By Peter Tchir of Academy Securities

It Was the Best of Times, It Was the Worst of Times

Why do we both having both an establishment survey and household survey if we cherry pick the data to look at?

The headline number was simply awesome. 272k jobs, 229k in the private sector, both beating expectations (and an even lower “whisper” number). “Only 15k of downward revisions to the prior month. Unequivocally strong headline jobs.

Monthly and annual earnings ticked higher and were above expectations, and last month’s annual level was also bumped up. Signals potential inflationary pressures remain and may even be rebounding.

Then things get “weird”. The unemployment rate ticked up to 4%. That occurred as the participation rate slipped back to 62.5% (tied for the lowest level since February of last year). That is because the household survey showed a job loss of 408k. A difference of almost 700k between the two versions of this report. I still struggle to understand why we use the household for the unemployment rate, and treat that as valid, while ignoring the actual number of jobs created or lost in this report.

While not quite as extreme as last month, the birth/death model added 231k, Basically all of the private payroll jobs were created by the birth/death model which has been an increasingly large part of the report – we touched on this last month in Jobs “Exceptionalism”.

The other part of the household survey showed 625k full time jobs lost, while 286k part time jobs were added. Another issue we’ve been struggling with (and mentioned in that earlier “exceptionalism” report) has been that so many of the jobs, according to the household report, have been part-time, and that trend continued.

The establishment survey makes it look like an incredibly strong and healthy labor market.

The household survey makes it look like a very weak labor market.

If we pick and choose the data to look at, it is the best of times (which seems in line with the stock market). If we look at other data, it is the worst of times (which seems to line up with sentiment surveys).

The establishment data was so strong, and the wages were so hot, that July is off the table. I still think September is too treacherous for the Fed to cut (with the election looming). I think the path to higher yields has now been paved and we will follow it to higher yields, especially at the longer end. See Updated Rates Outlook, from earlier this week.

I hope you live in the “establishment” world, because that “household” world seems pretty darn bleak!

Authored by Paul Joseph Watson via Modernity.news,

To mark the 80th anniversary of the D-Day landings, a World War II veteran appeared on Fox News to assert, “I feel like a foreigner in my own country.”

Ronald ‘Rondo’ Scharfe lied about his age to be able to join the military aged just 16-years-old and ended up fighting in the battle of Iwo Jima.

Scharfe, who is now 97-years-old, said he was grateful for having the chance to raise a family and enjoy life whenever he visits his fallen comrades in the cemetery.

WWII hero Ronald Scharfe speaks out:

“I feel like a foreigner in my own country lots of times, and I don’t like it.” pic.twitter.com/7LqYn2dgor

— End Wokeness (@EndWokeness) June 5, 2024

“I was just lucky, a lot of the guys wasn’t as lucky as I was and I appreciate every day of it,” said Scharfe.

The veteran was then asked by the interviewer, “What do you feel about the state of our country today? How do you feel about the country you worked so hard to stay free, to keep free?”

“The real truth? I feel like a foreigner in my own country lots of times and I don’t like it, makes my heart real heavy,” responded Scharfe.

“There’s too much Hollywood going on in Washington all the time, the important subjects they don’t cover, so the thing is I hope all the guys will rally up and go back and straighten it all out,” he added.

Scharfe doubted that there would be many 16-year-olds who would lie about their age to fight for their country today.

“I don’t think so, it was a different generation…all of the different generations are great but I think some of the ones they got now are a little lazy and I think they gotta show more pride in their country than they do,” he said, adding that he is saddened when he sees people burning the flag.

Watch the full interview here.

*  *  *

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Ahead of the payrolls report, we commented that with both of the two largest banks – Goldman and JPMorgan – expecting a miss, it was only logical to expect a big beat…

Goldman (165K) and JPM (150k) are below the median NPF estimate of 180k.

It will beat. pic.twitter.com/v2UxP2TBky

— zerohedge (@zerohedge) June 7, 2024

… and sure enough moments ago the BLS reported that in May, the US added a whopping 272K jobs…

… up sharply from the (downward revised of course) April print of 165K (from 175), and not only 92K…

… or 4-sigma beat to the 180K median estimate..

