✔️ ICYMI news, 8/7-8/11.
✔️ 401k hardship withdrawals. Record debt. But hey: people'r'doin' great! 😵💫
✔️ Zoom called people back, LOL. If that doesn't say something to ya, I don't know what will.
✔️ Is inflation abating? Is it time to go back to QE and easy money? Really? 😵💫😵💫😵💫
Links where I can be found: https://causeyconsultingllc.com/2023/01/30/updates-housekeeping/
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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. Today. It is Monday August the seventh headline popped up from the independent earlier today on my phone and it is more than 60,000 homes in Scotland at risk of repossession. The byline reads the Bank of England has warned that the number of people likely to struggle with debt repayments is rising as a result of increasing interest rates. In this we read more than 60,000 homes and Scotland could be at risk of repossession due to soaring mortgage costs. Analysis by Scottish Labour has shown the Bank of England has warned that the number of people likely to struggle with debt repayments is rising as a result of increasing interest rates. Scottish Labour's analysis of the figures showed around 61,410 households in Scotland will be facing difficulties with debt repayment, putting them at higher risk of repossession. The figure is based on forecasts from the bank before last week's interest rate rise, the party has called on both the Scottish and UK governments to do more to support those at risk of repossession, and quote, that is a sobering statistic. And yet, if I get on here, and I say, Well, I mean, you know, you kind of in kind of been told things were going in this direction. Jared a Brock has that great article about how the hyper elites want a recession because they want to get your assets on the cheap, they want your stuff, you've done nothing and you'd be happy. Well, that's just a conspiracy theory. You're allowed to say, Hey, look at these people struggling. The interest rates are crippling them. They're in debt. There's clearly a systemic problem here, you're allowed to say that. In fact, you're probably considered a pretty good Neo live or pretty good leftist, if you point that out. But the minute you say, you know, you've not saying to be happy, kind of seems like they're going in that direction. kind of seems like they want to produce nations of renter's where you really don't own anything, the dubious as to whether or not you're happy, but you don't own anything. Well, then that's a conspiracy theory. Speaking of which, a headline has been popping up. It's been making the rounds that I guess over the weekend or something, the Orange Man said that he only needs one more indictment to be able to clinch the 2024 election. I thought that's there you go. Welcome to America. On fortune.com Today, we find the hedge fund Titan who's been watching for Black Swans for decades, says the greatest credit bubble in human history is set to pop. But he's not worried. Also, Welcome to American here's American news. Over on the independent we get, hey, more than 60,000 homes in Scotland are at risk of repossession over here we get Yeah, I mean, a greatest credit bubble in human history is about to pop but I mean, okay, no worry about it. In the byline, we read Mark Spitz Nagel and Nassim to lab have been watching for Black Swans for decades. We've never seen anything like this level of total debt and leverage in the system. He tells fortune. It's an experiment. It's not going to feel very much like an experiment. If you get steamrolled by what's coming, in my opinion, if you feel like you were run over by a steamroller, or you were like wily coyote in the cartoons and plump an anvil hit you right on the head, and you're having a difficult time recovering from it. It's not going to feel so much like oh, I mean, hey, it was just an experiment. Thinking of like SNL the wild crazy guys. Isn't experiment. Yeah, right. Okay. on TechCrunch we read Astra lays off 25% of workforce reallocates engineers in an effort to fight dwindling cash reserves. Astra has laid off 25% of its workforce since the beginning of the quarter and is reallocating at least 50 engineers and manufacturing staff away from its launch business. To focus on spacecraft production. The company said Friday and quote Wow 25% But hey, people are doing great. Inflation is cooling. There is no recession. It's not coming. It's been cancelled. layoffs are abating 3.5% unemployment right now known Great. On the side panel for LinkedIn we find who's listening when you type that have to be honest. I was like, Is this another like Job surveillance morning thing, Okay, boss is probably listening to whether or not you're typing or not. In the article we read, you might be used to covering your webcam when it's not in use, but now You might have to muffle your keyboard sounds to a team of British university researchers has trained a deep learning model to identify your keystrokes by the sound they make and steal information. The scariest part question mark is 95% accurate. Even over zoom, the model was a stunning 93% accurate record for the medium. This kind of acoustic attack method makes passwords, private messages and other sensitive data easily accessible using just your iPhones microphone. The researchers suggest using white noise to mask the sound of typing or using biometric authentication or password message. password managers if available to lessen the risk of keystroke information theft and quote, wow, you know, I am gonna go ahead and add as far as workplace surveillance goes, if somebody can develop this AI program, whether they're trying to use it for corporate espionage or some some other form of espionage, let's say they're trying to steal information, hackers, etc. Don't mean I even think that couldn't happen in an office environment. If you get to where you're covering your webcam, and they can't necessarily watch everything that you do, but they could listen. I mean, I'm sure a lot of them have keystroke software on the computers anyway. Just Just be aware, we are living in such crazy times. And the lack of privacy is truly astounding. I always say and this is just my opinion, which could be wrong. I don't give you advice. I don't tell you what to do. I sit here and I opine for your entertainment only. If it were me, I never, ever, ever would assume that any piece of employer technology in my home was completely safe. I would never undress in front of it. I would never say anything disparaging in front of it. I would be extremely careful and I don't care if we're talking about laptops, tablets, cell phones, or something as simple as a thumb drive. I would be very, very careful. To date as to Tuesday, August 8 on CNBC today, we find as credit card debt tops $1 trillion. For the first time a huge test for card holders is coming. In the TLDR key points we read. Total credit card debt reached $1.03 trillion in the second quarter of 2023. According to the Federal Reserve Bank of New York, credit card balances have now notched seven consecutive quarters of year over year growth. The resumption of student loan payments will be a huge test for many card holders says one expert and quote. I talked about that on the last Saturday broadcast. As we get back to student loan payments resuming the moratorium ins for landlords and the rent, pandemic relief, whatever it was called. People are going to get squeezed. I don't see any way around that even though we're supposed to believe. peachy keen, sunshine and roses. People are doing great. There's nothing to see here move along move along. I don't freaking think so. Also, today on CNN, we find Americans are pulling money out of their 401 K plans at an alarming rate. More Americans are tapping their 401 K accounts because of financial distress. According to Bank of America data released Tuesday, the number of people who made a hardship withdrawal during the second quarter surged from the first three months of the year to 15,950, an increase of 36% from the second quarter of 2022. According to Bank of America's analysis of clients employee benefits programs, which are comprised of more than 4 million plant participants. It's a pretty troubling development if more people are resorting to making hardship withdrawals. Matt Schultz, chief credit analyst at lending tree told CNN, you understand why people do that in the heat of the moment. But the opportunity costs on that are really, really high over time. He said, Bank of America's latest participant polls report also found that a greater percentage of participants borrowed from their workplace plans from the first quarter and average contributions trailed off as well in quote, so you have two things going on there. We have people raising their 401k due to quote, financial distress, just not surprising to me. We'll have two eyes and two years and I'm in tune with reality. Then we also have the contribution rate decreasing. People need as much money as they can get every dollar counts right now. Wherever this inflation is supposedly abating I still haven't seen it.
