Are you “ahead of the news” or are you “behind it?”
On trade, there are always Alt-Sources of supply…so why is the media getting yet-another story wrong? China is convenient but not irreplaceable. Think Taiwan, South Korea, Vietnam, Myanmar, India, Brazil…cheap labor is everywhere!
It’s not a trivial question. There’s a tremendous sense of confusion that comes from failure to comprehend “the news.” Particularly, when the mainstream media largely “gets it wrong” and has (sadly, predictably) what amounts to a “lobbying arm” of the People’s Republic of China.
First Some Basics:
The news you take in is often up to a day out of phase with reality.
Simple example today would be the Drudge Report headlines. All about ‘woe is trade’ and all that. One headline in particular that can mislead a novice investor: “DOW -617.”
Don’t get me wrong, I mean Matt Drudge is a good guy and all, but that is only loosely “news.” Anyone with significant skin in the game knew that number 14-hours ago. In a sense, that’s history. Because at the same time that headline was running today, Dow futures were up 150 and S&P futures were up 20.
BTW, here’s today’s NFIB press release:
WASHINGTON, D.C. (May 14, 2019) — Optimism among small business owners continued its steady climb in April, with the NFIB Small Business Optimism Index increasing 1.7 points to 103.5. Sales improved in April, the inventory soft spot seen in last month’s report rebounded, and profit trends posted a very solid advance. Job creation plans gained, hiring remained strong, and expectations for sales, business conditions, and credit conditions all improved.
End of the freakin’ world? Uh…not presactly…
Just out from Labor:
U.S. import prices advanced 0.2 percent in April, the U.S. Bureau of Labor Statistics reported today, after increasing 0.6 percent in March. The April advance was driven by higher fuel prices, which more than offset decreasing prices for nonfuel imports. Prices for U.S. exports rose 0.2 percent in April after a 0.6-percent rise in March.
Some Background May Help
When I was young, my family subscribed to the Seattle Times. Most of the news at city hall was done by noon so in the afternoon edition, there was 80% of local happenings.
Then along came television. Ah. They needed to get their film “to the lab” by 3:30 PM in order to give editors time to get something for the early show. Even then, however, you could see “the gap” between local Event X and when it showed up on television or in the paper.
ENG – electronic news gathering – “Here live at the scene of the yada yada…” started its ascent in about 1975. In many ways, “The News to Real-Time Gap” was closing.
It closed more with the advent of citizen newsing on the Internet via YouTube. and Vimeo with distro’s (alerts) going out on FB and Twitter. Thing is, many sites are still human-parsed and that causes a time-delay. Even our auto news parser over at https://computationalfuture.com has up to 15-minutes of delay due to the refresh sequencing as it collects RSS data – another gap-closer.
The second key fact: Not everyone’s living in the “same time.”
- Ure (and likely you) live from present to future; designing our inputs accordingly. We don’t so much invest as gamble on probabilistic future outcomes. To us, the future is a floating crap game and we’re addicts.
- “Regular” people live on a delayed-basis of up to 24-hours. (They may come up to the present for a big event like the WTC [omg omg live live did you see that???], for example, but mostly they are 24-hour laggards. OK, except Oscars night or when a dress falls off…)
- “Slow people” get around to news over time. Maybe. This is the low-stress path and makes sense because unless you have money in the game, you can’t impact much of anything.
People I hang with live anywhere from 1-minute to 2-days into the immediate future. We’re future trading. That is, when the Drudge headline was touting the China trade talks failing, those of us who play markets seriously already had seen (and factored in) not only the futures pricing the market up 150 points, but also before closing yesterday were tossing a dart toward this afternoon when a 200+ point rise is possible. You getting how this works?
I’ve become very fond of using Bayesian News Analytics of late. Essentially, Thomas Bayes “invented” conditional probabilities theory and since there are so many “If this, then that” pairs in financial news, it can be a real leg up on regular slow-newsers.
Most people live in a kind of rolling near-term history. Which is fine because most times it’s a lower stress way to live. But, it also gives too much time for the “useful idiots in the newsroom” to get things terribly wrong.
