Hey everyone me kevin here is the next great depression upon us. After all, we already know that inflation is not going down and did not peak in march has hoped. Instead, it's broadly expanding markets are now pricing in substantially more aggressive action by the federal reserve, with an expectation that the fed could raise the fed funds rate to a high of three and a half to four percent by the end of the year to fight inflation. That would be the highest fed funds rate in 15 years.

Harkening back to what few of us want to compare to 2007 just the beginning of the great recession, but see the great recession could end up being a baby compared to what happened in the early 1980s. Where inflation had been elevated for over six years and people as well as markets had lost faith in the fed's ability to actually control inflation that led to a fed chair, paul, volcker, saying enough is enough and increased federal reserve interest rates. The fed funds rate to 20 percent purposefully getting ahead of inflation crashing markets and to finally prove that the fed was actually serious about lowering inflation. Today, even if rates were at three and a half to four percent, we would still be half the rate of inflation.

Today, inflation expectations are rising, but they're, not yet at the levels that we saw in the early 1980s. In fact, they seem somewhat quote anchored. However, it has been made clear that if inflation expectations run away, jerome powell will have no problem, quote paul vulcaring us and even the last 30 days, he'd mentioned his admiration for paul volcker and talked about how paul volcker did the right thing to bring inflation under Control this is the first time in his career as the fed chairperson, that he has uttered the words paul volcker, which have come to mean much more of a signal of potentially pain to come as memories are brought up of the early 80s than of just simple Admiration, the federal reserve is all about communicating their hints and folks. There are plenty that there's a lot more pain ahead of us or is there see our fed u-turned with the belief that inflation was no longer transitory in november and december of last year, 2021..

The federal reserve said: don't worry, though they had already sold their individual stocks to avoid a conflict of interest, so it was all good we were set to tighten, which meant stock prices had to come down and that they did. Since then, the s p 500 is down 18.4 and the nasdaq technology is down 18. Oh sorry, 28.09 percent. Since the beginning of the year, bloomberg is reporting that s p multiples are down to 40 percent.

That's the similar decline that we saw for price to earnings ratio multiples. As the dot-com era crash note, these are multiples, not prices. Earnings seem to be holding up prices better today than in the dot-com era, where companies were a lot less mature. Today's stock market crash, however, is happening three times as fast as that of the dot-com era, which is giving many hope that maybe the recovery will be three times as fast, especially since the dot-com bubble took some stocks 14 years to go from a top through the Bottom and back to a higher than original price, 14 years, a long time, it's a generation, but the idea that today's stock market might rebound three times as fast because it fell three times as fast might just be.

Hopium see s, p multiples are down about 40 percent peak to trough in may, and the s p pays just five percent in earnings and quote-unquote pays, because this includes dividends and net earnings. That's a fancy way of calculating this, but when the s p pays out just five percent at the same time as we have a fear that we might be facing an earnings recession coming up, which is two quarters of a negative year-over-year earnings growth for companies. At the same time as investment grade bonds are yielding 4.4 percent folks are asking themselves: why take the risk on stocks it'd be better to sit in cash or in bonds? Not all bonds are winning either and if you're actually trying to achieve that 4.4 yield on investment grade bonds, you have to hold through duration. Otherwise, if you're trying to resell on the market, while the bond market's crashing, you can end up seeing the value of your bond portfolio plummet.

But if you hold through duration, guess what happens? You don't invest your money in the stock market while you wait for that yield to come a reality and sit on the sidelines of perceived safety downside for that more pain for stocks. At the same time, consumer credit is exploding at the fastest pace in the last 30 years, which, unfortunately, consumers taking on more credit, especially riskier credit like credit card debt, often pre-signals a recession on top of this mortgage rates and the housing market are seeing pain themselves. Mortgage rates have exploded over three percent higher than where they were in december, leading to an over 30 reduction in purchasing power in just five months. Some are saying: don't worry, the real estate market will be fine, there's too little inventory.

But that's what folks said about the apparel business, which is now saturated with inventory, and if we look at leading indicators for housing. What do we see inventory starting to inflect up and the amount of active listings with price drops rising both the leading indicators that even the founder of the real estate case-shiller index says, may bring back people's memories of a 2008 real estate bubble burst? But that's not the only bubble to potentially burst or to have burst, consider blank check. Spec ipos burst fintech stocks like sofi and robinhood bursting stay-at-home stocks like zoom and peloton getting gutted, some of them down 90 percent from their peaks and despite strong travel demand. Airlines aren't faring much better due to an oil price shock, the likes of which also helped lead to the 2007 great recession, also, inflation being at a 40-year, high trending up and expect it to stay stubbornly high for the foreseeable future in 2022.