… but also above the highest Wall street estimate which was 258K courtesy of Regions Bank, and which was 14K below the actual print.

Not surprisingly historical data was – as always – revised lower: March was revised down by 5,000, from +315,000 to +310,000, and the change for April was revised down by 10,000, from +175,000 to +165,000. With these revisions, employment in March and April combined is 15,000 lower than previously reported.

It wasn’t just the jobs that came in red hot: wages did too: in May, average hourly earnings increased by 14 cents, or 0.4 percent, to $34.91, double the April increase of 0.2% and more than the 0.3% estimate.

The increase meant that after declining every month since January, in May hourly wages actually rose on an annual basis, increasing 4.1% from the upward revised 4.0% in April, and above the 3.9% estimate. Separately, in May, average hourly earnings of private-sector production and nonsupervisory employees increased by 14 cents, or 0.5%, to $29.99.

The average workweek for all employees on private nonfarm payrolls remained at 34.3 hours in May. In manufacturing, the average workweek was unchanged at 40.1 hours, while overtime edged up to 3.0 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged up by 0.1 hour to 33.8 hours.

Yet not all was great: indeed, the umemployment rate unexpectedly rose to 4.0%, from 3.9% (amid expectations of an unchanged print). Among the major worker groups, the unemployment rates for adult men (3.8 percent), adult women (3.4 percent), teenagers (12.3 percent), Whites (3.5 percent), Blacks (6.1 percent), Asians (3.1 percent), and Hispanics (5.0 percent) showed little or no change in May.

Not only that, but after recovering almost all covid-losses, the participation rate unexpectedly slumped back to 62.5% from 62.7%.

Why the increase in the unemployment rate? Because while the Establishment survey reported a red hot print, the Household Survey which is far more accurate and used to measure the unemp. rate, actually reported that the number of working Americans tumbled by a whopping 408K!

… which means that the gap between the always upward sloping (and market moving) Establishment Survey and the flatlined Household Survey, which hasnt made a new high since late 2023 and is back to where it was last summer, is now the biggest on record!

For those asking how much of the 272K number was fabricated, here is the answer: according to the BLS, Birth/Death adjustment (i.e., new business creation) added 231K jobs. These are jobs that were not actually counter but were imputed and plugged in some spreadsheet.

We’ll have more to say about this stunning gap shortly, but here is the punchline: in May, the number of full-time workers plunged by 625K to 133.3 million, the lowest since February 2023, while part-time workers surged by 286K to 28 million, the highest on record (more on this shortly).

While the bulk of the jobs report was literally made up, this is how the BLS broke down the new job additions in May:

• Health care added 68,000 jobs in May, in line with the average monthly gain of 64,000 over the prior 12 months. In May, employment growth continued in ambulatory health care services (+43,000), hospitals (+15,000), and nursing and residential care facilities (+11,000).
• Government employment continued to trend up in May (+43,000), in line with the average monthly growth over the prior 12 months (+52,000).
• Employment in leisure and hospitality continued to trend up in May (+42,000), similar to the average monthly gain over the prior 12 months (+35,000). Employment in food services and drinking places continued to trend up over the month (+25,000).
• Professional, scientific, and technical services added 32,000 jobs in May, higher than the average monthly gain of 19,000 over the prior 12 months. Over the month, employment increased in management, scientific, and technical consulting services (+14,000) and in architectural, engineering, and related services (+10,000). Specialized design services lost 3,000 jobs.
• Social assistance employment continued to trend up in May (+15,000), primarily in individual and family services (+11,000).
• In May, employment in retail trade continued to trend up (+13,000), about in line with the  average monthly gain over the prior 12 months (+8,000). Building material and garden equipment and supplies dealers added 12,000 jobs in May, while job losses occurred in department stores (-5,000) and furniture and home furnishings retailers (-4,000).
• Employment showed little or no change over the month in other major industries, including mining, quarrying, and oil and gas extraction; construction; manufacturing; wholesale trade; transportation and warehousing; information; financial activities; and other services.

