Labor Market Data: Recent nonfarm payroll numbers were significantly lower than expected, with only 22,000 new jobs in August, and previous months' figures were revised downward, indicating a slowing labor market.
Unemployment Trends: The unemployment rate ticked up to 4.3%, with labor force participation largely unchanged, highlighting potential underlying weaknesses in the job market.
Historical Context: Historically, negative nonfarm payroll prints outside of recessions are rare and often precede or follow economic downturns, suggesting potential recession risks.
Interest Rates and Treasury Yields: A significant drop in Treasury yields was observed, attributed to lowered growth and inflation expectations rather than changes in debt levels, challenging common narratives about debt and interest rates.
Federal Reserve Policy: The unexpected labor market data has increased speculation about a potential 50 basis point rate cut by the Federal Reserve, which was not anticipated prior to the report.
Market Reactions: The S&P 500 showed a slight decline, indicating a shift in market sentiment where bad economic news may no longer be perceived as good news for equities.
Banking Sector Dynamics: Banks are likely to act as a stabilizing force in the bond market, as they will buy treasuries if yields rise significantly above nominal GDP expectations, due to the attractive risk-reward profile.
Transcript
Hello fellow rubble capitals. Hope you're well. So we had nonfarm payroll come out and just like the jolts numbers and just like the ADP numbers, it was a swing and a miss, baby. And it wasn't just a swing and a miss. It was more downwardly revised numbers from previous months. Now there was a little bit of a catch. I think last month was upwardly revised. But the huge huge thing is the month of June was revised down into negative territory. That's right, negative negative nonfarm payrolls. So, let's get right into it. And not only did I think this shock the world, but what's an even bigger shocker that we're going to discuss right now in this video is how the United States debt has done something completely unprecedented. That's right, the deficits and the debt. Got to stay tuned. We're going to talk about that at the end of this video. So, this is a juicy one, guys. This is what we've all been waiting for. Let's get right into the screen share because Josh is way too busy swiping on Tinder. So, I have to do all the screen shares myself. And we're going to start by going over to the Wall Street Journal. We'll just get the plain vanilla data. And then we'll go to the BLS and then we'll go over to Zero Hedge. So here actually let me do a zoom in for you guys. Oh not actual size the opposite of that. So headline hiring stalled in August with 22,000 new jobs. What was the expectation you may be asking? More than 22,000 jobs. We'll go right over to the handy dandy calendar. And it was where are we here? Oh, let's see. They've already got it. They always do this to me. Okay, 75,000. So, last month, as you remember, 79,000. Huge disappointment. Massive downward revisions. And this month, they were expecting 75,000. They got 22,000, but we had some more downward revisions that we're going to get into in just a moment. And then you know what I did is I actually went back in time, believe it or not, and I took a look at how often we have a negative non-farm payroll after revisions. And we do not have a recession, and I'm going to be going over that as well. This is going to be an awesome podcast or an awesome video. So, let's get back to the Wall Street Journal. You see what expectations were. I'm sure they'll reiterate. And look at this trend. You notice it's kind of if I tilt my head. Yep. Yep. There we go. It's like that. The trend is down. All right, let's get into it here. Oh, yeah. Forgot unemployment rate ticked up. But I don't I mean that's a big deal, but it's just the labor force participation. That's a huge component of that household survey. But I do want to see in the household survey how many jobs we added or how many jobs we lost because remember the non-farm payroll is about the establishment survey. All right. Uh government also revised down numbers from earlier this year. They said the economy lost a net 13 job 13,000 in June. That's what I was saying. remember we uh the first headline number for June if I'm not mistaken was right around 120,000 roughly and then they revised it down to like 194,000 and now we're revising it down again to a negative negative 13,000 jobs. Now, I believe last month they increased they revised up slightly, maybe 5,000, but that's not the last revision. We we got to wait till next month to get the last revision on that one. So, here we go. We talk about how the UN or they talk about how the unemployment rate bumped from 4.2 to 4.3. Still not in danger really of triggering the SOM rule again. Rebecca Patterson. She's an economist and senior fellow at the Council of Foreign Relations. I don't know why they're all of a sudden an expert on the economy, but she said the labor market is continued to slow to a stally. Thanks, Rebecca. I Wow. I'm sure glad that the Wall Street Journal went out and got that quote. I mean, that is incredibly profound. Let me repeat that guys. Actually write this down because if it wasn't for the experts over at the Wall Street Journal and this incredible top-notch journalism digging really into the depths of how the economy really works and this just incredible, incredible insight from Rebecca. We would be robbed of this highlevel analysis. So write this down. The labor market is continuing to slow to stall speed. Wow. Yeah. Anyway, moving on. The US has added just 598,000 jobs for 2025 outside of 2020 when the survea sickness hit. That was the fewest in the first eight months since 2009. Wow, I didn't realize that. That's a stat for you. With the exception of the survea sickness, the amount of jobs added in 2025 is as low as it has been since 2009 when we were really reeling from the GFC. And keep in mind that's a nominal number. And the population was a lot bigger or excuse me, the population is a lot bigger now than it was in 2009. Private sector employment grew by 38,000 driven by a gain of 46 and healthcare. Okay. Yeah, that's typical. Federal government declined 15,000. That's good. And thanks to tariffs for all you mega people out there, the manufacturing jobs boomed by or actually wait I'm sorry. Manufacturing jobs lost 12,000. I'm sorry. I'm sorry. I don't mean to poke fun at the mega tariff folks, but ah sometimes I just can't resist. Okay, now oh going back to patter. We're going back to this profound economic legend. Here we go. If America wasn't getting older and sicker, we would have negative payroll print today. That's not good. Wow. More words of wisdom. and this federal government employment. Okay. Yeah, we got that. That's actually a good thing. But and a lot of you, you say, you know, you got to realize that anything under say, I mean, 200,000 is a terrible number. It's a terrible number. It means the job market is not keeping pace with the population. And if the job market isn't keeping pace with the population, meaning that there's just not there's just no jobs and there's far more workers than there are jobs or people actually want gigs, that means purchasing power goes down. What does that mean for the economy? Economy slows down if not goes into a recession. Okay, so you get this. Let's go over to the BLS, the actual report itself. And again, let me zoom in. There we go. And let me just make sure we got the screen share working, which we Oh, Josh is back from Tinder. Josh, how'd it go? Did you get any likes? >> Been grinding all day. >> Nice. How many likes did you get? >> By a million. >> Whoa, dude. Nice. That's just an average day for Josh. You could tell because well he obviously isn't working and he obviously doesn't show up on time to do these videos so he's got to be doing something and at least he's getting getting a lot done over there on Tinder. Okay, so getting back to where was I here? Ah yes, the BLS employment situation the blah blah blah blah blah transmission of material. Okay, we got that. So basically they're reiterating what we saw right here or right uh back there in the Wall Street Journal. They break it down by unemployment rate for adult men, adult women. And as you can see, we live in a uh what is it? The male