Doesn't instill confidence in the market so, if you're fearful about the market, you're right to be fearful and is raising concerns that the fed will continue to raise rates, unfortunately causing bankruptcies today about 12 percent of companies in the s p 500 are considered zombie companies. These are companies with declining and higher interest rate payments alone than they have net income and guess what happens to these companies in a recession often bankruptcy. Consider the multinational personal care company revlon established march 1, 1932 selling products around the world with locations in london, paris, hong kong, tokyo, sydney and singapore. The company has 5 700 employees and, despite a well-known brand, is now rumored to be preparing a chapter 11 restructuring bankruptcy filing this led the stock to fall nearly 53 in a day, followed by another seven percent in after hours in my programs on building your wealth, Including buying real estate to go from zero to millionaire, which are all linked down below with an expiring 50 off coupon code, i'm often asked how can we spot a company going bankrupt before it happens? Well, in this case, it's easy if you read the financials for revlon in their last quarterly report march 31st, 2020.

Two, you would have learned everything you needed to know in less than five minutes here you go. Here's a picture of revlon's balance sheet. In the first quarter of 2022, they reported 70 million dollars in cash and no market securities, the only other current assets they had consisted of prepaid expenses, which is supposed to keep a business operating, doesn't help you pay your interest and inventory which, if people stop buying Or you have to substantially cut prices below, potentially the cost of goods sold makes you have no valuable inventory and trade receivables. Aren't that useful? Because that's money that's supposed to show up within the next year, but it may not.

So basically, they had 70 million dollars in cash in q1 2022, with some hope that other money would come in okay, well, 70 million dollars with hope that other money comes in sounds good right. Well, not if you keep looking see. Unfortunately, they had debt due to be paid of about 60 to 70 million dollars and folks. Those were just interest payments on that debt, which means, quite frankly, they'd be about 30 days away from default if any of their receivables were delayed and even if they did make the payment they'd be facing the same problem.

The next 30 day period, in fact, consider this. They have 11 times as much debt due within the next year as they have cash, and the long-term picture wasn't any better. They have nearly 50 times as much long-term debt as they do cash, but maybe their business would help them survive right. Well, that's unlikely! In the first quarter of 2021, they lost 96 million or about 32 million dollars per month that didn't get much better in the first quarter of 2020, where they lost over 22 million dollars per month, combined with debt expenses of around 60 million dollars per month.

And folks, you don't have to keep looking far to understand why this company is going bankrupt and the fear is that this bankruptcy and the job loss that come out of bankruptcies like this will only lead to a cascading effect of job losses. Then foreclosures in the real estate market, followed by a sapping of consumer purchasing power, as their savings are exhausted, a slashing of prices as inventories drop all while at the same time, the federal reserve could miss the signals of these bankruptcies and inventories rising in job loss, Which would lead to disinflation or substantially declining inflation and instead proceed to hike rates like paul, volcker, pushing us not into a recession but actually pushing us into a great depression again as the federal reserve over tightens. At the same time, we go into an era of job loss, depression and disinflation, and that's partially because the federal reserve's monetary policy actions like quantitative tightening and rate hikes, don't tend to impact the market for 6 to 18 months. If, in 12 months from now, for example, in may of 2023, we have substantial disinflation, bankruptcies, job loss and more foreclosures at the same time as the federal reserve's hawkish actions today start impacting markets and businesses ability to borrow and spend or hire, we could be going Into a depression, hey but quick note, this video is brought to you by ftx.

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So, whatever way you like to trade with start there and make sure you redeem those rewards and again, if you're on desktop, you get to take advantage of that trading view ta, which is just what we need, especially during somewhat bearish times in the crypto market. Right now pay specific attention to the 200-week moving average for btc we're almost there. So if you're wondering why the market has been bearish 38 of trading days this year, featuring bearish price action known as the triple lower low. Well, it's because there's a lot of reason to be fearful a triple lower low by the way is a lower high in the stock market, followed by a lower low, followed by a lower close.

The next day, see lower lower lower triple low and folks. 2022 has just hit a record for the highest level of triple lower lows since 1983. see the market can also have triple highs, and if you take a ratio of these, we can get a positive or negative number. If you take out, if you have a positive number, it means you have more triple highs in the market than you have triple lows.

If you have a negative number, you have substantially more lows triple o's, then you have triple highs. This makes sense and statistically, if we draw a regression line between these, you have a very strong correlation between triple lows and poor annual performance for the s p 500. So in english, if you feel like you're right to feel like the charts say so, and we could be going through an earnings recession right now, without even seeing it. Yet all we have right now are substantial cuts and guidance over and over and over again take, for example, goldman sachs who's cut guidance three times this year.

