The Peter Schiff Show Podcast

Trump Jumps to Tweet on Mediocre Jobs Numbers

This morning the Labor Department released the July Non Farm Payroll numbers and Donald Trump tweeted,"Excellent Jobs Numbers just released - and I have only just begun." Many job stifling regulations continue to fall. Movement back to USA!" What is excellent about these numbers?  If you look at the household survey reveals that we created 393,000 part time jobs during the month, and we lost 54,000 full time jobs. Candidate Trump complained about these types of numbers. He talked about the proliferation of part time jobs and the loss of full time jobs on the campaign trail, yet now, it's "excellent news!".

Small Rise in Manufacturing Jobs

Although the report was not a disaster, it was not greater than many we've seen under the Obama Administration. The expectation was for a gain of 178,000 and we beat it. We came out with 209,000, which is really not a lot of jobs.  Given the size of the American economy, creating 200,000  jobs in a month is really not a lot of jobs.  But exceeding this rather low bar gives rise to over-exuberant headlines over a strong jobs report.  In fact they did revise last month's gain of 222,000 up to 231,000 and this month's was better than estimates. The unemployment rate did tick back down to 4.3; remember it jumped up to 4.4 and now it's back down to 4.3.  We did gain 16,000 in manufacturing jobs and they did revise upward last month's gain from 1,000 to 12,000, so that is somewhat good news, although as a percentage of the overall jobs, it is small.

What's the Real Unemployment Rate?

The Labor force participation rate did ratchet up one tenth, back to 62.9; still very low.  Wages rose .3% meeting expectations,  and most numbers remained status quo. It's not a disaster of a report but it is not spectacular.  We had plenty similar reports under Obama, which were previously labeled "fraud".  The unemployment rate is low, and candidate Trump was saying, "The real unemployment rate is closer to 49%". What's the real unemployment rate now?

Are the Numbers B.S.?

The question is, "Was candidate Donald Trump being honest? Did he really believe the numbers were phony or was he just saying that?" Or, was he being dishonest as a candidate and is he being honest as a president? Was he and honest candidate or was he being dishonest? Does he realize that these numbers are B.S. yet embracing them anyway to feather his own nest, when the economy is behaving exactly as it did when Obama was President.

Counting Jobs Twice

If you look at the jobs, about 40% of the jobs created were in leisure and hospitality, which was the #1 category, and then healthcare and education. We have record numbers of people now tending bar and waiting tables, although these are probably part time workers being counted multiple times as Obamacare drove away full time employment.

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Trump Jumps to Tweet on Mediocre Jobs Numbers

This morning the Labor Department released the July Non Farm Payroll numbers and Donald Trump tweeted,"Excellent Jobs Numbers just released - and I have only just begun." Many job stifling regulations continue to fall. Movement back to USA!" What is excellent about these numbers?  If you look at the household survey reveals that we created 393,000 part time jobs during the month, and we lost 54,000 full time jobs. Candidate Trump complained about these types of numbers. He talked about the proliferation of part time jobs and the loss of full time jobs on the campaign trail, yet now, it's "excellent news!".

Small Rise in Manufacturing Jobs

Although the report was not a disaster, it was not greater than many we've seen under the Obama Administration. The expectation was for a gain of 178,000 and we beat it. We came out with 209,000, which is really not a lot of jobs.  Given the size of the American economy, creating 200,000  jobs in a month is really not a lot of jobs.  But exceeding this rather low bar gives rise to over-exuberant headlines over a strong jobs report.  In fact they did revise last month's gain of 222,000 up to 231,000 and this month's was better than estimates. The unemployment rate did tick back down to 4.3; remember it jumped up to 4.4 and now it's back down to 4.3.  We did gain 16,000 in manufacturing jobs and they did revise upward last month's gain from 1,000 to 12,000, so that is somewhat good news, although as a percentage of the overall jobs, it is small.

What's the Real Unemployment Rate?

The Labor force participation rate did ratchet up one tenth, back to 62.9; still very low.  Wages rose .3% meeting expectations,  and most numbers remained status quo. It's not a disaster of a report but it is not spectacular.  We had plenty similar reports under Obama, which were previously labeled "fraud".  The unemployment rate is low, and candidate Trump was saying, "The real unemployment rate is closer to 49%". What's the real unemployment rate now?

Are the Numbers B.S.?

The question is, "Was candidate Donald Trump being honest? Did he really believe the numbers were phony or was he just saying that?" Or, was he being dishonest as a candidate and is he being honest as a president? Was he and honest candidate or was he being dishonest? Does he realize that these numbers are B.S. yet embracing them anyway to feather his own nest, when the economy is behaving exactly as it did when Obama was President.

