Wait,… what? Who cancelled the recession?

Remember when the financial media and democrats were assuring everyone the U.S. economy was g.u.a.r.a.n.t.e.e.d to enter a recessionary phase? Well, apparently MAGA Trump cancelled it… with the help of millions of U.S. middle-class workers who are spending their wage increases, bigly.

The Bureau of Economic Analysis releases the third quarter (Q3) GDP growth estimate today, and the overall Q3 GDP growth is +1.9 percent. However, behind the economic growth stats the scale of U.S. Main Street strength is the real story.

[BEA pdf link – table 3]

Main Street consumer spending was up $64 billion on goods and $36 billion on services. As those who follow MAGAnomics closely will remember, the Main Street economy is founded upon middle-class spending. Strong jobs, wage growth, low taxes, low inflation, and low energy costs, means more disposable income.  Disposable income grew 4.5% in the third quarter.

The U.S. economy is strong because approximately 80% of everything produced inside our economy is consumed inside our economy. As long as the underlying jobs market stays strong, consumer spending leads to self-fulfilling economic expansion. Main Street is doing very well.

The weakness is Wall Street investment into expanded production of goods in the U.S.

For 30+ years Wall Street has been investing overseas for production of goods; and with that process U.S. jobs were lost. President Trump has positioned the best return on production investment as the U.S.  Tariffs on China and the EU bolster that approach.

The key to reignite domestic investment is to pass the USMCA trade agreement which will provide certainty and allow corporate CFO’s to calculate Total Cost of Production (TCP). Once TCP can be calculated within the 5-year and 10-year rolling business plans, manufacturers will be able to determine specifics of U.S. investment; and/or retraction from Asian investment.

Unfortunately, Nancy Pelosi knows the USMCA ratification is the key corporate investors are looking toward. As a result, and with the intent to keep the Trump economy as favorable as possible for her 2020 ambitions, Pelosi is stalling the passage of USMCA.

China and the EU continue to struggle as the U.S. economy remains strong.   China and the EU devaluing their currency is driving up the value of the dollar, and dropping the import cost of goods.  As a result, despite the tariffs, the U.S. continues to import deflation (lower prices of imports).  Domestic production is healthy and inventories are turning.

The negative ‘spin’ from Reuters:

WASHINGTON (Reuters) – U.S. economic growth slowed less than expected in the third quarter as a further contraction in business investment was offset by resilient consumer spending, further allaying financial market fears of a recession.

The Commerce Department’s report on Wednesday was, however, unlikely to discourage the Federal Reserve from cutting interest rates again amid lingering threats to the longest expansion on record from uncertainty over trade policy, slowing global growth and Britain’s imminent departure from the European Union.

The Trump administration’s trade war with China has eroded business confidence, contributing to the second straight quarterly contraction in business investment. The fading stimulus from last year’s $1.5 trillion tax cut package is also sapping momentum from the expansion, now in its 11th year. (read more)

Monetary policy from the FED cannot yet impact inflation.  Exactly as CTH predicted in 2016:

2016 […]  Understanding the distance between the real Main Street economic engine and the false Wall Street economic engine will help all of us to understand the scope of an upcoming economic lag; which, rather remarkably I would add, is a very interesting dynamic.

Think about these engines doing a turn about and beginning a rapid reverse.  GDP can, and in my opinion, will, expand quickly.  However, any interest rate hikes (monetary policy) intended to cool down that expansion -fearful of inflation- will take a long time to traverse the divide.

Additionally, inflation on durable goods will be insignificant – even as international trade agreements are renegotiated.  Why?  Simply because the originating nations of those products are going to go through the same type of economic detachment described above.

Those global manufacturing economies will first respond to any increases in export costs (tariffs etc.), by driving their own productivity higher as an initial offset, in the same manner American workers went through in the past two decades.  The manufacturing enterprise and the financial sector remain focused on the pricing.

♦ Inflation on imported durable goods sold in America, while necessary, will ultimately be minimal during this initial period; and expand more significantly as time progresses and off-shored manufacturing finds less and less ways to be productive.   Over time, durable good prices will increase – but it will come much later.

♦ Inflation on domestic consumable goods ‘may‘ indeed rise at a faster pace. However, it can be expected that U.S. wage rates will respond faster, naturally faster, than any monetary policy because inflation on fast-turn consumable goods becomes re-coupled to the ability of wage rates to afford them.

The monetary policy impact lag, caused by the distance between federal action and the domestic Main Street economy, will now work in our favor.  That is, in favor of the middle-class.

