Hello everyone, welcome back to another meet! Kevin Report: I Want to start off by saying this is hard. waking up at three. We're trying to wake you up every day before three because my goal is waking up before three. So I have my coffee on.

Buy three is hard, especially when you're uh, when you're traveling. Whether you know the 99 of the time that's for uh, uh, for work or one percent of the time you're you're traveling. uh, for fun. it's not easy to wake up early every day.

Uh, But anyway, I will continue to do my best and try to become more consistent with our start time, but in the meantime, the value will still come. So uh. With that said, let's get into it this morning. so we've got a lot to hit.

Uh, most importantly, we're gonna give you the update on the banks and then of course, uh, then we're going to talk about the FED because uh, this is Fed week coming up so it's a very big deal. So uh, we'll prep for Fed week and then we'll see what other time we have because I have another flight to catch. All right, let's get started. Well folks, the banking crisis is continuing to evolve with now potentially Warren Buffett stepping in and that is usually not a good sign for what's going on in markets, but a great sign for potentially where we are in the cycle.

Let's get into all of these updates. so first to catch you up to speed: UBS is now offering potentially one billion dollars for Credit Suisse but they're really only doing that if they can get guarantees from the Swiss government that they won't suffer losses from the Credit Suisse disaster. In other words, UBS is offering a billion dollars for a bank on the condition that they can't lose money. Now on.

In some regards, this sort of makes sense and I've been talking about this for weeks. Why would a private Enterprise buy a company like Credit Suisse or Silicon Valley Bank It doesn't make sense. you would have to buy it for such a low amount for such Pennies on the dollar to hedge yourself against risk of taking on those toxic assets. UBS is specifically concerned about the risk.

Your investment division uh, over at a Credit Suisse That's the trading desk, The investment banking division, the speculating division, the division that deals with credit default swaps and all the goodies that led to the 2008 financial crisis now. UBS is also asking if they get guarantees against losses from the Swiss National Bank that's their Federal Reserve and they're able to buy a Credit Suisse. They want it to happen quickly. They also want the deal to be hedged so that if credit default swaps spreads the spreads in Cds's credit default swaps Jump by 100 basis points.

In other words, if the market thinks the risk is going up in that deal, UBS also wants a contingency to be able to cancel the deal and get out. So in other words, UBS is like look, we'll only buy this if we don't take the risky crap and the stuff that we do buy. We want guarantees against losses. We want a contingency to be able to cancel the deal if the deal doesn't work out and we want you to change the law literally.

Swiss Authorities are now planning to change the country's laws to bypass a shareholder vote to get the deal done. In other words, private. Enterprises Know the Credit Suisse deal is so risky and nasty nasty that they basically want the government to pre-bail them out and eliminate any risk of this private takeover because the deal is so toxic. That shows you how nastily these banks have gotten away with.

I Mean basically Insanity in financial markets like where Have The Regulators been? Yes, we've had Regulators supposedly for the big big Banks but where were they here with Credit Suisse Apparently nowhere to be seen, but this is the same thing that's happening at Smaller Banks as well and this is where talk about Warren Buffett also comes up. But I Want to give you an example first. Speaking of first, remember: First Republic Bank Well, First Republic Bank smaller Regional Bank right? We've heard that the larger banks have agreed to move about 30 billion dollars in deposits to First Republic Bank Excuse me and that is sort of being done as a charade to show. Look, if the big banks have faith that they can put their deposits into the local banks, well, you should have faith that you can put your deposits into the local banks as well.

Well, that might be the charade the government is putting on because if you haven't been watching for the last two weeks, let's be real: your money ain't safe at the smaller Banks if you have more than the FDIC Insurance limits Google the FDIC calculator to make sure you're within the limits. But anyway, this is what the government trade or this is the government trade that's being attempted to be put on. But what's happening behind behind closed doors? Well watch this. Unlike Insider sales reports that are required to be made for larger companies, those at First Republic Bank because it's a smaller Bank aren't required to be reported as clearly or as quickly as at larger institutions thanks to the Securities Act of 1933.

well get what's happening at First Republic Bank and then we'll get to Warren Buffett Top Executives of First Republic Bank have sold 12 million dollars of company shares in the three months before the company shares plummeted during this Panic that we've been going through. Executive Chairperson: James Herbert II sold the most 4.5 million dollars in shares since January 1. he made two sales worth five and seven percent of his Holdings At the same time, the bank's President of Wealth Management sold 73 of his shares for 3.5 million dollars in his first train since 2021, and the CEO sold nearly one million dollars worth in January with the chief credit officer selling over two and a half million dollars worth in three sales since the start of 2023.. Do you see what's happening here folks? The government wants everybody to think you're safe with the small Banks everybody's everything is fine says the governor government.

But what's actually happening? The Insiders are dumping their shares at First Republic Just like the Insiders dump their shares at Silicon Valley Bank and the private Enterprises who are being asked to bail out. The other big boys like Credit Suisse are like y'all need to guarantee us against losses because these are some major toxic assets. It's bullcrap. These are toxic.

You don't want to be around them. The banking crisis is real and all you have to do is look at where the money is going and when you follow the money, you know what's going on. But what does all this have to do with Warren Buffett Ah yes, well. Warren Buffett is apparently now in conversation with the bidens.

Team Buffett and team Biden are having conversations about potentially getting Warren Buffett to invest in the regional banking sector. Remember back in 2008 Warren Buffett gave Goldman Sachs a 5 billion dollar Lifeline to get through the financial crisis. Remember in 2011 when Bank of America was trading at rock bottom, Warren Buffett came in and injected Capital liquidity and gave a vote of confidence because we all know when Warren Buffett buys something, other people like to buy something. Therefore, the Biden Administration is trying to get Warren Buffett to help Shore up the regional banking sector.

