Tag: U.S. economy

More Layoffs Are Coming

More Layoffs Are Coming

Inflation, interest rates and OpEx are climbing while demand softens for many companies. One glance at the table below shows that layoffs over the past two months are fairly widespread across industries. We believe that more layoffs are coming as inflation and interest rates rise. Rates will accelerate higher in June should the Fed make … Continue reading More Layoffs Are Coming

The U.S. Economy Is Long-Term Fragile

The U.S. Economy Is Long-Term Fragile

We do not believe that investors fully appreciate how fragile the U.S. economy is. Our view is that the U.S. economy is in a recession and that this period will be followed by long-term muted growth given: 1.) the enormous U.S. Government debt load ($30.4 trillion), 2.) persistent price inflation, 3.) a consumption-driven economy rather … Continue reading The U.S. Economy Is Long-Term Fragile

The Colonial Pipeline Cyberattack Exposes A Significant Economic and National Security Risk

The Colonial Pipeline Cyberattack Exposes A Significant Economic and National Security Risk

We have written numerous articles about the risks associated with legacy technologies from a cybersecurity perspective. It seems Colonial Pipeline got off easy in its recent ransomware cyberattack. The economic and national security impact would have been significant if an enemy state decided to corrupt Colonial's systems in such a manner so as to prevent … Continue reading The Colonial Pipeline Cyberattack Exposes A Significant Economic and National Security Risk

Workers Choose To Collect Federal Unemployment Benefits Rather Than Work

Workers Choose To Collect Federal Unemployment Benefits Rather Than Work

Low wage services jobs are difficult to fill as we recently wrote (we continue to collect anecdotal data that supports our prior writing). Workers are choosing to stay home and collect Federal unemployment benefits rather than be productive. The moral hazard we warned of months ago is here. Should Biden and The Fed choose to … Continue reading Workers Choose To Collect Federal Unemployment Benefits Rather Than Work

When You Are Your Biggest Customer

When You Are Your Biggest Customer

The U.S. is similar to a legacy Technology company whose best days are in the rear view mirror. A telltale sign of this reality is that fact that the Federal Reserve is the largest buyer of U.S. Treasuries. There was a time when Japan and China were the largest holders of U.S. Treasury securities. Today, … Continue reading When You Are Your Biggest Customer

Markets Are Poised To Grind Lower

Markets Are Poised To Grind Lower

It is going to take several years for the U.S. economy to recover back to 2019 levels. 2019 is a low bar in our view as that economy - much like the present one - was debt-fueled, deficit-ridden and plagued by artificially low interest rates. These factors in the aggregate have stymied sustainable, real economic … Continue reading Markets Are Poised To Grind Lower

Expect A Bumpy Ride For The Economy and The Capital Markets Over The Next Several Years.

Expect A Bumpy Ride For The Economy and The Capital Markets Over The Next Several Years.

Q3'20, Q4'20 and calendar 2021 consensus estimates need to come down. Why? 21% unemployment (U6 measure), permanent economic damage that businesses suffered (and will continue to suffer), as a result of the shutdown, the COVID "back-to-work tax", the threat of a second COVID wave, geopolitical risk, record debt levels and social unrest have created more … Continue reading Expect A Bumpy Ride For The Economy and The Capital Markets Over The Next Several Years.

U.S. Economy Improves from COVID Lows Boosted by Bars & Restaurants

U.S. Economy Improves from COVID Lows Boosted by Bars & Restaurants

Total non-farm payroll employment increased by +2.5 million in May led by a recovery in Leisure and Hospitality. The biggest driver was bars and restaurants ("Food Services and Drinking Establishments"), which added +1.4 million jobs and accounted for 56% of total non-farm payroll additions. Non-farm employment in May improved sequentially and was 13% below February … Continue reading U.S. Economy Improves from COVID Lows Boosted by Bars & Restaurants

Mr. Market Is Trading On Speculation. Fundamentals Will Matter Again.

Mr. Market Is Trading On Speculation. Fundamentals Will Matter Again.

The market is trading on speculation. Fundamentals don't matter now. Fundamentals will matter again. The Fed can print only so much money before inflation rears its ugly head. We can't continue to devalue the dollar as a matter of long-term monetary policy without consequences. Our "print first, ask questions later" monetary policy and "subsidize everything" … Continue reading Mr. Market Is Trading On Speculation. Fundamentals Will Matter Again.