WARNING: Huge Corporate Layoffs Just Announced (What You Need To Know)
Summary
Corporate Layoffs: Significant layoffs have been announced at major companies like Meta, Rivian, and Target, reflecting broader economic challenges and adjustments in corporate strategies.
AI Sector Challenges: Meta's layoffs in its AI unit highlight the difficulty in monetizing AI investments despite significant capital expenditures, raising questions about the sustainability of the AI bubble.
Electric Vehicle Market: Rivian's layoffs and financial losses underscore the slower-than-expected demand for electric vehicles, exacerbated by regulatory changes and economic slowdowns.
Economic Reality vs. Market Hype: The podcast emphasizes the disconnect between market hype and economic reality, particularly in sectors like AI and EVs, where share prices have outpaced actual profitability.
Subprime Lending Concerns: The bankruptcy of subprime lender Primal Lend highlights growing financial strains in the subprime market, echoing past financial crises.
Economic Slowdown Indicators: Increasing corporate layoffs, subprime market issues, and liquidity concerns in private credit and repo markets are early signs of an economic slowdown.
Investment Strategy: The podcast suggests adopting contrarian investment strategies to navigate financial bubbles and protect wealth, as traditional buy-and-hold approaches may not be effective in current market conditions.
Webinar Announcement: An upcoming webinar on October 29th will cover contrarian strategies for investing during financial bubbles, offering insights for both novice and experienced investors.
Transcript
Hello fellow Rogue Capitals. Hope you're well. So, we've got some big news today. Some huge layoffs have been announced. In fact, the the last one just came on the wire maybe an hour ago and I was totally shocked by this one. Uh we'll get to that last and then yesterday we got cut off because of the internet. So, I want to go over what's happening there with this most recent blow up in the subprime lending space. But first and foremost, let's go over to the corporate layoffs that were just announced. So, right here we've got Meta. And this is not the one that I was shocked by. In fact, this didn't surprise me at all. Number one and two didn't surprise me at all. Number three really surprised me. So, Meta or what I I keep calling Facebook. It's Facebook. you want to go with meta, you can go with beta because Mark Zuckerberg, he's trying to be more alpha recently, you know, going to the UFC and everything. But at the end of the day, it's like, come on, dude. You are the most beta human being on the planet Earth. But anyway, getting back to the article here, Beta lays off 600 from bloated AI unit. Now, let's remember that AI and the AI bubble is propping up not only the S&P 500, but basically the entire US economy. I was reading a statistic the other day that we had what like 3.8% revised GDP growth and like 2% of that was from AI capex spending. So, and this is predicated upon just exponential growth to infinity and beyond. And it's not it's also predicated on not only exponential growth, but them figuring out a way to actually monetize this stuff, which they haven't been able to do yet at all. Let's keep going here. Key talking points. Beta will lay off roughly 600 employees within its artificial intelligence unit. Okay. cuts did not impact the TD labs. This was specific to uh they've got some stupid name for this. It was specific to the uh like super intelligence labs I think is the name uh that they called it, but it wasn't super intelligent enough to turn a profit obviously. So then the third key talking point layoffs are an attempt by beta to continue to trim the department and but look if AI is going to make trillions and trillions and trillions of dollars and they're not worried about that. They're betting the house that this is going to be just wildly profitable. When you include the fact that there's no mode, the fact that it's uses massive energy, the fact that the capex is just staggering, the fact that the depreciation schedule is like 3 days. Slight exaggeration, but only slight. Then why on earth are they laying off these people? That's weird, right? And in other stories, I've heard of massive insiders selling at companies like Nvidia. So why on earth would they sell? Anyway, let's get back to the article here. The company announced cuts in a memo in a memo from chief AI officer Alexander Wang just hired and here you go. So back in June, you know, this is all the rage and it's the future and then we kind of get into this bubble where it's either put up or shut up. Right now we're at the stage of the game where we go from all this capex spending coming from cash flows. Now it's got to go to new debt. And if it goes to debt, there needs to be light at the end of the tunnel. And I think what's happening right now is they're seeing that AI is definitely the future. There's no disputing that. But as far as being profitability, we don't see or as far as being profitable, we don't see that light at the end of the tunnel yet. So what do you have to do in the interim? You got to cut jobs. And this is just right after they invest not just 14.3 billion in scale AI whatever that is but that's just the tip of the iceberg as far as what they have spent. So, Beta has been aggressively overhauling its approach to AI in recent months as it works to keep pace with rivals like OpenAI, which loses billions, and Google, both pouring billions of dollars into infrastructure products or projects and recruitment. Well, fantastic, because OpenAI, they love incinerating money, so they can just hire all