Did Jamal Khashoggi Die For Nothing?

Authored by Philip Giraldi via The Unz Review,

Let the cover-up begin…

The angst over the Jamal Khashoggi murder in the Saudi Arabian Consulate General building in Istanbul is already somewhat fading as the media has moved on in search of fresh meat, recently focusing on the series of attempted mail bombings, and currently on the mass shooting in Pittsburgh. But the affaire Khashoggi is still important as it potentially brings with it possible political realignments in the Middle East as well as in Europe as countries feel emboldened to redefine their relationship with Saudi Arabia.

The Turks know exactly what occurred in the Consulate General building and are now putting the squeeze on the Saudis, requiring them to fess up and no doubt demanding compensation. Some sources in Turkey believe that President Recep Tayyip Erdogan will actually demand recreation of the Caliphate, which the Kemal Ataturk led Turkish Republic’s government abolished in 1924. That would diminish Saudi Arabia’s ability to regard itself as the pre-eminent Islamic state due to its guardianship over the holy sites in Mecca and Medina. It would be a major realignment of the Islamic umma and would be akin to a restoration of some semblance of Ottoman supremacy over the region.

To be sure, the brutally effective Turkish intelligence service, known by its acronym MIT, is very active when it comes to monitoring the activities of both friendly and unfriendly foreign embassies and their employees throughout Turkey. It uses electronic surveillance and, if the foreign mission has local Turks as employees, many of those individuals will be agents reporting to MIT. As a result, it should be presumed that MIT had the Consulate General building covered with both cameras and microphones, possibly inside the building as well as outside, meaning that the audio of the actual killing that has been reported in the media is no doubt authentic and might even be supplemented with video.

One recent report, on BBC, indicates that CIA Director Gina Haspel has traveled to Turkey and has been allowed to hear the recordings of Khashoggi being tortured and killed. It’s a good thing the Trump White House sent Haspel as she would know exactly what that sort of thing sounds like based on her own personal experience in Thailand. She will presumably be able to explain the operation of a bone saw to the president.

So the Saudis seem to be in a hopeless situation, but they have several cards to play. They have many lobbyists of their own in Washington that have bought their way into think tanks and onto editorial pages. They are also in bed with Israel in opposition to Iran, which means that the Israel Lobby and its many friends in the U.S. Congress will complain about killing Khashoggi but ultimately will not do anything about it. The White House will also discourage America’s close allies from adopting measures that would do serious damage to the Saudis. In regional terms, Saudi Arabia is also key to Trump’s anticipated Middle East peace plan. If it pulls out from the expected financial guarantees aspect, the plan will fall apart, so Washington will be pressing hard on Ankara in particular to not overdo its bid for compensation.

All of which leads to some consideration of the hypocrisy of the outrage over Khashoggi. Saudi Arabia murdered a citizen in a diplomatic facility located in Turkey, apparently because they believed that individual to be a dissident who was a threat to national security. They then seriously botched the cover-up. In spite of all that, it would seem that the issue involves only two parties directly, the Saudis and the Turks, though there have been calls from a number of countries to punish the Saudis for what was clearly a particularly gruesome murder carried out in contravention of all existing rules for behavior of diplomatic missions in foreign countries.

The Vienna Convention on Diplomatic and Consular missions grants to Diplomats a certain level of immunity in foreign posts, but that does not include murder. In consular posts, like Istanbul, consular immunity only extends to officials who are actually performing consular duties when an alleged infraction occurs. I know from personal experience how subjective that process can be as I was arrested by Turkish police when I was the U.S. Consulate duty officer in Istanbul while looking for a missing American who turned out to be a drug dealer. The Turks weren’t sure what to do with me as I was Consular so I spent 24 hours playing cards with the prison governor before I was released.

The hypocrisy comes in when the U.S. Congress and media become enraged and demand that there be “consequences,” in part because Khashoggi was a U.S. legal resident and therefore under law a “U.S. person.” Saudi Arabia is, to be sure, a country that most would consider to be an undesirable destination if one is seeking to eat, drink and be merry. Or just about anything else having to do with personal liberty. An absolute dictatorship run by one family, it has long both relied on and been the exporter of the most backward looking and unpleasant form of Islam, Wahabbism. But for the fact that the Saudis are the world’s leading exporter of oil, and, for Muslims, guardian of the religion’s holy sites, the country would long ago have been regarded as a pariah.

But that said, Congress and the White House might well consider how the rest of the world views the United States when it comes to killing indiscriminately without fear of consequences. President Barack Obama, who has practically been beatified by the U.S. mainstream media, was the first American head of state to openly target and kill American citizens overseas. He and his intelligence advisor John Brennan would sit down for a Tuesday morning meeting to revise the list of Americans living outside the U.S. who could be assassinated. To cite only one example, the executions of Yemeni dissident Anwar al-Awlaki and his son were carried out by drone after being ordered from the White House without any due process apart from claimed presidential authority. Obama and his Secretary of State Hillary Clinton also attacked Libya, a nation with which America was not at war, destroyed its government, and reduced the country to its current state of anarchy. When its former ruler Moammar Gaddafi was captured and killed by having a bayonet inserted up his anus, Hillary giggled and said “We came, we saw, he died.”

