21 Sep ⚠️ Emergency Message: It’s Happening! ⚠️
Another prediction vindicated. Sadly.
I have been warning you for months on my blog and on this podcast (as well as anywhere else that will listen) that, IMO, the labor market is being used as a straw man. Looky over here at this hawt job market! Why, we couldn’t possibly be in a recession, right? Right? RIGHT?!
Now here we are. Yesterday, CNBC published the video, “Will This Recession See Massive Layoffs?” which you can find here: https://www.youtube.com/watch?v=qUJsts5qvoc
This is why I say repeatedly: I believe you are playing a dangerous game if you are waiting to be “officially” told that the economy is in trouble. This video is such a depressing yet elegant example of why I have said that.
Transcription by Otter.ai. Please forgive any typos!
Hello, Hello, and thanks for tuning in. I wanted to hop on and take a few quick minutes to record an emergency message. I feel it is that important. Yesterday, I watched a video on CNBC and I thought, here we go, this is it. This is the initial wave of, Okay, we’re gonna let you know a little bit so that we can’t say we didn’t really warn you. For me, it’s like being an athlete. Okay, you trained for this. You told everybody this was coming. Here it is. This is the first wave of it. It’s game time. It’s really time to put your training and your skills and your preparations to good use because we’re no longer in hypotheticals and theoretical anymore in my opinion. Of course, I will drop a link to this video so that you can watch it for yourself. It’s less than 10 minutes long, so I would highly encourage you to check it out. Please don’t take my word for it. Go watch the video for yourself and draw your own conclusions. The video is titled will this recession seeing massive layoffs. The blurb fortunately, is pretty detailed. And so I want to read from that blurb for you now. From red hot inflation to a strong jobs market. And all the negative gross domestic product in between economists are divided on the health of the US economy. A top concern for Americans are there layoffs on the horizon, economists break down the data and economic indicator complexities brought upon by the COVID pandemic and the war in Europe. More corporate leaders are anticipating a recession according to a survey. Big companies are already announcing layoffs including Best Buy Ford Motor, HBO, Max peloton, Shopify Walmart and Wayfair. Meanwhile, a survey from Price Waterhouse Cooper shows 50% of firms expect to reduce their labor forces in the next six to 12 months. This comes at a time when the labor market could hardly up here stronger. In July 2022. There were 11 point 2 million job openings revealing a shortage of workers for available positions. I think it’s very important to look at the number of job openings Julia Pollack, Chief Economist at ziprecruiter told CNBC. The question is how steeply they will fall, how sharply they will fall. If they go back to 7 million, the level before the pandemic in quote. Now I’m going to continue to read from the blurb I just want to button for a second and make an important point. So in her mind, the question is not well, are we going to have a decline in these job openings? It’s like in her statement, it’s a fait accompli. So the question is not will the job openings start to fall down it’s how steeply and how sharply. In other words, I’m not going to sit here and totally blow smoke up your rear end and say that nothing is going to happen. And it’s just a matter of how bad is the bad thing going to be? Isn’t that quite a change of the tune? Now we’ll continue to read, not to mention the labor market is facing off against the great resignation. In July 6.4 million people got new jobs, while another 4.2 million quit jobs. The Federal Reserve is raising interest rates at this point in an effort to slow down the job market. And that’s going to mean more layoffs. Federal Reserve Chairman Jerome Powell said it will be a challenge to return to an environment of stable prices without sacrificing the economic gains of the past two years. All button again, what economic gains? This doesn’t even really make any sense. Because on the one hand, you have politicians looking at you, Mitch McConnell, telling everybody that people are flush with cash, that they are still somehow living in grandma’s basement off that 2020 stimulus money, and they just don’t want to work there. They just have all of this money as if it just fell from the sky, I guess. And so they don’t have to work. Who is it? That has made these economic gains of the past two years that Jerome Powell is worried about sacrificing? I’m just saying like, how is it that people are supposedly flush with cash and they’re living in grandma’s basement off STEMI checks, they don’t