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ZERO SIGNAL. Hey guys, welcome back to zero signal
shorts, please like and subscribe Email is at
zero signal truth at gmail .com. We'd love to
hear your feedback and your thoughts. So today,
I thought we would talk about the potential recession
slash depression that could be right around the
corner. So looking at the US economic stats,
it looks like the overall recession probability
is in the 20 to 40 % range in the next 12 months.
And this is according to JP Morgan. Polymarket
rates around 40%. So there seems to be a moderate
risk. It's a little bit down from higher fears
earlier in the year. I know some of these corporations
I think are urged or nudged by the government
to put these odds, make them a little bit less
detrimental to the agenda at hand. So currently,
as of the October estimate, it looks like the
unemployment rate is around 4 .4%. So let's rise
slowly. It's the highest it's been in the past
four years. And the number that kind of sticks
out to me is the... people not participate in
the labor market. We have roughly 62 .5 % participation
in the labor market at this time. So that leaves
about 100 to 105 million people that are currently
unemployed or not looking for a job. That's a
scary number. Back in 2015, there was roughly
90 million people not participating. And despite
the net gain of about 30 million people in the
past 10 years, about 8 to 10 million more people
are not participating. So that's a scary number.
It makes me take pause and look at that. So I
think the group that's particularly harmed by
this or that's having an adverse and increased
effect is recent college graduates. So their
employment rate is around 7 .1 % depending on
what report you look at. So that's the worst
in decades. And I think a lot of this has to
do with AI automation. So a lot of entry level
white color jobs are hit hardest by this AI automation
and a lot of employers are preferring people
with experience. So AI is having a direct negative
effect on these kids coming out of college. It
was interesting. I read an article the other
day about. College kids getting their undergrads
coming out and they're not finding jobs. They
want so the under employment rate for that group
is around 41 % so essentially what that means
is that 41 % of the people coming out of college
or working jobs that don't require a degree there
are hundreds of thousands of dollars in debt
potentially and They're taking on jobs that are
probably hourly jobs that don't really care if
they have that college degree or not Like I said,
I was reading the interesting article and due
to this under employment problem that we have
a lot of these kids are going back to get their
MBAs or the law degree. So one of two things
happens here. A, well, I think both happen here
in this situation. So A, they get even further
in debt by taking loans out to finance, either
getting the law degree or MBA. And two, some
of those degrees take two to four years, depending
on where you're going. So when you come out on
the other side, not only are you going to be
more in debt, but the AI automation is going
to replace a ton of white -colored workers. I
think they're going to... come out the other
side to a rude awakening that not only are they
further in debt, but there are actually fewer
jobs that are going to require these advanced
degrees. So let's look at some AI displacement
numbers. Just in this year, it was looking like
between a hundred and two hundred thousand jobs
were erased off the map due to AI. And globally,
that number is around one to five million. And
these are just rough estimations. There's really
no consensus on the exact total. But I know the
tech sector was hit hardest and I said 100 to
200 ,000 in the past two, three years, 80 to
90 ,000 of those layoffs took place in 2025 alone.
And that was essentially stated to be layoffs
siding AI and restructuring. And we know what
restructuring means. It means cutting your labor
for us to reduce your expense to become more
profitable. So earlier in the decade, there wasn't
a whole lot of stats tracking AI specific losses.
That's been a recent metric that's starting to
be tracked in the past two, three years. So with
the advent of AI and with workers preferring
people with experience, recent grads are struggling
disproportionately. Their unemployment rate has
risen faster than any other group in 2025, often
exceeding the national average for the first
time in decades. This reverses the historical
trend where there was a college premium put on
people entering the job market. And again, There
are fewer entry level jobs due to AI automating
and junior roles in tech, data and HR are just
really not needed anymore. But an upwards of
15 % are actually not participating at all. These
are temporary opt -outs and this is just discouragement
from applying to thousands of jobs that you've
all seen the TikTok videos, the YouTube videos
for people go in, apply for hundreds, if not
thousands of jobs and get no response in return.
