The Causey Consulting Podcast

Saturday Broadcast 9

July 30, 2022
The Causey Consulting Podcast
Saturday Broadcast 9
Show Notes Transcript

Saturday broadcast, 7/23 - 7/29.

Key topics:

✔️ ICYMI news.
✔️On June 30th, one of my job market predictions was that we would see more zombie companies propped up by hot air, debt, and VC money going under. That's already happening.
✔️More layoffs & hiring freezes.
✔️ Cannibalism, new "definitions" of a recession, get yer "to go bag" ready in case of emergency, etc. 
✔️The BoA leaked memo vindicates what I've been telling y'all for months about the balance of power in Corporate America. Would that it were not so.  😖

Links I mention in this episode:

Hello, Hello and thanks for tuning in. I am recording this portion of the Saturday broadcast on the previous Saturday, the afternoon of July 23. This morning, I was really thinking back to that video that was on CNBC about a month ago. I mentioned it in Saturday broadcast number four. The title of it is us is only days away from an absolute explosion on inflation, according to pollster Frank Luntz. In that video, Frank talks about how there are three holidays, when Americans are typically buying more groceries than normal, and they're hitting the road, they're using more gasoline than they normally would Thanksgiving, Christmas and the Fourth of July. And he makes the prediction. It's about a minute 47. And if you want to go back and watch the video, another time, he says Americans are going to come face to face with the fact that they cannot afford it, they're not going to be able to fill up the gas tank for the same amount of money as before, they're not going to be able to fill up the shopping cart for the same amount of money as they could before. At about the two minute mark the little headline under his face that's on the screen reads lence, we're 13 days from sentiment explosion on inflation. So here's the deal. This will be Saturday broadcast number nine when it drops, and I haven't seen that happen. I didn't see that happen on the Fourth of July. And I'm just being honest, because I feel like it's important for us to take a look at predictions and suss out whether they came true. Did they carry water? Did somebody have a valid point that maybe they predicted a little too early? What's going on in real time, I did not see people flipping out. I didn't see riots out in the street. You know, I talked before about the people that lived down the road that have every toy, every gadget imaginable, and they were popping off fireworks like municipalities by for the entire town to celebrate a little further down the road from them. There's some fairly dicey looking individuals and I don't even know that they would have two nickels to rub together. But they put on a firework show. And it's like the money is coming from somewhere. It's coming from somewhere. And you know, I've also mentioned I have a friend ever since the springtime, he and his family have been be bopping all over the country. They're taking flights, they're going to resorts, they're having expensive vacations, they're not going to the beach for free. They're not hanging out at the park for free or going to the local splash pad so that the kids can play in the water and cool off night. They're getting on airplanes and flying to expensive destinations. And my theory is a lot of these people have bought into the idea, no pun intended, that inflation is transitory people are doing great. Overall, the economy is in a good space, we're just going to have to weather this temporary storm of inflation. We're not in a recession, unemployment is low. There's two open jobs for every one unemployed person, we are doing great. So they're whipping out the credit cards. They're saying I'm not going to make any real lifestyle adjustments. If I want to go to the grocery store and mound up the basket. That's what I'm going to do. If I want to have a fireworks blowout, like I'm entertaining an entire city, that's when I'm going to do if I want to load up the kids and we want to go to Disneyland. That's when I'm going to do and I'm going to put it all on this credit card and hope I can pay it off later. And whenever the Lord have mercy, whenever the storm hits, whatever it is that's about to happen, whatever it is economically geopolitically that's about to happen. Whenever it really tunes up hardcore. I don't know how those people are going to make it. I really don't. It is Sunday, July 24, a bird's eye view of what I'm seeing in my local Walmart here in the Midwest. All of the ibuprofen was gone. Zippo none of it. There were three or maybe four bottles of Tylenol or acetaminophen left and that was it. A leave or naproxen sodium you can still find also things like muscle rub Icy Hot then gay Biofreeze that looked like it was very well stocked. No ibuprofen at all. In the feminine hygiene aisle. Very few boxes of tampons were left and they were only the like seven or$8 a box brand name tampons, and there were only a few of those I'm gonna say there was maybe eight to 10 boxes all total for the whole store. Depending upon where you're at, you might be able to find some good bargains in the garden center. To me it looked like they were trying to clear some of that product out maybe to begin getting in seasonal things. In my particular Walmart that I often shop at the garden center usually gets flipped over into holiday things. So for a period of time it'll be some Halloween and some Thanksgiving autumnal type stuff and then it rapidly It turns into Christmas. So who knows, you may be able to pick up some garden tools or some things that you need maybe a grill. If that's something that you need and you can afford to buy, you might be able to get some good deals on those types of things right now. Also, you might be able to get a good deal on summertime clothing, I picked up a couple of tank tops for $1 apiece. And one of the things that I want to mention here is even if you and your family don't have a need for them, if you have a few extra dollars, you might be able to pick things like that up to be able to bless somebody else, you might be able to donate it to a church to a clothing bank to a charity to a family in need that you know, when clothes are getting down 50 cents or $1 apiece, that's lower than a lot of thrift stores right now. So you might be able to pick a few things up to be a help or to be a blessing to someone else. There are still places where there's just random pallets of stuff in weird, offbeat places. a pallet of baby diapers next to the Gatorade aisle, or a pallet of paper towels next to the meat section. I mean just stuff places where it's difficult to be able to get down the aisles or get from one part of the store to