Quarterly Earnings and Tariffs

The on-going earnings season is 80% over. Mostly, as predicted by analysts, it has been good. Trump's tax relief has been a big part to the bottom line. Profits are up. This is reflected in the stock market as the short correction in February is far behind the rear view mirror. A new high was set on the S & P 500, the transports and small caps. It should be noted that the S & P did not hold price. This is one aspect that points out that the market does not have full conviction. This is why the January's high in the Dow has not been breached.

Not Happy...

Trump won't admit it in public, but he is unhappy that producers have not returned to America. The idea behind the tax break was to give manufacturers incentive to reopen plants and factories here in the US. This, so far, is not happening. He instituted plan B: Tariffs. This is why it is in the title.

Tariffs will either have to be considered until they become part of the economic picture for producers and consumers or they are dropped. The market thought that they were a bluff. Sebastian saw them as reality. He is correct. Now, outsourced contracts are being adjusted for price increases. In some instances the producers will adsorb the tax. In other cases they will raise prices and pass the cost to the consumer. The Fed will be watching closely. Who knows? In the future articles could include interest rates by the Fed designed to halt inflation. The Feds actions could be to slow the economy at the same time. You know if you drive to slow, you can get a ticket. If the Fed drives up rates too high, the economy slows. Workers get pink slips(tickets). I believe Trump is right. We must force producers home and then, our workers will make a living wage. They will be able to afford a car or a starter home and get out of debt. Then, our standard of living will begin to rise again. If his gambit loses, we all lose.

With that said there is other concerns that the gang here at Evolution of Democracy see as obstacles in the earnings report. We don't feature individual stocks so much, but we look at the sectors to give a complete market view and insight to our economy.

Drugs...

had a different meaning back in the 70s. Today, it needs a better adjective. We are talking earnings.  Merck had a bad quarter and it is trending down. Pfizer had good earnings, however they mentioned the strong dollar hurting profits. Big Pharma is under pressure from the opioids epidemic. Overall, earnings are good for drug dealers.

Nevertheless, the strong dollar is being mentioned more and more. It broke out above its trading range and it could test its highs, especially since the Fed is expected to raise rates again in September. Retail giant, P&G said costs are rising and the strong dollar is hurting them. Maybe they should bring their outsourced products home? Hanes is in the same boat. They outsourced and now, they complain about the dollar. However, Sebastian noted that Hanes lost a contract and that will hurt future earnings.

Automotive

Earnings are up, but sales won't reach 17m like in 2017. A report stated that the average price for a used car is at a record $20,000. Ouch! Another report on the big three American truck sales stated that in the near-term future, trucks will have a price tag over $50k. Double ouch!!…I love my 2002 Buick. Hang in there, baby because I can't afford those prices. In other news, Tesla could be in hot water with the SEC. The stock was halted due to a tweet by Musk(CEO). He mused that he is considering to take the company private. Just moments before this media outlet, someone purchased a huge amount of option calls. This is why I like charting. Someone always knows something. The stock reopened up $29 bucks. If you or I was that someone and we bought the .25 option call, it jumped to $9 dollars after the stock reopened. This will be news for awhile and Musk could be in trouble. I see Tesla hitting $261 before it stabilizes. JP Morgan sees $195.

Tech

There is two categories in tech. They are led by the FAANG stocks and the other is the chips. All the faang stocks did well except Netflix. During this quarter Apple hit an historic milestone. They became the first company to be valued at $one trillion dollars. Congrats to them. By the way here is a short litany of other evaluations of stocks from the past.
*1st company to be worth $one billion=US Steel.
*1st company to be worth $10 billion=G.M.
*1st company to be worth $100 billion=IBM.
Keep in mind that one-fourth of Apple's income comes from China and tariffs will cause pain. I'd sell at these prices and use the tax break to keep most of the profits.

The other half, the chip sector had mixed earnings. There are some clouds and analysts are coming out to warn that the dollar along with tariffs will hurt the next quarter. Chips led the market up and they could lead the market down.

Financials

Analysts love this sector. They always push these stocks. Bank of America had a good quarter, but Wells Fargo keeps shooting their own foot. Overall, this group is in a sideways trend. In a related issue Goldman Sacks(GS) CEO says buybacks will exceed $one trillion this year. This does not necessarily mean stock prices will rise because many go to options that the executives receive. These people are buying at market highs for their retirement fund. This is so wrong.
In a related aspect, GS, BAC and MS all expressed some doubts about the current bull market. They see too much rising debt, fear of trade wars, high evaluations and Fed rate hikes any of which could derail the market.

Retail

Had a strong quarter and with back to school and Christmas on the horizon, things are looking better for this industry that employs many, many people. The margins are thin in retail and the strong dollar could surprise to the downside, but confidence is high. Overall, this sector appears okay until January 2019. There are however casualties in the field. J. C. Penny is following Sears which is following Radio Shack into business oblivion. Other signs of future worries can be reflected in Home Depot(HD). They posted good numbers, but the market sold off the stock. The company announced that it will buyback $6B in shares. Nothing like buying at highs with shareholder money to keep the stock up. This is a lack of leadership or at least that is how we see this maneuver.

