The world spins while the United States sucks on it’s pacifier and goes goo-goo gaa-gaa

This is starting to look like 2008 all over again.  For years, the tech industry was the strongest part of the U.S. economy by a wide margin.  The largest tech firms were raking in billions upon billions of dollars in revenue and their stock prices soared to unprecedented levels.  But now the tech industry has suddenly fallen on difficult times.  Many large tech companies are laying off huge numbers of workers, and we are being warned that even more layoffs are ahead.  If the most prosperous sector of our economy is experiencing this much trouble already, what is the outlook for the rest of the economy as we head into 2023?

As I write this article, the layoffs that Elon Musk is conducting at Twitter are making headlines all over the planet.  It is being reported that approximately half of all Twitter workers could lose their jobs, and the widespread layoffs are apparently happening “in departments across the company”…

Twitter on Friday laid off employees in departments across the company, in a severe round of cost cutting that could potentially upend how one of the world’s most influential platforms operates one week after it was acquired by billionaire Elon Musk.

Numerous Twitter employees began posting on the platform Thursday night and Friday morning that they had already been locked out of their company email accounts ahead of the planned layoff notification. Some also shared blue hearts and salute emojis indicating they were out at the company.

Needless to say, a lot of these former employees do not plan to go quietly.

In fact, some of them have already slapped Twitter with a federal lawsuit…

Twitter has been sued by multiple staff members over an alleged violation of federal law, with workers claiming they were not given enough notice regarding planned layoffs.

Employees who had worked at Twitter’s offices in San Francisco, California, and Cambridge, Massachusetts filed a class-action lawsuit in the U.S. District Court, Northern District of California (San Francisco) on Thursday.

Sadly, Twitter is not alone.

Lots of other large tech companies are conducting mass layoffs, and in each case the current economic climate is being blamed.

For example, Lyft has announced that it will be laying off 13 percent of its workforce…

Lyft Inc. said it is cutting 13% of staff, or nearly 700 jobs, the latest technology company to say it needed to reduce costs ahead of choppy economic conditions.

Confirming an earlier report by The Wall Street Journal, Lyft co-founders John Zimmer and Logan Green announced the cuts to staff Thursday. “There are several challenges playing out across the economy. We’re facing a probable recession sometime in the next year and ride-share insurance costs are going up,” they wrote in the memo viewed by the Journal.

And it is being reported that Chime will be letting 12 percent of their workers go…

Chime is one of the latest private tech firms to announce layoffs amid a worsening economic outlook and a recent wave of cuts from both public and private companies.

A company spokesperson told CNBC that the so-called challenger bank – a fintech firm that exclusively offers banking services through websites and smartphone apps – is cutting 12% of its 1,300-person workforce, adding that while they are eliminating approximately 160 employees, they are still hiring for select positions and “remain very well capitalized.”

Not to be outdone, 18 percent of Opendoor’s workforce is about to get the axe…

Opendoor Technologies Inc. is laying off about 550 employees after higher mortgage rates cratered US housing demand.

The layoffs will reduce Opendoor’s headcount by about 18%, according to a company blog post. The cuts come after an abrupt shift in prices forced the company to sell homes for less than it paid for them.

In other cases, we are seeing companies that seemed to be doing really well let workers go.  As I discussed yesterday, Stripe has decided to “let go of 14% of its staff”…

Silicon Valley payments giant Stripe announced that it has let go of 14% of its staff. Citing global economic challenges including inflation, higher interest rates and “sparse startup funding,” cofounder and CEO Patrick Collison said in an email to employees that Stripe needs to cut costs.

I guess Stripe isn’t doing quite as well as we all thought.

Meanwhile, we have also just learned that Dapper Labs will be reducing the size of their workforce by 22 percent…

One of the biggest names in the non-fungible token (NFT) industry is dramatically reducing headcount as the crypto bear market continues to take a toll on Web3 companies.

Dapper Labs, which created the NFT marketplace NBA Top Shot, is laying off 22% of its staff, citing the “macroeconomic environment.”

But the economy is doing just fine, right?

Isn’t that what the federal government keeps telling us?

Well, if the economy is in such good shape, why does the tech industry keep laying off so many workers?