another because there's just stuff randomly strewn about that that's still going on. The cheap toilet paper totally obliterated there, the empty boxes were not even there on the shelf, it was like there was just nothing there to begin with. It was weird. There was still a decent amount of dog food. But cat food was very, very sparse. And that's the dry cat food and bags as well as the wet canned cat food very if you if you have a cat right now you need to be thinking ahead in my opinion, about how to make sure they have what they need. Because the cat food shortage seems to be getting really real. The Produce Section was still hit or miss on what they had, as well as the quality of what they did have available. Some of it looked like things that you probably wouldn't really want to buy anyway. The aisle where they have the box dinners like hamburger helper and do it yourself just add meat or just add water and stir and have a complete meal. All of that stuff was still very, very sparse, very picked over. Something else I want to make note of is just ensuring that you have a good sense of situational awareness, not paranoia, not blind fear, but just a good general sense of situational awareness. You know, I talked in a previous Saturday broadcast about encountering multiple people who seemed to be intoxicated and not on alcohol. At least I didn't smell any booze on them, but they were they were mentally impaired. The lights were on but someone other than the driver was not at home. And I think a lot of it is boiling down to the inflation, the hot I mean, just brutal, unrelenting heat, people being upset, they're on edge. They're not sure what's coming next. I have heard more than a few people say it just feels like there's something in the air. And if you listen to my episode about reality, Tran surfing, one of the things that I talk about in that episode is that I felt it since January. I cannot explain it to you rationally. But somehow like January 1, a door slam shot and another one opened and it hasn't led to anything super great. I don't know how to explain it, but it really does feel like some kind of shift happened and we're in this very weird, not particularly pleasant timezone. Right now, on this particular trip, there just seemed to be a variety of odd individuals. There was a man who drove through the parking lot way too fast. He dropped a woman off who bought a soda like there's some Walmart's, there'll be a vending machine or set of vending machines outside the actual store that sells Soda Pops, this woman gets out she buys a soda pop, she drinks, maybe half of it. And then the man who's continuing to drive through the parking lot way too fast comes back picks her up, and then they leave the store. And it's like, what what was even that all about? Who does that this just seems so random to me. Then you're in the store, you will also have individuals that whether they appear to be intoxicated, they're high on something other than life or high on something other than the Lord Almighty. You may see that. I also encountered lurkers on this trip, people just getting way too close for my personal comfort. People just just lurking just you didn't really know what they were doing behind you or around you. Maybe they had malicious intent. Maybe they didn't. I don't know. I don't know. But I don't myself want to be the victim of a pickpocket or some weirdo that's going to try to come up and do something. So one thing I want to say here is in addition to having good situational awareness, I think it's important to listen to your own spidey senses, your own gut instincts. And if you're at a point, you know, you know what the conditions are like in your town or in your community in the stores you typically shop at and what they're not like. I would say just me personally not offering advice just thinking out loud for your entertainment only, I would say For me personally, if my spidey senses told me it's really not safe to be out by myself, I think I should probably go in a group. I should go with my best friend, I should go with my spouse or my partner, I should go with a parent. I should make sure that there's a safety and numbers type situation whenever we go out. I would personally honor that gut instinct and I would listen to it. Today it is Monday, July 25. A couple of days ago, not making this up. Get check it out for yourself. A couple of days ago, the New York Times tweeted, cannibalism has a time into place. Some recent books, films and shows suggest that the time is now can you stomach it? And it leads to an article on the New York titled a taste for cannibalism question mark. I remember years and years ago when I saw Soylent Green for the first time, I certainly could not have imagined that in watching a dystopian sci fi film. I would ever in my lifetime see an article or a tweet, such as that. So? Wow, just wow. I'm not really sure how you make a transition from something like that into the news. I guess there's no good way to do it. So I'll just dive in. Over on CNBC, we see headlines today such as Walmart cuts profit guidance as it sees slower growth due to inflation. Below that we see Kalon avec says mild recession is already priced in and the worst is behind us. Okay. So you know, I've been saying that it's really important for us to go back and if an analyst or some prognosticator is making predictions, did they come true? If they said something was going to happen by a certain date? Were they accurate? If they said something was going to happen in economy or with the general public? Have they been accurate so far, and so I wanted to do that here. So Marco Kalon avec is the chief Global Market Strategist for JP Morgan, according to his LinkedIn profile, he's been with JP Morgan since 2008. And I think it's worth mentioning that he was a senior managing director at Bear Stearns from 2005 to 2008. So aside from saying that a mild recession has already been priced in and the worst is behind us what other predictions have been made on Bloomberg on May 18. He says that stocks can climb out of this hole, also on Bloomberg on June 13. He says that the US will avoid a recession. On April 19 of this year on CNBC television, he said that a near term rally is likely one month ago on CNBC television he's quoted as saying I don't see a recession, even if oil surges to $150 a barrel. On Business Insider Mexico, there was an article published on May 10 of this year titled, JP Morgan's Kalon avec says the market has reached peak hawkishness and investors should snap up risky assets and the little TLDR blurb beneath we read JP Morgan's Marco Kalon avec is staying bullish even as markets plunge, saying Monday he remains pro risk. He said central banks have likely reached