Welcome back to another meet! Kevin Report we are on episode 88 and it is 4 20 which means this is it. This is the lowest of a price you could possibly get for the courses and we're doing a big move up. Uh, we're going to a totally different strategy so the entry price will be a lot larger so if you want to get lifetime access today's but they will do it. But anyway, check out those links linked down below and let's get started with what's going on in the economy.

Um, still too hot. All right. So uh, first of all, Germany slightly raised their 2023 GDP forecast to point four percent, which is still pretty recessionary. but for 2024, they lowered it to 1.6 which is really interesting because that actually suggests that now and the rest of 2023 is more of a recessionary time in the eyes of German economists than uh, than uh, than 2024.

Now a lot of folks here in America are going hey, well, is it possible that our recession could get delayed to 2024.? TVD Right now, the Atlanta Fed now GDP measure which came out uh, just two days ago here about 36 hours ago April 18th is sitting at 2.5 percent. Doesn't feel very recessionary right now, especially with some of the earnings that we've just gotten, especially from American Express We'll talk about that. Uh, you've also got uh, right now. all indices read after uh, some earnings yesterday.

uh, one company in particular and nice little sand bag there thank you very much. Tesla uh and uh. oil as well as bonds. Making Some moves to the downside today: oil again under 82 bucks on the international blend, under 78 for the United States blend.

Looking at bonds back at about 3.54 I Think is so interesting here is the 30-year mortgage really isn't sliding. Uh, in fact, a lot more pain is what it feels like for the 30-year mortgage if you do uh, if you just do a quick little Google and type in mortgage rates, you'll see a little bit of, uh, the drama for mortgage rates. and you can see there's just been very, very little movement, if any, at all in mortgage rates despite the volatility that we've got in the 10-year Market Some suggest this has to do to credit spreads being relatively uh, a wide and widening. uh here.

if you go to the 740 credit score in California, you could actually see the 30-year mortgage. looks like it's about at the highest level that we've seen almost almost all year with the exception of maybe right there at the end of February. So a little intense there on the 30-year mortgage though. still massive lack of supply for Real Estate that we'll talk a little bit more about real estate a little later, then you've got Airbnb Apparently now partnering with companies like Starwood Property Group to potentially let tenants rent their properties on Airbnb Usually landlords prohibit tenants from subleasing, which would be like Airbnb and apparently now some larger apartment building landlords are finding that as a feature to attract tenants.

Now when I hear things like this, it makes me wonder: Is this because rents are starting to fall and landlords are trying to retain tenants? So big question there. if rents are furling and uh, you know, based on projections, we don't expect rents to be rising anymore like they were. Uh, in, uh, at the early part of 2022 is we hope to see this inflation come to housing. But no guarantees yet.

We have not yet seen that instead. Now, we've got to talk about stagflation light. That's right. now we're talking stagflation light.

Yeah, like Miller Lite not Bud Light Because no, uh, you know, maybe like a Diet Coke Kind of like a diet version of stagflation. How does that potentially lead some stocks to fall as much as maybe 87 if we end up in that sort of environment? Well, in this segment, we're going to break down two pieces. We're going to go through what the European Central Bank just said specifically Christine And then we're going to compare what she said to an estimate that just came out on stag relation light. And we're going to compare that to what has happened historically in periods of diet stagflation.

It's not great. now. So far, the Atlanta GDP measures our economy at growing in about a two and a half percent Pace right now, which is great. It doesn't feel very stagflationary, and we've certainly got some incredible numbers coming up the travel segment, especially with that wealthier cohort.

But what if that last remaining leg supporting the table Falls away and the table Falls over and we plummet into starkflationary environment of faltering growth. And then we're left holding the bags on mispriced assets like stocks and real estate. That's possible. And Christine like God gives us a warning as to how to potentially prevent that.

and then we'll compare. If the governments fail and Christina got fail. What we should be preparing for. So first Christine Lagarde's piece: She wrote a piece on essential banks of fragmenting the world, which initially sounds like okay, like why do we care about this Who is this lady anyway? Well, she's kind of like your Jerome foul, except she's the Jerome Powell of Europe Remember, Europe's like the number two currency in the world, so it's a big deal.

We want to pay attention to what they're saying, because, well, hey, sometimes they can give us some insights on potential red flags that we ought to pay attention to. And her biggest warning in the vision she has for a changing World economy is actually quite the following: boom stagflation, a changing global economy. In a time, after the Cold War, the world benefited from a remarkably favorable geopolitical environment under the hegemonic leadership of the United States Okay, in English Yo, things were great. When the United States was running the show, everybody was getting along just peachy.

After the Cold War, we didn't really have that massive of issues. Yeah, we had Regional conflicts in the Middle East, but you know what? Things were generally pretty good. China was still a baby and they were growing up and look how? oh uh yeah. Anyway, so as a result, Global Supply became more interconnected.

We had relatively low and stable inflation, along with long periods of growth. That was wonderful. Oh no, but that period of relative stability? uh oh, what is this may now be giving way to one of lasting instability, resulting in lower growth, higher costs, and more uncertain trade. Partnerships Instead of more Global Supply growth and flexibility, we could face the risk of repeated Supply shocks.

The recent events have laid bare the extent of which critical Supply chains depend on stable Global comma conditions. Today, the United States is completely dependent on Imports for 14 critical minerals, and Europe is dependent on China for 98 percent of its Rare Earth Supply One Recent study Based on data since 1900 finds that geopolitical risks lead to high inflation, lower economic activity, and a fallen international trade which again, Lower GDP would be recessionary or stagflationary. right? Stagflation is an environment where inflation is high, but growth is actually potentially turning negative. I Hate to say it, but you could look at potentially some Americans favorite electric vehicle company and go oh damn I see some negative growth over there because after all year over year earnings per share for Tesla just went negative.

You look year over year at even other growth companies like Nvidia and what do you get? negative I Hate to sound like a negative Nelly But numbers are not looking fantastic for massive growth and unfortunately, there's one thing a growth stock hates. It's no growth that's really bad. So anyway, uh, Christine Lagard him suggests that their analysis comes to similar expectations for the future under geopolitical risks that we could face: High inflation, lower economic activity basically basically stagflation if the global value chain fragments along geopolitical lines. which is a fancy way of saying yo.