A couple of this morning’s headlines to illustrate:
“FARMERS FEEL PAIN.” Well, no, likely not so much. Reason? There are still 7.6 billion people in the world and they all like eat. That demand ain’t going anywhere. Farmers can be uptight for now, but eventually, everyone wants to eat. Farmer’s real concern (growing trees in the Outback as we do) is getting crops in for all the damn cold and rain. (The climate hoax.)
Rather than get whipped up by the “useful idiots in the news room” (UIITNR) try Ag Professional which covers “Planting Delayed? Here Are Your Prevent Plant Options.”
Or, try TalkBusiness with their “Significant planting woes plague Arkansas farmers, especially those planting corn.” My, how China trade hype keeps the cooling (and resultant rains) off the front page, huh?
Apple woes from China trade? What a wonderful way to blame Trump for what we’ve told you would be along on its own (regardless of trade hype) anyway: The phone world is super-saturated. (Lately, we’ve beenb using our Kindle instead of the cell…)
Reality? Despite all the “woe is me” from the China-hype-lobbying US mainstream, the reality is you can still get a 55″ UHD TV for under $300 bucks – which is still amazingly cheap. How many do you want? Free shipping…
I could go on, but when you read some of the hysterical coverage about “trade this” and “trade that” remember there are Alt-Sources and China doesn’t want to see that big-bad straw-man fail. Lest they be found out to be a “paper tiger.”
Which doesn’t mean we can’t get paper cuts, of course. Useful Bloomberg story in Inside the Close Naval Encounters in the South China Sea.
But, China needs those three-square, too and oh, quick, look surprised: China says U.S. has agreed to keep talking over trade war. CBS, meantime, sees to be parroting China’s interests in ““Farmers are the ones that are taking it on the jaw.”
Remember where you heard it: Everyone needs to eat...We might make lunch money today, after all.
But ha e you noticed how stories all put Trump on the defensive? Example from Reuters today with emphasis added: “Trump defends China trade negotiations, says U.S. ‘in much better position’.” Defends? from WHO? “Explains” might be a less “basing” word choice. Seeing how this works?
The Broader Context
…is Resource Depletion. An unlikely source (Irish Tech News) offers “Resource-Light Business Models Are On The Rise.”
Odds are no other media will point out The State of Manufacturing 2019: Thriving Manufacturers Must Do More with Less…
EU court: employers must measure working time in detail; which means maybe less social media time on the employer’s dime?
Progress.org suggests “Resource Taxation as an Alternative Method for Diversifying the Revenue of Developing Countries.” Which we figure is wrong, since all “taxes” are simple theft that has been slowed-down, wrapped in officialdom, and smeared with lipstick before a greedy mob with the intent of screwing legal owners.
It’s why things like allodial title no longer exists. Fee simple property still means government can steal it if you stop paying them off – which is what property taxes are at their core: A shakedown wrapped in officialdom and smeared with lipstick before the angry mob. (You know this already, we’re sure.)
Whenever you read the word “tax” substitute the word “theft” or “steal” and you’ll get to the heart of things.
But you get the idea. That’s why Iran is so interesting. OK, besides the editorial stance of the NY Times which (rather self-importantly) suggests “It’s Time for Saudi Arabia’s and Iran’s Leaders to Talk” which gets it wrong. The time for the talk was before the explosions. Not after. Sheesh.
But that’s where the media is…walking a lag-time and reactive path in a world where Bayes rules not only in trading but in plotting our “computational future.”
(Whew!)
And in Other News
Fortune outs some corporate genius: Bayer Has Now Lost Over 44% of Its Value Since Its Monsanto Merger.
And in the latest chapter of our “Barbarians at the Mall” series (Lex Luthor/Amazon against the Betonite Tribe) :Walmart is rolling out next-day delivery.” They ready for Prime time?
And this note from Marijuana Business Daily, got us to thinking: Chart: Denver-area cannabis sales up 10%-27% in advance of ‘bomb cyclone’ storm. So maybe we should rename such storms “bong cyclones?”
