Jeff Sessions made it official tonight during an interview with Tucker Carlson.  The former U.S. Attorney General is running for a senate seat from Alabama.  WATCH:

After meeting with victims of communism earlier today in the White House, at 6:00pm ET President Trump will participate in a posthumous presentation ceremony for the Presidential Citizens medal.

President Trump will be presenting the Presidential Citizens Medal posthumously to veteran Rick Rescorla. Rescorla, who was head of security at Morgan Stanley, is credited with saving thousands of lives when he implemented emergency evacuation procedures during the September 11, 2001 attacks on the World Trade Center.

UPDATE: Video Added

WH Livestream Link – Alternate Livestream Link – Fox News Livestream Link

.

.

There is a lot of banter amid the punditry class of trade and finance watchers surrounding a statement from Chinese Commerce spokesman Gao Feng claiming that U.S. and China negotiators were discussing a ‘phased’ roll-back of U.S. tariffs as part of a trade deal. However, a note of very strong caution should be applied.

On its face the Beijing-central claim is essentially an accurate portrayal of a dynamic long discussed.  The tariffs were initially imposed to reset the outlook of China.  In any negotiation with China a concession of current status is a non-starter.  By natural disposition Beijing refuses to cede already won ground. This is their historic approach.

Therefore when engaging in any negotiations with China it is necessary to reset the baseline.  China has to naturally feel losses; the economic landscape must be changed around them without their participation; in order for for them to consider negotiation.

The punishing U.S. tariffs accomplished this objective; the Beijing baseline status has been changed.  The bamboo forest is significantly less than it was two years ago, and now China wants to recapture lost position. Their current status indicates exactly that dynamic.

Beijing is proposing acceptance of U.S. demands, but only if that acceptance also delivers a removal of the tariffs that created their diminished status.

USTR Lighthizer isn’t stupid, he’s not going to give back two-years of hard won position.

While they hate it, Beijing internally also understands the U.S. position, this is why they consider Trump such a formidable adversary.

So the latest position from Beijing is to say “a phased reduction in tariffs”, in exchange for a “phased acceptance” of terms.  From the Chinese position, they view this as their version of how they project the Western mindset of win-win into the negotiations.

None of the principals can say this directly; to make such an admission would be akin to losing face amid a history of thousands of years of specific Chinese strategy.  So they send out spokespersons to promote such a proposal.

Anyone who has an understanding of the Chinese outlook should take all of the media reporting on this with a grain-of-salt.  Beijing uses spokespersons as panda masks, and Team Trump know the distance between the Chinese principal and a Chinese spokesperson is part of their strategy.  The unspoken space between words is more important than the words themselves.  Inside this space is where cunning exists.

Regardless of the proposal, if it doesn’t come directly from a principal it doesn’t exist…. it is a false promise, or more panda mask.

This is what happened when the May 2019 talks collapsed.

Special trade envoy of Chairman Xi, Vice-Premier Liu He, quickly turned from a principal to a panda mask as soon as Beijing weighed in -and rebuked- Liu He’s negotiated terms.

Vice-Premier Liu He was stripped of his “special envoy” designation; and Beijing used the distance they just created with He as the justification for dismissing the May ’19 terms of agreement.  That example was very typically Chinese.

The point is, Beijing does not want to accept any new terms that diminishes their prior one-sided benefit.  China is communist, they don’t have a direct constituent group they are accountable to…. they are willing to incur suffering so long as they don’t lose position.

Losing less is not considered a position of benefit.  China cannot even contemplate such a position; it just isn’t done.  So any and all reporting on the discussions should be viewed through the prism that any deal is almost impossible to assemble unless, somehow, Beijing can view a deal as a win.   That is a deal President Trump is not going to accept.

(Via Reuters) […] The interim trade pact is widely expected to include a U.S. pledge to scrap tariffs scheduled for Dec. 15 on about $156 billion worth of Chinese imports, including cell phones, laptop computers and toys.

Tariff cancellation was an important condition for any agreement, Chinese Commerce Ministry spokesman Gao Feng said, adding that both must simultaneously cancel some tariffs on each other’s goods to reach the phase one pact.

“The trade war started with tariffs, and should end with the cancellation of tariffs,” Gao told a regular news briefing.

[…]  “There is no specific agreement for a phased rollback of the tariffs,” said Michael Pillsbury, an outside adviser to Trump. “The American side has been ambiguous when and which tariffs will be lifted. The Chinese have some wishful thinking and are trying to soothe their domestic hardliners that the tariffs will someday come off.”