If all of a sudden China Russia Saudi Arabia and Iran and maybe North Korea are all buddy buddy and friends and they don't like us anymore. and then all of a sudden we're stuck with you crying. We're screwed. That's basically what she says.

The ECB analysis: A recent ECB analysis suggests similar outcomes may be expected for the future. If Global Supply chains fragment along geopolitical lines. the increase in global level of consumer prices could range around five percent in the short run. What she's saying here is: sticky inflation is possible, followed by lower inflation in the future.

That's a problem because sticky inflation means higher rates for longer than people expect. That's potentially bad for company earnings today. Now there's a way to solve this and prevent this. but right now if we continue through this fragmentation path which again, is kind of like, we get Ukraine You guys get China Okay, we continue in that sort of path and we enhance these trade Wars that we're facing I Mean just today? literally? Just this morning, there are headlines that the Biden Administration is considering cutting off all exports to China or sorry to Russia not just what we've already limited going to Russia, but literally everything.

Well, guess what literally happens every time we sanction something in Russia Turkey and Kazakhstan just end up buying the crap from us and then selling it to Russia out of profit. So in other words, Russia still gets the crap they need. Their economy is still marching forward, but what we do is create more divisiveness between countries and the global sphere and we create more inflation just like Christine Lagarde is warning. Five percent inflation in the short term is a bad thing.

I Don't know why all of a sudden she turned Italian but it would be a very bad thing because we don't want more short-term inflation because again, it means higher rates for longer, higher rates for longer hurts poor people more. because food becomes more expensive, energy becomes more expensive. Uh, wages potentially stagnate. and then on top of that, what are you stuck with? Well, you're stuck with like a tighter consumer lending.

Not for the rich people, but guess what? for poorer folks, subprime loans for Autos are already getting cut off and that kills earnings for a lot of companies as the lower tier of customers becomes basically less capable of being able to operate in this environment. This is why they always say the rich get richer and the poor get poorer. Yeah! So Christine The guy goes on to talk about this multiple world and these new trade Partnerships that can lead to new alliances and blah blah blah blah. And she talks about China and Russia and the new monetary regime.

All right. I Basically already summarized all that. So how do you potentially stop this? How could you prevent this? Well, fortunately, she gives a solution. She's not just that kind of jerk who shows up at the office meeting, crosses her arms and goes nah nah nah not, it's not gonna work.

Nope, Nope. not gonna work well. Do you have another idea? Nope, Nope, Nope. But that that idea.

Definitely not gonna work right? She's actually got a solution and her potential solution is that government has to step in to make sure we do everything we can to remove Supply constraints created by the new World that we have the New World Order. This is a way of suggesting what we're doing is go going through a phase of re-globalization and in order to secure resilient Supply chains. we need governments to invest in making sure that the higher costs of creating these new Supply chains are offset basically with stimulus checks. Now that unfortunately, could in the short term lead to slightly higher inflation, but in the long term tends not to lead to stagflation.

Notice how now in both scenarios, in the short term, you have more inflation, In stagflation, you have more inflation. And if you fix the supply Problems by having government invest, you tend to create inflation a short term. but in the long term, you end up creating less volatility, lower inflation, higher investment, and higher growth. which fortunately, that's roughly what our governments are trying to do now at least in America That's what we're trying to see or trying to see via the chips.

Act 80 billion dollars, which would probably be 3x the size according to Goldman Sachs Same thing for the inflation reduction act. Probably instead of being a 389 billion dollar plan, will be more like a 1.2 trillion dollar plan to basically support the building out of manufacturing in America for advanced chip making sets for green energy projects for uh, electric vehicle chargers for electric vehicles in general, whatever it may be, the government is running the money printer essentially for stemi checks for these industries. That's what the government is supposed to do during this time. according to casino, of course, everybody's going to have their opinion on this and we might still follow the stagflation, which we got to talk about how that could potentially lead to a certain segment of stocks dropping 87.

We'll talk about that in a moment. But first we got to stop Peace. Less volatile growth and inflation will be key to continuing to attract International Investment And this is where she talks about how important it is that central banks coordinate to provide stability for the US dollar as well as for potentially a digital Dollar In the future that this potentially starts a totally different video where everybody starts freaking out over the idea of a Fed coin. Or recently, there was an announcement of an IMF coin potentially in development.

And here the ECB suggests how central banks navigate the digital era, such as innovating the payment systems and issuing digital currencies will also be critical for which currencies ultimately rise and fall. An important reason why the ECB is exploring in depth: our digital Euro Good work, best if lodged. Oh, the digital money is coming. Enjoy the paper while it lasts because then they'll be able to digitally print somewhere money.

But anyway, how can all of this lead to stagflation? And is gold Gonna Save You or is gold gonna get whacked in a stagflationary situation And what stock sectors could do well Tech Growth growth at any cost? What about Staples We're going to talk about exactly that by presenting to you a chart. Now before I explain this shot and then the result of what it could mean I Must remind you that today is 420 which means the price is on the courses on building your wealth go up substantially tomorrow. This might be the end for the lifetime access for the programs that we have. So that way anybody who joins in the future doesn't have that anymore.

So in other words, they'll probably be a really good day to check out by going to meet Kevin.com The programs on Building Your Wealth Whether it's zero to millionaire real estate investing, you still get lifetime access. You get lifetime access to the course member live streams, new updates the stocks and Psychology Money Group Uh Elite Hustlers If you're looking to increase your income as an employee or an entrepreneur, check them out. Link down below: Big deadline tonight up or 420. so staticflation light regime.

We've got to talk about this and what it could mean for particular stock segments. So first, it's worth noting that we're already in an era where growth is starting to falter. Though there are some indications that growth may actually be holding up the Achilles heel to everything right now is obviously inflation. If we don't have inflation, we don't have stagflation because you don't have deflation part.

You just have the Stag Okay, so it's really important that inflation goes down as soon as possible. Kevin's Achilles heel for his Nike Swoosh recovery Is inflation staying hot for too long? We don't want what Christine Legad talked about which is stakey inflation. We do not want that. We can't have that at any cost.

