10 Nov Dire Hedge Fund Warnings & Blaming the Peons for the Recession
Last week, a couple of important yet relatively unnoticed articles popped up on MarketWatch: “Hedge-fund giant Elliott warns looming hyperinflation could lead to ‘global societal collapse'” and “A U.S. labor shortage is planting the seeds for lots of layoffs. Here’s how.” Even though the topics may seem a little different, they are not unrelated, IMO.
✔️ I believe it’s important to pay attention to what the fat cats and hedge fund managers say PRIVATELY. Watch what they do and watch what they say to the investors, board of directors, etc. When they are telling investors that we may be in for the worst conditions since WWII, I think that’s worth a listen.
✔️ The state and/or The Fed won’t blame themselves. The memo from Elliott even admits that. Oh no. They blame working class people instead. Quelle surprise. 😒
✔️ If someone is still goofing around with their head in the clouds, I truly don’t know what it’s gonna take.
Links I discuss in this episode:
Need more? Email me: https://causeyconsultingllc.com/contact-causey/
Transcription by Otter.ai. Please forgive any typos!
Welcome to the Causey Consulting Podcast. You can find us online anytime at CauseyConsultingLLC.com. And now, here’s your host Sara Causey. Hello Hello, and thanks for tuning in. In today’s episode I want to talk about a couple of articles that appeared last week in Market Watch. One is titled hedge fund giant Elliott warns looming hyperinflation could lead to global societal collapse. The byline reads Elliott contends markets have not fallen far enough. And the world is hurtling toward the worst financial crisis since World War Two. I get it. I know some of you will roll your eyes and think well, that sounds like Doom scrolling or fear porn or doomsday cult type stuff. Sounds like an exaggeration probably not going to happen. But bear with me here. Because when we read the very first line of the article, we see investors should not assume they have seen everything. And in my opinion, I cannot give you advice. I cannot tell you what to do. But in my opinion, you would do well to have the same mindset. Do not assume that you have seen everything. That’s executives at leading hedge fund firm Elliott Management Corp warning that the world is heading toward the worst financial crisis since World War Two, in a letter sent to investors. Now, mind when I’ve said before, I don’t think it’s all that relevant to watch what they say to the unwashed masses to you and me and the other peons and the plebs out in the public that they want to keep from panicking. What they say to investors, the Board of Directors, the shareholders, the people to whom they actually do answer, it’s a lot more relevant, in my opinion to watch what they do and watch what they say behind closed doors to those people. In a letter sent to investors and reportedly seen by the Financial Times, the Florida headquartered firm, told clients that it believes the global economy is in an extremely challenging situation that could lead to hyperinflation. Elliott did not respond to market watch his request for comment. The firm led by billionaire Paul Singer, and Jonathan Pollack, told its clients that investors should not assume they have seen everything, because they have been through the peaks and troughs of the 1987, crash the.com boom and bust, the 2008 global financial crisis, and previous bear and bull markets, and makes me feel old because I’ve been alive for all of the events that they call out there. But it reminds me of a video I saw the other night on Instagram. And this guy was talking about only being eight during the great recession. And it’s obviously makes you feel old. But it’s a reminder that people born in the year 2000 or 22. At this point, they are full grown adults, but yet they really don’t have a good frame of reference for what the great recession was like. It’s not their fault. No one can control what year they were born and what events they have and haven’t lived through in that regard. But I think education is so important. Get ahead of things get ahead of the curve, don’t try to be behind the eight ball and something like this. It added that the extraordinary period of cheap money is coming to an end and is made possible a set of outcomes that would be at or beyond the boundaries of the entire post World War Two period. The letter reportedly said the world is on the path to hyperinflation which could lead to global societal collapse and civil or international strife. I think we would do well to pay attention to that. We need to be so careful of western world exceptionalism or American exceptionalism, as well as normalcy bias, because those things tell us Oh, well, now that may happen somewhere else. It might happen on some other continent in some other land someplace much less developed than we are but it would just love are. Sure. Have you ever seen Black Friday? Have you ever seen grown ass adults fighting over tickle me it almost and flat screen TVs? Do you really think that we couldn’t descend into a Lord of the Flies scenario? If we were running out of basic necessities? This is what they are telling people behind the scenes and I think ignoring this information would be a bad idea. Elliot reportedly argued that markets have not fallen enough yet. And then an equity markets decline of more than 50% would be normal, adding that it couldn’t predict when that would happen. The s&p 500 has dropped Up 19% from its peak at the beginning of the year, Elliot executives warned clients that the idea that we will not panic because we have seen this before does not comport with the current facts. Let me read that for you again, the idea that we will not panic, because we have seen this before, does not comport with the current facts. So what that tells me is they’re warning the investors as if to say, don’t assume you’ve seen this before, because you haven’t. This truly