The Deeper Dive: Economic Bubble Troubles Are Ready to Burst Everywhere

From the most inflated housing bubble in history, which is beginning to settle from the sky…to a high-altitude stock bubble that is stretched so thin in the stratosphere it is ready to pop…to a sinking labor market that is starting to wobble and is ready to hit the ground…to a monetary inflation bubble that is evaporating in the heat…to the world’s biggest Treasury/bond bubble, which has become distorted and unstable, the entire US economy is exhibiting signs of going bust everywhere you look.

The languishing labor market

The latest jobs report looked about as secure as a smoking oil tanker in the waters around Iran. It’s not underwater yet, but it has burned out at a meager gain of just 29,000 new jobs, causing unemployment to tick upward.

The Trump administration said it wasn’t worried about the job numbers. Why should it be? The current numbers are not nearly as bad as the numbers we will need to get used to seeing when AI starts replacing people at a faster clip. Several companies indicated this year they would be reducing forces due to AI, so the present sinking numbers may be the start of that change in the tide.

Not far ahead, billionaires will be beaming about the huge benefits they experience and will promise the rest of us benefits, too, to keep us from rebelling as the AI that enriches them does so by cutting us out of the picture. That is how they hope to put off permanent moves to their billionaire bunkers. Their promises of a free living for life will never materialize for you and me…just like DOGE benefits, tariff refunds, and, likely, that $5,000 pay-off if enough people vote Republican to secure the Trump dynasty.

Hiring remains far below the 166,000 monthly jobs that were the norm in 2023 and 2024…. “Today’s ice-cold report shows the jobs market may not be as healthy as previous data might have suggested.”

Some of us were never fooled into thinking the constantly revised job numbers ever represented a strong economy or robust labor market during Trump’s term or even the latter half of Biden’s. But let us watch some people show off how stupid they are:

The job market has proven solid in the face of a series of shocks - trade wars, persistent inflation, high interest rates and a conflict with Iran that has driven energy prices higher.

No, the unemployment rate refused to rise, even when the number of added jobs was relatively weak because so many people were leaving the labor force for good. Leavers don’t count as unemployed. I’ve explained all along why you should have no faith in the job numbers being reported. And we’ve seen consistently how they get revised lower and lower, as I’ve said they will, once they become too stale for most people to look at.

With stagflation, expect slowly rising unemployment at first (slowly because many are just leaving the labor force or being deported) coupled with continually rising inflation.

If jobs have been so good up until now, why are worker opinions of the labor market at a nadir?

Online jobs site Glassdoor reports that its employee confidence index, based on how workers view prospects for their own companies, dropped last month to the lowest level in records going back to the beginning of 2016, a period that includes a global pandemic.

That’s pretty bad because the global pandemic, itself, was a low, low for labor. At least 4,000,000 people left the labor force for good in about one month’s time. That’s the approximate number that never came back to work.

The report showed that average hourly earnings increased just 0.1 percent in September, putting the 12-month gain at 3 percent.

Which means even those who got raises, are still losing to inflation.

Treasuries more troubled than treasured

Even though jobs indicated a weak economy that could curb inflation growth in normal times, bond yields continued to edge upward anyway. We haven’t seen normal times in decades. Whenever the economy is weak, it usually only means these days that the Fed will relax interest rates to stimulate the economy and get sloppy with inflation again.

Bonds seem to be banking on a continuing rise of inflation, regardless of the job market falling apart and regardless of whatever the Fed does. They’re telling the Fed to keep going higher with interest rates “because we’re going higher anyway.”

Treasury yields are soaring. Seeking Alpha reports,

The U.S. bond market just completed its worst quarter this century, with the Treasury selloff pushing yields to two-decade highs as traders brace for higher-for-longer interest rates….

The benchmark U.S. 10-year Treasury yield (US10Y) went up 87.1 basis points over the September quarter, LSEG data showed. That’s the sharpest quarterly rise since 1994. US10Y rose … to 5.34% early today, notching its highest level since 2002, just a day after it surpassed its previous 2007 peak. The 30-year Treasury yield … was up 3 bps at 5.67%, also a 24-year high….

Is it time, then, to buy bonds?