want to work because they’re just so wealthy. And then Jerome Powell is like, well, we don’t want to sacrifice these economic gains. But yet there’s all these open jobs. Nobody wants to work, but are they jobs that actually pay? I don’t know, a living freaking wage. Something just doesn’t pass the sniff test for me here. Where are these economic gains coming from when the economy be in a more robust position if there were all these economic gains? If we really were in a situation of like a rising tide lifts all boats and everybody across The board was doing better. We didn’t have inflation. We didn’t have people making six figure income saying I can’t even buy the $25 backpack for my child, people having to do buy now pay later for groceries. You know that very dystopian quote about I don’t want to be in debt for a carrot. Who it who is it that’s made all these economic gains? It’s you talking about the Mitch McConnell idea that the folks living in Granny’s basement off STEMI money from two years ago, those people are the economic gainers. Something just doesn’t make sense here. And all you have to do is barely scratched the surface of it. I guess it’s one of the things I find so maddening is it’s like, Do you really think that the average human being is that stupid? I’m just going to leave a long pause there for you to make up your own mind. I don’t know. I find it insulting, I find it a deep insult to my intelligence because I’ve a brain in my head. And I know better. I’ll continue to read. Federal Reserve Chairman Jerome Powell said it will be a challenge to return to an environment of stable prices without sacrificing the economic gains of the past two years during a question and answer session at the Cato Institute, a Washington DC based think tank earlier this month. And then they invite you to watch the video above. Okay, so things have changed, with enough fluidity that I think looking back to the numbers earlier this summer and saying well, hey, all of these jobs were supposedly open back then. So what? First of all, I don’t believe that there ever were the supposedly like, livable wage to open jobs for everyone unemployed person 3.5% unemployment rate. I can only speak for myself. And in my opinion, I don’t think that those numbers were ever true. Even earlier in the summer, when they were putting them out. I would really draw a parallel between the housing market and the job market. Last year, it was not, I was in it. Fortunately, I decided I guess to let Cooler heads prevail and get out of that dynamic. And just like Orlando miner says, go sit on the sidelines and wait for better conditions to come along. I’m glad in hindsight that I didn’t get into FOMO and buy something that I didn’t really like you just because the interest rate was low. It doesn’t make any sense to buy a place that’s one or two or maybe even 300k overpriced, just because you can get a 2.5% interest rate. At the end of the day, you’re still left with a poopoo house that needs a lot of repair work. And it’s overpriced, you’re gonna be upside down on that joint in no time. That’s the thing. You know, it’s with age comes wisdom. And when you have lived through one of these recessions and housing market bubbles before, it’s a lot more difficult for some snake oil salesmen or con artists to come along and tell you that your own experiences are not valid. It’s like yeah, I’m I pretty much know they are valid because I lived it before I saw what happened the last time that I was invited to the showing of this movie, I remember how it ended. So I’m glad I got out of that. FOMO but the same type of dynamic was happening in the job market. Yes, there was a great resignation. Of course there was. I’ve argued before in recent times that I think the great resignation is over I think it had its time and a lot of people are scaling back and saying I don’t think I want to Job hop so much right now. I think I want to plug in in a place that feels stable. Where I can weather the storm come what may I don’t know. But I want to just hunker down and wait. I don’t want to be last one hired first one fired. I don’t want be shoved out the door in the midst of a recession. More people are doing that. That intense. I’ll just job hop all over the market and play it like it’s a chess game. I personally am not seeing that. I’m seeing a lot of white collar so called knowledge workers saying No thanks. I will wait. If I make a job change. It better really be something significant. I better be getting a significant title bump, more responsibilities, higher profile role in the company, a lot more money stock options, a partnership etc. They’re really playing hardball right now to get what they want. And that’s if you can even get someone to seriously consider it. So where does this leave us? Well, for starters, I think using any kind of out of date economic data is a waste of time. The markets are fluctuating we’re going into whatever this thing is great recession. 