It would be very bad. We needed massive disinflation so we could support the Nike Swoosh recovery. It's going to be volatile, it's going to be painful, but hopefully it is higher and higher rather than and lower and lower. So what do we know about what's going on in the economy right now? Well, once again, like I alluded to earlier, the rich are still doing just a fine.

American Express Just announced that spending volumes skyrocketed 14 in the first quarter when you consider foreign exchange. That was actually 16 growth in spending volumes in the first quarter according to American Express which Services a more premium customer quote. Our customers have been resilient thus far in the face of slower macro growth. gain the lead.

Yeah, so travel and Entertainment according to American Express In other words, what are the rich people up to? Travel and entertainment grew by 39. This is insane. It comes at the same time as companies like Synchrony are seeing more pain for lower credit to your customers. You've got companies uh, like smaller Banks like or even bigger Banks like Citibanks starting to cut off subprime Auto Lenders because they're worried about defaults from Guess whom poor people and the rich people are still spending like crazy fueling spending like this is potentially inflationary.

but it is potentially a way to guard yourself from the Stag part of stagflation. You do not want companies that are stagnating a lot. the companies though, will go through a period of an earnings recession where you will see a couple quarters of negative year-over-year growth in earnings and then hopefully from there the companies pick up the pieces and return to growth. Nike was one of the first to go through it Nvidia has gone through it and quite frankly now Tesla's going through it.

But what do we know about the history of stagflation light and is it possible that this earnings recession stays in Anchor at the same time as inflation remains High much like Casino award. Well, if you look over here, you could see some of the historical periods where we've had stagflation light before, and this is going to lead us into what kind of stocks usually experience the most pain in this sort of environment. So stagflation light environments here show you that you've seen these periods of stagflation in other words, higher inflation which is the white line here. CPI along with anemic growth in around the 1990 to 91 era of the early 80s Paul Volcker era and the second oil rush, the first oil rush of the 1975 era, and then the loose money printing era uh of uh of the late 1969 era.

So we've had this sort of stagflationary environment many times before and there are some stocks that do well in this environment and some that just do really poorly. And so what I've gone ahead and done is broken out a chart showing you exactly this stagflation light fear, which stocks tend to do well and then what we're going to do is we're going to compare this particular chart to what that might mean for the returns we've already seen so far this year because so far this year we have not seen stagflation like pricing. But if we end up needing to see stagflation light pricing, let's just say it's going to be an Sh9t show and you're going to want to have life insurance paid sponsor on the channel By the way that you could get in this wrong button, that you could get in as little as five minutes by going to Metcaven.com life because it's going to be quite painful and there's a particular category that gets the most pain in stagflation and it's not good. So first median asset returns in stagflation regimes.

Here you go in an era of stagflation which is not my base case and would destroy my Nike Swoosh recovery, you can see Staples tend to return the largest benefit. That's your Procter Gamble your Johnson and Johnson your L'Oreal whatever. Uh, these These are the companies that perform the best Staples followed by retail clothing and value as well as foods and inflation protected securities and treasuries that compares to the ones that suck in a stagflationary regime. This was a shocker.

Look at the bottom here of what sucks in a stagflationary regime. Uh-oh Gold Info Tech Technology Machinery Commodities and Cars that's not great. So Cars technology. Well, that's two categories that says middle finger to Tesla and a stagflationary environment: Gold: 15.

To the downside, seems: crazy gold. it's supposed to be a hedge against Bad Economic Times And it's supposed to be a protector against inflation. But according to this Bloomberg piece, gold actually performs poorly in a stagflationary environment. That was, in my opinion, somewhat shocking.

Gold apparently does better in a um, uh, what should we say? a Uh In in an environment of uh, of basically depression or recession rather than stagflation. Now, stagflation can still be recessionary. Problem is, we're just fighting inflation more. So interesting.

Now, what happens when we take that chart and we annualize it, Responding basically to the numbers that we've already seen so far this year. In other words, how much of a correction might some of these segments have to go through? Well I Hate to say it, but look at this. this chart is scary as hell. This chart says oil could rise 23.6 percent from where we are now.

Financials could rise 17.8 percent. Good old Steve and his Commodities and his rocks could end up seeing a 7.3 17.3 rise. REITs are basically flat along with chemicals. Uh, oh, but what do you have down here? Gold down 42.6 percent, technology down 87.6 and even worse, cars.

Oh, negative 176 percent. In other words, Tesla Screwed. So in an environment of stagflation which is one that Christine just told us about uh, you are, um, gonna have a bad time? You're not gonna like stagflation and you could thank her for warning you about stagflation and stagflation light. Now maybe maybe we won't end up seeing stagflation.

Maybe we'll have a little bit of an earnings recession. Companies will end up. uh, you know, coming out of this earnings recession as wealthier people continue to spend and inflation magically goes away like the Goldilocks scenario we're all praying for. So in other words, maybe we just won't have any inflation.

And maybe just maybe the government's stimulus checks won't hurt inflation in the short term and instead will help prevent the global Supply disaster that we're seeing in this mode dibolo world and the fears that we may have of a multiple world. and maybe we just don't end up having all the pain. But if we do end up having the pain of stagflation, let's just say cars gold, Tech Tesla Tech Tesla Tech all sucks and the Nike Swoosh dies. So if you want the Achilles heel for the Nike Swoosh, don't worry, it's just stagflation.

And the nice thing about stagflation is really, if you look at history, it's not like there have been any blue bars and this has happened before. It's not like it can happen again or maybe it's already starting to happen. Yeah, anyway. uh, that's where I'm just gonna go ahead and end the video because that sucks.

and I don't really want to talk about stagflation anymore. Oh yeah, at T shares slump on Q1 results one billion dollars of free cash flow and still missed estimates. Um, still twice the free cash flow Tesla last quarter. not bitter coffee though.

Cook that too long. All right. what's next? Oh is Starship gonna take off right before the Bell How rude. Uh, let's see here.

Starship Flight test I Mean we have to watch it. Oh I'll pull it up. Oh 10 minutes. Okay, we have 10 minutes All right.