Counting Jobs Twice

If you look at the jobs, about 40% of the jobs created were in leisure and hospitality, which was the #1 category, and then healthcare and education. We have record numbers of people now tending bar and waiting tables, although these are probably part time workers being counted multiple times as Obamacare drove away full time employment.

Trump Takes Credit for Dow Jones 22K

We have an all-time high in the Dow Jones today, closing above 22K for the first time ever. Donald Trump did not tweet about this today, although yesterday he did put out a tweet that the market was about to hit 22,ooo; of course he is claiming credit for it. In fact he pointed out in his tweet that when he was elected, the Dow was 18,000 and not it is 4,000 points higher and of course he is claiming credit for it.  He says the media is ignoring it. They are reporting on the record highs, but believe me, when the Dow starts falling the media is going to pay a lot more attention to the declines than they do to  the rises, especially when the Dow starts falling the media is going to pay a lot more attention to the declines because Trump has already branded this market with his moniker.

Bad Economic News Did not Dampen Stock Market

Donald Trump did put out a tweet in which he was bragging about wages rising.  I don't know what Donald Trump is looking at - we got the personal income and spending numbers yesterday, and June income was flat.  They were looking for a gain of .4 and instead they got a flat number. That was the weakest number for personal income growth since November - the month Donald Trump won the election. He's talking about the wage gains, where are they? They don't show up in personal income, and most people's income is comprised of wages.This weak economic news didn't stop the stock market from making new highs today.  Of course, Apple was the main reason - it had almost a 5% gain.

 

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Trump Takes Credit for Dow Jones 22K

We have an all-time high in the Dow Jones today, closing above 22K for the first time ever. Donald Trump did not tweet about this today, although yesterday he did put out a tweet that the market was about to hit 22,ooo; of course he is claiming credit for it. In fact he pointed out in his tweet that when he was elected, the Dow was 18,000 and not it is 4,000 points higher and of course he is claiming credit for it.  He says the media is ignoring it. They are reporting on the record highs, but believe me, when the Dow starts falling the media is going to pay a lot more attention to the declines than they do to  the rises, especially when the Dow starts falling the media is going to pay a lot more attention to the declines because Trump has already branded this market with his moniker.

Bad Economic News Did not Dampen Stock Market

Donald Trump did put out a tweet in which he was bragging about wages rising.  I don't know what Donald Trump is looking at - we got the personal income and spending numbers yesterday, and June income was flat.  They were looking for a gain of .4 and instead they got a flat number. That was the weakest number for personal income growth since November - the month Donald Trump won the election. He's talking about the wage gains, where are they? They don't show up in personal income, and most people's income is comprised of wages.This weak economic news didn't stop the stock market from making new highs today.  Of course, Apple was the main reason - it had almost a 5% gain.

 

Obamacare Repeal Charade Over

The whole charade surrounding the repeal of Obamacare is finally over. The most recent attempt, labeled "Skinny Repeal" was a big fat lie.  They weren't really repealing anything, leaving the essence of Obamacare and accelerating Obamacare's death spiral. If Congress had repealed the employer mandates and the individual penalties but left everything else the same, then the number of healthy people making the irrational decision not to buy insurance would skyrocket and the sick people who would still be buying, would be facing higher and higher premiums and costing insurance companies bigger and bigger losses to be subsidized by the taxpayer.

Let the Democrats Own the Disaster

Many Republicans are upset with John McCain, for being one of the 3 Republicans to join all the Democrats in opposing the bill.  I think McCain did the GOP a favor. This bill, if passed, would have let the Democrats off the hook. They would have not owned Obamacare, and they would be responsible for its failure. Now we all know Obamacare is still there, it is exactly the way it was passed, the bill President Obama championed and signed, the one that Nancy Pelosi said, "We have to pass it to see what is in it."  We passed it, we know what is in it (although most people do not understand what is in it) and it is a disaster.

Late last year most people thought the Republicans were going to repeal it - everybody but me. I didn't think that they had the guts to do it.  I had this interview on Russia Today in mid-January, it's up on my YouTube Channel; the title is, "Peter Schiff Very Skeptical of Obamacare Repeal". If you watch that video you will see that I say, "I don't think they're going to repeal it."