So far, that's intra guidance periods. Usually companies give guidance at earnings, but if they're continually updating guidance to the downside in between earnings, it means the market is deteriorating substantially faster than expected. Take, for example, target who also had to substantially revise guidance just three weeks after their q1 earnings call where they guided one number and then reduced that number by 60 percent, just three weeks later, for their earnings expected in the quarter or take, for example, docusign a Sas company, with a once once quite brilliant valuation, their stock is now down 58 on the year. They just reported earnings with a billings forecast that was reduced a lot a lot more than we thought a stay-at-home company would reduce their billings for there was this belief that sure state home companies are going to pull forward demand.

Okay, that's fine! That was built into expectations. That would mean lower demand in the future, because it's been pulled forward, but now we're seeing such rampant declines in billable forecasts from the levels where the forecasts previously were many are scratching their heads as this is it. This is probably the start of an earnings recession. Now, earnings recessions do not always have to correspond to an actual recession in the market, but if you're investing in stocks both are bad.

Now, even though consumer sentiment numbers are at the lowest level since the great recession, consumers are behaving kind of weird. Consumers are taking on substantially more debt, they're saving less money than they ever have before since the great recession and, at the same time, as all of these uncertainties are unfolding. Companies like toast, who do payment processing for restaurants and dave and busters, have both told us in the lat in both of their last earnings, calls despite macroeconomic challenges, they're not seeing any indication of consumers slowing down their spending none. So, where do we go from here and how should we invest well, how to invest is obviously very personal, and this can't be financial advice, but some believe that the stock market crash will not exceed the bottom that we had in may of 2022..

That's about the 280 to 285 level on the qqq or an etf that tracks the nasdaq technologies and that the best time to invest is actually now during a potential recession or during the time that we fear a recession is coming. Remember the yield curve, the spread between the 10-year and two-year treasury. That's often seen as a leading indicator of a recession, coming inverted for one day or about 36 hours on april 1st, and so now everybody's wondering. Are we fools to be in this market, or are we fools to not be buying see the favorite quote that often circulates from warren buffett is be fearful when people are greedy be greedy, when people are fearful right now, people are fearful.

Warren buffett and charlie munger are buying, are you buying and, after all, when fear strikes it's understandable to be devastated by the feeling of years of your hard-earned money, literally evaporating on the daily in front of your eyes, we get concerned about eight percent inflation, yet somehow We bear through eight point six percent losses on the daily, sometimes in stocks. It can just feel like your back is against the wall. It's hard to fight a falling stock market, so fight or flight kicks in and since you can't fight flight takes over and people bail, sometimes at the worst possible time, especially since there's no shortage of bears. Who say that things will get worse before they get better and they might be right if we get paul volckerd, he will not want to own any stocks or potentially assets at all.

You'll want cash if we don't get paul volckerd and inflation. Finally, trends down: we avoid a great depression where the federal reserve tightens, as we're heading into a disinflationary drop loss and bankruptcy time. If we don't have those, then maybe consumers might spend less, we might have a minor recession or not, but the fear that we built up today could end up proving to have been the opportunity of a lifetime to buy the bond markets crash will also, in the Meantime likely lead real estate financing to at a minimum correct at worst case scenario, real estate might just crash, though many outside of the home ownership. Realm revel in the idea that maybe they'll be able to buy cheap real estate in the future.

Most important thing: if you're one of the people saying i can't wait for real estate prices to come down, so i could buy or buy more. Most important thing is for you to prepare yourself adequately: get out of debt, increase cash and reduce your debt to income ratio, prepare your tax returns and your finances and get pre-approved for a mortgage, make sure you're depreciating more than you're taking write-offs and make sure you're Doing this, in coordination with a cpa in a mortgage lender, see everyone has visions of buying the dip in real estate, but few prepare themselves today when somebody comes and says hey, i want to buy a three bedroom two bath between five to six hundred thousand dollars. There are usually zero to one properties in that threshold. In my market, for example, now we expect that number to rise based on the indicators we're seeing, maybe we'll get to two or three here in the next couple months, but back in 2011 at the bottom of the real estate market, where everybody's, like oh yeah, when Real estate dips, again i'm going to be the buyer few had actually prepared themselves and if you came and said, i want to buy a three bedroom two bath in this particular area.

I could give you a list of 20 within just one neighborhood and that's why? If you want to learn how to go from zero to millionaire in real estate, investing check out the sponsor of today's video linked down below me and the programs on building your wealth with me in personal course, member live streams where i can help walk you through. How to go from zero to millionaire and real estate via recorded lectures and updated information through our daily course member live streams when the market is open and i'm in the office thanks. So much for watching good luck out there and, let me know in the comments down below, do you believe we're going into a depression, or is this just going to be a mild recession?.