Housing

This is the most important segment because it stands for not only the American dream, but it is the most expensive purchase by a consumer. Toll Brothers had a strong quarter, but don't let a high end builder fool you about the market. They stated that California is slowing and they blame the tax limit deduction as the cause. There are many other ominous cracks developing in housing. Sebastian has reminded you that the housing model that begins with a starter home is no longer working. Builders are only constructing new homes for the upper middle class and higher. Rents consume too much of a paycheck for consumers. They cannot save to make a purchase. Student debt is also a burden to housing. Younger people are living with their parents, relatives or friends. This is a formidable obstacle. In addition, sales declined in three of the last four months. The busiest season is turning out to be a bust. Even high end homes are lowering prices to lure sales. A report shows 14% of listed homes gave a price reduction in July which is the heart of the selling season.
If the Fed continues to raise rates, housing will continue to decline. Already builders are crying about the price and cost to develop land. The lack of workers. The rise in the cost of materials. The clouds are building. After all this is hurricane season. In the back recesses of the market's mind, this is a worry.

Restaurants and Leisure

Eating out is at record levels and the restaurant industry had a strong quarter. There is ominous signs in the leisure business. Airlines were dropping in value due to fuel costs, however they recovered by raising fares. Ticket prices are rising, but the Fed ignores this sign of inflation. In addition, the leader in bookings posted poor numbers. Priceline, now Bookings Holdings(BKNG) dropped like a rock in water. Could you sleep at night after seeing your stock fall 5%? This stock was over $2,000 a share. It fell to $1942. It is now around $1840. Charts say $1700 is possible. In the first paragraph about the rally in the market, I stated that the market is not totally convinced. This is one example.

Food

I see rising prices all the time. The Fed says they don't. Profits were mixed. Many producers cited rising prices and concerns over tariffs. Campbell says the extra cost in aluminum for canning comes to $1.1B or one cent per can. This effects soda, beer and any metal users. Earnings in equipment makers like John Deere had a good quarter and gave a strong guidance going forward. Tariffs have not stopped farmers from buying equipment.

One can include staples in this category. Generally, the quarter was mixed. Producers cited rising costs, the dollar and trade worries. Kimberly-Clark will raise prices among others.

Energy

The industry had a strong quarter with the rising price of crude. However, recent consumer usage is down and a glut is building in the market. A consolidation at lower levels is on the horizon.

Mining

All mining companies are in decline as prices for all commodities suffered with the strong dollar and Dr. Copper demonstrated the fear of tariffs. The price is at multi year lows. Caterpillar was not effected. They posted record numbers. Miners still need equipment and infrastructure projects are looming to paint a bright picture.

All in all the quarter appears very strong and this should have given the market the push to pass the January's high. It didn't. It has tried and failed repeatedly. This says to me you can never go wrong taking profits. With September looming, I'd be very careful.

Trump's Wall is not the only ONE

President Trump has threatened to shut down the government when the debt ceiling comes due if Congress does not give him money to build the barrier wall between the US and Mexico. There are good and bad points concerning the "wall" in the debate. My feeling on immigration is that I generally favor immigration except when our economy cannot accept more labor. We are at that time. The decline in unemployment is misleading. The real truth of unemployment is revealed in labor participation. We have almost 40%(38% to be exact)not employed. We have too many part-time jobs that don't offer a living wage. The nation does not need more cheap labor which immigrants provide.
Cheap labor helps the rich, but lowers everyone else's standard of living.

When manufacturing actually happened in America, the expansion of production allowed strong job growth. The competition for labor had a balance between needs and wants. The nation could absorb the influx of immigrants. With the advent of NAFTA, the outsourcing of jobs, new technology in production, the need for labor has declined. We see the results in Detroit in the Rust Belt of the Mid-west and the destruction of central cities everywhere. The lies of the benefits of trade cannot mask the rise in poverty in America or the use of food stamps.

With that said and all the BS in the news about immigration, none of the media outlets talk about immigration in the global society. In history most mass migrations resulted in historical world changes. Sadly, it usually centers on conflict. Fact is, the US is the most open nation the world has ever seen. We are at a point in time where people are being displaced due to wars, famine, political asylum, religious beliefs or lack of opportunity. So, how does the world treat their DNA brothers from another nation?

WALLS!

That's how. In European history, the city-states made castles because it gave walls for control and defense. Today, Europe and the EU do it another way.
For a few years the EU members took in immigrants from the Middle East and Africa. Italy and Greece bore the expense with little help from Brussels. Now, we see the backlass as EU members have put up barriers from barb wire fences in Austria to containment camps in France and England. Italy has a naval blockade. Immigrant ships now move to Spain and Portugal, but for how long? I say less than one year. The US has had immigrants come across the border from Canada and Mexico since we won our independence from Britain. In Europe this is a political issue and every party that campaigns against immigration is on the rise. There may be no visual wall in Europe, but society puts up obstacles with invisible barriers. At the moment there is a big issue of wearing scarfs or headdress, mostly by Muslim immigrants in Germany. Muslim woman claim democracy gives them the right to freedom of expression. Normally, I would agree except the problem as we know it, is terrorists could use this freedom to commit their crimes. When a immigrant migrates to a new nation, it is understood that the immigrant accept local customs, values and language. If locals feel uncomfortable due to terrorism, they have every right to demand the newcomers understand their concern. This is all part of assimilation. The use of head scarfs is allowed in their house of worship, but in public, the majority has every right to do what will provide protection for all.