But guess what? he probably won't unless he has massive guarantees much like UBS does. This is why Warren Buffett likes to hold his cash. People like to think, oh, Warren Buffett makes great deals by buying proper or buying companies publicly on the market. While to some extent that may be true, Warren Buffett's most fantastic deals don't tend to come in the form of common shares.

They tend to come in the form of preferred stock. Preferred stock is wonderful because preferred stock basically gives you a rate of return, sort of a dividend payment. It gives you the first rights in the event of a liquidation event. like a bankruptcy.

At a company, you're the one who gets paid out for first, and you tend to have conversion rates to common stock. So in other words, you get the best of all worlds. You get a dividend. You basically get the upside of a common stock, and in the event of liquidation, you're the first to get paid out, so your risk is limited.

This is when Warren Buffett makes his big bucks. He comes in in these sort of distressed environments, and he basically minimizes his downside substantially while maximizing his upside. It's brilliant. Obviously, everybody wants to invest like Warren Buffett, but you have to see these opportunities for Warren Buffett are created through his name and reputation.

People want to be associated with the Buffett name. That's why the Biden Administration is basically trying to get his Blessing over the regional banking system. But guess what folks, unless he gets massive guarantees, against the downside, it ain't gonna happen now. He can make a fantastic deal here, but let's be real, there are two.

There are three. Well, I would say there two possibilities here. One possibility is buff. It just kind of advises the Biden Administration and does not invest.

That's possibility number one, the second possibility. And that's probably my opinion. Most likely the second possibility is Warren Buffett actually does make some kind of investment and it's going to be some kind of charade investment to make people feel a false sense of confidence in the regional banking system. If Warren Buffett makes any kind of investment, it will be done so in such a way that he's probably getting massive guarantees either from the government or in the private sector to where you will not have the same guarantees that he is getting.

In other words, they will basically be borrowing and leveraging his name. The problem with that is that's a very risky Endeavor for Warren Buffett because if Warren Buffett invests in, let's say as an example, a First Republic Bank and then it goes bankrupt. Even though he might be protected, his name could be scarred so and he's well aware of that. Even his legacy, right.

He doesn't want potentially one of his last acts. Dare I say that? Okay, bless the guy, knock on wood love Warren Buffett But he's old. You don't want one of your last acts to be a failure. Okay, so uh, being real here I Think there would have to be, uh, there would have to be some massive guarantees for Warren Buffett to actually walk into any kind of deals here in the regional banking system.

But he's probably a fantastic advisor for politicians. and I think politicians ought to listen to whatever Warren Buffett is telling them. Uh, because I think he, uh, he knows a little bit more about finance and economics than the politicians do. uh.

But anyway, what all of this goes to show you is that the banking system is in a nightmarish position. and I think what we have to always consider is what is the impact to us as as regular Americans Who don't get these preferred share opportunities, who don't get the blessing of guarantees us normal Americans Who look at the stock market and say, look, we just want to make a buck, We want to work hard, we want to invest our money, and we just want to make a buck and make our family happy and provide for our children and our children's children if possible. Right Well, in my opinion, the answer is very clear. The answer is you can't be above FDIC limits with smaller Banks I'm not saying ha don't have a relationship with smaller Banks smaller banks are a fantastic way for you to make money.

I Want to be very clear about this. My first rental property that I ever bought was made possible by a smaller bank. That's because I bought my property with an FHA loan thanks to the government. Okay, the government subsidized anytime you put less than 20 down.

Thank the government. Anytime you get a 30-year fixed rate mortgage. Thank the government. Those institutions exist because of the government.

So I thank you to the government for allowing these opportunities. Three and a half percent down on my first home and getting a renovation loan on my first home would not have been possible without the government. And I realized that. and I'm thankful for that.

and I encourage other people to take advantage of the institutions the government sets up for us. This 30-year fixed rate loans are a blessing. so that was a blessing. But listen to this.

When I built equity in my first property much like I teach in my zero to millionaire real Estate investing course linked down below I Teach you exactly how to build equity in your first property instantly when you buy it, right? That's the goal. I Bought my place for about 350k all in with fix up costs. It was in a 450 000 neighborhood, so my net worth and my wife's net worth we went from about an eighteen thousand dollar net worth to around a hundred and fifty thousand dollar net worth basically instantly when we fixed up the property. So okay, a couple months.

Uh, and that's fantastic. That's called buying a wedge deal, right? But listen to what I did then then I refinanced with a local credit union Okay small Bank look I understand Credit Unions non-profits they're slightly different from a Regional Bank but they're all still smaller. Okay I get it. I Owe them a massive thanks because I went to Logix Federal Credit Union and I refinanced my home and I got a home equity line of credit they let me take out.

Uh, so not only did I refinance my first with a 20 down loan because I had all this Equity but they let me attach a home equity line of credit which let me pull out up to 90 percent. and honestly, the appraisal I got was was pretty generous at the time. uh I I thought the uh, the the uh a credit line appraisal was was very generous. Uh, Anyway, so I was able to take out a credit line uh, in in my opinion, up to probably around 100 of the actual value of the property and I used that credit line to put 25 down on my first rental property.

Okay, that that started my career as a real estate investor. So I Want to be very clear I understand. For the last two weeks I've been making videos pooping on the small Banks because I don't want you to lose money. Okay, so so spread it out: I'm not saying don't do business with the small Banks Just realize you're not guaranteed above the 250k and I respect the small Banks I Don't want them to go away because they give us these opportunities.

