Hey, everyone, welcome back! Today's coupon expiration day and CPI day we've got Warren Buffett on Squawkbox talking about carbon capture Technologies at Austin Dental Petroleum leading into CPI Let's listen into a little bit of what Warren has to say. it's actually one of the reasons I had originally invested in Occidental was because of the carbon capture Tech Uh, let's listen. Well, it's essentially nothing and we we are writing more cat cover this year actually than we were riding last year because the prices are somewhat better. And actually you know I don't know a damn thing about hurricanes but but uh, but in terms of you know El Nino or whatever it may be, it's it's slightly.

It's somewhat more probable that that we have a good hurricane season I mean a good one of being a whirlwind than than last year. But but there's all kinds of chance events and that's what we insure people against. But but can you say it's without yeah, without hesitation that you're you need to charge much higher premiums because these things are happening much more frequently. Because that's we're consider we're considering spending in terms of no, we're charging higher.

Go ahead, we're charging higher prices Joe because prices got too low I Mean we're we're the price level for Hurricane insurance is not I Mean if you take Florida as an Apple for example and we say we'll we'll insure against any event that causes more than 50 billion dollars of damage in Florida. You know there's all kinds of reinsurance contracts, but those are those have been priced well below what they were. Uh, some years ago and and and we we didn't think we were getting paid enough. Uh, but now the prices have moved back up.

So what? And we you know a Jeep calls me and says how much are you willing to lose in a single event you know in in Florida or or Texas or earthquake and I said you know we could lose 10 billion dollars and nobody else can play in that game. Uh and so now it hasn't been. It's not as attractive as it's been a different times, but but the Auto Insurance which we've done big through Geico The average price of our policy when I went in in 1950 was I don't know 50 or 60 bucks and now it's over two thousand dollars a year And and we even went. The whole auto insurance industry went from pricing the stuff for a yearly policy to changing it every six months.

I mean we are not issuing any 20-year policies or 30-year policy and it's not a special risk for insurers. You just keep adjusting your prices to the risk as the risk changes and and you can argue. uh, I'm sure it's a little push it on anybody, but even argue inflation is basically good for insurance because you're right. You know they've got the bikes, bigger premiums on much bigger coverages, and and that's actually happened in auto insurance.

While while the Autos have gotten safer you know and it isn't everybody is, uh, driving terribly. compared to why they drive 20 years, the accidents per 100 million miles driven you know has gone down a lot. But the price of insurance auto insurance has gone up like 30 or 40 for one and it went up. It was going up with a fast enough rate for the insurance company said we're not going to say give you a one-year policy, we're gonna give you a six-month policy.

It was going fast enough. We'd give a one-month policy or Thirty you know, 15-day policy. Uh, you know we are not committing ourselves as to what insurance is going to cost in respect to climate 30 years from now and we it is not a special risk to the insurance industry. Ella People don't get that, but it really isn't I mean and we're backing it up with money every day.

Well let me just ask you, um about the economy. We have heard recently from Jamie Dimon in his annual letter uh JP Morgan He says a recession is much more likely now Janet Yellen was just speaking I think in the last 24 hours, although it's hard to track from here when things are happening has just said in the last 24 hours. I Think that the U.S is in better shape now than it was six months ago. Which of those camps would you put yourself in? well I I Know what a lot of different businesses are doing and I just got report from one element that happens to be in them: retail related business.

And in any event, you know it was minus 22 in February from a year ago and they didn't think that was going to happen. Sales and sales problems are done a lot more than that. On the other hand, some of our businesses are still doing fine, but they all are reporting that the new. You know some of them are living off of orders were placed months earlier and that sort of thing.

But but, uh, it's a tougher world out there in a great many businesses not in the insurance business. Uh, Insurance business should be better this year than last year. That doesn't mean it will be because we can't predict everything that happens, but on a probability basis it should be better than last year and the railroad business is down uh, and Carlos carried. Uh, but it is dramatic.

And of course, we've got a utility business and that doesn't really vary much of a thing. So, but overall I Think people that run our businesses that do have any sensitivity to the economy are surprised at where they are now compared to where they thought they were going to be six months ago. That doesn't mean the world is coming to an end or anything because 58 years I've been running. Berkshire I Mean we've run into all kinds of problems, but but that's that's what business is about and and we run our business so that we don't depend on everything being we might have saw that we will be the last man standing and and that's the way.

If millions of people are going to give me their money and help me to take care of it, we're going to try and take care of it. and if we don't make as much. Really good point By the way. I Don't know if we'd averaged more or done other policies, so be it.

But you think a recession is more likely now than maybe you would have said six months ago? Well, I think most of our manager would say would say that they are surprised at where they are now compared to how they thought they were going to feel six months ago at this point. and not a lot of businesses but not in the insurance business you know, and and uh uh. But I think the people of the railroad are are somewhat surprised that car loadings aren't a little higher rather than a little lower. Now some are lower, but most of the stuff we carry is is essential.

but but it reflects what's happening. And and of course supply lines were so disrupted and everything a year or two ago that uh, you know no economic figures are pure but I will I'm just telling you my impression and I look at the numbers every day I mean I can I look at our Easter sales day by day the candy store and I you know I can look at California versus Washington versus Oregon and I can I get them the next day? I mean so I I love figures. You know and you say that it doesn't really do me that good to be such a figure or not. but I just like it when I see him in terms of the potential for a credit crime.

Much coming through what the banks are going through right now, there's been a lot of speculation about what that could mean to the economy. Is it going to mean a 0.5 percent hit to GDP Is it going to mean a one percent hit the GDP What would you guess? I would say that I've been in business running Berkshire for 58 years and I've never upon the economic forecast of any use to the company and all you have to do is keep running every businesses as well as we can and we got to keep plenty of cash on hand so that people can keep making intelligence decisions rather than those forced upon them. And that's all we know how to do. And if I didn't depended in my life on economic forecasts, you know I don't think we could make any money I don't know how to do it and and you know people want to get them so they get them.

but but uh, it doesn't. It has no utilities. What? I've when I find one of our companies has hired somebody to tell them what's going to happen in the economy I Mean they're throwing the money away as far as I'm concerned. All right.

