In a second, we’ll get to the ADP and Challenger job numbers. But first, a discussion of context is in order.
For those too young to remember, the term “drink the Kool-Aid” arose from the tragic events at Guyana in 1978. From Wikipedia:
“”Jonestown” was the informal name for the Peoples Temple Agricultural Project formed by the Peoples Temple, an American religious organization under the leadership of Jim Jones, in northwestern Guyana. It became internationally notorious when on November 18, 1978, a total of 918 people died in the remote commune, at the nearby airstrip in Port Kaituma, and in Georgetown, Guyana’s capital city. The name of the settlement became synonymous with the incidents at those locations.
A total of 909 Americans died in Jonestown, all but two from apparent cyanide poisoning, in an event termed “revolutionary suicide” by Jones and some members on an audio tape of the event and in prior discussions. The poisonings in Jonestown followed the murder of five others by Temple members at Port Kaituma, including United States Congressman Leo Ryan, an act that Jones ordered. Four other Temple members committed murder-suicide in Georgetown at Jones’ command.”
“And this has what to do with Kool-Aid?”
We read deeper to find this:
“Although Jones used poisoned Flavor Aid, the drink mix was also commonly referred to as Kool-Aid due to its status as a generic trademark. This has led to the phrase “Drinking the Kool-Aid”, referring to a person or group holding an unquestioned belief, argument, or philosophy without critical examination.”
With this, we drop into extensible mode and eye with suspicion recent behavior of the markets.
Let’s pull out the key phrase from the Wikipedia report on topic and see how it works out in the “extensibility mode” of thinking:
Could this describe the stock market since the Election? Is the market presently made up of “a person or group holding an unquestioned belief, argument, or philosophy without critical examination?”
Your Mileage May Vary (YMMV) but despite our continuing high hopes that Donald Trump will be America’s “turn-around president” (as discussed in the Millennial’s Missing Manual this morning (following post), we have to look at the over-all recipe for how governance and prosperity work.
Christmas, for example, more or less skipped the UK this year. As the Financial Times puts it “Poor seasonal trading at Next sparks fear among leading retailers.”
Next, for those unfamiliar, is a mid-level clothing outfit. And they seem to be caught between two rocks and a hard place. One rock, which we have bemoaned before, is that fashion is dead. People today don’t mind dressing like xhit. So that’s one rock.
The second rock is falling disposable incomes. Humans globally, not just in the UK are downscaling on everything for economic reasons and it’s now peer-acceptable to roll with cheap. Except on an iPhone 12, or whatever your e-fad peers dictate. The hard place? Well, that’d be the investors demand a higher return, after all, seems like rates have bottomed, right? So returns need to be higher and it’s nearly impossible to find a solution set to that equation.
Still, equations aside, the majority of market participants don’t seem to have “gotten the email” on this, hence economic reality is taking a back seat to economic insanity.
This is not to say Trump will fail…no, far from it. But it’s like getting excited about a farmer’s bumper crop before it’s even warm enough to plant.
Congress has to facilitate and with polecat hacks on the GOP side looking as lousy as they did in the debates, we still look at the nominally GOP majorities as really being as cantankerous and unmanageable as the Harry and Nancy fiasco which pushed through Obamacare, bills for which are now coming due, and who will skate and blame the dim-witted bag holders elected by the former republican party.
Got two for you: ADP hiring and Challenger jobs whacked reports. You want the good news or the other?
And as for the other:
“ROSELAND, N.J. – January 5, 2017 – Private sector employment increased by 153,000 jobs from November to December according to the December ADP National Employment Report®. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by the ADP Research Institute® in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.”
Nice jobs report – but not perfect. Look at the 16,000 additional jobs lost in “goods producing” – that means ever-further into shopkeeper economics.
As a result, we hold to the moderate view that turning the American economy is like turning an oil tanker (which can take 15 miles, if you haven’t taken the helm of one recently). The investment community is acting like this is a Donzi ski boat and it just doesn’t work that way.
It’s OK, though: Divergent opinions are what make a market. Even at extremes of grape-flavored liquids.
A Moving Story
Again, in case you’re not old enough to remember, I believe the record-holders for looting the White House may still belong to the Clintons. Even the fact-checking Snopes.com site admits “An Internet meme claiming that Hillary Clinton was forced to return $200,000 worth of furniture, china and art she “stole” from the White House is based on a grain of truth.”
How big a grain was that? An ABC News story here says it was $190K worth of goods poached, $28K returned, and eventually they paid for $86K worth. You work out the net.
Noting this, we wonder whether Michelle has Hillary on speed-dial to be a “moving advisor” since other than hiking and hiding-out, Hil’s been ultra-low profile.
Meantime, as the visiting son-in-law notes, the furniture at the White House may be a step down for Trump…which speaks well of Trump’s character that he’d take the step-down.
If you were a multi-billionaire, would you? Money, great wife, marvelous children, your own golf course(s)…hmmm…Good question…
Speaking of Former Democrat Job Search
I hope you noticed that former Attorney General Eric Holder is being hired by Kalifornia lawmakers to, in effect, go pit-bull after Trump when the real changes begin to roll through the swamp. I can think of two cards he’ll play.
We continue our view, however, that the biggest battles for Trump will rage between the Shadow Government (meaning FedGov’ers at GS-13 and higher) which is essentially fire-proof versus the new MSH (make xhit happen) private sector picks to sit on top of the mess.
Meantime, the Wall Street Journal says the prez-elect plans a shake-up of the office of the Director of National Intelligence. We would offer that Trump should re-read a few books on the (alleged, conspiratorial) backstory(s) to the Kennedy Assassination before getting too far into the too-deep swamp. Must be present to win. Eyes wide…and so forth.
You see how all this gets back to our earlier “oil tanker” not “ski boat”’ theory of market pricing? I assume your blood alcohol level is low enough, or you’ve beaned-up enough, to follow the ideas so far.
Windy City Hate, NY Crazies
Check this out in today’s Chicago Tribune: “Hate crimes charge possible after Facebook Live attack that included anti-Trump, anti-white profanities…”
Here in Texas, look for Constitutional Open Carry to move through the legislature.
Key point: Should you have to undergo a background check, testing, etc. to simply exercise a (supposedly) Constitutional right?
Look for the left to go nuts on this.
On the one hand: They don’t like tracking voting qualifications with photo ID – they are huge Open Voting supporters.
But when comes to this other Constitutional issue, fingerprint them, snap them, track them, database ‘em and tax ‘em. Dance of the Goose and Gander. What about equally restrictive voting and gun laws, huh?
Reality check? Sure…
The first city has lots and lots of guns. ChiTown has tough gun control…on the books, anyway. But obviously not on the street…
When again seems to prove that when guns are banned, only the lawful citizens are disarmed…which I assume came from the Dictator’s Manual.
So much for Thursday… futures down a tad (-14 on the Dow) so Ures truly won’t be making a killing today, except of the language, of course.
More literary carnage tomorrow. Unless you support pen control…