S. CoC) who are adverse to NAFTA renegotiation.   See who is on the committee HERE.

This example is not even a legislative product that needs a vote.  This example is simply a statutorily required notification that requires being accepted.  What do you think would be the outcome if Senator McConnell was given a legislative product containing similar pre-paid lobbying conflicts for his membership?

This reality also helps to explain the frustration from the White House when they do have a legislative product that moves the needle (ie. healthcare), road-mapped primarily by HHS Secretary Tom Price, and yet the House of Reps can’t even bring it to a vote.

The Freedom Caucus can wax philosophically about the Price/Ryan bill not being a full repeal; and they can argue accurately about the bill having flaws remaining from the influence of the ObamaCare lobbyists, but what is the actual alternative?  Nothing.

Nothing is not an option.

The White House paying for their own staff to hire outside people to write legislation because congress doesn’t have an ideological enterprise to create their own is what has lead to this ridiculous situation we are in right now.

This DC quagmire might improve over time as new enterprises (legislation builders) move into DC to do work with a more favorable ideological outlook in-line with the new administration.  But in the interim nothing is getting done, the simple tasks of budgets are at loggerheads, and time is wasting.

Fortunately for congress, right now foreign policy is taking up a lot of intellectual and administrative energy.  The current domestic economic policy outcomes are being driven by the executive office alone without congress having to do any work.

However, understandably, President Trump is not going to sit and wait for congress to evolve in their ability to turn away from existing lobbyists hanging around to defend their interests.  Sooner or later President Trump is going to do something dramatic to break the impasse within the broken legislative system.

Considering that Trump is not a politician, that “something” could get rather ugly.

 

Part I – Understanding Why President Trump Has Not Received Legislative Action From Congress…


There are many new commentators at CTH, and even more new people taking notice of politics for perhaps the first time in their lives.   There is also some confusion noticed between two distinct groups who appear to be talking above and around each other.  Two groups trying to communicate from two entirely divergent sets of understanding.

Perhaps it is valuable to reset the larger frames of reference and provide clarity.

Many, heck, most people think when they vote for a federal politician -a representative- they are voting for a person who will go to Washington DC and write or enact legislation. This is the old-fashioned “schoolhouse rock” perspective based on decades past.

There is not a single congress person who writes legislation or laws.

In 2017 not a single member of the House of Representatives or Senator writes a law, or puts pen to paper to write out a legislative construct.  This simply doesn’t happen.

Over the past several decades a system of constructing legislation has taken over Washington DC that more resembles a business operation than a legislative body.  Here’s how it works.

Outside groups often called “special interest groups” are entities that represent their interests in legislative constructs.  These groups are often corporations, banks, financial groups or businesses; or smaller groups of people with a similar business connection who come together and form a larger group under an umbrella of interest specific to their like-minded affiliation.

Sometimes the groups are social interest groups; activists like climate groups, environmental interests etc.   The social interest groups are usually non-profit constructs who depend on the expenditures of government to sustain their cause or need.

The for-profit groups (mostly business) have a purpose in Washington DC to shape policy, legislation and laws favorable to their interests.   They have fully staffed offices just like any business would – only their business is getting legislation for their unique interests.

These groups are filled with highly-paid lawyers who represent the interests of the entity and actually write laws and legislation briefs.  In the modern era this is actually the origination of the laws that we eventually see passed by congress.  Within the walls of these buildings within Washington DC is where the ‘sausage’ is actually made.

Again, no elected official is usually part of this law origination process.

Once the corporation or representative organizational entity has written the law they want to see passed they hand it off to the lobbyists.  The lobbyists are people who have deep contacts within the political bodies of the legislative branch, usually former House/Senate staff or former House/Senate politicians themselves.

The lobbyist takes the written brief, the legislative construct, and it’s their job to go to congress and sell it.

“Selling it” means finding politicians who will accept the brief, sponsor their bill and eventually get it to a vote and passage.   The lobbyist does this by visiting the politician in their office, or, most currently familiar, by inviting the politician to an event they are hosting.  The event is called a junket when it involves travel.

Often the lobbying “event” might be a weekend trip to a ski resort, or a “conference” that takes place at a resort.  The actual sales pitch for the bill is usually not too long and the majority of the time is just like a mini vacation etc.

The size of the indulgences within the event, the amount of money the lobbyist is spending, is customarily related to the scale of the bill the sponsoring business entity needs to get support for.   If the sponsoring business or interest group can gain a lot of financial benefit for the legislation they spend a lot on the indulgences.

Recap:  Corporations (special interest group) writes the law.  Lobbyists take the law and go find politician(s) to support it.  Politicians get support from their peers using tenure and status etc.  Eventually, if things go according to norm, the legislation gets a vote.

Within every step of the process there are expense account lunches, dinners, trips, venue tickets and a host of other customary way-points to generate/leverage a successful outcome.

But the important part to remember is that the origination of the entire system is EXTERNAL to congress.

Congress does not write laws or legislation, special interest groups do.  Lobbyists are paid, some very well paid, to get politicians to go along with the need of the legislative group.