peak hawkishness as the Fed shiz away from a 75 basis point rate cut rate hike tried to say that three times fast 75 basis point rate hike. The bank's top strategist said investors should stick to equities and recommended buying corporate bonds and quote Oh okay. Returning now to CNBC. The numbers show the US economy is at least teetering on a recession. s&p 500 closes flat Monday as traders brace for big earnings Fed decision later this week. Weber shares tank as grill maker announces CEO departure amid disappointing sales. Zelinsky says Putin is waging a gas war against Europe. wheat prices rise after Odessa attack. Over on Yahoo Finance we find Walmart shares plunged 8% in after hours trading. Now we also find a couple of other interesting tidbits. The biggest Ponzi scheme in history, this CEO warns that the feds strategy has created a big bubble in housing. Beneath that we see shallow recession calls are totally delusional. Roubini mourns the little byline that we're able to see underneath says economist Nouriel Roubini. So this person is an economist unlike me, I am not an economist. I don't sit on the W E F. I'm not a professional financial planner or advisor. This individual is in fact an economist. Economist Nouriel Roubini said that the US is facing a deep recession. As interest rates were Arise, any economy is burdened by high debt loads. Frankly, in my opinion, my opinion only. I think that is correct. Earlier today I heard that Credit Suisse is having layoffs. I'll drop a link to the article so you can read that for yourself. On LinkedIn, we learned that tech unicorn whoop reveals layoffs and I'll read that I'm laughing at the name not the situation. Whoop, I hope I'm saying that right. I'll read the blurb for you now. Whoop. The buzzy unicorn that was valued at $3.6 billion almost a year ago will cut 15% of its workforce impacting every department in the company. The wearable tech startup is noted for its connection to big names and sports such as LeBron James Tiger Woods and Michael Phelps. According to front office sports, a cluster of former whoop employees took to LinkedIn to announce the layoffs. Ben Foster oops Chief Product Officer altered his job description to gainfully unemployed. Foster noted in his post that many growth stage companies who relied on endless streams of venture capital must immediately downshift to manage burn and extend their runway and quote, this is another unfortunately, job market prediction I made back on June 30. In that episode that has come to pass. I am still seeing plenty of people in HR talent acquisition who are losing their jobs or getting laid off or they're trying to get out ahead of a layoff, setting out a shingle to say that I'm a coach or they're doing some kind of guidance, still seeing an uptick in that which I've predicted. But now another prediction has come to pass. And I want to read a little bit of that episode for you now. Not all that glitters is gold. And so I do think that is more of the zombie companies fold these companies that are backed up by nothing but hot air debt and VC money. As they have to go bankrupt and they start to fold. I think more people out in the marketplace might finally clue in Oh, okay. So the same day that the zombie company declared bankruptcy, they still had 58 Open wrecks posted on their website and quote, just because a company might have had some huge valuation last year, they may have had celebrity endorsements, they may have had advertisements all over the TV all over the internet. That doesn't necessarily mean that everything is peaches and cream this year. I would yet again harken back to what we've seen in the housing market. People last year did absolutely insane things. And unfortunately now some of those buyers that gave in to that intense FOMO and Yolo. And all of that are paying a steep price for it now, buyer's remorse. discovering their house was a lemon getting into a place and discovering that the area or the neighborhood had high crime had problems, and now they're stuck. On June 21, I published an article on my blog titled The Bitcoin Bull. I want to read an excerpt of that for you now. Housing is starting to rollover, he said inventories have exploded. There are layoffs in multiple industries and the Fed is stuck, he said, with a position of having to hike interest rates until inflation rolls over from the same MarketWatch article. This tracks with everything I'm seeing too. As I've shared before, I decided to strategically quit my real estate expansion goals for a while because well, the market has been knocking funds. As interest rates got higher and greedy sellers gotten more and more absurd with their price points on junk houses. I thought no, I'm a pass. Where I live in the Midwest sellers are still on another planet with their prices to give but one example, there's a house that sold in March for 500k, which is a solid 200k over the true value of the place. It was listed by the current owners at the beginning of June for over 600k already. I don't know the people or the situation. Don't know if the house has a lot of problems. The area's unsafe. They overloaded their butts financially. But in looking at the photos of the place, they haven't made any improvements to justify the price hike. And they have plenty of toys around multiple trucks and Winnebago ATVs motorcycles, electronics and giant TVs and every room, et cetera. Part of me is like, well, that's how it goes the eyebrow Pachala with America. Welcome to America. George Carlin had some great commentary about how Americans accumulate too much stuff and we use our houses as a way to store all the stuff. So I'd be willing to bet the people who want to get rid of their overpriced house, overloaded themselves and want someone else to bail them out. Now, if you think there won't be an abundance of people like that in the coming months, I don't know what to tell you in quote. So here's an addendum to that story. Recently, the individuals attempting to sell this house dropped their real estate agent, I assume because that person couldn't turn water into wine for them like JC. They decided to put the house back on the market for sale by owner and they have progressively been doing little small price reductions in an attempt to just get rid of the place at this point to me it looks like they're trying to sell it for just about what they have in it, plus any type of closing costs and nobody's biting. Also on LinkedIn today, we see sales of beer smokes signal shift, I'll read the blurb for you now. an uptick in cheaper beer and cigarette sales suggests consumers are trading down as high inflation persists, according to the analyses of Nielsen data cited by the Wall Street Journal. Year over year lower price