Over on Yahoo Finance Today we find Moody's downgrades US banks warns of possible cuts to others. Bum Bum Bum ba insert ominous music here. Moody's cut credit ratings of several small to mid sized US banks on Monday and said it may downgrade some of the nation's biggest lenders will warning that the sector's credit strength will likely be tested by funding risks and weaker profitability. Moody's cut the ratings of 10 banks by one notch and placed six banking giants including Bank of New York Mellon, US Bank Corp, State Street and truest financial on review for potential downgrades. Many bank second quarter results showed growing profitability pressures that will reduce their ability to generate internal capital moody said in a note this comes as a mild US recession is on the horizon. Oh, it's back again. Really? Okay. This is news to me. This comes as a mild US recession is on the horizon for early 2024 and asset quality looks set to decline with particular risks in some banks commercial real estate portfolios. Moody said elevated care exposures are a key risk due to high interest rates, declines in office demand as a result of remote work and a reduction in the availability of care or commercial real estate credit. The downgraded banks by Moody's include m&t Bank Pinnacle financial partners prosperity bank and bok financial Corp. Yeah, but remember, remember own Dave telling us they were just play? You don't need to be worried about your local bank down the road where grandma has a CD and Timmy has his paper route money. No. If you're worried about that, you're just being foolish. Don't go do quote stupid, but thanks. Yeah. Okay. All righty then. Also on Yahoo, finance and then analogous article we find stocks fall as Moody's bank downgrades add to August woes. Who can be surprised by that? It's not it's not good news. I mean, at least the markets have enough sense to go whoa, wait a minute. This is not shiny, happy people holding hands. An article from the American Institute for Economic Research that's been making the rounds. I wanted to go ahead and mention it because it's worth mentioning. The Fed hits 3,000% inflation. The US economy was pushed to extremes during the pandemic recession and subsequent recovery. The unemployment rate peaked at 14.7%, the highest in the post world war two period, inflation reached its highest rate in 40 years, prompting the Fed to raise short term interest rates to their highest level since 2007. As of June, the economy hit another dubious milestone. Inflation has now reached 3,000%. Under the Federal Reserve. The Federal Reserve Act was passed by Congress in December of 1930, and the Regional Federal Reserve Banks opened for business in November of 1914. Comparing the price level at the end of 1914 to the level today tells us how much total price inflation the US economy has experienced under the Fed. The Consumer Price Index, or CPI is the most widely used and longest running measure of the US price level. But there are disagreements about the accuracy of historical CPI, measuring worth aggregates, macro economic data such as probably aggregates, I think I mispronounced that measuring worth aggregates micro macro economic data such as interest rates, economic production and price level from the most reliable historical sources. Historical CPI data for measuring worth show that the US price level rose by 2,920.2% from 1914 through 2022. While the measuring work dataset provides only annual data, we can add monthly data for the current year from the official CPI data from the Bureau of Labor Statistics. According to BLS data the CPI rose by 2.74% Not seasonally adjusted in the first half of 2023 that brings total inflation under the Fed to 3,000.2% in quote. Yeah, but you know, here we go. Whenever you start talking about crony capitalism and the banksters and the central bankers and the Wall Street fat cats and how they do not care about the the little people the unwashed masses out here you'll still get that's just a conspiracy theory wearing tinfoil hat believe for yourself what you want to believe but for me it's like you're looking at this information about banks are getting downgraded people are raising their 401 ks due to financial hardship credit card debt is an all time high. But we're supposed to believe sunshine and roses hunky dory everything's fine. Something there is not adding up. Apparently now we're being told that the recession is back on there's gonna be a mild recession sometime next year. But then next week, we may be told the recession is off again. It's like this weird on again off again, bad relationship. Like if you ever had a boyfriend where the two of Do you break up all the time? My hands in the air. I did that two times in my life and it was stupid both times that I did it. I love you, I hate you. I can't get enough of you. If you leave me all die, get out of my life lose my number. It's like that with the recession. This is crazy to me. Nevertheless, it's like, I trust what I can see. It makes sense to me that people are struggling because of what's going on in the economy. It doesn't make sense to me to say we're not in a recession and in fact a recession is not coming. Judge for yourself.