When you are voting for a Congressional Rep or a U.S. Senator you are not voting for a person who will write laws.  Your rep only votes on legislation to approve or disapprove of constructs that are written by outside groups and sold to them through lobbyists who work for those outside groups.

While all of this is happening the same outside groups who write the laws are providing money for the campaigns of the politicians they need to pass them.  This construct sets up the quid-pro-quo of influence, although much of it is fraught with plausible deniability.

This is the way legislation is created.

If your frame of reference is not established in this basic understanding you can often fall into the trap of viewing a politician, or political vote, through a false prism.  The modern origin of all legislative constructs is not within congress.

“we’ll have to pass the bill to, well, find out what is in the bill” etc.  ~ Nancy Pelosi 2009

“We rely upon the stupidity of the American voter” ~ Johnathan Gruber 2011, 2012

Now, think about this reality against the backdrop of the 2016 Presidential Election.  The entire system within DC was not structurally set-up to receive a Donald Trump presidency.

If Hillary Clinton had won the election, her Oval Office desk would be filled with legislation passed by congress which she would be signing.  Heck, she’d have writer’s cramp from all of the special interest legislation that would be flowing to her desk.

Why?  Simply because the authors of the legislation, the special interest and lobbying groups, were spending millions to fund her campaign.  President Hillary Clinton would be signing K-Street constructed special interest legislation to repay all of those donors/investors.  Congress would be fast-tracking the passage because the same interest groups also fund the members of congress.

President Donald Trump winning the election threw a monkey wrench into the entire DC system…. The modern legislative machine is frozen in place.

The “America First” policies represented by candidate Donald Trump are not within the legislative constructs coming from the authors of the legislation.   Congress has no bills to advance because all of the myriad of bills and briefs written are not in line with President Trump policy.

That’s why congress has not passed any legislation for President Trump to sign.

There’s no entity within DC writing legislation that is in-line with President Trump’s economic and foreign policy agenda.  Exactly the opposite is true.  All of the DC legislative briefs and constructs are antithetical to Trump policy.

There are hundreds of file boxes filled with thousands of legislative constructs that became worthless when Donald Trump won the election.

Those legislative constructs (briefs) representing tens of millions of dollars worth of time and influence and are now just sitting there piled up in boxes under desks and in closets amid K-Street and the congressional offices.

Any current legislation must be in-line with an entire new political perspective, and there’s no-one, no special interest or lobbying group, currently occupying DC office space with any interest in synergy with Trump policy.

Think about the larger ramifications within that truism.

That is also why there’s so much opposition.

No legislation by outside interests means no work for lobbyists who sell it.   No work means no money.  No money means no expense accounts.  No expenses means politicians paying for their own indulgences etc.

However, no K-Street expenditures -because of the futility of it- also means more money available for opposition and activist activity.

Lastly, when you understand this reality you begin to see the difference between legislation with a traditional purpose and faux-legislation with a political agenda.

Remember, politicians don’t write laws – outside groups do.

If you asked a DC Senator or House Member to actually write a law they’d look back at you like a cow just licked them on the forehead.  The politician would have no clue what you are asking them to do, and would immediately look to their staff as their closest reference point (the go-betweens) for outside lobbyist assistance.

This helps to understand when Senator Rand Paul, Mike Lee or Ted Cruz are “pitching” a “bill they’ve written”, it’s a gimmick – a ruse – a pure fundraising ploy.  Nothing more.  That’s why the bills they talk about (ie. El Chappo, Clean Repeal etc.) never actually materialize…. they are raising money, not legislation.

And that’s why Trump’s legislative inbox is empty.

Staffers with nothing to do…

Economic Reality: Bottom 50% Of Americans No Longer Matter


Tyler Durden's picture

Authored by Mike Shedlock via MishTalk.com,

The Fed likes to brag about the “We saved the world” recovery.

However, the unfortunate truth of the matter is a record Half of American Families Live Paycheck to Paycheck.

Does it Matter? Let’s investigate.

Unprepared for Nearly Anything

  • 50% are woefully unprepared for a financial emergency.
  • Nearly 1 in 5 (19%) Americans have nothing set aside to cover an unexpected emergency.
  • Nearly 1 in 3 (31%) Americans don’t have at least $500 set aside to cover an unexpected emergency expense, according to a survey released Tuesday by HomeServe USA, a home repair service.
  • A separate survey released Monday by insurance company MetLife found that 49% of employees are “concerned, anxious or fearful about their current financial well-being.”

Deleveraging? Where?

A Fed study shows U.S. Households Will Soon Have as Much Debt as They had in 2008.

The Federal Reserve announced Friday that the U.S. has $1 trillion in credit-card debt. Consumers hit that number in the fourth quarter of 2016, but eased on revolving credit during January 2017. The Fed announcement showed revolving consumer credit hit more than $1 trillion once again in February 2017.

“Credit card debt is rising quickly, but delinquencies are still really low,” said Matt Schulz, a senior industry analyst at the credit cards site CreditCards.com. “Many Americans are doing a good job of controlling their debts, but eventually with big debts and rising interest rates, it’s likely that something will have to give.”