Moron the morrow, then…
George
Now for something entirely different!
In my never ending quest to bad mouth Uber the were not a taxi cab company that is a taxi cab company here’s some gris for G2’s mill:
https://www.zerohedge.com/news/2019-05-14/blain-ubers-warning-emperors-new-clothes-moment-upon-us
Actually the article covers the concept that the markets are at a turning point.
Enjoy!
Yo G – Duuuude – what a tasty weather report for the Denver area…it was a Bong Cyclone just as the Magic Mushrooms went legal…whoa was that a flying pink elephant ? nope kinda looked like chucky schumer in pink dress of NXVIM fame ? or was that lil adam schitt wearing pink – TREASON worth the $? Enjoy the sex w/child slaves? Why the heck do their eyes always look like their fixing to pop out?
Oil is starting to look interesting again..ME tensions ratcheting up -bigly, Oxy beating out Chevron for Annadarko, Turkey flexing naval muscle in Cypriot oil grab, Yemmini’s taking their fight to saudi Oil Infrastructure – finally. Long Oil with ETF or Call options on volatile oil stock..gotta find a volatile Oil co. stock.
The national priority for trade should be to kick leftist trade partners to the curb, and give regimes which show some semblance of adhering to multi-party democracy preferred access to American markets. I’m on the fence on constitutional democratic monarchies as trade partners, but as long as we don’t allow the monarchists in the back gate and into the beltway woodpile with intelligence partnering, trading with constitutional democratic monarchies may be OK, at least if we keep’em at arms length. Keeping the leftists at arms length has proved impossible, and we should give it up. If a country boots the leftists and installs a democratic regime, we should increase trade opportunities for them.
Determining our trading partners based on geography and willingness to engage in wholesale bribery and corruption needs to stop. The Marksists, er, I mean Marxists are looking for marks to fuel the revolution. Any trade concessions we get from the leftists are offset by the damage they do to our institutions at home. Companies which have shipped technology to the leftist states, and abandoned US manufacturing need to be put under real scrutiny.
Son you can;t even keep your own constitution but yet rave on about other countries and their (there goes that sh*t word again democracy) or lack of as it may be,I got news for you we don’t give a rats as* about democracy and never have, as long as we get what we want, Iran in 1953 is more than proof of that, but i’m sure its ole lefty’s fault as we march on around the world braying God forbid “just like us”” as we steal kill loot and plunder every country that’s not just like us.!!!
I think you got that “ravin'” message deal down pat. Your argument seems to be that we should only trade with countries we exploit. Do rave on.
No we should deal with ALL countries as Washington said, but crawl in bed with NO countries nor interfere in the type of government they have,for that is left up to the host country and their people to decide what type of government works for them, not up to Washington and American interest, wall street banking business etc.Iraq Ukraine Libya Syria are more than proof of that!!i
N___,
It’s all about a companies bottom line. While Government didn’t shift manufacturing to other countries, they did make it easier through regulation…but only because of the pressure from corporations…Nixon, a Republican opened the flood gates, Reagan and Clinton solidified it….
Interestingly…the Democratic Party was the party of unions and labor… They had a lot to lose with this trade partnership..and have. The 2016 election proved that.
But, in the end, Apple, Nike, Ford, 3M, Microsoft, Boeing, Intel, Corning and even Trump and Ivanka with their own apparel lines made the choices to manufacture abroad because it was a way to make better profits. Why? Leftist regimes know how to keep costs down…Corporations want them to stay that way. Not saying it’s right…but for the past 40 years, American have become such a value driven market, that we are stuck in this third world manufacturing conundrum.
It’s the Democrat party, not “Democratic”
Again, you are making the same argument that we should trade with those who are the most proficient at exploitation because that’s what corporate America dictates. Had our national policy been to deter trade with the leftists, those factories you mention would have been built in places more conducive to our national interest, including at home. We don’t have to export revolution or try to force change on other repressive regimes; we just have to pick friends who play nice with their own citizens and us.