Today it is Wednesday, August 9. Over on CNBC, we find Thursday's inflation data may be low, but don't expect the Fed to declare mission accomplished yet. In the TLDR key points we find. The closely watched Consumer Price Index is forecast to show a monthly increase of point 2% for July and a 12 month rate of just 3.3%. But history has shown that inflation is stubborn and can last longer than expected once it becomes elevated. former Fed Governor Richard Clarita told CNBC that central bankers don't want to declare mission accomplished too soon. Breaking down Thursday CPI report could end up being more about the details than what the headline numbers say in quote. Yeah, I don't think he wanted to clear mission accomplished too fast. Hmm. An analogous article over on Yahoo Finance CPI preview inflation expected to have ticked slightly higher last month. In this we read on Thursday, investors will be closely watching for one of the most important data points the Federal Reserve will consider in its next interest rate decision. July's Consumer Price Index or CPI. Report set for release at eight 3am Eastern Time is expected to show headline inflation of 3.3% and acceleration compared to juice 3% annual gain in prices. According to estimates from Bloomberg, I'm just gonna button here and say, but we were told that it was cooling. Nothing to see here, people things are improving. We're really gonna pat ourselves on the back and say how great we are. Yeah, about that. Gas prices are still going up here in the Midwest, grocery prices are still going up. I have yet to walk into $1 General or the local grocery store or the nearest Walmart and go wow, there's some real price reductions happening on necessity items, the toilet paper is less expensive, the food is less expensive. Bottled water is going down. This is great. Now I'm not saying any of that. Junk and tchotchkes and non necessity items might be going down in some places. But in terms of like food, water, shelter fuel, now, I'm not seeing it yet. A 3.3% increase over the prior year with Mark the slowest annual increase, and here we go. This lowest annual increase in consumer prices since since March 2021. Over the prior month, consumer prices are expected to have risen point 2% In July, in line with the monthly increase seen in June, on a core basis. And they have core in quotes here on a core basis, which strips out the more volatile costs of food and gas. I'm sorry, I have to laugh because you either laugh or you cry. The more volatile costs of food and gas prices in July are expected to have risen point 2% over the month and 4.7% over last year according to Bloomberg data. Okay? So we're gonna say it's more volatile food and gasoline prices are too volatile. So let's just take them out of the picture. You know, in my opinion, which could be wrong, it just kind of seems like this is being done to gaslight you kind of seems like the important things like your food, your shelter, your fuel, are being disregarded. We're going to tell you that inflation is cooling off, and the Fed is really turning it around and people are doing great. But we're also at the same time engaged in some in my opinion, chicanery and some weird manipulation of the figures. Like I said, you have to laugh rather than cry. Also on Yahoo Finance, we find gas prices are higher again, hitting consumers very directly and very profoundly. Yes. Now this I believe, because I'm witnessing it my own eyes. Gas prices are just playing high and consumers are taking notice. As of Wednesday, the national average gas price stands at $3.83 per gallon per AAA. That's lower than the average price this time last year at $4.06 but slightly higher than last week's average price at $3.78 per gallon. And that may have larger implications on consumer spending and how Americans feel about the economy, especially heading into the important back to school shopping season. Consumer Sentiment is very directly and very profoundly affected by gas prices. Since Michael Stefaniak, economist at s&p global market intelligence told Yahoo Finance, he added that there's a roughly 70% correlation between gas prices and sentiment over the time period shown below. So we have a chart that shows like The gasoline price index in orange, and then the consumer sentiment index in purple. And what we see towards the end of this chart is as the gasoline price index has gone up, consumer sentiment has gone down. Again, not a surprise. So let's think back to the last article on a core bases, which strips out the more volatile costs of food and gas, okay. But then we look at this correlation between gas price index and consumer sentiment index, we think about the back to school push, people are gonna have to take the kids to school in the morning, maybe they ride the school bus, maybe they don't, maybe the parent takes them. Or if it's a child that 16 or older and they have a vehicle they're going to have to pay for the vehicle in that car. These things matter. on Yahoo Finance by way of Reuters, we find us mortgage rates spiked to highest since November, approaching a 22 year high. But yet, you'll still have people that will get on YouTube and various other forms of social media and tell you it is still a great time to buy a house great time to invest in real estate. In this we read the average US 30 year mortgage rate jumped to a nine month peak on Wednesday, and hit the second highest rate since 2001. So we're going back more than 20 years, the second highest rate since 2001. As interest rates reacted sharply to a downgrading of US government debt. The average 30 year mortgage rate shot up to 7.09% for the week ending August 4, a 16 basis point increase from the previous weeks 6.93% rate. According to a weekly report released by the Mortgage Bankers Association rates have not been that high since November 2022, which were then the highest levels since 2001. potential borrowers adjusted promptly to the surging cost of borrowing the mortgage applications index, a measure of total mortgage application volume fell 3.1% to a six month low of 194.5. And quote, I don't give you advice, I don't tell you what to do. Just sit here and opine for your entertainment only thinking about myself and my family. Wow, you would have to feel very confident that you are getting a bargain. The price on that place would have to be so low that a seven seven a half 8% interest rate would be negated by the price. I haven't seen bargains like that out there in my part of the Midwest, not to say that we won't ever find those kinds of bargains again. But right now I'm not seeing them. So for me the idea of getting involved in the market, getting off the sidelines. The circumstances would have to be really extraordinary. We also by way of Investor's Business Daily on Yahoo Finance find the CPI inflation inflation rate is expected to rise in July why the Federal Reserve won't care. I'm tempted to be like Well, yeah, I don't care. I feel like they are and this is just my opinion. It's just a theory and it could be wrong. But I feel like there are certain