Paycheck to Paycheck “Good Job”

Excuse me for asking but if half the nation lives paycheck to paycheck, is that really indicative of doing a good job at managing debt.

And as for “low delinquencies”, I remind you of my April 26 article Subprime Credit Card Losses Bite Capital One: Income Down 20%, Charge-Offs Up 30%.

Nonetheless, I remind you of an important perception.

We Saved the World

Two Reasons Not to Worry

  1. The stock market and housing are still going strong. We heard the same thing in 2007 but it’s different this time.
  2. The bottom 50% of the economy simply do not matter.

The real crux of the matter is point number two.

The Fed does not give a damn about the bottom half of the economy even though it spouts continual lies about “income inequality.

The Bottom 50% Do Not Matter

As long as the Fed can keep stocks and home prices elevated, there is no concern about the food-stamp, rent-subsidized, Medicaid-supplement, disability-income, Obamacare-subsidized 50% of Americans struggling paycheck-to-paycheck.

That money rolls in guaranteed, month after month!

That 50% cannot afford a house is irrelevant as long as suckers keep paying $500,000 to two-bedroom shacks in LA.

The game is to keep asset prices up so that the top 50% keep spending. The bottom 50% are taken care of by government (taxpayer) subsidies noted above.

Here’s the real deal: Fed Expects a Second Quarter Rebound, Higher Equity Prices.

Repeat Performance

The Fed needs to keep asset prices elevated even though it’s pretty clear concerns are mounting over bubbles.

Can the Fed save the world again?

Previously, the bottom third did not matter. Then the bottom 40% did not matter. Now the bottom 50% do not matter.

That statement is a bit over the top. By how much I don’t know. But the trend is clear, as is the fly in the ointment.

Brexit was the first warning shot. Trump was the second.

As soon as the bottom 65% don’t matter, those 65% may vote to take matters into their own hands.

Futures Rise On Government Funding Deal; Most Global Markets Closed For Holiday


Tyler Durden's picture

With much of Europe and Asia, including the U.K., France, Germany and China markets closed for Labor Day, Asian stocks and the dollar rose buoyed by news that Congress had reached a deal to keep the US government funded through the end of September. S&P futures are up 4 points or 0.2%. Oil declined as rigs targeting crude in the U.S. rose for a fifteenth week and output from Libya rebounded.

What’s happening this morning? Not a whole lot. The two big incremental headlines concerned China (the Apr PMIs were underwhelming) and US gov’t spending (as was widely expected a deal was reached to fund the gov’t until Sept 30 although a shutdown this fall, along w/a debt ceiling battle, remain distinct possibilities). Otherwise it was a relatively quiet weekend/morning. Note that a lot of the world (other than the US) is closed Mon 5/1 for Labor Day/May Day holidays (including HK/mainland China and Europe/London).

The Yen declined for a fifth day in six, while Treasuries retreated with gold.

Related Video
Global markets: US, euro zone go separate ways

The MSCI All Country World Index edged higher, after capping a sixth straight month of gains on Friday. Japan’s Topix rose to the highest level since March after its best week of the year. Trading volumes were lower than average due to holidays in most of Europe, China, India and Mexico, and a forthcoming three-day break in Japan.

MSCI’s index of Asia-Pacific shares outside Japan rose 0.1%. Japan outperforming on upbeat earnings, with Japan’s Nikkei climbing 0.4%, with high-tech blue chips gaining on strong earnings.

Asian shares initially took their cue from Wall Street, which dipped on Friday after data showed the U.S. economy grew at its weakest pace in three years in the first quarter. The mood brightened however, on news that U.S. congressional negotiators hammered out a bipartisan agreement on a spending package to keep the federal government funded through Sept. 30, thus averting a government shutdown. Asian markets were little fazed by China’s official manufacturing survey on Sunday which showed growth in the country’s factories slowed more than expected in April to a six-month low.

Pointing to a higher open for the main market later in the day, E-minis gained about 0.2% while 10-year Treasury yields rose after three successive days of declines.

“It is hard for markets to make big moves with holidays in so many places today, and people are just waiting for more information to come out,” said Harumi Taguchi, principal economist at IHS Markit in Tokyo.

“The main focus of the broader markets this week will be on the United States, with the Fed’s May 2-3 policy meeting and the jobs report on Friday,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo. “While many of the indicators in the first quarter were weak, the jobs data could confirm that labor market conditions continue to improve and lift the dollar and U.S. yields.”

In currencies, the greenback was up 0.2 percent at 111.750 yen edging back towards a four-week peak of 111.780 reached last week. The euro handed back earlier modest gains and was flat at $1.0891. The common currency had been lifted on Friday after euro zone inflation data rose more than expected and returned to the European Central Bank’s target. The euro was still in range of the 5-1/2-month high of $1.0951 struck early last week on relief over the first round of the French presidential elections. The pound was 0.3 percent lower at $1.2907 after climbing to a seven-month high of $1.2957 on Friday, when traders were seen to have closed off bets against the pound ahead of Britain’s long bank holiday weekend.  The Australian and New Zealand dollars were slightly lower at $0.7483 and $0.6856, respectively.