They help startups exist, they hate, they help people get a start in America because they have looser, uh uh uh credit standards. Dare I say right? you can get better deals at the smaller Banks So I want them to exist I Don't want them to go away. but until uh, the government steps in and basically extends FDIC Insurance limits either to a larger amount or or whatever. I Don't think you can be exposed to more than the FDIC limits and unfortunately, that means there's probably going to be a massive consolidation of banks.

Now Don't worry, they will come back whether that's through fintech or otherwise. That flexibility will always come back. We always it's it's like a balloon. Okay or dare I say a bubble.

Things get really, really loose and bubbly. Then there's a correction and a bunch of them go bankrupt and then they come back. So I I bless the small Banks Up to the FDIC limits I Love doing business with them. but I think right now we're in a risky environment and quite frankly I don't think any uh Credit Suisse rejected the UBS deal.

Yeah, there'll be drama all over that. But anyway, whether or not that deal happens or not, it doesn't really matter. Uh, the Credit Suisse is a big old toxic asset and and really, the again, the only way you're actually going to see those deals go through is if there are massive guarantees from the governor. that's how you're going to see that.

But my point is, you have to be careful. So for a regular person I Personally think stay away from any Finance related stocks. Stay away from Finance related stocks. This isn't personalized investing advice I I Don't know what your personal situation is I am a licensed financial advisor run an ETF I run a real estate fund All of us.

But my point is, my belief is stay away from the finance sector I Think there are great opportunities to invest out there I think we're going to look back and look at 2023 and say wow, that was a fantastic time to invest and and make good moves. But just be careful and and do your best to work hard and make more money. And I know it's hard get a second job if you need to and I know that's hard to say because we want free time. we want r r time.

But now is the time to work hard and and get through this period of time. Uh, and and so hopefully we can get through this this Insanity of this banking crisis relatively unscathed. Really, what it requires is inflation continuing to Trend down. It's going to take time for it to Trend down.

But we need to get through the banking crisis I Don't think the banking crisis is so bad that our Sibs the systemically important Banks actually are going to suffer a massive issue like we saw in 2008. We don't know that I think their stocks are probably going to Trend down because there'll be a lot of punishing revaluing going on. Uh, but that's why I wouldn't touch them with a 10-foot pool from an investment point of view. but again, over FDIC limits I'd be out of there.

So anyway, uh, somebody here donates 11 Euros to say we're back to QE Yes, yes, we know, we know, we've talked about that for the last few days already. But yes, yes, we are. Uh, to some extent we are back to QE now. now.

Listen, that does not mean we are permanently back to QE right? Just because the Fed's balance sheet pops up 300 billion dollars in a week, doesn't mean we're back to QE permanently. Okay, yes, for the week we are big, downtrend, spike up. Does that mean we're going to continue training up? Quite possibly it possibly does mean Qut is over. It does.

Technically we're still in QT Technically, even though we popped up 300 Bill Technically, we're still dropping by 90 Bill a month. Obviously, the pace at which Q the printing press has been turned on is very, very rapid and very fast right now, right where outpacing. QT Uh, what will be interesting is whether or not the FED pauses QT but we'll talk about that in a different segment. Uh, but yes, for the week the Fed's balance sheet has popped up and I think the more we pay attention to the Fed's balance sheet, the more we can see how much Financial stress there truly is in the banking system.

Uh, and and there are real stresses JPMorgan Estimates that we could be uh printing as much as two trillion dollars. In other words, all of the QT that we've done to the extent of about seven to eight hundred billion dollars of QT we've already gone through all of that could be eradicated and we could actually just swing to the opposite direction and be so high in Qt or QE again, quantitative easing that we actually end up printing more money than we ever tightened and vacuumed out of the system. It's going to be remarkable. It's going to be remarkable.

Okay, so that is an update on the banking system. Remember folks, we have a coupon code for the uh, uh, Saint Patty's week that expires after the FED meeting coming up here on Wednesday So make sure to check out that program. Uh, link down below any of the programs you get lifetime access to them. All of them come with the course member live streams and uh, Elite Hustlers has a custom live stream that it comes with uh which? I Got to catch up on one of those lives for this weekend and I'd love to see you there.

Thanks so much. All right next. So let's now talk about Fed. All right.

All right now we gotta talk about the Federal Reserve What is going to happen on the 22nd? What is Jerome Powell going to do? What are markets pricing in? and what do we think? Well, it's a coin toss right now and markets are going to flip-flop a lot on Monday and Tuesday. But I think what's most important is that we actually take a look at the SCP Now we haven't looked at the Sap in a little bit. it's been a hot minute. But what we're going to do right now is we're going to pull up the Sap that we got last in December.

Now keep in mind the SCP from December is not the most recent analysis from the Federal Reserve, but we're going to get a new version of this on the 22nd of March and we're going to go through it with a fine-tooth comb because I believe that is going to be much more applicable than what the FED actually does with their rate move I Think we're probably going to get a 25 BP hike I Think a pause would signal too much stress in the banking system I Think a 25 BP is a sign of confidence that no, we're strong. We're going to continue to fight inflation, and we can continue to do so. Even though we're panicking in the back end and printing money like crazy, we're going to continue fighting inflation and therefore we're going to raise rates. 25.

BP This is despite the fact that Elon Musk says that the FED is operating with way too much latency in their data and rates need to drop immediately. Elon Musk Tweeted yesterday: let's look at the SCP Excuse me? All right? Uh, Okay, so SCP is right here. This is the last summary of economic projections. Now what I want you to remember is this was released on December 14th.