pockets of the population that are just gunning for us to get back to the age of easy money, quantitative easing, fire up the printing press, get everything low again, get the bubbles back inflated. I don't know if that's going to happen or not. But I do think just this headline is funny. Why the Federal Reserve won't care. Yeah, I mean, it's almost like the hyper elites and their cronies like don't give a shit about you and me it's almost like that. Also on Yahoo Finance we find we work stock plunges after company raises substantial doubt about its future. We weren't raised substantial doubt about its future existence on Tuesday, adding another twist to a dizzying journey that has marked the company staggering rise, fall, rebirth and potential imminent collapse. The co working space provider warned investors that facing losses and fleeing clients substantial doubt exists about the company's ability to continue as a going concern. I think maybe that should be a growing concern. I don't know. According to its second quarter earnings report management laid out plans to improve liquidity and profitability over the next year but Wall Street recoiled we weren't stock plunged nearly 40% Following the announcement. The grave warning punctuates we work disastrous run as a public company. Its shares have lost roughly 90% of their value this year beating down its market cap to 105 point 5 million As of Wednesday afternoon, we work once had a valuation of 47 billion, only can knollys. So they've gone from a valuation of 47 billion with a B to 105 point 5 million with an M. Wow. But we've seen these things we have seen these things as these artificially manipulated markets as the bubbles go up, and then they pop or they start to deflate. We've seen these things across other industries. The overwhelming losses echo we worked earlier run as a startup, once valued is one of the most promising enterprises in the tech world, the company's worth evaporated as it prepared to go public in 2019. As potential investors took a closer look at the company's financial documents, they raised concerns over its money losing model, its curious dealings with co founder and then CEO Adam Newman or Neumann not sure. Also raised alarms, including a widely criticized arrangement that we work pay had paid Newman 5.9 million for the use of the word we in its name. Wow. So many just bizarre stories like that have come out, I think in big tech in particular. Just while now, so we have this situation with we work but then also over on the guardian. From yesterday, there was an op ed, titled How can you tell remote work is over zoom has ordered employees back to the office. The byline reads, working from home offered the chance for a great rebalancing of family friendship and our careers. But the dream is fading fast. I would agree. I would agree, I have been on the leading edge of this contrarian ism telling you I think that hybrid work is going to be used as a stepping stone to full RTO. Not for every single company No, but for a lot of them. And I think that they set up this worst of both worlds scenario so that people will become more compliant. Now what could derail that if we had another pandemic, if we had another flare up of or something like it? If we had lockdowns, whether it's climate lock downs, or some other politically related lockdown, turmoil, martial law, world war three, these are all terrible scenarios, and I don't even want to consider but those are possibilities, no matter how close or remote they may be. Those are possibilities that could derail my theory. But I really think in the absence of some cataclysm, you're going back, if you don't hold it, you don't own it. And if your game plan is, I'm going to play pretend that the great resignation is going to go on forever. And I can hippity hop across the market always be able to find a remote opportunity. I would just humbly ask how would you handle that scenario, if your role on the side panel for LinkedIn, we find China falls into deflation. China has slipped into deflation for the first time in two years, and what could be a warning sign for the US and other major world economies? I'll button right here and say, you may as well save your breath. Because there will be a whole host of people who see a headline like that and think it would just never, these are the same nut balls who act like we would never have another oh eight or oh nine. Whether you want to talk about we wouldn't have another housing bubble that pops or we would never have another great recession. They're just so locked into lala land that they can't even imagine it. Well, that might happen over there in China. But who were up here. Oh, okay. Sure. Since the nation lifted pandemic restrictions late last year, prices have fallen for everything from steel to vegetables, they were down 1.3% in July compared to a year earlier. In sharp contrast to the US and the EU, where consumer prices rose at annual 3% and 6.4% in June respectively, then that's what we were told those lower prices could lead to achieve to a flood of cheap exports from China, which in turn could hurt profits and jobs at producers in other countries. Unquote. Stay aware. This is an auspicious time to keep your head on a swivel and just stay aware not paranoid. Not scared to death not Chicken Little just aware. Are you in an industry that's growing? Or is it dying off? Are you in an industry that could be really impacted by AI? Or are you relatively insulated from that? Is your job something that's maybe not completely recession proof but it's relatively safe or are you in a volatile situation? I feel like it's better to know those things in advance than it is to find out when you've already been thrown off the cliff.
Are you looking for more? Don't forget you can find Sara on her blogs at CauseyConsultingLLC.com and at SaraCausey.com. You can also read her content on Medium and Substack. On with the show.