The United States is also supporting the ongoing war in Syria and also enables the Saudis to continue their brutal attacks on Yemen, which have produced cholera, starvation and the deaths of an estimated 60,000 Yemenis plus millions more threatened by disease and the deliberate cutting off of food supplies. And the White House looks the other way as its other best friend in the Middle East, Israel, shoots thousands of unarmed Palestinian demonstrators. Overall one might argue that if there is a smell in the room it is coming from Washington and one death in Istanbul, no matter how heinous, pales in comparison to what the U.S. itself, Israel and Saudi Arabia have been doing without any pushback whatsoever.

And then there is the small matter of actual American interests. If Washington persists in going after the Saudis, which it will not do, it will presumably jeopardize future weapons sales worth tens of billions of dollars. The Saudis also support the system of petrodollars, which basically requires nearly all international purchases of petroleum to be paid in dollars. Petrodollars in turn enable the United States to print money for which there is no backing knowing that there will always be international demand for dollars to buy oil. The Saudis, who also use their own petrodollars to buy U.S. treasury bonds, could pull the plug on that arrangement. Those are actual American interests. If one pulls them all together it means that the United States will be looking for an outcome to Khashoggi’s slaying that will not do too much damage to Saudi Arabia.

So, what do I think will happen as a result of the Khashoggi killing? Nothing that means anything. There are too many bilateral interests that bind the Saudis to Europe and America’s movers and shakers. Too much money is on the table. In two more weeks mentioning the name Khashoggi in Washington’s political circles will produce a tepid response and a shake of the head. “Khashoggi who?” one might ask.

Who Really Built America’s Massive Pyramid Of Debt?

Ernest Hemingway once wrote, “How did you go bankrupt? Two ways. Gradually, then suddenly.” 

Howmuch.net, a website that provides visualizations about money, recently published a new report that shows a unique perspective, breaking down debt into the deficits of each U.S. President has added throughout history.

Hemingway’s warning looks strikingly similar when it comes to the U.S. national debt, which now stands at a whopping $21 trillion.

When President Trump was elected, the National Debt Clock at 1133 Sixth Ave., New York, NY, where it has flashed sobering stats on America’s indebtedness from the Durst Organization-owned office tower since 2004, was quickly removed.

Now, one must check Twitter @NationalDebt for daily sobering tweets about the debt. And, as of October 29, the U.S. national debt officially stood at $21,694,906,926,249.

Before the Reagan administration, the combined cumulative U.S. debt stood at $750 billion, which Reagan almost tripled over eight years, said Howmuch.net.

After Reagan, his successors did not slow down, with George H.W. Bush adding $1.55 trillion in a single term, followed by Clinton at $1.4 trillion, Bush at $5.85 trillion, and Obama at $8.59 trillion.

Estimates already show that Trump is expected to add a total $4.78 trillion during his first term.

So the trajectory of the deficit is out of control. Reagan inherited a national debt of $750 billion, and Trump added almost $779 billion in fiscal 2018 alone.

What does all this mean? Is the country ever going to change course?… The answer: Not until something breaks, as we addressed this sensitive topic a few weeks back:

And more bad news: in order to finance the soaring budget gap, the US Treasury will aggressively increase the pace of debt issuance, borrowing $769 billion in the second half of the current calendar year. That would be the most since 2008. The full year number for 2019 is expected to be well over $1 trillion, and has been cited by some as the reason behind the recent blow out in interest rates.

Cited by Bloomberg, Trump’s top economist, Kevin Hassett, said this month the president will unveil measures soon to address the shortfall, although he did not provide specifics.

“The deficit is absolutely higher than anyone would like,” Hassett said. And, looking ahead, it’s set to keep rising indefinitely until finally, something breaks.

The Putin-Nazi-Terrorist-O-Matic

Authored by CJ Hopkins via The Unz Review,

I suppose it was always just a matter of time until the global capitalist ruling classes and their mouthpieces in the corporate media combined their two main official narratives into a Ronco-type 2-in-1 kind of deal. That’s right, folks, your days of switching between the War on Terror official narrative and the Putin-Nazi official narrative are over, because now, for just $19.99, the Putin-Nazi-Terrorist-O-Matic® takes care of all your official narrative needs with just the press of one button!

Here’s how it works.