I'll I'll pull it I'll put it up. but we have another segment to cover so that's stagflation. We'll watch it together. All right now we have to do oh yeah.

Goldman's response to Tesla Okay, all right, so okay. well Tesla's price cutting end up hurting Tesla And they're earnings Actually went negative year over year, which is absolutely horrible because if you're trying to calculate an average 30 percent growth for EPS for Tesla, you're screwed. If earnings stay negative now, there's obviously still hope that maybe EPS at the end of the year can be positive and hopefully in excess of 30, but the margin hit that Tesla token. Q1 is painful and the reality is Elon Musk made it really clear.

he doesn't really care if they make any money or not on these cars right now. they just want to make them and get them off the shelf because essentially they take more EV market share. But this has led Goldman Sachs to agree that yes, Tesla is taking more EV market share. but unfortunately Goldman Sachs response is a lower price target for Tesla.

Unfortunately, PP is shrinking faster than a skier without pants on in a blizzard. Unfortunately, pricing power is waning and Tesla's once believed super strong margins, while still best relatively in the industry, just start starting to get a little soft and nobody likes the soft PP because we all invest for big people massive pricing power. but unfortunately Goldman Sachs believes that is starting to slightly. Wane Goldman Sachs projects a 185 dollar 12-month price target for Tesla which basically gives you a nominal upside for the rest of the year.

They reiterate some of what we heard in earnings yesterday, but they see massive costs ahead, including the new Factory ramps. Northeast Mexico Obviously, outside of Shanghai, we're going to have a new facility, the 4680 facility. Uh, well, that's the Mega Pack facility outside of Shanghai along with ramping Berlin and Austin, we've got lost a lot of costs ahead and the massive free cash flow missed by Tesla wasn't expected by many I think I was one of the few who's warning that we could have a massive free cash flow Miss But it wasn't just that it was also the margin miss that really hurt now Goldman Sachs does promote Tesla suggesting hey, their energy storage business could actually do really well, especially since they've got the software to really position their energy storage business well. However, their their demand elasticity seems to be fading.

In other words, yeah, they're able to improve Demand by cutting prices. but the problem with that is they're hitting their margins pretty heavily. Now we could look at again some of the potential upsides and this is where I actually wrote over here that in Q1 one of the upsides is Tesla took some one-time non-recurring warranty adjustments and service adjustments. Some issues that they say they no longer face, however, keep in mind they did tell us that margin shouldn't fall under 20 percent.

They told us that in Q4 and what did we get? we got 19.3 margin. so we got clickbait. But another thing that I noticed that Tesla did not do uh very clearly. or at least they didn't clearly outline it in Q1 is they did not break down their FSD beta revenue And it's possible based on what we heard in commentary from the earnings call that they didn't actually take FSD beta recognition as Elon Musk described FSD is basically taking two steps forward.

One step back. No, Revenue recognition here means that in the future they could really end up potentially pumping Tesla by taking that Revenue recognition and getting back to EPS growth. Now it does make you scratch your head because once again, Kimball Musk killed it with the timing of a sales, it seems like Kimball Musk is honestly better than Nancy Pelosi at being able to well time selling Tesla sales or shares. Take a look at this chart here that floats around on Twitter and it shows you a little red circle every time Kimball Musk sells shares he just saw sold about 19 million dollars worth of Tesla stock at the first week of April And once again, it appears as if certainly he didn't have Insider information he just happened to perfectly time.

Tesla Once again now Goldman Sachs is slightly bearish here in my opinion with their low forecast. but they actually give some really dirty low forecasts for the future and I want you to see some of those now. Do keep in mind that they do say on the bull side that Tesla is expanding their current addressable Market They're getting with these lower prices to a completely new market, which in my opinion is kind of like a way of saying hey, Tesla's advertising by creating new network Effects by creating or opening up Teslas to a new lower tier of customer that might otherwise be looking at more expensive other vehicles. This is leading to Tesla's market share in European countries trending higher.

We've got a nice uptrend on Tesla's market share in Europe of the total Bev Not just, uh, not just hybrid or sorry ice ice compared to EV market share. but the battery Electric market share Tesla clearly has the dominance here uh and is expanding. The same is true for Tesla's EV stake in China. The same is true for the battery Electric market in China We've got some beautiful uptrends on Tesla and you ultimately have uh Goldman Sachs here projecting that you could see 16 percent of Tesla's total revenues end up coming from their energy business in the future.

Which is interesting because just yesterday I made projections about Tesla and I wrote down that a total revenue from energy could be somewhere around 10 to 15 percent. I ended up doing my analysis based on 10, but this was similar to what I was suggesting yesterday that I had highly undervalued how much revenue could end up coming from the energy business from EPS Estimates This though scary scary. Goldman Sachs estimates here Goldman Sachs estimates that in 2024, you might see earnings per share at just 3.65 This is pretty dirty because if you end up only assigning a peg of One X to Tesla At that level, you end up with a price target of 91 dollars for Tesla in 24.. that's really bad.

They round that to roughly 90. If you take my peg multiple of 1.67 at 3.65 you end up with a price of closer to 152.. So I'll write 152 at Kevin's 1.67 for a peg. but this is a big downside collapse here for EPS growth.

and we really need to see that EPS growth step up. So this is going to be something we have to pay attention to. Almost potentially more than margin is the fact that EPS growth went negative year over year is very bad because it destroys all the valuation as estimates for Tesla now. I Personally agree with Elon Musk that the Sun comes out next year and yes, all those are hit hard Autos Get hit hard in stagflationary environments Ally Financial Taking massive losses, they're get A lot of auto companies are getting cut off from lending to used cars.

Uh, you've got uh, folks like CarMax taking massive new lost reserves for subprime models. so the lower tier segment of the Autos Market is already trash. and if any of that trickles into, well, the Tesla higher tier territory where you're generally selling to higher net worth individuals who unfortunately are also getting laid off in finance and Tech they can't find new jobs. Maybe a Tesla's not the right answer and this could potentially lead to more price cuts for Teslas.