Today is Thursday, August 10. The main headlines of the day are about the CPI report and the July inflation data. In fact, on Yahoo Finance, there's a purple bar that says CPI reaction. Feds daily tells Yahoo Finance there's still more work to do on inflation. Hmm, you don't say. Also on Yahoo Finance we find July inflation data shows convincing signs price pressures easing, taking heat off fed, inflation re accelerated in July for the first time in 13 months. But beneath the surface of the 3.2% headline number revealed in Thursday's Consumer Price Index report are several signs the Federal Reserve's fight against inflation is headed in the right direction. The July CPI report offered more convincing evidence that inflation pressures are abating. Ey Parthenon, Senior Economist Lydia boost soar said on Thursday, fuel price increases helped force headline inflation back up in July. When looking at core inflation. The feds preferred inflation gauge that strips out the volatile food and energy categories. Prices rose at their slowest pace since October 2021. Okay, well, we talked yesterday about the core inflation, and it had this exact same language, we're going to strip out the volatile food and energy categories. So I guess the spin is because fuel prices have gone back up. It makes the inflation seem worse than it actually is. Question mark. This reminds me a lot of the spin that we get with job market and labor market statistics 3.5% unemployment rate, churn and burnin to legit up jobs for every one unemployed person. And it's like, yeah, huh? Where's the evidence of that in real life? When you're seeing slower times to hire, you have people on LinkedIn talking about how it's taking months to find something sometimes even to get a significant nibble about anything. Zoom has called its people back to the office, even though they ruin the good old fashioned phone call. People don't want to just have a simple introvert friendly telephone call anymore. No, they want you to judge up and get on a damn zoom call. Crazy Crazy times. Also on Yahoo Finance, inflation, consumer prices rise 3.2% in July as inflation slowdown stalls. All right, consumer prices showed a faster year over year increase in July compared to the previous month's annual gain, according to the latest data from the Bureau of Labor Statistics released Thursday morning. All right. We also if you skim down just a little bit see that say the same language on a core basis, which strips out the more volatile costs of food and gas prices in July climbed point 2% over the prior month and 4.7% over last year, roughly on par with June. Both measures were also in line with economist expectations, okay? Look at these articles for yourself pay attention to this language that just gets repeated across platforms. And regardless of journalists, it feels to me isn't just my opinion, and it could be wrong. But it feels to me a lot like a bit of ComStat propaganda, da, here we go. We're going to use the same language over and over and over again. It would only be better if we if we leaned in close to the microphone. And I was wearing a soft pastel sweater. And I spoke to you and very gentle, very melodic tones. Hush little baby. We're looking at inflation on a core basis, we're gonna take away those volatile costs of food and gas, things actually are getting better. Now we're on very thin ice trying to tell you that because it doesn't really see that things are getting better, but they are paying no attention to the man behind the curtain. It's ridiculous. Then if we go over to the side panel for LinkedIn, we find the question our high prices here to stay. And I'm like, here we go. Last year when I was buying hay for the animals, it was a challenge because of the drought this year. It's a challenge because we've had an abundance of rain and thunderstorms we've had throughout the summer, the kind of springtime storms that we often get in April and May. This is included torrential rain, high winds, hail tornadoes in some places or direct shows. Sometimes I think if the weather service doesn't issue a tornado warning fast enough, they'll just say oh, it was straight line winds. Oh, it was a spin up oh It was a direct show, but it wasn't really a tornado. And I'm like, Yeah, kind of know what it looks like kind of know what it sounds like I've lived here long enough. And we were talking about the high prices of hay. And the various people that had hate to sell would tell you, more than likely when we get out of the drought, the prices are going to come back down, what goes up must come down, so on and so forth. And I'm like, I just don't know. I don't know because people get greedy. And when they see that you're willing to pay a particular price for their product, it's hard for them to take that step backwards. And so as I've been getting in contact with people who sell hay, hopefully at some point we'll be able to get our stock replenished because it's been a nightmare for people to cut and bail due to how wet and muddy it's been. The prices are not coming down. In fact, some of the same Jack wagons that told me all well, don't worry next year if we're not under drought, it will be better the prices will get more normal. They have raised their prices even beyond what it was during the drought year. Our high price is here to stay. You damn well better in my opinion, make a plan for yourself about what if that's the case? I will read. After months of price increases what's next for consumer goods? Executives are mixed on the answer. McDonald's CFO Ian Borden said that as inflation cools, he expects our pricing levels to also start to come down. Linda Rendell are Rendell CEO of Clorox, which increased prices 16% In the most recent quarter said the company didn't intend to drop prices if its cost came down. The price hikes allowed many food and household goods companies to increase profits last year, despite selling fewer products. Where's their freaking incentive to drop prices? If they know that you will pay that amount of money for a jug of bleach or for a Big Mac? Or whatever the product is? Why would they? They can make more money despite selling fewer products? Are you kind of starting to see like what Jared a Brock talks about when he says the hyper elites are jonesing for a recession, because they want to pick up your assets on the cheap. The more that they can squeeze you, the more you have people falling out of the middle class or even the working class and into the working poor. In my opinion, tinfoil hat, no, that makes you more malleable. And it sort of it puts people in this area of resignation. Like I'm not going to try to stand up for myself, I'm just gonna go along to get along and that's the price I got to pay for a Big Mac. It's what I'll do. That's what I got to pay for my coffee. It's what I'll do if that's what I got to pay for a jug of bleach. I guess that's what I'll do. People just sort of go alright. Okay. And the bullet points for this. We read some companies are starting to see consumers pulling back on spending and trying to maximize their pantries by buying in bulk, or switching to generic brands said Kellogg company CEO, Steven Cataline. I think I'm saying that right. I don't know. grocery prices rose point 3% In July, and food prices overall have risen 4.9% to date this year, per new numbers from the Bureau of Labor Statistics and quote, right, because the inflation is only cooling, it's only abating it's only starting to get improved. If you take out those quote, core numbers of food and gasoline. That's not even to mention the story's about rent I think I saw a posting earlier and it may have been on on LinkedIn. I'm not sure. But it was about how the average rent in Manhattan was like $5,500 a month. So insane. That is insane. I was watching a YouTube video and it. It may have been on Scott Walters channel and I'm trying to remember because I watched one of his videos earlier where he was talking about the uptick in foreclosures, which I thought was interesting. Not surprising, but interesting. And somebody had written in the comments, and I don't remember if it was on that video if it was another video about how, like a cracker box house a cracker box starter house that is like as is needs improvement. Not even looking so good can be half a million dollars. This is like the Weimar Republic, and I'm like exactly. At least there are other people out there who are seeing the lunacy and all of this. But this I think is an early warning signal to you our high price is here to stay. Could we have something like what China is experiencing right now with deflation? Maybe. Maybe, but I have to believe just like what I'm seeing with these people and their price gouging over the price of hey, if we got you to pay it last You're what's to prevent us from getting you to pay it or more this year?