the people that Beta is firing. Perfect. Win-win, right? during the company's second quarter earnings call in J July beta said it's ex it expects its total expenses in 2025 oh this is great you'll love this to come to a range of 114 billion to 118 billion raising the low end of its previous outlook the number is only expected to increase so your expenses are going up by34 billion dollar a year and they're only expected to increase but then there's no profit light at the end of the tunnel. So that dog don't hunt. Getting back to it here, results in 2026 year-over-year expense growth rate that is above the 2025 expense growth rate. So, for those people who thought, "Oh, this is just a one-time investment, and once they have this AI, it's just going to be this massive cash cow." Well, no. It's it's it's not. And again, the depreciation schedule is what is very alarming because you see how this rhymes with the buildout for the internet as far as the the wires or the cable. um that was I forgot exactly what they call it but anyway it was laid across the ocean and you know they had this massive capacity um and they only used a fraction of the capacity but that didn't dep usable. We're still using it today where this stuff is like completely obsolete after two or three years. So, it isn't exactly the the cross ocean cables or whatever that uh give us the internet. On Tuesday, Met Beta announced a $27 billion deal with Blue Owl Capital to fund and develop its massive hype Hyperion. I love all these fancy names that they give. every single name is like super intelligence or it just kind of insinuates that this new world of just massive growth which I'm not debating. There is a new world and we are seeing massive growth and we're probably going to continue to see massive growth. Unfortunately, we haven't seen any growth in profits. And usually that means that the share prices have got ahead of reality. You've got fantasy versus reality. And in that boxing match, guess who always wins? Inevitably, it's going to be reality. And that's probably what we're seeing start to kick in in the AI space. We're not done. Speaking of a massive bubble or a mania that really didn't pan out, let's go over to electric cars and Rivian laying off more than 600 workers. I don't know why everyone's 600 workers, but the bottom line here is the EV thing just didn't pan out. And it didn't pan out to the degree to which they thought it would. and they're depending I'm just scrolling down here on these um let's call them incentives basically uh tax rebate for buying one of these cars and Trump takes that off the table and now they actually have to compete on a level playing field with IC cars and they're like yeah I'm not really into the EV thing and if I am into the EV thing I'd much prefer a hybrid And so then they start to see sales go down. But this is if you look at the second paragraph, I think it's much more about this. Aside from regulatory issues, Rivian also faces slower than expected EV demand and lack of new product until next year amid needs for cash and earning losses. The company lost 1.1 billion in the second quarter. And by the way, I want to remind you that although this seems to rhyme a lot with what we're seeing in a in AI now, are electric cars and hybrids the future? Sure. Absolutely they are. But the mania and the hysteria got way ahead in the share therefore the share price got way ahead of reality. Again, fantasy versus reality. reality. Boom. Right hook from Tyson out of nowhere. And Fantasy is down for the count. But I'd like to point out that Rivian only lost a billion dollars last quarter. That's peanuts. That's that's chump change compared to what OpenAI lost. And and by the way, Open AI lost that. And they have 800 million customers. They have almost a billion customers. They have almost 18th of the planet you uses I chat GBT and they're still hemorrhaging money. I look what's your growth strategy if 18th of the planet already uses your product and you're you're selling it for you're selling the compute for let's say five cents and every unit of compute is costing you a dollar. And you say, "Oh, George, that doesn't matter because the compute cost will go all the way down." Well, fantastic. Well, now they are as a utility because if OpenAI brings their, let's say, cost down to a penny and then they charge 2 cents, well, their competitor is just going to come in and say, "I'll charge you a penny and a half." And then OpenAI says, "Ah, I'll charge you a penny and a quarter." It's a race to the bottom with this stuff, but it's the same overall concept, right? You get a story, you get a narrative, you get hysteria, you get mania, you get the share price going way out ahead, and then you get all of this capex, all of this investment for the demand. And then with the EV side of it, the demand just goes away because of the regulatory stuff and because the economy is actually slowing down. We're seeing all car sales, not all car sales, but a lot of uh let's say cracks in the car industry, especially in the used car industry, and that goes back to some of the subprime blowups that we've seen, but it's a very similar concept, right? You just get way over ahead of your you get uh out over your skis and then all of a sudden you've got to scale things back to reality. And the fantasy was this. And currently the reality is that even though I will be the first person to admit that the this reality is definant is definitely going to be reality but not next year. It's going to be reality in 10 years or 5 years or whatever it is. And therefore you have to adjust the share price down to what the reality is going to be over the