Oh dear, Prime Minister Rainbow Sparkle-Socks is issuing threats now.

“We aren’t going to take any old deal,” Trudeau said Friday at a town hall in Nanaimo, British Columbia. “Canada is willing to walk away from Nafta if the United States proposes a bad deal.
We won’t be pushed around.” (link)

The backdrop is important context here.  Prime Minister Twinkles has been watching Trump, Ross, Mnuchin and Lighthizer closely.  Two months ago Twinkles attempted to launch economic leverage by entering direct trade discussions with China; but there’s a problem – Twinkles actually believes Beijing is ‘playful panda’.  PM Rainbow-brite doesn’t grasp that Playful Panda is a mask.  [Wrong place for leverage.]
Trudeau is willing to open his door to Chairman Xi without realizing once inside Beijing will hold open the door for arriving goods, and shuttle out the Canadian manufacturers. Attachment to China is a one-way proposition; and China only indulged Canada from the context of using the Canadian NAFTA door, as a tariff workaround to gain entry to the U.S. market.
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With the new year comes more Main Street winning; and the distinction between Wall Street’s economy and Main Street’s economy becomes stunningly clear.
The January jobs report showed a gain of 200,000 U.S. jobs, and more importantly, a 2.9% year-over-year growth in wages.  –SOURCE–  [Biggest wage rate jump since the phoney trillion stimulus-funded growth mid-2009.] We continue to remind of our two-year prediction that stunning wage growth will evidence in Q2 of 2018 (April-July)… today’s report is only the preview of that wage growth cycle.

Construction reported by the biggest gain by sector with 36,000. Bars and restaurants added 31,000 and health care was up 21,000. Manufacturing also showed a gain of 15,000 and durable goods-related industries added 18,000.
“Perhaps the biggest positive surprise on hiring is the continued surge for the goods-producing sector with manufacturing and construction leading the way,” said Mark Hamrick, Bankrate.com’s senior economic analyst. (link)

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It can be a little confusing to listen to business or economic news analysts discussing the current state of the economy.  They are all generally positive, but the inherent delivery of their forecasts is cast against the backdrop of their experience.  Almost no-one, currently in the business of economic analysis, has experience, life skills, analytical training or educational understanding based on anything other than a Wall Street economic outlook.
Business Schools stopped teaching the principles of Main Street economics forty years ago.  All modern analytical tools, and the data-systems therein, were structurally built upon an economic theory that establishes Key Performance Indexes based on Wall Street economic models.  Titans of industry were replaced by fast-talkers pushing paper.
The paper economy and the monetary policy therein, has been the underlying architecture of economic analysis for decades.  Within this process Main Street U.S.A., was assigned the role of a “service driven” economy. Institutionally everyone accepted this reality.  Thus, those same voices are conflicted and cannot reconcile today’s economic shifts.
The Atlanta Federal Reserve is now estimating the potential growth for the first quarter of this year at 5.4%.  This is a stunningly high projection when historic assumptions are factored.  However, in the new MAGAnomic economy, it’s high, but not out of line.

The Main Street economic engine is roaring back to life.  Real consumer spending jumped from 3.1 percent to 4 percent in the latest quarter.  Consumer spending is approximately two-thirds of our GDP.  However, the real key figure is ‘investment”.   Private fixed-investment growth surged from 5.2 percent to 9.2 percent, that’s where the growth projections should be focused.  Trump’s MAGAnomic policies are driving investment in the U.S. economic base.  The current growth in private investment has doubled.
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Commerce Secretary Wilbur Ross appears on CNBC to discuss ongoing trade initiatives including NAFTA, China and the more broad Asia background.  Additionally, Wilburine discusses growth in GDP and anticipated economic enhancements from the tax cut legislation.

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Earlier today it was announced that ADP private payroll growth for January has exceeded 234,000 jobs gained.   “The job market juggernaut marches on,” Mark Zandi, chief economist at Moody’s Analytics, said in a statement. “Given the strong January job gain, 2018 is on track to be the eighth consecutive year in which the economy creates over 2 million jobs.  (read full story on payroll report)
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NAFTA renegotiation round six ended yesterday in Canada will no substantive progress on the most contentious trade issues.  One negotiation chapter on corruption was closed, but there was little to no agreement on much else.
Each of the primary Trade Representatives gave a closing statement at the conclusion of Round #6.  U.S.T.R. Lighthizer blasted Canada for attempting to inject schemes, fraud and deceptive dealing within the negotiations. Princess Rainbow Sparkles from Canada tried to pretend the Canadian proposal was realistic.  It was all awkward.  Hopefully President Trump will soon get us out of this nonsense. Lighthizer Transcript below video:

