Yeah, we will get to the “good news” about personal incomes and the employment cost index in a sec.  But, we need to have a little “come to Jesus” about what’s going on because a lot of people seem wildly delusional about present Realities.

Not that they are to be blamed, of course.  We are entering Post Modernism with only a bankrupt sketch of retools Marxist ideologies.  And, if you listen to the “deep thinkers” at the Macro level, things don’t look at all promising.

In our work, it all blows to hell-and-gone this fall.  Here’s why:

Reason #1:  Earnings Mean Little  

Hype yes.  meaningful? No.  A LOT of Tech Earnings are Phony.  You see, once-upon-a-time, companies that made piles of money were judged on earnings because that meant there would be a  dividend along shortly (as in “actual cash money”) paid out to investors.

Example 1:  Facebook.  “Good earnings” report and so in the pre-open session the stock was trading up 6% to almost $250 per share.  But, since we like “thinking like Buffett and Munger” (a  lot) we look at Facebook and apply our “Lemonade Stand Methodology”.

Whacking off zeros, the “market cap of FB” is around $656.54.  The book value of the stock (selling off the parts of the stand and the lemonade jugs) is less that 1/6th of that, according to the statistics on Yahoo Finance here.

While this “$656.54” Lemonade Stand does generate $73.36 in sales.  we like companies that are more than a stock proposition.  Ergo, we focus on this troubling section:

I will never own the wisdom of Buffett & Munger, but you do see the point, right?  A LOT of the high flyers in this market are stock propositions and not what a conservative thinker would define as “investments.”

Example #2:  Tesla.  See their stats over here. Seeing the pattern, yet?

Example #3:  Amazon.  See their stats over here.

To cold-hearted investors of the Jerry McGuire (“Show me the money!“) school, stock propositions are a dime a dozen.  Or, in the case of Amazon in the early slog $3,235 per share.

Ure doesn’t invest in this kind of proposition.  Because these companies do not have a long-term track record of sharing the wealth with the people who made all the growth possible.  All you get is the possibility of a higher stock price for now.  To me?  Well, call me old-school, but we are presently living in the greatest financial bubble in the history of the world.

When it breaks?  God help us all…

After the hype and BS smoke on the financial impo channels has cleared?  Demand is still collapsing as evidenced by “ExxonMobil Records Second Consecutive Quarterly Loss Amid Q2 Oil Price Plunge, Demand Slump.”

The Fed’s Asymmetric Counterfeiting Op

We know the American stock market dropped more than 33% in mid March.  And it has come up a bit since – almost to new highs.

But there’s been no economic recovery.  Next week we will get employment data, but in the previous month’s report, remember the number of people actually working was still far lower than the previous June.  This year, 142,182,000 were working.  In June of 2019, 157,148,000 held jobs. About 9.5% MORE unemployed.  10% fewer workers and stocks near records?  Beat me some more! I’m stupid enough to swallow anything.

With the bump up in first-time jobless claims this week, we don’t think a lot of jobs will ever be coming back.  And when they do? Not only will workers have to navigate the treacherous waters of “political correctness” (defined by mob rule), but in addition robotics will take a lot of jobs.

On point are articles like “This Popular Burger Chain Now Has Robots Cooking Your Food” and “‘Thousands will be displaced’: Stone & Chalk acquires tech internship platform Ribit as robots loom large over labour.”

We’re quickly departing “The Robots are Coming!” to “The Robots are HERE!”  And no country in the world – save Russia, which is eyeing a 13% income tax equivalent on robo-labor) seems to understand that when no one is working, no taxes come in, which drives inflation out past Uranus…

What to do, while the blow-down blossoms?  Why print up more Fed Scrip,. of course!

Since we know the market went down 33% – and we see where six-months in, M2 is UP 35.8% in the overnight Fed H.6 Money Stocks report, we can see the tatters of “hanging together” will be cited by delusional economists who think MUM/MMT (Making Up Money/masquerading at Modern Monetary Theory) will all work out.

Check with Zimbabwe and remember when Mexico went down this path a couple of decades ago, it brought the Nuevo Peso and the rise of Cartels.  Venezuela and our tax burdens are nearly equal now on a PPP basis…with the only difference being that everyone is claiming victory and neither country supports a president.

Fun shit, huh?

Oh, why to I call MUM/MMT counterfeiting?  Because there is now  nothing in the way of stable convertibility of dollars into goods.  Inflation is coming as we pass the depressionary deflation.

