Tesla CEO Elon Musk was seemingly channeling his inner Galt during a video interview with Joanna Stern of the Wall Street Journal at the CEO Council Summit. Apparently Mr. Musk can see what’s on the other side of this spending horizon and doesn’t want to experience it. WATCH:
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U.S. nonfarm productivity is a measure of economic activity within the engine of the U.S. economy. The U.S. productivity rate is a measure of how much value is produced by the economy through demand for the products and services, and the labor associated with the creation of those products and services.
I have often used the example of making bread {Go Deep}. If you are making 10 loaves of bread, there is a set amount of cost associated with each loaf created. The total cost of each loaf is the total cost to produce the entire batch divided by ten. However, if you have customers demanding 15 loaves of bread, you make more profit on the last five because it doesn’t cost 50% more in material or labor to make 50% more loaves.
Your productivity in the last five loaves is higher because the fixed costs of production (raw materials, energy) barely change, and the labor is only slightly higher. The opposite is also true. It costs more per loaf to make fewer than ten loaves because the fixed costs and your labor are pretty consistent, yet the finished value of 7 loaves is less than the finished value of ten.
Anecdotally, it has looked for quite some time that around May of this year the economy peaked, plateaued for a few weeks, and then began a slow downward progression. Today the Bureau of Labor statistics puts some revised data to that third quarter (July, August and Sept) economic activity {data here}. The quantified results align with what we sensed was taking place.
The value of all products and services generated increased by 1.8 percent. However, the labor cost of generating that small amount of added value increased by 7.4 percent. The difference between those two numbers is a drop in productivity of 5.2% over the entire quarter.
This is the largest quarterly drop in productivity since 1960 !
The Biden administration will blame the drop in productivity on a lack of material to produce the end product (ie. the COVID excuse). Which means employed people were sitting around waiting for goods to arrive and being less productive. There is a small amount of that which might be true. However, it is not the biggest factor, at least not on this scale. Keep in mind we are talking about both goods and services.
The more likely cause of such a massive decline in productivity is a genuine decline in demand. In the aggregate, consumers needed less goods and services. This likelihood aligns with the diminished and softened retail sales figures recently noted. It is a simple cause and effect. When gasoline, energy, and essential products like food cost more, consumers have less money for other stuff. Demand for the non-essential products drop.
As the demand drops, the productivity of the economic activity to generate those goods and services also drops. However, the scale of the decline is the part to pay attention to. A five percent drop in productivity is huge for a single quarter. Under normal circumstances this means more slack in the labor market, and that is what we saw recently in the retail sector of the employment figures from November {data here}.
During the month when retailers are customarily ramping up their employment to cope with increases in consumer demand, last month that didn’t happen. The ‘retail sector‘ lost 20,000 jobs in November. Think about that.
At the time of the November jobs report, the “national economists” were trying to figure out why the employment report missed expectations by 300,000+ jobs. We were not so surprised, because the actual result aligned with other data suggesting the Q3 economy overall was contracting. Consumers are being squeezed by inflation, that is creating a stagnant economy or “stagflation.”
Wage growth is currently at 3.9% {data}, and when combined with the loss in productivity, the unit labor costs for businesses at a macro level means a total cost of +9.6 percent in the third quarter. If employers do not start reducing their payroll costs as demand contracts, each unit produced will cost more money. Unfortunately, that dynamic adds to inflation and we grease the skids on this downward spiral.
I have not seen any financial pundits concerned about where this cycle naturally ends. Perhaps the media silence is because the White House knew the Q3 productivity data was alarming, and that stirred the administration to contact those pundits in advance in an effort to avoid widespread notice.
Regardless of reason for their avoidance, a drop in productivity of such a scale tells us to complete our economic preparations as soon as possible. The intensity of the inflation storm worsens with a weak employment outlook.
Two Democrats joined with Republicans yesterday in passing a bill that would eliminate any federal vaccine mandate. It seems silly that Congress would have to pass a law saying the unlawful and unilateral act of the executive branch, which has been blocked by separate federal courts, is unlawful…. but that’s where we are.
Democrats Joe Manchin (West Va.) and Jon Tester (Montana) joined all the Republicans present in the 52-48 vote. The bill now goes to the House, where it is going to be put on ice by Nancy Pelosi in order to save Joe Biden from an embarrassing rebuke of his overreach. However, White House Press Secretary Jen Psaki was asked today if the House were to vote on the bill, would Joe Biden veto it.