First, you take your classic mentally-disturbed individual, someone like, say, John Hinkley, Jr., Mark David Chapman, or Travis Bickle, or a total wack job like Cesar Sayoc, and you paint whichever clearly psychotic crimes he’s committed as acts of “terrorism.” Don’t worry about the definition of “terrorism” or how it has become a virtually meaningless label the capitalist ruling classes and corporate media can slap onto anyone. Just keep saying “terrorist,” “terrorism,” and any other lexical derivatives of “terror,” over and over, like some kind of mantra … you know, like the Hare Krishnas do.

Next, you take whatever obsession your disturbed individual is maniacally obsessed with, and you paint that obsession as an “ideology,” or some kind of organized political movement, as if your wack job was actually a rational person and not just a totally paranoid geek who decided to attempt to assassinate Reagan because he couldn’t get a date with Jodie Foster, or to murder John Lennon because God had ordered him to do so in a J. D. Salinger novel.

Now, this works much better if your disturbed individual is actually obsessed with something political, like, say, if he’s a Donald Trump fanatic who has plastered the windows of the van he’s living in with all sorts of blatantly psychotic artwork deifying Donald Trump and demonizing Donald Trump’s political opponents, but you’ll have to work with what your lunatic gives you. In any event, whatever his pathology, you will need to de-pathologize your psycho, so you can misrepresent him as a “domestic terrorist,” and then associate whatever “ideology” you’ve just painted onto him with “terrorism.”

If that sounds a little complicated, don’t worry, folks, it’s really not!

The ruling classes and the corporate media just provided us with a demonstration of the Putin-Nazi-Terrorist-O-Matic in action, which proves how easy-to-use it is. In the span of just a single week, they whipped up so much mass paranoia that, by the weekend, millions of hysterical liberals were calling for a Deep State coup, and the arrest and internment of all registered Republicans, because a right-wing loon had sent a bunch of non-exploding bomblike devices to prominent members of the neoliberal “Resistance,” or rather, to their respective mail-screening services.

These Putin-Nazi Terrorist “bomb-like devices” were “intercepted” throughout last week. Their targets were a roll call of Resistance heroes, Soros, Obama, Hillary Clinton, John Brennan, the offices of CNN, Eric Holder, Maxine Waters, Joe Biden, and, yes, even Robert De Niro! Putin-Nazi panic paralyzed the nation! The neoliberal corporate media (who, remember, are serious, respected professionals, not conspiracist nuts like Alex Jones) began pouring out pieces informing the world that Donald Trump was behind these attacks, or had encouraged, “emboldened,” or “inspired” whoever was with his violent, neo-Hitlerian rhetoric.

The Washington Post went full Shakespearean with Dana Milbank’s What Hath Trump Wrought? The New York Times explained how Trump was employing a strategy called “stochastic terrorism,” i.e., inspiring random acts of violence that are statistically predictable but individually unpredictable! “Trump’s words have consequences,” The Guardian lectured. “Words matter,” CNN concurred. John Brennan, who courageously continued to appear on television, despite the ongoing terrorist threat, affirmed that Trump’s “un-American” rhetoric had “emboldened individuals to take matters into their own hands.” Even “alternative” Resistance outlets like Truthout joined the chorus of voices reporting that “Trump’s Rhetoric Emboldens Violence!”

By Thursday morning, #MAGAbomber, #MAGATerrorist, and other such hashtags were circulating widely on Twitter. Which meant it was only a matter of time until the Resistance linked these stochastically-terrorist MAGA bomber attacks to Russia. On Thursday evening, MSNBC’s Chuck Todd did exactly that, speculating that “this could be a Russian operation!” (Washington Post propagandist Craig Timberg, author of the infamous McCarthyite smear piece on “peddlers of Russian propaganda” that got the whole “fake news” hysteria going back in December 2016, would soon follow up with this ridiculous attempt to connect the “MAGA Terrorist” to Russia … but I’m getting a little ahead of myself.)

By Friday, after anti-Terrorism specialists (or the kids that work in the mail screening room) “intercepted” more “bomb-like devices” addressed to Senator Cory Booker and ex-National Intelligence Director James Clapper, the neoliberal punditocracy were soiling themselves on national television. This was it! The long-awaited Putin-Nazi Apocalypse had finally begun! And just as Paul Krugman had prophesied it would … or, OK, not exactly like that, but still, Trump was, once again, about to suspend the Constitution, declare martial law, and appoint himself dictator! Clearly, Putin had ordered Trump to launch the destruction of Western democracy by deploying the dreaded Totally Incompetent Domestic Terrorist Mail Bomber Strategy … and just in time for the midterm elections!