So you had a hundred messages. I'm very tall Berkshire had 128 billion almost in cash at the end of the year. Yeah, and and treasury bills and a bit in money market Government Bond only. Uh.

money Market funds. Uh, but we've never. we don't own commercial paper and we and we didn't in 2008. Now we we.

You know it's we want to be ready for anything that happens. Do you have more or less seven minutes? Uh, where are we? Three and a half months later? Yeah, well. we laid out um, you know, summer billion plus uh in terms of the pilot and we spent four billion buying in stocks. That's 11 billion that's going out the door.

but uh uh. below the figures and you know exactly. But I think we're probably up on cash and and drive tables. Yeah, just because more keeps coming in, the money comes in every day.

uh and and uh. you know we heard in the neighborhood of something over 100 million dollars a working day and a little less than that for all calendar days and that money comes in and and uh uh, we spend the money that we had for depreciation we don't talk about Eva diary crazy thing. but but we have a lot of money coming in and the float grows in the insurance and and and we'll continue to have a lot of money coming in and we'd love to this boy some of it. We also want to have I'm not running around so the worst can happen and we're not.

We're looked at as an asset to the United States recovery rather than rather than uh, something that caused, uh, the problems of the economy. And would you say you're doing anything differently at this point. Just in terms of all right, you're not going to worry about economic. We haven't changed.

We don't change our what we're doing in terms of trying to improve the railroad or whatever they don't want to I don't want to give economic forecast to our managers now they run their business I just wanted to make sure that they have happy customers and and that they have. They're cost effective and they're behave good citizens but that they you know they ask me and before they spend a lot of money in terms of capital allocation. Warren If you don't mind, we're going to pause here because we do have that big CPI number coming up. We're gonna have more with Warren in just a little bit, but right now Andrew we'll we'll toss it back over to you.

That's right Becky in just a moment. All right awesome we have CPI coming up. Uh, in five minutes here. Uh, this is gonna be pretty exciting.

You can see the estimates there on screen from CNBC Uh, we are going to be going through this report pretty detailed. Uh, in a pretty detailed Manner And so I'm excited to go through it all with you. Uh, some pretty incredible insight as usual from Warren Buffett We might catch up on that a little later. For now though, let's uh, take a check and see how things are going.

Uh, in pre-market Keep in mind we'll be having another price increase in the programs and building your wealth link down below. So I would love for you to check out the links down below. Uh, and let's go ahead and see how the pre-market is moving. and then we'll look at expectations and we'll get to the data as it comes in within the next four minutes.

So we got Futures Basically flat, it looks like Bitcoin just moved back up over thirty thousand? You have it sitting at 30 000.35 Next stop would probably be knocking on the door of 35.9 If we continue on this trend, you've got the 10-year treasury sitting at Three Four Four One. now. What's interesting is that 30-year mortgage rate is actually not moving. uh, terribly much to the downside, even though we've seen this 40 basis, 40 to 80 basis actually closer to 80 basis point drop in, uh in mortgage rates, look at this weird volatility you're seeing on the blue line of mortgage rates over here.

Let's throw this up on screen. Uh, okay. Well, if we can, push the right button and there we go. So take a look at this right here.

You see uh, the 30-year mortgage sitting at 6.9 for a 740 credit score. Even if I jump over to Cali, it doesn't make a difference here. You see this temporary dip we had over here in mortgage rates. But even though that 10-year treasury is coming down, you're seeing mortgage rates hold pretty steady right now going into this inflation data.

Part of that could be because of widening spreads, so widening fears of stress. So let's talk projections. uh and try to tie this all together as we get started here for our CPI data. So let's make a quick little note here: Keep in mind a live stream every day.

Uh Actually I Don't even take weekends off to cover. Let me Kevin report. So let's get started here on Uh CPI which we are now about two minutes away from CPI Let's write that down: Uh uh. Okay, here we go.

We're now two minutes away from the CPI inflation report. The projections are CPI Point two percent month over month. My projection is point one percent month over month CPI X Energy and Food month of month Point of four We are projecting myself I'm projecting point three percent. Uh, so a one-tenth of a percent.

below both. The both of those are my projections for the month over month figures. The prior report was 0.4 and 0.5 so we'd be coming down with a 0.2 and 0.4 on both of those. Year over year, we're going to see a nice big decline moving from a year over year of six percent to 5.1 percent, which is a fantastic drop down.

Uh, however, Core is expected to actually take up slightly from 5.5 to 5.6 so we'll be getting that data within about the next 100 seconds here. We're very excited. This is a big moment. This is A.

This is absolutely going to give us guidance on whether or not the Federal Reserve is expected to raise interest rates by either 25 basis points again or pause. This is a very big deal right now. The expiration of the coupon code is also set for today. We'll be raising prices on that.

Uh, tonight. Now let's go ahead and look at the rate monitor as we get into the next 60 seconds here. So the rate monitor puts us at about a 74.7 chance of getting a 25 basis point hike. Next, the Federal Reserve does appear to be split on this 10-year treasuries have come down, so that is a loosening of financial conditions.

The mortgage rates do still remain high at about 6.9 percent for the 30-year mortgage as credit spreads are widening. So that's actually a weird phenomenon where you can actually see, uh, 10-year treasury yields come down. but Financial conditions remain tight and keep mortgage rates High For Real Estate Uh, However, real estate inventory has been so low, we have not actually seen any kind of, uh, major pain just yet in real estate. Okay, we are now just seconds away from the CPI data.

Within the next 10 20 seconds here, we'll have the CPI data. We'll be going through the report as well. This is a big moment. Again, we're looking for a market is looking for 0.2 and 0.4 So drum roll and stay tuned.

Remember, check out that coupon code. Oh my. God It's point. One month over month I was right.

However, the core was 0.4 So core matches expectation point one on the month of a month. Let's freaking go. Let's go. Uh, year over year comes in a little soft as well at five percent as opposed to 5.1 Core matches expectations at 5.6 so expectations matched on core, month over month and year over year.

