The NAFTA sell-off is underway.  Relax.  No big deal.  The “NAFTA Reality Correction” is approximately 5 to 7%.  Multinationals hold greatest exposure. Everything is temporary.

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Twists and turns as Wall Street paper economy shifts toward ultimate equilibrium with Main Street real economy.  Real company P&L results (MAGA) will eventually replace speculative stock valuations.  Volatility is the norm while navigating the space between.

President Trump will pull the U.S. out of NAFTA and direct the U.S. Trade Representative to engage in bilateral trade deals with Canada and Mexico individually.   There is no other possible alternative and here’s why.

First, the essential problem with NAFTA was an evolution over time.  In its current form NAFTA became an exploited doorway into the coveted U.S. market.  Asian economic interests, large multinational corporations, invested in Mexico and Canada as a way to work around any direct trade deals with the U.S.
By shipping parts to Mexico and/or Canada; and by deploying satellite manufacturing and assembly facilities in Canada and/or Mexico; China, Asia and to a lesser extent EU corporations exploited a loophole.  Through a process of building, assembling or manufacturing their products in Mexico/Canada those foreign corporations can skirt U.S. trade tariffs and direct U.S. trade agreements.  The finished foreign products entered the U.S. under NAFTA rules.
Why deal with the U.S. when you can just deal with Mexico, and use NAFTA rules to ship your product directly into the U.S. market?
This exploitative approach, a backdoor to the U.S. market, was the primary reason for massive foreign investment in Canada and Mexico; it was also the primary reason why candidate Donald Trump, now President Donald Trump, wanted to shut down that loophole and renegotiate NAFTA.
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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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There is a key distinction being overlooked, perhaps conflated, by many who are reviewing the recently released HPSCI memo as it relates to the outlined targeting of U.S. individual Carter Page.
In the HPSCI outline it specifically notes the targeting of U.S. individual Carter Page was NOT a FISA Title VII search request.  Title VII is FISA(702), the incidental collection of U.S. person information as it relates to National Security or Counterintelligence operations targeting foreign individuals.

The FISA ‘warrant’ request, against Carter Page, was made October 21st, 2016, under Title I of the Foreign Intelligence Surveillance Act.  Meaning the surveillance application was specifically stating, to the court, the U.S. individual was likely an actual agent of a foreign government, ie. “a spy.”
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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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Imagine that despite your always knowing the DC swamp was deep (dangerous and full of terrors), corrupt, and generally horrible, you decided to do it anyway. You “just had to”.
Imagine you have spent years thinking about it; thinking about every angle within it; thinking and talking to people who know almost everything about it, well, from their perspective anyway; and ultimately you decided to do it.
Imagine that even though you knew it was bad, it wasn’t until you actually began running that you discovered the depth of the corrupt nature with it. –SEE HERE– You see things in the campaign you never expected; things no-one ever talked about.
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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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