There's also a big thought that a lot of these
job postings are actually not active. It's companies
posting on places like Indeed. and other hiring
websites in order to keep the guys up that they're
actually trying to expand. And when in reality,
they're really not. And if I was in that situation
and I applied for hundreds of jobs and I wasn't
getting any sort of feedback or even any interviews,
I'd be pretty dang discouraged myself. Again,
we're dealing with a culture who puts a big emphasis
on the college degree. And I'm not saying that
they're not important, but you look at these
schools and look at some of the degrees they
offer and they're completely irrelevant to what
most people are going to end up doing with their
lives. Unless you're going to be professor studying
something like anthropology or sociology is probably
not a job that has a high demand outside of the
educational institutes. So. Again, you have tons
of kids going to these universities, getting
degrees that are not going to translate into
the real world. Not only that, employers are
preferring people that have real -world work
experience. I know my degree personally is not
relevant to anything I've done in my career.
It's a way to get these people into indentured
servitude with the debt, barely keeping their
head above water and paying hundreds, if not
thousands of dollars a month once they enter
the workforce to pay down these loans. And then
we have the hard fact that a lot of these people,
especially But in the late 90s, early 2000s,
a ton of people saw computer science, coding
was the next big thing. But unfortunately with
the advent of AI, a lot of these coders and a
lot of these computer scientists are no longer
needed or wanted. AI can do these jobs themselves.
And this also spills over into other industries
as AI becomes more profound. It gets better.
You're going to lose newscasters. You're going
to lose actors. You're going to lose influencers.
I know there was even a story about a big pushback
where companies are using AI models now to display
their clothing and their wardrobe. Humans are
being slowly pushed to the periphery. and being
pushed out of a lot of these spaces where AI
can come in and take over these roles. So instead
of paying someone down the street to act, to
read the newscasts, to the heck, to even podcast,
they can create these false identities and the
corporation can take the money for themselves.
They don't have to pay all the insurances, all
the health insurance, all the labor rates, the
millions of dollars that if someone becomes famous
enough, they can keep all this money in their
pocket. And on top of that, the cost of living
has become Very unaffordable, especially for
the middle and lower classes. The standard American
lifestyle for most people include owning a modest
home in a decent area, raising one to three kids,
driving reliable cars, eating out occasionally,
saving a little bit at the end of the month to
throw in the bank account and maybe take a vacation
once a year if you're lucky. That has shifted
from being challenging to effectively out of
reach for the majority of households earning
a median income or below. So real inflation adjusted,
the median household income in 2024 was essentially
flat versus pre pandemic levels in 2019. So the
nominal rate was $83 ,700 in 2024. And that money
essentially bought the same amount of goods and
services that would have purchased back in 2019.
Wages have not grown that much in the last five
years. But overall, consumer prices have rose
23 to 25 % in the same period. And this just
leaves most people worse off in real terms in
this current time. Pre -pandemic in 2019, the
medium home price was around $320 ,000, $330
,000. The mortgage payment on average was around
on a $300 ,000 loan was 3 .5%. So that came out
to about $1 ,350 a month. So in late 2025, and
this is just the reality, the medium existing
home price is $410 ,000. $435 ,000. New homes
regularly being sold for $460 ,000 plus and a
payment on a $350 ,000 loan at a 6 .87 % interest
rate is $2 ,300 to $2 ,500 a month plus the taxes
and insurance. So you're looking at around $3
,000. That's more than double what it was in
2019. It's crunching all those numbers. It takes
roughly 35 to 45 % of gross income. just to buy
what is considered an affordable home nowadays.
57 to 75 % of households can't even afford a
$300 ,000 home. So this is essentially the worst
in generations. The classic 3X, 4X income rule
for buying a house is dead. Now it's four to
five times your median income to buy a home in
most metros. And first time home buyers are locked
out unless, you know, there's a dual high income
earning home or some family help. Not only that,
I think the rental market is worse. So the actual
average back in 2019 for a normal one bedroom
was $1 ,100 to $1 ,200 a month. Now the national
average for one bedroom is around $1 ,500 to
$1 ,600 and in many metro areas is $2 ,000 plus.
