The Naked Truth About the April 2024 Non Farm Payroll Report

The US economy added 802K jobs in April, down from April 2023 when 948k jobs were added.

Year to date, the US economy has lost 64k jobs per month, on average.

US employment peaked in November of 2023 at 157.87 million jobs.

Job Growth for the last 12 months ending April 2024 is 1.813%.

In April 2023, job growth for the 12 trailing months was 2.488%.

Summary: Job growth continues to decline in the US.

A Look at the Consumer Price Index (CPI) for All Urban Consumers Not Seasonally Adjusted- March 2024

Removing the manipulated seasonal adjustments will give you a better sense of what the CPI is doing without all the shenanigans. Today we will look at the data just released.

CPI For the 12 Months Ending 3/2024

The CPI for the 12 months ending 3/2024 is 3.48%. This is down from 12 months ago which came in at 4.94%.

It is also down from 24 months ago, which came in at 8.54%

The CPI is also down from the 12 months ending September 2023 of 3.70%(where we were six months ago).

Over the Last Five Years

While down from the 12 months ending 3/2023, the rolling 12-month CPI increased from February 2024 by 0.33%, from 3.15% to 3.48%.

The CPI peaked at 8.58% in May 2022 and has fallen more than 5% since the peak.

The lowest CPI for a 12-month period was 0.12% for the 12 months ending May 2020, which occurred during the COVID shutdown..

The Federal Reserve Bank (FRB) has a stated objective of 2% for inflation.

Rolling 12 Month CPI

To review the data directly from the BLS, you can go to their site and download the data directly.

We’ve Pulled As Much Future Demand Forward as We Could

Perhaps more than anyone else, we’ve been keen on documenting the rise of subprime auto loans.

Over the course of the last 12 months, data from Experian clearly shows that underwriting standards are falling in the industry as competition for a shrinking pool of eligible borrowers heats up.

  • Average loan term for new cars is now 67 months — a record.
  • Average loan term for used cars is now 62 months — a record.
  • Loans with terms from 74 to 84 months made up 30%  of all new vehicle financing — a record.
  • Loans with terms from 74 to 84 months made up 16% of all used vehicle financing — a record.
  • The average amount financed for a new vehicle was $28,711 — a record.
  • The average payment for new vehicles was $488 — a record.
  • The percentage of all new vehicles financed accounted for by leases was 31.46% — a record.”


As you read through the data above, it becomes obvious that something has gone seriously wrong in our economy.  To finance a vehicle for 84 months-7 years to you and I, is phenomenal.  The rate of depreciation on the vehicle nearly guarantees that the owner will be underwater for nearly the entire length of the loan. Continue reading

Brace Yourself For the Slowing Georgia Economy

images_man_braking_car“Individual income tax collections for the month increased by 11.5 percent, while gross sales tax collections deposited during November rose a minuscule 0.2 percent. Net sales tax revenue fell by 1.3 percent.

Corporate tax revenues in November increased by $5.1 million.”

There’s what you need to know in a nutshell.

Gross sales tax collections rose only 0.2% in November.  Net Sales Tax Revenue fell by 1.3%.  That says recession.

In an economy that is based on consumption, consumption must outgrow everything else.

The individual tax collections will soon follow suit as well as corporate tax revenues.

If people are not spending more money, companies do not make as much profit.  Companies that do not make as much profit do not need as many employees.  Fewer employees means lower income tax collections.

The state of Georgia did pass a Billion dollar transportation tax earlier this year.  We have begun to see that impact.  Taking a billion dollars out of gross receipts and sending it to the state, rather than to the bottom line of companies and into your banking accounts as savings has a cost.

We will see that cost in full glory shortly.  The tax, however, will not be reversed.

What we will see is everything else blamed, from warm weather to cold weather, to the strong dollar to …..

The truth, however, is much simpler.  Governments that tax too much destroy their own economic engines.


Rand Paul’s Falling Behind-Is There Anything That Can Be Done?

rand paulRand Paul faces a series of major decisions. He has lost the edge he came into office with. His positions are dulling as he listens to advisors that tell him he needs to be more inclusive. WRONG WRONG WRONG.

Paul needs to be so clear on his positions that anyone(and I mean anyone friend or foe) knows where he stands and what his reply would be.