patriarchy. Um and I mean you can see this, you know, misogynistic society that we live in right here played out in the numbers. I mean look at this guys. Adult men, 4.1% unemployment. Adult women, obviously a lot higher than that because everyone hates women and discriminates against them. But wait, ah, there you go again. It's the opposite of that. 3.8. All right. And because we live in a society where discrimination is so rampant, we rampant, we see that um the Asians actually have a lower unemployment rate than the whites. All that discrimination against those white folks. All right, moving on down here. Among the unemployed, the new the number of new entrance decreased by 1,000. Excuse me. 199,000 to 700 among the unemployed the new entrance decreased by 19. The new entrance H. Okay, let's keep going here. The entrance are unemployed people who are looking for their first job. Ah, so the new entrance decreased. Okay. So, I'm going to have to think about that one. That seems like Let's see. The among the unemploy that's worded very weird. The number of new entrance decreased. Okay. Well, that's good. By 200,000 in August, largely offsetting an increase in the prior month. The new entrance are unemployed people who are looking for their first job. Okay. But I mean, a lot of those people could have just given up. It it's weird because the way they do these unemployment numbers is they've got the U3 number, the U6 number, and to be categorized in the headline number, U3. I think it's like you have to be looking for a job in the last four weeks or six weeks or something like that. So, it it's very difficult to parse through these things with any accuracy. But what you can do is look at the trends. So that's why I try to look at the the trend in the household number just the net jobs plus or minus and then you kind of get a feel with what's happening when you include the labor force participation and then you know when you start to see that trend down in non-farm perils although this number I'm sure isn't accurate it's going to be revised again it just show it just kind of gives you a better feel for what's happening underneath the surface so they say labor force participation a little changed okay got that Number of employed part-time at 4.7 little change. Okay, got that. The number of people not in the labor force who currently want the job at 6.4 changed little but was up. Okay, so then they talk about what actually happened in this establishment survey, the breakdown. Okay, we get that. Now, let's go over to Zero Hedge because they've got some further insights. We're going to zoom in and then we're going to go over if there has been times in the past in the United States where we have actually had a negative non-farm payroll number and we have avoided a recession. Okay, so they say putrid payrolls job growth collapses to just 22,000. unemployment rate goes up to 4.3 putting a 50 basis point rate cut in play. So this is something that nobody was talking about. Actually Snyder was. You got to give him credit. But other than Snyder, nobody was talking about a 50 basis point cut like last week or even yesterday. But let's go over to the CME group. I've got that one pulled up and let's just do a little refresh action here. And we see that 89% 25 basis point cut. Now we're at 10% for a 50. And notice what we were yesterday 0%. Week prior 0%. Month prior 0%. In fact, look at this. One week ago, there was a 13% chance that they'd pause. So, we've gone from a 13% chance they'd pause and 0% chance of a 50 to 0% chance of a pause and a 10% chance of a 50. Why is that? It's all about the labor market, ladies and gentlemen. All about the labor market. It's Jolts, it's ADP, and then just that roundhouse. Boom. Mike Tyson punch with the non-farm payrolls today. and okay, let's go back to Zero Hedge. Okay, so they've got basically the same chart that we saw earlier with Wall Street Journal. Okay, let's keep going down here. The revisions push pushed the three-month average uh who to just 29,000. Wow. So again guys, we're we're creating on a uh you know kind of the the rolling average if you will 29,000 jobs per month in an economy with 350 million people. That that is that that is not an example of the economy running on all eight cylinders. No chance. This is economy that's just sputtering along here. And you have to again ask the question when you look at this trend, what are the probabilities that this trend just out of nowhere reverses and goes back up? Like if we just had a one-off, like a negative, you know, 100,000 and it was just a total one-off due to I don't want to say weather because that's such a bad excuse, but we'll just say like a huge strike at Walmart or something like that. Um, okay, that's fine. But, but again, look at this. And I I mean, the best argument you could make is this is just the economy normalizing from the massive uh job increases that we had during the surveys sickness, which was not due to the surveys sickness, as you guys know. It was due to the government's response to the surveys sickness and all these economic distortions they created. But I I think that's the best argument. But even that argument at a certain point, you know, if we continue to get these negatively revised numbers that actually do take the nominal number negative, you've got to say, okay, this is not about normalization. This is about the economy just grinding to a halt and potentially going into recession, especially when you got the Jolts numbers backing up, the ADP numbers, etc. Okay, so we've got the labor force kind of rolling over. We've got the non-farm payroll. Okay, we've got that. Get that chart. That makes sense. And then they break it down by Hispanics, whites, blah blah blah blah blah. Okay. Okay. Now, we're talking about the un Now, let's see the same. Oh, labor force participation. Talk about that. Reversing last month's drop to the lowest level. So, that's why the unemployment rate went up to 4.3 is because you had the labor force participation increase slightly. So, if this continue, and I'd say this trend is down, but if this does continue back this way, then you're going to see massive upward pressure to the unemployment rate. And while U3 came in line, U6 or undermployment far worse. Okay, that's what I was getting at when we were going over the actual data from the BLS. So again, U3 is that headline number. So the 4.3, that's U3. Uh U6 is undermployment and I think U6 used to be U3. Don't quote me on that, but I think back in the 70s and 80s, I think that's how they measured it. But regardless, U6 is a much better and more accurate reflection of what's happening in the economy because this actually includes all of the unemployment uh all the unemployed people, not just the people that just happen to have looked for a job over the last four weeks. It's like magically if you stop looking for a job after a month that you're no longer considered unemployed. What? Uh, ask the people who are unemployed. So, here's U6 up to 8.1%. Wow. I'm glad Zero Hedge put that in there because again, I think this is a much better reflection as to what's happening in the real economy as far as the labor market than just the U3 headline number. Hourly earnings drop slightly. Okay, that's no bueno zone. full-time to part-time workers. US full-time, so part-time was okay, look at that. We got a we got a a bigger actually, we had an increase in part-time and a decrease in full-time net decrease. Oh my gosh, look at this. Yeah, 597. I would guess that is Is that the delta? Hm. I'm not sure how they're getting that number, but the bottom line here is pretty much all the jobs gained in that 22,000 number looks like on net would have come from part-time or the reason why we had a plus 22,000 instead of a negative number was pretty much all due to part-time workers. I think that's kind of what that chart is saying. Uh native born, let's see. So nativeborn, foreignb born, native born. Wow. Nativeorn. So that's a big change because remember Zero Hedge and the whole MAGA crowd was really excited. And I'm not saying it's right or wrong, whatever. They just were because we saw the opposite. We saw the nativeborn workers, you know, really picking up employment. And then we saw a net decrease in foreignb born and now it's it's now we flipped. Look at because the green line represents the native born and that's steeply negative