China and Asia and moving West...

China built its Great Wall to control immigration and for defense. Today, China uses a different type of wall for control. China has a Firewall. It censors the internet. There is no freedom of speech. It is so bad that Google left China eight years ago. Sadly, money has lured them back. They will operate with a special search engine that the Communist Party approves.

How about Japan? They import labor from Thailand and other SE Asian nations. The problem is these immigrants keep their culture which collides with Japanese culture. Now, the Japanese society wants them out of the country and end all immigration. The immigrants are ruining the culture. This argument is also heard throughout the EU. It is also heard throughout Asia and continues into India. Pakistan is a result of revolution away from India due to religious beliefs. Bangladesh is also a nation evolved from religious persecution. These nations do not allow immigration across their borders. They despise each other over religious beliefs.

In S. Korea citizens protest the influx of Yemen's. They say these immigrants steal jobs, lower standards, hurt the culture and the danger of radicals. In America, if we just changed Yemen to Hispanic, the thinking is the same.

In the Philippines there is constant conflict over religion. The Muslims resent the Catholic majority. There is outbreaks of violence all the time. In Indonesia religious outbreaks occur between Muslims and Hindu's and even Buddhists. Revolution is only an argument away. None of these nations welcome immigrants.

Keep moving west to the Middle East. Iran hates Iraq. Saudi Arabia won't allow Yemen's into their country. In the strife caused by ISIS, little stories get known like the Yazidi. This is a small tribal community that lives together like in a ghetto in Iraq. The ISIS took control of the city where the Yazidi live. The Yazidi are not Muslim's. They suffer discrimination. Anyway, ISIS took as prisoners some 7,000 Yazidi women. Most of these missing women were sold as Slaves! This is not a typo. Slavery in the 21th century in the Middle East. What can you call this type of wall?

There is also severe persecution of Christians and laws on the books concerning the immigration of Christians in the Middle East. Oh, how could I forget the central hatred of Israel and Jews. Not a lot of cross border immigration going on in this region, but Israel does have a wall in sections of its border.

West to Africa...

The continent has a history of tribal conflict with the victors enslaving the losers. It still happens today in the form of past hatreds and religious beliefs. Recently, a renegade group in Nigeria took captive 400 Christian women in that nation and along its borders. They were used in forced sex and many sold as Slaves! It happens in little discussed stories throughout the continent. Most notable in Ethiopia which is in civil war between Catholics and Muslims. This is a one-sided affair. The Catholics don't have weapons and the other side does. It is slaughter. Behind the religious theme is the real reason: Oil. It is in the Catholic section and the Muslim government is doing genocide to take the land. How do you label this wall?

Bottom line: Trump's wall will be visible like the Berlin Wall. It will go up and then, probably come down. The real problem for the world is how do we get along with each other. Nations that possess a homogeneous demographic have the most peaceful environment. The US has had its problems with race. It still does. However, it is the only nation to include all peoples. This was due to economic prosperity. This aspect allowed the assimilation of many ethnic variations. The immigrants through time not only learned the language, but the values in the concept of America and the dream behind the thinking of its people. We do have a culture, but diversity diverts from the central theme in American values. Recent immigrants don't want to learn the language or respect what made America. Earlier immigrants took that challenge because they believed in the freedoms the US grants.. There are idiots out there who want a one world society. They never mention who rules because it would be elitist totalitarian in nature. The radical extreme of democracy can lead to totalitarianism.
The open border policy only makes the poor in our nation suffer due to our poor economic climate as the competition for low wage jobs only heightens tensions between the citizens who are poor and immigrants who begin in this economic level. Diversity takes from the culture and only seeks self serving rewards. Diversity over time is a wonderful thing, but to have it jammed down your throat with no respect for the present culture only offers resentment and racial strife. There may be one world, but it consists of many parts. Respect is what is needed at the border.

Poison in Debt is Rising...Again

Everyone should know by now that one of the biggest reasons for the financial crisis of 2008 was CLOs or collateralized loan obligations. Banks would assemble a package of loans based on borrowers ability to repay. Some were triple - A and some were Ninja's(no income no job or assets). They divided the package by yield called tranches. The riskier part received a greater yield.

The problem surfaced when too many risky loans defaulted. This crushed the value of the package. The chain of the dominoes falling sent many lending institutions and banks to financial oblivion.

As a result we got Dodd-Frank and other limitations to reckless lending, but the greed factor never goes away. Little-by-little demand for yield gave banks and non-regulated lenders the enticement to begin CLOs, anew.

There are many types of investors - pension funds, hedge funds, mutual funds, sovereign wealth funds, and insurance companies. These are the takers to bite the apple. Where are the regulators, you ask? In the pocket of the weak side of our democracy.