I don't even want to talk about the two or three
bedroom apartments because you just might as
well add thousands of dollars on top of that.
You know, about half of renters are cost burdened
by rents. So if we want to look at groceries
and food at home, a typical family basket in
2019 was $800 to $900 a month. The same basket
now with the same items, if you were to take
them in just the prices for inflation, that basket
is now $1 ,100 to $1 ,200. That's 30 to 35 %
increase. from what it was six years ago, extra
three, $400 a month versus 2019. And all of this
on top of wages that really haven't grown in
proportion with the rate of inflation, the rate
of the housing market. Looking at cars, the average
transaction price for a car in 2019 for a brand
new car was 38 ,000 to 40 ,000. Now just to get
a new car, you're looking at 50 ,000 plus. I
can't tell you how many cars are out there. 60
70 80 thousand the monthly payment is usually
at 72 months at seven and a nine percent So just
to get a car now, you're looking at seven fifty
eight fifty plus insurance and gas the air of
this reliable new family car under thirty thousand
is over most affordable cars are now stripped
to base models or tiny crossovers these little
cars you get into and if you're over six foot
tall You're struggling to get in and out not
to mention your wife and your kids with them
in the back I know Trump just introduced the
concept of a 50 year mortgage. If you look at
that, doesn't really lower your payments that
much every month. All that does is translate
into more interest that the banks get over time.
So again, another policy that may look good on
the surface, but on the back end, a 50 year mortgage,
I don't know what you're going to do if you buy
a house when you're 40, you're going to work
till you're 90 years old to pay this bad boy
off, assuming that you're lucky enough to live
that long. The extra hundreds of thousand dollars
in interest payments that the bank is reaping
on the back end. So just not sugarcoating it.
If you're A medium household income or below
the 1950s to 1990s version of the American dream
is mathematically impossible for most of the
people in the country without extreme sacrifice.
You don't have kids. You don't have cars. You
don't want roommates forever. You don't want
retirement savings. You're treading water at
best and you're slowly drowning at worst. And
if you're in the bottom 40 % household income
of less than 60 ,000, you're already in survival
mode. You're probably using food banks, working
multiple jobs, skipping doctor visits, and you're
in perpetual debt. If you're in the top 20 %
on the other hand, you're finer or better. Your
assets are inflating. The stock market keeps
blowing up recently in the past few days of starting
to show cracks. But we'll get into that here
in a minute. And I think that has a lot to do
with AI. But in the past year, if you had a 401k,
if you invest it, your assets are just growing
faster and faster. It doesn't even make sense
to me logically. In my opinion, a lot of the
stock market is inflated by companies investing
in 401ks. So that's the money that you take out
your paycheck tax -free your company. And at
least I don't, I know at one point, a lot of
companies would match up to a certain percentage.
And I know a lot of them are getting rid of that.
The government does not want the stock market
crash to have millions of people, their savings
to be decimated. I know that happened in 2008.
I knew a guy who had roughly a million plus in
his 401k and seemingly overnight that value was
essentially halved. I can't imagine if you're
on the cusp of retirement and you watch your
401k lose half its value in a matter of a week.
And on top of that, the illegal immigrant surge
in the past four years has had a pretty profound
effect on the cost of owning a house. So just
low estimates that accounts for an additional
five to 15 % spike within the housing market.
They want to say that it's a minor driver overall,
but five to 15 % on the $300, $400 ,000 house
is fairly significant. And it's definitely having
an effect on the American citizen. When we look
in terms of rent. It's caused a pretty moderate
increase. The highest estimate is around 25%.