and the foreignb born now is actually positive. Multiple job holders way not way higher but definitely higher than what we saw prior to the surveys sickness. Okay. Now, what I want to do is I want to go over kind of the hit. I found this fascinating. So, what I did is, and let me see if I can zoom in here as well. This is chat GPT. I've got like the $20 a month deal. And I did like the deep dive or whatever they call it, the deep research. And here's the question I asked. I said I'm Okay, that's not the first question. Here's the first question. Has the US ever has the US of every that's Jeez. Okay, that's me being an idiot. Has the US ever had a negative non-farm payroll print and not been in or close to a recession? If so, when specifically? Please go back in history as far as you can, ideally to the 1970s at the very least. So, here we go. And this is great. Great. What they they gave me here. So n early 1970s prior to the recession we did have a non-farm payroll. It came at -49,000. We had right here at -62, negative 308, but see look at this communication workers. So here's we can go through here. So the punch line is yes, we absolutely have had negative non-farm payroll numbers outside of a recession. But what you'll notice is and and this is a recession by the way. I told Chat GPD specifically to give me the using the parameters of what the NBER defined as a recession and the actual timeline, the official timeline they used. So what you'll find is one of two things. Either it's some bizarre anomaly like um like here wrapping up the census 2000 UPS workers strike severe blizzard and temporary federal government shutdown. So unless it's some kind of you know out and right field deal it's it's usually either just preeding or just proceeding a recession. So it's always right around a recession or it's some one-off anomaly. and yeah, like 90% of the time. So, going back to see if we can go back to that trend. Here we go. So, it it's it's very rare to see a trend down like this and then get a negative print after the revision and then magically just go right back to, you know, job growth running on all eight cylinders or the labor market just firing on all eight cylinders. That's really, really, really rare. Usually the only time you see one of these, again, just to make sure we're all on the same page, it's either some wild anomaly that can be explained or it's it's it happens around, if not in a recession. So, that doesn't mean that there's a 100% probability we're going into a recession. As you guys know from watching my videos, I say every single day to Blue in the Face, there are no certainties. There are only probabilities. But what we have to do is we have to look at history and say, okay, if it's happened nine times out of 10 this way, then it doesn't mean it's going to happen for sure, but the probability is a lot higher than just a coin toss, right? And that's what we're doing through these videos. So now what I want to do is go into the next shocking thing that that nobody nobody had on their bingo card. I can assure you. Josh, did you see this? That the the United States deficit and the debt decreased massively today. >> Did you have that one on your bingo card? >> I did not see that one. >> Yeah. Yeah. The deficits down huge. the national debt in the United States down just today. In fact, the the the word hit the wire or the news hit the wire right around 8:30 Eastern time. Well, let me let me actually Josh, let me show you what I'm referring to. So, if we go over to the 10-year Treasury yield, look at this, Josh. Right here, right around 7:30 or call it 8:30 Eastern time, we just see rates drop off a cliff down, call it 6, seven basis points. And it looks, in fact, they're down a lot more than that. It looks like they're finishing kind of uh down, you know, we'll call it seven basis points. And then if we look at the 2-year Treasury yield, it's down at 3.5 3.53. So again, we're seeing an uptick here, which is what you would expect of this massive selloff. And especially if we look at the 2-year Treasury, let's go over the last five days. and we can see decline and then bam drop off a cliff. And the 30-year Treasury, very very similar uh looking chart. And also, if you go even to the front end of the curve, those rates are extremely low. So Josh, what this is telling me obviously is that the United States debt has to be coming down, right? Because we all know we all know that if you increase the supply of treasuries well then obvious the rates are going to go up right because prices are going to go down. It's just simple supply and demand. And therefore the only way that interest rates can go down or prices can go up is if you reduce the debt, you reduce the deficits. So whenever you see interest rates go down, that must mean that the United States has lowered the debt. And whenever you see interest rates go up, well, all you have to do is watch CNBC. All you have to do is look at social media and you know that the reason these interest rates are going up is because the market is just realizing that the debt is unsustainable. So on days like today, in fact, let's do this just for fun. Let's go back to the 10-year Treasury and look at the year-to date. So, we start right here right around yeah 4.6 and today we're call it 4 uh 4.10. So, we're down 50 basis points this year. So, obviously the debt and the deficits have come down dramatically since the beginning of the year. But wait a minute, Josh. Have the debts and the deficits come down dramatically since the beginning of the year. >> It's the only explanation. >> But but I'm just You know what? I don't have that chart in front of me. But if my memory serves me well, I I think the debts and the deficits have actually increased this year. Yeah. You know what? I think they have. In fact, let's let's just go to a chart here. Let's see if we can pull up a Fred chart. So, the public debt. Wow. So, we go back and we must be at a debt ceiling or something. But the B Yeah, the the debt has definitely increased. That is for sure. The expectations for the debt definitely increased. And so this isn't making a lot of sense. Unless Unless of course Unless yields aren't a reflection of the supply of treasuries, but yields are really driven by growth in inflation expectations. Maybe, just maybe, the 10-year Treasury went down today because of the non-farm payroll. Maybe, just maybe, the 10-year Treasury this year has gone down by 50 basis points because growth and inflation expectations are lower. And maybe, just maybe, if growth and inflation expectations are lower, even when the debts are going higher and higher and higher and higher and higher, and even when the deficits are going higher, and even when we're coming out with higher expectations for debt and deficits due to the big beautiful bill or whatever it is, that at the end of the day, what really drives yields, the overriding factor is growth in inflation expectations. And a so you guys hopefully you I was trying to make a joke there, but you get my point. And that how many people have you heard, we talked about this yesterday, that are are still sitting there saying on, you know, a podcast or CNBC or whatever that interest rates are going up, interest rates are going up. Interest rates are going up. Interest rates are going up. Well, we all know that interest rates have been going up. We all know that the debts, the deficits have been exploding. they're unsustainable and that interest rates have been going up. We all know that there's no demand for treasuries. We all know that investors are dumping treasuries. I mean, it's obvious. Look, that the interest rates are going up. Yet, if you just look at the chart, it's no, the interest rates are going down. They're not going up. And a lot of people like to claim this is because of yield curve control. Well, that again assumes that the supply of treasuries and this therefore the central planners can come in there and either buy over here or sell over there and they're just going to overwhelm or they're going to override growth in inflation expectations. But then all you have to do is look at a chart of the 10-year Treasury yield and quantitative easing 1, two, and three. And when you pull up a chart of, let's just say, uh, 10-year yield and QE123. We'll do versus, that'll probably pull it up. Whoa. What just happened? What the heck? Uh, let me do a space