- Sign, sign - Everywhere a sign Blockin' out the scenery Breakin' my mind Do this, don't do that Can't you read the sign?
- Five Man Electrical Band
King $Dollar
It gave us a sign as it is bouncing upward. It could hit 104. This will negate higher oil prices and higher import prices that appeared to be coming in August. This is happening even after the ratings service Fitch downgraded the US debt. The last rate hike by the Fed might have saved their ass...for now.
However, the dollar and the US economy have other problems and these will not disappear overnight. Of course, the shills will deny. Jamie Dimon of JP Morgan Chase who said about the downgrade, "It doesn't matter." It does and I give thanks to this agency for having the guts to make this call. We need a balanced budget among many other issues to be remedied. Then, we noticed these signs that are like a dark cloud coming our way.
Charts: They are taking the escalator up and the elevator down. Translation: higher volume on down days.
Layoffs: Anheuser-Busch announced pink slips. AT&T thought this was a party and they joined. Layoffs are up this year by 244% over last year. We could add the sad saga of Yellow Trucking and their 37,000 people. The firm averaged 49K shipments per day in 2022. It dropped this year to 10/15K per day. In our continual dispute with the unemployment figures, we offer this: full-time employment fell by 585,000 in July. There are jobs and there is BS. Job losses are a lagging piece of data. Shipping is a huge indicator of the health of an economy. You also can get a connection through cardboard use. It is down. In a related aspect, stores and plants are closing.
Corporate Debt: Defaults have already exceeded 2022 and now, interest rates are even higher.
Inflation: It is bad enough that the Fed's BS gets away from not including the three things' people need every day (food, energy, shelter), but no one mentions other aspects that inflation has affected such as, auto repair. The costs are up 20% year-over-year. There are others, but space is limited.
Household Debt: Consumer's credit card debt just passed one $trillion. Many struggle to meet shelter costs which keep on rising. In LA, CA, more than 768,000 households are behind on rent. Evictions are coming and not just in LA. Homeowners are also feeling the pain of higher interest rates. Foreclosures are coming. The estimate is 186,000 will join the homeless along with the evicted renters.
EVs: They are the wave of the future, but at the moment, not cost effective. Ford and Lucid lose money on every ev vehicle that they sell. What other auto-makers are not revealing about this point? Ford says it will lose $45B on electric vehicles this year.
Yield Curve: It has been inverted way too long and the spread has not changed. In a related aspect, Moody's downgraded 10 banks and are looking into downgrading a few more. So much for the Fed's stress test.
Commercial Real Estate: This segment is already in recession and approaching depression. Hey, Jamie, "It does matter!"
Strikes: We wrote over a year ago that strikes would be coming due mostly to inflation, but there are other factors. We repeated the alert last January. We also told you that this aspect would rekindle inflation, especially when government unions entered the scene. It is happening as you read this piece. Of course, the Fed controls the media. The question is how they will address the strikers, unions and workers in general. Look for the signs.
"...signs, signs, everywhere a sign. Can you read the sign?" Peace.
