The mother of all mass layoffs is coming

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The stock market is in a bubble with NVDA responsible for more than half the S&P 500 gains this year.

“All previous stock market bubbles share the following in common: a narrow stock market rally that focuses on a small group of stocks in a small sector of the economy that Wall Street is working overtime on promoting”

The unemployment rate is up to 4%.

“The difference between what actual people say is their employment status, derived from the Household survey, as opposed to the establishment survey, was a whopping 680k jobs!”

“the number of full-time employees is down 1.16 million”

Inflation is 3.3% y/y.

“the Fed will be cutting rates too little and too late to prevent a sharp slowdown in the economy. By the way, that is a good thing because recessions and deflations reset asset prices and debt”

“the Fed has saddled the US economy into an endless rollercoaster of boom/bust cycles. Unfortunately, this means the economy should experience a protracted and acute period of stagflation”

“The opportunity here is to increase positions in gold and bonds while these prices are relatively low as compared to what will occur when the Fed is forced into its typical panic rate-cutting cycle.”

www.fxstreet.com/analysis/when-will-the-boom-bust-rollercoaster-end-202406141418

The US economy is headed into a corporate bankruptcy cycle that will spike unemployment

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A wave of large bankruptcies is about to hit the US economy — and that could spark job losses for a growing number of Americans, according to Wall Street forecaster Danielle DiMartino Booth.

The QI Research CEO pointed to the climb in corporate bankruptcies over the past year, a sign that businesses are struggling under higher interest rates and tighter financial conditions. Corporate bankruptcies rose 88% through April this year, according to data from S&P Global.

That marks the highest number of bankrupcies recorded in the last 12 months, and that tally should continue to rise, Booth said.

Nine companies worth $50 million or more have failed so far this year, the fastest pace of large bankruptcy filings since the pandemic. Booth predicted that the number of large bankruptcies would climb to 25 by the end of June, surpassing the peak of large corporate bankruptcy filings during the pandemic.

“I think that the bankruptcy cycle kicking into high gear is going to be enough to tame inflation,” Booth said in a recent interview on the David Lin Report. “When you have these large bankruptcies, liquidations, and what have you, you do have a loss of income. A complete loss of your paycheck,” she said.

The US job market remains on solid footing, but the unemployment rate has ticked up to 4%. Meanwhile, the economy has lost around a million full time workers over the last 12 months, Booth noted.

See also  June construction layoffs spike, highest since September 2007. Continuing claims hit a new cycle high, approaching 1.9 million.

Small businesses are also feeling the pressure of tighter financial conditions and higher wages. 10% of small business owners said labor costs were their “single most important problem,” according to the latest Small Business Optimism Index.

www.businessinsider.com/recession-layoffs-unemployment-job-market-outlook-economy-corporate-bankruptcies-defaults-2024-6

h/t  LoudMind967

 

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