Maybe it's human nature. Maybe it's greed. I'm not sure. But people will try to figure out what is your flinch point? Where is the point where you finally say, I'd love to do business with you, but I just can't because the price of doing business with you is just too high. They'll try to figure out where that level is, and get right at it. And it's hard for me to imagine that the prices you see in the grocery store are just going to be slashed in half one day. I just don't think so. I don't think that's coming. I think even when we do get off of this inflationary cycle at some to be determined point in the future. I don't think you're gonna walk in and food is going to be half price from what it is right now. It may come down what 10 20% And they'll all pat themselves on the back like what a great freaking job they did. Meanwhile, you're still playing paying that much more than you did before all of this insanity. Okay, speaking of which, a frequent tuner enter, pointed me in the direction of an article that he found on Axios dated from August the fourth of this year, scoop Biden pushes to end remote work era for feds. In this we read President Biden is calling for his cabinet to aggressively execute plans for federal employees to work more in their offices this fall after years of working remotely according to an email sent every Friday. Now excuse me, an email sent Friday to every Cabinet member and obtained by Axios. Why it matters, it's Biden's most overt push yet to get federal employees to return to their offices, a dynamic Many businesses have also struggled with as Americans continue to embrace remote work despite the pandemic waning driving the news in an email to the cabinet on Friday, White House Chief of Staff Jeff Zions wrote We are returning to in person work because it is critical to the well being of our teams, and will enable us to deliver better results for the American people and what that verbiage right there. Sounds like it is straight out of corporate America does it not? It's the same kind of justifications that we've heard over and over again, it will help with productivity will get better results will have more collaboration. It's good for us to be together or on or off. But I have warned you, I have been on the leading edge of contrarian ism on this RTO versus work from home issue. And I have warned you if it comes down to brass tacks. The cronies are not afraid to call in their favors on Capitol Hill. They're just not. If corporate America decides you're going back, guess what you're going back. Even if it has to be legislated that you're going back, guess what they can do that. If you don't hold it, you don't own it. Not to say that every single company is going to be full time in the office. There probably will remain to be companies that are fully remote and some that stay on some worst of both worlds hybrid model. I think when we look at the majority, the majority of offices will most of these businesses say You know what? Nevermind. We're gonna give up on the RTO initiatives. It hasn't really gone our way. Y'all just stay home. You've won the day. I just don't think so. Today it is Friday, August 11. TGIF in a major way. I'm so glad it's Friday. In terms of the news, it is a weird mixed bag of tricks as it so often has been in 2023. on CNBC, we find retailers are shaping a wave of laws to crack down on organized theft. Below that retailers say organized theft is biting into profits, but internal issues may really be to blame. And below that. Companies say organized retail crime is on the rise, but there's no data to prove it. Welcome to 2023 That right there. There you go. Conflicting headlines. What's the truth? What's real? I hope you can figure it out. judge to decide whether to send Sam Bateman free to jail over alleged witness tampering. s&p 500 inches lower heads for second losing week in a row. Wholesale Prices rose point 3% In July, higher than expected. We also find 80% of bosses say they regret earlier returned to Office plants. A lot of executives have egg on their faces. Hmm Do tell. After three years of haphazard plans for getting workers back at their desks, the return to Office movement has entered a phase of remorse. Has it though? Hmm. A whopping 80% of bosses regret their initial return to Office decisions and say they would have approached their plants differently if they had a better understanding of what their employees wanted. According to new research from ongoing, many companies are realizing they could have been a lot more measured in their approach rather than making big, bold, very controversial decisions based on executives opinions rather than employee data. Larry Gadea, envoy CEO and founder tells CNBC make it envoy interviewed more than 1000 US company executives and workplace managers who work in person at least one day per week, some leaders lamented the challenge of measuring the success of in office policies, while others said it's been hard to make long term real estate investments. bump the Bump, bump bump up, I think we're getting to some truth now. While others said it's been hard to make long term real estate investments without knowing how employees might feel about being in the office weeks or even months from now. Ah, well, you know, I'll publish that article about a nice little recession. So you know, kind of think that if we get into a situation where John and Jane Q Public are allowed to know that nudge nudge, we don't really have that 3.5% unemployment rate, and it's taking a hell of a lot longer to find a job if you need a job. I think that might change the picture of it. What do you think? Cathy, catcher a consultant who advises corporate executives on their return to Office plans is surprised the percentage isn't higher. Many organizations that attempted to force or return to Office have had to retract or change their plans because of employee pushback. And now they don't look strong says catcher, the president of career slash life Alliance services. A lot of executives have egg on their faces. And they're sad about that. Okay. I can't speak to the data that she has, it doesn't match what I've encountered as I've been talking to clients and prospective clients, who, when you're asking them, is this going to be remote hybrid or fully on site? There's no sadness. There's no like, well, like mealy mouthed Ness about it. No, they're like, this is hybrid, or this is on site periodic. So that doesn't match what I'm saying. Again, I can't speak to her data. Maybe she has been talking to a lot of executives that feel like they have eggs on their face, and they are sad about that. It's not when I've encountered the great resignation to the great regret, as some business leaders accept hybrid work is a permanent reality. Others are backtracking on earlier pledges to let employees work from home on a full or part time basis. As of July 59%, of full time employees are back to being 100% on site. I'm going to read that again, because I really want you to hear it. In spite of all the hot air and hopium in my opinion that you get on social media. I'm real. I want you to hear that. As of July 59% of full time employees are back to being 100% on site. A majority of full time employees are back button seat Monday through Friday, I told you, I have warned you and warned you and warned you that in my opinion, hybrid is nothing more than a stepping stone to full RTO. For a lot of companies for everybody. No, not for everybody, for a lot. Mm hmm. I'd bet on it. While 29% are in a hybrid arrangement, and 12% are completely remote, according to new data from work from home research, offices are still only half full compared to their pre pandemic occupancy. So let's think about this 59% of people that are full time w two employees are back to being 100% on site, and 29% are in a hybrid arrangement only 12% are still completely remote. So there you can clearly say a majority of full time w two employees are either been in seat on a part time hybrid basis or they're but in seat on a full time Monday through Friday basis.
