In my previous post, Who Will Trump Hire in October?, I speculated that, despite all of his anti-immigration rhetoric, Donald Trump might staff Mar-a-Lago with foreigners for the upcoming tourist season in Palm Beach. And in what may be the most idiotic decision in the history of politics, Trump has applied for 78 work visas, according to this BuzzFeed story.
Did I nail that, or what?
Regardless of what Trump says, his actions show him to be nothing more than a garden variety robber-baron when it comes to labor.
As of the latest USDA data, Florida is coated with a thick blanket of poverty, sporting 3,259,847 people on food stamps. The idea that none of them are willing to work at Mar-a-Lago is 100% BS.
Politically, Trump needs to blame these visa applications on an underling who was just doing business as usual, and then hire some actual citizens. But don’t hold your breadth waiting for the proverbial leopard to change his spots. He can’t; his brain just doesn’t work that way.
Were you shocked by this morning’s big jobs surprise? Well, you have only yourself to blame because if you were one of my DJU subscribers, you would have received this chart on Monday night (click to enlarge):
That dramatic “V” turn in payroll-tax collections in October is hard to miss, no? Withholding taxes don’t lie. And here’s what I wrote in my letter:
“Economists are only expecting 190,000 new jobs to be reported in Friday’s non-farm payrolls report. And that is the most-pessimistic forecast of the year. Economists tend to just extrapolate the recent trend, and this dour forecast looks like a consequence of last month’s big miss of only +142,000 jobs. So, I think the odds favor an upside surprise on Friday.”
Did I nail that or what? Now, go to DJU and subscribe. WTF is wrong with you anyway?
On Friday morning (3/8/15) everybody was surprised when the jobs report blew away estimates. Economists were expecting 230,000 new jobs, and the BLS reported +295,000. Before the shock could wear off, people were shocked again as the raging bull market “celebrated” the good news by plunging. The DJIA closed down 279 points.
People were turned every which way but loose, except for a small elite group of investors who were advised of this exact scenario three full days prior by an email sent by your hero (that would be me in case you are confused on the subject).
How did I do it? Well, economists were frightened by rising unemployment-claims, but just because some people get laid off doesn’t mean that other people aren’t getting hired. And the soaring withholding-tax data that I follow at The Daily Jobs Update was rocketing upward. So, the stage was set for a big surprise – a surprise that would shock investors into visions of Janet Yellen taking away their punch bowl.
While I didn’t cure cancer or deliver world peace, one of the aforementioned elite investors described my call as “beautiful” and “masterful.”
The moral of the story is that you should subscribe to The Daily Jobs Update and gain access to this esoteric, and invaluable, real-time economic indicator.
On April 5th, investors were jolted when the non-farm payrolls report came in at +88,000 – missing expectations by a mile. However, the day before on ritholtz.com, I wrote:
“If a weak number is reported, the odds favor it will likely be revised upward in the future.”
And what happened today?
Not only did the non-farm payrolls report show +165,000 jobs for April, beating expectations, but also +114,000 in revisions for February and March. The S&P 500 blasted to an all-time high.
So, I totally nailed it. How did I do that? Easy: tax collections don’t lie. Companies go to great lengths to avoid paying taxes, squirreling away their money in the Caymans, making employees “independent contractors”, floating bonds when they have billions in the bank, etc. So, when tax collections are strong, it’s pretty much guaranteed that lots of jobs are being created.
On Friday, the BLS reported that the economy created 236,000 jobs in February. Having predicted only 171,000 jobs, economists were surprised. However, my subscribers at The Daily Jobs Update were not because on Tuesday night, I sent them this chart (click to enlarge):
The chart plots the growth-rate of federal withholding-tax collections – the money withheld from paychecks. The “second derivative” of the data, the slope of the chart, was clearly slanted upward since January. So, the economy was gaining momentum. The Daily Jobs Update is not free, but if you want free data, just head over the Zero Edge and stay bearish until your wife takes away your trading account.
