There is no money!

The main news. There are two main topics. The first one is the shutdown in the USA. There is a lot of noise, but not much economic impact. Due to the closure of government agencies, labor statistics in the United States were not released, but this was offset by private data (see the next section). There will be serious consequences if the shutdown lasts more than 2-3 weeks.

The second one is that London has taken the honorable 20th place in the ranking of global financial centers by the number of IPOs. This is the most important political symptom, because with such indicator, Britain, which claims to have serious political positions, would be better off keeping quiet. But this is also a very important point economically, as British offshore companies have always played an important role in the global financial arena. Today it became clear that this role is unlikely to return. In any case, it is not yet very clear what needs to be (and can be) done to achieve such a result.

Macroeconomics. The PMI (expert index of the state of the industry; its value below 50 means stagnation and decline) of the Brazilian service sector is 46.3, this is a repeat of the 9-year low (minus covid):

The key component of the US non-manufacturing PMI (from ISM), business activity, dropped to 49.9 points. Apart from covid, over the past 16 years it has been slightly lower (46.6) only once, in June 2024:

Chicago’s PMI in the USA (40.6) has been in a recession zone for 22 months now – this has never happened in almost 60 years of statistics:

Housing prices in the USA +2.3% per year, the weakest trend since April 2012:

Monthly house prices have been falling for 4 months in a row, and taking into account two zeros in February and March for six months now:

The turbulence in the US mortgage market continues, with applications of -12.7% per week, including refinancing of -21%:

The number of job openigs in the United States returned to the levels of 2018/19.:

And the number of voluntary job quits is even returned to the level of 2017, people are becoming more cautious about leaving their current jobs:

The number of jobs in the US private sector (ADP survey) has been declining for 2 months in a row, for the first time since 2020:

If we exclude covid, then the previous time this happened was only in early 2010:

Finally, the Challenger, Gray & Christmas review states the highest layoff announcements in the United States in January-September since 2020:

At the same time, hiring plans in September have been minimal since 2011, and in January-September – since 2009:

The number of new buildings in Japan is -9.8% per year, the 5th negative month in a row:

The absolute value of the indicator is at the worst levels in 2010 – there have never been more such values in history:

Retail sales in Japan -1.1% per year, 6-year low (excluding covid):

Unemployment in Japan at annual peak:

And the ratio of vacancies to their applicants is the lowest in 10 years (not counting covid):

The number of unemployed in Norway is at the top in almost 4 years:

The number of unemployed in Germany has updated its 12-year peak:

As expected, the Central Bank of Australia left monetary policy unchanged, as did the Central Bank of India.

The main conclusions. The crisis is actively continuing, unemployment is rising, and stagnation in the real sector is intensifying. In reality, taking into account more or less adequate data on inflation, there has certainly been a serious decline for a long time. This does not prevent financial markets from growing, which, in fact, is a clear inflationary indicator.

Gold prices have broken another historical record, silver prices in dollars have come close to the peak of 2011:

The Wall Street Journal published an article describing the telltale signs of an AI bubble threatening a debt crisis:

It should be noted that Pavel Ryabov has repeatedly noted that this bubble, which has already fully formed, has been exceeding all previously achieved indicators for quite some time. In one of the previous reviews, we cited one of Pavel Ryabov’s analyses, which shows that companies’ revenues from AI are logarithmic relative to their investments. In other words, these investments will never pay off.

Note that it is quite difficult to talk about when the collapse will occur. Given the clearly already established process of strengthening the control of the US administrative authority over the FRS (although the final result is still far away), the likelihood that another trillion or two dollars will be printed in case of urgent need is quite high. And this will delay the collapse point by at least 3 months, or even six months. Of course, by exacerbating the results of the crisis.

In general, we have entered the world of high turbulence and we can only once again congratulate our readers, who were warned about all this in advance. And they will warn you in the future. And therefore, we can with a clear conscience wish them a good weekend and a successful working week!