And visually:

What to make of the data? Well, we will shortly show that once again the number was brutally massaged by BLS low-level buraucrats to make Bidenomics look better than it was, but for the market’s kneejerk reaction purposes, the jobs report was too hot for comfort and with the market no longer pricing in a full rate cut before December, yields and the dollar surged, and stock, bitcoin and gold all tumbled. As Fitch economist Brian Coulton put it, “Payrolls expanding at a monthly average rate of 250k over the last 3 months does not point to  much of a slowdown in labor demand. At the same time the household survey tells us that the participation rate and the labor force declined on the month. That is not the mix of news on labor supply and demand that the Fed wanted to see in order to corroborate its assessment that labor market imbalances are easing.”

Yet we would look for a reversal.

As Bloomberg notes, “the direction of travel in a weakening labor market is best indicated by the higher unemployment rate, not the payroll print. That should keep September interest rate cut squarely on the table. The higher unemployment rate, now 0.6% above the cycle low, and downward revisions to prior months’ payroll numbers tell a story of deteriorating labor market.” Indeed, the incorrectly named Sahm Rule (named after pro-Biden socialist Claudia Sahm who stole “her rule” from a Goldman economist), and which is used to calculate recession signals from an uptick in unemployment, says an increase of 0.5% in the previous 12 months gets you there. Like last month, we are now at 0.37%, dangerously close. And outside of the initial pandemic shock, the highest levels since May 2010.

Morgan Stanley, which is sticking with three Fed rate cuts for 2024, starting in September, agrees: “We think the Fed will see the rise in the unemployment rate as sign of further slackening.”

And here is Bloomberg’s Anna Wong, who four months after us, observed that the monthly jobs print is about to be revised dramatically lower:

“May’s jobs report presented contradictory views of the labor market, as we expected. The establishment survey shows robust gains in nonfarm payrolls — yet the unemployment rate rose to 4.0%. We believe the latter currently offers a closer approximation of reality than payrolls, as BLS’ model for estimating business births and deaths – which added 231,000 jobs to the nonfarm-payrolls print in May – is lagging the reality of surging establishment closures and falling business formation. We think the underlying pace of current job gains is likely less than 100,000 per month.”

Since we have been pounding the table on this for the past year, we clearly agree. And to that point, expect another analysis here shortly, showing just how ugly today’s jobs print truly was.

Redditors and momentum chasers are being led into a burning building by ‘meme’ stock trader Keith Gill’s (aka Roaring Kitty) on the latest pump as GameStop shares erase overnight gains following the announcement of sharp revenue declines in the first quarter and an “at-the-market offering” program to sell more shares.

The grift continues:

*GAMESTOP MAY SELL UP TO 75M SHARES OF CLASS A STOCK

— zerohedge (@zerohedge) June 7, 2024

Let’s begin by describing the source of the latest pump. Roaring Kitty’s YouTube live event, slated for 1200ET, was announced on Thursday afternoon, which sent shares doubling from around $26 in cash session to as high as $66 in after-hours trading.

In premarket trading, shares were above the $60 handle, then crashed 40% to around $38 following the news that GME filed an at-the-market offering to sell 75 million shares of the company’s Class A common stock. 

Jefferies is the ‘Sales Agent’ on the deal.

Earlier, GME reported first-quarter results showing net sales of 881.80 million, down from $1.237 billion year over year. Net sales missed Wall Street’s consensus estimate of $995.30 million. 

GME also reported an EPS loss of 12 cents, missing the average estimate of 9 cents. According to Reuters, this miss highlights customers’ shift to online video games and collectibles, while the retailer continued to rely on its brick-and-mortar stores. 

Just weeks ago, during another pump by Gill, GME announced it sold 45 million shares of common stock for about $933.4 million. CEO Ryan Cohen is effectively using Gill’s pumps to dump millions of shares into mom-and-pop retail, chasing momentum. 

momentum chasers are literally giving their money to Ryan Cohen

— zerohedge (@zerohedge) June 7, 2024

At 1200 ET, Gill will have to re-explain his investment thesis in GME, as first-quarter earnings show a sharp decline, and Cohen is dumping endless shares. 