Even before this latest round of layoff announcements, the tech industry had already laid off over 52,000 workers so far this year…

After a banner year for tech, layoffs are here. In fact, as of late October, more than 52,000 workers in the U.S. tech sector have been laid off in mass job cuts so far in 2022, according to a Crunchbase News tally.

Tech companies as big as Netflix have slashed jobs this year, with some citing the effects of the COVID-19 pandemic and others pointing to overhiring during periods of rapid growth. Robinhood, Glossier and Better are just a few of the tech companies that have notably trimmed their headcount in 2022.

Of course it isn’t just the tech industry that is letting people go.

According to Reuters, Morgan Stanley is gearing up for “a fresh round of layoffs”…

Wall Street major Morgan Stanley is expected to start a fresh round of layoffs globally in the coming weeks, three people with knowledge of the plan said, as dealmaking business takes a hit due to rising inflation and an economic downturn.

So please don’t listen to any politician that tries to tell you that everything is going to be okay.

Everything is definitely not okay.  According to Challenger, Gray & Christmas, the number of layoff announcements in the United States is far higher than it was last year at this time…

The job placement agency Challenger, Gray & Christmas released a report on Nov. 3, which revealed that American-based firms announced 33,843 job cuts last month, up from 29,989 in September.

This is higher than the same month last year, when 22,822 employees were laid off.

Hopefully your job is safe, because I believe that we will eventually see millions of Americans lose their jobs during this new economic downturn.

We are truly moving into unprecedented territory, but unfortunately most Americans simply do not understand what is ahead.

A lot of people seem to think that we will have some sort of a mild recession and then things will get back to normal.

I wish that was true.

Unfortunately, a day of reckoning is now upon us, and countless numbers of our fellow Americans are about to have their lives completely turned upside down.

If you live in a major urban area, you may have noticed that “tent cities” are starting to pop up all around you.  The worst inflation crisis in decades has combined with the worst drug crisis that we have ever seen to create an unprecedented homelessness crisis.  Every night, even more Americans join the rapidly growing “unsanctioned encampments” that are taking up more and more real estate in our largest cities.  If things are this bad now, how many of our fellow citizens will be sleeping in the streets when economic conditions are much worse a year or two from today?  We are supposed to be the greatest nation on the planet, but with each passing day even more tent cities are established.  Our system is failing, and the widespread economic suffering that we are witnessing right now is truly difficult to comprehend.

Just look at what is happening in Sacramento.  It is the capital of the California, and tent cities are being established all over the place.

In fact, it is being reported that the number of homeless people in Sacramento has risen by nearly 70 percent just since 2019…

During the pandemic, the unhoused population has soared all over California, but the increase in Sacramento has been particularly stunning.

The region has seen an almost 70% rise in homelessness since 2019, now counting more unhoused people than San Francisco.

Needless to say, absurd housing prices are one of the main reasons why so many people are being forced out into the cold streets…

The primary force behind the dramatic rise, according to the 2022 point-in-time count, is the high cost of housing. The median home price in the county has surpassed $500,000 and the median monthly rent is $2,774, up more than 5% from last year. Some studios downtown rent for $2,000 a month, said Crystal Sanchez, the president of the Sacramento Homeless Union, while thousands of people sleep outside.

Most middle class families can barely afford to pay $2,000 or more for housing each month.

And those that are poor don’t stand a chance.

Conditions are very similar up in Portland, Oregon.  Housing prices have soared to insane levels, and homelessness is spreading like wildfire.

At this point, Mayor Ted Wheeler says that there are “nearly 800 unsanctioned encampments” spread throughout the city…

“Nearly 800 unsanctioned encampments spread out over the 146 square miles of the City of Portland,” Wheeler said. “Something needs to change.”

But many Portlanders have lost faith in city leaders.

In a recent poll conducted by The Oregonian, nearly 75 percent of Portland voters said the city is “on the wrong track.”

At this stage, it has pretty much gotten to a point where you simply cannot avoid the tent cities.

Things are so bad right now that there is a possibility that the state of Oregon could actually elect a Republican governor in November…

The race for the governorship remains a tossup, with a new poll showing a narrow lead for the Republican candidate in a state that hasn’t elected a Republican governor since 1982.

Republican Christine Drazan leads Democrat Tina Kotek in the race, 44 to 41 per cent, according to a new Nelson Research poll, KOIN reported.

