WH REFUSES To Publish Job Loss Data

Yeah, so Emily and I covered yesterday this ADP report that came out that said that there were, you know, roughly 10,000 jobs being lost every single week in October. And that report has taken on a lot more significance because, due to the government shutdown, we aren't getting government data. So we have to rely on people like ADP who are compiling data. So yesterday, Caroline Lovett was getting asked about, hey, you know, when might we see some actual official government jobs numbers? And she revealed

we may just never actually release the October jobs report. So let's take a listen to that.

The Democrat shutdown made it extraordinarily difficult for economics, economists, investors, and policy makers at the Federal Reserve to receive critical government data. The Democrats may have permanently damaged the federal

statistical system with October CPI and jobs reports likely never being released and all of that economic data released will be permanently impaired leaving our policy makers at the Fed flying blind at a critical period. So she's

saying not only are they not releasing those past numbers, but they may have permanently damaged the systems. Pretty wild saga at a time when I think people are very interested in what direction the economy is headed in.

Yeah, they're like, oh, we just can't release the data, especially after they've helped fire the BLS commissioner and now their new commissioner isn't gonna get the votes. So it's just, yeah, interesting, isn't it? Look, in general, even with some of these stats, it's almost not even necessary when the only stat that matters is the consumer sentiment.

Consumers are saying that this is the worst economy in 20 years. OK, I believe them. Like at the end of the day, I don't think that people are delusional whenever it comes to consumer sentiment, which is based on expectations and based on reality, as well as the lack of change over the last five years. At every structural level, life is shit. I just think that that's basic.

It doesn't take a genius or some BLS month-by-month data to look at it and just look at the basics of healthcare, of home and daycare or childcare, any of those three things, groceries as well, and be like, okay, obviously things are not trending in the right direction. Also, at the same time, you know,

the AI stuff just hovers above all of us entirely, billions of dollars moving and changing hands with no expectation of real profit and the real expectation of a genuine crash. Put this up on the screen, like for example, just to show you how crazy shit it's getting. So SoftBank, Masao Ishizan's SoftBank,

has sold some 5.8 billion of their stake in Nvidia to pay for open AI deals, okay? So he sold his stake in Nvidia, according to their more recent quarterly report, in order to help fund their $30 billion spending plans alone just on open AI. So they sold an AI basic stock

in order to fund other AI deals. This is billions and billions and billions and billions of dollars. They were talking about 100 billion alone that's pledged just to spend on projects here in the US. And the thing is, is remember, with stocks,

which is what we talked about with Palantir, with Nvidia and everything, everything is built on future value, on expectations. So, I mean, one of the things I just can't get away from is this is not dot com, in that some of these companies, it's not that they're making no money.

OpenAI is making a good amount of money. They're making $20 billion a year, roughly, on Target. But the thing is, is they have a trillion dollars that they have to spend in the next 10 years. And so, for their expectations to meet reality, they're making it so that you have like a,

you know, a pretty successful company. But the value, the inflated value, that's propping the whole market up and everything is about exponential growth for the next 10 years with an expectation of value of six, 700 billion in the future. That would be more than any other company in human history.

So you're like, uh, okay. I mean, that's literally the delusion that you have to believe. So I'm not saying it's dot com, as in it's not diapers.com or pest.com or any of these places where it's totally out of whack. They do make a lot of money,

but the problem is that the valuation is made so you can't just be successful. Like why can't you just take the win? Yeah, we make 20 billion and be valued normally. They have to be valued as if they're a trillion dollar crash, even back to reality, all of us will still suffer because of the way that market ripples, interest rates, you know, how many other, oh my god, I was reading today, life

insurance companies, a quarter or something of life insurance is parked in some AI or data center, bets, right? So yeah, people will die, right? And you have to pay that out. Remember AIG, all of that?

Nothing has changed.

It's all deeply interconnected.

I honestly, I think it's vastly worse than the dot-com. I do, because of the amount of money that we're talking about here. And because of how much shitty our economy is now. Like, you know, back in 2000, we still, there was more stuff that we still,

we still had more of a real economy. Of course. Right? We were only partially into the like,

We were only six years into that.

