My Investing Muse (08Dec25)
Layoffs, Bankruptcy & Closure news
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US nonfarm employment fell by 9,000 in November, marking the 2nd consecutive monthly decline, according to Revelio. The firm compiles data from company career pages, such as LinkedIn and Indeed, and staffing agencies. This comes as private employment dropped 19,400 while the government added +10,400 jobs. Furthermore, October’s decline was revised sharply lower, by 6,400 jobs, to 15,500. This brings the total downward revisions to 158,800 over the last 4 months. Nonfarm payrolls have now posted 5 declines over the last 7 months, the worst streak in at least 5 years. Deterioration of the job market is accelerating. - Revelio
Denny’s is closing 150 locations in the coming weeks, according to PennLive. - Syracuse
US bankruptcies are running at RECESSION levels: US large bankruptcies rose to 655 YTD, the most in 15 YEARS. This is higher than in 2020, 2021, 2022, and 2023. October, Sept, and Aug saw 68, 66, and 76 filings, the most since the 2020 CRISIS. - X user Global Markets Investor
U.S. layoffs totaled 71,321 in November and reached 1.17 million this year. It’s the most since 2020, and a 44% increase from 2024. Recent Layoff Announcements: UPS: 48,000 employees; Amazon: Up to 30,000 employees; Intel: 24,000 employees; Microsoft: 15,000 employees. 2026 will be the year of mass unemployment.
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10 Roads, one of the largest postal linehaul operators, shutters. The fleet had 2500 trucks and 2600 drivers. This shutdown is one of the largest trucking failures ever and the largest since Yellow filed bankruptcy in 2023. Nearly 5000 employees will be out of work.
AI & Data Centre
Here are some of the news surrounding AI and the Data Centre. If America wishes to lead, the innovations need to be backed by the right policy and adequate infrastructure. Here are some of the recent news items that raise concerns about AI’s development.
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A staggering 180GW chasm between planned data centre capacity for actual development capacity. - X user ZeroHedge
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“If we don’t have energy growth, we can’t have industrial growth. If we don’t have industrial growth, we can’t have job growth. It’s as simple as that.” - Jensen Huang on Joe Rogan
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“The AI boom is looking more and more fragile,” per WSJ
53% of investors now believe AI stocks are already in a bubble, per Bank of America
My Final Thoughts
The current low success rate of AI pilot programs (around 5%) suggests that the immediate financial returns from AI initiatives may be less lucrative than anticipated. This situation raises a key question: Will these returns deter investors who are expecting high profitability?
Despite these setbacks, the drive for greater AI adoption among companies is increasing. This leads to another important question: Will the underlying demand and urgency for AI eventually outweigh the disappointments and low pilot success rates?
A notable trend is the disparity between public pronouncements and actual outcomes: companies are often quick to announce their “AI journey” while remaining silent about their AI failures.
Finally, the broader market context is optimistic: the market is anticipating an upcoming interest rate cut, which is expected to boost market liquidity and potentially offset caution regarding AI’s current returns.
Financial Strategy and Outlook
Let us spend within our means, invest only what we can afford to lose, and avoid leverage. Let us review our current holdings with the intention of divesting from businesses that are losing their competitive advantages. Additionally, I will consider adding both hedging strategies and defensive positions to our portfolio to mitigate risk.
As we move forward, it is crucial to conduct thorough due diligence before assuming any new responsibilities.
Wishing everyone a successful week ahead.
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