When the Federal Reserve conducted their last Fomc press conference, they told us that they expect that this SCP would have actually been higher if they had to go back to their February 1 if if they had to write it February 1. So come February 1. the FED would have written this SCP more aggressively than what it was here. However, now we actually expect it to be written down.

Now, how could it be written down? Well, we'll take a look at that first. We have to remember that inflation is sticky. That is something very important. So let's go ahead and start with this chart before we look at the SCP.

So let's pull it up like this. Okay, what I want you to pay attention to are the trends here. So first, I'm going to go ahead and draw. Uh, let's go ahead and do a big old big red.

Okay, yeah. perfect. Uh okay. so the first thing I want you to pay attention to is this this trend right here.

So you see this trend that I drew right here. Okay, that was a problem and that Trend continued to about June of 2022. see that Trend right here. That is critically important.

The reason that trend is critically important is because of that trend is a Paul Volcker Style Trend That Trend right there tells you you're screwed. Get out. Do not be anywhere but cash and maybe even gold because we're going to hell. That trend is the death of markets.

That trend is what a wage price spiral looks like. That trend is the end of the financial markets as we know it. Fortunately, that trend has stopped and we expect that Trend We're going to look at the new trend in just a moment here and then we'll look at the Sap. But I Want to be very clear about that.

We are not in that kind of trend line anymore. What do we know in a Consolidated 30-second pitch? No, not for life insurance or 12 restocks or for the courses linked down below with the expiring coupon code linked down below. but in a 30 second Pitch What do we know about the market? Where it is? Now we know the supply of labor is higher. We know there is no wage price spiral.

We know that yes, wages have caught up the two Uh levels where they should be, which includes some lingering price hikes. But companies are taking it in the margin. We know companies ability to just raise prices is gone. That's over.

We are not seeing the conditions of a wage price spiral. Period. That means less chance of a Paul Volcker from a wage point of view. But where is that showing up from a CPI point of view? Uh, consistent as well.

The conditions for a wage price file are not in labor and they are not in CPI. Look over here. so this is obviously a much more difficult Uh Trend Here to draw, we could draw a trend right here. We could also try to wedge this a little bit like this.

It's it's You know it's a little volatile over here because we have this very large drop. But the point is, this trend that we had of higher highs is over. It's substantially over. We know this is still too high, right? because the trend right here brings us to around four to six percent inflation.

It's sticky. It's a problem, but it is no runaway inflation. It is no Paul Volcker Inflation expectations are falling Financial Conditions are tight and high. This is not a Paul Volcker scenario.

so the Federal Reserve has substantial leeway to loosen their summary of economic projections. So let's talk about the summary of economic projections. What's up hex? Flex dude I love that name uh I had I like I'm like sucker for the Rhymes you know I I who was it with um uh Sarah did she made a joke the other day She said her husband, uh, he's uh, he's from South Korea and uh I guess his his screen name used to be uh uh, because his last name's Hill uh so he I guess the screen name used to be uh, what was it I can't remember now what it was uh um Kim Jong Hill I think he may or something like that. but anyway, I'm a sucker for for screen names I think that's hilarious.

uh I can't remember exactly what it was, but stuff like that, that's cool. So what's up hexflex I Don't know why I'm going on that tangent. Maybe because the coffee hasn't hit yet and I Really don't want to talk about this boring chart right here. actually.

I do want to talk about it. It just looks very dry. so I'm trying to inject humor, but I'm failing massively. But it's okay.

it's uh, it's six in the morning on a Sunday and I just went to the T Swizzle concert last night and I feel dead inside. Anyway, okay, did park next to her plane though. That was pretty cool. Okay, that that was like pinch me I can die.

So anyway, what do we have here? Change? Okay, so first of all, I think where we're gonna get and this is gonna I'm gonna tell you my opinion over here because that's that's all we're going to go through is really my opinion here. so let's do some erasing. Okay, we're gonna erase this crap I had drawn last time and what are we going to have over here? change in Real GDP So here's what's important. In the December meeting, they showed that their projection for a change in Real GDP fell substantially the concern going forward.

I'm going to tell you this is going to be the most concerning for the stock market. So if you're an investor, if you are a a Trader I promise you the most important and and I Okay, the mo Let me just get it out. The most important segment of this summary of economic projections is right here, folks. It's this box.

You could really look at nothing else. That's the box that matters because everything else is going to be based on that box right there. Everything is going to be predicated on this top box. the Fed's expectation for recession.

That's it. And so here's what happens if the Federal Reserve suggests that we could go negative here. which I Do not think they will ever do that. The market will crash instantly.

The market will crash if that number goes negative. I Do not think they are going to do that though because this is a tool. This is not what they actually really likely think is going to happen. It's a messaging tool.

It's to try to manipulate the market to do what they want it to do. It's a Communications tool. It's a joke. That's all it is.

but. but that's okay. It's a Communications tool that that just that's really never accurate. But the messaging of it will affect Traders at least in the short term.

So where could the messaging be dangerous? They're not going to go negative here. What they're going to do, in my opinion, is they're going to lower this right here. that hi Lauren that 2024 number I think they're going to revise that down and potentially although I don't think they go under 0.5 ever. Uh, if they went any under 0.5 over here, that's another recessionary indicator.

but I don't think they're going to do that I think that 0.16 number potentially could go down. So I'm going to write my bet. Okay, I Think that number could go down to 1.0 uh uh. Silly little chart thing here there we go.