Listen, you can play games and you can LARP if you want to. I don't recommend it. It's up to you. across industries major corporations, including Disney, Starbucks and BlackRock are requiring employees to spend more time at the office with executives often citing the need. For more in person collaboration. Zoom is the latest to reverse course telling employees who live within a 50 mile radius of a zoom office that they need to come in at least twice a week. It's an abrupt shift from the company's previous policy, which allowed employees to choose between hybrid in person or a permanent remote work. Yep, yep, yep, yep, blogged about that earlier on the job market journal. I'll just I'll drop a link to that in case you didn't see it, but I'll warn you. If you don't hold it, you don't own it. And it does not matter. If somebody's in charge. I'm using air quotes here in charged Have you know we're gonna be work from anywhere forever. That's like our business model, don't even worry about it. Hmm. If you don't own that company, you don't make that bottom line decision. We believe that a structured hybrid approach meaning employees that live near an office need to be on site two days a week to interact with our teams is most effective for zoom. A company spokesperson said in a statement to CNBC make it adding that the company will continue to leverage the entire zoom platform to keep our employees and dispersed teams connected and working efficiently and hire the best talent regardless of location. Yep. Some times are changing, and some times are changing. So look, you can you can look at an article like this and draw the conclusion. Well, if 80% of bosses say they regret their earlier RTO plans, they feel like they've got egg on their face. Therefore, it must mean that John and Jane Q Public are winning and work from home is winning the side of this battle, you can choose to believe that if you want to, I don't believe it, because it doesn't match what I'm actually seeing day in and day out in the workplace. When an employer says, Yeah, this is work from anywhere, it is remote, you will get subtle lammed. With applicants, some of whom makes sense for the job, and they're legit, and some of whom are just miles away from the requirements. They're just desperate, they want to stay remote, and they're desperate. Whereas if you take a job order from a client, they're like, No, this is hybrid, or this is button seat Monday through Friday, don't send us anybody that's not cool with that, you're still going to get applicants not as many, you're not going to get throttled with applicants the way that you do for remote work, but you're still going to get applicants. And the manager is not going to be like, Well, I feel like I have egg on my face. I mean, I shouldn't have asked you to go find somebody that wants to be here Monday through Friday. No, they're looking at you like you're the recruiter, you're the staffing Smee, go make this happen. I'm sure you can't see me, but I'm shrugging my shoulders. And I'm like, hello, let's get real. We also find job interviews are getting longer. Here's why it could be a red flag, a pre screen with human resources, a call with the hiring manager, followed by six half hour interviews that stretched across three days. That's not all a written case study exercise before yet another interview with the hiring manager. And finally, one last round with the CEO and quote, yep, I have actually linked to this person story before I think on another outlet about how she had nine different interviews, including a case study and still didn't get the job. I also published a blog post earlier this week about slow time to hire which any job seeker could tell you. In my mind, this is really about the preponderance of evidence. It's not about stray anomalies, well, this person got laid off, and it took them two years to find a job or this person got laid off. And within two minutes, they had another job. I don't look for the straight data or things that are on the very end of the bell curve. Let's look at the things that are the majority in the middle. What's happening to the majority of people? Are the majority of people just hippity hopping across the job market like they did during the Great resignation and constantly making more money. Not if not no, not what, based on what I'm saying. No. There was a video that I watched earlier this week from city prepping. disclaimer here. I don't know this man. I have not watched all of his videos. I don't know who he is, and I can't be responsible for videos he puts up in the future. It's sad. We have to make these disclaimers, but you know how it goes somebody be like, Oh, he said something in a video two years ago, and I'm offended? Well, I don't care. I don't know the man. He dropped this video, and I'll put a link to it. So you can watch it for yourself. It's very well done. In my opinion. The title of it is how much time we have left. And in this video, he addresses a question that he says he got from a subscriber. And essentially this is subscribers asking like, are we cherry picking data? Are we being gloom and doom? Are we getting confirmation bias and looking for bad news? are we considering the things that might be positive in the economy and politics and weather and whatever? And you know, my reaction to that kind of thing is mixed. I see both sides of it because on the one hand and like that's a valid question. Whether somebody is gloom and doom or they're over on the toxic optimism, toxic positivity, toxic gratitude side of the fence like yeah, you you have to consider Am I just looking for things to feel good about? Am I looking for things to feel bad about? Have I considered that the truth might be somewhere in the middle, I get that. Then at the same time, I get aggravated because I feel like social media has created a plethora of people that are armchair quarterbacks, amateur critics, the kind of people that Brene Brown talks about Like, they sit in the cheap seats and they heckle the gladiators that are actually down in the arena trying to fight the fight. Now, I don't know this subscriber, I don't know anything about this person. So I'm not talking about that individual. Personally, I have no idea. I'm really talking about myself and other content creators like, you get haters, bots, trolls, shills, mansplain. errs, and it's like, well, where's your content? instead of you trying to be armchair quarterback or amateur critic on me? Why don't you take a look in the mirror? Where's your blog? Where's your website? You clearly have internet access. And there are still sites where you can launch a blog or website completely free. So there's no barrier to entry here. What is your excuse? Why don't you find your own evidence? Why don't you present your opinions? And let us take a look at what you have to say. But no, those types of people that just want to be amateur critic, all they want to do is tear other people down, and I don't like that shit. I just don't like it. I don't respect it. So to me, I'm kind of like, if you feel like prepping channels or getting confirmation bias about gloom and doom, change the channel. Go watch Happy kittens running through a field or little bunnies hopping through the meadow and decompress from it get away from it. There's no law that says you have to watch prepper channels. Okay, that's just my opinion. And I could be wrong, but just saying, but he handles his video very well. And essentially, the answer to the question is we don't know. We don't know. But I like how he says that he tries to look for the most probable scenario, not the things that are on the fringe that, you know, maybe they're technically possible. They're not super likely. I mean, is it possible that there could be some kind of like zombie virus that turns people into brain eating zombies, like for horror movies, I mean, maybe with the kind of crap that these scientists are coming up with nowadays that just magically get unleashed from these laboratories. It's possible, but I'm not going to sit back and say, I'm going to prepare for World War Z. I need to be ready so that I can be Brad Pitt for my family in World War Z. I don't think that's a real likely scenario. I also don't listen to the people that say the apocalypse is upon us. I'm going to toast, marshmallows and light my cigar and the fires of the apocalypse. I'm going to be Mad Max Thunderdome. I'm going to have all this gold and silver and all these canned goods and people are going to come to me and I'm going to be the warlord don't listen to that crap. I think it's a waste of time. In my mind, what seems to be a more likely scenario would be something like a repeat of 2008. Or worse yet, what if the 1982 recession had a baby with the 2008? Great Recession? What if we continue to have hyperinflation, but then we also have an at high unemployment, people are struggling to pay their bills, they're defaulting on loans, their homes are getting foreclosed upon. I mean, I think that's a scenario that could happen. To me, I would rather be as economically prepared as I can for what if that scenario happens.
