My Investing Muse (18Aug25)
Layoffs & Closure news
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U.S. layoffs have surged to their highest level since the early months of the COVID-19 pandemic.
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US has hit its highest layoffs since COVID.
The above are some news items about layoffs and closures. As tariff negotiations drag on, the collateral to businesses (especially smaller ones) can compound.
US debts
Here is some news about the US debts:
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The US Treasury posted a $291 billion budget deficit in July, the 2nd-largest deficit for any July on record. The gap marks a sharp reversal from June’s $27 billion budget surplus. This comes as government spending surged +9.7% YoY to $630 billion, the 2nd-highest since January. Meanwhile, revenue rose just +2.5% YoY to $338 billion, including $29.6 billion in tariff revenue. The deficit is now up +7.4% YoY, to $1.63 trillion FYTD, putting this year on track for the 3rd-largest deficit in history. The deficit spending crisis is worsening.
US consumer SERIOUS delinquencies are rising as if there is a DEBT crisis: Transitions into serious delinquency (mortgage, auto, student debt) materially jumped in Q2 2025 across all age groups. A similar rise occurred during the Financial Crisis. - X user Global Markets Investor
Margin debt just crossed $1 trillion in June for the first time since 2021. July could come in near $1.1 trillion. Risk appetite among retail investors is off the charts. *The amount of money that an investor borrows from its broker. - X user Global Markets Investor
$9.2 trillion in Treasuries mature in 2025, per First National Financial.
US large bankruptcies hit 446 YTD, the most since 2010, a year after the Financial Crisis. This is higher than in the full years 2021 and 2022. In July, there were 71 filings, the most since the 2020 CRISIS
My final thoughts
These data points paint a picture of a deteriorating fiscal and financial environment. The combination of a widening budget deficit, rising consumer delinquencies, and a spike in corporate bankruptcies suggests growing pressure on the U.S. economy. The large volume of maturing Treasury debt in 2025 adds another layer of complexity, as the government will need to refinance this debt in an environment of potentially higher interest rates and increased fiscal strain. Together, these trends indicate a challenging period ahead, with a heightened risk of financial instability.
Recent market activity appears to be driven by optimism from retail investors, despite some caution from institutional players. The unexpected Producer Price Index (PPI) data has unsettled the market, and institutional investors are increasingly net sellers, a trend that warrants careful consideration.
It is worth noting Berkshire Hathaway's recent actions as a point of reference. Their increase in cash reserves suggests that the company may not be finding attractive valuations in the current market, with the exception of their investment in UnitedHealth Group.
While there may still be opportunities for market growth, the U.S. economy faces significant affordability challenges due to high levels of debt and rising interest rates. General metrics like median income and the performance of the S&P 500, which includes global businesses and the highest earners, may not accurately reflect the financial health of the average American household.
Given these factors, it would be prudent to conduct thorough research. For now, it is advisable to avoid using leverage and credit for trading.
Let us review our expenditures, income, and savings. Let us spend within our means, invest with what we can afford to lose, and avoid leverage. I am reviewing my holdings and plan to cut losses with businesses losing their competitive advantages. I would also consider hedging and adding some defensive positions.
Let us conduct our due diligence before taking on any positions. Let us have a successful week ahead.
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