could be a black swan event, it truly could be a once in a generation, maybe more than one generation type of event. Now, not saying that, that’s for sure what’s going to happen. We’re not reading this, like it’s a Nostradamus quatrain. I’m just saying it’s important, in my opinion, to look at what these hedge fund managers and the Wall Street fat cats are telling the investors and the Board of Directors behind the scenes, and they’re saying you can’t get into the mindset of I’m not going to panic because I’ve been here and done this before, because you haven’t. They blamed central bank policymakers for the current global economic situation, saying they had been dishonest about the reasons for high inflation. They said lawmakers had shirked responsibility by blaming it on supply chain disruption caused by the pandemic instead of citing the loose monetary policy imposed two years ago, during the COVID 19 peak. The Financial Times reported that the hedge fund has posted a 6.4% return so far this year, and has only lost money during two years. And it’s 45 year history. So what the last little bit is telling us there’s really just ceding credibility, it’s saying, hey, these guys have made money historically, the guy just wanted to know what the hell they’re talking about. As for the other paragraph, I mean, yeah, they’re not gonna blame it on themselves. They’re not going to say, hey, look, we printed up fiat currency that’s not backed by anything like it was free candy on Halloween. There was not going to be any consequences for it. And we just doled it out willy nilly. It’s not our fault. Oh, no, we’ll blame supply chain and all of that. Oh, and by the way, we’ll also blame you. Which leads me to the next article. In another article on market watch from around the same time we find a US labor shortage is planting the seeds for lots of layoffs. Here’s how the byline reads the Fed aims to loosen the tightest labor market in decades by raising unemployment. In the first paragraph, we find why are there so few workers for so many open jobs? It’s one of the biggest mysteries about the US economy, and helps explain why a big labor shortage is adding to high inflation. A mystery isn’t. The share of people in the labor force fell again in October and remains more than a percentage point below its pre pandemic peak. That might not sound like much but it is the smaller percentage of people who are part of the labor force suggests that some one to 2 million people who normally would be working are not. Since there’s not enough workers to go around businesses have to pay more to retain or attract workers. Wages are rising at the fastest pace since the early 1980s. So as inflation and adding to the Federal Reserve’s worry about inflation. We’re getting really nothing in labor supply now. Fed Chairman Jerome Powell said on Wednesday after the central bank raised the key interest rate again, the numbers tell the story. The so called labor force participation rate dipped to 62.2% in October, a few ticks below the pandemic high and it’s still well below the pre crisis level of 63.4%. Just what does this mean? Only 62.2 of every 100 able bodied Americans 16 or older are working or looking for work. By now the Fed and most private sector economists. Yeah, probably the same economist who said we wouldn’t see mass layoffs in q4, right. Private sector economists had expected more people to enter or reenter the labor force. Had they done so companies would find it easier to hire, and they wouldn’t have to raise their pay quite as much. Where are all the missing workers. The shortfall is mostly among the young and the old. Two notable exceptions are 20 to 24. And the 65 plus year olds wrote money market economist Thomas Simon’s of Jefferies and a note to clients. Explanations abound. For one thing several million Americans who were near or at retirement age have well retired from the labor force. The Fed and other studies show nor do they appear to have any plans to come back either because they are too worried about the Coronavirus or they have enough retirement savings to get by. Yeah, there’s that same narrative that people have all this money in savings, they’re doing great. They’re going into this downturn without a care in the world. The other group whose presence in the labor force is still well below pre pandemic levels are young people ages 20 to 24, who normally would be just starting out in their careers. So I guess this also goes back to the explanation that the young people are in grandma’s basement, they’ve got their stimmy money or they’re just mooching off grandma and Paul ball and hanging out in their basement and Okay. Economists are at a loss to explain why this is the case. Whatever the case, the overall rate of participation has stalled out after steadily recovering from a 49 year low in 2020. During the original Coronavirus outbreak, if those people don’t come back, economists say the labor shortage is likely to persist for months, if not years to come. Oh, okay. So, to me, this is one of two things it’s either a threat, hey, look, if we don’t get this under control, now, if we don’t nip it in the bud, it’s going to go on for years. The other possibility is they’re preparing you that this economic crisis is going to go on for years and they’re gonna blame it on you. They’re gonna say it was due to the labor shortage, it was due to the great resignation. Y’all just hippity hopped across that job market one too many times. Like Icarus, you flew too close to the sun and your wings melted all shame on up on, get back on that land, and till it for your feudal lord. While businesses would like to fill millions of open jobs, would they? I mean, seriously, would they look at how many stories we’ve heard of people applying and applying and applying and either getting rejected within minutes, or never even called at all? Some of the I have told you for months, some of these. Now hiring signs