there. Okay, that's better. I was like, "What on earth was that?" Okay, let's see if we can check out this chart really quick. There we go. This is the 10-year Treasury yield. This is QE1, 2, and three. And you'll And basically QE is yield curve control. That's when the Fed is out there buying or the issue today or the argument is that the Treasury just isn't issuing at the long end of the curve and therefore it's basically yield curve control. Same thing. same dynamic, same concept as QE where you're just trying to distort the supply demand ratio and you're trying to create either less supply or more demand and then bring down rates. But you'll notice what rates did every single time they did QE and even QE4 here. Rates went up, rates went up, rates went up. And you'll notice this time when rates actually went down would be in this period right here. What were they doing? They're actually doing quantitative tightening. They're doing the reverse of QE. That's when the interest rates go down. So, every single time that you are actually or the central planners are actually out there buying or restricting supply or however you want to say it, the interest rates go up. Why is that? Because it's not about supply. It's about growth and inflation expectations. And why is that? What what are the mechanics behind that? Because the bankers are the marginal buyer. So if you believe that the debt is unsustainable and if you believe that the deficits and the debt is going to continue to explode, which by the way I do, but if you believe that that's going to lead to an environment where the 10-year Treasury yield is just going to skyrocket and go way above, let's say, nominal GDP, then you also have to believe that banksters aren't greedy. Because if there is a huge delta between nominal GDP and the 10-year Treasury yield, that's free money for the bankers. Free money because they can just their dollar funding costs are extremely low and they're not taking their money, they're taking other people's money or they're just taking credit and then they're buying the 10-year Treasury and pocketing the spread. So again, if you believe that that's what we're going to have due to this deluge of supply and foreigners dumping treasuries and doing all these things, then you also have to believe that bankers aren't greedy and bankers don't like free money. Because if you believe bankers like free money, then you also have to believe that if there is that huge delta, they're going to step in and buy because all they're doing is pocketing a spread. That's mechanically why supply or supply expectations don't matter. And that's why growth and inflation really overrides everything else. And that's why when you go through and you see these big moves in the 10-year Treasury, the two-year Treasury, even the front end of the curve, you see these big moves, it's always always always due to a headline regarding growth in inflation expectations. I I mean, I would challenge all of you listening to this video or watching this video right now. How many of you a huge move in the 10-year Treasury yield? Let's say, you know, 6 7 8 9 10 15 basis points as a result of a headline about the debt. Nobody. Nobody. Because it's not a thing. The only time you see a headline really drive the yield is because it's all about growth and inflation. i.e. today like the labor market. Labor market. So I know I pound the table on that but that's probably the biggest I think misconception. In fact I was having dinner last night with a guy that was a very sophisticated oil trader. Very sophisticated guy. And one of the first things he said to me, "Oh, George, I watch your videos and you know I've watched a few of them here and there. I really like them. But boy oh boy, how about that US debt?" He says, I mean, that that's that's really unsustainable, isn't it? Meaning that at a certain point that no one's going to want to buy these treasuries and therefore interest rates are going to go way, way, way above growth in inflation expectations or nominal GDP and the Fed is going to have to come in and buy the long end of the curve and somehow that's going to bring down interest rates when it never has in the past. But it implies again that there's not going to be a buyer for the treasuries if you get that big delta. And I explained to him, well then you must believe that banks hate money and you must believe that banks aren't greedy and you must believe that banks hate free money because again they're not holding that 10-year Treasury and saying, "Oh, this is fantastic. We're getting a 4% yield and hopefully inflation won't be above 4% and in real terms we'll get a positive yield. But oh boy, oh no, what happens if inflation goes up to five or 6%? Now all of a sudden we're losing purchasing power on this treasury. That's not how it works for banks. That's how it works for you. But that's not how it works for banks because banks aren't using their money. They're simply borrowing money at 2% and buying a 10-year Treasury or whatever at 4% and pocketing the 2% delta. So, the delta is free money. Another way that I always, in fact, this is one example I used with the gentleman last night. I said, I'm not going to say his name, but I said, if I told you that over the next year I would give you $150 million, would you accept it? And he said, 'Oh, well, of course, absolutely. I said, huh, but there's a catch. There's a catch. What if I also told you that over the next year, the inflation rate in the United States would be 7%. Would you still expect uh would you still would you still accept the $150 million for free? Well, of course I would. Of course I would. And that's the decision the banks have to make. We have to incorporate that into our analysis at all times. That the banks have two decisions to make. They can really only lend. They can buy things to, but really they're in the business of lending. Whether that's to the government, whether that's to the real economy, whatever it is, they're in the business of lending. And if they have dollar funding, if they have dollar liabilities, they can't buy gold. It's there's too much FX risk. They're not going to do that. If they have they're not going to buy Bitcoin. They're not going to buy silver. They're just they're just not. Now, the central banks are because they can go b or they can't go bust. They can have negative equity. But the commercial banks won't do that. They have to match up their assets and their liabilities. So, they have two decisions. That's it. Either you lend out into the real economy to make money or you buy treasuries. That's your choice. or maybe you could buy corporate debt or something, but that's basically lending out to the real economy. So if the stuff is hitting the fan, if the labor market is deteriorating, if growth in inflation expectations for the US, let's just say nominal GDP is at 3.5%. And somehow Scott Bent comes out and dumps all these treasuries onto the market, which takes the 10-year up to whatever, let's say 5.5%. when expectations for nominal GDP is 3.5, what what are the banks going to do to expand their balance sheet? Are they going to lend into the real economy? Of course not. They're going to go buy treasuries because the riskreward is a total nobrainer. It's a no-brainer. And then that brings the interest rate right back down. And those banks, that's why I always say they're the marginal buyer. act as the equilibrating factor whether the interest rates are too low or the interest rates are too high. So rant over you guys. The main takeaways here, labor market definitely definitely slowing. There's no disputing that right now. I think the narrative is really changing. I think the S&P 500, by the way, I is down if I'm not mistaken. Let's see. Uh cuz that's that. Yeah, it's down to not much. But we could be seeing this change in attitude where it's like bad news is actually bad news again. And that could be a gamecher. And then I think from the Fed standpoint, this changes everything because now all of a sudden that 50 basis point cut is definitely definitely on the table. I'm not saying I'm predicting one, but it's definitely on the table when yesterday there was no mention of it. No mention whatsoever. On that bombshell, guys, enjoy the rest of your afternoon. As always, make sure you're standing up for freedom, liberty, free market, capitalism, and we'll see you on the next video.