Within the aforementioned distance between “X” and “Y”, a result of three decades traveled by two divergent economic engines, is our new economic dimension….  (more)

President Trump and First Lady Melania Trump participate in another fun Halloween event at the White House:

Moments ago President Trump honored a very handsome hero from the raid on the ISIS compound of Abu Bakr al-Baghdadi with a picture:

The hero’s name is redacted, but he sure is handsome. A key member of the Special Forces operation in Syria that took out the Islamic State leader on Saturday was a Belgian Malinois who chased al-Baghdadi down a tunnel to his death.  Doggo was slightly wounded but is recovering.  Hopefully he gets a Purple Heart and lots of treats.

President Trump delivers remarks to the traveling press pool from Joint Base Andrews. [Video and Transcript Below]

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[Transcript] – THE PRESIDENT: So, we had a great weekend for our country. We captured a man that should’ve been caught a long time ago. Unfortunately, he wasn’t. He’s done tremendous damage. But it was an amazing display of intelligence and military power and coordination, and getting along with people. Lots of great things happened. So that was a big, big day and a big weekend, and we’re very happy about it.

The economy is doing phenomenally well. We have — it looks like another good day will be taking place today. In the stock market, good numbers are being — good numbers are happening all the time. We have good numbers happening all the time.

Very soon — I guess we’re in record territory for stock. That’s great for 401(k)s, that’s great for everything. It’s great for jobs.

So, things are going good. Do you have any questions?

Q Are you considering releasing video footage of the raid?

THE PRESIDENT: We’re thinking about it. We may. The question was: Am I considering releasing video footage of the raid? And we may take certain parts of it and release it, yes.

Q Do you think Rudy Giuliani is in trouble with all of the investigations?

THE PRESIDENT: No, I think Rudy Giuliani is a great crime fighter. He was the greatest mayor in New York City history. But he’s been a great crime fighter. He’s always looking for corruption, which is what more people should be doing. He’s a good man.

Q Mr. President, are you on pace to sign the phase one deal with China when you go to Chile?

THE PRESIDENT: Yeah, we are looking probably to be ahead of schedule to sign a very big portion of the China deal. And we’ll call it “phase one,” but it’s a very big portion. That would take of the farmers. It would take care of some of the other things. It’ll also take care of a lot of the banking needs.

So we’re about, I would say, a little bit ahead of schedule, maybe a lot ahead of schedule. Probably, we’ll sign it. I imagine the meeting is scheduled for Chile. I know they have some difficulties, right now, in Chile. But I know the people of Chile and I’m sure they’ll be able to work it out.

Q Mr. President, why did you have such an aggressive response to John Kelly’s comments over the weekend?

THE PRESIDENT: Oh, I don’t think it’s aggressive at all. I would be surprised if he made those comments in a negative way. But I don’t think the response would be — if he actually said that, if he actually meant that, I said what I’d do, and that, I mean.

Q Mr. President, are you concerned that Nancy Pelosi and others can’t be trusted with this kind of information?

THE PRESIDENT: Well, I guess the only thing is they were talking about why didn’t I give the information to Adam Schiff and his committee. And the answer is: Because I think Adam Schiff is the biggest leaker in Washington. You know that. I know that. We all know that. I’ve watched Adam Schiff leak. He’s a corrupt politician. He’s a leaker like nobody has ever seen before.

We had a very good conversation with the Ukrainian President. The conversation was perfect. They don’t ever talk about the conversation. It started with the whistleblower, and now they don’t want the whistleblower. Then they had a second whistleblower; now they don’t want the second whistleblower. The reason is that when the whistleblower — when they saw what the whistleblower wrote, and then when I released the conversation, which bore no relationship to what the whistleblower saw, they said their case was out the window. And I think it’s a disgrace.

And, frankly, I told Republicans, who are really being taken advantage of — they’re really being maligned — and I think it’s a horrible thing. They’re really looking to hurt the Republican Party, and it’s turning out to be just the opposite.

So one thing I said: I’d rather go into the details of the case rather than process. Process is wonderful. We already 50 Republican senators — I never called one of them — sign up. Fifty. Out of 53, 50. And perhaps the other ones will do it too. But process is good. But I think you ought to look at the case. And the case is very simple; it’s quick. It’s so quick.

I had a great conversation with the Ukrainian President. I had another conversation with him also, I think before that, which was the same thing. It was nothing. They tried to take that conversation and make it into a big scandal. The problem was we had it transcribed. It was an exact transcription of the conversation.

So, in a nutshell, a whistleblower wrote a false narrative of the conversation. Now they don’t want to talk about the whistleblower because they didn’t think I was going to release the conversation. When I released the conversation, I blew up Schiff’s act. And just to put topping on it, the Russian — as you know, the new Russian President, a good man, made his statement. There was no anything. There was no pressure put on him. No anything.