Rand has made some critical mistakes along the way. But he is still young. Let’s see if he can learn from them and correct his course.

Here are three things I suggest he do immediately:
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1) Apologize for supporting McConnell

Let’s face it. This was a mistake. Rand showed us that his loyalties were to the party and a fellow Kentuckian, even if that Kentuckian was wrong for America. And since then we have paid a heavy price for this choice. Rand could have had another ally in the Senate had he not supported McConnell.

2) Take a hard line on the border and illegal immigrants. Libertarians support an open border ONLY if crossing it does not come with food stamps, welfare, housing and medicare. Crossing the border into the US should not mean you get all the perks of citizenship.

Donald Trump has shown clearly that this is the single biggest issue we all have at this moment. We have been told for decades that something would be done. It hasn’t. The needs of law-abiding citizens are secondary to the wants of illegal aliens. And we are being bullied from all directions that we must accept illegals. We do not. If your native country sucks, I am sorry. But it’s NOT my problem.

3) Start attacking the Fed. The Fed has painted themselves into a corner. We are screwed. If you cannot make the most of this opportunity, you never will.

We are on the cusp of a major economic event. The Fed is at the root of the problem. It’s going to be hard. But we must remove our economic outcome away from the idea that printing more money, and borrowing future demand to shore up businesses today is the answer. Our future is dismal if we do not act soon. It may very well be too late. But Paul can boost his standing by continuing to highlight the mistakes the Federal Reserve is making(and who is getting rich on their coattails).
End the Fed

Rand has decide where he stands if he wants us to stand with him. As of now, I think he is trying to play both sides. I am not sure where he stands.

That will be a fatal mistake to his campaign. There are 15 flavors of vanilla being offered by the Republican slate. And then there’s Trump. Rand needs to show what his true flavor is.

Paul has potential. He has shown courage. But he has faltered over the last twelve months. I suggest he pause and look around. Are those advising him of what he needs to do palying inside the box? Or are they thinking outside the box?

This game will be won outside the box. So why continue to play inside the box?

Buy Back Mania- The Top Sixteen Dow Companies Buying Back Their Own Stock

Apples are apples as they say.  At least sometimes apples are apples. But all is not always as it appears.  Much has and is being made about price earnings ratios, stock buybacks, corporate leverage and more.

These metrics all have an impact on the value of a share of stock.  Anyone who who has followed what I have been saying over the last 9 years knows the value I have placed on the single most important number of a company’s performance-The Bottom Line.

While the bottom lines have been less than stellar for some time now for many of the Dow 30 companies, the Earnings Per Share numbers have been spectacular.  Why?  Stock Buybacks.

Just how many shares have companies been buying back?  Here is a table of buy backs over the last 5 years.  The numbers are staggering for a few of these because several of these companies are borrowing large sums of money to do so.  The question we need to ask is where the dollars are going to come from when these sums need to be paid back?  Are they going to be issuing shares?  Earnings(which are falling)? Or both?

Travelers -28%
Home Depot -23%
Pfizer -23%
IBM -22%
Visa -18%
American Express -16%
Exxon-Mobil -16%
Goldman Sachs -14%
MMM -13%
Intel -13%
United Health -13%
Nike -11%
Apple -11%
Disney -11%
McDonalds -11%
Cisco -10%

Travelers tops the list, on track to have purchased back a whopping 28% of its shares by the end of 2015.  Sixteen of the Dow 30 will have repurchased 10% or more of its shares by the end of the year.

The heavy share buybacks is one of the reasons that prices have continued rising.  Investors see the EPS increase(even if bottom line profits do not) and buy more shares.  The companies, seeing that investors are liking the EPS growth, buy back more shares and keep the game going.

How effective is this game?  Let’s see if you can pick the right answer to the following question:

For the years 2013, 2014, and 2015, how many of these years saw the DOW 30 companies actually earn more dollars than the previous year?

And for bonus points- Which year was the best?

If you answered All, you are far off the mark.  In fact, only one of those years will see the Dow 30 earn more dollars in total.

Which year was the best? That is going to be 2014.

The year 2015 is on track to post a 7.9% drop in total earnings.

How does one hide such abysmal performances?

That’s right!  Stock Buy Backs.

And the games continue.