And that unfortunately is what people are saying is that right now Tesla is an environment of fear where we don't know how much more Tesla's going to have to cut. These were the Tesla price decreases in U.S China and Germany You could see them continue to Trend down on the right over here and the odds are we're going to see more of that going forward that is going to potentially create either a hell of a stock to own or the opportunity of a lifetime to buy Tesla at massive discounts. I Personally believe that if you're an investor in Tesla you need to be prepared to Diamond hand this sucker until at least 12 months from now. Talk to me after Q1 earnings 2024 after those cyber truck delivery start after energy ramps after Austin and Berlin further ramp after we get those Mega packs out and we really start getting to an Era of massive free cash flows again and profits.

Until then, I'm gonna enjoy watching a giant penis go fly into the air via nothing other than of course this Starship launch. So if you want to see the Starship launch, buckle up Because here we go because really, really, Tesla stock is probably going to explode just like this. Starship is probably going to explode I Have no idea what's going to happen I'm filming this live and this takeoff happens in about 50 seconds so who knows what the hell is going to happen. but I Expect a massive explosion and if you invest in Tesla stock, that's probably what you should expect for Tesla stock over the next few months.

although in the long term, that explosion could end up leading to real glory. So if you want to be a Viking, you're either going to have Glory or you're going to Valhalla or you're just dead. Either way, I Have no idea. Just don't get Margin Call Don't invest in margin and let's listen in to this.

Um, what's sure going to be a quite entertaining event. Here we go, let's listen in. Mm-hmm Okay, oh, let's see if CNBC is sound here for the moment. We'll see where they move the clock back to.

They could hold ft minus 40 seconds. They could go to an earlier Point. Give us a minute to listen into the Nets and we'll see if we can get you more information to share. Okay, all right, Morgan Some of that clock recycling gives us a little more time to talk about it.

It does walk us through some of this process here as the engineers get set for the for final uh preparations. So because this is the first ever orbital flight or attempted orbital flight of this system, This Is Not Unusual You tend to see a much higher bar in terms of actually moving forward with a liftoff because it's a new system, it's untested. Elon Musk Has said and said multiple times that there's a very high risk that this doesn't go according to plan and that he will consider it a success as long as this rocket gets off the ground and is far enough away from Starbase and this launch pad. If something happens that it doesn't actually damage the launch pad.

Um, so so this is very it's a high risk High reward scenario. And uh, as I mentioned, the rocket has been built for reusability. but you're not going to see that a year clapping. but the status is still on hold right now can actually because that's the Bell And to see if Starship can actually reach those orbital velocities that are going to be necessary before it returns back to Earth Get the CDC real-time exchange of the big board.

it's the Marcus Corporation and the Barbara Sinatra Children's Center marking April as Child Abuse Awareness Month. At the NASDAQ it is Chicago Atlantic Real Estate Finance and Cannabis Mortgage. We're going to get back to Morgan when we do know more. This is cold as she said guys, uh was always a possibility and I think the window here is somewhere in the neighborhood of an hour.

In terms of where they're where they'd have to think about, they'd be doing it another day. Um, it is amazing. All right, let's listen in here for a second. Let's try this one.

What do we got here? Hold on? Incredibly important company. And then halfway through we're looking at a historic launch that he of course is at the center of as well. Um, we haven't even talked about Twitter which I actually use to listen to the Tesla call yesterday I just went on Twitter and listened to to the call Via Twitter You did that. Yeah, I did.

It's easy I Think you're right I mean you had a throwaway line at the end. uh of the call? hey good luck tomorrow with Starship Yeah you need luck I Mean they come up with like the most important thing that's going to happen in the country today. Because By the way, you know the Chinese historical New York Times about how you know they did. they have no Chrome now they're like starting to line up Brazil we have Musk now I know he does.

he closed trying to phone they. They also would say they have what who's there you won't hear, you'll hear Elon do uh, criticize many things. He's very outspoken I don't think I've ever heard him say anything about China No one really criticized China other than the some of the people who we used to think what this is but now we know from chat. GPT they're happy.

How about this yelling speech? Uh where She says that security worries are more important than economic. Okay, so there's a call that I got up to listen to. Don't even ask why the Taiwan semi-call because the you know the call goes from like one o'clock to 4 30 right? But it's insomnia. Okay and they translate.

But of course let's listen in here for a second. Well, there's nothing to hear. quiet Sleepless Four minutes you tell me. I've been sitting here for four minutes just to see nothing I see nothing Yeah.

I was promised a rocket ship instead I got nothing. Um, all right. all right. we'll keep an eye on this and uh, we'll see what they say.

Let's see here. Let's see. let's hop back over here for a moment. Who else did we defend anyone? Why don't we use what we do in the Philippines with the joint? Uh, action? Why don't we do it with Taiwan Look if they hate us I Mean have you noticed the bread 50 miles away from the mainland? I mean but it's quite this way.

You could swim. you're a big swimmer. She's rhetoric is so horrible that it reminds me of Mal's rhetor. Well, what do we got here? Oh oh, here we go.

Here we go. That's pretty loud and obnoxious. here. we go.

usually they're faster here. Wow. 33 seconds into the test flight vehicle Tower cleared. we're into pitch over the Culson reports.

first stage engines. Novel. What a sight from the ground. Give us a story cutting the space difficult to the period of Maximum aerodynamic pressure.

Okay, it's a velocity increases. The depth of the atmosphere is decreasing, lessening stress on the vehicle to call out next two. Now continuing to watch the first stage as we head downrange 100 seconds into flight. Our next major activities? Just incredible to watch uh with Starship Just chills I Remember when they all made us watch John Glenn get off when I was in elementary school and it was like oh my God We're like we're gonna listen here.

An ignition of the Starship engines. What star step separates We light up six engines in a staggered sequence. This all goes well. Those six engines will burn for almost six and a half minutes.

One more view from Starship engines on the second stage is we prepare for stage separation and after safe separation, the first stage will flip and begin a boost back maneuver for landing in the golf. Continue on the fly two minutes 40 seconds. Let's get ready for main engine cut off. Okay, beginning the flip for stage separation spacecraft, it's going to fall back to Earth for a controlled Landing in the Gulf of Mexico and you're going to see that Starship structure that was on the top of that booster when you saw it on the on the launch pad.

