The Biden administration is trying really hard to convince us that the U.S. economy is doing just fine, but the numbers just keep getting worse and worse. Consumer confidence is plummeting, large corporations are conducting mass layoffs all over the country, and major retailers are really struggling right now.
Meanwhile, some of the smartest guys in the financial world are making moves that would only make sense if the economy was headed for big trouble. Earlier this month, I wrote about how Michael Burry has bet 1.6 billion dollars that the stock market is going to crash. He made a ton of money in 2008 by being on the correct side of the financial crisis, and he plans to make even more money this time around.
This week, speculation has been growing that Warren Buffett also believes that a major downturn is coming. In fact, Business Insider is warning that Warren Buffett “may be bracing for a recession” because he has been selling off stocks at a staggering pace…
Berkshire sold a net $8 billion of stocks and slowed its pace of buybacks last quarter, sparking a 13% rise in its money pile to a near-record $147 billion.
The sprawling conglomerate has now disposed of a net $33 billion of stocks over the past three quarters, fueling a $38 billion increase in its stash of cash, cash equivalents, and Treasury bills during that time.
Buffett’s second-quarter moves “are consistent with the anticipation of a recession and the fact that stocks are currently pricey,” Hanke told Insider.
Burry and Buffett are both extremely sharp, and they clearly understand what the economic numbers are telling them.
At this moment, most U.S. consumers are struggling to make ends meet from month to month and millions of them are absolutely drowning in debt. And the latest consumer confidence figures are downright dismal…
Consumer confidence cratered in August, falling from a downwardly revised 114.0 last month to 106.1. The projection was for a slight increase to 116.
Americans don’t think the economy is doing well currently. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—fell to 144.8 from 153.0.
And they don’t think the economy is going to do well in the near future. The Expectations Index— based on consumers’ short-term outlook for income, business, and labor market conditions—declined to 80.2 in August. That reversed July’s sharp uptick to 88.0.
An Expectations Index below 80 generally signals an impending recession.
So that means that we are almost to the level that “signals an impending recession”.
Of course other numbers suggest that a major downturn has already arrived. When the economy is booming, FedEx and UPS have to schedule more flights because they have so many packages to handle. But at this point the number of package flights is falling precipitously…
The number of package flights operated by FedEx Express and UPS significantly declined month over month in July, underscoring how far the overall air cargo market has sunk since the spring of 2022 and the effect of efficiency initiatives the companies have undertaken in response to lower express volumes.
FedEx (NYSE: FDX) flew 9% fewer domestic flights last month than in June following small sequential gains the prior two months, with year-over-year flight activity down 14%, according to an analysis by investment bank Morgan Stanley. The year-over-year decline in UPS’ flight activity accelerated to 13% from 10% in June. UPS (NYSE: UPS) reduced July flights by 14% from June. Flight activity in May and June, by comparison, was relatively stable.
At the same time, big companies all over America continue to lay off more workers.
Right now, we are seeing a lot of large financial institutions let people go as turmoil in the banking industry continues to spread…
BMO Financial Group, Wells Fargo, and USAA have reported hundreds of layoffs to state officials in recent weeks as the U.S. banking industry continues to downsize.
The job cuts come as banking executives express caution about the industry’s growth prospects in the second half of the year, and as some banks divest certain parts of their businesses.
Sadly, this is just the tip of the iceberg. There will be many more layoffs in the months ahead.
Needless to say, the second half of 2023 will not be a particularly good time for retailers.
In fact, Best Buy is already projecting that sales will fall this year more than originally anticipated…
U.S. shoppers have continued to pull back on tech spending, according to the latest earnings report from Best Buy.
The retailer on Tuesday lowered the high end of its full-year revenue outlook amid declining sales, and now expects to make between $43.8 billion and $44.5 billion in revenue during fiscal year 2024, down from its prior guidance of up to $45.2 billion. Comparable sales from stores, websites and call centers open at least 14 months are expected to dip 4.5% to 6% this year, compared to the previous estimate of 3% to 6%.
And we have just learned that Rite Aid is suddenly on the verge of filing for bankruptcy…
Philadelphia-based Rite Aid’s stock price dipped more than 50% Friday after the reports on the pending bankruptcy filing were published by The Wall Street Journal and Bloomberg, citing people familiar with the matter.The Chapter 11 filing would allow the company to restructure its more than $3 billion debt load and help it address lawsuits alleging the company filled hundreds of thousands of opioid prescriptions unlawfully.
Every day, we hear of even more retailers that have gotten into trouble.
Stores are being shut down all over the nation at a frightening rate, and this is particularly true in many of our core urban areas.
For example, the following is from an article about downtown San Francisco that CNN just posted…
In many ways, San Francisco’s downtown is in dire straits. The city’s Union Square neighborhood — once bustling with shoppers, diners, and tourists — has suffered from declining foot traffic and shuttered storefronts.
Stores in the area now have papered-over windows and “Retail for Lease” signs, according to Google Street View, which was last updated in June.
But downtown San Francisco still seems relatively prosperous compared to downtown Oakland.
One man recently took a camera down there, and he discovered that so many stores have closed that it literally looks like a ghost town right now…
This is what communities all over America are going to look like during the very harsh economic environment that is ahead of us.
We have been warned for a long time that this crisis was coming, and now it is here.
Our leaders just kept making one self-destructive decision after another, and now we are in the early chapters of an economic nightmare.
Michael Burry and Warren Buffett are positioning themselves for what is coming. What about you? I hope that you are ready for the approaching storm, because it is really going to pack quite a punch.
Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here. Article cross-posted from The Economic Collapse Blog.
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.
Warren Buffett? One of the DEMONIC dudes funding the transgendering of children?!
Who cares foe any of his opinions . . .