In commodities, crude oil prices slipped amid lingering concerns that an OPEC-led production cut has failed to significantly tighten an oversupplied market.U.S. crude shed 11 cents to $49.22 a barrel, heading back towards a one-month low of $48.20 plumbed late last week and Brent LCOc1 was down 16 cents at $51.89 per barrel. Oil was weighed by news that US rigs targeting crude in the U.S. rose for 15th week while output from Libya rebounded. The number of oil rigs operating in U.S. fields advanced to most since April 2015, according to Baker Hughes. Libya’s crude production rebounded to more than 700k b/d as the OPEC member’s biggest oil field and another deposit in its western region resumed pumping after halt. “Higher prices will attract American producers to ramp up production, especially in profitable areas like the Permian basin, and the conflict in Libya was already winding down last week,” says Sheldon Laliberte, a Rotterdam-based crude oil analyst at commodities trader Cofco International Ltd. “I’m structurally bearish oil right now.”

DISH Network, Advanced Micro Devices, Cardinal Health among companies scheduled to publish results. It is another busy week for earnings with 131 S&P 500 companies reporting and 85 Stoxx 600 companies reporting. Amongst those reporting are Apple, BP, BNP Paribas, Facebook, Merck, Tesla, Time Warner, Pfizer, HSBC, BMW, Shell and VW.

Market Snapshot

  • S&P 500 futures up 0.2% to 2,385.00
  • STOXX Europe 600 down 0.04% to 386.92
  • MXAP up 0.2% to 149.12
  • MXAPJ up 0.1% to 487.23
  • Nikkei up 0.6% to 19,310.52
  • Topix up 0.5% to 1,539.77
  • Hang Seng Index down 0.3% to 24,615.13
  • Shanghai Composite up 0.08% to 3,154.66
  • Sensex down 0.4% to 29,918.40
  • Australia S&P/ASX 200 up 0.6% to 5,956.52
  • Kospi down 0.2% to 2,205.44
  • German 10Y yield rose 2.1 bps to 0.317%
  • Euro down 0.01% to 1.0894 per US$
  • Brent Futures down 0.6% to $51.72/bbl
  • Italian 10Y yield rose 3.7 bps to 1.987%
  • Spanish 10Y yield rose 2.2 bps to 1.648%
  • Brent Futures down 0.6% to $51.72/bbl
  • Gold spot down 0.4% to $1,262.81
  • U.S. Dollar Index up 0.08% to 99.13

Top Overnight News from Bloomberg

  • U.S. House and Senate negotiators reached a bipartisan deal on a $1.1t spending bill that largely tracks with Democratic priorities and rejects most of President Donald Trump’s wish list, including money to begin building a wall along the U.S.-Mexican border
  • The U.S. is considering a range of options, from expanded economic sanctions to military operations, as it reaches out to allies in confronting North Korea’s latest provocations, according to a senior Trump administration official
  • Marine Le Pen and Emmanuel Macron kick off the final week of the French presidential campaign with major rallies in Paris after weekend sparring on subjects ranging from the euro to the environment
  • The pound fell as Prime Minister Theresa May stuck to her guns in arguing that Britain should be allowed to line up a “comprehensive” free-trade deal with the EU at the same time as it negotiates its departure from the bloc
  • China’s official factory gauge declined on lower commodity prices, clouding the outlook for sustaining the past two quarters’ acceleration in economic growth
  • U.S. Looks at Sanctions, Military Action Against North Korea; N. Korea Says Will Speed Up Steps to Bolster Nuclear Deterrence
  • Fox, Blackstone Said Teaming to Make Competing Tribune Bid
  • China Manufacturing Gauge Declines From Almost Five-Year High
  • HSBC, RBS Saudi Arabian Ventures in Talks to Merge
  • Macquarie, Hastings-Led Groups Said to Bid for Endeavour Energy
  • First NBC Bank Fails; Deposits Assumed by Hancock’s Whitney Bank
  • U.S. Oil Output to Expand 400k B/D This Year: Continental’s Hamm
  • BNSF Says Track Outages in U.S. Midwest Impacting Operations
  • Coach Said Considering Takeover of Jimmy Choo: Telegraph
  • GSO Capital Partners Said to Buy More J. Crew Debt: Reuters
  • Elliott Said to Meet BHP’s Australian Holders This Week: Reuters

Most of Asia was closed Monday for holidays (HK, mainland China, Taiwan, Korea, India, and others, were closed). Japan was open and saw decent gains (TPX +0.52%, NKY +0.59%). Australia also ended higher (+0.55%). News was quiet in Asia other than some eco headlines – the China NBS Apr PMIs were mildly underwhelming while Macau Apr gaming revs and Japan’s manufacturing PMI were both about inline. Within the NKY, tech was by far the top performer (the Japanese info tech index ended up ~3.8%) while materials did well too (energy, discretionary, healthcare, and utilities lagged). Tokyo Electron and Nippon Electric Glass both surged on earnings (up ~13.3% and ~11.7%, respectively); note that Tokyo Electron is just the latest pos. data point for semi equipment (semi equipment stocks have posted very healthy results).