And then, just like that, they caught him … Cesar “the Jackal” Sayoc, Jr., the terrorist mastermind that had nearly perpetrated another 9-11-type event, and who was sleeping in his van behind an auto parts store! As is standard procedure for terrorist sleeper agents, Sayoc, until he was “activated,” had been maintaining a totally low-profile cover as juiced-up, body-building, racist male stripper with an extensive criminal record and an obsession with Trump. Like the “Skripal assassins” and other Putin-Nazi operatives, he had made a point of getting himself photographed and noticed by witnesses in various public places, and otherwise drawing attention to himself, which is one of the first things they teach you at the Kremlin. Sayoc hasn’t yet divulged the names and ranks of his handlers in the GRU, but, presumably, Eliot Higgins and Bellingcat are hard at work googling that right this minute.

In the meantime, the liberal corporate media have been working the Putin-Nazi-Terrorist-O-Matic on a more or less 24/7 basis. It is crucial at a time like this, when mass hysteria is reaching peak levels, that the public not be allowed to believe that this “MAGA Terrorist” is merely one more pathetic, attention-seeking geek who decided to vent his impotent rage on those he perceived as his mortal enemies. Same goes for the Pittsburgh synagogue attacker, who struck as I was writing this piece. Never mind that this homicidal idiot did not like Trump, who he condemned as a “Jew-lover.” In order to maintain the official narrative, the ruling classes need us to believe that he was not just another anti-Semite with a gun collection and a gab.com account, but, rather, an official “domestic terrorist,” who was probably “radicalized” by Donald Trump’s rhetoric!

Look, I’m no fan of Donald Trump, or racism, or anti-Semitism, or any other type of bigotry (despite what my smear-happy former editors at CounterPunch would like you to believe). What I am is a student of the production of ideology. I lived through the deployment of the official “War on Terror” narrative after 9-11, and then watched in frustration as millions of Americans mindlessly supported a war of aggression, the abrogation of many of their civil liberties, torture, and various other atrocities, based on nothing but propaganda and media-generated mass hysteria.

We are experiencing a similarly historic ideological readjustment at the moment, which I’ve been trying to capture (satirically and more seriously) since it began in the summer of 2016. The official “War on Terror” narrative (and people’s understanding of what “terrorism” is) is being gradually redefined and expanded to encompass any and all forms of “extremism” (i.e., whatever the ruling classes decide is “extremism”).

Mass murder, battery, racist graffiti, opposing the spread of global capitalism, saying nasty things about Soros, tattooing your forehead with a giant Swastika, using the words “globalism,” “sovereignty,” and so on … the distinctions are rapidly disappearing. The media-generated mass hysteria over Islamic terrorism during the War on Terror is being replaced with media-generated mass hysteria over Nazis and Russians (unless you’re a die-hard Trump supporter, in which case, you’ve got your immigration hysteria, but my focus is on ruling class ideology, which, despite the existence of Donald Trump, remains neoliberal, supranational, and, yes, God help me, globalist in nature). Any and all forms of opposition to global capitalist ideology, regardless of whether they come from the Left or the Right, are being stigmatized as “extremism,” and thus inextricably linked to “terrorism.”

I described this, back in January, as a global capitalist “War on Dissent,” and I think events over the last ten months have largely confirmed my diagnosis.

I’d love to go on, but this essay is already way too long for people’s phones, and the midterm elections are fast approaching, so this is no time for critical thinking … and plus, news is just coming in from Guardian columnist Christina Patterson that Jeremy Corbyn and the Labour Party are also responsible for the Pittsburgh attack, and for “emboldening” all these “extremists” and “terrorists,” and for “normalizing” anti-Semitism and fascism, and mass murder, and who knows what other atrocities, and I don’t want to miss a chance to catch the Putin-Nazi-Terrorist-O-Matic in action!

October Payrolls Preview: Here Comes First 3%+ Wage Growth Since 2009

Tomorrow at 8:30am ET, the BLS will release the October jobs report: payrolls are expected to jump to 200k from last month’s hurricane-affected 134K. However with record low unemployment and a bubbly labor market fueled by Trump’s stimulus, where labor shortages are said to be the biggest concern to companies, markets will ignore the weather-affected payrolls print and focus squarely on average hourly earnings to see if last month’s inflationary wage pressures (+2.8% Y/Y) remain, or rise significantly as consensus expects (exp. 3.1%)

Here are Wall Street’s consensus expectations:

  • Non-farm Payrolls: Exp. 200k, Prev. 134k (extremely broad range of 105K to 253K)
  • Unemployment Rate: Exp. 3.7%, Prev. 3.7% (NOTE: the FOMC projects unemployment will stand at 3.7% at the end of 2018)
  • Average Earnings Y/Y: Exp. 3.1%, Prev. 2.8%
  • Average Earnings M/M: Exp. 0.2%, Prev. 0.3%
  • Average Work Week Hours: Exp. 34.5hrs, Prev. 34.5hrs
  • U6 Unemployment Rate: Prev. 7.5%
  • Labor Force Participation: Prev. 62.7%

The breakdown:

PAYROLLS: As ING writes, whereas forecasting payrolls growth is always more luck than science, there is even more guesswork than usual this month because there is a double hurricane effect to take into account. September’s payrolls figure of “just” 134,000 was clearly depressed by Hurricane Florence, which prevented thousands of workers in the Carolinas and Virginia from getting to work. This month there should be a clear rebound in the region with additional jobs created thanks to the rebuild/clean-up operations put in place.