How good is 236,000 jobs? Well, it’s better than a sharp stick in the eye. But after we deduct 100,000 or so for population growth, perhaps another 100,000 for mass legal immigration, and god-only-knows how many thousands of more jobs offshored, its no surprise the that number of people on food stamps has hit a record high. See the next post.
Back here, I castigated Walter Isaacson for writing an entire book about Steve Jobs without even mentioning the giant gulag of brutal Asian sweatshops that make Apple’s products.
That was in December 2011. What happened next?
A month later, performance artist Mike Daisey’s “embellished” account of Foxconn caused a huge wave of sweatshop stories in the reluctant corporate media.
At a stroke, a decade of carefully crafted multinational propaganda was swept away. Today, everybody knows about the sweatshops. In fact, it is so mainstream now that even Saturday Night Live did a bit on it:
But don’t expect any multinationals to voluntarily give up their sweatshops. The gulag is very tightly integrated with our economy. It is part of our flesh and blood now – sort of like slave plantations were in the Old South.
It took the Civil War to exercise slavery from the South, and I don’t expect it will be much easier to exorcise the sweatshop demon. Rather, I believe we will see the system expand. This year, we signed a “free trade” deal with Colombia. In China, unions are illegal. In Colombia, union organizers are assassinated. They practically hunt them for sport down there. And that makes Colombia an ideal site for sweatshops from the perspective of the multinationals because they can have their prized “clarity” on labor costs.
So, not only is it a “race to the bottom” on labor costs and working conditions. It is also a race to the bottom on brutality and murder. If the Chinese don’t massacre some Foxconn workers soon, and restore orderly production, they may lose business to Colombia.
“People have rushed into the streets. They are protesting like crazy. They are mad as hell. But if you ask them why, they say: “We’ll get back to you.”
I’m calling BS on this phony revolution.”
I would have written a lot more, buy my Democratic friends had such high hopes for OWS that I didn’t want to rain on their parade. Nevertheless, I totally nailed it. OWS might go down in history as the most politically ineffective movement in history.
Turns out, anarchists are bad leaders and organizers. Who knew, right?
“What’s the thing on the wall, what are you fighting for? I’m not going to a park and picnic, I have no idea what to do, I don’t know what the fight is about. What do we want, do you know?”
Indeed Mr. Z, indeed.
The Seinfeldian “Revolution About Nothing” came to nothing. Sure, banking reform is needed, but we didn’t need OWS to tell us that, now did we?
OWS had the complete attention of the media for a long time. They had a real opportunity to get their message out. And they totally flubbed it. The only points they made while being mocked by Steven Colbert were about “process.” Building consensus, getting money out of politics, etc. Not exactly the stuff of revolution.
Has there ever been a more prescient feat in the history of blogging? I think not. But enough about me.
This news crystallizes a spectacular failure in nation-building. That’s the bad news. The good news is that our troops are going to be a lot safer, provided that they also isolate themselves from Afghan workers. While it might be the Taliban in an Afghan army uniform that pulls the trigger, it’s the nice Pashtun lady who empties the commander’s wastebasket that provides the enemy’s intel.
Maybe one day we will end this corporate welfare program. If the multinationals want to exploit Afghan resources, let them pay the pacification costs themselves and leave us taxpayers out of it.
Two months ago, investors were freaking out over a weak payrolls report. But I took the other side of the trade right into the teeth of the panic and posted: “Jobs-Ageddon? Maybe Not“. That was on June 4th, which was the exact bottom of the summer correction – see the red arrow on this S&P 500 chart (click to enlarge):
“While not all of the US financials have active CDS, the dependence between stocks and credit had remained high with current CDS levels inferring a drop of over 60% in XLF as the top 30 globally most systemically important financial entities reach their March 2009 peak in riskiness once again.”
Umm…no. The financials rallied back with the rest of the market.