Uh, However, on non-core we got that point one percent. and that five percent year over year. That's absolutely fantastic. Uh, that's uh.

that's a sign of not a devastatingly weakening economy. It's not a sign that we're in this crazy recession that everything is falling off a cliff. It is a fantastic sign that inflation is continuing to Trend down upon expectations. We're not getting any kind of crazy, uh, reanimation of inflation here.

even though uh, outside of expectations? Uh, we're not. And that's a big issue, right? We were worried that maybe in this report, we would see some kind of massive increase in Services inflation or something. Uh, keep in mind, housing inflation is still keeping these numbers really elevated. So we're going to take a look at all of that data here.

But this is a fantastic report. So far. Based on the headline numbers here, we're going to get Wall Street reactions here as well. But let's get into both the report and Wall Street expectations.

Uh, or Wall Street reactions rather. so, let's jump into the actual report. and here we go. This is the actual report on screen.

Now let's see what we got here: CPI Rises 0.1 percent. That was my expectation. There were only four economists out of all of them surveyed that had that expectations. At that expectation, over 40 of them interviewed by Bloomberg were looking at point two.

There's that point. Four percent. Kevin was off on that one by one percent over the last 12 months. There's that five percent.

Okay, let's go into the actual granular data here. So it looks like, uh, okay. Here we go here. We go here.

we go. Uh, the index for shelter was by far the largest contributor to the monthly increase. That's good. That's actually a good thing because we do expect that to come down for rents, which is good.

Uh, However, we still haven't seen that come through. So there is that risk that what if that rental deflation never comes through? That would be a big problem, right? But we still expect it to come down even. Jerome Powell Just a few weeks ago, reiterated uh, that this will be coming. Uh, down.

We do have. uh, stock futures jumping. The two-year treasury yields are tumbling right now. This is fantastic.

It looks like real average hourly earnings. Fall point: seven percent year over year. No wage price spiral. This is fantastic.

Uh, this is. this is really good. And this is not like so bad to where. All of a sudden we're looking at it going.

Oh my gosh, you know we're at the end of the world in terms of depression or whatever. Uh, let's see here. shelter. What shelter? Shelter there it is.

Look at that shelter coming in at points six percent. Uh, for the March numbers over here. that's telling you. Remember Shelter: It was actually up weighted in the CPI re-weightings to about a 34 Weight Transportation Services.

My goodness. Coming in at one point four percent that's high Medical Care is not reinflating. That's very good. Uh, Medical Care Commodities However, a little bit of a Commodities bump over here.

Not so good. Point: Six percent. It's about 7.2 percent annualized used cars coming in. Negative point: Nine percent.

That's good. new vehicles coming in at point Four percent. Let's get a little bit more of a detailed chart here. While I also get some more reaction here.

Housing cost was the biggest contributor Wall Street Reacting to this, we're going to get the detail chart here. Get a little bit more numbers here while I Pull this up. Remember CPI is uh, this is going to be a crazy day. I'm getting so many emails for bundle coupons already this morning because on expiration day we go through all the emails.

For everybody who wants a bundle coupon, email us at Kevin.com Let's go through the actual detailed set here. If you want to bundle code as well, you can email I Want to go right to the end and services. This is the most important side. Okay, here we go: Personal services Thank Freaking.

God Look at that point. Two percent. Let's go. Let's go.

No re-annovation, reanimation of inflation and services. Really important point: Two percent. That's two point four percent year over year. That's great personal care services.

Uh, however, you have personal Services Overall, still hot but but kind of a line aligned with Trend here at about six percent so still a little high there but not running away. kind of like last month we had that 1.1 that was not great Legal Services Finally reducing to about 0.2 last month we were a little high. funeral popped up a little. Financial Services Finally coming down a little bit here.

kind of matching that previous Trend coming down from these prior higher numbers here, we want to see these Services really stable. We don't want to see runaway inflation here. Education services annualized at 3.6 percent, postage at uh, 1.2 percent annualized. That's great.

Telephone services going negative: great, fantastic photography is going negative. Okay, well, sorry photographers. Okay, here we go. Thank goodness.

Okay, this is one place where there could have been lingering inflation and uh, that is in: Pets Pet Supply Pet Foods You name it. Uh, thankfully for pet services including vet services 0.5 that's more stable at six percent. That's good. We don't want to see runaway there.

video and audio Services Still a little hot over here at Point nine Rec Services Coming in flat, good airfares. Oh my. Lord Uh, that's not so great airfares at four percent? Uh, it's shocking to me how these Airlines can continue to price it or can continue you to pass on these high prices. That's pretty remarkable and unfortunately it's just a point six percent weighting, but that's still pretty high.

It is down from last month, but we'd like to see that negative. Motor Vehicle Insurance Uh, 1.2 percent for the month that's still way too high Warren Buffett Was just talking about how insurance is actually helped by inflation because they can bring in more float which then they can invest. Uh, so. Warren Buffett Actually cheering inflation for insurance? Not something we want to hear.

Obviously, car and truck rentals down 3.8 percent Good transportation services still hot though. Health insurance thank goodness. Look at those drops across the board drops here in medical basically Services via uh Insurance hospital and related Services Also Negative Good Good Good Good good Medical Care Services Overall negative, negative, negative, negative good Trend Here of services This inflation we like seeing this Uh, this this Falls right into the argument that inflation can end up proving to be transitory, especially once we actually get the decline. Oh, it's happening.

Oh, it's starting. Look at this. We're getting the rollover here. Uh, somewhat.

We're finally starting to see it. Rent of Primary Residence finally coming in at point Five percent. Uh, back to what we've seen previously. finally seeing the rent of shelter number overall back to 0.6 Off of those really high numbers like that 0.8.7 I Think we're starting to lap some of the year over year numbers and month over month, we're starting to see a little bit of weakness however, lodging away from homes so hotels still explosive growth here in the numbers, so still a little expensive.

however. uh, rent of of, uh, your your home is going to be a substantially larger contributor. You can see that here owners equivalent rents coming in at point five percent. Let me quickly see what that point four percent number is.

That is our fourth number here. Yeah, that is the unadjusted Feb to March number. So let's get back over here. We're just going to ignore this right here.

because that's the Feb to March number. Really, You're going to be looking over here. That's the last three month Trend and we finally see that moving down a little fine. Finally, that's actually really, really good.