No Guts to Repeal

Of course, everybody thought, "of course they are going to repeal it. They've been campaigning on it for years!" The President promised it.  Everybody who has run for office as a Republican says, "Elect me and I am going to get rid of Obamacare!". They voted to repeal it many times when Obama was still President. And, of course, every time they voted to repeal it, Obama vetoed it, which of course, the Republicans knew was going to happen. As it turns out, that was the only reason they had the guts to repeal it because they knew it wouldn't actually happen. I knew that the Republicans would have a tough time taking away the free lunch. I knew that a lot of them were promising to repeal but keep the ban on pre-existing conditions and I knew that was impossible. Pre-existing conditions is the very essence of Obamacare.  You can't repeal it and preserve it at the same time.

The Stock Market Has Not Gotten the Message

The stock market, however, still doesn't understand the significance.  It hit another record high again today. The Dow was up, it closed at a new high today. The NASDAQ and the S&P were down. The transports managed a slight bounce from yesterday's drubbing.  Transports were down around 300 points yesterday. Again, more cracks in the armor for the stock market.  Look at what happened to Starbucks today.  The latest victim of declining retail sales; it was down around 9% today.  They reduced their guidance based on a drop in sales, now I don't know if you can blame this on people buying their coffee on Amazon.

 

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Obamacare Repeal Charade Over

The whole charade surrounding the repeal of Obamacare is finally over. The most recent attempt, labeled "Skinny Repeal" was a big fat lie.  They weren't really repealing anything, leaving the essence of Obamacare and accelerating Obamacare's death spiral. If Congress had repealed the employer mandates and the individual penalties but left everything else the same, then the number of healthy people making the irrational decision not to buy insurance would skyrocket and the sick people who would still be buying, would be facing higher and higher premiums and costing insurance companies bigger and bigger losses to be subsidized by the taxpayer.

Let the Democrats Own the Disaster

Many Republicans are upset with John McCain, for being one of the 3 Republicans to join all the Democrats in opposing the bill.  I think McCain did the GOP a favor. This bill, if passed, would have let the Democrats off the hook. They would have not owned Obamacare, and they would be responsible for its failure. Now we all know Obamacare is still there, it is exactly the way it was passed, the bill President Obama championed and signed, the one that Nancy Pelosi said, "We have to pass it to see what is in it."  We passed it, we know what is in it (although most people do not understand what is in it) and it is a disaster.

Late last year most people thought the Republicans were going to repeal it - everybody but me. I didn't think that they had the guts to do it.  I had this interview on Russia Today in mid-January, it's up on my YouTube Channel; the title is, "Peter Schiff Very Skeptical of Obamacare Repeal". If you watch that video you will see that I say, "I don't think they're going to repeal it."

No Guts to Repeal

Of course, everybody thought, "of course they are going to repeal it. They've been campaigning on it for years!" The President promised it.  Everybody who has run for office as a Republican says, "Elect me and I am going to get rid of Obamacare!". They voted to repeal it many times when Obama was still President. And, of course, every time they voted to repeal it, Obama vetoed it, which of course, the Republicans knew was going to happen. As it turns out, that was the only reason they had the guts to repeal it because they knew it wouldn't actually happen. I knew that the Republicans would have a tough time taking away the free lunch. I knew that a lot of them were promising to repeal but keep the ban on pre-existing conditions and I knew that was impossible. Pre-existing conditions is the very essence of Obamacare.  You can't repeal it and preserve it at the same time.

The Stock Market Has Not Gotten the Message

The stock market, however, still doesn't understand the significance.  It hit another record high again today. The Dow was up, it closed at a new high today. The NASDAQ and the S&P were down. The transports managed a slight bounce from yesterday's drubbing.  Transports were down around 300 points yesterday. Again, more cracks in the armor for the stock market.  Look at what happened to Starbucks today.  The latest victim of declining retail sales; it was down around 9% today.  They reduced their guidance based on a drop in sales, now I don't know if you can blame this on people buying their coffee on Amazon.

 

Summary:

The Dow and the NASDAQ set new record highs today as the dollar sold off near the end of the day to close at yet another low for the year. Remember, the dollar index rallied 6% between the election and the Trump inauguration. It has now fallen more than 10% since inauguration. Many currencies are at two-year highs.  The Australian dollar is at a 2-year high, certain commodities are at a 2-year high, copper broke to a 2-year high; oil prices have been strong.  Oil was up about $.80 today after being up about $2 yesterday.  We're now above $48.50.  Getting close to $50/barrel again.

Federal Reserve: "No Hike"

One of the reasons for the strength in commodities is the weakness in the U.S. dollar. The catalyst for the weakness in the dollar today is the Federal Reserve, the FOMC, concluded their 2-day meeting today; their press release came out at 2.30pm ET and they announced that they did not decide to raise interest rates during this meeting. Nobody expected the Fed to raise interest rates, which is one of the reasons why they didn't.

