Will happen soon today. I want to talk about how china is slightly. Ahead of of us. And is already putting together a bailout package for the chinese real estate and the chinese financial sector.

As well and how these same bailouts will happen in the us. The uk and europe soon enough so stay tuned. And let's make some money and i want to dive straight. In with the key information.

So unusual tweet is saying. Amid reports that the chinese government is preparing a bailout of the sector that could cost 300 billion yuan or 44 billion. Dollars. The ratings agency s.

P. Has concluded the fall in sales in chinese real estate will be twice as bad as they had originally forecast for this year. So yesterday this was expected to be a 12 billion dollar bailout. Today it's increased to 44 billion and i think this bailout will stretch as high as 300 billion dollars.

I could be wrong and it could go to 500 billion or even a trillion and there could also be shadow bailouts totaling 5 10 trillion or even higher but first let's start by talking about why bailouts are already happening in china. And when they're likely to happen in the us. The uk and in europe as well the chinese stock market. The hang seng index actually peaked all the way back in february of 2021 ever since february of 2021.

It has been falling hitting its lowest part here in may of. 2022 but obviously the crash in us. British and european stocks didn't happen until december of 2021 around 10 months after the chinese stock market peaked. Therefore the chinese stock market has been crashing for 10 additional months on top of what the us european and uk markets have been crashing for on top of that obviously the chinese property sector started crashing in december of 2021 and was getting absolutely obliterated and that is still the case now because the chinese property sector has already crashed and the chinese financial sector has already been crashing for a lot longer than we have that's why they're needing bailouts right now.

But these same bailouts will be needed in say. 10 months in the us in europe and in the uk. As well the capacity letter. Tweeted saying the current situation is that median home prices are actually down 95 percent last.

Month so actually seems like the us real estate market is already starting to crash mortgage demand is at a 22 year low and home prices have actually started to. Slip i've mentioned before that listing prices across the us. Has fallen by 20 30. 40 and even 50 in some states.

But it now seems like even. Sold prices are starting to slip. As well. Capacity letter.

Also tweeted. Saying. The us credit card debt. Is nearly a trillion dollars interest.

Rates are rising at the fastest pace in history 60. Percent of americans are unable to keep up with inflation and obviously as i said the mortgage demand is at a 22 year low and therefore the bubble is finally bursting us stocks and us real estate is likely to continue crashing over the next few months. Potentially over the next 10 months until we start seeing us bailouts. As well it says shares in china's biggest property.

Developers. Rallied. Following. Reports.

The government had created a dedicated fund to support the heavily indebted sector. So yesterday this was around 12 billion us dollars. But china state council has already increased this to 44 billion. I expect this to continue increasing as there's around 300 billion dollars of stalled apartment projects still uncompleted that means.

These chinese property developers need at least 300 billion dollars to even finish. The stalled apartment projects. Let alone start new projects. After that it says.

The development or the bailout comes. Shortly after property buyers across the country threatened to stop paying mortgages on uncompleted flats. If construction stalled now you'll have also seen. There's been a number of bank runs in china as well and banks aren't letting chinese people aren't letting the chinese population have access to their cash it says the liquidity crisis is cascading across china's real estate sector and their financial sector as well.

It says the response to the bailout has been generally muted as potential white knights fear that most projects will not turn a profit when completed that's why i expect this bailout is going to be much much bigger than they've written so far. It says chinese officials are struggling to complete 300 billion dollars of stall department projects and they want to flip them into leased units. They've said more inventory is good in the long run. But the housing market needs more buyers than renters.

But interestingly enough in the us. This hasn't been the case. Julian tweeted. Seeing in the last 50 years.

Whenever new homes for sale materially diverged from new homes. Sold the end result was always a recession and most of the time it was an ugly. One guys if you haven't already be sure to set up to moomoo right now using the link in the description. Below you can currently get ten free stocks worth up to a total of twenty five thousand dollars.