Again, it's significant. And that 25 % is in
high flow metro areas where these illegals decided
to come once they got into the country. Nationally,
it's around 3 to 8%. But still, those percentage
points over time are huge. And on top of all
that, with this illegal immigration, it does
suppress wages. You have these people taking
jobs at a significantly lower rate than, say,
the average American would. Again, I know they're
taking jobs that are less skilled but still as
opposed to making 20 to 25 dollars an hour for
some of these really difficult labor intensive
jobs they can pay an illegal alien under the
table 12 to 15. Again it has a direct correlation
between the wages not increasing as fast as inflation
is over time. I read another interesting story
I think it came out in the past week so today
is November 18th just to put this in context
as to when I'm getting this information and sharing
it. But Trump put out, I guess, a directive mandate.
I'm not real sure what happened to it. I know
there's been a lot of pushback, but he wanted
to give 600 ,000 H1B1 visas specifically to colleges
that come into our universities, mostly Chinese
and Indian. So when I look at this, it's irritating
that the state college systems were set up to
make college affordable without having to travel.
far away to get a decent education. You know,
what I like to call the educational industrial
complex. These colleges have become businesses.
When your kids go to college, even in -state
tuition for some of these places can be pretty
astronomical depending on where you're living,
unless you somehow get a grant or get a scholarship.
If you look at in -state tuition versus out -of
-state tuition, out -of -state tuition can be
roughly twice, if not greater in terms of what
these kids are paying. So these H1V visa kids
come in from different countries. Typically what
happens is China, India, or whatever country
they're coming from, they sponsor these kids
and pay for them to go to college here. And that
we compared to the in -state out -of -state to
someone who is on the H1B visa. The H1B visa
costs significantly more than a kid going to
college from within the state or even out of
the state for that matter. So for these colleges,
they have an incentive to take on the kid with
the visa because they can charge tens of thousands
of dollars more per year. And not only does this
keep another, I mean, there's only a finite amount
of spots in a college education system. So for
every one that you bring in, you're leaving the
kid stranded who wants to go to school within
the U S probably within the state. And that spot
is taking up from a kid from a different country.
So I don't know how that puts America first.
I don't know how that makes America better. I
just don't know why we're not prioritizing, especially
our youth in making college affordable without.
putting kids in to hundreds of thousands of dollars
in debt. And that's just to get a bachelor's
degree. That's not to mention a master's or a
doctorate. So again, these college institutions
need to get out of this business model and make
college affordable. I don't know why someone
has to go into significant debt. in order to
get just an average education. The kind of scary
thing is with the advent of AI, the GDP growth
for the past year is not that significant. It's
slowly going down. So in regards of, so we're
just going to talk about the US GDP. So in the
first quarter of 2025, it was around 0 .6%. So
that's a pretty small number. In Q2, it was 3
.8%. Again, not beating the brakes off of it.
That's not terrible, but not where we want to
be. As of November, 17th 2025, they're estimating
a 4 .1 % GDP growth for quarter three. But the
consensus forecast for the full year of 2025
once adjusted, one of these numbers initially
come out that they're, I don't think they're
very accurate, but they're predicting around
for the year of 2025, a net growth of 1 .7 to
1 .8%. So that is not It's not super good, but
the scary thing is that most of this GDP growth
is coming from the investment in AI. So without
that, there would be negative GDP growth for
the country. So the GDP is contracting. So the
GDP growth attributed to AI varies all over the
place, but typically it lands around 0 .8 to
1 5 % percentage point. So if you look at the
annualized GDP of 2025 for the U S it's right
around that number. So it would either be flat
or negative. So in 2024, AI Capex contributed
roughly 30 to 40 % of total real GDP growth.
In 2025, they're predicting that anywhere from
50 on the low side to 90 % on the high side is
the AI contribution to the nation's GDP growth.
And on top of that, almost 100 % of this impact
is front loaded from Amazon, Microsoft. Google,
Meta, Apple, NVIDIA supply chain. Actual productivity
efficiency gains from deploying AI are still
negligible in the official numbers. Economists
like Goldman Sachs and McKinsey expect to start
to see these show up meaningfully not until 2027.