With tighter standards all boats floated safely. Now, it appears that banks are sneaking riskier loans into packages that utilize higher yield to attract buyers. The same suspects from above have come for another bite of the apple. This poison is circulating. We have reached a point in the debt cycle where riskier businesses are seeking and getting loans. I do not want to disparage a brand name, but think of some of the current companies in a rough patch like Sears, Radio Shack, et. al. There is another problem. Since the Fed is raising interest rates, the chances for the more riskier participants in these loan packages to default rises substantially. With too much debt on the books, companies cannot service the load. I think this danger will first appear in car loans and commercial real estate, notably with malls.

Sad but true...

One of the central usages for loans today is to buy back shares or for mergers. This practice makes the bottom line look good and CEOs line their retirement option package at the companies expense. These corrupt so-called leaders will be gone when rosy predictions of acquisitions fail to materialize. These type of loans are up 38% from last year's near record total.

Credit rating service companies like Standard & Poor's, Moody's and others have warned, but the siren's call is too great. All the blame cannot be directed to banks. Non-regulated lenders are competing for loans. They deal in toxic CLOs. They work the system. They buy lobbyists and donate to political parties. They can exploit the weak link in democracy. These are the people that I referenced above who are in the pockets.

The next part shows the effect...

You can see the results in a set back on Dodd-Frank by a recent court ruling. The Republican appointed judges ruled against the "skin in the game" provision in Dodd-Frank. The idea that the issuer retain 5% of a loan package to show good faith in the deal. It is dead! Killed by these idiots who think too much government regulation in business is the problem in our economy. They over look man's greedy, corrupt nature. They fail to see the same pattern that happens in history time-after-time.

The poison is in the system. The effects will soon be displayed. The doctors will arrive late and after the fact. Sadly, the dominoes will fall again as the disease circulates.

China, Tariffs and Jobs

China likes its projection. Its ego desires to be number one. Thus, it does not see its lies and flaws. When President Trump said enough and sought to level the playing field, they reacted tit-for-tat. Trump pinpointed China because they are the poster child for undercutting competition and stealing market share in the global economy. They use the same playbook as all the previous nations like Taiwan, Japan, South Korea, and EU members. Currency manipulation is front and center. Behind the scenes, they layer importers with bureaucratic red tape, time studies and fees. When all else fails, they protect the local competing company with tariffs.

So, for China to fight the US, it added more tariffs to their already protective market. If the Democrats complain about Russia influencing the 2016 election, look around. All the back lass over Trump's tariffs has some Chinese money for shills who argue the same old same old. Of course, there will be inflation. That, dear reader, is pain. If someone is addicted, and seeks to end the bad habit, withdrawal pains are real. Back in time, when someone's factory closed, there was pain in unemployment. It was real.

We, as a nation have become addicted to low prices by foreign entities. We have been buying things that we use to make. When we made things, we increased everyone's standard of living. Now, you see homeless and beggars everywhere. This is evidence in our declining standard of living. Screw China! They have been screwing us ever since tricky Dicky opened up their market. Our corporate leaders are anti-worker. They sought riches by exporting our plants for cheaper labor sponsored by state governments. Foreign companies get government help with regulations, low rate loans and tariffs. Many of our companies don't get this type of help. Our nation does give subsidies to agriculture, government contracts, etc. However, these were band-aid steps that legislatures never talk about but understand as a fact of life. There is no such thing as free trade. It is a lie! Native Americans were only partly right. White men in politics speak with fork tongue not all white men.

Case in point...

In China last week, the largest Chinese coal producer defaulted. Wintime Energy is a classic example of a state sponsored company. They were like a boxing bum who gets carried by his opponent for x-amount of rounds before he becomes a TKO. There are many more out there like Wintime that receive protection from China. If that company was in the US, it would have ceased to be years ago. With fiat money, the government just prints money, buys it and keeps the company a going enterprise. Chinese companies paid old debt with new borrowing. It sounds like our Federal Reserve and in a way, it is exactly like the Fed. This is why our founding fathers insisted upon gold. You can't fake gold.

This is also being reflected in the Chinese stock market. The average total debt-to-equity ratio of listed Chinese companies is rising like a thermometer in summer. It is 99.5% at the end of 2017.  Debt demand continues to rise(addiction) for more leverage to finance projects. However, investment by investors shrank by $691 billion yuan last month. This is the largest monthly drop since China kept records. Who or where will these companies get money?  Daddy of the communist party?Probably. In the US, if this happened, our market would begin to pull back like the many boom and busts in our history.

In any event, the Chinese economy is largely a Ponzi scheme. This type of business model always ends badly like it did for Wintime Energy. This should be the writing on the wall for our government leaders. There is a limit to rolling over debt and a day of reckoning will come. As for the tariffs, we will feel some inflationary pain, but if we become self-sufficient again, we will end our declining standard of living. We will swing the pendulum back to a rising motion. Just think for a moment. Trump announced that he might put a tariff on all the products that we import from China. All those products could have come from factories right here in America. See where this is going?

Odds and Ends for July 2018

Trump seems to have more critics than supporters, especially in the media. In his recent trip to Europe he was right in bringing up the matter of economic support by our so-called NATO allies. These people are the first to put their hands in our pockets and almost every nation in the EU has a better standard of living than citizens in America. Sometimes, they bash our policies and sometimes they are correct to do so like the attack on Iraq and the phony war on terrorism.

