I can’t understand why anyone would still want to live in California. Yes, there are lots of high paying jobs and the weather is very nice, but crime is completely and utterly out of control. As you will see below, a new report that has just been issued is warning that violence in the state has now reached “epidemic” levels. The police are doing what they can to try to contain the violence, but at this point they are vastly outnumbered by the predators. Sadly, this is the end result of literally decades of cultural rot, and what is happening in California is going to happen to the rest of the nation if we do not take urgent action to turn things around.
Originally, I was going to write about something else today. Tens of thousands of rail and port workers were threatening to go on strike, and this could definitely cause some substantial economic disruptions…
America is bracing for chaos as tens of thousands of railway, port, and hospital workers look set to strike over the winter – plunging the country into further disruption.
As many as 60,000 railway workers, 15,000 nurses, and 22,000 West Coast port workers are plotting mass walkouts as they seek better working conditions.
Several US freight railroads said they were preparing for widespread strike and service interruptions Friday, a deadline set by two holdout labor groups in protracted talks with railroad carriers about better benefits.
But even though these strikes could cause severe short-term problems, they will eventually be resolved.
[ZH: And were resolved right before the strike was set to take place]
So in the greater scheme of things, they really aren’t a major concern.
On the other hand, our cultural decay is a massive ongoing crisis that isn’t going to go away.
As I mentioned earlier, a brand new report that was just released is warning that violence in the state of California has risen to “epidemic” levels…
The Golden State is losing its luster. A troubling new report labels physical and sexual violence in pandemic-era California a statewide “epidemic.” To put it simply, violence is on an alarming rise.
According to the new annual report from the California Study on Violence Experiences across the Lifespan (CalVEX), violence statistics have seen a significant increase since COVID-19 emerged. The report, conducted by scientists at the University of California San Diego School of Medicine, reports more than one in six Californians (18%) experienced either physical or sexual violence in just the past year.
If you live in one of the biggest cities in California, this isn’t news to you.
Once upon a time, the state was a place of great beauty and great tranquility, but now it has been transformed into a crime-infested hellhole.
I was particularly alarmed by the numbers on sexual violence in this new report…
While more than 1.5 million adults in California admit to committing acts of sexual violence in the past year, men were more than two times as likely as women to report that they perpetrated sexual violence and intimate partner violence.
Women also showed greater mental health impacts and life disruptions due to violent experiences, with 82 percent of women reporting anxiety or depression as a result of physically aggressive, coercive or forced sexual behavior.
Of course much of this violence is being fueled by illegal mind-altering drugs.
Some of these drugs are so immensely powerful that they literally put people into catatonic states for an extended period of time…
Can anyone explain to me why Democrat voters enjoy seeing this so much they just keep voting for more? pic.twitter.com/hq4unJn0S8— ????????Piglosi's Peaks???????? (@StokingFreedom) September 13, 2022
I will never understand why people would willingly do that to themselves.
Today, we are facing the biggest drug crisis that we have ever seen in American history, and addicts will often do whatever it takes to get another fix.
Sadly, this is one of the factors that is contributing to skyrocketing rates of shoplifting all over the nation…
We are all painfully aware of the huge rise in shoplifting and even violent robberies of stores. We watch the videos of thugs brazenly raiding stores, and read about the organized crime rings that have sprung up to profit from the trend. Shoplifting has become a big, if criminal business. Chances are that if you use eBay to purchase a wide range of products at reduced prices you have unwittingly purchased stolen goods. No good way for eBay to stop the practice.
One homeless man that originally came from Alabama recently admitted that he regularly shoplifts in order to fund his heroin use…
People say high rent causes homelessness but Ben, who has been homeless in San Francisco for 7 years, says the “vast majority” are homeless due to addiction. Just 6-7% are from SF. Ben says he "boosts" (shoplifts) and breaks into cars to pay for his $60/day heroin habit. pic.twitter.com/uewKTtBuOS— Michael Shellenberger (@ShellenbergerMD) February 6, 2022
There have been homeless addicts in the streets of San Francisco for years, but now we have reached a point where they are seemingly everywhere.