And that's assuming that there's not an AI bubble,
which we're going to talk about next. But before
that, I just want to belabor the point. So right
now, the US economy is being completely propped
up by the AI investment boom. I just want to
touch on that briefly. We've talked about in
some of our episodes. So, you know, not only
is this AI investment propping up GDP, it's actually
squeezing out the middle and lower classes. When
these server farms are built, they take an incredible
amount of energy. They take an incredible amount
of infrastructure, which a lot of these are being
offset by taxpayer dollars. When a big company
comes into the city, They typically get pretty
significant tax breaks. What's that? What that
means is they're paying these companies to build
their investment, which means that you are not
only that your energy prices are going to go
up. Your water prices are going to go up in 99
out of a hundred cases. Your infrastructure is
not built to listen that sort of load on the
system. So again, another way. for the consumer
or for the taxpayer to essentially provide corporate
welfare in order for these companies to build
their investments. And so the other scary thing,
we're gonna go back to this potential AI bubble.
So let's just say this AI bubble burst, and I
think it's starting to show some cracks as to
that it might happen here in the next six to
18 months. So let's say Nvidia comes out, and
this is just a theoretical situation. Let's say
they have a disappointment. earnings call, they
would end up slashing anywhere between 50 to
80 % of their spending and the macro fallout
would be sharp. It would be very concentrated
and very painful. Even though the AI economy
is still a relatively small part of the whole
GP, a direct hit of 1 .5 to 3 percentage point
in the first year could happen essentially overnight.
AI related fixed investments, like I said, currently
adding one to 1 .5 % to the GDP accounts for
roughly 50 to 90 % of the growth in 2025. So
let's just flip that contribution to negative
on the real US GDP. And that goes from 1 .5 to
0 .5 or worse, almost in an instant. That would
be a huge sector bloodbath. And the video alone
is 6 to 7 % of the entire S &P 500. A realistic
70 to 80 % drawback, which translates to 15 to
20 trillion, and valuation drags the NASDAQ down
30 to 45%. The S &P is hit with a 25 to 35 %
loss. And 401ks and pension funds will get obliterated
overnight. So again, this is a complex theoretical
problem, but this would cause a massive recession.
Layoffs would essentially hit within the first
week. You would lose 200 to 500 ,000 high skilled
tech jobs and construction jobs overnight because
construction is a big part in building these
AI data centers and then to affect another one
to 2 million workers from suppliers, real estate
services, et cetera. With recent college grads
already at almost a six to 7 % unemployment rate,
they would get absolutely crushed and the entire
AI fallout would just absorb all the smart kids.
And overnight, again, they would lose their jobs.
So if that bubble burst in 26 or 27, the kind
of peak to trough, you're looking at a negative
3 % to negative 6 % GDP growth, or I guess shrink.
And that would be worse than the dot com bubble.
Theoretically, unemployment would peak at 9%.
I don't even know what that number would translate
into people that are not participating in the
labor market, but I'm guessing it would add millions
on top of that. And finding a job would not.
be an easy thing to do. Not that it is now. I
feel sorry for anyone that's going through those
struggles. I guess the only thing we really have
going for is it would not be another 2008 type
crash where the banking system was so leveraged
that banks started to fail. Right now, the housing
market doesn't seem to be in desperate shape.
It's getting worse, but it's still overall in
good shape. So, it would not be as brutal as
the dot -com bust, but it would just be faster
and more concentrated. It would hurt just as
bad. A lot of people think that the economy is
recession -proof because of AI, but I think that's
a pipe dream and people... inflating their egos
and their worth and trying to make that statement.
So all in all, I think with everything that's
coming around the corner and some of these articles
that we're seeing, I think a recession is a real
possibility in your future. And we just got to
prepare, spend wisely, pray, get your finances
in order, and try to find a way to hedge and
mitigate your risk. As I always like to say,
we love you, Jesus love you. And I hope you guys
have a great day. If you have any questions,
comments, be sure to like and subscribe and email
us at zerosignaltruth at gmail .com. I hope you
all have a great day.