Uh, if that 1.0 number over here goes down to or sorry that 1.6 number goes down to about 1.0 I Think the market goes red I Think the market will be very nervous and that's because the markets don't care so much about inflation anymore. Right now, they care about a recession and that is a recessionary indicator. And so that that is a recessionary indicator that markets are going to be a little pissy about. Uh, in addition to that, uh, the 2025 number I'm not so worried about I do think the longer run, they'll Trend towards that uh 1.8 and that's so far away.

Nobody really cares. But the question is, are we going to see that five Quarter Recession that the Uh Goldman Sachs and TS Lombard were talking about yesterday. Yesterday, we covered in our reports that there's a potential for a five quarter long recession that five quarter long recession could begin as soon as uh, that would be the third quarter of 2023 and Lasting basically through 2024.. If the Federal Reserve agrees that we could be seeing a five quarter long recession, they are going to revise down that GDP figure on their SCP Personally, I Believe that is the most important segment of that of this chart and it's one that you really want to pay attention to now.

Uh, the next thing we're going to do is let's look at the rest of the chart here. Okay, here we go and remember this meeting is on the 22nd, so you really want to pay attention to what's going on on the 22nd. Okay dokie then so the next thing. this unemployment rate.

Now this will be interesting. So I want to see if the Federal Reserve actually thinks they can get this number up I Don't think they're going to change the unemployment rate much for for 2023. but I would not be surprised if they adjust this 2024 number and this ends up being a five five. So I would go 5.5 right here.

Those are going to be my like. if I was at The Fad this is what I would do I would be real right here I'd go 5.5 for the unemployment rate I would expect a big take up over here I'd go GDP down to one percent. Now you're sending real concerns about a recession. then what you're going to do in my opinion is for this.

for this rate trajectory. let's erase all this crap over here. Those are the last notes that we made. uh and remember: I don't delete videos.

You can always go back and look at the stuff I said in the past I Actually think that's a really cool thing because then we can kind of compare to the Past stuff. But so that's why I'm erasing that now is because it's all in old videos anyway. So um, fed funds right? What do we have over here? We've got a projection of 5.1 Okay, I don't think we're going to hit that anymore. We're not going to get to that so this is probably going to drop to my previous belief that we were going to hit about 4.8 Uh, that would probably be like a 4.75 which would probably be consistent with one more 25 BP hike and that's it.

Uh, I don't think we're going to cut this time I Don't think we're going to pause this time. Give us one more 25 that'll signal a 25 or a 4.8 Now what A? Really? this could really balance the the market potentially going red on Wednesday What could balance it is this number right here: 4 1 is the Fed Potentially by the end of the year, next year by the end of 2024. Are they potentially going to, uh, signal large cuts by the end of the year, beginning of next year, 4-8 over here is probably I Don't think they're going to want to Signal cuts at the end of this year. even though the market is pricing it in, they'll want to show no, no, we'll be strong, even though they probably will cut by the end of the year.

I Think this number goes down probably quickly to three five and this number over here probably to two five pretty quickly. And those are the 24 and 5 numbers for the Fomc rate projections. So I think you're going to get a slash next year in the projections over here. Uh, and and I Don't really think this inflation projection matters much over here? You could actually possibly see the FED come in over here and you could actually see them raise this to let's say 3.8 to signal that they're okay with more stickiness.

So in other words, I wouldn't be surprised to see the inflation numbers actually up the GDP numbers to come down and the rate numbers to come down. That'll be enough of a signal that the Fomc is okay with slightly stickier inflation and a higher for longer trajectory as a result, though trending closer to recession and more unemployment. Now one of the analogies that I that I was reading about this morning: I I wake up too early I'm sorry I really do feel very tired. Um, but one of the projections.

uh this morning. um thank you for your somebody donated twenty dollars talking about somebody bought a house for ten dollars. what do you in like Detroit You know if you want to want to see me go house hunting in Detroit I did that years ago with graham Stefan you can actually type it in YouTube meet Kevin Detroit you'll see it was a great video. but anyway, one of the things I was reading about this morning was this idea that people like to think of the Federal Reserve raising rates as sort of tapping on the brakes.

but that's actually a false analogy. The Federal Reserve isn't tapping on the brakes. What they're really doing when they raise rates is they're pulling a rubber band. But everybody basically keeps spending like normal and everybody keeps acting like normal until something breaks and that breaking is not hitting the brakes.

it is the rubber band snapping. And that's what we're seeing with the banking crisis. And so the problem is, we don't really know what the long and variable lags are of Federal Reserve monetary policy because they kind of hate you all at once and that's one of the problems that we're going to face and we're going to hear a lot about I think with the Fomc during the Feds press conference: I think we're going to get a lot of hey, like we have to be careful and I think it would be very good for J-pal and I don't I don't know that he watches me, he probably doesn't. It would be really flattering.

but if I could talk to durable I don't actually think he does. But if I could talk to Jerome Powell and I think he knows this my these: I Think these projections are reasonable and remember every individual at the FED makes their own projections and then they sort of average them right? That's why when you look at this, you could actually look at the central tendency on the right. and you could look at the range over here on the far right and you can kind of see where where all of their heads are. Uh, you know how lower people, how high are people Anyway, if I could talk to J-pal I would probably make projections like that, but I would probably suggest doing as much as possible to talk about in a transparent manner.

How uh, mindful they want to be about the lags of monetary policy and how the fact of the matter is, they just don't know what the lags are. Is it an 18 month lag? Is it a six month lag? Is it a two-month flag? And how do we feel that lag Is the lag instantaneous like a rubber band breaking? Or is it a Breaking of the economy Like it in the way that you kind of put your foot, you take your foot off the gas in a car, and then you slowly tap on the brake right. And if it's possible that lags are more of a uh of a oh God they're all happening at the same time, then then I think it's important for the Federal Reserve to be transparent about that potential, right? Uh, and so I think if Jerome Powell takes some more time during this this pressure time, or even if a reporter is listening, please, somebody who's in that Press Room asks about. Is it possible like this? If I could ask a question I mean I'd have a whole host of questions in.

