Proverbs 6:6-11 Go to the ant, O sluggard; consider her ways, and be wise. Without having any chief, officer, or ruler, she prepares her bread in summer and gathers her food in harvest. How long will you lie there, O sluggard? When will you arise from your sleep? A little sleep, a little slumber, a little folding of the hands to rest, and poverty will come upon you like a robber, and want like an armed man.

What is the REAL Unemployment 3.7% or closer to 25%?

I am confused. The official Unemployment Rate is 3.7%. That means that 96.3% are working! The Economy should be robust! Yet, we see problems in the Economy, there is talk of heading into a Recession. However, Official Unemployment is only 3.7%; low unemployment is associated with a very good economy.

The population is 335M, 167M working leaves 168M unaccounted for. The 99.8M are working age, not in the workforce. There are still 68 million for under 18 and over 65. The calculations are by no means implied to be deadly accurate; more scratch pad math to account for what appears to be a huge discrepancy.

It would be very interesting for a study to determine how many jobs are full time and how many are working multiple jobs that may be counted more than once. I suspect that working even 1 hour a month might qualify as employed. The true situation may be worse.

The Federal Reserve Electronic Data System has so much information. A much better study would be very eye-opening! It would be very interesting to determine how many jobs are full-time and how many people are working multiple jobs that might be counted more than once!

Manufacturing has also declined for over 2 years and is now negative, negative 4.24% and yet we have only 3.7% unemployment. How is that even possible. With 3.7% unemployment, we should be in a robust economy, but we are not!

Bankruptcies are going up to levels last associated with the 2020 COVID Recession and the GFC Recession.

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michael@michaeldouville.com

Brace for Impact! Hard Landing says Federal Reserve!

1 Chronicles 12:32a And of the sons of Issachar, having understanding of the times, to know what Israel should do.

Brace for Impact! Looks like we are going to have a Hard Landing. Even the Federal Reserve’s own Economists are out with a report.

Those companies that are over-leveraged, firms in distress are likely to have an effect on Investment, Employment, and aggregate activity. Those firms that have been surviving on borrowed money have had their cost of Capital in the way of higher interest rates doubled, maybe tripled. This is going to put a lot of them out of business.

Are we following in the steps of Paul Volcker in the 1970’s? Jerome Powell thinks Volcker is a hero!

A Recipe for a hard Landing is Historic Tightening, the lag effects are 9-15 months, and we are just feeling them now.

We have Sticky Inflation. A good recession will kill inflation.

We have Banks in trouble, and they are tightening underwriting. Banks are losing reserves, losing deposits. Money supply is decreasing.

Manufacturing has entered a level of recession at 46.2. There is a severe drop in the need for goods.

The 10/2 year yield curve is inverted around 100 basis points or 1%.

Pending home sales are dropping. Prices will eventually decline.

Be aware of distressed metropolitans across the United States. Recovery may take up to five years. Crime is a result of the vacuum left by diminished occupancy of central cities and bad governance. As the Economy worsens, expect increased crime and social unrest. We can also add expect increased taxes as municipalities lose vital revenue.

Consumer credit card debt is exploding.

Michael’s comments on the hotel, Airbnb crisis:

In these cycle completions, all of the excesses are removed. Over-leveraged, over-optimistic, and under-capitalized Speculators usually realize losses. The larger the excess, the larger the losses. I am assuming the short-term rental owners will have a reality check soon, No one knows for sure, but the number floating around here in Scottsdale is 4200 units. The demand for them has fallen significantly, but the cost of ownership remains. When the Hotels start to reduce rates, the end is near for the novice. Not only is the market going against them, but many municipalities are stepping in with regulations. Neighbors hate the party house next door!