Post-modernism insists there “be no discomfort” for the darling snowflake whiners.  No “sucking it up” and “working your asses off.”  Eventually, we will have to implement China-style “re-education camps” for the Free Lunchers, but first we have to trash America enough.  Then Soros, et all, can  really have their way with us.

Daily Data Dose

Which one first?  Employment costs, is it?  Can you say wage-driven inflation?

Compensation costs for civilian workers increased 0.5 percent, seasonally adjusted, for the 3-month period ending in June 2020, the U.S. Bureau of Labor Statistics reported today. Wages and salaries increased 0.4 percent and benefit costs increased 0.8 percent from March 2020.

Compensation costs for civilian workers increased 2.7 percent for the 12-month period ending in June 2020 and also increased 2.7 percent in June 2019. Wages and salaries increased 2.9 percent over the year and also increased 2.9 percent for the 12-month period ending in June 2019. Benefit costs increased 2.2 percent for the 12-month period ending in June 2020. In June 2019, the increase was 2.3 percent.

Then comes the personal income fairytale.  Unless your last name begins Bez or Zberg and you have a stock proposition going.

Personal income decreased $222.8 billion (1.1 percent) in June according to estimates released today by the Bureau of Economic Analysis (tables 3 and 5). Disposable personal income (DPI) decreased $255.3 billion (1.4 percent) and personal consumption expenditures (PCE) increased $737.7 billion (5.6 percent).

Real DPI decreased 1.8 percent in June and Real PCE increased 5.2 percent (tables 5 and 7). The PCE price index increased 0.4 percent. Excluding food and energy, the PCE price index increased 0.2 percent.

Ready for the belly laugh?

Personal saving was $3.37 trillion in June and the personal saving rate—personal saving as a percentage of disposable personal income—was 19.0 percent

Hand me a line of blow while I go through what they’re saying, here:  Income was down, DPI was down, and consumption increased, right?  OK, how the holy-f*ck does that leave an increase in “personal savings?”  (*correct answer: crooked definitions!  Disconnected from real world.)

Not in our world out here.  But, for those with a cult-like following who don’t demand rent on their money – since everyone else is sinning the stock propositions (FOR NOW), it’s all good, right?

Jeer at me while you can because you know what happens today, right? $600 unemployment benefits set to expire Friday.  More to come?  With the DC Clown convention?  YGTBSM.  When could your new stimulus check come from the IRS? Let’s review some possible dates…all speculation and hard to pay bills with that.

You stupid and generous taxpayer, you:   Fools on the Hill are about to take off for recess.  Fire ’em all at the polls or by mail this fall.

Viral News

Passings:  Herman Cain – who I would have voted for in a second had he made it that far.  Of coronavirus.  And yeah, he refused to wear a mask.  And yes, he had comorbidities.  Higher CV-19 risk for cancer survivors.

Appallingly, the  NY Times continues the left-wing drive to continue to use a global medical issue as a political wedge.  See “Will Herman Cain’s Death Change Republican Views on the Virus and Masks?” as the latest example.

As of today, we see global cases around 17.332 million and the only question is which side of 18-million by the time we get to next Wednesday’s Peoplenomics report.  We will likely be in million cases a day globally around the first of October.  Compounding just like interest.

The only good news is global community immunity at the 50% level looks to us like late spring of 2021. When the death toll globally is up around 16-million.  Just looking ahead.

Oh, and did you see where “Coronavirus cases in Tokyo soar to new high as city prepares to launch its own “CDC”?

In the Shorts

Not so slick, Willy: Bill Clinton visited Jeffery Epstein’s private island, unsealed court documents suggest.

“Oregon” still means “idiots” asPortland protests draw thousands Thursday, after state troopers start duty at federal courthouse.”

Is better computer security coming? IBM completes successful field trials on Fully Homomorphic Encryption/”

Peoplenomics tomorrow.  We expect the market to rally early, but if Europe doesn’t do more than a dead catr bounce, our Global Aggregate shows a decline this week and that could be a U.S. headwind into the close today and opening Monday.

For now, everyone’s skipping rehab meetings and futures are up 42 on the Dow.  I’ve worn out another pair of ViseGrips pinching myself this month.

Be safe…and yes, we continue to wear PPE for the 10-minutes a week one of us is in town.  Medicine is real.  Wrong-headed Opinions will get you killed.

Write when you get rich,