So happy, happy to hear this. This is good. Then you've got what do we have here? We've got personal care products. Wow, that's still a little expensive.

A little expensive over here on some of those personal care services. Uh Services less energy Point Four percent. That's okay Goods Goods are still deflating. Well, not.

I Shouldn't say point five percent is deflating. but other Goods Sitting at point five percent led by cigarettes actually alcoholic beverages away from home? Point Three percent. Look at this: alcohol starting to really come in low in the last two months here. deflating probably because Kevin stopped drinking alcohol.

uh sorry. I was contributing to the industry too much and so now I've stopped. But at least we're causing deflation which is good. Uh, so that's a good thing.

We've got education communication Commodities Good, nice Negatives: Over here we have toys, toys still hot. Uh oh, that's surprising at point Seven percent. Sporting Goods Negative Point: Six percent Pet and pet products. See, look at this still hot.

Over here at pet Products That's good. For companies like Petco they're still able to pass on. They still have pricing power. We don't know how long that'll last though, given the flat household formations.

Medical Care Commodities Coming in at point Six: Recreation Commodities 0.2 Here we go: New vehicles coming in at point: Four percent Transportation Less motor fuels? Uh, zero percent new cars 0.6 new trucks 0.3 used vehicles Negative Point Nine: So you're still getting that compression where you've got new coming up in price and used coming down in price? Uh, this is this is fantastic. Um, we're going to speculate on the Federal Reserve in just a moment: Apparel coming in at point Three percent. finally softening after that initially warm uh winter that we got in January and February and uh, and you started seeing some more of those uh Spring sales pushed forward which are generally higher or more likely to be full price sales tools and Hardware coming in at just point Two percent really nicely off that 2.7 from last month. Fantastic household.

Furnishings Coming in at point four percent. still a little high Appliances: For some reason at 0.7 odd, those are going to be like your coffee makers. Whereas major appliances are still negative, they've been negative for a while those more durable goods. And then of course, if we look at Foods we have a lot more volatility over here.

Food: However, look at that. Food Inflation: Zero percent. Who actually believes that I Don't know food's been so expensive. You go to restaurants.

it's just insane. right now. How's coffee doing? coffee coming in at negative point? Four percent good I Need some energy? Had a nice big drop over here at 3.5 percent. All right, let's get a little bit more of um, uh, the uh commentary here from Wall Street And then let's speculate on the Federal Reserve Shall we? Okay, so Chief Economist at Wells Fargo tells Bloomberg TV that while there are pockets of optimism in today's print, inflation is still far from two percent.

You know I'm so tired of people saying this: I Really think they are just like Bears Who don't understand that inflation just has to Trend down to two percent throughout the rest of the decade. And it's fine. Of course, it's not going to go. Oh, we're the two percent? No.

Sherlock it's just I Don't think people realize the FED is going to pull fate out of the genie out of the out of the Magic Hat the bunny rabbit that comes out is going to be fate. Flexible Average Inflation Targeting the Federal Reserve uses policies known as opportunistic disinflation to make sure that inflation Trends down over time. Obviously, inflation is too hot at five percent year over year. and that's why we're seeing rate increases to accelerate that disinflation.

But does the Federal Reserve really want to destroy the economy? Uh, in order to get inflation down as long as it is trending down? No, of course not. So could the case be made for a pause here? Yes, Do I think this is enough deflation or disinflation? Should I say to see a pause? Probably not. I Would probably go for a 25 basis point hike and that's based on probably the Atlanta Fed Now real GDP P Estimate that is real GDP Growth Right now, it's still expected to be about two percent. That means we have plenty of room for the Federal Reserve to increase their tightness on markets.

I Also think there is a large psychological effect to making sure that inflation is indeed uh, or proves to be transitory. I Know everybody makes fun of the Federal Reserve obviously for saying that because they've been wrong for so long and it's likely that they could be wrong again. But when we take a look at this right here, this is the Atlanta real GDP Fed Now estimate. Uh released two days ago, which is two days before the expiration of the coupon code.

Given that today is the 12th, prices are going to be going up tonight if you want to bundle up for any of those programs whether it's zero to millionaire real estate, investing, stocks and psychology money. Elite Hustlers Make more money As an entrepreneur and employee, Learn about insurances liabilities LLCs You name it everything linked down below. Check that out. Obviously this video isn't personalized Financial Advice but I Am a licensed financial advisor and run an ETF and have other affiliate links.

You You can learn more about it. Meet Kevin.com some of which are sponsored. but let's go ahead and look at this GDP link here. What do we have? Latest estimate: 2.2 percent.

What's important for you to know about this, right here is that this is a tool for the Federal Reserve to say hey, look if GDP is still trending two percent. In our last and in our last summary of economic projections, we were looking at GDP at coming in at 0.5 percent. by the end of the year, we still have leeway to actually raise uh interest rates and I think there's a psychological element to the FED getting to five percent. So I think while the odds of a 50 basis point hike are going to fall as a result of this, I do believe that we are going to see the Federal Reserve end up uh, uh, going for a 25 basis point hike I Actually think that is a good thing.

if the FED goes 25, it's a sign that we are further away from recession than people think, which is fantastic. 10-year treasury yields are falling about seven basis points. We're sitting at about 3.36 right now. This is reiterating that inflation is trending towards potentially being transitory again.

I Realize that is offensive to some people to say that word because the FED has been wrong so long to your treasury yields now falling about 14 basis points sitting at 3.91 However The fact of the matter is, if in a year from now, inflation is potentially under Target, we will look back and say Yes. It ended up being transitory. It just took time, it took patience, and that's probably the biggest thing we could learn from Uh from this entire cycle is that every this, this whole cycle tends to take a lot of patience. Now, what I really want to be clear about Uh is what Wall Street is reacting with.

So right now, it does look like Futures are up about Um 65 basis points on the Dow, 82 basis points on the S P and 107 basis points 1.07 on the NASDAQ. It looks like uh, a Powell's favorite inflation measure as of late is the core services in excluding housing came in at point four percent. That is down from the point five percent in February, but it is still slightly elevated. Uh, that is Uh.

That is still a problem. So core Services excluding housing is not running away. That's a good sign. It's not runaway inflation.