Not this time...

All Europe gets a free ride in their defense while our deficits, lives and resources go to waste. Only eight of the twenty-one EU members pay the minimum of 2% of GDP towards defense. Guess what? 

Even financially troubled Greece, anti's up the 2% while rich nations like Germany don't even come close and if you add up all the years of NATO by these so-called allies, that is serious money.
I wish that we had the "balls" to drop out of NATO and any foreign defense alliance. Stick to the wisdom of our founding fathers and stay away from dangerous entanglements. In addition, the recent info about the Russian involvement in our last election will hamper any peace or trade possibilities between Trump and Putin because he now has to include this nonsense about the election. As it turned out, Trump sought a peaceful meeting, and now, he gets back lass over the belief in the meddling. Move on! The election is over. Election boards and media outlets need to do a better job in the future. Enough with the sour grapes! We have a lot of positive history with Russia from Catherine the Great, the buying of Alaska, an ally that helped defeat Nazi Germany in WWII and the Space Station. Like War sang, "Why can't we be friends...?"

Back to the market...

According to Trim Tabs, buybacks in public companies continue at record levels. Are these CEO's so blinded by greed that they don't see the dangers of buying at highs and late in a bull cycle? They are not investing for the future in R&D or paying into employee pension funds or even paying down debt. The top five in the idiot cycle of spending of announced $435 billion in buybacks for the second quarter are:

*Apple= called for $100 billion.
*J.P. Morgan, B of A, and Citi= all plan to do buybacks as the Fed will now allow them after passing the stress test.
*Nike= $15 billion, rounds out the top five.



Let me add this...

I'm not alone in worrying about the doings in the market. Four respected firms had either individual analysts or the institution itself made these dire warnings about the state of the market.

*Guggenheim Partners: calls this rally the last hoorah.
*A Morgan Stanley strategist says it's time to go full defense.
*Barclays: not even small caps are immune to any trade war fallout.
*Morningstar Investment Management Group: investors should brace for another lost decade for stocks. OUCH!


I didn't know this:

The final four in World Cup each receive a bonus.
* First place= $38 million.
* Second place= $28 million.
* third place= $24 million.
* fourth place= $22 million.
In addition, the four quarter finalist teams that did not advance to the semi's, will split $64 million.
The Round of 16 teams that didn't advance will split $128 million($8 million each).

This info could be very bad for our NCAA basketball tournament as lawyers will use this for another reason to pay players and not the schools who they represent.



Another problem...

Housing, which is the cornerstone of our economy is providing misinformation. Any report always focuses on rising prices, but the core of housing is destabilized. New home sales have fallen 37% below average in the last five months as compared to the last 30 years or the life of a mortgage. Almost all new homes target upper middle class to the high end which breaks the natural progression of the housing market. They are not building starter homes, and as I have mentioned many times because wages do not meet the price of a entry level homes. You can also see the verification of less sales with mortgage purchase applications. They are down 9% in the best selling month as compared to June 2017.

Finally,

I want to congratulate team Russia for their effort in the World Cup. They were not gifted with talent, but they displayed excessive heart and made the quarter finals. Also, Putin showed leadership in viewing the game without bulletproof seating. After the championship game he was on the field congratulating the winning French team even with the weather turning bad in pouring rain. Well done!

 

Who Is On First?

In his campaign for the presidency, Trump repeatedly praised his own ability to do the best or to get the best to perform a job. His A-team would add a new chapter in our history that would restore America to its greatness.
Apparently, his tenure is finding it difficult. I have not heard him sing, Neil Young's song with the line, "...I'm mining for a heart of gold and I'm getting old." It would give him an excellent excuse.

More To Come...

With that said the numbers don't lie. The Trump administration is setting a record for top-tier turnover. It currently rests at 34%, but it is set to rise even higher in the coming months for various reasons like the mid-term elections and the known fact that private entities will offer top positions for ex-government staffers. Yeah, they talk the BS about public service when it is really a stepping stone to the corporate hierarchy seeking government contracts.

In the big picture counting all staff members, Trump has seen 61% of his appointees leave or have been asked to leave for one reason or another. However, there is the other side of the coin...

Not the Whole Truth...

It also could be the difficulty with running for office and getting the job. It is one thing to develop a catchy slogan that wins a campaign and another to have the skill to govern. Trump has the dual difficulty that comes from the top job. The learning curve is steep and that difficulty is compounded by his lack of political experience.

Trump's personal appointments have ended up badly. Many have disagreed with him. Some have contradicted him. Trump finds himself in "Twitter" fights that only appear as insubordination to us and leave us with many questions. We figure that the issues are deeper than the surface news.

In any event, I have collected this list at this time, the mid-point of the baseball season. Here is the All-Star list. Can you recall these oldies?