The President and the Senate set foreign trade policy, not Ivanka and the corporate brown shirts.
G, you’re right. Tariffs are taxes that make us ‘feel’ good for paying them. The low-skill/high pay jobs aren’t coming back. Britain tired the tariffs when America took their textile industry back during the 1780’s. Textiles never went back…. but the tariffs remained.
And speaking of farmers, U.S. farmers can’t compete even with Tariffs.
The first round of tariffs resulted in Trump giving the Farmers $12,000,000,000 in subsidies. This new round of tariffs, last Friday – Trump now seeks to give farmers an additional $15,000,000,000 in subsidies. From last fall to this spring, that’s a windfall $13,107 of support per farm (2016 farm count). Take away the cheap labor migrant farm workers and the American Farmers will need even more subsidies.
Isn’t subsidizing farmers to counteract lost business due to trade tariffs, a robbing Peter to Pay Paul practice? And you are right Out of Work Steve, throw in the immigration clamp down on cheap migrant harvesters, and basically, we will need more Government subsidizing and America’s food basket of the Midwest, Southeast, and West brings us a step closer to socialism. Thanks Trump. NOT!
Yep cheap labor is everywhere but you forgot that big gorilla in the room and he’s the one called China, that buys up billions upon billions of dollars worth of our worthless paper called treasuries and bonds,will the small countries buy all of that worthless paper not likely,will the Fed. buy up all that worthless paper again not likely,will it crash the system more then likely so what have they gained except poking a finger in China’s eye.
Now we have all of these reports put out by labor,BLM or some other government agency or who recieve money from government sources peddling their b.s. that all’s well,why unemployment simply fails to exisit along with poverty I presume, but then when you go to the lay-off list and see numerous lay-offs, endless small business’s closing and the great news of the day is like up in Buffalo this morning that utopia is here again, that Micky Dee is putting on 170 burger flipping jobs, while down the road from there a machining plant hiring skilled workers is closing their doors and laying off a hundred well paying jobs,which tells me that what they are running is the biggest con game in history,well next to the stock market that is, as we add another trillion to the debt as if anyone is watching.!!!
Robert.. the gorrilla isn’t stupid.. they have been reinvesting in businesses , land and homes in the USA with those worthless dollars..
cheap mortgage anyone..
https://www.cnbc.com/2019/01/08/chinese-middle-class-buying-up-american-residential-real-estate.html
https://southeastproduceweekly.com/2018/04/26/china-buying-worldwide-agriculture-interests-usda-says-yes/
https://amac.us/with-acquisition-of-california-port-china-broadens-influence-on-us-commerce/
https://www.loc.gov/law/help/real-property-law/china.php
While I agree and stated a few days ago on this site that there are alternatives for manufacturing outside of China, a very good friend of mine that is in the import/shipping side of the business and whose livelihood is dependent on trade, told me…”You can’t just switch computer/phone, garment, shoes, electronics and various other widgets to another country overnight..First, there are factory contracts signed, shipping logistics and available ports to consider, and US retailers timelines that need to be adhered to. Then, a company must re-train and build out a factory to the specs of said company. That could take up to a year or more.
He said, we are stuck with China for the near future and while seasonal items for summer are in freight or have most lifley, already landed won’t affect American for the next two quarters…the tariffs WILL have an affect on late 3rd quarter/4th quarter shipments…just in time for the holiday season. So George, if you are looking for an “event”…4th quarter price increases of up to 25% could be the trigger.
Good info. Do your Xmas shopping early. I understand that there are already 10% tariffs on most of the affected items, so the delta may be only 15%.
I don’t see any of this as a “REAL” problem for us! An in·con·ven·ience for some, YES, but not for most. ;-(
We have much bigger problems in our society. Why do otherwise INTELLIGENT people waste so much otf their time on minor issues?
exactly mark.. we outsourced our manufacturing to china the last time I had read any projected time to re open manufacturing in the usa.. it was a five plus year period to retool and start the factories back up..