beer sales jumped 5.4% and the four weeks ending July 2 With Busch light Ice House and Milwaukee's best ice showing the strongest gains. Sales of high end imported and super premium beers are also growing suggesting that wealthier drinkers are still spending freely. Meanwhile, sales of cheaper cigarette brands Montego Montego and Maverick have accelerated this year eating into Maril burrows US market share. lower priced store brands of food staples, including coffee and oatmeal are among items gaining traction with consumers for the first time since the pandemic began. According to market researchers, Treasury Secretary Janet Yellen says she is confident the Federal Reserve will get a handle on inflation and an appearance on NBC Meet the Press. She acknowledged the US economy has slowed down but added this is not an economy that's in a recession and quote P people get ready. Okay, if they're they're not telling you yet, hey, here's something something to be worried about here. They're still saying everything's fine. People are doing great. I just want to ask this question. How bad will it have to be before somebody will actually step forward and say, Hey, we're in a poopoo storm guys. Over on the blog website, we find an article title. How do economists determine whether the economy is in a recession? This was published on July 21. And the little first paragraph introducing this says what is a recession while some maintain that two consecutive quarters of a falling real GDP constitute a recession. That is neither the official definition nor the way economists evaluate the state of the business cycle. Instead, both official determinations of recessions and economists assessment of economic activity are based on a holistic look at the data including BUMP BUMP BUMP, including the labor market, consumer and business spending, industrial production and incomes. Based on these data. It is unlikely that the decline in GDP in the first quarter of this year, even if followed by another GDP decline in the second quarter indicates a recession and quote, hmm, yeah, okay, so are you connecting some dots? People are doing great 3.6% unemployment rate to open jobs for every one unemployed person. Hot labor market labor shortage, labor shortage. Hmm. Connect the dots, la la la. We've made it now to Tuesday July 26. Over on CNBC we have headlines such as alphabet misses on earnings and revenue for second quarter. Apple's earnings will give a peek into the mindset of the high end consumer stock futures tick up ahead of key Fed decision. Microsoft missus estimates but stock up 5% On rosy guidance. Here's how to know if we're in a recession and it's not what you think. Hmm, I wonder if that's because they recently changed the definition the classical definition of what a recession is. wonder wonder. Logitech CEO says customers will return in the fall after quarterly earnings miss Walmart's slashed profit outlook since morning about state of the American consumer Shopify stock sinks 14% After company says it will lay off 10% of its workers. After the news went off this evening. There was some TV show that came on it was like one of those Talking Heads type shows were a bunch of people kind of pitch different entertainment or human interest type stories. I don't even know the name of the show. It wasn't anything that I had really paid any attention to before. I was busy in the middle of something else. When the news broadcast went off. This broadcast came on and I didn't even recognize any of the people on on it. So I don't know if I've just gotten too old to know who they are, or if they're like D list celebrities or whoever. But there was a story on this show about not trusting your own gut instinct. And they had some other talking head on there saying that humans are so bad and interpreting data. So instead of researching a topic on your own, trying to collect information and process the data, and then trusting your own gut instinct, you should not do that. Because in this talking heads, opinion, your own gut instinct is so fragile and so irrelevant and so likely to be wrong that you should just trust whatever you're told by experts, and I thought, yeah, wow, just just wow, what else can you say? It's Wednesday, July 27. Now, over on CNBC, there's a breaking news ticker, which says Dow jumps 370 points, NASDAQ jumps more than 3% as Powell says Fed could slow pace of rate hikes. Meanwhile, fed hikes. Interest rates by point some five percentage point for second consecutive time to fight inflation. Here's now another point seven five percentage point Fed rate hike will affect you. McDonald's and Chipotle say customers are trading down visiting less often as inflation hits budgets. Pending Home Sales fell 20% in June versus a year earlier as mortgage rates soared. Vox media cuts staff slows down hiring as recession fears grow. Over on Yahoo Finance we have Fed raises rates by another point seven 5% says economy has softened. The Federal Reserve raised interest rates by another point seven 5% on Wednesday afternoon as the central bank continues its effort to tamp down inflation in the US economy. Chipotle CFO defends latest price increase. We're probably in the early stages of a new bull market nervous start with these five moat stocks. Yeah, just no comment on that. Bosses are oblivious to why employees are really quitting. Here's what they need to know. And essentially if you click on that article, it it shouldn't tell you anything that you don't already know especially if you're a frequent tuner enter to this podcast if you read my blogs, the TLDR summary that I will give you of that article is treat people with dignity. Don't treat them like robots and do not treat them like indentured servants treat them like human beings. Over on the side panel for LinkedIn news we have fed approved another jumbo rate hike. Zuckerberg ramps up the pressure at Mehta more bad news for renters job offer rescinded do this Gen Z rejecting older social media. That's fine with me. That's that's that's cool. You know maybe those of us that are like Gen Xers or baby boomers can hang out on like Facebook, maybe somebody can bring back MySpace and be like that's all of us that would consider ourselves to be too too old. Instead of being too cool for school we're too old for it so we can hang out there. A slowdown in big tech earnings Pending Home Sales take a plunge Hulu changes course on political ads. So I want to click on Zuckerberg ramps up pressure at meta because he has already been saying there's probably some y'all in here that shouldn't be and when we turn up the heat if you want to like self select out the door that's fine by us. So let's explore this new article here. In the blurb we find ahead of reporting