went up in windows when they took out those PPP loans, and they never came down. But yet they’ve never actually hired anybody kill Sopris. Okay, connect the dots. The working age population is growing just 50,000 to 100,000 a month economists estimate until participation fully recovers. Shortages of qualified workers will remain a problem said chief economist Joshua Shapiro of MFR Inc. Don’t say that as MFer Inc. Sorry. The joke was right, there was a right there, I had to go for it. That’s not good news for the Fed or the broader economy. The bank wants to slow. Once the bank wants hiring too slow and unemployment to rise to ease the upward pressure on wages. The main way the Fed does that is by jacking up interest rates, higher rates, prompt consumers to cut spending, depress demand for goods and services and spur businesses to lay off workers who are no longer needed. The shortage of labor it could turn out might be the spark that results in an eventual surplus of labor companies could end up laying off workers if the economy sinks into another recession. Oh, if it sinks Well, I think we’re already there. We are in a recession. And I quite frankly, agree with the commentators who think that by the time we’re told that, oh, we’re in the recession, now it’s happening. It could actually be an economic depression. I think it could get that bad. And I think that’s another one of the things that that Elliot hedge fund is trying to telegraph to its investors, by the time that the general public is aware that the economy is in a real hot dumpster fire of a mess. It’s going to be quite bad indeed. And there could be civil unrest over it. That’s what they’re saying behind the scenes. But in this article, we clearly get the narrative. It’s your fault. It’s your fault. It’s the fault of the youngies and the oldies that don’t want to participate in the workforce anymore, supposedly, you know, but then there was the article I published about the garish zoom layoff where these people said, No, we do want to work. In fact, we were promised overtime, we weren’t given the overtime. Instead, we got rounded up onto one of those god awful mass zoom calls and laid off instead. To me, things do not add up. It just doesn’t make sense. There’s really a labor shortage. No one wants to work the entirety of Gen Z is lazy, blah, blah, blah. We’re getting so much propaganda and corporate nonsense quote, in my opinion, corporate sponsored corporate shilling nonsense about what’s actually going on here. It reminds me so much of the Wizard of Oz. Pay no attention to that man behind the curtain. Just keep paying attention to the illusions keep believing what we tell you. Ignore common sense because your common sense would tell you none of this does make sense. This feels very irrational to me. And these explanations don’t seem to carry water. At the slightest bit of criticism, they fall apart. So what’s actually going on? Well, apparently, they want to blame the working class, they want to blame average people for what we had nothing to do with. I’m not I’m not some hedge fund manager for billionaires, I don’t control the Fed, I don’t control interest rates. I don’t print up fiat currency and handed out like candy to use the phrase du jour Come on man. But yet, they want to blame the average working class people. And whenever employees and job seeker saw an opportunity to get more money to get better benefits to get hopefully, into a place, that doesn’t completely suck, and so they took advantage of it. Oh, naughty, naughty, you need to get your hand slapped, you shouldn’t have done that. Because look, look at what you did to the economy, you should have just been toiling on the land like a good and proper serf. Look at the mess you have made for everyone. And now the Lords have to come in and clean it up for you. I feel like if you ignore this information, you’re doing so at your own risk. I’ll be perfectly honest with you at this point. I’m not recording episodes to try to wake anybody up. Because I feel like if you’re not already aware of reality, I’m not sure what else it’s going to take. Seriously, I’m not sure who you’re going to listen to, I’m not sure what’s going to really make the difference. At this point, I’m really recording episodes for those of us who are already aware and are just trying to watch whatever this poopoo storm is in real time. Shrug shoulders and sighs existentially for the people out there that are still Oh, there’s going to be a Hail Mary pass this is going to be alright. It’s not that big of a deal. Or worse yet, if they listen to this stuff, and they believe it, they think that we only have a 3.7% unemployment rate. They think nobody wants to work. They think that everybody is laying at home in Nana’s basement off of stimulus checks from 2020. There. Wow. In my mind, there’s just not any hope for somebody like that. I’m sorry if that sounds harsh, but I’m trying to be real with you. I’m trying to be as real with you. As those hedge fund people were with their investors behind the scenes. Yeah, Craps getting ready to hit the fan and this is going to be bad. It’s going to be pretty, pretty bad. I can’t tell you what to do. But I know that speaking personally, I would want to be sure that I had my house in order, and that I was ready as I could be. No one’s ever 100% Ready. You cannot prepare for every single contingency in life. I mean, that’s part of what that memo said is that don’t assume that you’re going to be just fine because we’ve seen this before. We may very well be headed into some very scary and spooky uncharted territory in the economy. Do the best that you can be prepared, not scared. Don’t panic. Don’t get Chicken Little. But do what you can stay safe. stay sane, and I will see you in the next episode. Thanks for tuning in. If you enjoyed this episode, please take a quick second to subscribe to this podcast and share it with your friends. We’ll see you next time.