But if I was on the spot right now and being asked, hey, what would you ask Jay Pal in that presser, say J-pal can Can you win a just as transparently as possible go through what is a long and variable lag mean in the effect of for an average American How do we feel those lags? Is it by us crashing and hitting a wall? Or do we feel the effects of monetary policy slowly and then he'll probably go into well I Mean interest rates go up slowly, right? Lending conditions Titan Financial Titan Slowly. Uh, credit card rates go up, home rates go up. You know that's how we feel that as an average person, right? And no, no, that's not what we need to hear. We know that we need to know is the banking crisis.

We're facing the culmination of a policy lag. And how bad is that actually going to get? How many banks are actually going to collapse Now, of course there's a limit to how much detail he can go into here because he doesn't want to create a crisis. So I think we really have to think about being jaded in the way that you ask a question because if you ask a question that you know he's not going to answer anyway, then you've kind of asked a worthless question. But any kind of hints that we can get in J-pow talking to us about.

Okay, yeah, maybe these lags can all come at once and we have to be very careful. Those hints or what I think are going To be eaten up by the market and it's going to take a lot of thinking about those hints in terms of how we digest those. But I think we're going to get a lot of those hints this time. That's what I think this press conference is going to be about.

It's going to be about hints dropping hints that we're probably going into recession. This banking crisis sucks. A lot of banks are going to go bankrupt and don't worry, we will turn the money printer on again to bail everyone out. And so what hints are we going to get for the potential Fed? U-turn And that I think is the beauty? What hints do we get of the potential sad U-turn That is what.

I am most curious about the hints for the FED u-turn and quite frankly, more insight into that Fed Money printer will be very interesting because that will confirm is what we're seeing right now. This switch to QE for the week with 300 billion of liquidity injected. Is this just a transitory QE And are we still going to stay on the path of QT quantitative tightening? Or are we going to pause? Remember, the FED is tightening to the tune of 90 billion dollars a month right now. What if they come out and say 25 BP uh? Hints that we're basically breaking the rubber band in the presser, higher unemployment and trending closer to recession? Uh, and you know what? Because of that, we're going to slow QT What if they say that hey, we're going to pause Qt or we're going to go from 90 billion a month to 45.

Well, that's going to be a sign that things really are breaking right? I don't think they want to send that signal with actual policy change. so I don't think they'll change policy. but I think verbally they're going to give us those hits. so I think they'll stay at 90 Bill QT See, they can still be a 90 Bill Qt per month, but then actually be running the money printer faster through the FED liquidity facility.

So I don't think they have to change policy. So I'm gonna I'm gonna make my projection. we're going to get 25. We're going to keep 90 Bill QT They're going to run that money printer as much as they need to to help this banking crisis so nothing's actually going to change.

Accept the messaging. That's why we went through the Sep. the Sep is going to matter and how severe is this rubber band breaking Jpow and I think it's pretty severe and I think they realize it and I think we probably are on a path back to QE and as long as inflation goes away which it is trending away, I Do not believe and look I I Respect Peter Schiff I I Really enjoyed my interview with him I think he is a brilliant person. I I Do not think that the 2008 money printing uh, from well, 2009 on money printing is what's catching up now and that the covet inflation is still ahead of us.

It was a fantastic argument. You should watch the interview. uh I Respectfully disagree with Peter and that's okay. everybody can have a different opinion.

That doesn't mean a dislike The guy I Hate thing I Love Peter I Think he's a brilliant person and he's a wonder. He's got a fantastic family I Love them. His wife is so cool. uh his his son is brilliant.

uh his his mom is super cool. she is so she is like an OG Hustler man so cool I Want to make like I Want to interview Peter Schiff's mom like confronting Peter Schiff's mom. She's got such a cool story. she is like an OG Hustler She made it as a woman were generally only men made it and it was.

It's remarkable. She was like the analogy I would make is that the power woman in in uh in like a Manhattan admin madman setting. Super cool. but anyway.

uh, tangents, tangents Kevin damn it. but anyway, um geez, where was I basically uh I don't think we're going back to to uh I I Do think that this inflation on screen here is going away and I think the FED knows that they can take their time and the reason I know they can take their time is because they've done it before and I'm not just gonna hold up my my old fate flexible average inflation targeting uh, argument out of the Hat Again, even though I think they're going to do that I'm going to pull a new one. Okay, you ready for this? I've talked about this before, but it's been a while since we've talked about it. Opportunistic Disinflation Study that make that your mission today.

Study opportunistic disinflation. By the way, this is the kind of stuff why I think it's it's cool if you join me in the course member live streams as well because I do think I have some crazy perspectives that that are unique and different. You don't have to agree with me and everything I Think that's why the haters come back and they watch me too is because it's good to know even people you don't like or people you want to just punch in the face. It's good to know what they think right? Look into opportunistic disinflation.

What is opportunistic disinflation? Well, basically once inflation expectations were under control in the early 1980s via Paul Volcker, the Federal Reserve took 20 years to get back to two percent inflation. And they did so because they could every opportunity they had. Every market crash or whatever, Inflation went lower and lower and lower. And as long as we do not have a wage price spiral which we don't and as long as we do not have runaway inflation which we don't and as long as inflation expectations are anchored which we have.

and as long as Financial conditions are tight which we have the Federal Reserve all the conditions for here. the Federal Reserve can buckle up under something known as opportunistic disinflation. In other words, you buckle up and you just take your time. and you let inflation subside over time, even if it takes another decade.

