Wednesday, September 6, 2023

We Stand...

...by our call. 

Funny thing about time, it has a price like the thesis of Edward Chancellor in his work with the title name. His idea says time causes mistakes in setting targets like inflation. It seeks to assess the relationship between variables like supply and inflation that are stationary. They are not. Needless to say, the Fed does not like his theory.

I guess a Fidelity Strategist must have just read Chancellor's book. It announced last week that it sees a spark for a recession in 2024 due to a wall of corporate debt that is due and faces higher interest rates. The firm is not the only one, but these small voices are drowned out by the bulls who dominate the media.

3.8%...

...unemployment. Well, we gave you the math metrics that calculate the percentage. In real numbers, new jobs came in at 187,000. So, if one tick is 150,000, this means 787,000 loss work. This is a big jump from 3.4%. Time will reveal September's numbers. We do not feel that they will be good. At the same time, oil has broken through resistance. It could test $93 per barrel. This puts a burden on all citizens. This continues what we at Evolution have termed, "A Stealth Recession." While Powell talks, people suffer. When the pain hits the wealthy, then it will get a media meme name. We already gave it one. We just got a clue from a report by the Dallas Fed, of all people. It is in manufacturing. The data says....

1) Computer and electronic product manufacturing: Customers are reducing or cancelling orders due to soft demand. The volume of orders is down 51% year-over-year.                                                      2) Food manufacturing: There are fewer government contracts. Customer discretionary spending has declined.                                                                                                                                                        3) Machinery manufacturing: Slow. Phone not ringing. Projects are being postponed and payments late.                                                                                                                                                                4) Primary metal manufacturing: The industry says it is in a technical recession.                                  5) Printing and related activities: They are surviving due to previous large contracts. Nothing on the horizon.                                                                                                                                                          6) Transportation equipment manufacturing: Higher prices and interest rates are hurting.

We stand by our call.  Peace.                              

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