New Labor Market Data Just SHOCKED The World
Summary
Transcript
Hello fellow rubble capitals. Hope you're well. So we had nonfarm payroll come out and just like the jolts numbers and just like the ADP numbers, it was a swing and a miss, baby. And it wasn't just a swing and a miss. It was more downwardly revised numbers from previous months. Now there was a little bit of a catch. I think last month was upwardly revised. But the huge huge thing is the month of June was revised down into negative territory. That's right, negative negative nonfarm payrolls. So, let's get right into it. And not only did I think this shock the world, but what's an even bigger shocker that we're going to discuss right now in this video is how the United States debt has done something completely unprecedented. That's right, the deficits and the debt. Got to stay tuned. We're going to talk about that at the end of this video. So, this is a juicy one, guys. This is what we've all been waiting for. Let's get right into the screen share because Josh is way too busy swiping on Tinder. So, I have to do all the screen shares myself. And we're going to start by going over to the Wall Street Journal. We'll just get the plain vanilla data. And then we'll go to the BLS and then we'll go over to Zero Hedge. So here actually let me do a zoom in for you guys. Oh not actual size the opposite of that. So headline hiring stalled in August with 22,000 new jobs. What was the expectation you may be asking? More than 22,000 jobs. We'll go right over to the handy dandy calendar. And it was where are we here? Oh, let's see. They've already got it. They always do this to me. Okay, 75,000. So, last month, as you remember, 79,000. Huge disappointment. Massive downward revisions. And this month, they were expecting 75,000. They got 22,000, but we had some more downward revisions that we're going to get into in just a moment. And then you know what I did is I actually went back in time, believe it or not, and I took a look at how often we have a negative non-farm payroll after revisions. And we do not have a recession, and I'm going to be going over that as well. This is going to be an awesome podcast or an awesome video. So, let's get back to the Wall Street Journal. You see what expectations were. I'm sure they'll reiterate. And look at this trend. You notice it's kind of if I tilt my head. Yep. Yep. There we go. It's like that. The trend is down. All right, let's get into it here. Oh, yeah. Forgot unemployment rate ticked up. But I don't I mean that's a big deal, but it's just the labor force participation. That's a huge component of that household survey. But I do want to see in the household survey how many jobs we added or how many jobs we lost because remember the non-farm payroll is about the establishment survey. All right. Uh government also revised down numbers from earlier this year. They said the economy lost a net 13 job 13,000 in June. That's what I was saying. remember we uh the first headline number for June if I'm not mistaken was right around 120,000 roughly and then they revised it down to like 194,000 and now we're revising it down again to a negative negative 13,000 jobs. Now, I believe last month they increased they revised up slightly, maybe 5,000, but that's not the last revision. We we got to wait till next month to get the last revision on that one. So, here we go. We talk about how the UN or they talk about how the unemployment rate bumped from 4.2 to 4.3. Still not in danger really of triggering the SOM rule again. Rebecca Patterson. She's an economist and senior fellow at the Council of Foreign Relations. I don't know why they're all of a sudden an expert on the economy, but she said the labor market is continued to slow to a stally. Thanks, Rebecca. I Wow. I'm sure glad that the Wall Street Journal went out and got that quote. I mean, that is incredibly profound. Let me repeat that guys. Actually write this down because if it wasn't for the experts over at the Wall Street Journal and this incredible top-notch journalism digging really into the depths of how the economy really works and this just incredible, incredible insight from Rebecca. We would be robbed of this highlevel analysis. So write this down. The labor market is continuing to slow to stall speed. Wow. Yeah. Anyway, moving on. The US has added just 598,000 jobs for 2025 outside of 2020 when the survea sickness hit. That was the fewest in the first eight months since 2009. Wow, I didn't realize that. That's a stat for you. With the exception of the survea sickness, the amount of jobs added in 2025 is as low as it has been since 2009 when we were really reeling from the GFC. And keep in mind that's a nominal number. And the population was a lot bigger or excuse me, the population is a lot bigger now than it was in 2009. Private sector employment grew by 38,000 driven by a gain of 46 and healthcare. Okay. Yeah, that's typical. Federal government declined 15,000. That's good. And thanks to tariffs for all you mega people out there, the manufacturing jobs boomed by or actually wait I'm sorry. Manufacturing jobs lost 12,000. I'm sorry. I'm sorry. I don't mean to poke fun at the mega tariff folks, but ah sometimes I just can't resist. Okay, now oh going back to patter. We're going back to this profound economic legend. Here we go. If America wasn't getting older and sicker, we would have negative payroll print today. That's not good. Wow. More words of wisdom. and this federal government employment. Okay. Yeah, we got that. That's actually a good thing. But and a lot of you, you say, you know, you got to realize that anything under say, I mean, 200,000 is a terrible number. It's a terrible number. It means the job market is not keeping pace with the population. And if the job market isn't keeping pace with the population, meaning that there's just not there's just no jobs and there's far more workers than there are jobs or people actually want gigs, that means purchasing power goes down. What does that mean for the economy? Economy slows down if not goes into a recession. Okay, so you get this. Let's go over to the BLS, the actual report itself. And again, let me zoom in. There we go. And let me just make sure we got the screen share working, which we Oh, Josh is back from Tinder. Josh, how'd it go? Did you get any likes? >> Been grinding all day. >> Nice. How many likes did you get? >> By a million. >> Whoa, dude. Nice. That's just an average day for Josh. You could tell because well he obviously isn't working and he obviously doesn't show up on time to do these videos so he's got to be doing something and at least he's getting getting a lot done over there on Tinder. Okay, so getting back to where was I here? Ah yes, the BLS employment situation the blah blah blah blah blah transmission of material. Okay, we got that. So basically they're reiterating what we saw right here or right uh back there in the Wall Street Journal. They break it down by unemployment rate for adult men, adult women. And as you can see, we live in a uh what is it? The male patriarchy. Um and I mean you can see this, you know, misogynistic society that we live in right here played out in the numbers. I mean look at this guys. Adult men, 4.1% unemployment. Adult women, obviously a lot higher than that because everyone hates women and discriminates against them. But wait, ah, there you go again. It's the opposite of that. 3.8. All right. And because we live in a society where discrimination is so rampant, we rampant, we see that um the Asians actually have a lower unemployment rate than the whites. All that discrimination against those white folks. All right, moving on down here. Among the unemployed, the new the number of new entrance decreased by 1,000. Excuse me. 199,000 to 700 among the unemployed the new entrance decreased by 19. The new entrance H. Okay, let's keep going here. The entrance are unemployed people who are looking for their first job. Ah, so the new entrance decreased. Okay. So, I'm going to have to think about that one. That seems like Let's see. The