The following is what one reporter witnessed during a recent journey through the city…
I saw complete hopelessness in the eyes of haunted souls dragging themselves down the street looking for their next fix.
I saw men and women of all ages hunched over on the sidewalks with open wounds all over their bodies.
I saw the filthy tent cities stinking with human excrement and strewn with needles and pipes.
I saw children staring in horror at people dying right in front of them.
At one time, such activity was limited to the bad portions of the city.
But now addicts that have been drugged out of their minds are pulling down their pants and crapping in the streets right in front of some of the most expensive real estate in San Francisco.
This has made the wealthy people really angry, and Mayor Breed says that she is finally going to “get serious” about this crisis.
Of course “getting serious” doesn’t mean arresting a bunch of people and throwing them into prison.
That just wouldn’t be very “progressive”.
Instead, authorities in San Francisco are getting ready to launch a “soft-touch” program that will seek to “interrupt” drug trafficking…
City supervisors released a resolution for a vague ‘soft-touch’ initiative called ‘San Francisco Recovers.’
And here’s the catch, and it’s a doozy: the plan is being touted as, ‘a way that nobody’s going to jail but we’re doing an effective job of interrupting the drug market and drug scenes.’
Is this a sick joke?
Yes, it certainly sounds like a sick joke to me.
Good luck with all that.
If major cities such as San Francisco actually want to have a chance of turning things around, they need to send the police out to round up all the drug dealers.
Unfortunately, police forces in many of our biggest cities are rapidly getting smaller.
In fact, a whopping 122 officers have left the Seattle Police Department in 2022 alone…
The liberal city of Seattle is losing police officers amid a major spike in crime, 770 KTTH reported.
“We’re screwed,” former King County Sheriff John Urqhart said, according to 770 KTTH.
In total, 122 officers have left the Seattle Police Department in 2022, including six that left in August, 770 KTTH reported, citing a police source. Since the city council voted to defund the police department in 2020, nearly 500 police officers have left the force.
I wouldn’t want to be a police officer in a major west coast city at this point either.
They are underpaid, the politicians treat them with tremendous disdain, and they are often hindered by absolutely ridiculous regulations which keep them from doing their jobs effectively.
We like to think that we are so “advanced”, but the truth is that if you compare video footage from major cities on the west coast from decades ago to video footage from today there is absolutely no comparison.
Our society is melting down right in front of our eyes, and if we stay on the path that we are currently on there is no future for our country.
But the politicians insist that people like me have it all wrong.
They continue to tell us that things are better than ever and that a glorious future for our nation is dead ahead.
You can believe that if you want, but the truth of what is really happening to our society is on display for the whole world to see.
America is dying, and we are quickly running out of time to turn things around.
* * *
September Payrolls Preview: “Bulls Need A 100k Print For The Market To Alter Its Fed Expectations”
September Payrolls Preview: "Bulls Need A 100k Print For The Market To Alter Its Fed Expectations"
Prior to Friday’s NFP (and CPI next Wednesday),…
Prior to Friday's NFP (and CPI next Wednesday), the market has been oscillating between the “hawkish Fed” and “Fed pivot” narrative. While the JOLTS Job Openings and the ISM Manufacturing employment index showed more evidence of a slowing labor market...
... yesterday’s stronger than expected ADP/ISM Services once again proved the economy still remains strong and therefore weakens the hope of a near-term pivot from the Fed. In a nutshell, according to JPM's trading deks, with consensus expected tomorrow’s NFP to print +255k, Equity bulls would need a print ~100k to see the market alter its Fed expectations.
That said, many have said that in the absence of a huge outlier (to the downside) what markets and the Fed will be focusing on will be the participation rate (look for a big bounce here to confirm the recent slump in job openings) and hourly earnings: anything below 5.0% Y/Y and a 0.1% or lower sequential number will be greeted by the market.
Want more? Here is Newsquawk with a more detailed preview of what to expect tomorrow:
- The headline rate of payrolls growth is expected to resume cooling in September, with the consensus looking for 255k payroll additions (vs 315k in August);
- The jobless rate is seen unchanged at 3.7%, and there will also be focus on the participation rate after a welcome rise in August.
- Wage growth is expected to continue, although the annual rate is expected to cool a touch.