Neoliberal destruction of any real, actual economic activity. Now we're in this, you know, la-la land of just complete financialization and fantasy where our entire economy is a bet on AI. And so, and the center of the whole thing is Nvidia, right?

You've all seen the chart of like, here's Nvidia and here's all the arrows going circular to this one and back to that one and whatever. Nvidia is the center of all of that. And so that's why when SoftBank, who was a major player, major investor in the space, like major investor

in the space, when they're like, we're selling all of our stake in NVIDIA, people are like, hmm. Now as Sagar said, what they're saying is basically like, look, we need the cash because we're still all in on AI. This is we need the cash because we committed to open AI that we're going to make this investment. So this is how we're doing it.

It has nothing to do with our assessment of NVIDIA. But it still was very head scratching for people at a moment when a lot of analysts are looking at what's going on in AI and saying, this looks like a giant bubble. And just ask yourself this question, as I was talking about how wild the valuations are

and how much exponential growth in revenue they would need to be able to actually like fund the build out that they've committed to. We talked about this before. It would take like every single iPhone user on the planet, $34 of revenue for them, for them to meet revenue projections, et cetera.

I have it here. And then ask yourself the question. Ask yourself the different chat GPT models that are coming out, are they exponentially better? They're like modest improvements one over another. The story of AI is that as it gets better, the improvement goes exponential

because as the AI improves and the AI can start to train itself. Now, what you could say is, okay, well, that only that exponential curve, that really happens when you hit AGI, and then you've got the AIs training the other AIs, and that's when you get to this exponential growth curve.

But if you're looking for indications that the promise here may not match the reality of where we are, I think one very important indication is that after the chatbots came online and the initial shock of like these LLMs and how

how much improved they are over ordinary search and like all the things they can do and all the research that they're capable of processing and all of that like they have not really improved that much there's still tons of hallucinations you know I was asking Grok yesterday for hey what's out there that in the Epstein files that were just released that connects,

that's like about Trump? Like just every reference that has been flagged, can you pull it for me? The only things it pulled were the three initial emails that the Democrats had released. And then when I pushed it, it was like, no, this is it.

So I mean, and I'm sure you guys experience if you use any of these, chat GPT or grog or whatever you use, they hallucinate and make shit up all the time. So again if this is going to be, if this is going to justify the spend and the valuations and all of the hype and the hysteria and the incredible mass bet that our society, that thanks to our political leadership,

our society has placed on these things, you would think that they would be improving pretty dramatically over this time period, and we just aren't really seeing that.

I said yesterday, cure cancer or get out. You know, it's one of the, that's what you said was gonna happen. In the interim, if you're just doing pornography and data center construction.

And like a glorified Google search.

Look, I mean, let's not discount it too much. It's cool, I like, especially for math. Like I use ChatGPT for math a lot. But all of it is stuff I could do in Excel. It's just that I don't have to do the actual formulas there, right?

And I specifically use it for personal finance. But, but, to say that you should totally trust it, I'm telling you, as you just said.

Absolutely not.

I'm talking about basic shit. I remember once, I was looking at Super Bowl statistics, like some NFL stuff, and I was like, well, who won the Super Bowl in this year? They just said the wrong team. I was like, that's not true.

And you're like, oh's not true, recheck it. And they're like, yep, you're right. I've done that with math all the time, especially if you're using complex stuff. If you ever wanna go and calculate, we talk about mortgages here all the time,

so I'm constantly in chat with you, and you'll be like, oh, if I have a 6% mortgage, of the time, like all the time. It's just totally wrong. Well, and it was these AI agents were supposed to be

like this huge game changer in terms of, oh, that's what's gonna like, you know, really revolutionize in, you know, in the corporate space and whatever. And we're gonna talk about, I mean, I do think that there is AI job loss.