Thoughts for today:
Tariffs: When I first heard of this, I factored an additional 15% to my bottom line costs of everything and dealt with it mentally. My only concern is that single sourced items I want might go off the market completely. Either way, I can’t control it and can handle it, so it’s not an immediate concern.
Typical EU: Mandates for yet more detailed records and accounting to the point that nobody can get any work done at all.
Bayer: A company with a checkered past buying one of the most hated companies in the USA, to the point that it lost half its stock value and may lose more. Shorting, anyone?
Farming: Good info on the state of planting in the great northern bog. I doubt most people have a clue about how the massive rains are related to global cooling though.
Money: The real problem with short term investing/trading is the massive time sink it can become. Going for lower returns with a need to monitor only once or twice a year could be a net gain for some of us. Like real estate, a financial “investment” can easily become a job.
We’ve all heard of Smithfield (the Chinese pork company on the U.S. mainland). They qualify for U.S. subsidies. LOL
LOL LOL LOL LOL… I will never forget the night I was stocking shelves at a local grocery store.. I walk back to the meat counter and its filled.. I looked.. and then asked.. what is that.. the meat man says oh pork azz holes. LOL LOL I said really.. yup we sell a ton of them this time of month.. a little later a friend and I were going to lunch and here goes some refugee with a cart full of them.. a loaf of bread some mayonnaise ketchup mustard onions lettuce.. my friend looks at the cart and then he asks.. what in the world is that..
I calmly looked at him and said.. what you’ve never had an azzhole sandwhich.. LOL LOL
they get a whole lot more than subsidies..
Idk George, its all about “leveling up”. At the end of every ‘”game” is the Big Boss and ya have to defeat him to win the prize. Right now there is a full court press. Many are called to play, very few participate and of them that participate even fewer win. Its so dang convoluted even with my skillz i have a hard time sorting it all out. Im not sure which guys are the good guys or bad guys anymore. I realized the other day that Ling Solomon had sol i(sun)n and mon i(moon)n his name.
This game goes waaaay back and evryone is selling their souls for a place in power. Back to a time of antiquity.
I know way too much, and i dont know what to do with it. I have never lost a battle in these relms. Never, not once. And im feeling pretty overwhelmed. All this political hype and grand standing by both parties is amazing to witness@ i have never seen anything like it. Its all reminiscent of the “battle for middle earth.” LOL! The One Ring to Rule them all was forged in Mt Doom. So, idk. I mean pretty good at reading things and all that, even schmegal had his place in the story. Unless, i can sort a few things out and soon. I may just fly the bird and walk away. I mean that dude has the big eye at the top of his castle.
Hard to find balance with scales in your eyes.
“They” say its the chance of 100 life times. Im just a dude. To be honest, Im pretty honored they think so much of me. What to do, what to do. I mean David slew goliath with a little stone, so to speak. Im not afraid of that philistine either. Sometimes thats all it takes, a little rock. What was it he said? Oh yes! ‘As sure as God has given me victory over the lion and bear, he will give me victory over this philistine”. And that giant got knocked F out! Didnt take a bunch of magic stuff.
Hmmmm. That the “word” on the street. This is “field” report for the week.
One things forsure, almost all them power emblems are self serving. Ego driven. Hmmmm thanks but no thanks. I will stick to what i know best. Driving. ;)
You must read this coming Saturday’s Urban report – right up your alley
Cool! I will check it out! :)
I know you dont like tube videos. Please allow this one. Thanks Man!
https://youtu.be/UFrDpx7zLtA
One more thing before I start work…I just saw a tweet from Trump touting his great negotiating strategy. So, since when does a “negotiator” shout out his “great” strategy to the entire world, so his opponent can see it?
So, using a sports metaphor…Steph Curry, tonight when you square up against the TrailBlazers, tell Damian Lillard well before the game tonight that you are going to do a right elbow fade-away to compliment your Pull-up three and see what happens.