- Traders will be framing the data in the context of Fed policy; there are building hopes that the central bank might relent on some of its hawkishness if its policy tightening gives rise to financial stability concerns as it moves policy further into restrictive territory – these concerns could be exacerbated by soft economic data, as seen this week after the release of the Manufacturing ISM and JOLTs data, which fueled bets that the Fed would not be as aggressive with rate hikes ahead.
PAYROLL GROWTH: Analysts expect 255k nonfarm payrolls to be added to the US economy in September (Goldman estimates nonfarm payrolls rose by 200k in September, 50k below consensus and a slowdown from the +315k pace in August.), with the pace of jobs growth seen easing from 315k in August;
This would represent a resumption of recent trends where payroll growth has begun to cool (3-month average 378k, 6-month average 381k, 12-month average 487k). Jobless claims data that coincides with the reference period for the establishment survey in August and September augurs well for the headline: initial jobless claims eased to 209k vs the 245k level heading into the August jobs data, while continuing claims declined to 1.347mln vs 1.412mln into the previous jobs report. Meanwhile, while the ADP’s employment data bodes well for the official payrolls data (ADP printed 208k in September, a little above the expected 200k, and improving from the previous 185k), there is a great deal of scepticism about the payroll processor’s modelling, particularly given that its new methodology did not capture the trend of the August data in its inaugural release. Business surveys were mixed; the Manufacturing ISM report gave a sobering look at the labor market, where the Employment sub-index fell into contraction territory at 48.7, 5.5 points lower than the level recorded in August; the Services ISM however, saw the Employment sub-index rise to 53.0 from a previous 50.2, suggesting employment in the services sector continues to expand, while employment in the manufacturing sector is declining.
UNEMPLOYMENT: The unemployment rate is likely to have remained unchanged at 3.7%; analysts will also be watching the participation rate, which encouragingly rose by 0.3ppts in August to 62.4%. Additionally, there will also be focus on the U6 measure of underemployment after that picked-up to 7.0% in August from 6.7% in July. In terms of signposts about how these data will impact monetary policy, JPMorgan’s analysts point to the so-called non-accelerating inflation rate of unemployment (NAIRU), a level which puts neither upward nor downward pressure on inflation. JPM explains that when unemployment is above NAIRU, inflation tends to go down, and vice versa. The CBO estimates NAIRU is currently around 4.4%, but the median estimate of FOMC participants is at 4%. JPM itself argues that the actual level might have moved higher after the pandemic: "the relation between unemployment and job openings is also consistent with a higher natural rate," it writes, "massive sectoral reallocation over the past three years is a likely culprit for this increase." The Fed’s most recent economic projections envisage the jobless rate rising to 4.4%, where it is expected to stay into next year.
WAGES: Average hourly earnings are seen rising 0.3% M/M, matching the rate seen in August, but with the annual measure expected to ease a little to 5.1% Y/Y from 5.2%. The Conference Board's gauge of consumer confidence in September revealed that consumers were more optimistic about the short-term prospects for the labor market, although they were mixed about their short-term financial prospects. On this front, Fed officials have been closely monitoring the JOLTs data series, which offers a proxy on the tightness of labor market conditions (the tighter the labor market, the more wage growth economists expect ahead). In that regard, the latest JOLTs data may be welcomed by Fed officials, given that it showed labor market tightness eased significantly in the month, which might suggest that wage growth is to cool further in the months ahead. (NOTE: the latest JOLTs report was for August, not September).
POLICY IMPLICATIONS: Analysts will be framing the data in the context of the Fed’s mission to tackle surging consumer prices. BMO’s analysts argue that “as the market can now see the end of the rate hike cycle, market volatility around employment releases will increase,” adding that “the Fed has been very effective in communicating the fact that the strong underlying labor statistics have allowed it to be more aggressive in fighting inflation than they might have otherwise been; at some point this will turn, and as a result not only will the official BLS data be pivotal.” Accordingly, BMO argues that as the real economy enters the next stage of the cycle, the market will be on guard for any signs of undue stress in the labor market, given the ramifications it could have on the speed of Fed policy. Indeed, this week, soft ISM and JOLTs data both resulted in a re-pricing of Fed hike trajectory expectations (traders reason that soft data may compel the Fed to relent on some of its hawkishness, while any particularly strong economic data will embolden the Fed to continue to act aggressively with normalizing policy).