You're going to see it ignite its own engines. It's going to move deeper into space and it's going to start pushing towards those orbital speeds. Uh, in the second chapter of this test flight. So it's been a lot of rolling that this sucker's doing Um, no, obviously no, no Personnel on board.

No, Uh. and there's no cargo this time. That's right. Um, and all of this will lead to uh in terms of the Artemis that explosion of what in the next, say two years.

So there there are going to be many, many tests after this one. Uh. As I noted before, this is a system that is designed to be reusable. They're not testing the reusability aspects on this flip.

That is not part of this question, but you're going to see those tests. You're going to eventually see tests that that do involve involve crew. You're going to see tests around the Moon uh. and if all goes according to plan and there's other things that have to happen too for Artemis.

But you could see this system as soon as. and it's a very ambitious timeline. But as soon as 2025, Uh, basically take astronauts for the Us and our allies from Oopsie Dipsies. an extra test flight.

Yay! We got our Boom Foreign vehicle applied from a Bear of Our control center. at Starbase there's Elon which we refer to as Star Command. As we said before, obviously we wanted to make it all the way through. but to get this far honestly is amazing.

Yeah, that that, uh, spinning there didn't look too great there for a moment. Uh, but uh, hey, you know what? Tesla is only down 6.7 Let's go Pump It Oh, it's comedy. All right folks. We got uh, more to talk about here.

So uh, let's uh, let's move on here. All right. So very cool. Next topic to talk about.

We must talk about. Oh yeah, this is a good one. Oh yeah, Oh yeah. uh.

All right yeah. this one's fun. All right. Yep, well there's your explosion so let's rock this down.

And uh, All right. Well, once again, everybody is speculating about the real estate industry and specifically the commercial real estate segment, because nobody wants to go back to offices. According to Bloomberg, about 50 percent of office space in use today is empty, and that's potentially a new normal, but it creates issues when 92 billion dollars of non-bank specifically office debt matures this year, which needs refinancing a potentially substantially lower prices. Some brokerages are estimating that there will be 330 million square feet of excess Office Space by the end of the decade.

And just to picture what a million square feet feels like, think about an average Mall being around a million square feet. Now picture 330 of those and fill them with cubicles. That's how much empty office space you might have. That's a lot, so it's leading a lot of people to believe that.

Oh well. we could probably just rebuild those office spaces into condos, right? I Mean, why not just take the condos or or the office spaces and turn them into condos? You know we need more housing, so why not solve the housing? Problem by doing just that? Solve the housing problem at the same time as dealing with all these vacant office spaces. And the New York Times has done a phenomenal piece on this. The New York Times analyzed just this, and they found that there are certain shapes of buildings that are really conducive to doing this.

now are all from a particular era, which is great. They have these shapes that look like this: They have eight shapes, o shapes, C shapes, U shapes, eye shapes, and L shapes. These buildings are really conducive to being turned into office spaces because they're close to Windows and they have a lot of availability of space so it's easy to turn these buildings into condos. or Studios look.

for example, if you have a solid like a a slender, a skinny Building look at this for example. Let's say this was a typical small office building where maybe it was a 10-story building and you basically had little offices off the left and right. You had maybe be a receptionist window and then an office and then you had shared bathrooms. These kind of buildings are very typical for the late 1920s sort of the pre-war era office building where you had little suites as you could see here and these Suites are perfect for turning into guess what homes.

Two bedroom homes, one bedroom homes. Fantastic. As you can see here, looks functional right? You created one, two three four five, six seven, eight, nine, ten, eleven, eleven different units that people could live in out of what used to be offices. That's fantastic.

Unfortunately, something happened that makes these sorts of conversions which look pretty nice and usable for Manhattan a lot less functional for today. And that's unfortunately because we changed the architecture of our buildings substantially. instead of having these older 1920s Style buildings where you had smaller windows that could actually operate and open and they weren't that wide to where a lot of space was close to Windows which could easily then be converted into condos. What did you end up getting after the war? Well You ended up getting apartment or should I say Office Buildings That ended up looking a lot wider.

See, here's your typical 1929 building. that's cylinder that that's slim building I Should say that makes it very easy to on one side put a condo and then on the other side put a condo and then you have a hallway in between. Easy right? This is your typical 1929 building. Well, what unfortunately happened after that? Oh, 1959 post-war damn the thing.

Got a whole lot box here and all of a sudden it's really difficult to put a condo in the middle of the property because now it has no window space at all. But the problem just got worse. In 1974, the buildings got even wider. You can still see that same footprint for condo over here in the middle of nowhere.

No window space. Not great in 1974. Another example here. Willis Tower in Chicago Here's a 1983 example in Houston Same problem.

Here's a 2020 example from the 50 Hudson yards property. Even worse of a problem. Now, this is typically how these are generally laid out. You have a crap ton of office space and cubicles.

You have an open workspace. That's what everybody wanted. Before the pandemic, everybody wanted a bigger trading floor, a bigger co-working area. People didn't want small offices anymore.

So what came to office? everybody's like look we got AC we don't have to be close to Windows we got fluorescent light bulbs we don't have to be close to Windows Heck now we got LEDs Let's just have a massive open workspace and everybody could work together all happy. Well, that's wonderful and that's the trend. We went on for like 60 years. Then covet hit and what happened? Yeah, we just don't like offices at all.

So now you're stuck with these open floor plan buildings where you really have to do a lot of rejiggering to make these. Office Buildings functional and it's very difficult Now it's possible to do it. The New York Times shows an example of how it was possibly done. Here's an example where you have the original floor plan followed by a potential after floor plan where you create a courtyard in the middle to create more light.

but unfortunately that courtyard is just people looking at other people's windows. You don't really have a view of anything, but you do get some natural light. You basically have to hollow out the center of the building if you can do that. structurally.

and now you can create condos, but you end up creating some funk like look at this. Look at these weird zigzag walls that you have to create because of the way the existing Plumbing electrical systems and most importantly, the structural beams end up sitting so you end up having structural members in the middle of bedrooms. You end up having funky floor plans and it makes it really difficult to convert these old Office Buildings into something functional. And so the New York Times makes the argument that many unfortunately of these Office Buildings are potentially just going to have to be demolished Again, you've got a lack of Windows in many of these, a lack of operable.