Balance Sheet Normalization?

There was some anticipation that the Federal Reserve may be more specific concerning when it might start quantitative tightening or 'balance sheet normalization' as they call it. So people wanted to know when that would start, and by how much are they going to let their balance sheet to run down but the Fed did not allude to any specifics. All they said is that the process will begin relatively soon.  Now the last time they put out a statement, they said it would begin this year. Now they are saying it will begin 'Relatively soon'. Why didn't they leave it at "this year"? Because "this year" would be within the next six months. "Relatively Soon" leaves the statement comfortably vague enough to fit within the Fed's slippery parameters.

Gold Hanging In There

The markets didn't know what to do for the first half hour, but eventually the dollar broke, and gold finally popped up; it was up around $11-12.  It was about unchanged going into the announcement  and the knee-jerk reaction was a $2-3 selloff, then it came back to unchanged and then we had the rally.  Gold stocks had a pretty good day today; the GDX up about 2.5%; the junior minors doing a little bit better.  Yet these stocks have barely moved this year, but this is just getting started.

 

 

 

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Summary:

The Dow and the NASDAQ set new record highs today as the dollar sold off near the end of the day to close at yet another low for the year. Remember, the dollar index rallied 6% between the election and the Trump inauguration. It has now fallen more than 10% since inauguration. Many currencies are at two-year highs.  The Australian dollar is at a 2-year high, certain commodities are at a 2-year high, copper broke to a 2-year high; oil prices have been strong.  Oil was up about $.80 today after being up about $2 yesterday.  We're now above $48.50.  Getting close to $50/barrel again.

Federal Reserve: "No Hike"

One of the reasons for the strength in commodities is the weakness in the U.S. dollar. The catalyst for the weakness in the dollar today is the Federal Reserve, the FOMC, concluded their 2-day meeting today; their press release came out at 2.30pm ET and they announced that they did not decide to raise interest rates during this meeting. Nobody expected the Fed to raise interest rates, which is one of the reasons why they didn't.

Balance Sheet Normalization?

There was some anticipation that the Federal Reserve may be more specific concerning when it might start quantitative tightening or 'balance sheet normalization' as they call it. So people wanted to know when that would start, and by how much are they going to let their balance sheet to run down but the Fed did not allude to any specifics. All they said is that the process will begin relatively soon.  Now the last time they put out a statement, they said it would begin this year. Now they are saying it will begin 'Relatively soon'. Why didn't they leave it at "this year"? Because "this year" would be within the next six months. "Relatively Soon" leaves the statement comfortably vague enough to fit within the Fed's slippery parameters.

Gold Hanging In There

The markets didn't know what to do for the first half hour, but eventually the dollar broke, and gold finally popped up; it was up around $11-12.  It was about unchanged going into the announcement  and the knee-jerk reaction was a $2-3 selloff, then it came back to unchanged and then we had the rally.  Gold stocks had a pretty good day today; the GDX up about 2.5%; the junior minors doing a little bit better.  Yet these stocks have barely moved this year, but this is just getting started.

 

 

 

Summary:

My recent trip to Las Vegas for The Freedom Fest provided some interesting lessons.  My observations that we are paying more for less were illustrated by the theft of my luggage,  as there are no more luggage security checkers in baggage claim exits.  Also, for the first time, major Las Vegas hotels are charging from $15 - $18 for parking.  This is causing hotel valet workers to lose money, as customers are less likely to leave a generous tip (or any tip) if they are already paying quite a bit to park. So the Las Vegas experience is changing; we're getting less for more money.  Prices are going up and wages are going down.

Taking Credit for Phony Statistics

This is the real U.S. economy. Forget about all these phony U.S. statistics. The real world reflects the truth about the economy and why Donald Trump is President.  I wish candidate Trump would come back; I would rather see the President questioning phony government statistics instead of embracing them. I'd like to see the President talking about the stock market being a bubble rather than a bull market and claiming credit for the increase.

Weakness in U.S. Dollar

The big story is the continued weakness in the U.S. dollar, in fact this morning the dollar index hit a new low for the year. It's now back in positive territory as I am recording this podcast, but the low this morning was 93.64 on the dollar index.  Remember, the dollar index rose about 6% between the election of Donald Trump and the Inauguration, and the reason for the rally was the optimism for economic growth as a result of tax cuts, de-regulation, fiscal stimulus and a tighter Fed.