That gives Drazan a 2-point lead in the RealClearPolitics polling average, having narrowly led in every poll this fall.

I thought that we would never see another Republican governor in that state.

It looks like I might have been wrong about that.

Washington D.C. doesn’t have as many “unsanctioned encampments” as Portland does, but the New York Post is reporting that the number of tent cities in the capital of our nation has now grown to 120…

In the past two years, homeless encampments have exploded in Washington D.C., as both the city and federal governments lifted enforcement measures during the COVID-19 pandemic — and made it a no-brainer for itinerants to lay down roots by providing for their every need.

A tour by The Post of the district’s major tourist areas this week found at least 35 vagrants in residence at a National Park Service site two blocks from the White House; more than 20 in the green spaces surrounding the State Department complex; and five across the street from the infamous Watergate Hotel.

And these sites accounted for less than 5 percent of the estimated 120 tent cities in Washington D.C.

Over a decade ago, I worked in the heart of Washington.

And during my entire time there, I didn’t see a single homeless person living in a tent.

But now tent cities are all over the place.

Of course a rise in crime often comes along with an explosion in homelessness.

In New York City, the rape of a female jogger by a homeless man with 25 prior arrests is making a lot of headlines this week…

Police said the victim was out by Pier 45, near West and Christopher Streets in the West Village, at around 5:30am, when the man, Carl Phanor, 29, grabbed her from behind and choked her until she passed out, the New York Post reports.

Phanor, who has 25 priors and who is wanted for at least two other sex crimes, then removed her clothes, raped her, and then fled the scene on a Citi Bike with her headphones, cell phone and wallet.

The shaken victim was spotted by a fellow jogger, and first responders took her to a nearby hospital.

Sadly, the homeless population just continues to rise in New York City with each passing day.

In fact, the problem has gotten so severe that the National Guard has now been called in to deal with the crisis…

New York City has called in the National Guard to deal with the rising migrant crisis that is overwhelming homeless shelters and facilities as staff are unable to cope with the surge.

National Guard reservists are being deployed to help with day-to-day operations at many shelters, including managing the capacity, distributing food and helping out with staff shortages.

There are over 62,000 people currently living in New York City’s homeless shelters – close to 13,000 of which are migrants, according to the Department of Homeless Services.

But this is just the beginning.

Over the next few years, I expect millions of Americans to lose their jobs.

And the truth is that it is already starting to happen.  Just today, we learned that Stripe will be laying off approximately 14 percent of their entire workforce…

Online payments giant Stripe is laying off roughly 14% of its staff, CEO Patrick Collison wrote in a memo to staff Thursday.

In the memo, Collison said the cuts were necessary amid rising inflation, fears of a looming recession, higher interest rates, energy shocks, tighter investment budgets and sparser startup funding. Taken together, these factors signal “that 2022 represents the beginning of a different economic climate,” he said.

Yes, as I detail in my brand new book, a “different economic climate” is definitely ahead of us.

As economic conditions deteriorate, the number of tent cities will grow much larger.

So the cold, hard reality of the matter is that our homelessness crisis is only going to intensify from this point forward.

I know that may be difficult news to hear, but the truth is that these are difficult times.

The last time interest rates were this high, the U.S. economy plunged into “the Great Recession” and millions of Americans lost their jobs.  But the Federal Reserve is not going to stop here.  In fact, Fed Chair Jerome Powell is telling us that more rate increases are on the way and that officials at the Fed are determined to “stay the course until the job is done”.  If “the job” is to destroy the U.S. economy, they have already made a tremendous amount of progress toward that goal.  The housing market is completely and utterly imploding, and economic activity is steadily slowing down all around us.  But even though Powell can see the damage that is happening, he insists that the Fed will keep raising rates until the official rate of inflation returns to 2 percent.

But this isn’t the early 1980s.

Today, there are a whole host of factors that are working in unison to push prices up.

So the Fed can try to hammer demand as much as it wants, but getting inflation back under control is not going to be as easy as it was during the Volcker era.

And dramatically hiking interest rates at the beginning of a major economic downturn is literally suicidal.  Many of us have been pleading with the Fed to stop raising rates so rapidly, but we witnessed yet another 75 basis point rate hike on Wednesday…

The Federal Reserve on Wednesday approved a fourth consecutive three-quarter point interest rate increase and signaled a potential change in how it will approach monetary policy to bring down inflation.

