Unemployment

In its attempt to evade the shackles of conventional fixed and variable costs, Rio Tinto has decided to begin eliminating humans from its "workforce" altogether. According to the Chinese state media, Rio Tinto has started using automated, driverless trucks to move iron ore in its Pilbara mines, controlled from an operations center 1,200 kilometers away in Perth. 

Socialism violates the Ten Commandments which prohibits anyone from coveting what their neighbor has. Well, God must have had a bad day for he does not understand what is fair. If someone is smarter than others are, that is OK and God’s Will, but he should not have more material things. God obviously cannot be all knowing since Marx must be right. God clearly can’t understand what is fair.

Free trade, as a matter of practicality, can only exist where all trade partners exist on a perfectly “level playing field”

AsiaPac stocks were generally lower heading into the all-important Chinese macro data (S&P -6pts, Japan -0.7%, China -0.2%) as JPY erased Friday's ramp and crude dropped back below $47. The PBOC left the Onshore Yuan fix practically unchanged (following Friday's significant devaluation). Then the data hit... China GDP beat expectations (printing 6.9% YoY vs 6.8% exp) but is still the lowest growth since Q1 2009. Industrial Production missed (printing 5.7% YoY vs 6.0% exp). Retail Sales beat (10.9% YoY vs 10.8% exp). The initial reaction was kneejerk buying in USDJPY and stocks but that is fading as "good news" will relieve The Fed's angst over growth...

Bernie Sanders’s entry into the presidential race has sparked a nationwide conversation about socialism and its potential to remedy the real and perceived pathologies suffered by Americans. The underlying problem with socialists like Bernie Sanders is that they do not actually believe (or understand) in economics at all. As Ludwig von Mises himself has pointed out, socialism is not an economic theory — it is a theory of redistribution.

Q: Why do you still expect the FOMC to hike rates in December?

A: Because the FOMC leadership has said that a rate hike by the end of the year is likely if the economy and markets evolve broadly as expected. Our near-term forecast is similar to theirs, so our baseline is also that they hike.

“President Obama’s decision to prolong the U.S. led war in Afghanistan only ensures U.S. responsibility for more death and destruction. Veterans For Peace condemns the decision and calls on the U.S. public to say no to more war..."

Bottom line: despite being two months backward looking, today's JOLTS report provide the latest batch of weak news coming from the US labor market, which likely explains the ongoing levitation in stocks which have officially given up on the "rate hike is good for stocks" narrative, and fallen back to what has worked for the past 7 years, namely terrible economic news being great news for risk assets.

The European Commission will release €2 billion to Greece in the coming days to help the country manage the current migration crisis, a top Commission source told MNI Friday, but as German daily Wirtschaftswoche reports, the German Government is considering 'helping' Greece more financially – but only if Athens is more involved in the refugee crisis.

One of the main reasons why the BLS has been massively overstimating job creation ever since great financial crisis, is due to the well-known birth-death adjustment, aka the CES Net Birth/Death Model, which quantitatively is shown on the chart below, has resulted in the "addition" of some 5.3 million jobs, that don't actually exist, but are merely modelled by the BLS which continues to assume the same new business creation/destruction dynamics that existed before the crisis. The is a big problem with this fundamental assumption: it is dead wrong. Here's why...

Central banks are fearful and unwilling to normalize but artificially high valuations across asset classes cannot be sustained indefinitely absent fundamental global growth. Central banks are in a prison of their own design and we are trapped with them. The next great crash will occur when we collectively realize that the institutions that we trusted to remove risk are actually the source of it. The truth is that global central banks cannot remove extraordinary monetary accommodation without risking a complete collapse of the system, but the longer they wait the more they risk their own credibility, and the worse that inevitable collapse will be. In the Prisoner’s Dilemma, global central banks have set up the greatest volatility trade in history.

The fact of the matter is that year over year retail sales at these levels only happen during recessions. It’s really that simple. Without the crutch of subprime auto loans and student loan debt being spent by pretend University of Phoenix students on iGadgets, fitbits, hookers and blow, this economy would already be in free fall. Look no further than what happened to Wal-Mart today for confirmation we are in the midst of a worldwide recession, if not depression. The only people who refuse to acknowledge recession reality are the Wall Street hucksters, looking to fleece a few more muppets before their party is over. Propaganda and lies can’t stop this recession.

The yawning gap between job cuts (surging most since 2009) and initial jobless claims (hovering near 42 year lows) continues to grow as initial jobless claims collapse 7k this week to 255k - the lowest since 1973. Bear in mind, Goldman's explanation that jobless claims are useless in this part of the business cycle..."this does not signal a booming labor market."

• China economic growth seen slowing despite policy easing (Reuters)
• FBI, Justice Department Investigating Daily Fantasy Sports Business Model (WSJ)
• Obama to slow pace of withdrawal of U.S. troops from Afghanistan (Reuters)
• Corporate America's Epic Debt Binge Leaves $119 Billion Hangover (BBG)
• Islamic State battles insurgents as Syria army prepares assault (Reuters)
• Why Hillary Clinton Can’t Win by Going After the NRA (BBG)

Aside from Chinese monetary data, it was a relatively quiet session in which traders were focusing on every move in the suddenly tumbling USD, and parsing every phrase by central bankers around the globe, as well as the previously noted piece by Fed mouthpiece Jon Hilsenrath which effectively ended the debate whether there will be rate hikes in 2015. Adding to the overnight froth were ECB speakers first Ewald Nowotny and then Spain's Restoy, who said that euro-area core inflation "clearly" below goal, remarks which were immediately assumed to signal increasing pressure to boost stimulus, and which promptly translated into even more weakness in EUR and equity strength, pushing US futures up about 15 points from yesterday's close.