Senate Backing Away From Repeal

At the time, I argued that that was nonsense, and so far I am being vindicated.  We're six months into the Trump Presidency and nothing has happened. They haven't even been able to repeal Obamacare, nor are they going to.  The Senate already backed away from the version that I said would not work.  Trump did a press conference yesterday talking about Obamacare, assuring everybody that pre-existing ban is going to stay. The very essence of Obamacare is that insurance companies can't charge sick people more for insurance than they charge healthy people. That's the essence of Obamacare that doesn't work and that's what Donald Trump and many Republicans want to preserve.

Preserving the Essence of Obamacare

Of course, in order to achieve that goal, they had to have employer mandates and penalties.  These are the only things the Republicans want to get rid of. But they want to preserve the very essence of Obamacare and that's the mandates and penalties were designed to deliver. So now they have to come up with another way to deliver the promise of Obamacare.

Currency Markets Get the Message

The point is, the currency markets have figured this out.  The dollar has dumped better than 10% since the Inauguration, but the stock market has made new highs. The Dow Jones is at a new high today; the NASDAQ hit a new high yesterday, so it's a disconnect.  The initial rally in the stock market happened for the same reason the dollar rallied.  The currency traders have connected the dots. What's the problem with the stock traders?  Why are they oblivious?

Dollar Weakness Spark Commodities

The weakness in the dollar is also sparking a rally in multinationals, in commodities.  Look at the move today in Freeport-McMoRan a major copper producer; that stock is up better than 13%.  Oil prices are coming back up; oil is up better than a dollar today. Emerging markets are strong.

Bullish Conditions for Emerging Markets

I have been saying that a weak dollar is extremely bullish for commodities. Why?

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Summary:

My recent trip to Las Vegas for The Freedom Fest provided some interesting lessons.  My observations that we are paying more for less were illustrated by the theft of my luggage,  as there are no more luggage security checkers in baggage claim exits.  Also, for the first time, major Las Vegas hotels are charging from $15 - $18 for parking.  This is causing hotel valet workers to lose money, as customers are less likely to leave a generous tip (or any tip) if they are already paying quite a bit to park. So the Las Vegas experience is changing; we're getting less for more money.  Prices are going up and wages are going down.

Taking Credit for Phony Statistics

This is the real U.S. economy. Forget about all these phony U.S. statistics. The real world reflects the truth about the economy and why Donald Trump is President.  I wish candidate Trump would come back; I would rather see the President questioning phony government statistics instead of embracing them. I'd like to see the President talking about the stock market being a bubble rather than a bull market and claiming credit for the increase.

Weakness in U.S. Dollar

The big story is the continued weakness in the U.S. dollar, in fact this morning the dollar index hit a new low for the year. It's now back in positive territory as I am recording this podcast, but the low this morning was 93.64 on the dollar index.  Remember, the dollar index rose about 6% between the election of Donald Trump and the Inauguration, and the reason for the rally was the optimism for economic growth as a result of tax cuts, de-regulation, fiscal stimulus and a tighter Fed.

Senate Backing Away From Repeal

At the time, I argued that that was nonsense, and so far I am being vindicated.  We're six months into the Trump Presidency and nothing has happened. They haven't even been able to repeal Obamacare, nor are they going to.  The Senate already backed away from the version that I said would not work.  Trump did a press conference yesterday talking about Obamacare, assuring everybody that pre-existing ban is going to stay. The very essence of Obamacare is that insurance companies can't charge sick people more for insurance than they charge healthy people. That's the essence of Obamacare that doesn't work and that's what Donald Trump and many Republicans want to preserve.

Preserving the Essence of Obamacare

Of course, in order to achieve that goal, they had to have employer mandates and penalties.  These are the only things the Republicans want to get rid of. But they want to preserve the very essence of Obamacare and that's the mandates and penalties were designed to deliver. So now they have to come up with another way to deliver the promise of Obamacare.

Currency Markets Get the Message

The point is, the currency markets have figured this out.  The dollar has dumped better than 10% since the Inauguration, but the stock market has made new highs. The Dow Jones is at a new high today; the NASDAQ hit a new high yesterday, so it's a disconnect.  The initial rally in the stock market happened for the same reason the dollar rallied.  The currency traders have connected the dots. What's the problem with the stock traders?  Why are they oblivious?

Dollar Weakness Spark Commodities

The weakness in the dollar is also sparking a rally in multinationals, in commodities.  Look at the move today in Freeport-McMoRan a major copper producer; that stock is up better than 13%.  Oil prices are coming back up; oil is up better than a dollar today. Emerging markets are strong.

Bullish Conditions for Emerging Markets

I have been saying that a weak dollar is extremely bullish for commodities. Why?