And I think there in particular, companies are assuming they're gonna be able to use AI to replace entry-level workers even though they haven't really figured out how to do that yet. So, they're just hiring fewer people based on their assumption. They're going to be able to figure that out. But in any case, the AI agents have not been,

that's not been a game changer either. So, I mean, to me, the best possible case is that it doesn't ever reach AGI, that it's like self-driving vehicles where it gets up to a point and then the growth and the trajectory really stalls out. It's very difficult to solve

that last mile of the problem. That's actually my hope because I think AGI is such an incredible looming disaster for humanity. And Matt Walsh apparently agrees with us on that. I saw him posting about it.

Well, my buddy, John Co Coogan has described it as, he's like, okay, maybe it won't be AGI, but it could be like the credit card, where, you know, like frictionless payments. Yeah. That was good, you know, and then it creates more revenue,

and, you know, the frictionless payment means that some companies can accept payments. I was like, yeah, I have no issue, like with a better math machine. Cool. That's I like that better Google not worth where currently is. And that's my fear.

I mean, my my fear is that I mean, my my biggest fear is that they do achieve their goals and try to replace all workers because you know, what what is better than like a union busted low wage workforce that you can exploit and abuse is no workforce whatsoever. That's the ultimate capitalist dream. And that's what they're aiming for.

That's what they're driving for is to make all of us absolutely irrelevant. So I hope that progress stalls out and that it never reaches that capacity. Put C4 up on the screen. This speaks to that. So DeepSeek leadership here warning that AI could eliminate most jobs in the next 10 to 20 years. DeepSeek of course being that Chinese-based LLM,

which really sort of shocked the world with its prowess and operates much more efficiently, requiring much lower levels of compute, doesn't require all of this like mass data center build-out that we've seen here. In any case, he says,

during this period societal structures will also be greatly challenged. Tech companies should play the role of guardians of humanity at the very least, protecting human safety and then helping to reshape societal order.

I don't know, I'm not feeling too good about letting like Mark Zuckerberg, Sam Altman, and Elon Musk, and Peter Thiel be the guardians of humanity. I'm not feeling great about that direction, me personally.

And you can again- Or the CCP, if they win the AI race, right? It's like, neither of these are like particularly great.

Any human being, even the best person I could, most intelligent person I could think of, I don't really want that kind of power consolidated in any one person. So when you see someone making these sorts of pronouncements and he's far from the only one, you can see this from any number of these tech barons who are leading the charge here.

This is their expectation, and it's their goal. And they're talking openly about how they are working to upend society completely. And I think people are just starting to gain awareness of what their long game really is. And it's hard to wrap your head around because it seems preposterous, right? Especially when you're just like messing around

with chat GPT and Grok, and it's giving you bullshit wrong answers. You're like, this stuff is never gonna be that transformational. I hope that's true. But the people who are involved closely

and working on this think very differently. We have to take that seriously. Of course you take it seriously, 100%. And I think just the reason why AI is having so much backlash right now is because people are just not happy with the economy. Go put B8 up here on the screen. They don't like the idea that tech titans are going to control their entire destiny. B8, please, just to show everybody. So how's the economy doing? Corporations say better than ever. Workers and consumers are saying, I'm in hell. Corporate confidence in the economy is running close to a 20 year high,

while unemployment expectations are closing in on a 40 year high. You just can't get away from this stuff. And in general, people are correct. You know, just to back up your point, what you were saying earlier,

can we put B6 on the screen, just to show you? If you read this JP Morgan report, to drive a 10% return on our modeled AI investments for the 2030 would require 650 billion of annual revenue in perpetuity, which equates to $34 and $72 a month from every current iPhone user. Just let that sink in. That's what they're building their current PE ratios and investments on.

It's just not gonna happen. B7 then, just to back up as well, the AI boom quote is looking more fragile than ever, where they look at the currents versus the three month high and they also talk specifically about losses. Open AI is currently projecting that losses will swell

to 74 billion in 2028. This is what I said earlier, you guys are making $20 billion a year. 20 billion, that's cool, right? That's a big ass business. But your CapEx is 74 billion in losses in 2028,

even with modeled increase in your overall profit. And the journal, they're actually doing a great job, just by highlighting all of this, is that right now, investors are currently expected to stomach $150 billion alone in open AI losses. $150 billion alone in open AI losses. And that is where the chat GPTs of the world and others are basically just saying, yeah, we know

it's not that great right now, but it's gonna get better. You have to bank on exponential growth and all of this. And I'm just sorry, I don't buy it. I don't think a lot of other people should buy it. And in the interim, what will happen is a crash, like an epic crash.