However, we are starting to see a trend down. It's just not low enough yet. That's okay. We know that it takes time for it to Trend down the price of eggs tumbled the most since 1987, down 10.9 percent from Taylor.

Swift's actually down more. probably down like 50 from what Taylor Swift said she was going to help get egg prices down. Obviously, that's a joke. Uh rates Market is Uh is reacting to this this weaker report here? However, we have the let's see here again Core: Services X Housing up point four percent not fantastic.

Uh, but again still trending down so that's called the super Core level which does exclude housing just so we can really narrow into Services Uh, let's see here Fed: Futures the pricing and still rate Cuts towards the end of the year from the Federal Reserve is still sitting at expectations though for let me look at if we can get an adjustment on the terminal rate here and then let's also look at the five-year break. even stand by for that data. five-year Break Even Data: Let's see what we have uh and then let's also look at if the terminal rate has started moving so uh, slight inflection down coming on the five-year break even for inflation Expectations: In terms of the Fed's terminal rate, we are looking at uh Financial conditions by the way also coming down, but you would expect that uh, less Financial tightness given lower rates here waiting for this terminal rate to load uh terminal rates still pricing at 4.99 No big movement here, so still looking at that 25 BP hike. but it's it's becoming clear as day that probably going to be at an end of the Federal Reserve's hiking regime once they get to an even five percent I Do again think that is a psychological level that they are going to get to and I am not concerned about a 25 BB hike.

Do keep in mind later today, the Federal Reserve minutes come out from the prior meeting. Uh, Bond market is still pricing in 17 basis points of hikes that is leaning towards 25. Remember what they basically do is they take the average of how much the bond market is pricing at zero and how much the bond market is pricing at 25. That average or the middle.

The midpoint would be 12.5 basis points, right? The market right now is pricing at 17 basis points which again leans us towards a 25. BP I Agree with that. I Actually think it is good. Get to five percent and be done.

Uh, markets are. Let's see here. core figure coming at 0.1 percent was fantastic. Uh, that actually matched my estimate perfectly which is very exciting and so uh, we're looking at actual Market reactions here I Would expect that this very much aligns again with the Nike Swoosh theory.

If you haven't been watching sort of daily where I've been talking about the Nike Swoosh that's okay. I still love you. Uh, but let me make it clear: I Think the Nike Swoosh is basically where we have a sharp decline in prices uh, which we've had over 2012. Uh, and then a Nike Swoosh style recovery.

Let's show you what that would look like. Uh, briefly. This is pretty simple: What a nature swoosh potentially looks like is you have a sharp decline which we had throughout 2012. you bottom out in around October maybe at some stocks you bought them out in July in December depending on the type of stock and then you have this this very long drawn out dare I say Nike Swoosh That potentially takes really just the next 10 years not necessarily to get to Prior levels, but basically the Nike Swoosh just continues for the next 10 years we had.

We really start a new bull market era. However, in the meantime you end up with a lot of this a lot of volatility that creates a lot of nervousness and pessimism. Each one of these drawdowns will be very painful and people will question is inflation transitory Is the did the FED over Titan How terrible is the recession going to be? Uh, who knows. but uh, my thesis is look for pricing power stocks I talk about those obviously.

Uh. and and I put my money where my mouth is. You could learn more about those at Meet Kevin.com You can see the links not only for the courses with trade alerts or the the ETF or the affiliate links link down below, but this gives a CPI a fantastic Uh. read on CPI Very very excited about this so this is great news.

Uh uh. it is a little bit of a shocker that it came in low, but come back on over to Warren Buffett and see what Buffett has to tell us. uh, and potentially in reaction to what we're seeing now. So uh, top in Wagers Taiwan Semiconductor is a stock that, all right.

showed up in Berkshire's Holdings in a big way a couple of quarters ago and then a quarter later most of it was gone. Yeah, that was me, that wasn't one of the two other guys. There's two other people that make the decision that he's run about 15 billion dollars and sometimes they get confused with me. they step off a spying this or not and there's one or two other guys.

But that was my decision and as I think Taiwan Zombie Conductor is one of the best. Well, it's the best in that field and is one of the best companies in the world. It's a fabulous Enterprise and uh, Apple buys a lot of the products from them. I mean they they're good and they're coming in the United States and we're We're actually I think maybe even building for one of our subsidiaries helping build facilities form.

but I do think that that uh, they there is a danger there to some I don't have any idea there's actually a danger of seismic yeah action. I mean and and and and where they're located. but that's a whole probability and they you know they they're smart people. but but I rather have it it was the U.S domicile company than than be a subject of who knows what depending on conditions outside their control I'd Rather, you know I I reevaluated that part of it I didn't reevaluate the business, the management, or anything of the sort.

It is a fabulous company. Uh, and um, you re-evaluated the geopolitical risk from China stepping in to Taiwan Yeah, I Think there's any question that conditions change I just don't know what the results of conditions changing I mean China and the United States are going to be superpowers. You know, as long as your children live and yeah, and and they will always compete with each other. and uh, and they showed it and she can't really get out of control and you can't have accidents and all sorts of things.

I mean that. uh, it, You know it. it. It's a dangerous world.

If you're concerned about China and what that might mean for Taiwan semiconductor. are you worried about what it would mean for your largest holding? Apple because Apple does so much of its business there, both in terms of manufacturing and sales. I weighed that in. But but Apple was.

uh, if somebody, if you're an Apple user and somebody offers you ten thousand dollars, uh, that's the only Proviso is you'll never be able to. They'll take away your ass, your iPhone and you'll never be able to buy another. You're not going to take it. Uh, if they tell you, if you buy another Ford motor car, they'll give you ten thousand dollars not to do that.

He'll take the ten thousand dollars if you buy a Chevy instead. I mean it is. It's an incredibly valuable uh. utility is that doesn't mean that it can't be misused by kids and Tim Cook cares about that.

I mean everything can be used. Fire can be misused I mean but I think that Tim Cook is the or the classiest CEOs that he understands the business and he has a product which Steve Jobs Basically a matter. but Tim Cook has managed that company in an extraordinary way and uh uh, you know I I Love it. You know we've got a hundred and well, whatever we got, we've got nine most 900 million plus 915 million shares actually and you know it's it.