its quarterly earnings. Facebook, parent Mehta is at a crossroads. CEO Mark Zuckerberg is setting a relentless pace as Facebook morphs to better compete with tick tock anonymous sources tell the New York Times. At the same time, Zuckerberg is making a harder pivot away from bread and butter social networking to focus on the next phase of meta building the immersive world. Hmm. In the meantime, New York Times The Virgin insider report, he's also turning the screws on staff warning low performing employees that their days are numbered. Major tech companies are in the midst of an unprecedented stress test this week per Forbes as power players including meta report quarterly earnings during an unusually turbulent period across the industry. Alphabet and Microsoft results showed a slowdown, though investors appear relieved that the numbers weren't worse in quote, if we go all the way back to Monday, May 8, in 2017. There was an article published in The Guardian I will drop a link to it so that you can see it for yourself. The title of it is the meaning of life in a world without work. And it was written by Noah Harare. I'll read from that article for you now. The crucial problem isn't creating new jobs. The crucial problem is creating new jobs that humans perform better than algorithms. Consequently, by 2050, a new class People might emerge the useless class people who are not just unemployed. But unemployable. The same technology that renders humans useless might also make it feasible to feed and support the unemployable masses through some scheme of universal basic income. The real problem will then be to keep the masses occupied and content, people must engage in purposeful activities where they go crazy. So what will the useless class do all day? One answer might be computer games. Economically redundant, people might spend increasing amounts of time within a 3d virtual reality world, which would provide them with far more excitement and emotional engagement than the real world outside. This is in fact, a very old solution. And quote, I will offer you that bit of information with no additional comment. In the meantime, something I do want to comment on is something I'm noticing is where I'm at in the Midwest. No small number of people like doctors, dentists, veterinarians, etc, that had gotten to be older, flirting with retirement age or there abouts have gone ahead and retire. And some of them are leaving their practices to much younger doctors, dentists, veterinarians, etc. And I, yeah, okay. I'm going to get hate mail for this. But I'm just telling you, in my opinion, from my perspective, what I am seeing some of these older people that have retired have turned their practices over to younger and much less experienced individuals who may be great at what they do, they may be a very talented dentist, they may be a very talented and knowledgeable veterinarian. But when it comes to running a business, they suck. Point blank, I'm telling you what I'm saying. One of the lessons that I learned the hard way, when I went splat at the bottom of the Grand Canyon is that when you're a business owner, you have to not only work in the business, you have to work on the business. And if you get busy working in the business, and you're not doing any business development or marketing, you're not getting the word out about your services and nurturing relationships, then you can be in a world of hurt. And I think in some situations, these people just don't know what they don't know, they don't have the experience yet. And so they've been thrown into a position that perhaps in my opinion, they're not really ready for. And they have not learned how to nurture the business. They want to work in this business that they've inherited, or they've purchased from someone else that spent years maybe even decades building it up. And it almost seems to me that some of them are hell bound and determined to ruin the business that they've stepped into people that just don't want to work. They don't want to do after hours, they don't want to do emergency calls. And so for those of you that have animals, whether you're raising livestock, or you are taking care of companion animals, a dog or a cat, there may be some times when you have to get really creative, you may have to drive way out of your normal sphere of reference to find somebody that's willing to help you. Because what I'm seeing now, I cannot speak to every city in the country or if you live overseas, you may be in a completely different dynamic, I don't know. But what I'm seeing here in the Midwest of the United States is that as more and more of these old timers retire, and the Young Bloods come in, and they're like, No, I'm not into hustle culture, eff that. Well, I get that I'm not either. I don't believe in working 24 hours a day, seven days a week and selling your soul to accompany that's crazy. My point to you as the consumer is you're gonna have to be aware of this. So there may be times when you have to wait for a vet to get out to your farm. There may be times when you have to wait to get a dental appointment, and you're sitting there hurting and you're trying to figure out what on earth you're going to do until you can get worked in. This is not the time to bury your head in the sand. This is the time to be thinking about a game plan for yourself and your family. In my opinion. Today, it is Thursday, July 28. on CNBC we have headlines such as stocks move higher despite second straight GDP contraction, Dow jumps 370 points. GDP fell point 9% in the second quarter, the second straight decline in a strong recession signal. You know if they hadn't changed the definition of a recession? Well, golly gee whiz, we'd officially be in one right now. Isn't that something? The economy may look like it's in recession, but we still don't know for sure. Jet Blue to buy spirit for $3.8 billion. Frontier shares jump after its deal falls apart. Beyond Meat stock falls after conclusion of McDonald's MC plant test. The TLDR on that, apparently is that research proved that there was a lackluster demand for the meatless burger which was made using beyond meat patties. Who can really be surprised by that. And I'm not going to get into any kind of debate about vegan vegetarian versus meat eater, whatever. My point here is, I'm just thinking out loud from the American point of view. A lot of Americans that visit fast food joints are going to get junk food, and they want to get a greasy cheeseburger. They want to get a hot dog with all of the trimmings on top of it. They want french fries and tater tots. It seems to me that anytime, fast food companies try to make some big shift towards quote, health food. It just doesn't work out in the long run. Returning