Part 1: General Commentary Part 2: Market Commentary
Recession Worries
If you follow the signs, things are not as they seem. Wall Street sings the praises of companies beating their earnings estimates, and note an 11% growth in profits during this last earnings cycle. But underneath the surface we see some of the uglies.
Think about it like our job report on Friday. Once again the BLS had to "revise lower" the two prior months. This has been going on all year, they toss us out a jobs number and then in the following month, they cut it to shreds.
They say we got 22,000 jobs in August. But not curiously, the BLS "birth death" model was as always, included in that figure. They put 90,000 jobs in the report. So at the end of the day, we didn't gain 22K Jobs we LOST almost 70k. Oh and it's been that way for months on end.
By the way, if you don't know what the Birth/death model is, it's a Nobel prize worthy work of fiction. While you can go to their site and see their explanation of how they arrive at these "phantom" jobs, it reads like scientific literature meets lost in space. It's meant to be mind numbing.
Basically they say that for every "X" amount of people that get fired, or laid off, "X" amount of them will open a business and hire workers. So they literally guess at how many that is. They have no proofs of these jobs, no tax papers, no employment agreements. Nope, just a guess.
Then scroll down to the 2025 Net Birth-Death Forecasts, not seasonally adjusted (in thousands) and look at the last line of entries. Last month they injected 257K jobs into the report. Jobs of which not a single one is verified. Neat huh? Don't you love the Government agencies lying to you? Well they do it all the time and everywhere.
Yes the job market is in trouble. But then, so is a large swath of our citizens. Consider this, a Bankrate survey found that while nearly 2 in 5 cardholders (37%) have either maxed out or come close to maxing out a credit card since 2022, the average credit utilization rate nationally was lower, around 21% in early 2025.
Delinquency rates for credit cards have risen, especially for those with high credit utilization. The Federal Reserve Bank of New York noted in May 2025 that the transition into serious delinquency for maxed-out borrowers had surpassed pre-pandemic levels.
Pre pandemic levels? But, but, Wall Street says we're humming along! Surely that's a stand alone issue, right? Well, not so fast. While not "crashing," the subprime auto loan market is showing significant distress, with serious delinquency rates reaching levels not seen since the 2008–2010 period. This is a major concern for both lenders and consumers, driven by a combination of high interest rates, vehicle prices, and inflationary pressure.
In January 2025, the subprime 60-day delinquency rate hit a record 6.6%, a level not reached since tracking began in 1994. The serious (90+ day) delinquency rate across all auto loans also reached its highest point since 2010. To cope with high costs, a record 22.4% of new car loans in Q2 2025 were for 84 months or longer.
Fake jobs, credit cards maxing out, car delinquency rates soaring. Anything else worrisome? Well, home sales have been slowing significantly and the U.S. housing market is considered to be in a "deep freeze". The number of sales has dropped to the lowest levels seen in decades, though the degree of the slowdown always varies by region. But you get the point. Housing is a nightmare.
Moving along, A substantial number of Americans, with the numbers varying by survey... but often cited at over 60%, live paycheck to paycheck, meaning they have little to no money left after covering essential expenses. A significant number of people, often cited around 37-40%, have reported they would struggle to cover a $400 emergency expense, according to surveys from the Federal reserve themselves. Hey, great job Fed! Aren't you guys supposed to keep the economy on an even keel? Fail.
Tons of folks are struggling to put food on the table. Of course they are. Food prices are nuts.
So add all that up folks. What do you come away with? A big problem. Your average guy/gal in the street is suffering bigly, and what's their future? AI is going to take over most of their jobs. Then what?
Yes we are in and have been in, a recession for months on end. It's been white washed as usual to make things appear okay. Yes the Fed is going to cut rates this month. But by how much?
This is where they've painted themselves in a box. By lying about how well the economy is, they can only justify doing a 25 basis point cut. But if they were to tell the truth, like I did just now, they'd be justified in cutting 75 basis points. So what's it going to be? I still think 25 but with a huge heaping load of dovish talk about more cuts to come.
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