*Reince Priebus - Chief of Staff
*Katie Walsh - deputy chief of staff
*Sean Spicer - press secretary
*George Sifakis - director of public liaison
*Michael Flynn - national security advisor
*K. T. McFarland - deputy national security advisor
*Rex Tillerson - secretary of state
*Steve Bannon - chief strategist
*Gary Cohn - chief economic advisor.
There is your starting line-up and your bench players like Paul Winfree who voluntarily resigned. Then, James Comey who was fired along with many others.

Of course, you the fans may be disturbed by not seeing your favorites like Anthony Scarmucci, director of communications.
Hope Hicks, interim director of communications.
and let us not forget the Big Brother celebrity, Omarosa Manigault who was director of public liaison.

Just in: Scott Pruitt resigned from the EPA. His deputy will interim for the moment. Andrew Wheeler is a step beyond bad. He was the top coal lobbyist for years. He knows how to work the system. This means that he is opposed to coal's competition like alternative energy. We will lose not steps, but years to China in developing those energy sources. This will be yet another American contribution that foreigners reap the benefits.

Soon to come...

Michael Cohen, Trump's ex-lawyer will soon be indicted. Who knows what can of worms will be opened and what repercussions?  However, we have more important things to worry about and on top of the list is tariffs and the jobs that it will effect and government revenue. Sebastian called the trade war is on and he is right.

With the difficult strategy of turning our nation around back to a manufacturing nation that is self sufficient, Trump should look to economist who are outsiders and agree with his tariff fight for our standard of living and not the phony inflation argument in the transition back to self-sufficiency. It is good that the lies of the term, "free trade" is exposed. I could help.

An Aspect of JA's Dream

This short story is dedicated to our Founding Fathers whose vision gave us liberty. Although, it is always threatened, it still rings true as we celebrate our Independence Day.

     In the spectrum of color, each hue has its own beauty, but together, they form a kaleidoscope. This adds another unique embellishment from the coalescence. In the same way, a person might have a concept that becomes so accepted that it becomes tradition. Such a person is very fortunate. Even if time creates shades to his vision, he did a wonderful thing. Each separate degree of style and individuality is really only a floor to the cornerstone of the original thought. Not only was the idea beautiful, but each variation added to the picture.

     As I stepped into my car, I was thankful for air-conditioning. It was humid and getting hot for 7:30 in the morning. Summer, by the calendar, was only days away. Each season has its chronometric time. The summer solstice is the time for baseball, swimming, and barbecuing, especially with the family. Teenagers surface. The older ones cruise main drags and almost all hit the mall. The crumb snatchers have grandparents for sitters. They say kids don't do summer jobs anymore, but I still see them cutting grass and at fast food places. Everyone spends the high point of the sun in different ways, but there is one common thread that is weaved in our culture, Independence Day.

     After my last appointment of the day, I drove, looking for a fireworks stand. I marveled at the thought. When I was a kid, fireworks was a back-room business with the air of a speakeasy. Then, they became publicly licensed. I remembered seeing a location along Goldenrod Road. I turned onto route 551. Perhaps, they might have something that I liked or knew?

     I clicked on the radio. I searched for the oldies station. The music of Freddie Cannon singing, "Palisades Park" rekindled memories. As I drove, I reflected on my earliest recollection of summertime and the national holiday.

     I can recall back to when I was four or five. My family, as well as everyone else in the old neighborhood, celebrated the Fourth in the same way. As soon as dusk settled, we ascended to the roofs of our tenement buildings in the Bronx. We brought whatever we had up to those tar tops and joined our neighbors in one big jamboree. Everyone squeezed out a space and formed a mosaic quilt to life.

     The collage included card games, checkers and chess, hotdogs, soda and beer. Maybe some ice cream, but always laughing, dancing, and singing ethnic songs. The air was filled with an esprit de corps. The sky would hold a panorama of multi-colored rainbows. Each roof adding its stroke to the canvas and its chord to the harmony. The effect created a symphonic atmosphere like the talking cereal - snap, crackle and pop. Every holiday has its special flavor. The Fourth was one of unity and sharing. No one had to go political about our freedom. It was reflected in the joy of their faces. John Adams was probably smiling in his grave.

     Traffic ahead snarled. I slowed to a crawl with all the late workers and early shoppers, hitting the streets simultaneously. It required more attention to drive. My mind contemplated on how times have changed. Over the years, those changes affected how people celebrated the holiday. I pursued the thought. I wondered how JA's grand concept for Independence Day fares against the modern critics.

     A deeper issue centered on children who had been hurt by fireworks. It effected a response by groups who took up the concern as a cause. The resulting legislation all but extinguished the traditional way families celebrated the holiday.

      I can't blame the people who wanted to cure the civic illness, but on the other hand, we seem to legislate away our way of life. We have laws requiring licenses for this and that. C'mon! You cannot even have a garage sale without a fee. Everything ends up being about revenues for government and money for corporations. I understand the seat belt law, but I have empathy for smokers. You need a lawyer to know all the insurances that you need. What about traveling? You go through a gauntlet of metal detectors, searches and Id requests. It seems if someone has a gripe, we all get taxed with inspections or wait in line. No wonder I miss the old days.