next one year or the next two years. And that means scaling back capex. And that means cutting workers. That means unemployment rate goes up. That means the economy slows even further. And you go into that feedback loop which usually usually results in a recession. But hey, maybe this time we won't get a recession. Let's remember that no matter how bad the economy gets, if you don't know about it and if we don't get any data, then the NBER isn't going to announce an official recession. And can we have a recession if the NBER doesn't officially announce it? Obviously, the answer is yes. But will the markets trade on that? All right. Now, let's go to the last one that that really caught me off guard, and that's Target. Look at this. Target cuts 1,00 corporate jobs. And this came out, well, it was, let me refresh here. It was not 17 minutes ago. It was an hour ago, 51 minutes ago. So, this is hot off the presses. Target said Thursday it's cutting 1,800 ROS across the company, roughly 8% of its corporate workforce. Marks the largest round of layoffs at the company in a decade. A decade. The retailer is fighting to get back growth. Okay. They've got a new CEO. Now, what I highlighted, the company has said it expects annual sales to decline this year. Its shares have fallen 65% since their all-time highs when 2021. Why? Goes right back to what we're saying. Oh my gosh, look at this demand. Look at the demand. Look at the demand. We're sold out. We're sold out here. The restaurants are sold out. The department stores are sold out. The car dealers are sold out. Everybody's sold out because we have all this demand. And everyone thinks that demand is just going to continue indefinitely into the future, not realizing that that demand was just a sugar rush provided by the government. And the government increased the purchasing power above and beyond inflation even though wages weren't coming up. But at a certain point in time, fantasy has to come back down to reality and the purchasing power decreases because the stemmies were out, the subsidies were out, you got to start paying back your student loans, all these things. And what that means, your purchasing power goes down and the first thing to go is the disposable income and probably your car payment or at least buying a new car in the form of a new car or a used car. And so it's it's no surprise that we're seeing this stuff play out. And by the way, all you had to do is just look at the dam look at the darn yield curve. I mean, just look at the yield curve. That's all you had to do. That's all you had to do and you would have predicted all of this. Just watch interest rates. I guess that's the main takeaway for the video. But we're not done yet. Let's go over to and this is what I was talking about yesterday when the internet cut me off. Primma lens bankruptcy renews focus on subprime consumer strain. It's the same story. It's just playing out in a different You've got all these cracks of the in the dam. all these cracks in the dam and they're a result of the exact same thing. But what's happening here is the beginning of this video was talking about this crack is starting to leak water over here and now we're talking about this crack over here is starting to leak water in the dam. But the all these cracks in the dam are a result of pretty much the exact same thing. So what this is is it's it's really confirmation, right? We look at what's happening in the repo market. I think we talked about that on the video yesterday that got cut off. And we asked the question, you know, this temporary spike that we saw in the repo market, is that just business as usual or is that a result of a lack of liquidity? And is the lack of liquidity a result of just not enough bank reserves or counterparty risk? And I think when you look around and see what's happening withricolor, with First Brands, with uh Western Alliance, with Zion, with all these newlyannounced corporate layoffs, and let's not forget about the revisions to the non-farm payrolls back in the good old days when we actually used to get non-farm payrolls. And then you combine that with this subprime blow up that we're seeing, and it's like, yeah, risk is increasing. Risk is definitely increasing. But I think this time is a little bit different from the GFC from a standpoint that the you could argue subprime blowing up back then and the credit crisis led to the recession or it was the main catalyst to the recession. But this time I think it's kind of reverse order that the economy is slowing down. We're seeing the purchasing power going go down because of the economic distortions created by the central planners during the surveys sickness. And now it's just the rubber is meeting the road. Unfortunately, it's time to pay the fiddler. Unfortunately, right now we're we've just woken up at at 8:00 a.m. with a massive hangover and a massive headache from one hell of a party last night. But the party's fun and the party's great when you're out there jamming on the dance floor. But then you wake up the next morning and you suffer the consequences. And right now I think we're in the the basically the hangover phase. So the point there is I think the GFC is really about the credit blowing up or the subprime blowing up creating or being the catalyst of the recession. I think this time the the recession is actually the catalyst to what we're seeing with the subprime blow up. So Plano, Texas provider of financing to auto dealerships focus on subprime borrowers and you always see it start at the at the lower ends of the income totem pole. So how these cycles always play out. So Primal Lend was lending and so what was Primal Lend? They