Today, July 1st, is the first day of the third quarter 2019.  As typical some of the earliest economic reporting from June is released.  One of the first reports comes from the Institute for Supply Management (ISM) as they compile the manufacturing sector.

As noted in the ISM review, manufacturing growth remains strong with an overall index of 51.7 (anything above 50 is growth), and the results are stronger than initially predicted by the financial media (Wall Street).
The manufacturing production index for June is 54.1 versus last month’s 51.3 (May); generally this means manufacturing outputs are growing, order backlogs are being reduced, orders are being fulfilled faster.  This is an indication that new production investment is now coming on-line and delivering actual products from orders.
In the past CTH had noted the heavy Main Street investment which began in 2017 would start to come on-line in Q2 2019, it generally takes about two years for a new manufacturing facility to start producing, and then increases in production efficiency follow.  The ISM result shows we were pretty close with that forecast.
Within the review there are particular notes for additional interest.  First, the June manufacturing employment index is 54.5, very strong; (last month 53.7).  In essence manufacturers are hiring at a fast rate.  One cause is better weather (seasonal), and the majority cause is filling the jobs from new production facilities coming on-line.
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Mike Morell was the Deputy CIA Director when President Obama and Hillary Clinton botched the joint 2011 CIA and State Department operation “Zero Footprint” in Libya.
“Zero Footprint” was the covert operation initiated by Secretary of State Clinton and CIA Director Leon Panetta.  Director Panetta left the CIA just before the operation went sideways and resulted in the attack on the Benghazi State Dept./CIA annex September 11th, 2012.  General David Petraeus was the new CIA Director when the Benghazi attack happened.  Immediately, General Petraeus became a risk.  [Deep Background]

After the Benghazi attack, the relationship between journalist Paula Broadwell and General Petraeus was used by ODNI James Clapper to remove the CIA Director.
Immediately after the election of 2012 CIA Director David Petraeus resigned (Nov 9th) and interim CIA Director Morrel took over. This is why Petraeus never testified about CIA operations to the Senate panel investigating Benghazi, Mike Morrel took his place.
Morrel’s job was to provide cover for the background operation (2010, Zero Footprint) where Obama, Clinton and Panetta provided covert weapons, including shoulder fired missiles, to Libyan “rebels”, aka Libyan al-Qaeda.  AND Morrel’s second role was to cover for the extended CIA operation (2011-2012) where the CIA was buying back those missiles and shipping them into Syria for use overthrowing the Assad regime; the second operation was based out of the secret (at the time) State Dept/CIA facility in Benghazi.
Morrel was essentially the CIA narrative ‘fixer’.  He was up to his eyeballs in the cover-up behind Benghazi 2012 and 2013.  After Acting Deputy Morrel testified to congress about the CIA involvement around Benghazi, and the issues of terrorism vs. Islamic movie (happy squirrel chase) etc. Mike Morrel was replaced at the CIA by John Brennan.
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With President Donald Trump making massive strides toward peace and stability surrounding North Korea, the media cannot accept -nor allow- the common sense solutions to succeed.  President Trump is clearly perceived as a risk because his success highlights just how useless and manipulative a professional political class of consultants, advisors and DC think-tanks really are.
The U.S. media are desperate to find something to criticize and openly cheering for failure, so long as it provides fuel for their anti-Trump narrative.  It is stunning to watch against the backdrop of President Trump cutting the Gordian knot known as North Korea.

Perhaps by training, by habit or by unintended consequence, the DC proletariat have developed a system for themselves where the process itself as the end result.  This allows them to wax philosophically about problems; but it is within the discussion of the problem itself where their industry exists.  Solutions are not wanted because that stops the process.
DC journalism has evolved into reveling about the never ending process and, as a consequence, media completely ignore the end point, miss the bottom line, don’t actually SEE the subject matter, and never actually attempt to discover solutions.
If you watch this nonsense long enough you realize those inside the industrial media complex avoid the subject matter deliberately; because if they get their heads around it and nail it home, they won’t have anything to talk about – they will have exhausted their stash.
As part of their unspoken strategy when they encounter a solution driven approach, the media (writ large) fall back on the Gruber Principle: relying on “the stupidity of the American voter” not to understand how the lies and talking points are being distributed.
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President Trump has tweeted the high-level status of the negotiation restart.  Essentially the outcome is as we expected.

