The large-cap tech powerhouses Facebook, Amazon.com, Netflix, and Alphabet Inc (Google) — collectively “FANG” — are getting a second look from the sell-side ahead of their second-quarter reports…. CLICK for the complete article 

“Are we there yet?”

That question is nails down the chalkboard for harried parents.

But imagine that query from the lips of Wall Street’s talking heads, pundits and investment experts.

Recently they’ve all pointed at their favorite indicator, economic report or line on a chart as the demarcation for what was or will be the top for this bull market run.

But in the race to be the first — or maybe just the loudest — there’s one overlooked little indicator that tagged a high not seen since 2001.

Yes, that’s back to the late days of the dot-com bubble, when the economy experienced years of amazing growth.

The Best Time to Leave 

When an economy is humming along at a solid clip and we are confident that growth will continue, we take more risks. That includes quitting our jobs for better opportunities such as higher wages and improved benefits.

And that’s what we’re seeing right now.

In May, the percentage of people within the private sector who quit their jobs jumped to 2.7% from April’s reading of 2.5%. That’s the highest level since 2001.

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The rate at which people quit their jobs across all workers also climbed in May to 2.4% from 2.3% — another high not seen since 2001.

While the quits rate has steadily risen from extremely low levels reached in 2009, workers have largely been hesitant to quit their jobs.

At first, a shortage of jobs was to blame. And then it shifted to a lack of improvement in terms of higher wages.

In fact, many people have stayed at jobs far longer than average because of a lack of opportunities. The average worker between the ages of 25 and 34 stays at a job approximately 2.8 years.

However, a Pew survey revealed that 22% of millennials in 2016 had been with an employer at least five years. That’s double the average.

A New Economic Environment = New Opportunities

Employees have gotten gutsy again. A heathier job market is to thank for it.

Over the past year, we’ve seen a steady rise in hiring and job openings. In fact, the number of job openings hit an all-time in April of 6.7 million, outnumbering the number of people actually looking for work.

Not surprisingly, the unemployment rate ticked higher in June as more people returned to the job market.

The only thing that has been missing from this puzzle is wage growth. June average hourly earnings climbed by 2.7% on a year-over-year basis. That’s short of the expectations for growth of 2.8%.

Employers will be forced to raise wages to keep and find new talent as the job market gets tighter and people start quitting their jobs for better opportunities.

While higher wages will lead to inflation worries and the Federal Reserve increasing interest rates, we still have time before the Fed raises rates high enough to put a serious crimp on economic growth and stocks.

Don’t run from this market yet. We’ve still got some room to grow as job seekers grab higher wages. The Fed won’t be putting an end to this party until at least 2019 at the earliest.

Regards,

Jocelynn Smith

Martin Armstrong answers a question on what the timing and nature of the oncoming “Crash & Burn” looks like – R Zurrer for Money Talks

QUESTION: Martin, as all members do, I really do thank you and appreciate you for your knowledge and insight. I am a business owner – Real Water and do approximately $10 million in annual sales right now. As a concerned citizen, I have also run for political office and was elected to the Nevada State Assembly in 2015. With Republican control, our legislature pushed through the largest tax increase in our State’s history in the name of more money for education (I led the opposition against the tax, but failed in preventing it). Of course, our latest school ratings came out and we are still ranked at the bottom – 50th. More government is NOT the solution!

I completely understand we are headed for a financial crash and burn. You have frequently stated that the only reason you are doing what you are doing is for your posterity. Other than personal preparation, extra food, don’t be in bonds, etc., what do you believe is the most beneficial thing we can do to help our country come out of the crash and burn with more freedom and limited government (like our Founders so emphatically intended) as opposed to the other potential of totalitarianism that you frequently warn us about? What is the most effective way to rally the troops so to say to help push our civilization in the proper direction?

To an elevated lifestyle,

ANSWER: The Government always thinks that throwing more money at something make it better. I have NEVER seen where that has EVER corrected any such trend. The problem lies in the total mismanagement. Governments are simply incapable of operating even a bubblegum machine. They completely fail to understand the economy, human nature, or society as a whole. The only way to actually correct such a problem is to privatize. That installs actual management and employees must actually perform. Government unions demand benefits and they negotiate with themselves. This is why the entire socialist agenda is collapsing.

I had a friend who was a postmaster. He had to tell an employee he would be checking on them a day before to ensure they were doing their job. The union made them provide notice so the employee would not actually be caught doing anything. This is how government unions have destroyed themselves and society. This is what we are headed into a crash and burn because governments do not respect the people and assume we are an endless supply of revenue.

All government agencies should be privatized and then the services they provide would actually work. Going to the New Jersey Division of Motor Vehicles was a case study in how not to run a government. The people were nasty, you would wait in line and they would be having a conversation with the next employee about what they would do after work and actually make you wait even 5 minutes while they did this right in front of your face. The attitude was WTF do you want now. Just absolutely nasty and hostile. No supervision and nobody even forces them to actually work. Always a horrible experience – not just one time. Ask a question and you NEVER got a straight or correct answer.

It is a structural management problem. There is no accountability and you can look at any government agency and you will see the same pattern. Increase the budget and there is NEVER any actually change. They cannot improve because there is a lack of management ability.

What does the Crash & Burn look like? It all depends upon how long we have to wait to achieve it. If we get the start of a Crash & Burn in 2021, then there is real hope of a soft-landing. If we are looking at stalling and refusing to change as taxes continue to rise, we will see that last wave of totalitarianism and then what comes AFTER 2032 is a very hard landing. That type of decline historically results in civil war and/or revolution.

All I can offer is what has happened before historically. My personal opinion would be just a guess and that is not what clients want to hear. So the sooner the better and the longer this is stalled the worse it gets.