among the unemploy that's worded very weird. The number of new entrance decreased. Okay. Well, that's good. By 200,000 in August, largely offsetting an increase in the prior month. The new entrance are unemployed people who are looking for their first job. Okay. But I mean, a lot of those people could have just given up. It it's weird because the way they do these unemployment numbers is they've got the U3 number, the U6 number, and to be categorized in the headline number, U3. I think it's like you have to be looking for a job in the last four weeks or six weeks or something like that. So, it it's very difficult to parse through these things with any accuracy. But what you can do is look at the trends. So that's why I try to look at the the trend in the household number just the net jobs plus or minus and then you kind of get a feel with what's happening when you include the labor force participation and then you know when you start to see that trend down in non-farm perils although this number I'm sure isn't accurate it's going to be revised again it just show it just kind of gives you a better feel for what's happening underneath the surface so they say labor force participation a little changed okay got that Number of employed part-time at 4.7 little change. Okay, got that. The number of people not in the labor force who currently want the job at 6.4 changed little but was up. Okay, so then they talk about what actually happened in this establishment survey, the breakdown. Okay, we get that. Now, let's go over to Zero Hedge because they've got some further insights. We're going to zoom in and then we're going to go over if there has been times in the past in the United States where we have actually had a negative non-farm payroll number and we have avoided a recession. Okay, so they say putrid payrolls job growth collapses to just 22,000. unemployment rate goes up to 4.3 putting a 50 basis point rate cut in play. So this is something that nobody was talking about. Actually Snyder was. You got to give him credit. But other than Snyder, nobody was talking about a 50 basis point cut like last week or even yesterday. But let's go over to the CME group. I've got that one pulled up and let's just do a little refresh action here. And we see that 89% 25 basis point cut. Now we're at 10% for a 50. And notice what we were yesterday 0%. Week prior 0%. Month prior 0%. In fact, look at this. One week ago, there was a 13% chance that they'd pause. So, we've gone from a 13% chance they'd pause and 0% chance of a 50 to 0% chance of a pause and a 10% chance of a 50. Why is that? It's all about the labor market, ladies and gentlemen. All about the labor market. It's Jolts, it's ADP, and then just that roundhouse. Boom. Mike Tyson punch with the non-farm payrolls today. and okay, let's go back to Zero Hedge. Okay, so they've got basically the same chart that we saw earlier with Wall Street Journal. Okay, let's keep going down here. The revisions push pushed the three-month average uh who to just 29,000. Wow. So again guys, we're we're creating on a uh you know kind of the the rolling average if you will 29,000 jobs per month in an economy with 350 million people. That that is that that is not an example of the economy running on all eight cylinders. No chance. This is economy that's just sputtering along here. And you have to again ask the question when you look at this trend, what are the probabilities that this trend just out of nowhere reverses and goes back up? Like if we just had a one-off, like a negative, you know, 100,000 and it was just a total one-off due to I don't want to say weather because that's such a bad excuse, but we'll just say like a huge strike at Walmart or something like that. Um, okay, that's fine. But, but again, look at this. And I I mean, the best argument you could make is this is just the economy normalizing from the massive uh job increases that we had during the surveys sickness, which was not due to the surveys sickness, as you guys know. It was due to the government's response to the surveys sickness and all these economic distortions they created. But I I think that's the best argument. But even that argument at a certain point, you know, if we continue to get these negatively revised numbers that actually do take the nominal number negative, you've got to say, okay, this is not about normalization. This is about the economy just grinding to a halt and potentially going into recession, especially when you got the Jolts numbers backing up, the ADP numbers, etc. Okay, so we've got the labor force kind of rolling over. We've got the non-farm payroll. Okay, we've got that. Get that chart. That makes sense. And then they break it down by Hispanics, whites, blah blah blah blah blah. Okay. Okay. Now, we're talking about the un Now, let's see the same. Oh, labor force participation. Talk about that. Reversing last month's drop to the lowest level. So, that's why the unemployment rate went up to 4.3 is because you had the labor force participation increase slightly. So, if this continue, and I'd say this trend is down, but if this does continue back this way, then you're going to see massive upward pressure to the unemployment rate. And while U3 came in line, U6 or undermployment far worse. Okay, that's what I was getting at when we were going over the actual data from the BLS. So again, U3 is that headline number. So the 4.3, that's U3. Uh U6 is undermployment and I think U6 used to be U3. Don't quote me on that, but I think back in the 70s and 80s, I think that's how they measured it. But regardless, U6 is a much better and more accurate reflection of what's happening in the economy because this actually includes all of the unemployment uh all the unemployed people, not just the people that just happen to have looked for a job over the last four weeks. It's like magically if you stop looking for a job after a month that you're no longer considered unemployed. What? Uh, ask the people who are unemployed. So, here's U6 up to 8.1%. Wow. I'm glad Zero Hedge put that in there because again, I think this is a much better reflection as to what's happening in the real economy as far as the labor market than just the U3 headline number. Hourly earnings drop slightly. Okay, that's no bueno zone. full-time to part-time workers. US full-time, so part-time was okay, look at that. We got a we got a a bigger actually, we had an increase in part-time and a decrease in full-time net decrease. Oh my gosh, look at this. Yeah, 597. I would guess that is Is that the delta? Hm. I'm not sure how they're getting that number, but the bottom line here is pretty much all the jobs gained in that 22,000 number looks like on net would have come from part-time or the reason why we had a plus 22,000 instead of a negative number was pretty much all due to part-time workers. I think that's kind of what that chart is saying. Uh native born, let's see. So nativeborn, foreignb born, native born. Wow. Nativeorn. So that's a big change because remember Zero Hedge and the whole MAGA crowd was really excited. And I'm not saying it's right or wrong, whatever. They just were because we saw the opposite. We saw the nativeborn workers, you know, really picking up employment. And then we saw a net decrease in foreignb born and now it's it's now we flipped. Look at because the green line represents the native born and that's steeply negative and the foreignb born now is actually positive. Multiple job holders way not way higher but definitely higher than what we saw prior to the surveys sickness. Okay. Now, what I want to do is I want to go over kind of the hit. I found this fascinating. So, what I did is, and let me see if I can zoom in here as well. This is chat GPT. I've got like the $20 a month deal. And I did like the deep dive or whatever they call it, the deep research. And here's the question I asked. I said I'm Okay, that's not the first question. Here's the first question. Has the US ever has the US of every that's Jeez. Okay, that's me being an idiot. Has the US ever had a negative non-farm payroll