Okay, in the meantime, you run the money print. turn back to the Moon we go baby and look I'm not a moon boy. Okay, maybe, but um, but but that's what I think Okay, anyway, uh yes, Kevin should try for Deadpool dude that is such a compliment Kevin Reynolds you guys are like you can make me cry that's so nice Okay Anyway, um oh my. God it's 701 I have to be at a plane in 29 minutes and I have a whole set to pack up God damn it.

Kevin Do I have time for anything else? Probably not. This is why I'm always late just so I Get so much to talk about. All right, we gotta do one more thing. one more thing.

one more thing. one more thing. one more thing. All right.

we're gonna keep this one quick. Okay, all right, this is gonna be fun. All right now. we gotta talk about Donald Trump and what's going on with the rest of the Dominion lawsuit against Fox News I'm going to show you some of the some of the really good summaries of what's going on and we're going to keep this one quick because people keep telling me Kevin's stay out of politics.

But you know what? I Ran for governor Did you run for governor? No. So I get to talk about politics because it's fun. It's fun because it's loony and it's crazy and it's wild to think about Tucker Carlson hating Donald Trump which we'll also touch on. But more entertaining is this political sh9t show that we're going to get on Tuesday with Donald Trump getting arrested.

Do we think he's going to be in handcuffs? No. because the Republicans are going to have a field day if Donald Trump is actually in handcuffs on Tuesday We don't need to go into the whole Stormy Daniels hush money allegations. We already talked about why yesterday. just type it into YouTube meet Kevin Why Donald Trump is being arrested.

We went through all that. Now we got to talk about the reactions that are happening from Republicans and a little bit about Dominion Kevin McCarthy and other Republicans are already coalescing around Donald Trump That should be a big signal to Democrats Wake the F up. Okay, no one, No one actually believes on the Republican side that this is anything but a political sh9t show. This is a this is for the show.

That's what the Republicans believe Democrats Say no, this is Justice This man has been Teflon Don for too long and it's time he finally goes to jail. He ain't gonna go to jail. Um, look, he's going to get indicted on Tuesday We don't think he's going to be in handcuffs. It would give the Republicans way too much ammo.

uh for for a political sh9t show and it would give the Republicans way too much to show. This is what happens when Democrats are in charge. They don't prosecute all the crime that happens in areas like New York City or San Francisco but they put handcuffs on the president for something from eight years ago or seven years ago or whatever, right? And they're going to use that as a rallying cry for the Republican base. They're already using this for the base.

In fact, you have not only Kevin McCarthy uh, calling this ridiculous, but even I hate to say it. Pence Okay, Pence is like Mr neutral. Well, I mean obviously he's a republican, but I mean like of the Republicans he's probably more neutral-esque Dare I say that I mean kind of like I Think of him more as like an even Evangelical Republican but also potentially like, um, what's probably similar like a Mitt Romney kind of that style of of Republican that's to be contrasted from like, uh, you know, like a Newt Gingrich or like a Paul Uh, these are very different breeds of Republicans right? But anyway, even Pence is calling this politically charged. In other words, Pence Pence's suggestion is let history take care of Donald Trump not New York prosecutors.

So even Mike Pence is like this is ridiculous. Okay, so that's how you rile up the Republicans to get out and vote in 2024. you have to realize this: Democrats have to wake up to this and realize this too. And I'm trying to say this is in the middle of possible I consider myself 5149 Okay, I really think I'm very much in the middle.

Um, I think Democrats have to wake up and realize that the more of this crap they pull on Donald Trump Whether it's Justified or not, the more of this happens, the more Republicans come out and vote. Yes. I Understand Democrats are going to go. Yay! Got Donald Trump Get him.

He deserves it. All it does is motivate people who may otherwise not have come out and vote. to come out and vote. You need to piss off the base and this is how you potentially get people to re-elect Donald Trump So if you're a Democrat you actually do not want to poke the bear and piss off the base because that is exactly how you end up with Donald Trump Okay, Elon Musk himself said if Trump is arrested and placed in handcuffs, he will be re-elected in a in a landslide Victory This is why because elections are not based on the core voters on the left or the core voters on the right.

Elections are based on who'd you piss off the most to wake up and actually vote? That's how elections are decided. Did you piss off your base enough to actually get them off their ass and voting? Because guess what? for the the core voters God Bless you. You're doing your civic duty for everybody else who doesn't vote. I Get it? Okay, Like you have to take time out of your day.

You got to fill out the ballot. You got to make a decision. Like we got lives to lead. Okay, we got kids.

we got obligations. We're busy. We're busy people. Okay.

I'm not saying if you don't vote, you're a bad person. You're just a busy person. I Get it. Okay, I'm not calling you lazy I'm just a busy person.

But the point about elections is, elections are decided based on who gets pissed off the most. And I'm telling you there's nothing more that you could do to piss off Republicans than put Donald Trump in handcuffs. You're going to realize you're gonna get a republican in the next cycle. Anyway, Now that aside, it's very interesting.

DeSantis Is being silent on this. People are calling calling on to Santis to to basically stop the arrest of Donald Trump because it's happening in Florida right and DeSantis is like disappeared because he's gonna let. he's gonna let the cards fall where they may. It's very, very interesting.