It could be just like dot com, or it could be 2007. The ripple effects will be devastating for everybody else Remember the bankers were all mostly fine after 2000 2008 nobody. It's not even just about jail They're all actually rich like if they just if they held out like those are some of the richest people in America right now and so even people who are like well I didn't have anything to do with mortgage-backed securities or even if you never took out a subprime loan Well, if your commercial paper got screwed and you got laid off, you still got affected by it. That's what's gonna happen.

That's actually what's going to happen. And I talked about the life insurance stuff, the people who are tied up in this, pension funds. If you think Dodd-Frank fixed anything, I have a bridge to sell you, or I have a car to sell you at 25% interest.

Something I really was thinking about yesterday and the Derek Thompson piece we had about how corporations are like, you know, they're feeling great, their sentiment is an all-time high and consumer sentiment is an all-time low, is, you know, used to be that I think there was a good case that you could, like good free market case

you could make that like, if you give the corporations what they want, they're gonna grow, there's gonna be more jobs, that's gonna benefit America more broadly. What was it was like, what's good for GM is good for America, like that sentiment, it wasn't totally true, but it had some truth.

It was a lot more true than AI is.

Now, the best thing you can do as a corporation is to lay off your workers, right? I mean, it's always been the case that those sort of cost cutting is rewarded, but I think the relationship between how your average American is doing and how corporations are doing,

it's not only not correlated anymore, they're actually directly at odds with one another. So the better that corporations are doing in the stock market, the worse that your average person is doing. And AI makes it so that that is like dramatically, obviously true. We can

put C5 up on the screens talking about these like Gen Z workers who are coming into the job market right now. And they talked to, you know, one of the bosses gave the New Yorker this quote, there's just no reason to deal with young employees. AI is taking entry level jobs. What happens when Gen Zers can't start their careers? Starts off with this truly heartbreaking story about this guy who did the whole thing, went to a good college, gets the job at the consulting firm.

And what is his job? His job is to go in and help different companies automate automate, use implement AI to automate certain processes so that they don't need as many workers. Then lo and behold, he automates himself out of existence. It's the modern day version of reminded me of

that ad that Obama did famously against Mitt Romney, where the guys built the stage on which their own layoffs were announced. It's like the AI version of that. He built out the automated processes that allowed his own firm where he was a high performer because he was

really great at building out these AI processes for different companies. He built out the process that replaced himself. So like I was saying before, even if companies haven't totally figured out how to replace entry-level workers with AI, they assume they're going to, and they're very uncertain about the state of the economy right now anyway. The tariffs and Trump and, you know,

things feel a little wobbly and not sure that we want to, like, bring on a bunch of people right now anyway. So, the Zoomers are coming out of college increasingly, there just isn't that entry-level work. So, if you never go through that process of doing the shit work of the, I'm going to compile the spreadsheets and do the analysis and crunch the numbers for the higher ups. How does that work?

Like what does that even look like in terms of a workforce? So, these are dynamics that are already taking hold at a time when the AI promise has not reached its full fruition or anything close to what is being ultimately promised.

Yeah, exactly. With the SCUT work, yeah, all entry level work is SCUT. And the whole reason is not to gain skill. It's to acclimatize to the workplace. It's to learn basic norms about how to send emails and what it's like to be an adult.

Like that's 95% of it, you know? And what you do is through osmosis, you see other people do a little bit more complicated work and you're like, oh, that's how you approach that. And then slowly you get handed a little bit of responsibility but I mean, what does everybody

who ever wants to join the workforce say? I just need an opportunity to learn a little bit of something. And yeah, that's what you're ultimately hiring for. Especially when you're looking at a 22 year old straight out of college or an 18, 19 year old who's coming out of trade school. who's coming out of trade school. No one's hiring you for your skill. It's for your ability to learn.