print and not been in or close to a recession? If so, when specifically? Please go back in history as far as you can, ideally to the 1970s at the very least. So, here we go. And this is great. Great. What they they gave me here. So n early 1970s prior to the recession we did have a non-farm payroll. It came at -49,000. We had right here at -62, negative 308, but see look at this communication workers. So here's we can go through here. So the punch line is yes, we absolutely have had negative non-farm payroll numbers outside of a recession. But what you'll notice is and and this is a recession by the way. I told Chat GPD specifically to give me the using the parameters of what the NBER defined as a recession and the actual timeline, the official timeline they used. So what you'll find is one of two things. Either it's some bizarre anomaly like um like here wrapping up the census 2000 UPS workers strike severe blizzard and temporary federal government shutdown. So unless it's some kind of you know out and right field deal it's it's usually either just preeding or just proceeding a recession. So it's always right around a recession or it's some one-off anomaly. and yeah, like 90% of the time. So, going back to see if we can go back to that trend. Here we go. So, it it's it's very rare to see a trend down like this and then get a negative print after the revision and then magically just go right back to, you know, job growth running on all eight cylinders or the labor market just firing on all eight cylinders. That's really, really, really rare. Usually the only time you see one of these, again, just to make sure we're all on the same page, it's either some wild anomaly that can be explained or it's it's it happens around, if not in a recession. So, that doesn't mean that there's a 100% probability we're going into a recession. As you guys know from watching my videos, I say every single day to Blue in the Face, there are no certainties. There are only probabilities. But what we have to do is we have to look at history and say, okay, if it's happened nine times out of 10 this way, then it doesn't mean it's going to happen for sure, but the probability is a lot higher than just a coin toss, right? And that's what we're doing through these videos. So now what I want to do is go into the next shocking thing that that nobody nobody had on their bingo card. I can assure you. Josh, did you see this? That the the United States deficit and the debt decreased massively today. >> Did you have that one on your bingo card? >> I did not see that one. >> Yeah. Yeah. The deficits down huge. the national debt in the United States down just today. In fact, the the the word hit the wire or the news hit the wire right around 8:30 Eastern time. Well, let me let me actually Josh, let me show you what I'm referring to. So, if we go over to the 10-year Treasury yield, look at this, Josh. Right here, right around 7:30 or call it 8:30 Eastern time, we just see rates drop off a cliff down, call it 6, seven basis points. And it looks, in fact, they're down a lot more than that. It looks like they're finishing kind of uh down, you know, we'll call it seven basis points. And then if we look at the 2-year Treasury yield, it's down at 3.5 3.53. So again, we're seeing an uptick here, which is what you would expect of this massive selloff. And especially if we look at the 2-year Treasury, let's go over the last five days. and we can see decline and then bam drop off a cliff. And the 30-year Treasury, very very similar uh looking chart. And also, if you go even to the front end of the curve, those rates are extremely low. So Josh, what this is telling me obviously is that the United States debt has to be coming down, right? Because we all know we all know that if you increase the supply of treasuries well then obvious the rates are going to go up right because prices are going to go down. It's just simple supply and demand. And therefore the only way that interest rates can go down or prices can go up is if you reduce the debt, you reduce the deficits. So whenever you see interest rates go down, that must mean that the United States has lowered the debt. And whenever you see interest rates go up, well, all you have to do is watch CNBC. All you have to do is look at social media and you know that the reason these interest rates are going up is because the market is just realizing that the debt is unsustainable. So on days like today, in fact, let's do this just for fun. Let's go back to the 10-year Treasury and look at the year-to date. So, we start right here right around yeah 4.6 and today we're call it 4 uh 4.10. So, we're down 50 basis points this year. So, obviously the debt and the deficits have come down dramatically since the beginning of the year. But wait a minute, Josh. Have the debts and the deficits come down dramatically since the beginning of the year. >> It's the only explanation. >> But but I'm just You know what? I don't have that chart in front of me. But if my memory serves me well, I I think the debts and the deficits have actually increased this year. Yeah. You know what? I think they have. In fact, let's let's just go to a chart here. Let's see if we can pull up a Fred chart. So, the public debt. Wow. So, we go back and we must be at a debt ceiling or something. But the B Yeah, the the debt has definitely increased. That is for sure. The expectations for the debt definitely increased. And so this isn't making a lot of sense. Unless Unless of course Unless yields aren't a reflection of the supply of treasuries, but yields are really driven by growth in inflation expectations. Maybe, just maybe, the 10-year Treasury went down today because of the non-farm payroll. Maybe, just maybe, the 10-year Treasury this year has gone down by 50 basis points because growth and inflation expectations are lower. And maybe, just maybe, if growth and inflation expectations are lower, even when the debts are going higher and higher and higher and higher and higher, and even when the deficits are going higher, and even when we're coming out with higher expectations for debt and deficits due to the big beautiful bill or whatever it is, that at the end of the day, what really drives yields, the overriding factor is growth in inflation expectations. And a so you guys hopefully you I was trying to make a joke there, but you get my point. And that how many people have you heard, we talked about this yesterday, that are are still sitting there saying on, you know, a podcast or CNBC or whatever that interest rates are going up, interest rates are going up. Interest rates are going up. Interest rates are going up. Well, we all know that interest rates have been going up. We all know that the debts, the deficits have been exploding. they're unsustainable and that interest rates have been going up. We all know that there's no demand for treasuries. We all know that investors are dumping treasuries. I mean, it's obvious. Look, that the interest rates are going up. Yet, if you just look at the chart, it's no, the interest rates are going down. They're not going up. And a lot of people like to claim this is because of yield curve control. Well, that again assumes that the supply of treasuries and this therefore the central planners can come in there and either buy over here or sell over there and they're just going to overwhelm or they're going to override growth in inflation expectations. But then all you have to do is look at a chart of the 10-year Treasury yield and quantitative easing 1, two, and three. And when you pull up a chart of, let's just say, uh, 10-year yield and QE123. We'll do versus, that'll probably pull it up. Whoa. What just happened? What the heck? Uh, let me do a space there. Okay, that's better. I was like, "What on earth was that?" Okay, let's see if we can check out this chart really quick. There we go. This is the 10-year Treasury yield. This is QE1, 2, and three. And you'll And basically QE is yield curve control. That's when the Fed is out there buying or the issue today or the argument is that