However, Hurricane Michael, which hit Florida and Georgia last month, will have had a detrimental impact on payrolls in that region through worker absence. As such, markets should refrain from placing much emphasis on the actual outturn. “For what it is worth,” ING is “forecasting payrolls growth of 200,000, but to be honest, anything could happen – the range of economist forecasts is 105,000 up to 253,000, according to Bloomberg.”

In this vein, a quick side note on the ISM non-mfg survey: if payrolls follow the employment component, tomorrow’s jobs number should print in the 500,000 range, the highest since 1983. If that happens, look for 10Y yields to shoot into low earth orbit.

WAGE GROWTH: When it comes to the one number that matters most, average hourly earnings, one bank is especially optimistic: according to ING, while pay rates have been grinding higher, the bank expects to see a real breakthrough this month. The annual rate of wage growth is set to push above 3% year-on-year for the first time since April 2009. ING, however, expects to see a 0.3% month-on-month, 3.2% YoY outcome. The NFIB survey below shows that the proportion of small businesses looking to raise pay is also at the highest in the survey’s long history, which shouldn’t come as a surprise given the tightness in the job market.

Goldman (Payrolls exp. 210K) is slightly less optimistic and estimates that average hourly earnings increased 0.1% month over month and 3.0% year over year, with calendar effects a negative this month, as the survey week ended on the 13th. As shown in the chart below, Hurricane Florence also appeared to temporarily boost average hourly earnings in the Carolinas, and the unwind of those effects could reduce October average hourly earnings growth by around 0.1%.

While Goldman cannot rule out an offsetting boost from Hurricane Michael in tomorrow’s report, the timing of those disruptions would argue for a limited impact.

UNEMPLOYMENT RATE: The unemployment rate likely remained stable at 3.7% in October, after falling 0.17% in last month’s report (to 3.68% unrounded). Continuing claims continue to fall (-25k from survey week to survey week), and as shown below, the level of claims would argue against a rebound in the jobless rate. At the same time, the participation rate has returned to the bottom of its two-year range (62.7%), and a short-term bounce can not be ruled out.

WEATHER IMPACT: As noted above, for the second month in a row, a key focus in tomorrow’s report will be the impact of recent hurricanes, and specifically how they affected payroll growth. Barclays analysts say that in contrast to September, US initial jobless claims data is continuing to show only a modest effect from Hurricanes. In the week-ending 13 October (which captures the October data survey period), initial jobless claims fell by 5k in the week to 210k, and the four-week moving average rose only slightly to 212k from 210k. “At the state level, the very modest rise in initial claims following the hurricane that made landfall in North and South Carolina in early September appears to be reverting,” Barclays says, pointing out that initial jobless claims in North Carolina rose by around 10k initially, but was now tracking lower, while South Carolina’s rise was much more modest and has now reverted. “The relatively mild rise in initial jobless claims following the hurricane in these two states seems at odds with the notable softening in nonfarm payrolls in September,” and adds that while it believes the storm did temporarily weaken some categories of employment, it has a tough time reconciling the stability of the initial jobless claims data and the slowing of September payroll growth, and expects revisions when the report is released on Friday, adding that “for now, the signal from the claims data remains one of low rates of job separation and, in turn, healthy labor market conditions.”

TRADE WARS: There will be attention on the manufacturing jobs component of the report to assess how much of an impact trade wars is having on US manufacturers’ hiring. “We expect soft manufacturing and construction payrolls, factory payrolls have been slowing since the first tranche of tariffs in July,” UBS notes, adding “we expect to see factory employment slowing much more sharply in October after the 10% China tariffs were put in place.”

ADP PAYROLLS: ADP’s gauge of payroll growth in October beat to the upside, printing 227k job gains in the month against a consensus 187k; “whether it tell us anything about Friday’s official number is another matter altogether, because ADP won’t capture any hit from Hurricane Michael, but the official data will,” Pantheon Macroeconomics said. “ADP counts names on payrolls, while the official data only include people who were paid – anything – during the survey period,” the consultancy explains, “this means that part-timers, in particular, can drop off the official payroll count when bad weather prevented them from working during the survey week.” Pantheon says it would be very surprised to see Friday’s headlines as strong as the ADP data, “but with hurricanes making landfall in the survey weeks in both September and August – that has never happened before, as far as we know – we’re braced for anything,” it says.

