Welcome back everyone to another episode of the meet. Kevin report we are live with Episode number 57 should be an entertaining week this week. we've got existing home sales coming out tomorrow along with mortgage applications we've got on the 22nd. The day later the Fomc meeting, we are expecting that 25 BP hike going from a point uh, or a 4.5 to 4.75 on that lower bound.

That's the expectation. Now we are looking for uh, some durable good orders and then we'll get Pmis on the 24th as well as manufacturing activity on the 27th. Really biggest Catalyst this week obviously going to be the Federal Reserve as well as what happens the banking sector. So the banking sector exactly is where we kind of got to start today.

Uh, so let's go ahead and get started there. But remember, every All Eyes pretty much are going to be on the Fed's reaction to this as if they somehow have some sort of magical Insight uh and why? I Don't really think they do, especially after the last, uh uh, the last many uh, years of uh, oopsie dupsies and faux pas. But uh, hey, you know what? it'll still be very entertaining, as will the potential uh, arrest of the big BT Uh, although we don't expect that to be on Tuesday anymore, that could end up getting delayed, so we might touch on that a little later as well. But for now, let's talk Banking and what the heck is going on in markets? So it's official Credit Suisse is being acquired.

but uh, what does this mean for potential recession? And what are charts telling us that's probably the bigger issue? Let's look at exactly that. So First Things First Financial Conditions: As of this morning here on: Monday Nice and tight. We want these to remain tight. The tighter these Remain the less the FED has to do because the market does it for them.

This is what you want. This is a combination of not only bond yields lending tightness, what's going on in stocks, but other Financial assets as well. It is the Goldman Sachs Financial conditions index. Compare that to the five-year Break Even which is also very important because we do not want to go back to unanchored inflation expectations.

What do we have here? Uh, stable? Drop over here. Last we checked we were we had just fallen and now we're holding stable down here. You can see we're almost at the same level levels where we were right before January January Well, let's see here. I Guess Well, no, this would be this was within January This was about the second to third week in January Right here here's your January window.

there's your Feb Here's your March There we go. So right before we start getting that hot January Data: We actually hit a pretty low level here. Now where we sit now. excuse me? Uh, where we sit now is, uh, nearly at that low level.

Uh, which is good because we really want to see this. 2.18 get to somewhere around 1.6 Which is around where we actually expect the Federal Reserve to cut. So think about that for a moment. If we could get this 2.18 down to 1.6 then the Federal Reserve might actually cut.

These are the two charts they're really using to drive everything Now, of course, the banking crisis is driving these two charts, driving inflation expectations to come down because markets are starting to expect that a recession is more likely to occur, especially because of the banking crisis. Now, more banking crisis, tighter lending standards, which means more likely ahood of or a greater likelihood of recession. Now, what about this Credit Suisse debacle That happened? Well, let's just say, if you want to learn how to lose 80 percent fast, the Saudis can teach you exactly exactly what to do. Now, even though they say don't worry, we're fine, This is not a good look for the Saudi uh private investment fund or the Uh.

quite frankly, the rather, the Saudi National Bank not the private investment fund, It's the Saudi National Bank. A little different. The Saudi National Bank took a 1.5 billion dollar stake in Credit Suisse in November. They bought those shares for three dollars and 82 cents.

Uh, actually, that's 382 francs. Let me be clear, with that, dollars slightly higher at about five percent to convert to Dollars. Anyway, Uh, those are now only worth 76 francs per share. Uh, or 76 Cent francs Point 76 francs per share.

Here we go. That's how to say it. That's an 80 loss in less than five months as a UBS is acquiring Credit Suisse for a bargain, the entire one 166 year history for Credit Suisse comes to an end with this. And what's actually remarkable is even though there's an 80 loss for someone like the or an institution like the Saudi National Bank in this Credit Suisse acquisition, it's actually even more wild is the fact that usually Equity gets written to zero before you actually start seeing Bondholders which are generally deemed to be senior debt holders get completely written off.

But that's not what happened with the Uh Bail Inable Bonds We talked about these a few days ago, so we'll keep that discussion on these shorts since they're a little complicated, but there are these fancy things called At1 bonds. They're nicknamed bonds with a grenade attached to them I Know that doesn't really roll off the tongue, but that's kind of what people call them because they're really high yield, but they're also potentially explosive. Now, we just had an about 17.3 billion dollar write down of those. In other words, these Bail Inable Bonds were written down from having a value of somewhere around when we last talked about this on Thursday 66 cents.

Uh, for each dollar of bond uh, that that existed to zero. So in other words, they were written off completely as worthless. That's 12 times larger than any other bail inable bond Extinction ever. So oopsie, dupsy.

Nobody was really expecting that these would get written to zero and Equity holders would still be held up. Now there was a lot of talk that these at ones were going to get written down. that's why we covered them last week. However, usually you have to respect Capital structures and seniority on cap table.