ARGUING FOR A WEAKER-THAN-EXPECTED REPORT
- Youth workers back to school. The loss of the youth summer workforce represents a headwind for September payrolls following strong summer employment gains for this segment. The household survey indicates that 1.3mn workers ages 16-24 were hired on net during the May-to-August payroll periods (nsa), the largest gain since 2016 outside of the 2020 reopening. As shown in Exhibit 1, September youth employment losses are strongly correlated with the summer pace of hiring in that segment, consistent with the vast majority of these workers returning to school in the fall. Additionally, this year’s particularly tight labor market suggests that many of these newly vacant positions remained unfilled during the September survey period. There is also find a negative correlation between youth summer hiring and the September nonfarm payroll surprise (relative to consensus, correlation of -0.47). These relationships would imply a roughly 35k nonfarm payroll miss and a roughly 110k drag on youth employment in tomorrow’s report (mom sa).
- Big Data. High-frequency data on the labor market were mixed-to-weaker inn September, with each of the three measures available this month consistent with at-or-below consensus job growth (see Exhibit 2).
- September first-print bias. As in August, payrolls have exhibited a tendency toward weak September first prints, which may reflect a recurring seasonal bias in the first vintages of the data. September job growth has missed consensus by at least 25k in 4 of the last 5 years and in 6 of the last 10 years. Relatedly, September payroll growth was subsequently revised higher by an average of 46k in the five years leading up to the pandemic, consistent with a negative bias in tomorrow’s report of roughly that magnitude.
- Employer surveys. The employment components of business surveys generally decreased in September. Goldman's Services employment survey tracker decreased by 1.0pt to 52.2 and its manufacturing survey employment tracker decreased by 1.7pt to 52.9.
- Job cuts. Announced layoffs reported by Challenger, Gray & Christmas increased 28.9% month-over-month in September, following a 9.3% increase in August (SA by GS).
ARGUING FOR A STRONGER-THAN-EXPECTED REPORT
- Jobless claims. Initial jobless claims decreased during the September payroll month, averaging 220k per week vs. 246k in September but up from 175k in August. Residual seasonality and other non-economic factors explain much of the variation in initial claims over the last few months, and the overarching message from the jobless claims data is that layoff rates remained very low in Q3. Continuing claims in regular state programs decreased 66k from survey week to survey week, although they may also be affected by residual seasonality.
- Job availability. JOLTS job openings surprised to the downside, declining by 1.1mn to 10.1 million workers in August. However, the level of job openings nonetheless remains elevated relative to history. The Conference Board labor differential—the difference between the percent of respondents saying jobs are plentiful and those saying jobs are hard to get—edged up by 2.0pp to 38.0%.
- Seasonal factors. In contrast to those of the spring and summer months, the September seasonal factors have not evolved dramatically in recent years. The September month-over-month hurdle for private payrolls was -618k in 2021 compared to -665k in 2019 and -695k in 2017 (which unlike 2019 was also a 5-week September payroll). On this basis, September 2021 was sequentially more difficult by 50-75k. However, this could reverse for September 2022 based on the trend in recent months toward favorable year-on-year evolution in the factors. On net, Goldman is not assuming a significant tailwind or headwind from the seasonal factors (compared to a seasonality tailwind of as much as 100-200k in the previous report).
- ADP. Private sector employment in the ADP report increased by 208k in September,n in line with expectations for 200k.
What Really Divides America
What Really Divides America
Authored by Joel Kotkin via UnHerd.com,
The Midterms aren’t a battle between good and evil…
The Midterms aren't a battle between good and evil...
Reading the mainstream media, one would be forgiven for believing that the upcoming midterms are part of a Manichaean struggle for the soul of democracy, pitting righteous progressives against the authoritarian “ultra-MAGA” hordes. The truth is nothing of the sort. Even today, the vast majority of Americans are moderate and pragmatic, with fewer than 20% combined for those identifying as either “very conservative” or “very liberal”. The apocalyptic ideological struggle envisioned by the country’s elites has little to do with how most Americans actually live and think. For most people, it is not ideology but the powerful forces of class, race, and geography that determine their political allegiances — and how they will vote come November.
