How voters in Germany turned against Angela Merkel – FT

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It Could Never Happen Here…But It Is

Fareed nails it this morning.   Wake up, AmeriKA!

If the country doesn’t repudiate this on Tuesday, the country and the world goes much darker and is in deep, deep doo-doo.

Soros is the perfect bogeyman for conspiracy theorists. He is rich, powerful, grew up abroad, and has a foreign accent.  Plus, he is Jewish.  Many Republicans now speak openly and often of the dangers of globalists, but for some reason, these globalists all tend to be Jewish financiers:  Llyod Blankfein, Janet Yellen, George Soros,  Gary Cohn. 

Given the ugly historical smears in this regard, one can only conclude that elements of the Republican Party are either clueless about anti-Semitism or actively encouraging it. 

…These forces used to be peripheral, voiced by marginal figures…Today senior Republicans emulate them. 

…The Republican Party is now squarely the party of Joe McCarthy.  Fareed Zakaria,  GPS, November 3

There you go, folks, about as partisan, or anti-partisan as GMM gets.

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As Everyone Looks Right, Germany Is Swinging Left

This is stunning and a shocker.

The support for Germany’s Green Party has doubled since the beginning of the year, while the right-wing Alternative for Germany (AfD), after peaking in the summer, is right back where it was.   The AfD, consisting mainly of nationalists and populists,  has sucked all the oxygen out of the political headlines in Germany over the past few years.

Check out the tracking poll here.

 

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Trump v. Obama Jobs Market – Midterm Review

The Bureau of Labor Statistics (BLS) released its final jobs report before the midterm election on Tuesday.

The pre-midterm final verdict is in.

The Obama economy created 423k more total non farm payroll jobs and 194k more private sector jobs in his administration’s last 21 months in office than did the Trump economy’s first 21 months.   The Obama economy averaged 216k monthly jobs while the Trump economy averaged 193k non farm payrolls.

Context is always good.  President Trump’s economy is impressive when considering it is running up against severe labor constraints as the unemployment rate hovers at multi-decade lows.   There is not a big pool of labor to draw from and wages are beginning to pick up due to these shortages.

Zero-Sum Game

Looking at the table below, we suspect the jobs market will now become a zero-sum game going forward.   For example,  employment growth in the Leisure and Hospitality has slowed under President Trump, while job growth in Mining and Logging sector has increased dramatically due to the rise in oil prices.   Could this be due to oil roughnecks quitting their bartending jobs and moving back to the oil patch?

We also suspect the retiring baby boomers are underfunded in their retirement and will remain in the workforce will beyond traditional retirement ages.

Macro Indicators

President Trump’s economy has generated, on average,  58 bps more wage growth over the similar 21-month periods.   Inflation is running a bit hotter under President Trump and the annual GDP growth rate has almost doubled, which indicates the economic treasures are still accruing disproportionately to capital.

 

Employment_1

 

Employment_2

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iPhone Inflation Drives Apple Earnings, Again

Apple continues to rely on iPhone inflation for revenue growth as unit sales quarterly year-on-year growth was flat for the 12th consecutive quarter.   The almost 30 percent increase in iPhone revenue is due to price increases.

Unit sales growth for the iPad and computers were negative year-on-year.

Assuming, for example, iPhone prices rose at the rate of inflation of 3 percent (and, of course, assuming away quality upgrades),  the company revenues would have increased by only 5.7 percent instead of 20 percent.

Relying on price increases is not sustainable and may be why the stock is taking a beatdown after the close.

I have a friend who works in retail smartphone who swears the Google smartphone is a superior product to the iPhone at the fraction of the price,   If consumers become a smidgen more cost conscious, Apple’s “annuity” revenue stream comes under pressure.

Moreover,  Apple shrank their shares outstanding by about 6 1/2 percent over the past year.   The market will eventually prioritize electrical engineering over financial engineering.

How long will the market stick with the stock?  Your guess is as good as ours.

Don’t get us wrong, Apple is a great company with great products.

We loved it pre-2016 and have missed the last 30 percent.

We suspect if unit sales do not increase this holiday season,  the stock could be in trouble. Just our calculated guess.