• Trade talks resume from former stalled point. [Likely Vice-Premier Liu He is back representing Chairman Xi Jinping – Beijing retreat]
• Current enhanced tariff’s remain in place. [The tariffs that were raised when talks collapsed will remain raised and in force. – Beijing retreat]
• China resumes AG purchases. [Likely soy beans will be priority – Beijing retreat]
• U.S. will allow trade purchases, exports, to Huawei of non-National Security tech. [Ross likely to determine products – Trump modifies position]

From this summation it would appear President Trump has created an exit ramp for Chairman Xi Jinping that allows him to save face.  However, obviously with retention of the recent tariff increases the benefits beyond optics all favor President Trump.
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It’s looking like the handshake meeting between President Trump, South Korea’s Moon Jae-in and North Korea’s Kim Jong-un is going to happen. President Trump told traveling pool: “We’re gonna see. They’re working things out right now.” Apparently the details are in rapid resolve mode.
President Trump arrived with the U.S. entourage at the Blue House in South Korea, where a reception and dinner were planned by the host nation. LPGA champion Se-ri Park and members of the K-pop band Exo were also at the reception. Video:

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After the reception the President and delegation had dinner hosted by President Moon Jae-in. The main dish was a sirloin steak made of US beef, accompanied by bulgogi sauce, pickled garlic leaves and other side dishes. There were also 12 cold Korean starters on the official menu including steamed sea urchin with tofu and pan-fried mung beans.
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President Trump will be holding a press conference this morning as the G20 summit has concluded. The presser is scheduled for 2:30am EST in Osaka Japan. There are multiple media reports that President Trump and Chairman Xi Jinping have agreed to restart trade discussions.  This will likely be a primary focus of questions as the world is watching.
UPDATE: Video Added

With the pre-G20 magnanimous panda activity by China, there’s little doubt Chairman Xi will have offered a modification in DPRK influence in exchange for a some form of trade negotiations; likely now limited to the restart.  That would present a position where Vice-Chairman Liu He can reengage with the U.S. team (Lighthizer and Mnuchin).
It would make sense for President Trump to pause any further tariff action as an act of good faith if that move can get Kim Jong-Un released. It costs the U.S. position nothing.
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The event the world is waiting for happens at 10:30pm EST.  President Trump will be holding a bilateral meeting with Chinese Chairman Xi Jinping.
All eyes are turned towards Trump and Xi as they go into what could be one of the most significant meetings of the entire G20. The U.S. and China have seen increasing economic tensions as the two superpowers square off over tariffs and China’s questionable connections to their tech companies.
UPDATE: Video Added: In two visible signals: (1) Chairman Xi brings back Vice-Premier Liu He to the table, signaling potential concession. However, (2) President Trump brings U.S. Manufacturing Policy Advisor, Peter Navarro, the arch nemesis Beijing, signaling no compromise.

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[Transcript] PRESIDENT XI: (As interpreted.) Mr. President, let me make a few opening remarks.
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On the second day of the G20 summit, President Donald Trump holds a working breakfast meeting with Saudi Arabia’s crown prince Mohammad Bin Salman.  The breaking news surrounds the possibility of an impromptu meeting between North Korea’s leader Kim Jong-un and President Trump. [Video and Transcript]

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[Transcript] – PRESIDENT TRUMP: Thank you very much. It’s an honor to be with the Crown Prince of Saudi Arabia, a friend of mine, a man who has really done things in the last five years in terms of opening up Saudi Arabia. And I think especially what you’ve done for women. I’m seeing what’s happening; it’s like a revolution in a very positive way.
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As President Trump begins day-two at the G20 he happens to tweet a public message to Chairman Kim Jong-Un about a quick meet-and-greet at the DMZ.  You know, if you’ve got a few minutes… LOL.

Too darned funny….. Obviously this possibility was the subject of the letter which President Trump recently sent to Chairman Kim which the North Korean leader described as “excellent content“.   Trump had this tweet timed for this moment. As we noted at the time, this was predictable.

By President Trump announcing the possibility of a visit with Kim Jong-un before Xi has a chance to sell his DPRK influence for a better trade outcome, President Trump has essentially removed any value.  Chairman Xi, the hostage taker, has been tricked by the hostage rescuer.

On the hostage dynamic – last week the hostage taker (Chairman Xi), finally positioned the public optics of Chairman Kim as the hostage; and indicated a likelihood Beijing would negotiate terms for release (better trade deal) with President Trump. Therefore the rescuer (Trump) countered with communication with the hostage (Kim), and set up an entirely different geopolitical background.
President Trump has totally out-witted Chairman Xi.
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The last bilateral meeting of the first day at the G20 in Osaka, Japan, was held between President Trump and Brazil’s President Jair Bolsonaro.  [Video and Transcript]
The US accounts for 34 percent of the world’s soybean production with 108 million metric tons. Brazil accounts for 30 percent of the global production of the crop with 87 million metric tons. Combined, Trump and Bolsonaro control 64 percent of global soybean production. [China consumes 60 percent of global soybeans available for export.]
Note: Brazil is a strategic geopolitical U.S. partner against Chairman Xi’s influence, due to the BRICS group (Brazil, Russia, India, China and South Africa). It is obvious this has been discussed between Bolsonaro and POTUS Trump.  Within the media pool some enterprising narrative engineer asked President Trump about the Day-Two meeting between Xi and Trump, as noted below (emphasis mine):

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[Transcript] PRESIDENT TRUMP: Thank you very much everybody. We’re with a gentleman who had one of the greatest election wins anywhere in the world, as far as I’m concerned, and he was very proud of his relationship with President Trump — President of Brazil. And he’s a special man — doing very well, very much loved by the people of Brazil. And I think we can say that Brazil and the United States are as close or closer as they’ve ever been. So I just want to welcome you and say thank you very much, my friend.
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