White House Trade and Manufacturing Advisor Peter Navarro has a good discussion with Martha MacCallum about the economy, White House economic policy and the focus in the aftermath of the COVID crisis to reemphasize an industrial resurgence in the U.S.

As Navarro outlines the focus of the administration policy is on Main Street and driving the main street economy that overwhelmingly benefits middle-class workers.

That said, when questioned about President Trump’s recent tone toward China, Navarro hints toward what many expect… President Trump is going to deliver a very deliberate, very strategic, very focused and very painful economic blow to Beijing.  WATCH:

(more…)

On Thursday afternoon President Trump delivered remarks after a tour of the Ford Motor Company Rawsonville Components Plant in Michigan. [Video and Transcript Below]

.

[Transcript] THE PRESIDENT: Thank you. Well, thank you very much. I like that dais very much, actually. That’s very special. Nice wood. Beautiful like the dashboards on your cars, Bill. Right?

MR. FORD: Absolutely.

THE PRESIDENT: Thank you. And I just heard you’re going to be having two more — two thousand more jobs right down the road for the Bronco, which is a big winner. That’s great. Fantastic job. Thank you very much, Bill.

MR. FORD: Thank you, sir.

(more…)

A visibly angered President Trump told Maria Bartiromo he “doesn’t want to talk to China right now” and expresses a more open opinion that we should just decouple from all economic attachment to China.  This is a seismic shift in tone toward Beijing.

All administration policy and economic influence is now targeted to remove Chinese manufacturing from the U.S. supply chain. President Trump and white house officials openly discussing a U.S. effort to decouple from China is a significant shift.

.

President Trump has been creating a dual position for several years; this is very unique because it is the same strategy used by China.  By expressing a panda face, yet concealing the underlying dragon, President Trump’s policy to China is a mirror of themselves.

(more…)

U.S. Trade Representative Robert Lighthizer and U.K. Secretary of State for International Trade Elizabeth Truss announced today [joint statement] the beginning of a series of fast-tracked trade negotiations toward a new free trade agreement. [USTR Release]

In the foreground is a trade agreement between the U.S. and the United Kingdom. However, in the more strategic background context these negotiations create leverage for the U.K. in their post-Brexit negotiations with the European Union. First from today:

LIGHTHIZER – […] The US negotiating team will be led by Dan Mullaney, Assistant U.S. Trade Representative for Europe and the Middle East; and the UK negotiating team will be led by Oliver Griffiths, Director for US Negotiations at the Department for International Trade. Over 200 staff from U.S. and UK government agencies and departments are expected to take part in the negotiations.

(more…)

The Bureau of Economic Analysis (BEA) released the first quarter Gross Domestic Product (GDP) advanced estimate and the result is a 4.8% decline in economic activity. [BEA Here]

The revised fourth quarter GDP shows the economy was growing at 2.1 percent prior to the COVID-19 shutdown.  The severity of the change in GDP reflects a severe drop in consumer spending, essentially bringing the economy to a halt in March as the entire nation went into lock-down.  As the BEA explains:

The decline in first quarter GDP was, in part, due to the response to the spread of COVID-19, as governments issued “stay-at-home” orders in March. This led to rapid changes in demand, as businesses and schools switched to remote work or canceled operations, and consumers canceled, restricted, or redirected their spending.

The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the first quarter of 2020 because the impacts are generally embedded in source data and cannot be separately identified. (more)

Digging down into the details the data shows what we all have seen.  There is some specific data that is noteworthy in the tables.

(more…)

With the economy at a halt, and unemployment skyrocketing while various Wuhan Virus mitigation efforts are underway, President Trump has announced his intent to suspend all immigration.  We’re closed:

(more…)

In the background of lessons being learned from the COVID-19 pandemic, stay tuned for a new MAGA-minded small farm program in the agricultural industry similar in construct to how President Trump and Secretary Mnuchin created the parallel banking system using community banks and credit unions.  Domestic food security is national security.

Today President Trump and Agriculture Secretary Sonny Perdue revealed a $19 billion U.S. farm relief program which includes the Dept. of Agriculture purchasing $3 billion in farm products from the fresh supply chain to support those impacted by the collapse of the restaurant, hotel, school and cafeteria demand (food away from home).   WATCH:

.