were basically one of these shadow banks. This is private credit. So they would borrow. So look at this. buy here pay here dealerships like so a bank is never going to lend toricolor now they want to but from a regulatory standpoint and they want to make it seem as though their balance sheet is just pristine and it's only AAA credit rated that we're lending to they want to make it seem like that but they're still greedy as hell they're banksters at the end of the day so they're going to want to make money and they're like hey we could make some money here withricolor or what I've been calling garbage corporation with the triple F credit rating. And but how do we do this? Because there's these regul, you know, Basil 3 and all the regulations that were put in place in the GOC. They say, "Oh, hey, no problem. Easy. We'll just set up a shadow bank. We'll lend to the shadow bank that's got the AAA credit rating." And the shadow bank will go ahead and lend to the garbage corporation with a triple AF credit rating. And that's how we'll go ahead and expand our balance sheet. We're both pocketing a spread. and Primal Lend or whoever the hell it is is just like sure we'll get in the middle act as a middleman and basically shield you and shield your balance sheet. It's it's all it's basically an offbalance sheet transaction for the big banks. That's really what this is all about. And this I think the hysteria the mania that we saw at a consumer level and with the retailers and with the car dealerships or with the car companies you know like Rivon I think you're seeing you saw the exact same thing with lending exact same thing so the PRAA or first of all the banks are like why not lend to Primma because the economy is on fire we're never going to have a recession again. So who who cares who Prima lends to? We're still going to get paid. And then Prima is like, "Ah, this lend to anybody. Who cares? They're lending to they're selling cars and giving loans, car loans to guys that have a 400 credit score and don't have a a green card. They're not even American citizens. No problem. There's no risk there." Why? Because everyone knows the economy is on fire. The economy is strong and resilient. look at the labor market. See, this is how they rationalize it. And then they take it a step further and they're like, "Oh, well, yeah, let's just take this collateral case of first brands and let's just pledge it to all these other shadow banks." And is it fraudulent? Maybe some gray area, but who cares because everyone's going to get paid back and everyone's going to be happy because we're going to make a return on all these loans because everyone knows the economy is on fire and the economy is doing so great and demand is so high. See, it all goes back to the economic distortions. All goes back to the economic distortions. So, I think the main takeaway here is what you're going to or at least what I'm going to be looking at is the labor numbers if we ever get them again. And the catalyst here is the deterioration of the jobs market. And we're seeing anecdotal evidence right there with the first three stories from Beta, from Rivian, and from what was it? Target. And then we're seeing, you know, a lack liquidity. We're seeing that show up in private credit shadow banking. We're seeing that show up slightly in the repo market. And these are usually the first signs that you're seeing this economic slowdown that at the end of the day was predicted far in advance by the yield curve for whoever was just willing to pay attention. And I think the people that are paying attention right now to all of these cockroaches, let's say, and we seem to get more and more and more every single day, but the people that are paying attention are the ones that are going to have an edge in with their portfolio in the throughout the rest of 2025 and into 2026. So, on that note, I'm doing a huge awesome mega webinar October 29th. And Josh, let's see. Yeah, he just put a a link up there. It is a free webinar and what I'm going to go over three I'm going to be going over a lot of stuff. One of the main thing three contrarian strategies that the pros use, the guys that I know like the guys I know in St. Barts and whatnot. And the these strategies are what they employ when they know that we're in we have a lot of these financial bubbles. So whether it's the stock market bubble, the AI bubble, the housing bubble, whatever it is, everyone can agree that pretty much we have just a limitless amount of financial bubbles. So how do you protect yourself? How do you actually grow wealth? Well, you don't buy and hold. You don't buy the dip. You don't just take 10% of your paycheck and allocate it to an S&P 500 index fund. You usually do the opposite of that. I'm going to be taking you step by step through these contrarian strategies. So, it's going to be perfect for a noob. It's going to be perfect for someone who is more advanced. And the kicker here, the best part of this is for every single person that attends, I'm going to give them a a $500 coupon code for Rebel Capitalist Live 2026. That is my incredible investment conference I do every single year in Orlando. It's not something you want to miss. And that coupon code takes the general admission ticket from 5.99 down to 99 bucks. So you've got everything to gain. Absolutely nothing to lose. But you've got to go right now and register for that webinar. Again, October 29th. We'll put a link in the description below. And remember, Josh just put a link in the chat. Okay, on that bombshell, guys, enjoy the rest of your evening. As always, make sure you're standing up for freed and liberty. Free market capitalism.