to CNBC, Deutsche Bank isn't convinced we're in a slam dunk recession once more evidence after GDP print. Walker, GDP dips sparking recession fears but don't confuse the headlines with the reality experts says. Yeah, and let me add to that. Now I'm no expert boilerplate here. I am not a financial planner or advisor. I'm not an economist. I'm not a billionaire. I don't sit on the World Economic Forum and rub shoulders with power brokers just a private individual opining for your entertainment only. I would agree with this headline to some degree GDP dip sparking recession fears but don't confuse the headlines with the reality expert says yes, indeed. So I believe we're already in a recession. And we have been, as I talked about, in the episode that I did about reality, Tran surfing, I started to feel it all the way back in January. It just felt that things were getting different. And I could see these little small microcosmic signs in the job market that hiring managers were kind of done with the great resignation. They were starting to pull back, they were starting to reassess their hiring funnels. Does this department really need an extra person right now? And can we kind of make it without one? So I think it is important to look at what you're seeing in your own reality. Does it seem to you that inflation is transitory? Does it seem to you that inflation is only 9.1%? Does it seem to you that well, I mean, by the classical definition, oh, we wouldn't be in a recession. But things are just so great that we're not, does it really seem to you that unemployment is at 3.6%? Does it seem to you that all of these magnificent jobs posted are actually paying a living wage with good benefits? So I would definitely concur with the idea that you need to look at your own reality as opposed to getting confused by the headlines. Upon that point, we are in agreement. I'll continue to read. Air conditioning is a climate disaster. And Bill Gates is investing in this startup to fix it. Wow. All right. So maybe we're gonna wind up like our grantees and great grantees during the Depression having to hang bed linens and towels from the doorways to that have been soaked in cold water just so we can get a breeze going through the house. Over on Yahoo Finance, it's a similar scene and said often is Apple set to provide hints on the health of consumers. Apple will release its q3 earnings on Thursday, providing investors and analysts with deeper insight into consumer spending amid the highest inflation in 40 years. I don't know what time that's going to drop because it's already Thursday, and I haven't seen it yet. Stocks resume rally despite GDP drop in q2, US economy contracts for second straight quarter. So the stock market is supposedly in a rally and the labor market is supposedly still red hot. Even though there's been a drop in the GDP for two consecutive quarters. That just seems weird to me. Consumers are prioritizing essential spending says the National Retail Federation. I feel like that's another moment of like, well, yeah, no duh, no duh. I've heard from multiple people, that when they're in like a supercenter of some kind or department store, people are focused on a essential must haves, whether it's trying to get the kids prepared for back to school, or it's food and grocery items. People are focused on the must haves and they're kind of departing from the things that are non essential. Now again, I want to be really clear in saying this, does that apply to every single person on planet earth? No, of course it doesn't. You know, I've lampooned the people down the street before that have every toy imaginable there all the time loud all the time having a ruckus all the time having parties having people over entertaining, they popped off gigantic when fireworks on the Fourth of July like people buy for entire towns. I have no doubt that people of that caliber if they still have room on their credit cards or if they haven't blown through whatever inheritance Great Aunt Harriet left for them. By Christmas time, they're going to be buying tchotchkes and Bs at the stores for Christmas. I'm sure they're still going in department stores and Super Centers buying junk that they don't actually neat. So I steer clear of this, like extreme hyperbolic language of all, always and never everyone and no one it I don't believe it's true that every single person has decided to rein in personal spending and their focus just on the essential items. I do agree with the sentiment that probably a majority of people are at least wised up enough to say, You know what, due to inflation, whether we're in a recession or not, is sort of beside the point. Because of inflation, we're going to have to cut back, continuing to read why tech could struggle to rebound anytime soon. If you don't need it, don't buy it right now. Here's where the Feds new rate hike will hit you the hardest and what you can do about it? Well, you know what glory be at least they're publishing an article like that, in my opinion, that's better than clickbait. And it's better than this hot air of everybody is doing great. People don't have any credit card debt, they're flush with cash they're living in man has basement off some stimulus from 2020 people are dead, right? This is, I think, another great example of looking at your own personal reality and what you're seeing in real time for yourself. Does it seem like most people in your purview are just doing great, nobody is using their credit cards and the band is going to play forever? Or have you noticed most people within your personal social circle or group of family and friends starting to cut back? Over on LinkedIn earlier today, they published an article titled US economy slips into recession, and they have recession in quotes as if to say, Oh, well, you know, kind of sorta Not really. I'll be talking about this exact topic over on medium on Sunday. That article should get published sometime on Sunday morning. In the meantime, at the risk of being the broken record, here we go. This is one yet another reason why I have consistently said by the time you are officially told, Hey guys, we're in a recession and the Poopoo economically has started to hit the fan. I believe, in my opinion, my opinion only it's too late. At that point, you have waited too late. I'll read the blurb for you now. The economy shrank for a second straight quarter, placing the US in what is commonly but on officially considered a recession. Gross Domestic Product fell by an annual rate. Point 9%. In the three months ended in June, the Commerce Department said following a point 4% contraction during the first quarter. While the labor market is the strongest it has been in about 70 years with an unemployment rate of 