In a well-telegraphed move that markets had been expecting for weeks, the central bank raised its short-term borrowing rate by 0.75 percentage point to a target range of 3.75%-4%, the highest level since January 2008.

According to Fox Business, it was a unanimous vote, and this “marks the sixth consecutive rate increase this year”…

The three-quarter percentage point hikes in June, July, September and November underscore just how serious Fed officials are about tackling the inflation crisis after a string of alarming economic reports. Policymakers voted unanimously to approve the latest super-sized hike.

The widely expected move puts the key benchmark federal funds rate at a range of 3.75% to 4%, the highest since before the 2008 financial crisis, from near-zero in March. It marks the sixth consecutive rate increase this year and puts interest rates in firmly restrictive territory.

What we are watching is economic malpractice.

I don’t know how else to describe it.

Sadly, the Fed is telling us that “ongoing increases” will be needed until the overall rate of inflation is brought back down to 2 percent…

“The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time,” the Fed said in a new sentence added to its post-meeting statement.

So more rate hikes are on the way.

The good news, if you want to call it that, is that Powell told the media that future rate increases may be smaller in size…

“I’ve said at the last two press conferences that at some point it will become appropriate to slow the pace of increases,” Chairman Jerome Powell told reporters during a press conference in Washington. “So that time is coming. And it may come as soon as the next meeting, or the one after that. No decision has been made.”

But of course rates are now clearly high enough to crash the economy.

The housing market is already coming apart at the seams, and we just keep getting data point after data point telling us that the economy is really slowing down.

There is no way in the world that the Fed should be raising rates, but Powell insists that the Fed “will stay the course until the job is done”…

‘My colleagues and I are strongly committed to bring inflation down to our 2 percent goal… We will stay the course until the job is done.’

I truly believe that those words will come back to haunt him.

Look, I can understand why the Fed is so spooked about inflation.  We haven’t seen anything like this in decades, and one recent survey discovered that 50 percent of Americans are “feeling their health suffer as a result of the cost-of-living crisis”…

Research at Toluna, a consumer insights firm, found that 50 percent of those surveyed were feeling their health suffer as a result of the cost-of-living crisis, with inflation currently running above 8 percent according to the consumer price index.

Among them, 37 percent said they were feeling more stressed, 21 percent said they were eating less healthily, 16 percent said they were smoking more, and 13 percent were boozing more often.

And we have just learned that approximately 29 million U.S. households “have been unable to pay their energy bills this past year” due to rapidly rising energy costs…

Some 29 million households have been unable to pay their energy bills this past year, according to a survey that says the cold winter weather and rising utility costs will only worsen the crisis.

Data from the US Census Bureau show that many more American families — 43 million households — have cut back spending on groceries, medicine and doctors’ visits, so they could settle an energy bill.

So I definitely agree that inflation is a major problem.

But killing the economy is not the answer.

If you doubt the severity of the crisis that we are heading into, just take a look at what is happening at Wells Fargo right now…

Mortgage volumes at Wells Fargo slowed further in recent weeks, leaving some workers idle and sparking concerns the lender will need to cut more employees as the U.S. housing slump deepens.

The bank had about 18,000 loans in its retail origination pipeline in the early weeks of the fourth quarter, according to people with knowledge of the company’s figures. That is down as much as 90% from a year earlier, when the Covid pandemic-fueled housing boom was in full swing, said the people, who declined to be identified speaking about internal matters.

If Wells Fargo is already facing a 90 percent decline, what will happen as the Fed hikes rates even higher?

Sadly, the “housing recession” that we are now experiencing could quickly become a “housing depression”.

In my brand new book entitled “End Times”, I explain that the U.S. economy has been going through a housing market crash every 14 years.

There was a crash in 1980, there was a crash in 1994, there was a crash in 2008, and now a new crash has begun in 2022.

But if the Federal Reserve was not being so foolish, we could have likely avoided a severe crash this time around.

Unfortunately, our leaders never seem to learn from history, and the months ahead promise to be exceedingly painful.

They are trying really hard to convince all of us that everything is just fine.  But close to one-fifth of the U.S. population is skipping meals because food prices are too high.  And nearly 40 percent of our small businesses couldn’t pay rent in October.  Our leaders are trying to put a positive spin on things, but the truth is that we are witnessing a tremendous amount of economic suffering all over the United States right now.  The core consumer price index just surged to “the highest level since 1982”, and this is putting an enormous amount of financial stress on American families and businesses.