This hostile attack against Trump is symbolic of the bureaucracy fighting to keep its power. They think if they can get Trump out of office, they will return it back to normal with a career politician. They are seriously wrong for the people voted for Trump because they are fed up with the system as is. This was not a personal popularity contest that Trump won. It is the rising tension of the people. There is not going back. This can only lead to a confrontation between the left and right. Choose where you want to like based upon the political orientation of that area. The area I live in was conservative which voted overwhelmingly for Trump. That is a bit safer than a left area for then they ultimate come after you and see you are the problem why things are not going their way.

There are some saying that Angela Merkel will be overthrown in a matter of weeks and others saying that there is no plot to remove her. Nevertheless, scandal rising in Germany over the refugee crisis keeps brewing behind the curtain. Cyclically, 2018 may be a peak in Merkel’s career despite what people are trying to deny.

Angela Merkel was born in Hamburg, West Germany, on July 17, 1954, and was actually trained as a physicist. She entered politics after the 1989 fall of the Berlin Wall. She eventually rose to the position of chairwoman of the Christian Democratic Union party becoming Germany’s first female chancellor. Moreover, Merkel has actually become the best-known politician in Europe whose face is more recognized than anyone else in Europe no less Brussels.

Merkel grew up in a rural area of the German Democratic Republic or East Germany. She studied physics at the University of Leipzig, earning a doctorate in 1978, and later worked as a chemist at the Central Institute for Physical Chemistry, Academy of Sciences from 1978 to 1990. She has obviously not made the connection between physics and the economy for if she just looked at the laws of thermodynamics she would have an epiphany and realize that there MUST be a business cycle.

Nevertheless, with the fall of the Berlin Wall in 1989, Germany was caught up in a euphoric moment and many expected East Germans to have the same work-ethics as those in the West as well as an understanding of the way things really worked. Merkel joined the Christian Democratic Union (CDU) political party and was quickly appointed to Helmut Kohl’s cabinet as minister for women and youth. She rose simply because she was a woman and from the East. It made good political propaganda. Merkel would later serve as minister for the environment and nuclear safety.

The political tide began to change and with Kohl’s defeat in the 1998 general election, she was named secretary-general of the CDU. Then in 2000, Angela Merkel was chosen party leader, but she lost the CDU candidacy for the chancellor to Edmund Stoiber in 2002.

Finally, on October 10th, 2005 Germany was on the brink of a new and volatile political era until a deal was cut that made the conservative leader Angela Merkel the country’s first ever woman chancellor. It came only after three weeks of a long, complicated dispute over the previous month’s indecisive election, Gerhard Schröder announced he was resigning. Angela Merkel became chancellor leading a “grand coalition” between her Christian Democrat party and its Bavarian ally the Christian Social Union, and Schröder’s Social Democrats.

Many questioned just how long such a coalition would last. Nonetheless, Schröder’s resignation came with a huge price tag. The Social Democrats emerged from days of secret negotiations with eight seats in Germany’s new cabinet and virtually all the big portfolios – including foreign, finance, health, environment, and transport. Merkel gave up tremendous economic power to become chancellor with the CDU taking only six cabinet posts. Merkel denied that the Social Democrats had got all the best jobs, and instead called it a “new beginning for Germany”.

Therefore, Merkel became Germany’s first female chancellor since it became a nation in 1871 who was also from East Germany fulfilling a dual role as the first female chancellor and the first East German chancellor to take control of Germany. Merkel was then elected to a second term in 2009.

Angela Merkel was reelected for a fourth term as chancellor in September 2017 with a vote that was well below 35%. However, although her CDU party held its majority in the Bundestag, because of her policy on allowing all the refugees into Germany, the far-right Alternative for Germany (AfD) won 13% emerging as the new third-largest group in parliament for the first time a right-wing political party regained any power since 1961.

Following the 2017 election, political problems surfaced by mid-November 2017 in the attempt to form a new government coalition collapsed. The Free Democratic Party (FDP) pulled out of talks with the CDU/CSU and the Greens, over differences regarding the refugee crisis.

The entire refugee crisis is clearly going to be Merkel’s downfall. Then in March 2018, the SPD voted to renew its coalition with the CDU after its leader Martin Schulz resigned. This step finally cleared a path for Merkel to retain the position as chancellor, but she would have to give up financial control to the socialists to maintain her political power for a fourth term.

Nevertheless, the refugee crisis and the mismanagement of the entire issue has resulted in clashes between Angela Merkel and German interior minister Horst Seehofer. There is a serious political crisis brewing where Merkel could be forced out of her chancellor position.

While Trump was quick to take a victory lap after signing a non-binding letter (of intent) with North Korea’s leader Kim Jong Un to implement the dunclearization of North Korea, several questions have emerged among which:

• the lack of deal enforcement
• the lack of verifiability of N.Korea’s denuclearization efforts as part of the “Complete, Verifiable, Irreversible  Denuclearization” or CVID protocol
• the legitimization of North Korea’s regime
• China’s role in the process
• the end of joint military drills with South Korea.

While Trump’s response to most critics was that the process is just starting and that it will take time to denuclearize, where Trump will see the greatest amount of pushback is on the last bullet point. Speaking in an interview with George Stephanopoulos shortly after the one-on-one with Kim, when asked if there was talk of pulling U.S. troops out of South Korea, Trump said the topic didn’t come up, however he said the following:

“We didn’t discuss that, no. We’re not going to play the war games… I thought they were very provocative. I also they’re also very expensive.” 

In his press conference after the summit, Trump reiterated that the US would halt joint war games with South Korea, as Pyongyang has agreed to destroy a “major” missile testing site.

“We will be stopping the war games,” Trump said Tuesday during a news conference after four hours of meetings in Singapore with the North Korean leader. He offered no specifics about which exercises would be affected,.

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