So basically if there's a preferred Bond or an At1, usually those are supposed to see liquidation profits before Equity like the shares. but that's not what happened here. And when these uh, the institutions were asked about this by Bloomberg uh Apparently there was a big pause and everybody's kind of like a you can almost hear sort of like a gasp in the room. and the response apparently from Regulators are is he's just as a baby.

Do it. Yeah So I I guess uh, that sets a little bit of a new standard for uh, the way people lose money in Europe uh This Is Why By the way, like long and short Out of all of this, because let's talk more about implications on how that affects us. long and short. Out of all of that, it's one of the reasons why I don't like investing in foreign countries because they do stuff like that that isn't dare I say normal like it, you know I don't know what Chinese Regulators are going to do or European Regulators at least I know and can take comfort in the fact that our Regulators in America are incompetent and basically can't get anything done most of the time because it's too bureaucratic.

Uh, but but in general we tend to like have have a respect for at least things like that. uh, the seniority of the way. uh, that you are supposed to lose money. Uh, but anyway.

uh, it's kind of I guess the Beast that you grow up with and get familiar with, uh, that you end up being most comfortable around I don't know. Some people call that a home bias I just call it uh, I I I I get the American there a little bit more even though I was born in Germany Uh, but that's not Swiss either. Anyway, all right so people were hoping that this was going to contain some of the recessionary drama and panic and fear that's been circulating. Uh, well.

apparently it's not really helping, especially since you're still seeing a run on Regional Bank stocks. For example, look at First Republic Bank Oh no, it's down another nearly 17 percent in pre-market Here's Credit Suisse down about 57 in pre-market That makes sense, because that's about where it's being acquired. The acquisition price you would have to convert this is again, 0.76 francs. 0.76 francs to USD works out to about 82 cents per share.

It's actually trading at about 86 right now, so a little bit of a dislocation there in the pre-market then we've got UBS UBS is actually up one percent in the pre-market Uh, this has been pretty volatile though at UBS about an hour ago was down about six percent in pre-market so the Market's still trying to digest exactly what's going on. Well you do have to keep in mind though is UBS it sounds at least like is getting a pretty Banger deal. So listen to this. They wrote the deal expecting to take nine billion dollars in losses.

Now that sounds crazy like why would you buy a deal expecting to take nine billion dollars in losses, potentially up to those sort of losses? Well, in my opinion, it's the same reason you would buy a fixer-up or house. except there's a beautiful government guarantee that makes this even more beautiful for them. Listen to this. Imagine you buy a fixed up or house like I teach in the zero to millionaire real estate investing course, right? You buy a fixer-upper house for 400 Grand in a 600 Grand neighborhood and you're like I'm comfortable putting in 50k of work.

Okay, well, what if there's another 200 000 of foundation work that you just weren't aware of, right? That would suck. But because the deal is having to progress so quickly to prevent Financial contagion and the entire banking sector from freaking out even more. This this government is saying: don't worry if you lose any more than that 50k in their numbers Nine billion dollars We will cover you on your next 15 billion dollars in losses. So in other words, yes, UBS is technically picking up a toxic asset, but they're doing so knowing that they're taking a write down of up to Nine Bill.

but that's that's already built into their purchase price. They know that. And then for the next 15 billion dollars in losses, they Gucci the government is picking up that tab. Which means yes, the taxpayers over in Europe are picking up that tab.

potentially. so now they can argue. Oh, right now, taxpayers aren't paying for anything. Yeah, right.

That's what they always want to do. They always want to dress it up as no, don't worry, we didn't spend any tax money today, but for tomorrow, we may have just signed up for a lot of potential losses anyway. So that's how this is working with UBS Which is actually really interesting because if you think about it, it's probably a very opportune time to make these sort of banking. Acquisitions And think about it, a bank is about to go bankrupt and Regulators are freaking out.

Much like with uh uh with the First Republic Bank the FDIC couldn't find a buyer at their first auction. Now they're running a second auction. Bids are due Friday By the way, in case you want to put some bids in on a you know, a billion dollar Bank Uh, bids are due Friday But anyway, the FDIC is frantically looking for a buyer for this. Uh, it's actually right.

about four billion dollars right now and they're hoping that they can close that sale quickly. Same thing that happened with Credit Suisse because they want to minimize contagion. Uh, the longer it takes, the more a signal is sent to markets that these banks are extremely toxic. and the more The Regulators have to sweeten the pie.