Meanwhile, reports suggest that ETrade might take action against Gill, and at least one securities regulator is currently investigating him for potential stock manipulation.

Boeing planes are back in the news this week after a Paris-bound Air Canada flight with nearly 400 passengers experienced an “engine issue” shortly after taking off, according to CP24. The wide-body aircraft was forced to return to Toronto Pearson International Airport shortly after takeoff. 

Video footage on X captured the dramatic moment when fireballs were seen shooting from the rear of one of the 777’s engines during takeoff on Wednesday. 

Video captures moment Air Canada 777 had a compressor stall on departure from Toronto Pearson International Airport on Wednesday. AC872 returned safely 30 minutes later. pic.twitter.com/I8LrySWHBJ

— Breaking Aviation News & Videos (@aviationbrk) June 7, 2024

Air Canada confirmed the incident to CP24: 

“After the aircraft landed, it was inspected by airport response vehicles as per normal operating processes, and it taxied to the gate on its own.

“The aircraft will be taken out of service for further evaluation by our maintenance and engineering professionals.”

The incident comes after a series of mid-air mishaps, investigations, and endless crises for the American plane manufacturer. 

Here’s the latest:

• Boeing Enters ‘New Territory’ With Federal Probe, Possible Criminal Charges

• One Dead After Boeing 777 Hit By ‘Severe Turbulence’ On London-Singapore Flight

• Nearly 300 Boeing 777s Used By United & American Airlines At Risk For ‘Exploding’ Fuel Tanks

• Boeing Doom-Loop Of Endless Crises Sends Shares Tumbling To Longest Losing-Streak In Five Years

Notably, later this month, Boeing CEO Dave Calhoun will testify before a US Senate panel on Capitol Hill about the safety and quality of its jets.

ByJan Nieuwenhuijs of Gainesville Coins

Sturdy central bank gold buying since 2009 and a rising gold price has grown the precious metal’s share of global international reserves to the detriment of fiat currencies. By the end of 2023 gold surpassed the euro and the next fiat currency to be challenged is the US dollar.

Often when financial analysts draw charts on the distribution of international reserves they focus on foreign exchange (omit gold) and start when the euro was introduced in 1999. Based on such charts the dollar’s share of total reserves appears to be falling slowly, from a peak of 72% in 2001 to 58% in 2023. In addition, it seems there is not one specific currency that is competing with the dollar.

But why not include gold and look back as far as possible? By combining multiple sources, we get a glimpse of the dissemination of reserve currencies from 1899 until 1935 (both fiat and gold), and a full picture starting from 1950.

This paints a whole different story. Instead of showing only the demise of the dollar at snail pace, the historic balance between gold and fiat currencies is revealed. It’s not the dollar that normally backs the international monetary system, it’s gold. Gold used to make up the majority of international reserves, even when sterling was said to be the world reserve currency before the dollar. In a chart covering more years but only gold and the dollar, the latter’s reign becomes even more relative.

The above chart displays that the dollar’s share of total reserves has fallen to 48% in 2023—caused by a declining trust in “credit assets” (fiat currencies), due to worrying asset bubbles, escalating wars, and fear of inflation—while gold is making ground.

Based on personal calculations of official gold reserves that include covert acquisitions, for example by the Chinese central bank, gold’s percentage of total reserves reached 18% in 2023, up from 11% in 2008. Gold has currently surpassed the euro, which got stuck at 16%. As the problems haunting fiat currencies won’t fade anytime soon it’s possible gold will overtake the dollar as well in the decade ahead (explained more detailed here).

Be sure not to miss the X-post below that includes a video illustrating the development of reserve assets since 1950 in a bar chart race!

🚨Gold overtakes the euro in global international reserves.

In our annual update of the chart below on global international reserves, it shows gold has a greater share than the euro since late 2023. We are of the opinion that gold is at the start of a multi-year bull market… pic.twitter.com/b1Z8iNLPlf

— Gainesville Coins (@GainesvilleCoin) May 23, 2024

A digital nomad visa allows individuals to live and work remotely in a foreign country for an extended period, usually six months to a year. It’s often accessible to self-employed or remote workers employed by entities outside the host country.