WARNING: Huge Corporate Layoffs Just Announced (What You Need To Know)
Summary
Transcript
Hello fellow Rogue Capitals. Hope you're well. So, we've got some big news today. Some huge layoffs have been announced. In fact, the the last one just came on the wire maybe an hour ago and I was totally shocked by this one. Uh we'll get to that last and then yesterday we got cut off because of the internet. So, I want to go over what's happening there with this most recent blow up in the subprime lending space. But first and foremost, let's go over to the corporate layoffs that were just announced. So, right here we've got Meta. And this is not the one that I was shocked by. In fact, this didn't surprise me at all. Number one and two didn't surprise me at all. Number three really surprised me. So, Meta or what I I keep calling Facebook. It's Facebook. you want to go with meta, you can go with beta because Mark Zuckerberg, he's trying to be more alpha recently, you know, going to the UFC and everything. But at the end of the day, it's like, come on, dude. You are the most beta human being on the planet Earth. But anyway, getting back to the article here, Beta lays off 600 from bloated AI unit. Now, let's remember that AI and the AI bubble is propping up not only the S&P 500, but basically the entire US economy. I was reading a statistic the other day that we had what like 3.8% revised GDP growth and like 2% of that was from AI capex spending. So, and this is predicated upon just exponential growth to infinity and beyond. And it's not it's also predicated on not only exponential growth, but them figuring out a way to actually monetize this stuff, which they haven't been able to do yet at all. Let's keep going here. Key talking points. Beta will lay off roughly 600 employees within its artificial intelligence unit. Okay. cuts did not impact the TD labs. This was specific to uh they've got some stupid name for this. It was specific to the uh like super intelligence labs I think is the name uh that they called it, but it wasn't super intelligent enough to turn a profit obviously. So then the third key talking point layoffs are an attempt by beta to continue to trim the department and but look if AI is going to make trillions and trillions and trillions of dollars and they're not worried about that. They're betting the house that this is going to be just wildly profitable. When you include the fact that there's no mode, the fact that it's uses massive energy, the fact that the capex is just staggering, the fact that the depreciation schedule is like 3 days. Slight exaggeration, but only slight. Then why on earth are they laying off these people? That's weird, right? And in other stories, I've heard of massive insiders selling at companies like Nvidia. So why on earth would they sell? Anyway, let's get back to the article here. The company announced cuts in a memo in a memo from chief AI officer Alexander Wang just hired and here you go. So back in June, you know, this is all the rage and it's the future and then we kind of get into this bubble where it's either put up or shut up. Right now we're at the stage of the game where we go from all this capex spending coming from cash flows. Now it's got to go to new debt. And if it goes to debt, there needs to be light at the end of the tunnel. And I think what's happening right now is they're seeing that AI is definitely the future. There's no disputing that. But as far as being profitability, we don't see or as far as being profitable, we don't see that light at the end of the tunnel yet. So what do you have to do in the interim? You got to cut jobs. And this is just right after they invest not just 14.3 billion in scale AI whatever that is but that's just the tip of the iceberg as far as what they have spent. So, Beta has been aggressively overhauling its approach to AI in recent months as it works to keep pace with rivals like OpenAI, which loses billions, and Google, both pouring billions of dollars into infrastructure products or projects and recruitment. Well, fantastic, because OpenAI, they love incinerating money, so they can just hire all the people that Beta is firing. Perfect. Win-win, right? during the company's second quarter earnings call in J July beta said it's ex it expects its total expenses in 2025 oh this is great you'll love this to come to a range of 114 billion to 118 billion raising the low end of its previous outlook the number is only expected to increase so your expenses are going up by34 billion dollar a year and they're only expected to increase but then there's no profit light at the end of the tunnel. So that dog don't hunt. Getting back to it here, results in 2026 year-over-year expense growth rate that is above the 2025 expense growth rate. So, for those people who thought, "Oh, this is just a one-time investment, and once they have this AI, it's just going to be this massive cash cow." Well, no. It's it's it's not. And again, the depreciation schedule is what is very alarming because you see how this rhymes with the buildout for the internet as far as the the wires or the cable. um that was I forgot exactly what they call it but anyway it was laid across the ocean and you know they had this massive capacity um and they only used a fraction of the capacity but