Apple is also so huge, the company has to wake up every January 1st and generate annual revenues larger than the size of Portugal or Peru’s GDP,  that is more than 77 percent of the world economies monitored by the International Monetary Fund.   That’s a big, big nut, folks!

Tim Cook is running out of time.

Update:  November 1 @ 6.25 pm eastern

Apple will stop reporting how many iPhones, Macs and iPads it sells each quarter, beginning with the December quarter, Apple CFO Luca Maestri said on the company’s earnings call Thursday.  – CNBC

Do you wonder why?

 

Apple_Earnings_3

 

Apple_Earnings_2

 

Apple_Earnings_1

 

 

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Key S&P500 Fibonacci Retracement Levels

Watch this space.   The battle taking place right now at 2,732.42.

No sense to even think about getting long for a swing until it clears and closes through the .500 at  2772.   Mr. Market desperately needs to close above 2732.42 today.   Baby steps.

Oh yes,  watch bond yields.

 

Fibos

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The Taylor Swift Boating Of The Midterms

The term swiftboating (also swift-boating or swift boating) is a pejorative American neologism used to describe an unfair or untrue political attack. The term is derived from the name of the organization “Swift Boat Veterans for Truth” (SBVT, later the Swift Vets and POWs for Truth) because of their widely publicized—and later discredited—campaign against 2004 U.S. presidential candidate John Kerry –  Wikipedia

But this (Taylor) Swift Boating is kinder and gentler, an exercise in decency, fairness, good citizenship, and the best of democracy — getting the young people out to vote.

 

Swift

 

Taylor Swift’s Savvy, Smiley Instagram Voter Drive

Please, please educate yourself on the candidates … and vote based on who most closely represents your values,” she [Taylor Swift] wrote in an Instagram post that likely contributed to a surge of more than 100,000 young adults registering at vote.org. Some might have guessed that this awokening would be a one-and-done affair before she returned to mere tour promotion. But instead, Swift has doubled down on her campaigning—though within clear and careful parameters. – Atlantic

So far, looking effective and generating results.   Ms. Swift’s instagram account has more than double the twitter followers of President Trump — 112 million versus 55.5 million, respectively.   Polls show the youth vote is set to almost double its highest turn out ever.

Youth Voter Turnout in the Midterm Elections Could Be Historic

Young voters could turn out to vote at record-breaking levels in the midterm elections next month, according to a new poll.

The poll, released Monday by the Institute of Politics at Harvard’s Kennedy School of Government, found 40% of 18 to 29-year-olds say they will “definitely vote” in the midterm elections on Nov. 6.

Youth voter turnout has historically been dismal in midterm elections, which tend to draw fewer voters overall than presidential election years. The highest rate of youth voter turnout in past midterm elections was 21% in both 1986 and 1994, according to the Harvard report, which cited U.S. Census data. – Time

These young people don’t like the “politics of mean.”   I know first hand, I have two.

We sense a political earthquake coming Tuesday.   Female, young, and left.   Brace yourself, folks. 

 

 

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Exit Mr. Rocktober

Ugly month.

The fourth worst October performance for the S&P500 since 1950.   Could have been much worse if not for the bulls skate save over the past two days.

Rare that stocks down so much yet 10-year yield 8 bps higher.    Something is cooking.

 

Mr. Rocktober_2

 

Mr. Rocktober_1

 

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“What will Brazil’s role in Venezuela be with Bolsonaro’s Presidency?”

Carlos Milani, Associate Professor at the Rio de Janeiro State University’s Institute for Social and Political Studies (IESP-UERJ) “Bolsonaro”s election is very worrisome for our young democracy”

Visit our website: http://www.france24.com

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Welcome To The Club, Mr. President

An antagonistic free press is part of the job description, no?

LBJ

President Trump – October 26, 2018

 

Whenever the press quits abusing me I know I’m in the wrong pew. I don’t mind it because when they throw bricks at me — I’m a pretty good shot myself and I usually throw ’em back at ’em.”  – President Harry S. Truman,  1958 

 

It seems, therefore,  essential the POTUS resume must include the following: 

Welcome to the Club, Mr. President

 

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