The people say well it's not our money Library Well we battle railroad worth of similar amount. We've got a utility business for worth of Summer month. I mean it's a wonderful business. How the hell could we can't develop a business like that and so we own a lot of it and uh and our ownership goes up a little bit over here because they buy on their stock and and and Tim does not issue it, he buys it in and and we love it.

Meaning you're not selling any. Yeah, no. I I there was one there is actually from a taxi. Understand what? it was a good idea to sell something.

We saw some around 115 uh and uh, it was a dumb sale I mean in the end now which was all the stack situation some other way and uh uh, we actually bought a few shares last year. we got a little two more shares when we bought we bought Allegheny Corp because they had some of the portable I only kept two stocks they owned Berkshire Hathaway had happened when they happened to them, they had 20, got on 27 stocks or something. like they're all gone except for those two. So I We will never own a business that makes so many people happier and useful for them.

and you know you probably got 20 000 photos up there and that that and it. Apple Steve Jobs Dead With that and other people can do other technical things and I don't know whether I'm when I look at my iPhone I don't know whether it's some little guy inside that's doing thing I don't know the technical oh Warren Buffett has an iPhone that's kind of cool. Also, keep in mind I stream every single day and I encourage you to join every single day. Uh, around this time and talk to the people that sell organs are Earth Products at the Furniture Mart and uh, you know whether at all, whether they're young, whether you know that they want to have it, and and lots of people have multiple uh uh, products are there.

They have, They have They've been come up with just one little addition after another. And who then who knows what they come up with. Additionally, what? Tim Cook has managed that business. Uh, the greatest managers obviously in history.

Let's talk about another company you own that has a major China presidents. In fact, that's its only presence. Byd or the Electric Car Company that you've owned for a very long time. You've been selling some of that.

Why? Well, they've been selling it because the company are interested in us being valued at what the interest we had is being valued. you know, six and a half billion, whatever it may be. And and I think it's an extraordinary company. and I think the funnel that runs it was running right along ever since we purchased it.

Well, 14 years ago or something is an extraordinary person. been over their business. But I I think that uh, we'll find things to do with the money that I'll feel better about. But uh, uh, my job is that.

Oh, come on, Elevate the capital and within Berkshire Hathaway The way I would do it for my sister because she is a picture holder and and that's the way I feel about all the millions of shareholders we have very quickly. Can I just ask you about Paramount that's an another Berkshire investment that's been a relatively new one. Um, this is because of streaming. What What happened Framing that? You know it's not really a very good business and uh, you know it.

Uh, the people in entertainment have made lots of money, the shareholders really haven't done that right over time and uh, supplied the many. It's a glamorous business and and uh, and some president Hollywood you know and they they look for pigeons, show and they find them I mean it's like it attracts people and uh, it means suckers. It's a great way to make your own girlfriends suckers. Uh, is it fundamentally that good of business? Whether it was Distributing producing movies or and and you've got some people that have got Deep Pockets that aren't going to quit and the product they're offering people a chance to watch all those movies you know, for peanuts and all that.

but can they very slices? We'll find out, but so far they haven't been able to. They've been able to attract subscribers, but they attract them at a terrible price. All right, you give a whole lot of reasons why not to buy Paramount Why did you buy it? Well, we'll see what happens. Um Warren You are known for somebody who has the appetite and the taste of a five-year-old You like hot dogs you like Coke you like Sees Candy Someone wrote in on Twitter and wants to know what you've been eating in Japan Oh that's that's an interesting question.

I I have a Coke here and uh I mean I had some Hershey kisses before I came over here and do things like that and uh and you know I I've gotten a 92 with the habits of the six-year-old and so far it's working Charlie's 99 and he doesn't need any better and I do pretty much but I just get more attention but mine you know at uh I think I mean you know your role will dice I've been lucky in life I haven't really gotten that sick but in the only terrible things happen when people die or get sick, they should get the care about and if you can make it a decent living in this country and you know just been lucky and and you know I make all kinds of money because I'm good at some game where the problems of capitalism just fall off the table and and uh and you know what, What people contribute to society is not proportional to somebody that you know gives their life and fight an award that they don't need to get that I always admire to Hank Greenberg get away and be a tough competitor and everything in the business. but he lied about his age upward in order to go in the army, any land or the Normandy that I mean that is that's really uh something. So I've been lucky and uh you know I I always tell people I find everything I like to eat by the time I was sick I mean why should I fool around with all these other Foods I know all these people eat all these green things and everything but somebody told me I would live an extra year if I ate nothing but broccoli and a few other things all my life instead of eating what I like to eat I would say technically take a year off the end of my life and let me let me eat one all I did. but I don't really think of them because I think I think happiness makes it an enormous amount of difference in in terms of you can't measure it very well in terms of longevity and I'm happier when I'm eating hot fudge sundaes or drinking Coke or whatever maybe hot dogs Warren We are lucky to have spent the last three hours with you.

We want to thank you for your time today. Thanks for inviting me! Yeah, you invited us, but thank you Warren Buffett and uh Joe we'll send it back over to you. All right, we've got some. I Love the correction you invited us.

That's awesome. Uh, really really cool. uh I mean Warren Buffett's an inspiration. It's uh, it's really, really awesome.

Uh well. let's do a let's do a sort of a quick recap on on some of the things that warrants talked about here just because. I I think there's they're just so wonderful and and genuine. Um, so let's do a quick little note here and we'll stand by.

Okay, so Warren Buffett just gave some wonderful life and investing advice that I think is so wonderful and uh, really genuine and I wanted to make a special segment just to highlight some of my favorite parts of what Warren Buffett mentioned. Uh First, probably by far the biggest mention that I Think will go uh, really, uh, under, uh the the news coverages uh, that is Most people won't pay attention to it is that Warren Buffett's biggest goal in business is making sure that his companies are run by good people who basically do the right thing and provide a good or service that makes happy customers. That's it. And I I can't emphasize enough how important that is.