that didn't dep usable. We're still using it today where this stuff is like completely obsolete after two or three years. So, it isn't exactly the the cross ocean cables or whatever that uh give us the internet. On Tuesday, Met Beta announced a $27 billion deal with Blue Owl Capital to fund and develop its massive hype Hyperion. I love all these fancy names that they give. every single name is like super intelligence or it just kind of insinuates that this new world of just massive growth which I'm not debating. There is a new world and we are seeing massive growth and we're probably going to continue to see massive growth. Unfortunately, we haven't seen any growth in profits. And usually that means that the share prices have got ahead of reality. You've got fantasy versus reality. And in that boxing match, guess who always wins? Inevitably, it's going to be reality. And that's probably what we're seeing start to kick in in the AI space. We're not done. Speaking of a massive bubble or a mania that really didn't pan out, let's go over to electric cars and Rivian laying off more than 600 workers. I don't know why everyone's 600 workers, but the bottom line here is the EV thing just didn't pan out. And it didn't pan out to the degree to which they thought it would. and they're depending I'm just scrolling down here on these um let's call them incentives basically uh tax rebate for buying one of these cars and Trump takes that off the table and now they actually have to compete on a level playing field with IC cars and they're like yeah I'm not really into the EV thing and if I am into the EV thing I'd much prefer a hybrid And so then they start to see sales go down. But this is if you look at the second paragraph, I think it's much more about this. Aside from regulatory issues, Rivian also faces slower than expected EV demand and lack of new product until next year amid needs for cash and earning losses. The company lost 1.1 billion in the second quarter. And by the way, I want to remind you that although this seems to rhyme a lot with what we're seeing in a in AI now, are electric cars and hybrids the future? Sure. Absolutely they are. But the mania and the hysteria got way ahead in the share therefore the share price got way ahead of reality. Again, fantasy versus reality. reality. Boom. Right hook from Tyson out of nowhere. And Fantasy is down for the count. But I'd like to point out that Rivian only lost a billion dollars last quarter. That's peanuts. That's that's chump change compared to what OpenAI lost. And and by the way, Open AI lost that. And they have 800 million customers. They have almost a billion customers. They have almost 18th of the planet you uses I chat GBT and they're still hemorrhaging money. I look what's your growth strategy if 18th of the planet already uses your product and you're you're selling it for you're selling the compute for let's say five cents and every unit of compute is costing you a dollar. And you say, "Oh, George, that doesn't matter because the compute cost will go all the way down." Well, fantastic. Well, now they are as a utility because if OpenAI brings their, let's say, cost down to a penny and then they charge 2 cents, well, their competitor is just going to come in and say, "I'll charge you a penny and a half." And then OpenAI says, "Ah, I'll charge you a penny and a quarter." It's a race to the bottom with this stuff, but it's the same overall concept, right? You get a story, you get a narrative, you get hysteria, you get mania, you get the share price going way out ahead, and then you get all of this capex, all of this investment for the demand. And then with the EV side of it, the demand just goes away because of the regulatory stuff and because the economy is actually slowing down. We're seeing all car sales, not all car sales, but a lot of uh let's say cracks in the car industry, especially in the used car industry, and that goes back to some of the subprime blowups that we've seen, but it's a very similar concept, right? You just get way over ahead of your you get uh out over your skis and then all of a sudden you've got to scale things back to reality. And the fantasy was this. And currently the reality is that even though I will be the first person to admit that the this reality is definant is definitely going to be reality but not next year. It's going to be reality in 10 years or 5 years or whatever it is. And therefore you have to adjust the share price down to what the reality is going to be over the next one year or the next two years. And that means scaling back capex. And that means cutting workers. That means unemployment rate goes up. That means the economy slows even further. And you go into that feedback loop which usually usually results in a recession. But hey, maybe this time we won't get a recession. Let's remember that no matter how bad the economy gets, if you don't know about it and if we don't get any data, then the NBER isn't going to announce an official recession. And can we have a recession if the NBER doesn't officially announce it? Obviously, the answer is yes. But will the markets trade on that? All right. Now, let's go to the last one that that really caught me off guard, and that's Target. Look at this. Target cuts 1,00 corporate jobs. And