Moomoo is very easy to use it's incredibly customizable they've got tons of technical indicators and advanced charting tools from moomoo's latest customer agreement they officially state they do not benefit from your order. Flow and they do not sell your order flow to market makers like citadel or declaring houses like apex clearing instead they clear their trades on their own through their own clearing broker photo incorporated. Which does also not sell your order flow. Therefore moomoo and foods who are brilliant for buying those amc and gamestop shares you can see here in orange.

This is the chart for new homes for sale aka inventory of new homes. Obviously. The white line is the new homes actually sold whenever. There's a material dispersants aka.

There's a massive amount of inventory. But a collapse or fall in sales that usually ends in a giant giant recession. Obviously in 2008. New home inventory was very very high right here whereas new home sales obviously collapsed just beginning the great financial crisis and right now in 2022.

We have this massive divergence again in new homes for sale or inventory and new homes actually being sold again as i said this is likely to end in the coming recession. The coming housing market crash and the coming bailouts as well in each of these previous recessions massive bailouts have been required to ensure the property market or the real estate market gets back on track and to ensure. The stock market gets back on track. As well.

Effectively. These bailouts are required to save. These major banks to save. These.

Major property developers and to effectively save the economy overall. I do think it's very interesting to see what's currently happening in china and how we can expect the same thing to happen in the us as well over the coming months in china. They're completed and uncompleted inventories started skyrocketing because they didn't have access to the cash to complete these projects. You then had the number of new homes being sold falling as well because obviously.

These property projects weren't being completed therefore couldn't be sold you then had no new cash flowing into these property developers. Therefore they didn't have the cash to even complete projects. And that's why the property sector over in china begun crashing right now in the us. It is slightly different inventories are on the rise because rates are going up and home buyers.

Can't afford to purchase a new home because the rates are higher property prices themselves are higher and bills are higher as well americans that previously locked in a low rate for their mortgage. A year or two ago. Now can't afford to move properties. Because the mortgage rates are far too high therefore.

Many americans are staying put. And that's why inventories are spiraling out of control. Because nobody can afford the properties not just based on purchase price. But based on mortgage repayment as well and this is ultimately why it will culminate in a recession.

It will culminate in a stock market crash. And it will culminate in a property market crash as well and ultimately when the recession happens. And when this final hail mary crash of the stock market is seen it will liquidate. Many of these large banks and it will liquidate.

Many of these large hedge funds as well many of these large banks and many of these property developers will need these bailouts. But these hedge funds especially the over leveraged over risking illegally acting hedge funds will be forgotten. These hedge funds that are using total return swaps and hiding their true positions taking massive amounts of leverage and betting against the us economy will be forgotten and won't be receiving those bailouts and ultimately this will end with these hedge funds being liquidated and forced to sell off their long positions. And force the cover and close out of their shorts.

Now in terms of the fomc meeting. Happening later today unusual. Wales. Tweeted.

Saying. A hundred basis point rate hike. Still remains. The base case for nomura city bank and associate generale.

Many are expecting only a 75 basis point rate hike. But i personally am also expecting a 100 basis point rate hike as well. I think. 75 basis points.

Will not dent inflation at. All and i would expect inflation to continue rising past this. 91. Percent maybe to say 95.

Next month. If they only hike by 75 basis points. But again on the flip side maybe a 100 basis point rate hike. Still won't dent inflation.

And maybe. It could accelerate. The stock market crash and the coming recession. The capacity letter tweeted.

Saying today. We will hear from the fed in the most important fed meeting since 2008. They said they're navigating an incredibly fragile economy with 40 year high inflation. They say a recession induced by rising rates is the only way they can contain inflation.

He said. Today's fed meeting should confirm that now on top of that to show even more confirmation of the coming recession. We have yet more blue chip stocks or more large tech companies laying off workers. We now have shopify laying off a thousand workers or 10 of its workforce.

Now that was sent from an email from the ceo. Many shopify employees arrived home yesterday to find themselves without a job and with no further warning. I think most of these job cuts have been in their recruitment and their sales sectors again because these are the sectors where workforce can be trimmed without damaging the overall business. But guys be sure to let me know what you think down in the comments below and as always guys be sure to ding that notification bell.

Because that way you'll be alerted when i upload a new video cheers.