Top Asian News

  • Korea Exports Surge for Sixth Month on Ships and Semiconductors
  • North Korea Test-Fires a Ballistic Missile: Yonhap
  • China April Manufacturing PMI at 51.2; Est. 51.7
  • Japan Govt Considers Installing Aegis Defense System: Kyodo
  • Mongolia Expects IMF Bailout to Happen ‘Soon’ After Postponement
  • Lotte Chairman to Meet Hershey Chairman on U.S Trip: Yonhap
  • PBOC Official Says China Should Deleverage Properly: Caijing
  • Freeport Union Says About 8,000 Grasberg Workers Join Strike
  • Nakheel, Hilton Agree Partnership for Rooms, Apartments in Dubai
  • Macau Casino Revenue Gains for Ninth Month With High-Stakes Bets

Most European markets are closed due to the Labor Day/May 1 holiday.

Top European News

  • Le Pen Says Her Presidency Will Lead to the End of the Eur
  • Macron, Le Pen Kick Off Final Week With Major Paris Rallies
  • Britain’s May Sticks to Guns Seeking Parallel Brexit Talks
  • Renzi Faces Uphill Battle to Italy Premiership After Primary Win
  • Novo Settles U.S. Probe of Kickbacks, Disguised Salespeople
  • DLR Kredit Plans to Issue DKK1b in Senior Resolution Notes
  • Alitalia Bridge Loan to Be Higher Than EU500m, La Stampa Says
  • Luxottica 1Q Rev. Soft, Improving Trends May Be Supportive: RBC
  • AB Science FY Revenue Decreases to EU1.5m
  • Netherlands April Manufacturing PMI Unchanged at 57.8
  • Danske Bank Raised to Strong Buy at Jyske Bank, PT DKK300
  • Turkey’s Erdogan Says Need to Alleviate Exchange-Rate Pressure

In currencies, the yen fell as much as 0.4 percent to 111.92 per dollar to the lowest level since the end of March and traded at 111.74 in early morning trading. The currency last week had the biggest slide since the Fed raised U.S. rates in December. The Bloomberg Dollar Spot Index added 0.1 percent, while the broader dollar DXY index was up 0.2 percent at 111.750 yen edging back towards a four-week peak of 111.780 reached last week. The euro handed back earlier modest gains and was flat at $1.0891. The common currency had been lifted on Friday after euro zone inflation data rose more than expected and returned to the European Central Bank’s target. The euro was still in range of the 5-1/2-month high of $1.0951 struck early last week on relief over the first round of the French presidential elections. The pound was 0.3 percent lower at $1.2907 after climbing to a seven-month high of $1.2957 on Friday, when traders were seen to have closed off bets against the pound ahead of Britain’s long bank holiday weekend.  The Australian and New Zealand dollars were slightly lower at $0.7483 and $0.6856, respectively.

In commodities, crude oil prices slipped amid lingering concerns that an OPEC-led production cut has failed to significantly tighten an oversupplied market.U.S. crude shed 11 cents to $49.22 a barrel, heading back towards a one-month low of $48.20 plumbed late last week and Brent LCOc1 was down 16 cents at $51.89 per barrel. Oil was weighed by news that US rigs targeting crude in the U.S. rose for 15th week while output from Libya rebounded. The number of oil rigs operating in U.S. fields advanced to most since April 2015, according to Baker Hughes. Libya’s crude production rebounded to more than 700k b/d as the OPEC member’s biggest oil field and another deposit in its western region resumed pumping after halt. “Higher prices will attract American producers to ramp up production, especially in profitable areas like the Permian basin, and the conflict in Libya was already winding down last week,” says Sheldon Laliberte, a Rotterdam-based crude oil analyst at commodities trader Cofco International Ltd. “I’m structurally bearish oil right now.”

US Event Calendar

  • 8:30am: Personal Income, est. 0.3%, prior 0.4%; Personal Spending, est. 0.2%, prior 0.1%
    • Real Personal Spending, est. 0.3%, prior -0.1%
    • PCE Deflator MoM, est. -0.2%, prior 0.1%
    • PCE Deflator YoY, est. 1.9%, prior 2.1%
    • PCE Core MoM, est. -0.1%, prior 0.2%
    • PCE Core YoY, est. 1.6%, prior 1.8%
  • 9:45am: Markit US Manufacturing PMI, est. 52.8, prior 52.8
  • 10am: ISM Manufacturing, est. 56.5, prior 57.2
    • ISM Prices Paid, est. 67.5, prior 70.5
    • ISM New Orders, prior 64.5
    • ISM Employment, prior 58.9
    • Construction Spending MoM, est. 0.45%, prior 0.8%

DB’s Jim Reid concludes the overnight wrap

Welcome to May. Given that today is either a May Day or Labour Day public holiday in most European countries we’ll be holding back the usual monthly performance review for tomorrow’s EMR. As always though we’ve got the full run through of what is another reasonably busy week ahead at the end. For markets this week we’ve got the double header of a Fed meeting on Wednesday and US employment report on Friday. Barring a big surprise though it’s more than likely that the Fed meeting is a bit of non-event and it’s hard to see the FOMC statement really diverging off course for now. It’s worth noting that there is no scheduled press conference after the meeting either. In terms of payrolls, the emphasis for now in terms of the timing and pace of global hikes in recent months has shifted away from employment and over to inflation and so this release is probably less of a focal point than it has been in the past.