this came out, well, it was, let me refresh here. It was not 17 minutes ago. It was an hour ago, 51 minutes ago. So, this is hot off the presses. Target said Thursday it's cutting 1,800 ROS across the company, roughly 8% of its corporate workforce. Marks the largest round of layoffs at the company in a decade. A decade. The retailer is fighting to get back growth. Okay. They've got a new CEO. Now, what I highlighted, the company has said it expects annual sales to decline this year. Its shares have fallen 65% since their all-time highs when 2021. Why? Goes right back to what we're saying. Oh my gosh, look at this demand. Look at the demand. Look at the demand. We're sold out. We're sold out here. The restaurants are sold out. The department stores are sold out. The car dealers are sold out. Everybody's sold out because we have all this demand. And everyone thinks that demand is just going to continue indefinitely into the future, not realizing that that demand was just a sugar rush provided by the government. And the government increased the purchasing power above and beyond inflation even though wages weren't coming up. But at a certain point in time, fantasy has to come back down to reality and the purchasing power decreases because the stemmies were out, the subsidies were out, you got to start paying back your student loans, all these things. And what that means, your purchasing power goes down and the first thing to go is the disposable income and probably your car payment or at least buying a new car in the form of a new car or a used car. And so it's it's no surprise that we're seeing this stuff play out. And by the way, all you had to do is just look at the dam look at the darn yield curve. I mean, just look at the yield curve. That's all you had to do. That's all you had to do and you would have predicted all of this. Just watch interest rates. I guess that's the main takeaway for the video. But we're not done yet. Let's go over to and this is what I was talking about yesterday when the internet cut me off. Primma lens bankruptcy renews focus on subprime consumer strain. It's the same story. It's just playing out in a different You've got all these cracks of the in the dam. all these cracks in the dam and they're a result of the exact same thing. But what's happening here is the beginning of this video was talking about this crack is starting to leak water over here and now we're talking about this crack over here is starting to leak water in the dam. But the all these cracks in the dam are a result of pretty much the exact same thing. So what this is is it's it's really confirmation, right? We look at what's happening in the repo market. I think we talked about that on the video yesterday that got cut off. And we asked the question, you know, this temporary spike that we saw in the repo market, is that just business as usual or is that a result of a lack of liquidity? And is the lack of liquidity a result of just not enough bank reserves or counterparty risk? And I think when you look around and see what's happening withricolor, with First Brands, with uh Western Alliance, with Zion, with all these newlyannounced corporate layoffs, and let's not forget about the revisions to the non-farm payrolls back in the good old days when we actually used to get non-farm payrolls. And then you combine that with this subprime blow up that we're seeing, and it's like, yeah, risk is increasing. Risk is definitely increasing. But I think this time is a little bit different from the GFC from a standpoint that the you could argue subprime blowing up back then and the credit crisis led to the recession or it was the main catalyst to the recession. But this time I think it's kind of reverse order that the economy is slowing down. We're seeing the purchasing power going go down because of the economic distortions created by the central planners during the surveys sickness. And now it's just the rubber is meeting the road. Unfortunately, it's time to pay the fiddler. Unfortunately, right now we're we've just woken up at at 8:00 a.m. with a massive hangover and a massive headache from one hell of a party last night. But the party's fun and the party's great when you're out there jamming on the dance floor. But then you wake up the next morning and you suffer the consequences. And right now I think we're in the the basically the hangover phase. So the point there is I think the GFC is really about the credit blowing up or the subprime blowing up creating or being the catalyst of the recession. I think this time the the recession is actually the catalyst to what we're seeing with the subprime blow up. So Plano, Texas provider of financing to auto dealerships focus on subprime borrowers and you always see it start at the at the lower ends of the income totem pole. So how these cycles always play out. So Primal Lend was lending and so what was Primal Lend? They were basically one of these shadow banks. This is private credit. So they would borrow. So look at this. buy here pay here dealerships like so a bank is never going to lend toricolor now they want to but from a regulatory standpoint and they want to make it seem as though their balance sheet is just pristine and it's only AAA credit rated that we're lending to they want to make it