It's one of the things that I built my business on is the idea of providing value, providing more than what people are expecting. Whether it's in, uh, when I was working at Jamba Juice or Hollister as a real estate agent, as real estate broker, hopefully as a YouTube content creator in my courses, as a financial advisor who cares, whatever it is, my goal is provide more than people are expecting and I think Warren Buffett reiterates that exact notion and he invests in businesses that do exactly that. For example, one of these incredible comparisons he makes is he makes this comparison of how people will go out of their way to pay more money for the next iPhone He reveals that he has an iPhone and even though he doesn't understand how the iPhone Works he understands that people are willing to pay a premium for that. iPhone What he's really describing is pricing power.

What is a product a good or service where people are willing to pay for it no matter what the price is? Is that potentially a Tesla with full self-driving Is it an Nvidia Graphics chip? Is it an AMD? Is it uh, the Nvidia server chips? or uh, or you know, is it an end phase micro inverter because people just have to have that particular quality micro inverter over another? Who knows. But Warren Buffett makes a fantastic argument. If the company has a goal of making their customer happy, they win. and that's his only goal.

He doesn't care about economic forecasts, he doesn't really care about the new cycle, He cares about the business. and even though in some of his businesses, he's realizing negative 22 percent year-over-year declines, he's seeing that some of his managers, in fact, a lot of his managers are seeing uh, things are down a lot more than they thought they would be six months ago, and part of that could be because of Prior orders, basically keeping the pipeline full and now they're slowing down even the railroads which transport a lot of essential Goods for the businesses Warren Buffett invests in, even railroads are seeing the Slowdown He's seeing the Slowdown but he ultimately just says, look, he's been doing this for well over 50 years. Probably well over 60 years At this point, the one thing to focus on is providing good value and making sure you're doing the right thing. You're not a criminal, you're putting one foot in front of the other, and you're investing in basically pricing power style investment.

It's a fantastic Insight Really, it doesn't matter what economists say. In fact, he says he goes as far as saying that Economist or a waste of money and that if there's an economist providing projections at a company, they should not, uh, be spending money on that person. In other words, the company is wasting their time and money listening to that person because nobody knows. The biggest thing that matters are numbers.

He's asked about the credit crunch or the banking crisis and He suggests hey, you know what? the banking crisis probably isn't over. There's probably more damage to come and a lot of people ask me. they say Kevin uh and I'm not trying to compare myself to Buffett I'm just simply, you know people ask me they were Kevin What do you think about the banking crisis like is it is it going to get worse? And the reality is there are always going to be companies that the fringes that go bankrupt, especially during recessionary times. Always that that will always occur.

There is no doubt that in recessionary times businesses will fail, those will be Banks Those will be companies that you know and love. Those will be companies that you hate. There will always be companies that fail that is extremely normal and so am I Terribly concerned about a banking crisis. No.

Am I terribly concerned about credit conditions tightening. Not terribly. There was a fantastic piece in The Economist this morning, though that did make a fantastic argument. and the Fantastic argument they made uh was actually I wrote it down right here.

They say uh, the final source of stress will be firm's own liquidity. That is, companies have been basically able to pull inexpensive debt. But if there are future shocks, being able to pull new liquidity going forward may become more difficult. So maybe we haven't seen the full shocks yet because we need another shock to actually strain businesses and then we will see a real liquidity.

Crunch And it's an interesting argument because it basically says don't look at the banking crisis today and try to find what the explanation is for credit crunch today. Instead, look for what a credit crunch could potentially do during the next shock. Now Warren Buffett does the usual when it comes to Bitcoin. He says Bitcoin has the same Allure as playing Russian roulette.

In other words, words, he eludes or Associates it with gambling. He says that a Taiwan Semiconductors is the best in its field. It was uh, his decision to end up parting with the company. Sometimes he does that because he sees a better opportunity somewhere else and in his case, it seems to be cash because they've got about 100 billion a million dollars in cash sitting around.

Do keep in mind they've been spending a lot of money on stocks as well. Uh, Warren Buffett Uh calls AI technology extraordinary. He does cite some concerns with him. He says that inflation is a constant threat to a country because ultimately you fade away the value of a dollar and this is why you invest in assets.

Uh, although Warren Buffett does invest heavily in cash, a lot of that money is held in treasuries. He says he's not into commercial paper. he prefers treasuries. He does say there could be further bank failures and that the government won't save shareholders from troubled Banks which they really shouldn't.

He says that troubled banks are not value stocks. This is something I've mentioned as well is that I think troubled Banks could be a way to maybe speculate and gamble, but uh, in the long term they're not something I would want to hold. He says uh, let's see here. dumb things Banks do lead to mistakes and bank failures I think that's a great argument.

basically puts the blame where it belongs right on the banks. Take a look at some of the other things he says he uh does talk about streaming I think this is a fantastic lesson as well. When he talks about streaming, he talks about streaming is basically being a very low pricing power business. He doesn't use the words pricing power, but he talks about streaming being a quote not really good business in other words Becky quick responds and says you mean it's for suckers and he kind of laughs and says, well, it's just fundamentally it isn't a good business and that's because even though it attracts people, the way you attract more subscribers is by lowering the price and that's the opposite of pricing power, right? Uh and and he says, look, what they're offering people is they're offering content for peanuts.

Do they really have the ability to raise prices he says now so he gives a lot of negatives for maybe a Disney or a Netflix. One of the reasons I haven't been exposing myself to Disney stock is because I feel like they're taking the profitable business and they're putting all that money into the unprofitable business of streaming. kind of like with Facebook And look, I know Facebook Stock has done fantastically over the past few months from the bottom. Obviously I mean if you time anything at the bottom, the stock will have done fantastically.

but I hate that they're taking a very profitable ad business and dumping all that money into the metaverse which I don't believe in in terms of a future. I Actually think that augmented Reality will be substantially, uh, more profitable and will be substantially closer to our near-term reality than virtual reality. Uh, augmented is think about kind of like wearing glasses and then maybe having like your Twitter feed off to the your peripheral vision or something just as an example. uh, that that's more of just my production though.

Uh, not something that Warren Buffett talked about. But I do think it's very interesting how he regularly when it comes to analyzing businesses talks about pricing. What is their ability to get somebody to part with their cash and think about the businesses that he pays? that that he owns I mean some of the biggest businesses Apple right? or Coca-Cola Sees Candy These aren't discount businesses by any means. None of them are businesses where people go to them because they're the cheapest.