Away from that, this week we’ll also get the final revisions to the April global PMIs which will be closely watched as always. Meanwhile ahead of this Sunday’s second round presidential election in France the two candidates, Macron and Le Pen, are scheduled to take part in a live televised debate on Wednesday evening which is certainly worth keeping an eye on. The last 5 polls all released in the past few days show Macron as holding an average lead of 20pp over Le Pen. This is down marginally from the 24pp average in the first 5 polls after the first round result but still represents a pretty comfortable margin for Macron. As we said this time last week it would take a numerical shock perhaps 5-10 times larger than Brexit or Trump for Le Pen to win. Staying with politics, this week President Trump is scheduled to meet Palestinian Authority President Abbas on Wednesday and Australian Prime Minister Turnbull on Thursday. After Congress averted a government shutdown on Friday lawmakers are also expected to hammer out the necessary legislation this week to keep the government funded for the rest of this fiscal year. In fact overnight news has emerged that Congress has tentatively reached a deal on a $1.1tn bill so worth seeing how that develops today. Meanwhile the situation in North Korea is never too far from the front pages with US National Security Adviser McMaster telling Fox News that the US and its allies need to respond, whether that be through military operations or enforcement of UN sanctions, following the news of a ballistic missile launch in North Korea on Saturday.

Not to be outdone, this week is another fairly big one for earnings with 131 S&P 500 companies and 85 Stoxx 600 companies reporting. Amongst the big names are Apple (Tuesday), BP (Tuesday), Facebook (Wednesday) and Shell (Thursday).

We’ll see if they can continue what has been a decent start to earnings season to date. Indeed the trend so far is one of the strongest on record. In the US we have had reports from about 60% of the S&P 500 and 81% have beat at the earnings line, coming in 6.7% above consensus. This compares to the historical beat of 73% of companies and a median beat of 3.4%. This is made even more impressive by the fact that consensus estimates were not downgraded in the month leading up to earnings season compared to a typical 1% downgrade according to DB’s Binky Chadha. He notes also that the results so far point to 15% EPS growth in Q1 which is the fastest pace since 2011. Our European equity strategists note also that EPS growth of Stoxx 600 companies has accelerated to 23% with reported earnings being 13% above pre-season expectations.

Switching our focus now to the main weekend news. In terms of data, the main focus was on China where yesterday we got the official April PMIs. The data came in a little bit softer compared to March. The manufacturing PMI was reported as falling 0.6pts to 51.2 (vs. 51.7 expected) and the lowest level this year, while the non-manufacturing PMI declined 1.1pts to 54.0 and the lowest since October last year. The majority of markets in Asia are closed today including China so we might have to wait to see if there is much of a reaction tomorrow. Of those open however both the Nikkei (+0.50%) and ASX (+0.29%) have edged higher on thin volumes while US equity futures are also slightly firmer. The Greenback also rebounded from early losses following the spending bill headlines.

In terms of other news to report from the weekend, in Italy former PM Renzi was re-elected as the head of the ruling Democratic Party after securing more than 70% of votes. His reappointment was largely as expected however the margin of victory will likely be seen as giving Renzi a strong mandate ahead of a general election early next year. Meanwhile the latest Brexit development concerns the release of the European Council guidelines which are intended to govern the EU’s Brexit negotiations with the UK (you can find them here https://goo.gl/ nW8NBO) which were unanimously backed following a gathering in Brussels on Saturday. EU President Donald Tusk said following the meeting that “we now have unanimous support from all the 27 member states and the EU institutions, giving us a strong political mandate for these negotiations”. EC President Juncker added that “the negotiations will be difficult and it will be even difficult to retain the unity that we were able to have today”.

A quick wrap-up now of how markets closed out last week. Following a strong run for most of the week, risk assets seemed to run out of steam a bit on Friday. Despite some decent earnings in the tech sector from Amazon and Alphabet the S&P 500 (-0.19%), Dow (-0.19%), Stoxx 600 (-0.18%) and DAX (-0.05%) all finished with what were fairly modest losses still as markets digested a huge amount of economic data released on both sides on the pond. Much of the focus was on the Q1 GDP report in the US which revealed growth of just +0.7% qoq (vs. +1.0% expected). A negative contribution from inventories was cited as significantly weighing on growth along with a decline in government consumption. Private consumption eked out a small +0.3% saar gain. Our US economists estimate also that one reason for the weakness is residual seasonality with government statisticians not properly adjusting the data for normal seasonal variation. They estimate this to be worth 110bps on Q1 real GDP. Rates markets were seemingly more distracted by the ECI print however which came in at a higher than expected +0.8% qoq (vs. +0.6% expected) and the largest quarterly increase since Q4 2007. 10y Treasury yields touched a high of 2.334% intraday following that before settling down to finish just over 1bp lower on the day at 2.281%.