The White House spokesperson affirmed that Joe Biden would veto any bill, created by the representatives of the people, that declared his authority null. WATCH:
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The Federal Bureau of Investigations (FBI) can legally access your “secure messaging app content,” according to a new report by The Epoch Times. In fact, it would only take officers about 15 minutes to access the contents of iMessages to collect metadata from WhatsApp. Our phones and personal electronic devices can provide agents with our location, contacts, pictures, search history, and more. Numerous people believe that encryption is one-dimensional and their messages are secure.
There are different forms of encryption and ways to bypass poorly encrypted software. People believed iMessage was secure due to Apple’s encryption, but automatic cloud backups are not encrypted and can be accessed. WhatsApp only began offering encryption backup in September, and the feature is not the default setting. The FBI document noted that search warrants could provide them with backup encryption keys as well.
Signal, Telegram, and WeChat are a bit more secure, but the FBI can still determine data logs or when the user logged into the service. Some may shrug and say they have nothing to hide and, therefore, nothing to fear. The problem is that the government can and will twist any information provided to them in order to win or develop a court case. Also, the FBI is not a beacon of ethics, and no one wants to have their personal information publicized. Since the majority of the world is not a threat to national security or a predator, sharing this much information with the government without a subpoena is asinine. All it would take is 15 minutes for someone’s private life to become public government information.
Watch Rep. Chip Roy (R-TX) destroy the House by questioning government spending and a complete lack of communication between parties. The Democrats pushed forward massive spending bills this year as the nation teetered on a recession and nearly defaulted on its debt. There are continuous plans to fund a growing number of social programs with zero solutions on how to fund them. “If we don’t stop it, this country will not survive,” Roy warned.
The issue is government-wide. “We never make a choice, ever — both parties, by the way,” Roy declared. Roy stated that he voted to take away powers from the president under the Trump Administration, despite being a Republican. Now, Roy noted, the current president has issued a federal vaccine mandate that no one voted on. He publicly admits that only a few people are making decisions for the masses. This means that a handful of people, acting in their own self-interests, are deciding the fate of millions. Democracy is in jeopardy.
British Parliament Labour Party member Zarah Sultana has urged the public to wear masks. “I feel incredibly unsafe in the chamber… I see most Tories not wearing masks,” MP Sultana said in a November 3 interview with the BBC. Interviewer Julia Hartley-Brewer promptly questioned, “Why are you not wearing one now?”
Answer: the rules do not apply to her. Sultana recently attended the Music of Black Origin (MOBO) Awards where she was spotted in a packed room without a mask. A proponent of shutting down schools and forced mandates, Sultana said that a mask-free Chamber was a “dangerous message to send to the rest of the country.” Yet, she is seen partying at a crowded function without the “protective” restrictions she expects the rest of the nation to abide by. Do we need any more proof that these policies are purely political?
The only thing left standing that was good about NYC was Junior’s Cheesecake. I could order it for delivery these days without going to Mayor Bill de Blasio’s contest to see how much business in New York you can destroy in three years. His departing decree was that every business in New York must vaccinate its employees or they are to be fired. I have sworn off ever visiting New York City again along with Europe. Of course, that is their ultimate goal to prevent people from traveling to end our free society.
Now the world is coming to an end. There is a cream cheese shortage stemming from supply-chain issues that has been wiping out Junior’s famous NY Cheesecake, and there is nothing like it anywhere! It has also caused a collapse in the production of the also famous NY bagel which has stressed many a connoisseur.
Junior has reported that they have been struggling to get any supply of the main dairy product that makes their famous cheesecake. The company has been forced to pause cheesecake production at its New Jersey baking facility. I had ordered mine for Christmas and it took a few weeks to arrive. Now this shortage behind inflation is only going to get worse.
Biden’s agenda is only climate change being pushed by the AOC agenda and who cares about the present living conditions? The sooner you just die and fade away, the better it will be for the planet. I really think they should show everyone how to do the honorable thing and do a public ceremony of Seppuku, sometimes referred to as Harakiri, which is the ritual form of Japanese suicide by disembowelment. This would be very helpful as an instructional HOW TO video to save the planet. If AOC wants to be a real leader, show us the way! Kind of an Instructional Guide for us, the Great Unwashed, who they do not even trust to vote because it’s just mindless populism.