Windows You know when you see like floor-to-ceiling glass skyscrapers? Well guess what happens with those suckers? You can't open the damn windows and you can't open the window. What do you not have fire escaped so you don't have a functional opportunity to turn it into condos anyway because you don't have two points of entry and exit. The problem deep. Interiors These open Office floor plans when people don't want offices anymore basically means when it comes to offices, you've got a lot of toxic assets.

Now, there are a lot of fears that the toxic Assets in the office space is going to end up leading to. Contagion will end up seeing the residential and Commercial sectors that is multi-family single family, retail, industrial, and all real estate values compressed and that'll ultimately be for speculation in a separate video. But what we can say is, when it comes to offices, converting offices is going to be a whole lot harder than it seems. Yeah, Can we convert 1920s buildings? Absolutely.

Can we easily convert some of the 60s, 70s, 80s, 90s, 2000s buildings? Not so fast. So we're going to have some massive problems. And so in my opinion this idea that, ah, no problem empty offices just convert them to housing. Easier said than done.

And if anybody's ever gone through permitting, you know that office space doesn't require the same standards that residential space requires. In fact, a lot of office space in many states don't require fire sprinklers, but residential space does. Residential space Also often requires more intense seismic requirements because people might be asleep when disaster could strike, whether it's fire or earthquake or other. Otherwise, that leads to more intense engineering standards, which some buildings just won't satisfy.

and so that creates a massive problem for the office real estate space. Probably the last place I'd want to be right now is owning. Office Buildings And the idea that companies with money can just go in and start converting Office Buildings Probably highly unrealistic. What is very realistic though, is you gaining the lead by checking out the programs of building your wealth? Link down below.

We've got a massive coupon expiration today on 420 at the end of the day 11 59. We are going to be moving to a completely different structure where there won't be a low-cost entry anymore. So if you're looking for a low-cost way to get lifetime access to those live streams, make sure you join today because it's going to be getting a lot more expensive and the barrier and entry is getting a lot larger. So check out those programs.

link down below and when it comes to office spaces sorry, the idea that we can easily convert these probably relatively unrealistic. Despite everybody hoping for more housing, the housing shortage should probably continue for a long time until governments finally wake up and make it easier for developers to build more homes faster and still at quality standards, But that might be too much of a feat to accomplish. So in the meantime, housing shortage likely to continue while office tanks. All right, a couple more things to cover here.

Uh, oh yeah, here it is. This was crazy. All right, let's write this down. Uh, all right.

So next up, All right. Well good old Joe Biden and the Biden Administration are now bringing affirmative action to real estate. Maybe not directly, but to some extent. Yeah, there is now a new announcement out from the Biden Administration that listen to this: they are going to hike payments for good credit home buyers to subsidize higher risk, low-income minority borrowers.

That's right. So if you've done right with your finances, you have a higher credit score and a higher down payment. You're now going to have to pay a higher monthly payment to subsidize people who just didn't operate their finances as well. On one side, people are arguing hey, well In fairness.

maybe you had the better opportunity to go to a better school because you were in a minority. On the other side, people are like f that I worked my ass off to get where I am and I shouldn't have to subsidize somebody else. That's the government's job, not my job. Government should be making it more expensive for me to operate because somebody else didn't do as well.

Well, that's exactly what's Happening Here Home buyers with good credit scores will soon encounter a costly surprise. The article speaks: home buyers, uh, will be forced by a new federal rule to pay higher mortgage rates and fees to subsidize people with risk your credit profiles who are also in the market to buy homes. Effective May 1 The Fhfa, the Federal housing and Finance Agency will push for more affordable housing and they will enact what are called loan level price adjustments to make it more expensive for you if you have a higher credit score. Here's basically how that works.

Basically, the way it works is usually when you go into a bank, you might see something like this. You might see. Okay, if you have a 740 credit score, we'll give you a rate of 6.5 Okay, you have a 720 credit score. We'll go ahead and give you the 625 or the 6.75 But we're going to go ahead and hit you with a loan level price adjustment of 20 basis points, right? You have a 700.

You might get that 6.75 plus 0.40 right? And this is usually the kind of metric and I'm making this this metric up. but this is just to make it simple math kind of what it looks like. when you go qualify for a loan every 20 points your credit score is lower. You tend to have to pay a little bit more of an interest rate.

Uh, and you either pay this in a higher interest rate or in higher points. So it's either rate or points. points are basically the loan fees that you pay. So these basis points could be part of your interest rate or they could be part of the points you pay.

And usually you get the best pricing at 740.. But basically what the Biden Administration is now trying to do is they're trying to distort the normal way this looks and they're basically trying to say hey, if you have like a 740 credit score and you're doing the right thing, you're putting 15 to 20 percent down. You were going to take those Rich borrowers and we're going to potentially charge them forty dollars a month on a 400k property. We're gonna give them a low level price adjustment.

We're going to charge Whoops. We're going to charge those people more money. And as we charge these rich people so to speak, even though they could be first-time home buyers too who just got off on the right foot or or are trying to do the right thing, we're going to charge them more money because that way we won't have to charge these people more money, who are more risky, who have a riskier credit profile, who should be paying higher rates because they're more risky. But the Biden Administration says no.

We don't want the free market to charge riskier borrowers more money. We're going to charge the safer borrowers more money because the riskier borrowers are more likely to be Black Or Hispanic and the higher credit profile borrowers are more likely to be white. So because we want more racial support and racial equity and we want to guarantee more equal results for people rather than just equal opportunity. given that no matter what your race is, you have the Equal Opportunity of getting transparent pricing based on a higher credit score rather than letting the free market do its work, the Biden Administration would prefer to just charge richer, more predominantly white people more money and give that to the riskier borrowers.

Now that's my explanation of it, but let's just go ahead and see that example in writing from the the Uh the research piece here which has mortgage industry Specialists say home buyers with credit scores of seven is 680 or higher will pay about forty dollars more per month on a home loan of four hundred thousand dollars. Home buyers who make down payments of fifteen to twenty percent will get socked with the largest fees. Now do keep in mind in my example, just to make it a little bit more clear I have implied that 680 was closer to the bottom. Keep in mind you could buy a home all the way up to like a 600 and 580 and 620 credits go up.