Of course, it is the business of both party elites — and their media allies — to make the country seem more divided than it is. To avoid talking about the lousy economy, Democrats have sought to make the election about abortion and the alleged “threat to democracy” posed by “extremist” Republicans. But recent polls suggest that voters are still more concerned with economic issues than abortion. The warnings about extremism, meanwhile, are tough to take seriously, given that Democrats spent some $53 million to boost far-Right candidates in Republican primaries.
Republicans are contributing to the problem in their own way, too. Rather than offering any substantive governing vision of their own, they assume that voters will be repelled by unpopular progressive policies such as defunding the police, encouraging nearly unlimited illegal immigration, and promoting sexual and gender “fluidity” to schoolchildren. They ignore, of course, the fact that their own embrace of fundamentalist morality on abortion is also widely rejected by the populace. And even Right-leaning voters may doubt the sanity of some of the GOP’s eccentric candidates this November.
In short, both major parties stoke polarisation, the primary beneficiaries of which are those parties’ own political machines. But most Americans broadly want the same things: safety, economic security, a post-pandemic return to normalcy, and an end to dependence on China. Their divisions are based not so much on ideology but on the real circumstances of their everyday life.
The most critical, yet least appreciated, of these circumstances is class. America has long been celebrated as the “land of opportunity”, yet for working and middle-class people in particular, opportunity is increasingly to come by. With inflation elevated and a recession seemingly on the horizon, pocketbook issues are likely to become even more important in the coming months. According to a NBC News poll, for instance, nearly two-thirds of Americans say their pay check is falling behind the cost of living, and the Republicans hold a 19-point advantage over the Democrats on the economy.
A downturn could also benefit the Left eventually. As the American Prospect points out, proletarianised members of the middle class are increasingly shopping at the dollar stores that formerly served working and welfare populations. Labour, a critical component of the Democratic coalition, could be on the verge of a generational surge, with unionisation spreading to fast food retailers, Amazon warehouses, and Starbucks.
To take advantage of a resurgent labour movement, however, Democrats will have to move away from what Democratic strategist James Carville scathingly calls “faculty lounge politics”: namely, their obsession with gender, race, and especially climate. For instance, by demanding “net zero” emissions on a tight deadline, without developing the natural gas and nuclear production needed to meet the country’s energy needs, progressives run the risk of inadvertently undermining the American economy. Ill-advised green policies will be particularly devastating for the once heavily Democratic workers involved in material production sectors like energy, agriculture, manufacturing, warehousing, and logistics.
To win in the coming election and beyond, Democrats need to focus instead on basic economic concerns such as higher wages, affordable housing, and improved education. They also need to address the roughly half of all small businesses reporting that inflation could force them into bankruptcy. Some progressives believe that climate change will doom the Republicans, but this is wishful thinking. According to Gallup, barely 3% of voters name environmental issues as their top concern.
Racial divides are also important — though not in the way that media hysterics about “white supremacy” would lead you to believe. Florida Governor Ron DeSantis’s decision to fly undocumented immigrants to Martha’s Vineyard was undoubtedly a political stunt, and one arguably in poor taste. But it succeeded in its main goal: highlighting the enormous divide between the border states affected by illegal immigration and the bastions of white progressivism who tend to favour it.
Under Biden, the Democrats have essentially embraced “open borders” — illegal crossings are at record levels, and few of the migrants who make it across the border are ever required to leave. This policy reflects a deep-seated belief among elite Democrats that a more diverse, less white population works to their political favour. Whether they are right to think so, however, is far from clear. Black people still overwhelmingly back the Democrats, but Asians (the fastest-growing minority) and Latinos (the largest) are more evenly divided, and have been drifting toward the Republicans in recent years.
Here, too, class is a key factor. Many middle and upper-class minorities are on board with the Democrats’ anti-racist agenda. But many working-class Hispanics and Asians have more basic concerns. After all, notes former Democratic Strategist Ruy Teixiera, these are the people most affected by inflation, rising crime, poor schools, and threats to their livelihoods posed by draconian green policies.