But anyway I Really want to quickly go into this here. This is the Uh Dominion lawsuit and I want to show you some of this so look at this: The Washington Post Put together a really good piece on this and what you have to remember when you go through the Dominion lawsuit is this is really a subtle First Amendment Question can a news Outlet speak about false claims made by a public figure? Uh and uh I gotta leave soon here I gotta get to the airport. but anyway, take a look at some of this. So I'm going to go through this and really, what's fascinating here is you get a Delaware judge by the way is very soon going to be deciding to see this is either going going into settlement or it could end up at the Supreme Court.

But some of the things that are being evaluated are the facts. That is it possible that Fox News should have been stronger in denouncing uh, these election fraud claims, right? And look at some of the things that we have here: Sean Hannity And the night after the election focused on calling this the steal of an election and what did we have? We have their Chief legal officer saying Hannity is getting awfully close to the line with his commentary of guests Tonight Fox Host Brett Brayer later than, uh, later that night if it's too early for me filming this. But anyway, there's no evidence of fraud, none allegations and stories Twitter BS But anyway, nothing else. This is what he's saying in text messages that night, right? So what's fascinating here is you have this internal struggle going on at Fox News trying to decide how do we cover this story because what they don't want is everybody running over to Newsmax Now I've actually been a guest on both Fox and Newsmax myself I've also been guests on on Democrat leaning shows I Want to be clear, been on both sides much more I've been interviewed much more on the right side.

That's because I ran against Governor Newsom but I actually ran against him as a Democrat Uh. But anyway, what's interesting here is there is always. and I Want you to know this about mainstream media. There is always what the mainstream media is showing you.

and then there's what's happening off camera. And what's happening off camera is probably more important because when you go through these pieces, uh, what? what you find is, look at this behind the scenes. Fox News The News Max Surge is troubling. There is a true alternative Universe when you watch and they talk about how Rudy Giuliani and uh and and Sydney Powell are basically insane people but Newsmax was airing them like crazy and getting a lot of views.

but behind the scenes the mainstream media is like we have to be careful how we run this because in their words, we're falling following idiots off of a cliff and we have to be careful how we air these election fraud stories because if we follow idiots off the cliff, we'll get more views in the short term, but we'll look like clowns in the long term. And so Fox News internally is like how do we cover this and the Washington Post did such a fantastic uh summary of all of the all of these uh election claims. The election fraud claims. The Uh Wall Street Journal editorial board claiming where's the evidence? Uh, you keep telling us that there are millions of votes uh Changed by software, but there's no evidence yet of this.

All we have are affidavits, sworn affidavits. but those are nothing right? Anybody can swear to have said something or to believe something, but that's not evidence of anything. This is. uh, you know you even got um, the executives over here at Fox saying this is the kind of sh9d that will kill us I Think nothing.

Uh, you know. Basically this this is this is crazy. like the press releases you're getting with Rudy Giuliani This is increasingly mad at the kind of Madness that you're getting. Uh, but anyway, what's interesting about this lawsuit is really it's a wake-up call to anybody who's watching the mainstream media.

And that's really the the lesson. I Think for the average person watching that we want to pay attention to is all of this sort of details of the man. the madness that happens here like Tucker Carlson saying we are very very close to being able to ignore Donald Trump on most nights I Truly can't wait I Hate him passionate Italy Uh, we are all pretending uh and we've got a lot to show for it because admitting what a disaster it's been has been tough to digest. But come on, there really isn't an upside to Trump In other words, you really have Fox News Realizing hey, look, we we have to potentially sacrifice views in the short term and actually start demanding the evidence.

Where is the evidence of this madness right? Uh, and so what? The lesson here I think is for the average person is the mainstream media can really take a position a very strong position of being on one side. But we have to be very careful because when you watch CNN they have to for example do whatever motivates their base and that is hating on Trump When you watch Fox you have to do what the base wants and that is hate on Democrats and unfortunately when you watch either Fox or CNN I I just want you to put on the hat of know that they realize they are making their content to make sure they can keep you coming back the viewers. and so you are always going to get a bias at either of them. So the reason I'm bringing this up in context of the Trump arrest is because when you watch news coverage over the next week I Want you to challenge yourself, watch both sides I'm going to do my best to cover both sides I'm going to do my best.

It's very hard. It is hard to be in the middle because then you generally don't have friends on the left or on the right because you're like which side are you on I really want to be on the side of 80 of America which is the middle I believe And it is to say this: this sh9t show that we're going to have over the next week is going to be maddening. It's going to be a disaster and I highly encourage an employer everyone to try to balance their views of what can we do. To suggest, you know what: Donald Trump is going to have a lot of media attention this week I Don't think he's going to get reelected in 2024 I Think we're probably going to end up getting somebody more like a DeSantis However, the more attention Trump gets throughout all of this, the more likely it actually becomes that Donald Trump could become president again.

So no matter what side you are on, uh, you have to remember that the more extreme this gets, the less likely it is that you get a Democrat Again, the less likely it is that you get a Biden again or a Kamala or Michelle Obama or Gavin Newsom right? And the more likely it is that you get a Republican the more extreme it gets, the more you motivate the base. the more likely you are to get a trump. Uh, right now going into this sh9t show I think you're more likely to get somebody like a DeSantis Uh, However, it's stuff like this that could flip-flop all of the odds back in favor of somebody like Trump. So consider that and pay attention to all this.

But those are my thoughts. So uh, for what it's worth, there's my political opinion and hopefully a little bit of an insight into the Jade of media. Keep in mind when I ran for Governor I learned a lot of the Jade of media from the media behind when the camera's off. Uh, and I think we all already know that, right? But but I Want to remind everybody as we go through this next week.

Buckle up! you're going to get a lot of Jade All right folks, thank you so much! God Bless everyone! appreciate you all I Love you for being here and we'll see all the next one. Goodbye.