This graphic, via Visual Capitalist’s Bruno Venditti, shows the countries that offer digital nomad visas as of May 2024.

The data comes from various visa programs around the world and was compiled by CNBC.

Dozens of Options to Work Abroad

Over 40 countries offer digital nomad visas.

Mexico and El Salvador offer the longest visas, with a duration of four years. In El Salvador, however, the worker has to apply for an extension to obtain the maximum length of stay.

Iceland, with a minimum income requirement of $85,000 per individual per year, and Belize, with a requirement of $75,000 per individual per year, have the highest minimum income requirements for digital nomads.

The most common length of stay is one year. This range includes sunny locations like The Bahamas and Bermuda, as well as countries with large economies like Italy and Brazil.

Many countries, like South Korea, Spain, and Portugal, offer a shorter period of stay (one year or less) but allow workers to renew their visas.

If you enjoyed this post, check out Ranked: The Cities with the Best Work-Life Balance in the World. This graphic lists the top cities in the world that encourage work-life balance.

By Tsvetana Paraskova of OilPrice.com

A subsidiary of China’s energy giant Sinopec has signed a $1.3-billion deal with Saudi Aramco to procure and build pipelines for an expansion of the Kingdom’s natural gas distribution network, the Chinese firm said on Thursday.

Under the turn-key fixed-price contract worth $1.3 billion (5.17 billion Saudi riyals), Sinopec International Petroleum Services Corporation, a wholly-owned subsidiary of Sinopec Oilfield Service Corporation, will be responsible for the in-country procurement and construction of Packages 6 and 7 of the Phase 3 Pipeline Project Clusters of the Master Gas System.

Mechanical completion of the project is expected by May 31, 2027, under the contract, Sinopec said in a filing with the Hong Kong Stock Exchange.

The project, Phase 3 Pipeline Project Clusters of Saudi Aramco MGS, is the third phase of the development of Aramco’s commodity natural gas pipeline project, Sinopec says.

The Saudi oil giant has in recent years expressed its intention to boost its natural gas production and sales in the Kingdom, to deliver gas to more customers and replace part of the crude that is currently being burnt for power generation in Saudi Arabia.

After scrapping oil capacity expansion plans earlier this year, the Saudi state oil giant Aramco is now poised to boost natural gas output by 60% by 2030, executives said earlier this year.

In the third quarter of last year, Saudi Arabia made two significant natural gas discoveries in two fields in the Empty Quarter, along with the discovery of five reservoirs in previously discovered fields. 

Demand for gas is seen increasing significantly amid a global energy transition, which has prompted Saudi Arabia to move more quickly to open up the development of unconventional natural gas fields. Global LNG demand is expected to grow by 50% by 2030.   

Aramco has also entered the international LNG market and is reportedly in discussions with U.S. LNG developers to buy a stake in one planned project and sign a long-term LNG offtake deal from another proposed export facility.

China’s third aircraft carrier recently began its sea trials, and there are reports that the People’s Liberation Army (PLA) Navy already has more ships than the United States, just how do these superpower rivals stack up, ton for ton?

This graphic from Chris Dickert, via Visual Capitalist, looks at the Chinese and U.S. navies by tonnage using data from the International Institute for Security Studies.

Key Takeaways

• The U.S. Navy has over 3.6 million (U.S.) tons of ships in its fleet, more than seven times the size China’s combined fleets of less than half a million tons.

• While China boasts the largest number of ships, 875 between both the PLA Navy and the Chinese Coast Guard, against the U.S. Navy’s 364, they are generally smaller and less advanced than their U.S. counterparts.

• The Chinese Coast Guard has received many of the PLA Navy’s older ships, however the vast majority of their ships are patrol and coastal combatants that average 156 tons apiece and aren’t able to sail far from China’s coast.

• Even as the U.S. Navy edges out the PLA Navy across the board, China does hold a 2:1 edge in tonnage of landing ships and craft, reflecting the Asian superpower’s stated policy goal of reunifying Taiwan with the mainland.