If you’ve been following our outlines on the food supply-chain issues, you’ll be well aware of what is causing the current farm crisis. {Go Deep} Secretary Perdue is stepping in to mitigate that impact and provide relief to farmers severely impacted by the supply chain disruption.

(more…)

Though the U.S. and Canada are not part of the “OPEC Plus” group, President Trump has  been leading negotiations between Saudi Arabia and Russia to broker a deal and stop their price war.  Today President Trump announces an agreement between the major petroleum exporting countries to curb oil production by approximately 10 million barrels per day:

Additionally, there was a loggerhead within the negotiations as Mexico did not want to cut their production by the requested amount of 400,000 barrels daily.  Mexico relies on oil as a large part of their economy. AMLO stated his economy could not withstand such a significant drop in state revenue.  Economic security is, after all, national security.

President Trump broke the OPEC+ stalemate by agreeing to decrease U.S. production by 300k/barrels allowing Mexico to drop a more manageable 100k/barrels.  Trump and AMLO reached an undisclosed agreement where Mexico will reimburse the U.S. later on.

I suspect the “reimbursement” will be more, well, strategically geopolitical than financial.  [*nudge-nudge*, *wink-wink*, *say-no-more/say-no-more*]  President Trump has an uncanny knack of collecting leverage for later, more strategic, purposes.  Just sayin’.

(more…)

…there had to be a point where the value of the Wall St economy surpassed the value of the Main St economy… Part I Here

We now look forward, and consider the question: How would the multinational underwriters, the multinational financial systems, reset all transactional tables (the bookkeeping systems underneath the valuation) if the U.S. stock market was ever forced to re-value economic nationalism over multinational globalism?

To first answer the “how” question, we must visit the “why” question. Why would the multinational financial underwriters want to reset their valuations?

Obviously, the global financial system does not act altruistically. What would motivate the global wealth valuation authority (various market investment indexes) to want, or need, a reset.

The answer to the “why” question might not be as challenging as it appears.

First, there has been a seismic shift in how the world looks at the economic exploitation of multinational systems, or globalism.  See Bernie Sanders?  See those yellow vests in France?  See what happened with the U.K. Brexit referendum?  See the shrinking EU influence?  See the open/public confrontation and push-back against China? See Trump? All examples are consequences of the rise of economic nationalism.

Secondly, the original Wall Street corporate motive (during decades of mergers and acquisitions) to shift product manufacturing to Southeast Asia (ASEAN nations) was driven by a lower cost of overall business, higher profit margins and greed.

As a direct outcome economic wealth was shifted from the U.S. to ASEAN nations, and particularly China. Low wages, low regulation, cheap operational costs, incentives and subsidies from Asia equals cheap TV’s, sneakers, furniture and durable goods.

Even with high fuel prices and overseas shipping costs, there was a big difference between U.S. and ASEAN manufacturing costs.  As hundreds of U.S. Wall Street multinationals chased profits the rust-belt was created.

(more…)

A very big picture discussion requires a considerable baseline.

The stock market is not the U.S. economy; the stock market is an investment instrument that determines valuations of economic activity company by company. The valuation is considerably arbitrary, based on the determinations of the arbiters (investors). This is empirically true.

However, that said, how would the multinational underwriters, the multinational financial systems, reset all transactional tables (the bookkeeping systems underneath the valuation) …if the U.S. stock market was every forced to re-value economic nationalism over multinational globalism?    Enter “Coronavirus”.

Four years ago CTH first explained a new way to look at the U.S. economic system and how Main Street was/is disconnected from Wall Street.  We presented a metaphor to explain. Before going deeper into the discussion of tomorrow; and at the request of several people who now accept the era of “deglobalization” is upon us,  I first present that prior reference & then will use this as the baseline to describe what could come next.

There is a key phrase at the fulcrum of everything past:

…there had to be a point where the value of the second economy (Wall Street) surpassed the value of the first economy (Main Street).

What we are going to outline in part II is the possibility what happens when this natural truism is reversed.  The objective is to answer: How, specifically would Wall Street reset its evaluative systems if Main Street once again emerged as the priority?

But first, a baseline revisit is needed.

(more…)