Away from that, in the US we also got the April Chicago PMI which was up 0.6pts to 58.3 in the month (vs. 56.2 expected). The final University of Michigan consumer sentiment reading for April was revised down 1pt to 97.0. Measures of inflation expectations were left unchanged however.

Closer to home in Europe the main focus was on the April CPI report for the Euro area. Headline CPI rebounded four-tenths to +1.9% yoy last month (vs. +1.8% expected) while the core rebounded five-tenths to +1.2% yoy (vs. +1.0% expected) which is the highest since June 2013. Given the timing of Easter – with services inflation accounting for the big jump – we will need to see another month of data to assess how much of the move has been sustained in reality. Away from that, Q1 GDP in the UK came in at +0.3% qoq which was also the same for growth in France. Both were a tenth below expectations.

Over to this week’s calendar now. As highlighted earlier, with it being a public holiday in the UK, Germany and France amongst other countries today, the main focus will be on the US session where there are a number of important releases include the PCE core and deflator readings and personal income and spending reports for March, as well as the ISM manufacturing reading for April and construction spending in March. Tuesday kicks off in Asia with the Japan services and composite April PMIs and Caixin manufacturing PMI in China. Over in Europe all eyes will be on the final April manufacturing PMIs as well as a first look at the data for the periphery and UK. The Euro area unemployment rate will also be released. In the US tomorrow the only data due out is vehicle sales in April.

Kicking things off on Wednesday will be Germany where the April unemployment numbers are due to be released. Shortly after that we’ll get Euro area PPI for March and then the advanced Q1 GDP report for the Euro area. In the US on Wednesday we’ll get the ADP employment change report in April and the final April PMIs and ISM non-manufacturing reading. In the evening on Wednesday all eyes then turn over to the Fed meeting. In Asia on Thursday the early data is out of China with the remaining April Caixin PMIs. In Europe we’ll also get the remaining April services and composite PMIs as well as Euro area retail sales in March and UK money and credit aggregates data. In the US on Thursday the data includes initial jobless claims, Q1 nonfarm productivity and unit labour costs, March trade balance, March factory orders and the final revisions to March durable and capital goods orders. With little of note in Europe on Friday the main focus will be on the US where we’ll get the April employment report including nonfarm payrolls.

Away from the data, this week’s Fedspeak is reserved for Friday when we’ll hear separately from Fischer, Williams and Yellen, as well as a panel debate with Rosengren, Evans and Bullard. Over at the ECB this week we are due to hear from Nouy and Nowotny on Tuesday and Lautenschlaeger, Praet, Draghi and Mersch on Thursday. At the BoJ we are due to hear from Kuroda on Tuesday, as well as receiving the minutes from the BoJ meeting last month. Other important events this week include a Fox interview with US Treasury Secretary Steven Mnuchin today, a meeting between Germany’s Merkel and Russia’s Putin on Tuesday, Wednesday’s live televised debate between French presidential candidates Macron and Le Pen, Wednesday’s meeting between President Trump and Palestinian Authority President Abbas and UK local elections on Thursday. Finally, expect earnings to also be a big focus for markets this week with 131 S&P 500 companies reporting and 85 Stoxx 600 companies reporting. Amongst those reporting are Apple, BP, BNP Paribas, Facebook, Merck, Tesla, Time Warner, Pfizer, HSBC, BMW, Shell and VW.

Report: Shutdown Averted – Spending Deal Reached – $1.070 Trillion…


Congressional negotiators have reached an agreement on a gap budget to operate the federal government through September 30th, the end of fiscal year 2017.

According to some summary information the bridge spending bill is $1.070 trillion for the remaining five months of fiscal year 2017.

The budget allows for $1.5 billion for border security, but does not direct funds specifically for the U.S. Mexico border wall.  Additionally the budget provides $15 billion for military spending.  The National Institutes of Health will gain $2 billion toward medical research and community development grants, and extends health insurance benefits for coal miners.

The catchall spending bill was required because there is no annual budget in place and congress has not operated with a federal budget since fiscal year 2008.  President Trump has proposed a fiscal year 2018 budget and congress will be debating that spending proposal over the summer.  Fiscal Year 2018 begins October 1st.

New York Times report HERE

The Dow & The Future – May 1st, 2017


DJIND-W 5-1-2017

The closing for April in the Dow Jones Industrial Index was very interesting to say the least. The closing at 20940.51 was just under our numbers defining bullish indicators – 20770-20975. This tends to suggest we are not breaking-out just yet and the turning point to watch has been the week of May 8th. If we look at the energy model above, we can see that energy is still positive. Typically, this indicator begin to decline showing little positive activity just before a crash when it goes negative. Here you can see our proprietary indicator back into 2007. The real crash was negative and pronounced. The other two times it went negative were marginal warning a brief correction and not a major change in trend.

We can see even technically it will now take a weekly closing below 2000 to spark a sustainable correction.

DJIND-W FOR 5-1-2017

Democrats Count of Press to Blame Trump if Social Security Defaults Temporarily


Default USA-1

The Debt Ceiling issue is back and of course people will sell the dollar as if the USA would actually default. The bulk of the debt is owned by the government so any default would send the economy down and pension funds from Social Security to government pensions.  Nobody pays off their debts. All countries just add to it year after year.