3.6%. Other areas of the economy are slowing in the face of high inflation and rising interest rates. I'm gonna break in long enough to say cheese and rice, are they are they going to bang that drum forever? What strongest labor market in 70 years unemployment rate 3.6%. Yet again, it reminds me It was awful videos that someone has to record when they're taken hostage, you know, they're reading from a script and they're holding today's newspaper, and they're like, the labor market is the strongest. It's been in about 70 years. Unemployment rate is 3.6%. To open legitimate jobs for every word unemployed person. Really, really, really, I you know, keep your head on a swivel, everybody. Stay alert, stay aware, pay attention to your own reality. Does this match? Does this make sense for what you personally are seeing in your own reality? Or does it not? At last, we've made it to Friday, July 29. I had a little bit of time today to make a quick run to the local Dollar General get a few odds and ends and I noticed that a great many items in the store had recently had stickers put over the last price change. I kind of heard through the rumor mill that that was probably going to happen. And so if you're a frequent shopper, you may see the same thing in your area. Now glory B we have finally in this part of the Midwest had some rain and it has knocked the temperature down significantly. It is humid and muggy. But we're not dealing with Death Valley kind of dry desert insane heat where like the heat index is 120 so it did not feel as oppressive in there today. You could tell that the air conditioning unit was actually operable. It also appeared to me that a pretty decent number of grocery items and necessities toilet paper, paper towels, trash bags, things of that nature had been restocked. It also looked like the medication on the dollar aisle had been restocked. So if you are in need of picking up like a small bottle of ibuprofen or acetaminophen and you're not finding it somewhere else, that's a place that you might check. With that being said there's still some clear price increases happening and some clear shrink Felician so what you get for $1 might be I don't No six off brand ibuprofen pills, but in an emergency that's better than zero. Before I get into the main headlines of the day, which at this point, honestly, they're just like same poop different day, just just the same old recycled bull. There was something that popped up on my phone. And I was like, wow, I mean, this is it's a sad vindication. I wish that I were not being vindicated on this point. But here we are. I have said repeatedly on this podcast, on my public blog, and over on Patreon, that corporate America is going to have its day pay cuts are coming. The pendulum is shifting, the balance of power is going back to corporate America. And if you think that they are not poised and primed and ready to take full advantage of that, in my opinion, you're nuts. Because Absolutely, AB so lately, well, now we're here on the We read, Bank of America memo revealed, we hope conditions for American workers will get worse, the financial behemoth privately fears that regular people have too much leverage. Bump, bump, bump bump, warned you this was coming. So if you're a frequent tuner or a frequent reader of my blog, you already knew you all ready new. Naturally, I will drop a link to this so that you can check it out for yourself and I would encourage you to do so. I will read for you now. A Bank of America executive stated we hope working Americans will lose leverage in the labor market in a recent private memo obtained by the intercept, making predictions for clients about the US economy over the next several years. The memo also noted that changes in the percentage of Americans seeking jobs should help push up the unemployment rate. Warn y'all about that, too. I'll continue to read the memo a mid year review from June 17 was written by Ethan Harris, the head of global economics research for the corporations investment banking arm Bank of America securities before I continue to read I will also break in warn y'all about that too. They don't answer to us. Corporate America doesn't answer to us. It is one big club and you and I are not in it. Okay? They answer to the shareholders, the board of directors the investors don't answer to us. It's worth noting that this individual is the head of global economics research for the corporation's investment banking arm Heller. I'll continue to read its specific aspiration by the end of next year. We hope the ratio of job openings to unemployed is down to the more normal highs of the last business cycle. The memo comes amid a push by the Federal Reserve to cool down the economy informed by much of the same rationale that high wages are driving inflation. Oh my god, yeah, high wages that it's the high wages, y'all y'all workers, you little worker bees, you Surf's Up yawns you your high wages have caused this inflation naughty, naughty, naughty, to skim down and read a little bit more. What the memo calls the ratio of job openings to unemployed is generally calculated the other way around, ie the ratio of unemployed people to job openings. The more widely used ratio offers one measurement of the balance of power between workers and employers. The lower this number, the more options unemployed people have when searching for work and the greater opportunities employed people have to switch to jobs with better pay and conditions. According to the Bureau of Labor Statistics, this ratio stood at point five as of May, meaning that there were then to open jobs for unemployed person in quote cod, are we ever going to stop hearing that we at some point, we will at some point we will. But this is yet again, like rolling into the apocalypse with a battle of semantics. We're going to talk about to open jobs for every one unemployed person. We're going to change the definition of a recession so that now we're not technically in one wink, wink, wink, wink. Now we're going to change the ratio that we use about unemployed people versus open jobs. I mean, is this giving you a headache at all? I mean, if it's not then where are you? How continue to read in 2009 at the worst moments of the economic calamity that followed the collapse of the housing bubble during the end of the GWP administration, good old Obeah. The ratio climbed as high as 6.5. So there were more than six unemployed workers for each open job. It then slowly declined over the next decade, reaching point eight in February 2020. Before COVID 19 lockdowns began in quote, yeah, here's the deal. Yet again. Let's let's play semantics. Let's play games. Let's talk about official reports. I was there I was in the workforce. I remember it. Clearly. I