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The #1 Fake News Network in the world, CNN, has gone after China and Russia for calling Biden’s Summit of Democracy a joke. Of course, CNN apparently does not know how to pick up a dictionary. Here in the United States, we have a republic – not a democracy. And in Europe, the whole political structure is a fraud for the people neither vote for anyone on the European Commission nor they do not vote for the head of state.
I suppose they never actually listened to the words of the Pledge of Allegiance to the Flag:
“I pledge allegiance to the Flag of the United States of America, and to the Republic for which it stands,
one Nation under God, indivisible, with liberty and justice for all,”
It explicitly states that the US is NOT a Democracy but a Republic. It is a joke that politicians pretend that we live in a democracy when we do not and Klaus Schwab’s 2030 agenda included the end of the right to even vote. Moreover, the press is no longer free and it is pushing its own agenda.
They refuse to investigate anything to do with COVID or the conflicts of interest elevating Gates to a world health czar who is not even a doctor any more than Schwab or the head of the WHO. The press has fully embraced the canceled culture and thinks “freedom of the press” means they get to report only what supports their agenda.
Here are the definitions of Democracy and Republic which Europe does not fit either. If CNN was honest, they would actually have to agree with the criticism of both Russia and China for the West is a Republic, and would never allow a democracy for then the people would vote on all of these spending issues instead of our pretend representatives since we are a Republic – not a Democracy.
So sorry, Biden’s Summit of Democracy is indeed a joke. Nowhere in the West do the people live in a democracy. It is all a republic and Europe does not even qualify as a republic it is closer to China and Russia than the United States. Historically, republics always die by their own hand – economic suicide which is unfolding perfectly once again. At some point, there will be a new version of Caesar who will cross the Rubicon.
In the aftermath of the White House demanding that media pundits put a positive spin on economic news, the National Economic Council Chairman, Brian Deese, appears at the Brady Room podium today [Full Video Here] to put the finishing touches on their Potemkin village of economics.
The statistics cited by Deese were jaw dropping in the level of spin used to create them. First, the economic council cite their own national employment forecasts for economic recovery (under their ‘American Rescue Plan’), then celebrate they are ahead of schedule for a timeline they created.
When asked about inflation, Deese then proclaims he is not going to get into the business of economic predictions; which the media just accept without reminding him that his economic policies are entirely based on his own predictions… which he just cited in the prior moment of self-congratulation. Additionally, according to Deese (without any citation to demonstrate validity for his claim), the NEC Chairman says “real household income” is at its pre-pandemic level; which seems highly unlikely given the scale of inflation.
When asked if inflation will continue into next year, Deese refused to answer the question. Keep in mind, the discussion of inflation is a percentage of change from a previous price 12 months earlier. If an item doubles in price this year (from $2 to $4), and then goes up to $4.50 in the following year, you can claim that inflation is dramatically decreasing. However, that does not mean prices will ever return to the prior level, or that the next year price is any more affordable. WATCH:
The fact remains that White House energy, regulatory, fiscal and monetary policies are devastating for Main Street. All of those policies impact the domestic economy with increased costs from field to fork.
Cumulatively, all of the White House economic policies are increasing housing costs, transportation costs, medical costs, food costs, retail costs and service costs. At the same time, wages are only modestly rising to keep up with those massive cost increases. No amount of spin is going to stop the reality of the inflation storm from hitting U.S. consumers.
As we shared during the Obama-era baseline budget spending and deficit mess: “Half of something you just quadrupled is not less than you started with.”
Here’s the full press conference:
ttom line: The inflation number due tomorrow is again likely to show the aggregate level of compounded inflation in the supply chain. This is what the White House is trying to distract from.
UPDATE: Guilty on five of six counts for filing a false police report related to the hoax racist attack he claimed to suffer at the hands of two men in January 2019
According to numerous media reports, the jury in the Jussie Smollett fake hate crime case has reached a verdict.
The jury verdict is expected around 6:00pm EDT.
(LA Times) – […] The jury deliberated about eight hours Wednesday and Thursday after a roughly one-week trial in which two brothers testified that Smollett recruited them to fake the attack near his home in downtown Chicago in January 2019. They said Smollett orchestrated the hoax, telling them to put a noose around his neck and rough him up in view of a surveillance camera, and that he said he wanted video of the hoax made public via social media. (read more)
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