This time the Democrats are deliberately trying to now force a default so people on Social Security are harmed because they know they have mainstream media plotting with them to destroy the Trump Administration. Why we even have a debt ceiling is absurd since it always has to be raised anyhow and there is no way the debt will ever be reduced. This is another one of those strange things nobody can answer in Washington.

The imminent default of the US government of course would not happen. If I was President, I would cut all salaries and expenses for those in government FIRST. Nobody in Congress will have 10 cents until such a budget is passed. Congress decided on Friday in the fast procedure a bridge financing that will last until the May 5th to avoid the imminent so-called “government shutdown”. But there maybe a deal – no funding for Trump’s Wall, symbolic to Democrats, and the budget will pass til September.

The Congress has not yet adopted the budget for the 2017 financial year, which ends on 30 September. The Democrats want to block the plan of Trumps Republicans in to construct a wall on the border with Mexico, and they are fighting to prevent any cuts to Obamacare. They are deliberately trying to sacrifice Social Security now to fund heathcare for “undocumented” illegal aliens and help their insurance companies who have doubled most people’s premiums.

The new emergency budget in the House of Representatives until May 5th, was adopted by 382 votes to 30 votes. In the Senate, approval was given by hand.

The Democrats are trying to orchestrate a shutdown and the media will blame Trump and can be counted on to make sure they will NOT report the truth. The danger with this strategy is more and more institutions will begin to realize our models are correct – avoid government paper and shift to top grade corporate. AAA Corporates do not default and their debt is backed by the assets of the company. Government debt is backed by politicians who can never tell the truth. Once government debt loses confidence among big money, it’s not coming back so fast.

Puck-Evil-Press-1988-Nove-21

Thank you ABC, CBS, NBC, CNN, New York Times, Washington Post for your undying patriotism to defend ALL the people of the nation. No doubt they hatred of Donald Trump will fit in nicely with the ultimate drop in confidence in government overall, which part of Big Bang. Here is an illustration from Puck Weekly Magazine “The Evil Spirits of the Modern Day Press”, published Nov. 21, 1888. See history repeats because the passions of man never change. You guessed it – that was the US presidential election of 1888 held on Tuesday, November 6, 1888. It saw the incumbent Grover Cleveland (Democrat), challenged by the Republican Benjamin Harrison who won. Then too, the general election was pretty close with Cleveland winning the popular vote like Hillary, but by almost 1%, while Harrison managed to win the electoral vote 233 to 168. The more things appear to advance, the more they remain the same.

North Korea – Beware of Internal Events


Kim Jong Un

QUESTION: Marty; I find it really amazing how your computer picked Ukraine, then Syria, and then you said in an interview that you regard Korea as the most dangerous of the three. Is this all cyclical based?

Thanks

Looking forward to Hong Kong

PL

ANSWER: Yes. We feed all information into the system that is both economic and social or more specifically war/civil unrest. When you correlate everything into the Economic Confidence Model, it becomes clear that war and civil unrest emerge only from an economic downturn. The only exception is the conquest model from the theory of empire building. We are not “imperialistic” today as was the case during the 19th century. The US model moved from conquest to puppet vassal states – national building rather than occupying.

Nikkei-Y 4-30-2017

IBJYUS-Y 4-30-2017The Marco Polo Incident took place on July 7th, 1937 (1937.515), and is regarded as the beginning of the Sino-Japanese War, which became World War II in the Pacific venue. If we look at this from Japan’s perspective, the peak of that 51.6 year wave picked the high in the Japanese economy and confidence in the Japanese government – 1989.115. If we add 72 years to the 1937.515 target, we come to 2009.515. Adding the War Cycle, this brought us to 2012.605. This lined up with the change in trend for the dollar/yen. The yen peak against the dollar was 2011. Successful launch of the Kwangmyŏngsŏng-3 Unit 2 satellite aboard a three stage rocket (December 12, 2012) was in line with the War Cycle turning up 2012.605 with regard to Asia. So far, everything is in sync.

In the conflict with North Korea cannot be solved with posturing or some show of force. The only way to deal with them is to open direct talks. This nonsense of refusing to talk to North Korea until they comply is like kids in a schoolyard. Trump did say in his Reuters interview that the diplomatic efforts could ultimately fail. “There is a possibility that we will end up with a great, big conflict with North Korea.” Secretary of State Rex Tillerson has called for stricter sanctions against the communist country. However, this has never worked and only provokes rocket and nuclear tests as a show of defiance and strength.

North Korea cannot reach California yet. The real danger of a North Korean nuclear attack is on Seoul or Tokyo. Keep in mind that this would be a desperate act most likely provoked by a domestic rise in civil unrest. If there is a fear that control will be lost, then an external enemy is needed to retain power. We should be more concerned about internal events right now. As long as his power is not threatened internally, then such an attack would not make sense. He does not have an arsenal of weapon to keep up a war. Beware of internal events – they are often the issue the drives madmen to act in desperation.