LAY-OFFS: Challenger reported that October job cut announcements rose to 75.6k, largely on Verizon’s announcement that it will offer voluntary severance packages to 44k managers in an effort to trim costs. “The good news for those accepting offers is now is a good time to look for a new job, especially if they act quickly,” data compiler Challenger said. “The increase in job cut announcements could indeed indicate we’re heading toward a downturn, although employers are still holding on to their workers for the most part.” Challenger also noted in its report that the economy is at near full employment, and job creation has typically surpassed expectations. Wages remain flat, however. Meanwhile, recent fluctuations in the stock market indicate investor concerns and that tariffs are beginning to have an impact.”

FED REACTION: The US economy continues to grow strongly and with the job market continuing to tighten, there is growing evidence of pipeline pay pressures. Inflation is already above the Federal Reserve’s 2% target on all the key measures the central bank follows and rising wage growth will only add upside risks for inflation. As such, the Fed looks set to remain in tightening mode with a December rate hike looking virtually guaranteed followed by three more 25 basis point interest rate rises next year.

* * *

Below is a more nuanced breakdown of the strengths and weaknesses of tomorrow’s report via Goldman:

Arguing for a stronger report:

Rebound from Hurricane Florence. State-level data for September showed a 36k drop in North and South Carolina payrolls (mom sa), consistent with a drag from Hurricane Florence of around 50k (assuming trend growth of 15k in those states). While most of these workers had likely returned to work by early October, Goldman expects the weather-related boost in tomorrow’s report to be partially offset by the negative impact of Hurricane Michael. While particularly strong (category 4), the most severe effects of Hurricane Michael appeared to be concentrated in a smaller swath of the country (mainly the Florida panhandle and parts of Georgia). Over 350k people were ordered to evacuate ahead of Hurricane Michael, compared with 1 million people for Hurricane Florence (we estimate the payroll impact for that storm at -50k) and 6.5 million Floridians during Irma (estimated payroll impact of around -180k). Power outages in Florida also appeared to affect a smaller share of the state (see red bars in Exhibit 1).

While these considerations would argue for a modest payroll effect, Michael also disrupted economic activity in several Southeastern states (after being downgraded to a tropical storm). As shown by the blue bars in the same exhibit, electricity usage declined sharply in the Deep South and Carolinas on the last day of the survey week. While uncertainty is high, we estimate that Michael will reduce the level of October payrolls by between 20k and 40k, producing a net weather effect of around +15k

Jobless claims. Initial jobless claims remained just above cycle lows during the four weeks between the payroll reference periods (averaging 212k). Continuing claims also moved lower, falling 25k between the survey weeks.

ADP. The payroll-processing firm ADP reported a 227k increase in October private payroll employment—40k above consensus and the fastest pace since February. We view the report as evidence that the pace of job growth likely remains well above potential.

Job availability. The Conference Board labor market differential—the difference between the percent of respondents saying jobs are plentiful and those saying jobs are hard to get—rose 2.7pt to +32.7 in October, a new cycle high. JOLTS job openings also rose to a new cycle high in the most recent report (7,136k in August).

Arguing for a weaker report:

Company-level one-offs. We expect a few company-level developments to weigh on service-sector job growth in tomorrow’s report, with a combined payroll impact of around -10k to -20k. Within the retail industry, we expect a drag from bankruptcies of Steinhoff Mattresses (closing 200 stores immediately) and Sears (closing 46 stores by November). A voluntary layoff program at Verizon (44k employees eligible) is likely to weigh on information payrolls, but we expect most of these individuals remained employed during the October survey period.[2] Finally, a hotel workers strike will reduce October job growth by 2k.

Service-sector surveys. Service-sector business surveys softened on net in October, with our non-manufacturing employment tracker pulling back from a cycle high (-1.0pt to 56.6) and our headline aggregate falling by 2.7pt. Those declines may overstate the underlying trend however, as we believe the particularly weak Richmond Fed measure was impacted by the hurricanes. Service-sector job growth rose 75k in September and averaged 145k over the last six months.

Tariff uncertainty. Trade tensions escalated further in the weeks leading up to the October reference period, as the White House imposed a 10% tariff on $200bn worth of Chinese imports on September 24th. We continue to expect that the growth and employment effects of trade frictions will be modest in the US, and accordingly, we are not embedding an explicit drag from the September tariffs in our payroll estimates for tomorrow. That being said, we note the risk that increased uncertainty or the prospect of retaliatory tariffs may have weighed on hiring.

Neutral factors:

Manufacturing surveys. Manufacturing-sector surveys were generally weaker in October, but most remain at elevated levels. Our manufacturing employment tracker fell for the fourth month in a row (-0.5pt to 57.3). Both the headline aggregate and employment subcomponent of the ISM manufacturing survey declined by more than expected in October.