The Foreign Minister of Ukraine made his statement. There was absolutely no pressure put on. They didn’t even know what we were talking about.

And just to finish it off, Adam Schiff went up before Congress and he made my words. He didn’t copy what I said. He didn’t know them, probably, at the time. Nobody thought I was going to release the conversation. I got the approval from Ukraine. Once I released the conversation, this thing all died. And that’s what they should be looking. And Adam Schiff went before Congress, and Adam Schiff, what he did, will never be forgotten. He made up a conversation that was a phony fabrication. It was a fraud. And people shouldn’t be allowed to get away. They say he has immunity because he’s a member of Congress. People shouldn’t be allowed to do that. That’s a criminal act. What he did is a criminal act.

Thank you.

Q On UMSCA —

THE PRESIDENT: I hope they approve USMCA. It’s in there. It’s a great agreement for the United States, for our farmers, for our manufacturers, for unions, for everything. It’s been approved by Mexico and Canada. They’re waiting.

We don’t seem to be able to have time for Nancy Pelosi. I call them the “Do-Nothing Democrats.” They’re the Do-Nothing Democrats. And, frankly, if they put it up, it’s going to win very easily. It’s going to have bipartisan support. I have no idea what they’re doing with it. I can’t imagine it takes this long. But they’re so busy focusing on a witch hunt and a scam.

Thank you.

END 8:52 A.M. EDT

Kayla Mueller (pictured below) was an American aid worker who traveled to the Turkey/Syria border to work with the organization Support to Life which assisted families forced to flee their homes.  Kayla was taken hostage by ISIS in Aleppo, Syria, in 2013; brutalized and confirmed murdered in 2015.  Her body has never been recovered.

Earlier today, following the announcement of the military operation that successfully killed the leader of ISIS, Abu Bakr al-Baghdadi, President Donald Trump made calls to families of U.S. victims.  The operation to kill/capture al-Baghdadi was named for Kayla:

(Via NBC) The Muellers received the official confirmation of Baghdadi’s death in listening to Trump’s news conference Sunday morning. They praised and thanked the President, the US military and special forces for taking action.

“We were deeply touched by what he said. We were grateful that they didn’t mess around and went right in,” Marsha Mueller said in a phone interview.

White House national security adviser Robert O’Brien said the US military operation that resulted in the death of Baghdadi was named after Kayla Mueller.

In an interview with NBC’s “Meet the Press” on Sunday, O’Brien said, “The chairman of the joint chiefs of staff named the operation that took down al-Baghdadi after Kayla Mueller, after what she had suffered,” adding “that was something that people should know.” (link)

On Sunday, the Muellers praised President Donald Trump and the soldiers who pulled off the mission.

ARIZONA – […] “We are so grateful for them … we are so grateful,” Marsha Mueller said. They were glad there was no loss of life on our side. They are grateful their daughter and the others who were tortured and killed by ISIS have not been forgotten.

“I still say Kayla should be here, and if Obama had been as decisive as President Trump, maybe she would have been,” Marsha Mueller said.

“For me what matters most I’m hoping now we will finally get the answers we have been asking for all along,” Marsha Mueller said. “I think this administration truly might help us. I don’t think they are as closed about what happened.”

Carl Mueller said he was comforted when Trump mentioned his daughter twice in his morning press conference.  “He knows her story. He’s been briefed on it, and he knows, and that’s important to me,” Carl Mueller said. “I don’t think anything would have stopped him from getting this guy.”

After Kayla’s death, the Muellers became outspoken critics of the American government’s handling of its foreign hostages. They had been encouraged to keep her captivity secret, and discouraged from attempting to free her or pay a ransom.

Carl Mueller also became a vocal supporter of Trump’s candidacy for president, speaking at his rallies on the campaign trail.  (more)

Generally speaking I wouldn’t recommend watching a Chuck Todd interview especially when he’s grieving the loss of one of his own; however, this interview with National Security Advisor Robert O’Brien provides some insight into why he was selected by President Trump for the very important position.

As to Todd’s disposition… do you remember those press briefings from Saudi Arabia during Operation Dessert Storm in 1991?  The briefings where the media would shout: “where exactly are our troops located, and when will they be moving”?  Or “can you tell us exactly how many troops are positioned near the Kuwait border, how many marines will be coming ashore; and exactly what time they will be arriving?” ….

If you remember watching that stuff; and if you remember General Schwarzkopf’s belittling responses therein; this interview with Chuck Todd will have a ring of familiarity:

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What a knucklehead…