This week, I was stunned to learn that a survey that was just released found that 37 percent of all small businesses in the United States could not pay rent last month…

The survey of 4,789 randomly selected small business owners saw more than half of respondents say their rent is at least 10 percent higher than six months ago.

If you go back seven months, the majority said their rents had increased by at least 20 percent.

Moreover, the study found that roughly 37 percent of small businesses – almost half of all Americans working in the private sector – were left unable to pay rent in October.

Prior to getting this news, if someone had asked me to guess the percentage of small businesses that are currently unable to pay rent, I would have responded with a figure that was far lower.

So often, things turn out to be even worse than I thought they were.

If those small businesses continue to be unable to pay rent, they will eventually be forced to shut down.

So what will our communities look like if millions of small businesses suddenly close up shop on a permanent basis?

Meanwhile, a different survey has discovered that 18 percent of Americans are now skipping meals because food prices have become so crazy…

Over the last 12 months, nearly two in five American households (40%) received food or goods from a food bank (22% for Millennials), and the same amount (17%) stopped buying healthier foods (organic or high-priced healthy foods).

Nearly one in five Americans (18%) say they skipped meals or didn’t buy groceries due to high inflation (including 28% of Gen Z and 23% of millennials).

Skipping meals can be a positive thing, because fasting is actually really good for your health.

But most of these Americans are not skipping meals for the health benefits.

In addition, the same survey found that many Americans are not taking medications or seeing their doctors because prices have gone up so much…

Many have cancelled or postponed plans in the past 12 months to see a specialist (14%), take a prescribed medication (10%) or get an annual physical (11%) due to high inflation.

If things are this bad already, what will those numbers look like next year at this time when economic conditions are significantly worse?

The American people are going to become increasingly frustrated as our standard of living continues to plunge.

All of us have to eat, and so many of the products that so many of us buy on a regular basis have gone up dramatically in price…

A year ago, a bag of potato chips at the grocery store cost an average of $5.05. These days, that bag costs $6.05. A dozen eggs that could have been picked up for $1.83 now average $2.90. A two-liter bottle of soda that cost $1.78 will now set you back $2.17.

Sadly, this is just the beginning.

Even though the Federal Reserve has declared war on inflation, food prices are going to continue to rise for a variety of reasons.

And as the cost of living keeps becoming more oppressive, more American families are going to struggle to make it from month to month.

Even now, nearly two-thirds of the entire country is currently living paycheck to paycheck…

As rising prices continue to outpace wage gains, families are finding less cushion in their monthly budget.

As of September, 63% of Americans were living paycheck to paycheck, according to a recent LendingClub report — near the 64% historic high hit in March. A year ago, the number of adults who felt strained was closer to 57%.

“Consumers are not able to keep up with the pace that inflation is increasing,” said Anuj Nayar, LendingClub’s financial health officer.

The worse things get, the more we will see people clamoring for the federal government to help them.

In fact, one recent survey actually discovered that 63 percent of all U.S. voters are in favor of “inflation stimulus payments”…

A recent poll found that almost two-thirds of Americans are proponents of the federal government sending out inflation stimulus payments.

About 63% of eligible U.S. voters expressed some degree of support for federal inflation relief checks being distributed, the Newsweek poll conducted by Redfield & Wilton Strategies showed. Of those who agreed the federal government should do so, 42% indicated they “strongly agree” while 21% said “agree,” according to the poll.

Sadly, most voters don’t seem to understand that sending out more stimulus checks would create even more inflation.

There is always a cost when the government gives out “free money”.

If our politicians would have exercised discipline over the past several years, we would not be in the mess that we are in today.

But now years of very bad decisions are catching up with us in a major way, and economic conditions are rapidly deteriorating.

At this point, the vast majority of the U.S. population can see this.  According to one recent Gallup survey, a whopping two-thirds of all Americans believe that economic conditions in this nation are getting worse.

So many people are talking about the possibility of a recession in 2023.

If all we have is a recession next year, we would be extremely fortunate.

Because right now the economy is starting to crack and crumble all around us, and the outlook for the months ahead is exceedingly bleak indeed.