Job cuts. Announced layoffs reported by Challenger, Gray & Christmas increased by 26k in October to 78k (SA by GS). On a year-over-year basis, announced job cuts rose 48k. However, these increases reflected the voluntary layoff programs in the telecom sector (discussed previously), and job cuts actually declined across the remainder of industries (+19k mom).

India’s Social Mood & The Tallest Statue In The World

Authored by Ritesh Jain via WorldOutOfWhack.com,

Rohit Srivastava at Indiacharts explains brilliantly the correlation in society mood, tallest statue and fate of markets

“Yesterday – the Indian Newspapers were splashed with advertisements of the Inauguration of the tallest Statue in the World constructed in the State of Gujarat. A big feat and it was undertaken by this regime in the midst of booming stock market. What can it tell us about the state of the mood in India and what lies ahead for the Indian stock market? At 182 meters this is now the Tallest Statue in the world

This was accompanied by a list of all the previous Statues that held this claim providing an interesting ground for R&D into the importance of these events.

This brought to my mind memories of the multiple articles on social mood written by Robert Prechter on the relationship between stock market peaks and construction of the words tallest buildings. He noted it was not the date of construction alone but the period when it was constructed that was important to know where we are in the long term. Without putting words in his mouth here is what he said in his Elliott Wave Theorist publication.

An interesting chart of the history of buildings near peaks is also below.

With that, let us see where we are with respect to the largest Statues in the World. It is my belief based on the work already done by the Socioeconomics Institute on the subject that the decision to construct the largest Statue in the world by Shri Narendra Modi, marks the strong social mood of the times in India. The confidence that all is well based on what has been a 15 year advance in stock prices. It also marks the final bubble phase of the Indian stock market, and based on my long term chart of the Nifty the 5th wave, in the form of an ending diagonal at the end of a Supercycle degree bull market. That it was completed yesterday is less important than that is was in construction for the past 56 months. The bids started in Oct 2013 and awarded in Oct 2014.

So now the big question is when was the second biggest statue constructed? Right into the peak of 2008 and completed by Sept 2008. The Spring Temple of Buddha though took 10 years to complete. But here is the big catch 3 of the tallest statues were completed in 2008 in months of each other and are all Buddha statues. A lot of tall buildings were getting constructed at the same time as mood was reaching a peak. We seem to have seen that with the statues in 2008.

The Ushiku Daibutsu in japan was completed in 1993 after 10 years of work and within that occurred the Supercycle degree peak in mood and the Nikkei stock index. So work started on it in the midst of the Japanese bubble that popped in 1989 but was completed only years later.

Now the Russian statue The Motherland Calls put up in 1967 a time when there was no RTSI index so it is hard to point to the stock market there. But the Statue of Liberty 1887, USA started construction in the early 1870s. It was a gift from France. That said the stock market rallied into the 1870s and then went into a long consolidation phase. What makes 1870 important is not the US stock market performance alone but that it was at the end of a global boom in railroads. So while US stocks peaked after the 1870s and consolidated for many years it was the UK charts that might be more compelling. As that period was marked by overinvestment in railroads and then banking failures. So here is a chart of the UK market cap performance from 1825-1870. Not the clearest view of the period but a zoom into what happened after 1873 for US stocks.

The next and final chart shows the US from 1950 to date

Lastly what did the railroad boom look like? The pre 1970 UK market boom was put together in one paper by Graeme G Acheson, probably written for Cambridge University but I found it online listed on many websites and am picking the chart from there so you know what it was like before the Statue was gifted to the US.

Now you may consider the evidence here coincidental and you can also think that the start dates of building are way before the bubble peaks. However, the moment I laid my eyes on an advertisement that spawned across the newspapers it appeared as a reflection of the positive mood of the times and it was worth the effort digging into it this morning. I am especially taken up by it because it comes at the end of India’s Supercycle degree bull market that is ending with an ending diagonal in my opinion. And if this tallest statue is a red flag then we have held it up wide and loud for the world to see and note. While most would see it as a sign of confidence, socionomic studies see it as the point of maximum confidence just as the tide is about to turn

My two cents…

I spend a lot of time understanding society mood. Pessimism leads to skepticism. Skepticism leads to optimism. Optimism leads to euphoria and the cycle repeat itself. The statue is a sign of late Euphoria…

“Don’t Ever Repeat This”: Beto Aides Busted Funneling Caravan Funds In Undercover Sting

James O’Keefe’s undercover operatives at Project Veritas have done it again; this time filming campaign staffers for Congressman and US Senate candidate Robert Francis “Beto” O’Rourke, seemingly engaging in the illegal use of campaign resources to help transport Honduran nationals traveling in the Central American caravan headed towards the southern US border. 

O’Rourke staffers Dominic Chacon and AnaPaula Themann admit to facilitating transportation to airports and bus stations.

Via Project Veritas

Chacon: “The Hondurans, yeah… I’m going to go get some food right now, like just some stuff to drop off…”

Themann: “How did they get through?”

