Andrew Zatlin: The “Phantom” Economy

Let’s talk construction jobs.

The construction industry is contracting. The number of permit applications recently hit a two-year low, meaning builders are not seeing much growth.

In fact, builders are having to add a lot of incentives just to sell the homes they’ve got out there. And in fact, when we talk about building starts, it’s at an 11-month low. In other words, demand for construction workers isn’t booming. It’s quite the opposite.

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But here’s where things get more interesting.

When someone files for a jobless claim, there’s a lot of data that’s picked up. Gender, age, ethnicity, and industry. Where were you working?

We’re seeing fewer jobless claims, but you know where we’re seeing a lot more claims. It’s in this category called no information. That’s right. Not everybody calls out where they were working.

So last year, about 13% of California’s jobless claims came back with no industry indicated, no information. 13%. This year it’s at 30%. One out of every three jobless claims being submitted is blank in terms of where the workers are.

Now, why would somebody not want to call out where they were working?

I’ll tell you, because those three sectors that I called out are dominated not just by Hispanic workers but by undocumented workers.

For example, farm workers, 70% of them are undocumented workers. Similarly, in construction, around 40% are undocumented Hispanic workers and so on and so on.

So rather than run the risk of being deported, many of these workers who are entitled to jobless claims and normally would be filing for those jobless claims are just belt-tightening.

They’re going to withstand not having an income for a while.

~ Andrew Zatlin

P.S. from Addison: That insight from Andrew Zatlin is just a small appetizer for the main event: our discussion on Grey Swan Live! Thursday. The jobs market is the main reason behind the Fed pivot to cutting rates… and ushering in the “most terrifying bull market” we’re likely to see in our lifetimes.

We’ll cover how Andrew views the labor market, why he’s been more accurate than other forecasters – garnering the #1 ranking on Bloomberg – and look at how his views fit in with many of the potential Grey Swan events we see occurring in the months ahead – including the possibility of a “most terrifying bull market.”

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It’s another Grey Swan Live! you won’t want to miss – all part of the incredible value our members enjoy week after week.

If you have any questions for us about the market, send them our way now to: Addison@GreySwanFraternity.com.

Let’s talk construction jobs.

The construction industry is contracting. The number of permit applications recently hit a two-year low, meaning builders are not seeing much growth.

Turn Your Images On

But here’s where things get more interesting.

When someone files for a jobless claim, there’s a lot of data that’s picked up. Gender, age, ethnicity, and industry. Where were you working?

Now, why would somebody not want to call out where they were working?

I’ll tell you, because those three sectors that I called out are dominated not just by Hispanic workers but by undocumented workers.

For example, farm workers, 70% of them are undocumented workers. Similarly, in construction, around 40% are undocumented Hispanic workers and so on and so on.

So rather than run the risk of being deported, many of these workers who are entitled to jobless claims and normally would be filing for those jobless claims are just belt-tightening.

They’re going to withstand not having an income for a while.

~ Andrew Zatlin

Turn Your Images On

It’s another Grey Swan Live! you won’t want to miss – all part of the incredible value our members enjoy week after week.

If you have any questions for us about the market, send them our way now to: Addison@GreySwanFraternity.com.

Our forecast will feel obvious in hindsight and controversial in advance — the hallmark of a Grey Swan.

Most analysts we speak to are thinking in terms of the history of Western conflict.

They expect full-frontal military engagement.

Beijing, from our modest perch, prefers resolution because resolution compounds its power. Why sacrifice the workshop of the world, when cajoling and bribery will do?

Taiwan will not fall.

It will merge.

Wars, technology races, and political upheavals — all of them rest on fiscal capacity.

In 2026, that capacity will tighten across the developed world simultaneously. Democracies will discover that generosity financed by debt carries conditions, whether voters approve of them or not.

Bond markets will not shout so much as clear their throats. Repeatedly.

Taken together, the seven Grey Swans of 2025 behaved less like isolated events and more like interlocking stories readers already recognize.

The year moved in phases. A sharp April selloff cleared leverage quickly. Policy shifted toward tax relief, lighter regulation, and renewed tolerance for liquidity. Innovations began to slowly dominate the marketplace conversation – from Dollar 2.0 digital assets to AI-powered applications in all manner of commercial enterprises, ranging from airline and hotel bookings to driverless taxis and robots.

Back in April, when we published what we called the Trump Great Reset Strategy, we described the grand realignment we believed President Trump and his acolytes were embarking on in three phases.

At the time, it read like a conceptual map. As the months passed, it began to feel like a set of operating instructions written in advance of turbulence.

As you can expect, any grandiose plan would get all kinds of blowback… but this year exhibited all manner of Trump Derangement Syndrome on top of the difficulty of steering a sclerotic empire clear of the rocky shores.

The “phases” were never about optimism or pessimism. They were about sequencing — how stress surfaces, how systems adapt, and what must hold before confidence can regenerate. And in the end, what do we do with our money?!

Our forecast will feel obvious in hindsight and controversial in advance — the hallmark of a Grey Swan.

Most analysts we speak to are thinking in terms of the history of Western conflict.

They expect full-frontal military engagement.

Beijing, from our modest perch, prefers resolution because resolution compounds its power. Why sacrifice the workshop of the world, when cajoling and bribery will do?

Taiwan will not fall.

It will merge.

Wars, technology races, and political upheavals — all of them rest on fiscal capacity.

In 2026, that capacity will tighten across the developed world simultaneously. Democracies will discover that generosity financed by debt carries conditions, whether voters approve of them or not.

Bond markets will not shout so much as clear their throats. Repeatedly.

Taken together, the seven Grey Swans of 2025 behaved less like isolated events and more like interlocking stories readers already recognize.

Back in April, when we published what we called the Trump Great Reset Strategy, we described the grand realignment we believed President Trump and his acolytes were embarking on in three phases.

At the time, it read like a conceptual map. As the months passed, it began to feel like a set of operating instructions written in advance of turbulence.