Trump last month outlined the first phase of a deal to end the trade war with China and suspended a threatened tariff hike, but officials on both sides said then that much work needed to be done before the pact would be finalized.  (more)

Unemployment claims dropped by 8,000 last week showcasing a very strong job market for all sectors of employment.  The U.S. Dept of Labor Report shows continued strong jobs growth surprising most economic pundits.

(DOL Report – pdf page 4)

(Reuters) – The number of Americans filing applications for unemployment benefits fell more than expected last week, consistent with strong labor market conditions and continued job growth.

Initial claims for state unemployment benefits decreased 8,000 to a seasonally adjusted 211,000 for the week ended Nov. 2, the Labor Department said on Thursday. Data for the prior week was revised to show 1,000 more applications received than previously reported.

Economists polled by Reuters had forecast claims would fall to 215,000 in the latest week.  (read more)

Additionally, in a related Bureau of Labor Statistics (BLS) report unit labor costs increased to 3.6% with a 3.3% increase attributed to increased wage costs.  This is a key metric.

The U.S. economy has started the process of re-coupling economic activity to the labor market.  This is going to be a key to watch moving forward. Watch closely…. Within this process the wage and benefit aspect to the production cost will now start to influence the output costs of the finished product, natural inflation.

Aggregate U.S. inflation has been heavily influenced by import prices dropping, a result of EU and Asian internal activity to offset tariffs, and the strength of the U.S. dollar.  In essence we have been importing deflation.  This process has been ongoing for more than two years.  [CTH predicted this outcome back in 2015.]

However, U.S. imports are now slowing…. and U.S. consumers are purchasing more products, finished goods, from within the U.S internal economic system [(manufacturing and production (which includes restaurants)].   As the percentage of total economic growth upticks from internal U.S. activity, and a higher percentage of overall GDP is internal to the U.S. economy, natural wage growth will begin generate inflation.

Do not be surprised to see this current quarter (Q4) when measured in late January 2020, showing the first significant increases in inflation.  Bookmark my prediction of 0.5% added to inflation in this current quarter we are in (Oct-Dec 2019).

Right now year-over-year wages are growing between 3.0 and 3.6%.  Output costs are now (re-coupling phase) starting to increase slightly more than wage growth, 3.3% just reported.   Natural inflation will now start to kick-in, domestic prices reconnected to wages.

Inflation has been running around 1.5% with slight ups and down relating to externaldynamics (EU/China devaluation, subsidies etc.).  The international community has fired their main cannons, they have nothing left to defend against tariffs and policies that bring the production economy back to the U.S.

We should now start to see inflation growth due to internal dynamics.   Watch now as the Main Street engine is re-coupled and we’ll start to see inflation at two percent and more.

This is the beginning, the very beginning, of a return to natural economic cycles.

There are going to be many connected smaller economic elements yet to be settled. However, in the big picture the apex has been reached.  We are in the period of pause, where U.S. multinationals have to make a decision.  Either they remain overseas and face higher overall costs to bring their products to the U.S. market; or they return to an economic system that has now been reset to be competitive and more predictable.

We will watch it unfold together.

Oh noes… Former Florida Attorney General Pam Bondi appeared on Fox News to discuss the likelihood of her joining the White House team in some capacity.

.

A mechanic is changing the car oil; you walk up to him and hand him a pair of snorkeling fins to complete the job; that look on his face is the same as mine.

Oh boy, have the wounds healed?  According to multiple media reports former Attorney General Jeff Sessions is poised to run for his longtime Senate seat in Alabama. He would be challenging Senator Doug Jones who is considered the most vulnerable Democrat in the Senate.

Mr. Sessions was generally disappointing during his tenure as AG; driven primarily by his recusal from all issues around the 2016 campaign, including the Mueller investigation. President Trump requested his resignation the day after the mid-terms, and President Trump stated giving Jeff Sessions the AG job was the biggest mistake of his presidency.

On the upside, Sessions was a good Senator and dependably strong on immigration and border security. I wonder how the people of Alabama feel about him? Ultimately it’s a decision for Alabama voters.  That’s who matters.

Tonight President Trump heads to Monroe, Louisiana for a Keep America Great Rally at the Monroe Civic Center to support gubernatorial candidate Eddie Rispone.  The anticipated start time for President Trump remarks 8:00pm ET / 7:00pm CT.

RSBN Livestream Link – GST livestream Link – Global News Livestream Link

.