Chacon: “Well I think they accepted them as like asylum-seekers… So, I’m going to get some groceries and some blankets…”

Themann: “Don’t ever repeat this and stuff but like if we just say that we’re buying food for a campaign event, like the Halloween events…

Chacon: “That’s not a horrible idea, but I didn’t hear anything. Umm, we can wait until tomorrow for that.

Themann: “Well that’s exactly the food we need. And I will just mark it as, I do have dozens of block walkers.”

“Don’t ever repeat this”

Featured in this report are campaign staffers who work on Congressman O’Rourke’s US Senate campaign discussing how they use campaign resources to help Honduran aliens and transport them to airports and bus stations. Said Dominic Chacon and AnaPaula Themann, who work on O’Rourke’s campaign:

Chacon: “The Hondurans, yeah… I’m going to go get some food right now, like just some stuff to drop off…”

Themann: “How did they get through?”

Chacon: “Well I think they accepted them as like asylum-seekers… So, I’m going to get some groceries and some blankets…”

Themann: “Don’t ever repeat this and stuff but like if we just say that we’re buying food for a campaign event, like the Halloween events…”

Chacon: “That’s not a horrible idea, but I didn’t hear anything. Umm, we can wait until tomorrow for that.”

Themann: “Well that’s exactly the food we need. And I will just mark it as, I do have dozens of block walkers.”

Using “pre-paid credit cards” … “some sort of violation”

A Project Veritas Action attorney reviewed the footage and assessed:

“The material Project Veritas Action Fund captured shows campaign workers covering up the true nature of spending of campaign funds and intentionally misreporting them. This violates the FEC’s rules against personal use and misreporting. It also violates Section 1001, making a false statement to the federal government. The FEC violations impose civil penalties, including fines of up to $10,000 or 200 percent of the funds involved. Violations of Section 1001 are criminal and include imprisonment of up to five years.”

Chacon and Themann also explain how they go about concealing their use of campaign funds for alien support purposes:

Themann: “There’s actually stores that just mark it as ‘food’ they don’t mark different types… at Albertsons, on the receipts, it marks it just based off of brand…”

Chacon: “I think we can use that with those [campaign pre-paid] cards to buy some food, all that s**t can be totally masked like, oh we just wanted a healthy breakfast!”

Themann says that she doesn’t “want to make it seem like all of us are from [the O’Rourke campaign]” when going to distribute supplies to the Honduran aliens. She adds, “I just hope nobody that’s the wrong person finds out about this.”

Chacon elaborates on the usage of pre-paid campaign cards, saying, “We’re going to use more of those cards to get them more supplies too. So it’s all going to work out. I’m done being nice. I’m done being professional. [Be]cause nothing is professional. None of this is like s**t there is a rule book for, you know?”

Later in the report, Chacon also reveals “there’s not really an approval process” regarding the usage of the pre-paid cards, and that “we can just go and get the food and we can come up with a BS excuse like as to why we needed to get this stuff.” He adds, “Under the table just sort of do it.”

“Nobody needs to know”

Chacon explains that Jody Casey, the campaign manager for the O’Rourke campaign, was happy to hear about their efforts supporting aliens with campaign funds:

Chacon: “She texted us afterward and was like, I’m so happy that we have a staff that gets it and was there, I was so happy to see y’all there, still working, still contributing, we have the best team ever… she was good about it.”

Journalist: “So, Jody knows?”

Chacon: “Well, she doesn’t know we used the pre-paid card, but she doesn’t need to know.”

Added Chacon, when discussing the possibility for using campaign vans to help the Honduran aliens, “we could probably get away with using the vans… Nobody needs to know.” Chacon also says, “For me, I can just ignore the rules and I’m like f**k it.”

When asked about using campaign resources to help the Honduran aliens, Casey said “don’t worry”:

Journalist: “It just made me really concerned, like, you know, because I know that we’re using some of the campaign resources to help with the migrants and like, I just didn’t want anybody to get in trouble with that…”

Journalist: “Like I didn’t want them to ask me any questions about people using resources…”

Jody Casey: “Don’t worry.”

Andrea Reyes, who also works on the O’Rourke campaign, revealed that she has text messages showing she received approval for using the pre-paid cards:

Reyes: “The thing is yeah, as long as we’re not advertising it. I mean yeah, I don’t really know. They said it was fine sooo *throws hands up* I mean I don’t know, okay. I told you about it! I have the text messages to prove it, sooo…”

Journalist: “So you told Jody?”

Reyes: “Yeah. I told Jody and I told my director.”

When asked about using campaign vans to assist the Honduran aliens, Chacon reveals that they are going to transport the aliens to airports and bus stations:

Chacon: “… we’re going to give rides to some of the immigrants too. Like to the airport, to the bus station, like why not, you know?”