seem like that but they're still greedy as hell they're banksters at the end of the day so they're going to want to make money and they're like hey we could make some money here withricolor or what I've been calling garbage corporation with the triple F credit rating. And but how do we do this? Because there's these regul, you know, Basil 3 and all the regulations that were put in place in the GOC. They say, "Oh, hey, no problem. Easy. We'll just set up a shadow bank. We'll lend to the shadow bank that's got the AAA credit rating." And the shadow bank will go ahead and lend to the garbage corporation with a triple AF credit rating. And that's how we'll go ahead and expand our balance sheet. We're both pocketing a spread. and Primal Lend or whoever the hell it is is just like sure we'll get in the middle act as a middleman and basically shield you and shield your balance sheet. It's it's all it's basically an offbalance sheet transaction for the big banks. That's really what this is all about. And this I think the hysteria the mania that we saw at a consumer level and with the retailers and with the car dealerships or with the car companies you know like Rivon I think you're seeing you saw the exact same thing with lending exact same thing so the PRAA or first of all the banks are like why not lend to Primma because the economy is on fire we're never going to have a recession again. So who who cares who Prima lends to? We're still going to get paid. And then Prima is like, "Ah, this lend to anybody. Who cares? They're lending to they're selling cars and giving loans, car loans to guys that have a 400 credit score and don't have a a green card. They're not even American citizens. No problem. There's no risk there." Why? Because everyone knows the economy is on fire. The economy is strong and resilient. look at the labor market. See, this is how they rationalize it. And then they take it a step further and they're like, "Oh, well, yeah, let's just take this collateral case of first brands and let's just pledge it to all these other shadow banks." And is it fraudulent? Maybe some gray area, but who cares because everyone's going to get paid back and everyone's going to be happy because we're going to make a return on all these loans because everyone knows the economy is on fire and the economy is doing so great and demand is so high. See, it all goes back to the economic distortions. All goes back to the economic distortions. So, I think the main takeaway here is what you're going to or at least what I'm going to be looking at is the labor numbers if we ever get them again. And the catalyst here is the deterioration of the jobs market. And we're seeing anecdotal evidence right there with the first three stories from Beta, from Rivian, and from what was it? Target. And then we're seeing, you know, a lack liquidity. We're seeing that show up in private credit shadow banking. We're seeing that show up slightly in the repo market. And these are usually the first signs that you're seeing this economic slowdown that at the end of the day was predicted far in advance by the yield curve for whoever was just willing to pay attention. And I think the people that are paying attention right now to all of these cockroaches, let's say, and we seem to get more and more and more every single day, but the people that are paying attention are the ones that are going to have an edge in with their portfolio in the throughout the rest of 2025 and into 2026. So, on that note, I'm doing a huge awesome mega webinar October 29th. And Josh, let's see. Yeah, he just put a a link up there. It is a free webinar and what I'm going to go over three I'm going to be going over a lot of stuff. One of the main thing three contrarian strategies that the pros use, the guys that I know like the guys I know in St. Barts and whatnot. And the these strategies are what they employ when they know that we're in we have a lot of these financial bubbles. So whether it's the stock market bubble, the AI bubble, the housing bubble, whatever it is, everyone can agree that pretty much we have just a limitless amount of financial bubbles. So how do you protect yourself? How do you actually grow wealth? Well, you don't buy and hold. You don't buy the dip. You don't just take 10% of your paycheck and allocate it to an S&P 500 index fund. You usually do the opposite of that. I'm going to be taking you step by step through these contrarian strategies. So, it's going to be perfect for a noob. It's going to be perfect for someone who is more advanced. And the kicker here, the best part of this is for every single person that attends, I'm going to give them a a $500 coupon code for Rebel Capitalist Live 2026. That is my incredible investment conference I do every single year in Orlando. It's not something you want to miss. And that coupon code takes the general admission ticket from 5.99 down to 99 bucks. So you've got everything to gain. Absolutely nothing to lose. But you've got to go right now and register for that webinar. Again, October 29th. We'll put a link in the description below. And remember, Josh just put a link in the chat. Okay, on that bombshell, guys, enjoy the rest of your evening. As always, make sure you're standing up for freed and liberty. Free market capitalism.