would be willing to bet that this ratio of 6.5 meaning there were more than six unemployed workers for each open job during the height of the Great Recession, I would say it had to be more than that. It had to be more than that, you know, when you see people coming into the place of business over and over again, begging to fill out an application begging to drop off their resume, and it's not just six people, maybe like 6.5 people on average per month, it's a hell of a lot more than that, then you know, it's like my my senses my ability to register, what I see and hear is telling me that this statistic sounds like a load of bull. So here we are, here we are Bank of America memo revealed, we hope conditions for American workers will get worse. If you're not awake yet. I don't know what you're waiting on. I really don't, I'm going to assume that if you're here, you've either been with me this whole time and you get it, or someone in your life cared enough about you, and your health and your well being and your welfare to share this episode with you, or share this podcast in general with you and say, hey, look, you need to be getting your stuff together, you need to be getting your mind right for whatever economic poop storm is fixing to hit. You know, as I've said many times, this is not advice. Everybody listening to this broadcast is in a different personal situation. And probably in different parts of the globe, people all over the world that tune in, there's no way for me to know your individual financial profile, how you're doing at work, are you in an industry that's still relevant or is about to be phased out, I have no idea. All that I can really do is encourage you to do your own research, and to make those decisions for yourself. And I also want to say like, I see you out there, I really do. Like right now I'm exhausted, I have worked and worked and worked. And on top of that, you know, I also have a farm and ranch responsibilities to do and working out in the garden and all that my back is killing me. My shoulder went out again. But I have learned you know, don't do this. This is not medical advice. I'm not a doctor or a physical therapist do not do what I am telling you that I have done. I have learned through the process of some physical therapy exercises and getting some you know, I have like a massage one that that I'm able to use to just finesse the right spot, I have figured out the best way to kind of pop that shoulder back into place. Whenever it gets out. Don't do that, you know, go go and seek medical help. But I'm tired, man, I'm exhausted. I am exhausted. My body hurts. My mind is tired. My spirit is tired. I need to rest. So if you're in that same space, you're like, Man, I'm hustling. I'm doing what I got to do to stack some cash. I'm doing what I got to do to try to get my preps ready. I want to survive whatever is coming. Whether it's you know, a can of soup that's$2 Today is getting ready to be$8 A year from now we don't know. Here's something else. On July 26. Around noon, the New York City Department of Emergency Management sent out a tweet. Naturally I'll drop a link to it, you can go read it along with the corresponding article for yourself. And it reads a go bag has everything you need in case you need to leave home in a hurry. Every household member should have one including kids, what will you pack non perishable snacks, bottled water copies of important documents for more ideas visit and then there's a link to the new website. So essentially, it's like, isn't that what the preppers have always called a bug out bag? I mean, y'all y'all up in here telling people is time to have your bug out bag in case you need to bail out in a hurry? What the hell? I mean, one of the one of the people responded to the tweet saying if we're getting nuked, can you let us know so I can call off work? I mean, so there's no telling bottom line. There's no telling what could happen over the next few months what life could look like by summer of 2023? I don't know and don't claim to know. The main thing I want to say here is I see you if you're hustling. If you're working if you're doing what you need to do, you're roughing out your job loss survival plan where you're thinking about how can I survive 1970s era stagflation? What am I going to do in a really tight recession? What would I do if we have a repeat of like 2008 to 2010 Another great recession where the housing bubble pops and there's foreclosures everywhere people are on TV crying about how they can't afford to feed their kids or having to go to a food bank for the first time. What if What if we get pulled in world war three? What if we all need to have a bug out bag full of non perishable food and water because the the nuclear bombs about to go off? Who knows? Who knows? Bottom line if you're tired, I get it. I get it. I would recommend that you take sanity breaks and find some find that find a sense of balance. Don't work yourself into an early grave. But if you're out there and you're like I get it, I see it. I understand. I feel you 100% Meanwhile, over on Yahoo Finance today we have stocks surge into the weekend. s&p 500 gains 9% in July this month since November. 2020 The NASDAQ's 13% gain marked the indexes biggest monthly rally since July 2020. As risk return to markets in July amid increasing optimism that inflation risks may have peaked. Are y'all feeling some increased optimism? Do you feel like that inflation risks have peaked? Wow. monkeypox treatment maker ramps up production CEO says one chart shows why a recession call isn't coming anytime soon. buying lottery tickets for employees should be a glimmer of hope. Mortgage rates will continue to rise says economist Hershey says won't be able to meet Halloween demand. Meanwhile, if you scroll down from the top headlines, you will see us inflation surges again and stays at 40 year high key price gauge shows. So you know what do you make of all this? That's for you and your family to decide. You know, like I said a minute ago, if you're out there, you're doing what you have to do. You're picking up extra shifts at work or you've got a side hustle. You've picked up a second job, you're trying to do whatever you can to be in the best shape possible to weather whatever type of storm is a Bruin. I salute you, I see you and I salute you. You are not alone. God bless you. May everything go well in your plans. You know, May May you be rewarded for not being a grasshopper that saying all summer. I don't get political. None of that. I am agnostic on this on this broadcast as well. I should be but if you're out there working your tail off. I get it and I understand. In the meantime, everybody stay safe. stay sane, and I'll see you in the next episode.