George – the Negotiator in Chief strategy with Germany..I mean China seems to be “operating” on several different levels. Everyone STILL UNDERESTIMATING Trump and his mad skills working LEVERAGE. The “pressure” is being applied on so many levels, including the threatening of auto tariffs on German cars. Bolton and Pompeo being set loose to bluster and threaten WAR, Trump gov. forcing the ChiComs to sell the LA/ Long Beach Port Operations business. Pieces of the puzzle just keep falling in place, but U never hear a WORD about it from the lame stream. Just like Israhell shut down all social and news during and after Hamas mass missle strike operation – overwhelming iron dome, and causing “lots” of causualties – wonder why it is illegal to view 1st person video from mosque attack in kiwi land..
1a)FBI buys intel from Hildog&DNC – dossier. 2) feeds it to Lamestream/Faknews -Lamestream, not obstructing, happily runs with it 24/7 – non stop hysteria based reporting. 3) FBI then USES the Fakenews stories as Evidence before the FISA court/Judge – These actions alone R going to Bring The House Down!
That was/is being done to COVER UP 8 years of OBOMANATION – we have been Obomanated..and some people actually support that piece of work.
You”all act like Trump or Clinton or whoever is in charge it appears to me (a lowly farmer) that the military industrial complex and the bankers are in charge. You can’t eat gold you can’t eat paper money and you sure can”t even see digital money. What is the answer I’m not sure,but personally I’m working on creating love, balance and wholeness around me and trying desperately to live in the moment.(growing some food meanwhile) This is our only hope, because if humanity does not arise to the occasion we are all f*#*#!!!!!!!!! We can also begin to think about what will take the place of said madmen or whatever they may be, when this system we are under fails that is if they don’t completely destroy this beautiful wonderful mother we reside on. History shows they will yet again take their power back. Let us remember who WE ARE!!!!!!!!!
What’s still missing, IMO, is one website that has ALL pertinent statistics on a running basis, w/o the (usual) commentary trying to explaining such statistics. ;-)
The solution to all the problems are change the charter of all the corporations but who has the balls for that only one person that I know of
Heard of a wave?
While exiting a medical facility this afternoon I twice heard a faint disembodied voice calling out my first name. Linking no one to the sounds, I continued walking, and then a sibling entered my field of vision. I apologized for not having recognized their called out greeting. They looked puzzled explaining they had said nothing, but had only waved in my direction in order to attract my attention.
Does the sky taste like blueberries?
Manufacturing can easily do “more with less” by an order of magnitude. Tooling, software and hardware, is the key.
The vast majority of manufacturing in the US is small companies, and most of them do not use the latest tools, both hardware and software. This is due to the fact that the collective ability of all tech to innovate far outstrips industry ability to absorb that innovation.
So the sky’s the limit. We’ll do it first here. That will be true for a century.
I crisscrossed Indiana and Ohio twice yesterday. I drove past some of the best “growing dirt” in North America. I drove lots of back roads, saw lots of farms. I saw exactly one field that’d been plowed, and none which appeared to have been planted… Many [were] under water, many more lay muddy and still littered by remnants of last year’s corn and soy crops.
Corn is typically coming up by now (old farmer’s idiom: Knee high by the 4th of July…) and where the idiom used to denote a healthy crop, it is now an indication of whether a crop will succeed or fail (chest-high is typical by the 4th, nowadays.) Corn likes it hot, and moist but not wet. It takes 78-104 days for the plant to sprout ears and grow them to maturity (depending on strain or hybrid.) The plant will grow a couple inches a day if it’s happy, but a lot less if it’s not. Generally, “if the seed ain’t in the ground by May 20th, the farmer cain’t grow it.”
I think Southern Michigan will still have time to crank out taters and hunyums, but I’m not at all sure the corn belt is gonna have pone and hominy in the fall…
Nobody seems to talk about China owns a country not 40 miles from our shores. including a huge commercial port at Freeport due east of west palm beach. the Bahamians are known corrupt and have sold their souls to the Chinese. Ask Sarkis Izmalian about how he lost over 100 mil in a Chinese Bahamian rip off called Baha Mar which is currently in the court at the southern district of N.Y. Tiger Wu is nobody’s fool.