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Ambassador Lighthizer: It is a pleasure to be here in Quebec. Montreal is one of the great cities of the world, and I have not been back in many years, and I’ve missed it. I used to come here in the 70s and 80s with my wife and children to go to Mont-Tremblant and learn how to ski. We loved the French culture, we loved the excellent food, the wonderful skiing and as I recall, it was cold all the time. That hasn’t changed at least.
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Round six of NAFTA renegotiation talks continue today as Canada and Mexico claim cautious optimism that a round seven will take place.  This round of talks is scheduled to continue through Monday and end with a much anticipated a joint press conference between Ildefonso Guajardo (Mex), Chrystia Freeland (Can) and U.S. Trade Rep. Robert Lighthizer.   There were seven rounds initially scheduled.
Canada and Mexico are trying to close less important, and less controversial, trade chapters in an effort to give the illusion of progress and frame a political narrative that lends itself toward continuing to talk; ie. round seven.
However, if there’s no significant progress on the larger issues it’s doubtful Lighthizer will find value in endless words that amount to nothing.
Canada and Mexico have been lobbying U.S. politicians hard to retain their parasitic trade positions.  Additionally, a significant number of Washington DC politicians are willing to take massive bribes from the U.S. Chamber of Commerce lobbyists and support the export of American economic jobs and wealth.   This is another key UniParty indulgence issue.
Big Corporate Agriculture (Big AG), the consortium of massive multinational agriculture companies who hold stakes in the entire continent, are pushing hard to keep their “controlled market” dominance in place, and is attempting to stoke fears using false claims about farms and negative trade impacts to farmers.  Pure nonsense.
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The U.S. Fourth Quarter GDP growth was reported two days ago at 2.6% and that stunned everyone who were expecting a much higher number. All U.S. economic indicators including U.S. Holiday consumer spending, which accounts for around two-thirds of total GDP, were off the charts in the fourth quarter growing +5.5% over the prior holiday.
The total growth in fourth quarter consumer spending was almost four percent (3.8%), that’s the highest rate of consumer spending in well over two years.  Q4 investment in new housing increased 11.6%, business spending on equipment surged 11.4% and outlays on structures edged up 1.4%.
Before the BEA (Bureau of Economic Analysis) announcement, everyone predicted 4th quarter GDP growth would easily be over 3%, and most likely in the 3.5 to 4.0% range.
So what gives.  Why did the Q4 GDP only grow at 2.6% ?

It seems a little funny to be griping about 2.6% growth because, well, that’s really good, Bigly even; so hopefully those within the Commerce Department don’t take this review personally.  But, c’mon, we expected more…  Well, the answer to the question is actually in the first few paragraphs of their release, and later in the deep weeds of the data.  I’ll explain.
First, the part of the announcement to note carefully:

[…] The Bureau emphasized that the fourth-quarter advance estimate released today is based on source data that are incomplete or subject to further revisionby the source agency (see “Source Data for the Advance Estimate” on page 3). The “second” estimate for the fourth quarter, based on more complete data, will be released on February 28, 2018.

The “source data for the advance estimate” is another set of separate analytical disclaimers (pdf here) which informs users there are economic data-sets that contain ‘less than‘ three months of information.  To see what data is missing, and what “assumptions” the BEA  recommends, you to travel to a third level of depth (LINK HERE), and then to the key source data and BEA assumptions (excel spreadsheet here).
Don’t try this at home without a pocket protector and guidebook to the fourth level of Dantes inferno. So let me try to make this easy.
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Earlier today, prior to his speech in Davos, Switzerland, President Trump sat down for an interview with Joe Kernen to discuss the America-First economic policy.

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The entire economic world is unilaterally focused on President Trump and the U.S. delegation in Davos, Switzerland at the World Economic Forum. CTH has stated for several years that MAGAnomics, the U.S. economic outlook, would be the primary generational change evident from a successful election of Donald Trump. What’s happening at Davos is simply visible confirmation therein.

Boil all international and geopolitical issues down to their common denominator and everything, E.V.E.R.Y.T.H.I.N.G., every issue, every discussion, every person, every policy, every position, everything -all of it- circles around economics. Nothing matters except the underlying economics of every single issue. Power or weakness, famine or war, peace or conflict, master or servant, culture or crisis, growth or collapse, the entirety of everything -including the foundation of freedom- centers around the economics.
There are trillions at stake.
Yesterday we saw U.S. Commerce Secretary Wilbur Ross commanding around 80% of panelist discussion, and factually 100% of all questions and attention from the Davos audience. Every single question was for Wilburine.  Team U.S.A. is the epicenter of the economic universe and Secretary Ross was well prepared for the severity of attention.
Today, the same theme continues as Treasury Secretary Steven Mnuchin engages with a similar panel discussion.

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U.S. President Trump and U.K. Prime Minister Theresa May hold a bilateral meeting on the sidelines of the World Economic Forum in Davos, Switzerland.
Against the backdrop of increasing discoveries surrounding the U.K. involvement in undermining the candidacy of Donald Trump; and against the left-wing U.K. political forces consistently highlighting criticism of President Trump; the reality is the U.K. is now in a position of economic vulnerability and needs favorable financial outcomes from President Trump.
As such, Prime Minister May is in a tenuous position and hoping the U.S. President will be magnanimous in his forgiveness of the past two years of scheming, ankle-biting and very public criticism. The scale of President Trump’s leverage over Prime Minister May is very visible in their dialogue and body language.

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Right now the U.K. needs American economic help and POTUS Trump. Almost nothing has worked in their economic benefit since they made the conscious decision to take a position of adversarialism. If the U.K. doesn’t knock off the nonsense President Trump will stand aside and watch them suffer. Theresa May knows this is her reality.
T-Rex is enjoying the art of the deal, having flashbacks to corporate life, remembering the power of holding all the leverage while witnessing an apex predator circling his prey. Cohn and McMaster well understand the play…
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