So it's not about bringing this back to the job market and these articles about slow time to hire and the RTO versus work from home battle. It's not about the sort of stray bullets that are on one end of the spectrum or the other. I got laid off and found a job at two minutes, I got laid off and it took me two years. It's more about the preponderance of evidence. And if you're reading post after post after post an article after article after article of people saying it's taking a six to eight months to land another job. Hello, hi, how are you? It's at some point, you've got to wake up and make these decisions for yourself. on CNBC, we also find why Americans are struggling with car loans, which also doesn't seem a surprise. There are more than 275 million cars on the road in the US. But in recent years, car ownership has gotten more expensive than ever due to the COVID 19 pandemic supply chain issues, stubborn inflation and the Federal Reserve's interest rate hikes. Outside of purchasing your first home a new car is the second largest purchase for most people said Joanna Dean, vice president of sales at Toyota Financial Services Group. Given the transaction prices and vehicle prices today financing is required to buy these vehicles we would have been in and say Do you think that's a coincidence? If I'm not singing to be happy? If it becomes increasingly difficult to own a home, it becomes increasingly difficult to own a vehicle. What are your options? Think about it. More than 100 million Americans have a car loan and auto loan debt in the US currently stands at $1.5 trillion, a record high in 2023. The average monthly loan payment for a new vehicle vehicle is $725 up from 650 and 2022 G's according to Experian. The average monthly payment for used vehicle a used vehicle is $516 In 2023, up 2% From the year prior holy smokes Well, outstanding balances continue to grow consumers are still originating auto loans Sid, Melinda Zebrowski experienced senior director of product management. The volume is a little lower, but the loan amounts are certainly higher. Geez, I bet 516 bucks for a used car. Oh, that blows my mind even worse than the the price for a new vehicle. Oh my god. Wow. Sorry, I missed a shock. Seriously. Poof. Over on fortune. We find Morgan Stanley just compared the bubble like euphoria over AI to the investing manias of the past century. The lesson for investors don't rush it. In the byline history has shown that for multi year themes, there's usually little need for investors to rush in. And list Edward Stanley said in quote, well, yeah, but we've had a lot of bubbles and a lot of bubble like euphoria going on in the economy, and has it stopped anybody. Again, Judge for yourself. Many workers facing a layoff would accept a 25% pay cut to keep their jobs but 90% 97% of bosses don't even ask. Alright, so let's think about that. Let's juxtapose that with a great resignation when things were churning in Berlin, and people were hippity hopping across the market. Can you imagine somebody saying I'll take a 25% pay cut just to stay here? No, no, no, no. Don't be fooled by the uptick in inflation economist says prices are falling and the Fed now has the ammo to pause its rate hikes. I'm not even gonna say much about that. I'm gonna have to do some grocery shopping sometime in the next day or two. And I know it's not going to be cheaper when we go in. It's not gonna be cheaper. So I'd be cheaper at the feed store to buy stuff for the animals. I mean, okay, prices are falling. I sure don't know where. Yeah, as I said, in my mind, it's about looking at the preponderance of evidence and it's about looking at the majority of things on the bell curve, not the things that are way off in left field or way off in right field. It took me two years to find another job. Oh, it took me two minutes or zombie apocalypse Mad Max, the Thunderdome versus everything is fine. The economy is resilient, and the labor market is robust. Go back to sleep, little baby like there has to be a middle ground where we can start to look at reality. What what is actually going on here? What do I think is true? I can't make any of those decisions for you. Those are decisions you have to work out on your own. I guess what I would say is I hope that you are I hope that you are considering these issues. Do you have an RTO survival plan that's relevant to you? If you own and operate your own business? Do you have a survival plan of what would happen if the economy took a real poop? And I couldn't make money? The primary way? I'm making it now what's my plan B, C, D? Do you have a job loss survival plan? How would you handle it? If you got a pink slip? Would you just assume that you're going to be that lucky person that found a job within a week or two? Or would you want to be prepared for something more substantial? In my mind is about thinking about these things ahead of time. Stay safe, stay sane, and I will see you in the next episode.
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