      I just noticed the light turn green. Someone saw it sooner. Their honk on the horn caused me a knee jerk reaction. I said to myself, Anthony, you're getting old. You're losing it. Not only are you having a conversation with yourself, but the horn you honked won't help. It will be like a needle in the head for the guy ahead. It certainly won't make traffic move any faster. Talk about going off on a tangent. All things considered, our democracy keeps trying to improve and that is more than I can say for myself.

     I couldn't turn off my mind. I asked and answered myself. What do I think? I think too much. Yeah! That would be JA's reply to modern critics, "Just relax, have a good time and enjoy our heritage of freedom."

     My cortex slowed and along with the soothing sounds of the Moody Blues rendition, "Tuesday Afternoon," my mind calmed. Finally, I saw the fireworks stand on the left.

     It was nothing more than a tent on a vacant lot. It occurred to me as I approached the stall with all its red, white and blue glitter, that I won't find my childhood favorites like cherry bombs, ash cans and Roman candles. Not everything passed certification.

     I greeted the attendant with, "Wow! Chinese rockets, helicopters and sidewinders. I'll take a dozen of each, and a few of those, and give me a couple of these too. Thanks, buddy."

     The smile on my face was short lived. As I returned to my car, I heard a commotion at the rear of the lot. Three older boys were jostling a younger kid. Although the teenagers looked like ordinary youngsters in their T-shirts, neon shorts and upscale sneakers, I wasn't sure of their intentions. Their actions spoke for their motive.

     I didn't have to hear intimidation to recognize it. I remembered when I was a target of it. It happened at around the same age as this kid, eleven or twelve. I set down my purchase and shouted, "Leave the kid, alone!"

     At first, they ignored me. However, when they saw me coming, they took off. The young man tried not to cry when I reached him. I asked, "Are you all right?"

     "Yeah. What's it to you?" as he eyed me curiously. He then blurted, "They took my stuff." I asked, "What did they take?" He didn't answer. I guessed, "Your fireworks?" He looked down as he replied, "Yeah. I saved for a month. All for nothing!" I attempted to gain his confidence as I followed up, "What did you do?"

     "Oh, lots of things. What's it to you, anyway? I don't know you. Leave me alone!" He was about to walk away, but I continued, "Hey, I don't mean you any harm. I was just trying to help." He fired back, "Yeah. You helped them get my stuff." He kicked the dirt as I responded, "I'm sorry. I didn't realize that you had it under control. What's your name?"

     "Raghib Jefferson."

     "Raghib, like the rocket from Notre Dame?" He made a mocking sound as he said, "Ha! Except, I'm faster." I adlibbed, "I guess they call you, Supersonic?" He made an expression like I was talking Greek, "That's a plane, man."

     I had the feeling that I was getting through to him. He no longer looked watery eyed or fearful. There was a glow on his face. I made a pitch, "Hey, Raghib. I realize that I've got a few too many pyrotechnics. Want some?" He didn't know the word as he tried to repeat it, "Pyro...what?"

     "Fireworks." He looked at me hard. I knew we were back to the beginning. I put on my warmest smile. Nothing. Then, I said, "You know, I'm a Notre Dame fan." He gave a knee jerk response, "Who cares. Down here, Canes rule." I struck a chord. He loosened his defensive barriers. I laughed, "Canes! They are like this weather, hot air! C'mon!" I walked toward my car. I hoped that he would follow. As I walked, I recalled what once happened to me.

     We moved from our neighborhood a year earlier because the city decided it was inhumane to live the way my family did. I was too young to understand things like leaking roofs, no heat, rodents, and no hot water which is life in New York tenements. The city had something new. They called it, "Projects." With the legislative wisdom New York always shows, they tried to get 10,000 people into a 100 by 150 lot. Somehow, I carved myself a 10 by 10 millimeter of space and I found a best friend.

     My mother never approved of him. His father was in the rackets. In the Bronx neighborhood friendships over-ruled parental worries. All I knew was this. At the end of the school year, Dennis and I were the most popular kids in the fifth grade at Blessed Sacrament and in all the Bronx. It was unbelievable.

     This is how it started. One afternoon in June, we took the subway to Harlem. Dennis forged a note from his father that read, "This is my son. Give him whatever he wants."

     We left with shopping bags filled with fireworks. The next day, we sold them at school at lunchtime. On weekends, we sold them in the neighborhood. I was one rich, little, crumb snatcher except for this one incident.

     On that Fourth of July, I left my house stuffed with fireworks. I had them in my socks, pockets, inside my shirt and under my baseball cap. I told my mother that I was invited to a family party at a nearby avenue. I had a long walk ahead, so I left early.

     The little fib, eased my mom's mind. She saw adult supervision in a better neighborhood. That block consisted of single-family homes. People had room, whereas, on our street, it was how many to a room. Their contractors stopped at the second elevation, while our builders used the multiple five series: 5, 10, 15 stories high. In their district, the latitude of style was reflected in the individuality of space, whereas, my apartment was the latitude of six on the elevator. In the Bronx space was either a linear or vertical perspective.

     As I walked along the way, some kids recognized me. They asked me to sell them some things. I hesitated. I had more than I needed. I thought with the extra money, I could buy a bike. Money and greed got the best of me.