Authored by Andrew Korybko via Substack,

Estonian Prime Minister Kaja Kallas is considered one of the most hawkish anti-Russian figures in the West, yet it was none other than her who just redefined this bloc’s terms for victory in Ukraine. She recently told the BBC that “Victory in Ukraine is not just about territory. If Ukraine joins Nato, even without some territory, then that’s a victory because it will be placed under the Nato umbrella.” This is a far cry from restoring Ukraine’s pre-2014 borders like the West hitherto claimed is its goal.

Here are several background briefings concerning the lead-up to what she just said:

* 24 May: “The US Is Now More Openly Allowing Ukraine To Use Its Arms To Strike Inside Of Russia”

* 25 May: “Russia Is Open To Compromise But Won’t Agree To A Ceasefire That Doesn’t Meet Its Interests”

* 26 May: “The US Is Playing A Dangerous Game Of Nuclear Chicken With Russia”

* 30 May: “Putin Expects NATO, And Possibly Poland In Particular, To Escalate The Proxy War In Ukraine”

* 31 May: “Is Ukraine Going Rogue Or Did It Attack Russia’s Early Warning Systems With American Approval?”

They’ll now be summarized for the reader’s convenience.

Basically, the West fears Russia achieving a military breakthrough across the front lines (particularly around Kharkov Region), so it’s now more openly allowing Ukraine to use their arms to strike targets inside its neighbor’s universally recognized territory. Poland is also flirting with shooting down Russian missiles over Western Ukraine and commencing a conventional intervention there too. All the while, Ukraine started attacking Russia’s early nuclear warning systems, which is unprecedentedly dangerous.

The NATO-Russian proxy war in Ukraine is therefore poised to intensify, though the West’s intent appears to be to “escalate to de-escalate” in order to then freeze the conflict afterwards on comparatively better terms for their side, provided of course that the escalation remains manageable. The upcoming Swiss “peace talks” are doomed to fail, but a parallel joint Sino-Brazilian peace process might arise in their wake as explained here and culminate in a grand diplomatic gathering during November’s G20 in Rio.

Kallas’ latest comment should be interpreted in this context as signaling an interest in compromising via the Korean-like armistice scenario that was prominently floated by former NATO Supreme Commander Admiral James Stavridis in November in his op-ed about this for Bloomberg. Ukraine’s bilateral “security guarantees” with NATO members, especially the ones that it’s negotiating with the US and Poland, could be spun as de facto membership that importantly doesn’t cross Russia’s red line of formal membership.

As for Article 5, Kallas recently told the Financial Times that those who dispatch troops to Ukraine on their own as members of implied ‘coalitions of the willing’ do so at their own risk, arguing that the bloc’s mutual defense clause wouldn’t automatically be triggered in that scenario. That said, it’s unlikely that the US would hang its allies out to dry if Russia pulverizes their forces, so this sequence of events would likely provoke a crisis that could only realistically be defused through Ukraine’s asymmetrical partition.

Depending on if or when this happens, there might be a several-month-long gap between freezing the conflict in that way and the potentially planned grand diplomatic gathering in Rio this winter, during which time bilateral negotiations could take place between Russia and the US to hash out the details. To be clear, Russia might not achieve a military breakthrough, NATO members might not conventionally intervene, no brinksmanship might occur, and the conflict might continue raging at its present tempo.

Nevertheless, the significance of Kallas’ statement is that it represents the first signal from the West’s most hawkish anti-Russian faction that they might be willing to freeze the conflict instead of continuing to fight until the last Ukrainian at the risk of sparking World War III by miscalculation. The only reason why she’d do this is because she knows that Russia has already won the “race of logistics”/“war of attrition” with NATO by far and that the West’s planned maximum victory is thus unattainable.

Considering the military-strategic dynamics that were earlier described in this analysis, everything is likely about to get a lot worse before it gets any better, but the incipient Sino-Brazilian peace process leaves hope that a compromise is possible by November’s G20. For that to happen, the impending NATO-Russian escalation in Ukraine must remain manageable, but that can’t be taken for granted given how desperate some Western hawks still are to inflict a strategic defeat on Russia despite the odds.