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.

Copper and resources are sending us a cleaner market signal than AI stocks.

Channeling Ludwig von Mises, we observe this morning that price is not just a number; it’s information. Price reflects what buyers and sellers collectively believe: demand, scarcity, fear, speculation, disappointment, future expectations and available supply.

When prices rise, and inventories fall at the same time, the message is usually straightforward: buyers need the stuff, and there is not enough of it.

A low VIX does not predict disaster. It measures complacency. A serial skeptic will read it as the calm before a storm. We shook off that feeling this morning and opted to pursue an opportunity instead.

Here goes:

A VIX reading below 15 means the market is not pricing in much near-term trouble, even though there are obvious risks still sitting in the room: Iran, oil prices, memory chip speculation, circular financing, high valuations, epic high concentrations, spiking long-term interest rates, a regime change at the Fed, a meltdown in Japan and a historic deficit and rising national debt.

Money is not flowing in a clean, straight line from outside investors to productive businesses. The firms at the top are investing in and buying from each other.

Microsoft and OpenAI are the easiest examples to follow.

Microsoft says OpenAI has contracted to purchase an additional $250 billion in Azure services, while Microsoft continues to account for $13 billion in funding commitments to OpenAI as an investment.

At this stage, it’s a stock picker’s market.

We expect space, robotics and some more visible tech startups to remain sources of speculation. After weakness in the first half of 2026, we’re also due for a strong rotation of capital into natural resources, precious metals, critical minerals and energy.

Copper and resources are sending us a cleaner market signal than AI stocks.

When prices rise, and inventories fall at the same time, the message is usually straightforward: buyers need the stuff, and there is not enough of it.

Here goes:

Money is not flowing in a clean, straight line from outside investors to productive businesses. The firms at the top are investing in and buying from each other.

Microsoft and OpenAI are the easiest examples to follow.

Microsoft says OpenAI has contracted to purchase an additional $250 billion in Azure services, while Microsoft continues to account for $13 billion in funding commitments to OpenAI as an investment.

At this stage, it’s a stock picker’s market.