So maybe I should have drawn this all the way down here and basically said this, Whatever, it's the same thing. The point is, the higher credit score people and the ones putting 15 to 20 down, they're going to pay the largest fees. The new fees will start for people who buy or refinance refinance as well after May 1. here it is an individual in the Bay Area who works for Bay Equity Home Loans who says these changes don't make sense.

Penalizing borrowers with larger down payments and credit scores will not go over well. And it's also confusing to Borrowers And here's someone else: the President of the National Association of Realtors Uh, it's a big position here who says in the wake of three percentage Point increases in mortgage rates now is not the time to raise fees on any home borrowers and the Fhfa says that the fee will increase pricing support for borrowers limited by income or wealth. They say the overall charge is minimal I Hate to say it, but every 40 bucks with how expensive things are, every 40 bucks is a little more than minimal. Think about it.

That's about five hundred dollars more per year. That's basically making home ownership more unaffordable For the people who made sure they had the best credit score, the best income. It seems like a slap in the face to people trying to do the right thing. The agency is also instead now going to delay a fee for people with higher debt to income ratios.

So in other words, they're burning the candle at both ends of the stick. They're basically saying, okay, people with higher debt levels were not going to charge them more money. We're going to delay that fee until August for people with more debt, and instead people with less debt, higher credit scores, and more down payment will charge them more sooner. So in other words, the goal here is to subsidize risky or riskier borrowers.

Listen to these segments: The fee changes are intended to subsidize high-risk borrowers by imposing an intentional disruption to the traditional risk-based pricing. Exactly, it's the rich paying for the poor. Why is it? And it's not even fair to call rich people. First time home buyers putting 15 down.

They're not rich. That's just the way they're trying to cast it. So maybe I should stop saying it. It's more the financially, uh, potentially capable versus the incapable I Don't know.

Anyway, why was this done? The answer was simple. It was to try to narrow the Gap in access to credit, especially for minority home buyers who often have lower down payments and lower credit scores. I Wrote: this is basically affirmative action for housing. You're basically saying hey, if you're black or you're Hispanic or you're a minority to some Next Step you get easier access to home ownership and if you're white, you get worse access to home ownership which is basically what happens at comp.

or or should I say schools like Harvard or Ivy Leagues or a lot of colleges where colleges say hey, the test scores we require from a white male are higher than the test scores we require from a blackmail. Okay, the thesis is that that should be sort of a way to repay for prior struggles. Uh, that. uh, black families Or Hispanic Families may have had because maybe they grew up in a more poverty-stricken area which had worse schooling, worse opportunities for jobs, worse internships, worse job growth opportunities, or mentorship opportunities worse.

Financial Education My response to that is all of our schools mostly suck. Most of them should be revised with substantial Financial education. And rather than trying to fix the problem here, why don't we go to the Root Cause? And rather than screwing up the economy, why don't we go to the Root Cause and start actually spending more to fix our schools by instituting Financial education programs in all of our schools. But start with the poorest, fix the schools in the poorest areas first, then introduce more financial education the poorer areas, and start actually fixing the root cause rather than trying to bandage the problem.

But no, no, the government would rather do this. She once again is backwards, but it's probably a way of attracting voters and the Democratic base. Anyway, the Gap in home Ownership opportunity is real is the argument on one side that hey, maybe this will help lessen the gap between home ownership. And it's true: white individuals own substantially more homes than black individuals.

Black individuals are much more likely to be tenants than white individuals. And unfortunately, when it comes to net worth, We know this because I teach it on my channel regularly and I have courses on building your wealth specifically zero to millionaire real estate investing. We know that the average net worth of a tenant is somewhere around 180 or sorry. uh, the average net worth of a homeowner is somewhere around 180 000, whereas the average net worth of a tenant is somewhere around a paltry five thousand, six hundred dollars.

So you have a massive disparity between net worth between homeowners and tenants. and, unfortunately, uh, home ownership is Out Of Reach for some folks because of their jobs, their debts, their credit scores or otherwise. But the Biden Administration solution here seems to be to reward poor financial decisions rather than going to the root cause of the problem. maybe providing more opportunities in school and more education for people in school than trying to bandage the problem like this, which just ends up creating more disparities in the free market economy of home ownership.

In other words, people who are saving more money shouldn't be punished for having a better credit score and having saved more money than individuals who have a worse credit score. It seems backwards. It actually feels anti-American To say that the people who worked the hardest to have the best financial standing should pay the highest fees feels backwards. But then again, the other side is making the argument that, well, In Fairness Because of like affirmative actions style policies, This is what we want to do.

That's what the Biden Administration is up to. So think about that and take it for what you may. All right? Uh, what do we have over here on CBC And then we get into the course of your life. Let's listen to this.

Teachers are pulling back at just 17. They had been as much as a quarter of the market last summer. Back to you guys, right? just adding to a string of data. Mrs Diana Thank you very much.

Stocks under pressure. So uh, investors now just 17 of uh buyers for Real Estate compared to 25 a year ago. That's interesting. Uh, I'm not a surprise though, seeing investors sort of back off real estate right now.

there's a massive lack of inventory. Let's listen in for another minute here and let's get to the course member live: I've been cutting prices and cutting prices so many times I think six times this year and yet it still came as a surprise to see those margins, especially the automotive gross Market margins including leasing under 20. That seems to be a point where analysts were wondering, hmm, do we really? are we really on board with this strategy? Yeah, uh. gross profit? uh, per per unit basically is back to 2019 levels.

At this point, we're in a situation where it's like, who has the highest pain tolerance, right? If you're going to grow volumes uh, who can produce it cheaper and and maintain lower prices for longer? And he's not just competing against uh, us, Oems guys, it's going to be the Chinese as well. especially in your Europe yeah, and in the Chinese market. Uh, which we've talked about. It didn't come up on the call quite as much as we might have anticipated, perhaps.

but uh, uh. Fierce competition there, of course. Chinese domestic brands starting to take a