the Treasury just isn't issuing at the long end of the curve and therefore it's basically yield curve control. Same thing. same dynamic, same concept as QE where you're just trying to distort the supply demand ratio and you're trying to create either less supply or more demand and then bring down rates. But you'll notice what rates did every single time they did QE and even QE4 here. Rates went up, rates went up, rates went up. And you'll notice this time when rates actually went down would be in this period right here. What were they doing? They're actually doing quantitative tightening. They're doing the reverse of QE. That's when the interest rates go down. So, every single time that you are actually or the central planners are actually out there buying or restricting supply or however you want to say it, the interest rates go up. Why is that? Because it's not about supply. It's about growth and inflation expectations. And why is that? What what are the mechanics behind that? Because the bankers are the marginal buyer. So if you believe that the debt is unsustainable and if you believe that the deficits and the debt is going to continue to explode, which by the way I do, but if you believe that that's going to lead to an environment where the 10-year Treasury yield is just going to skyrocket and go way above, let's say, nominal GDP, then you also have to believe that banksters aren't greedy. Because if there is a huge delta between nominal GDP and the 10-year Treasury yield, that's free money for the bankers. Free money because they can just their dollar funding costs are extremely low and they're not taking their money, they're taking other people's money or they're just taking credit and then they're buying the 10-year Treasury and pocketing the spread. So again, if you believe that that's what we're going to have due to this deluge of supply and foreigners dumping treasuries and doing all these things, then you also have to believe that bankers aren't greedy and bankers don't like free money. Because if you believe bankers like free money, then you also have to believe that if there is that huge delta, they're going to step in and buy because all they're doing is pocketing a spread. That's mechanically why supply or supply expectations don't matter. And that's why growth and inflation really overrides everything else. And that's why when you go through and you see these big moves in the 10-year Treasury, the two-year Treasury, even the front end of the curve, you see these big moves, it's always always always due to a headline regarding growth in inflation expectations. I I mean, I would challenge all of you listening to this video or watching this video right now. How many of you a huge move in the 10-year Treasury yield? Let's say, you know, 6 7 8 9 10 15 basis points as a result of a headline about the debt. Nobody. Nobody. Because it's not a thing. The only time you see a headline really drive the yield is because it's all about growth and inflation. i.e. today like the labor market. Labor market. So I know I pound the table on that but that's probably the biggest I think misconception. In fact I was having dinner last night with a guy that was a very sophisticated oil trader. Very sophisticated guy. And one of the first things he said to me, "Oh, George, I watch your videos and you know I've watched a few of them here and there. I really like them. But boy oh boy, how about that US debt?" He says, I mean, that that's that's really unsustainable, isn't it? Meaning that at a certain point that no one's going to want to buy these treasuries and therefore interest rates are going to go way, way, way above growth in inflation expectations or nominal GDP and the Fed is going to have to come in and buy the long end of the curve and somehow that's going to bring down interest rates when it never has in the past. But it implies again that there's not going to be a buyer for the treasuries if you get that big delta. And I explained to him, well then you must believe that banks hate money and you must believe that banks aren't greedy and you must believe that banks hate free money because again they're not holding that 10-year Treasury and saying, "Oh, this is fantastic. We're getting a 4% yield and hopefully inflation won't be above 4% and in real terms we'll get a positive yield. But oh boy, oh no, what happens if inflation goes up to five or 6%? Now all of a sudden we're losing purchasing power on this treasury. That's not how it works for banks. That's how it works for you. But that's not how it works for banks because banks aren't using their money. They're simply borrowing money at 2% and buying a 10-year Treasury or whatever at 4% and pocketing the 2% delta. So, the delta is free money. Another way that I always, in fact, this is one example I used with the gentleman last night. I said, I'm not going to say his name, but I said, if I told you that over the next year I would give you $150 million, would you accept it? And he said, 'Oh, well, of course, absolutely. I said, huh, but there's a catch. There's a catch. What if I also told you that over the next year, the inflation rate in the United States would be 7%. Would you still expect uh would you still would you still accept the $150 million for free? Well, of course I would. Of course I would. And that's the decision the banks have to make. We have to incorporate that into our analysis at all times. That the banks have two decisions to make. They can really only lend. They can buy things to, but really they're in the business of lending. Whether that's to the government, whether that's to the real economy, whatever it is, they're in the business of lending. And if they have dollar funding, if they have dollar liabilities, they can't buy gold. It's there's too much FX risk. They're not going to do that. If they have they're not going to buy Bitcoin. They're not going to buy silver. They're just they're just not. Now, the central banks are because they can go b or they can't go bust. They can have negative equity. But the commercial banks won't do that. They have to match up their assets and their liabilities. So, they have two decisions. That's it. Either you lend out into the real economy to make money or you buy treasuries. That's your choice. or maybe you could buy corporate debt or something, but that's basically lending out to the real economy. So if the stuff is hitting the fan, if the labor market is deteriorating, if growth in inflation expectations for the US, let's just say nominal GDP is at 3.5%. And somehow Scott Bent comes out and dumps all these treasuries onto the market, which takes the 10-year up to whatever, let's say 5.5%. when expectations for nominal GDP is 3.5, what what are the banks going to do to expand their balance sheet? Are they going to lend into the real economy? Of course not. They're going to go buy treasuries because the riskreward is a total nobrainer. It's a no-brainer. And then that brings the interest rate right back down. And those banks, that's why I always say they're the marginal buyer. act as the equilibrating factor whether the interest rates are too low or the interest rates are too high. So rant over you guys. The main takeaways here, labor market definitely definitely slowing. There's no disputing that right now. I think the narrative is really changing. I think the S&P 500, by the way, I is down if I'm not mistaken. Let's see. Uh cuz that's that. Yeah, it's down to not much. But we could be seeing this change in attitude where it's like bad news is actually bad news again. And that could be a gamecher. And then I think from the Fed standpoint, this changes everything because now all of a sudden that 50 basis point cut is definitely definitely on the table. I'm not saying I'm predicting one, but it's definitely on the table when yesterday there was no mention of it. No mention whatsoever. On that bombshell, guys, enjoy the rest of your afternoon. As always, make sure you're standing up for freedom, liberty, free market, capitalism, and we'll see you on the next video.