2.0 1982 recession. 2.0 1970s era stagflation, whatever the case may be. I feel like looking at out of Dayton. numbers is probably going to be a waste of time. I also think in my opinion, it’s a complete waste of time to look at numbers if they were inflated, manipulated, and complete bogus hot air BS in the first place. I could sit here and pull a figure completely out of thin air and say, Oh, look, I think that unemployment is actually 30%. But if I don’t have any evidence, there’s no data for me to back it up. I’m just out here saying it. What’s the point? It’s just bolt. So for me, no, I don’t I don’t personally believe that, that we still have any 3.5 or 3.7% unemployment rate. I don’t think we had those numbers back in July either. Nor do I think that all of these people are still hippity hopping across the job market that may still be happening in retail and hospitality. I will grant you that. There may be companies where a store cashier starts on Monday, and by Wednesday, they’ve already said To hell with it. I don’t want to be here anymore. Speaking of the white collar, so labeled knowledge workers, no, I’m not seeing that happening anymore. Oh, no, no, no, especially not like it was last summer. In the same way that buyers were at such a huge disadvantage or dis advantage if I can talk properly last summer, and sellers were on their high horse like they really thought their poopoo didn’t stink. Well, I mean, look, it was that way in the job market to people could hippity hop all across the market and demand exactly what they wanted. It’s not quite the same climate now. It’s really not. Things are changing. I cannot give you advice. I cannot tell you what to do. All I can do is really say that in my opinion, naivete is coming at too high a price. burying your head in the sand is coming at too high of a price. And I really feel like this video is being put forward to say, look, I mean, we did kind of give you a warning, right? I mean, we did publish this video on YouTube on September 20. To at least ask the question and float the idea past you have will this recession see massive layoffs, wink wink, nudge nudge. I mean, we did kind of trying to tell you. As I’ve said before, I will sound a broken record. I’m happy to do it. In my opinion, if you wait to be officially told we are in a recession, we now have unemployment that’s more like 10% and not like 3.5% Oopsy. Daisy, sorry. That’s because that’s probably what you’re gonna get. You’re they’re gonna get Oopsy daisy, we’re sorry. Or the numbers just jumped up quickly. I mean, yeah, we did legit have 3.7% unemployment. But like, then basically, like, overnight, it just, like, jumped up to 11%. And so who could see that coming? That’s how they’re gonna spin it. In my opinion. It’s either going to be Oopsy daisy, we were wrong. We’re sorry. And there’s no consequences. There never are. Or, oh, it just escalated so fast. I mean, like, all the numbers we gave you before were totally legit. You know, fingers crossed behind their back. They were totally legit. But now, I mean, it’s just a different world. If you sit around and listen to that, and you don’t make any preparations, you don’t have a job loss survival plan. You haven’t thought about what you would do to handle another great recession. I’m not sure you’re gonna make it. And feel free to say Debbie Downer. gloom and doom are. That’s, that’s fine. That’s totally fine. I sort of think that people have that persuasion. By now if they haven’t left this podcast. I don’t really know what else to say. If you’re in the mood to hear hashtag good vibes only Hashtag blessed. I don’t have to make any preparations because the universe will just give me everything I want. Okay? You know, Namaste, Go in peace. I hope that works out for you. But for the rest of us, I think that are a bit more practical. So yes, we try to endeavor to have a positive mindset. But we also endeavor to make sure we have food, you know, money in the bank and food in the larder so to speak. We’re trying to do the best that we can to get prepared, prepared, not scared. Cannot tell you what to do. In my opinion, please, please do not be naive. Please don’t bury your head in the sand. Please don’t assume that we could just never have another great recession that the housing bubble couldn’t pop, that you’re in an industry that somehow impervious to layoffs. Please do not think that. It would not be a wise decision in my opinion. Stay safe, stay sane. Take 10 minutes to watch this video on CNBC. I think it will turn out to be quite prescient. See you in the next episode.