     Soon, two kids became four and then, to the fourth power. I was getting nervous with such a crowd. The police would see me. There was no one to protect me. I tried to leave when a strong arm grabbed me.

     "Let's see what you got," as a tall, older, black guy held me. I recognized him and heard of his rep. Some said that he robbed checks from mailboxes. Some said that he robbed people and that he even raped a girl. My heart went to my throat. He had two cronies with him. They poked at my pockets. I was looking for an escape as I said, "I don't have anything else for sale. The rest belongs to my friend's family." He glared, "Give me what you got and your money too or I'll beat you to a pulp and just take it."

     My mind worked feverously. I never could understand how someone that I'd never met could have such a hateful look on his face. Man, I was scared. I reached into a rear pocket for a bag of cherry bombs. I came out with the hand of one of his buddies. As the leader looked at the bag, I took off. I knew I couldn't outrun three teenagers, especially loaded down as I was, but I threw items as I ran.

     I grabbed things from my shirt pocket. I let fly what was under my cap. I lifted my shirt to let loose what was around my waist. A little at a time, I created space between them and me as they stopped to retrieve my castoffs. I kept running all the way to McGraw Street.  

     When I finally reached it, I stopped and rested on a stoop. I took inventory. I still had my money and a cache of ash cans. I didn't want to tell Dennis or anyone about it. The frightening events seemed distant as the block party began to unfold.

     Then, out of the corner of my eye, I saw the three delinquents turn onto McGraw St. My heart almost stopped. My brain still worked. I realized that all I had to do was call Joseph, Dennis's older brother, and revenge would be mine.

     In that momentary pause, the three punks understood that they were as vulnerable as roaches caught in daylight. They scurried off.

     The night's coda surpassed the day's melodrama. I remember everyone saving their soda bottles to use as a launching pad for rockets. We lit them simultaneously, and the sky was filled with the color of pyrotechnic designs. Traffic was boxed out - block party style. In the center of the festivities, we used a city wire trash barrel for a fire. We poured entire packages of fireworks into it for fuel. All night long McGraw Street, crackled and popped. They were great people, special times and priceless memories.

     As I bent down to retrieve my bag from under the rear tire, I just hoped that he was behind me. I never looked back, but I was confident that he was there. I was given a chance to do a positive thing in the world. I just needed to find the right words.

     "Here it is," as I turned back. I was greeted with, "Man, why are you doing this?" I put on my best sales smile, as he continued, "I mean, those were white kids, and now, you are giving me all your stuff. Are you rich or something?"

     "No."

     "A preacher?"

     "No." I got an idea. I knew violence only breeds more violence. I asked him, "Do you know what graffiti is?"

     "Yeah."

     "Do you like it?"

     "Yeah." He wanted to say more, but I cut in. I continued the thought, "The first person who draws on a house, thinks it's cool. Soon, another does it. Before you know it, all you have is a collage that is totally abstract, reflecting chaos and despair. It spreads like a cancer to every house, fence and tree. It only reminds people who live there or pass by there, of the depression of poverty."

     He fired back, "Man. you don't know what you are talking about. Graffiti is cool." I sensed his words were mechanized, automatic responses. All I could hope was that he was engaging his mouth and not his mind. Eleven year old's do not see the big picture. I tried another way, "Raghib, I'm not talking about murals. Have you ever been in a classroom where there was writing on the desks and the place was worn and dirty?"

     "Yeah."

     "Have you ever been in a newer classroom where the desks are clean and the room is bright with plenty of supplies?"

     "Yeah."

     "Which would you rather be in?"

     "The nice one."

     "Maybe my example answers the question. Graffiti is a virus just like the writing on the first desk eventually becomes nothing but a mess of decay. Today, I had a chance to clean up some dirt before it became contagious. Without making you think that I'm weird, I hope you will see the positive side to all this. Maybe some day, you'll do the same for someone else. Enough said without preaching." His face lit up like he made a million dollar sale, "I knew it. You are a preacher, right?" I realized that he was listening to my words and thinking about them as I answered, "Not quite. I'm a salesman, but I wish, well..."

     "Well? That's a deep topic."

     I laughed and held out my hand for a handshake. He slapped it with a five as I said, "That's funny." His smile went from ear-to-ear as he suggested, "Maybe we should split this fifty-fifty? You didn't take much for yourself."

     "I decided to take my family downtown to our City Beautiful, Lake Eola and watch the display the municipality puts on. I'm a little old to be playing with fireworks." He interjected, "But not too old," as he pointed at what I kept. I grinned as I replied, "You're right. Not too old, but old and wise enough to know the Irish all over Miami. Bye, and have a good and safe Fourth."

     "Hey, mister! What's your name?"

     "Anthony Salutarelli."

     "Anthony what?"

     "Call me, Mr. S."

     "Hey, Mr. S, have a good and safe Fourth of July."

     I nodded another good-bye as I got back into my car. Before I drove away, I said, "Take care." I got a good feeling circulating within me. My heart was buzzing. It felt nice to do something with love other than just Christmas, even if it sounded corny to the boy.

     The engine roared as I turned back onto 551. Raghib yelled something after me. I didn't catch the words, but his smile and waving hand added another dimension to JA's dream.