Consider a company that uh Warren Buffett holds called Niche Jets It's a charter airline company. It is a company that that is a premium service. There are cheaper services for example, like Wheels Up uh, private Air. Charters However, Netjets which is a non-public company it's owned by Berkshire Hathaway in Hull Uh, it's a quality product and it's solely focused on making their customers happy.

now. I've used multiple different Charter services and I'll tell you Netjets is the best by far. it's the best. It's the highest quality.

They're the ones that make sure you have catered food when you come. The other companies don't do that. They have the nicest planes. They have the nicest service.

They seem to have the best. Pilots Warren Buffett Focuses on quality. Uh I mean consider ketchup. Uh, it's such a simple company.

but why invest in ketchup in the eyes of Warren Buffett People are willing to pay for it no matter what the price is such a simple business. Look at his 20.4 stake in American Express American Express caters to the higher income customer, the premium brand. So I think it's fascinating I think he's got some really great arguments in terms of businesses that he holds some of the companies that he invests in I'm not biggest fan of I'm not the biggest fan of investing uh directly in companies uh, like uh. Most specifically, at this point, companies like Bank of America But that may be because when I got started in the real estate business I had terrible experiences with the Bank of America uh, especially after their Countrywide takeover.

But hey, who knows, maybe things have gotten better. Uh, he's also got smaller exposure to some of the Staples like Procter and Gamble Johnson and Johnson uh UPS these are businesses I'm not terribly excited about myself and of course, he's made a lot of money investing in uh, some companies like Occidental Petroleum or Chevron a lot of these companies. the way he's describing them is having potentially pricing power not only because with the fact that we need oil, but also uh, that they're moving into these carbon Tire Capture Technologies and Green Technologies I Will say though, one of the problems with the carbon technology or carbon capture Technologies for example at Austin Dental really is that they're massive money losers. If you look at the annual 10K report for Occidental Petroleum Massive Money Loser uh, you you solely lose money on carbon capture technology and so I think it's sort of.

the companies are doing that to try to appear green to make Regulators a little bit happier, shareholders a little happier. So that way people have a defense and eventually those technologies will be good if these companies have the money to make the Investments and sort of make have losses over there. So maybe that makes sense. but uh, in the more grand scheme of things here I think Warren Buffett has has made a fantastic argument this morning uh on his um CNBC interview that you want to focus on where pricing power is and whether that is a simple product again like ketchup or Coca-Cola or does a premium product like Apple focus on pricing power and ultimately you win.

And that is something that he clearly said without saying it right. That and I think the best example was the his actual quote on streaming which was his actual quote on streaming I wrote it down right here. It isn't fundamentally a good business, you've got some people with Deep Pockets who won't quit. but what they're offering people is for peanuts.

Can they raise prices? eh? that was sort of his quote and I thought it was fantastic because it reiterates so much of what we talk about on the channel and again, anything I could do to compare myself to Warren Buffett I I Don't want to say that I'm trying to Pat myself on the back here I'm not at all I'm just saying I think that is the right path to be trending on Anytime you could be on the trend towards uh, towards where Warren Buffett goes I think that's uh. that is a great starting point. so I'm very excited about that. Uh, so that gives me uh, some admit or that share some opinion on Warren Buffett Let's next talk a little bit about uh, the Fed and let me see here what Wall Street has to say about the Fed so strong by force of head CBI Fed Bond market.

Okay, let's see here. American Aaron says quarterly profit likely below estimates. so we got a little heads up there on American Air that just came in. Okay, so the minutes are coming out today as well.

The Fomc minutes will be out in about four hours. The minutes are likely to show uh, this this price stability mandate we're gonna. These are gonna be the first minutes coming into or coming out of rather well. Hold on, let me check really quick.

Let me see when was the last meeting fonc meeting I think it was the February 22nd. Oh, these minutes are gonna be good. Oh my gosh, let me give you a preview on this. Hold on.

A second here meeting was the 22nd. Oh, these minutes are gonna be fantastic. All right, let's do a quick little preview on on the minutes and we'll do that. There we go.

Okay, quick preview on the FED minutes that are coming out at Uh 2 P.m Eastern 11 A.M Pacific Time Today these are going to be a massive deal because these are going to be the minutes from literally during the banking crisis. So March 22nd was the meeting. The Federal Reserve usually makes their decision on interest rate increases about two weeks prior to their Fed meeting. So in other words, the FED might be making their decision today for whether or not we're going to get that 25 basis point hike in May at the beginning of May May 2nd I Believe that we will now I Believe that we will because I think it would be a good that the Federal Reserve ends up going for a five percent terminal rate psychologically would be good for anchoring inflation.

Uh, and keep in mind that meeting starts on the second, the actual announcement will be on the third. So I just want to clarify that. So I do think the FED will end up going 425 BP and we'll probably see the market continue to price in a slight tilt tow towards that 25 BP But anyway, these minutes will show us how the Federal Reserve balanced inflation and the banking collapses of Silicon Valley Bank Signature Bank and the other banks that collapsed as well and the drama going on with the Regionals uh potential for a bank run how they responded. So what to expect? Here's an outline of uh, what to expect that first officials uh, comparing scenarios for should they keep hiking.

What about quantitative tightening? How do the new liquidity facilities affect quantitative tightening? Is it possible that as the FED balance sheet goes up, they can keep raising interest rates? I mean aren't those counterintuitive to essentially on one hand be printing money and on the other hand be raising rates we expect today in those minutes to see the evaluation of how they came to the decision to make sure to keep fighting inflation and one of the things that I'm going to be looking for in a minute. Or you know, let's make a list of things that we're going to be looking for in a minute. So the first thing that I would be looking for in the minutes is going to be economic strength. That's probably one of the most important things in the market right now is we want to see that the economy still has strength.

The Atlanta Real Now GDP forecaster shows that we're still above two percent for real GDP The FED expects GDP to fall as low as 0.4 by the end of the year. By the last summary of economic projections. what went into that? what data went into their projection that GDP is going to fall to point four percent by the end of the year and I want to see in the minutes what contributed to their fear that GDP was falling and they