Culture too plays a role. Immigrants, according to one recent survey, are twice as conservative in their social views than the general public and much more so than second generation populations of their own ethnicity. Like most Americans, they largely reject the identity politics central to the current Democratic belief system. Immigrants and other minorities also tend to be both more religious than whites; new sex education standards have provoked opposition from the Latino, Asian, African American and Muslim communities.
The final dividing line is geography, always a critical factor in American politics. For decades, the country seemed to become dominated by the great metropolitan areas of the coasts, with their tech and finance-led economies. But even before the pandemic, the coastal centres were losing their demographic and economic momentum and seeing their political influence fade. In 1960, for example, New York boasted more electoral votes than Texas and Florida combined. Today, both have more electoral votes than the Empire State. Last year, New York, California, and Illinois lost more people to outmigration than any other states. The greatest gains were in Florida, Texas, Arizona, and North Carolina. These states are high-growth, fertile, and lean toward the GOP.Likewise, regional trends suggest that elections will be decided in lower density areas; suburbs alone are home to at least 40% of all House seats. Some of these voters may be refugees from blue areas who still favour the Democrats. But lower-density areas, which also tend to have the highest fertility rates, tend to be dominated by family concerns like inflation, public education and safety, issues that for now favour Republicans.
Put the battle between Good and Evil to one side. It is these three factors — class, race, geography — that will shape the outcome of the midterms, whatever the media says. The endless kabuki theatre pitting Trump and his minions against Democrats may delight and enrage America’s elites — but for the American people, it is still material concerns that matter.
Global Trade Forecast ‘Darkens’ On Central Bank Tightening, Inflation, Ukraine War
Global Trade Forecast ‘Darkens’ On Central Bank Tightening, Inflation, Ukraine War
The World Trade Organization published a new report that…
The World Trade Organization published a new report that outlines a sharp slowdown in world trade is expected for next year under the weight of skyrocketing energy prices, soaring interest rates, and war-related disruptions, with increasing risks of a global recession.
WTO economists expect world trade to "lose momentum in the second half of 2022 and remain subdued in 2023 as multiple shocks weigh on the global economy." These economists expect global merchandise trade volumes will increase only by 3.5% in 2022, slightly better than forecasts in April of 3%. They warned that 2023 would be a doozy, forecasting only a 1% increase in trade volumes, down from the previous estimate of 3.4%.
Forecasts for world GDP will grow by 2.8% in 2022. The economists lowered their 2023 estimate to 2.3% from earlier expectations of 3.3% and warned, "major central banks are already raising interest rates in a bid to tame inflation but overshooting on tightening could trigger recessions in some countries, which would weigh on imports." This means central banks could exacerbate the downturn by tightening too much next year.
The WTO's downgrades to global trade align with new IMF and OECD projections. This is a drastic change and a considerable deceleration from last year's 9.7% growth in international trade. Consumers, fueled by stimmy checks and ultra-low rates by central banks during Covid, are dialing back on spending as the hangover phase is underway.
"We're looking at a situation in which a global slowdown is going to squeeze households even more, squeeze businesses and we may be edging into a recession.
"It's looking quite grim -- a little more grim than we had thought," WTO Director-General Ngozi Okonjo-Iweala said in an interview with Bloomberg Television.
The pandemic boom trade has ended as the global economy faces a multipronged crisis. We noted the reversal in the "shortage of everything" bullwhip effect has led to container lines on major shipping routes canceling sailings as US importers do not need to increase purchases of foreign goods because of rising domestic inventory as consumers are on strike due to negative real wage growth, low savings, and maxed out credit cards amid worst inflation in decades.
Last month, FedEx Corp.'s CEO Raj Subramaniam delivered a chilling message while speaking with CNBC's Mad Money with Jim Crammer: The global economy is "going into a worldwide recession."
More evidence of the world stumbling into trouble is JP Morgan's Global PMIs now sub 50, which means contraction.
WTO's latest report is a reminder that 2023 economic outlooks for the world are quickly darkening as excess tightening by central banks could spark an even more significant downturn.
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