I Mean look at how much I had to sweeten the pile up high with UBS Well, same thing here with probably First Republic Unless it's a really sweet deal, why would any private institution go for it? The people who have to make up the deal to actually make the numbers make sense are probably going to be taxpayers via The Regulators Anyway, this is really important because it could affect how deep of a recession we go into. And of course, Mike Wilson overhead Morgan Stanley Being the bear that he is and that's okay, it's okay to be a bear, We could still like you. Uh, Anyway, being the bear that he is, he's very unhappy about this banking crisis. and he's screaming that this banking crisis is really going to be exactly what we need to accelerate the R word.

the recession. Now he starts off by trying in his latest piece. here. he starts out by trying to make this argument that this is not quantitative, quantitative.

whatever easing. Uh, and we've talked about this many times before. But in short, the idea is that quantitative easing is is a process by which we permanently expand the Mo the money supply. Whereas what's happening now is many central banks are providing liquidity via loans.

In other words, it's technically supposed to be paid back. But the reason it feels like QE right now is because and I Wrote this little note on the side over here is because, technically what you're doing is when you digitally print, let's do it like this: There we go. When you digitally print money. remember, the FED digitally prints the treasury physically prints anyway.

When the FED digitally prints money, and then they transfer a loan to a bank or an institution, they're really providing the ability for that Banker institution to provide cash to depositors. That that temporarily has the effect of increasing the money supply until that money is paid back, and then the money supply in theory would come back down. So really, what you have is it's technically not QE It's technically a transitory expansion of the money supply. Yeah, so in other words, uh, yes, in the short term, there is some a money printing that does end up flowing through.

Uh, However, however, there is this potential that the velocity of money actually goes down when the velocity of money goes down and people are fearful. and they invest less. They buy homes less they spend. they buy less cars.

They take out less debt. Well then you could walk into a recessionary environment and this is where Morgan Stanley's Mike Wilson suggests. The pushback we've been receiving for our basically bearish complaining has consistently been that the hard data has been holding up and companies are not seeing the Slowdown that's being forecast. However, now we have the elusive Catalyst that should lead to the convergence of hard and soft data.

In other words, basically what they're saying is hey, we think this banking crisis is finally going to lead to that earnings recession that we've been talking about. The reason we believe that is because lending standards are going to tighten and that increases the risk of an actual credit Crunch And that does not bode well for growth. See usually when credit standards tighten like right Here we could see the Blue Line This is an inverted curve so the tighter things go instead of being up, the chart is down and they do that so they can align it with GDP to show when GDP goes down. So they invert Bank tightening.

But basically the lower the blue line goes, the tighter lending is. and you could pretty much see in this chart that goes back to the early 90s that every time the blue line goes down, the yellow line comes down with it. That's real GDP Now, one of the downsides in my opinion of using real GDP in this analysis is we are in a high inflationary environment, so we could actually be at a let's say, one percent GDP next year. Uh, you know we could have a growth rate of 0.5 or one percent or whatever, and usually GDP is inflation adjusted.

Okay, worth noting, but the point is, you could actually have nominal growth. But because we're in such a higher inflation and inflationary environment right now compared to what we've seen at any point in time in this chart, Notice how the 70s and 80s aren't included here? Uh, maybe maybe that quote unquote this time could be different, which is a dangerous thing to say. We know that, but of course it's just something to consider. Uh, but anyway, their argument is here.

Generally, the yield curve steepening is the painful period of time. And and it's true. Usually stuff breaks and the yield curve steepens. and that's basically what we're seeing right now.

When you look at the twos tens, you can see that the spread has actually narrowed. That's called a steepening. And it's not the inversion of the yield curve that's generally painful. it's the subsequent re-stepening.

And that's because everybody's starts panicking, stuff gets broken, all the Fine China falls off the shelves, everybody loses their poopsie dupsies and stops spending money, and then you actually end up in a recession. This is the two tens curve, by the way. right now. Uh, and you can see how inverted we got just walking into the banking crisis ridiculously inverted.

Uh, and and now you're seeing this sort of steepenating and it's that subsequent up that tends to be very painful. So that does actually reiterate historically. what? Mike Wilson argues here. So, uh, but of course you know stocks barely moved last week.

Uh, in some cases, they actually rallied last week's last week. And uh, Mike Wilson argues that this is because we've now quote re-liquified the banking system and that money is going to flow into the economy for a brief period of time. But that's not going to matter because soon enough, that is going to lead to the realization that, wait, now the banks have more debt, not more free money and that's going to make their leverage ratios lead to even tighter lending standards. And then earnings basically come down.

Mike Wilson's biggest argument is that earnings aren't going to hold up at the S P 500. and he says that over and over and over again. But it's just really entertaining to see him lash out because he's always lashing out and maybe he'll end up being right. but he's always lashing out because it seems like the more he lashes out, the more the market doesn't actually fall.

So, and since obviously I tend to take the bullish position at least at this phase in the cycle, I'm taking the bullish position. I Flip-flop a lot though. Remember, you can always follow every one of my flip flops by subscribing to the channel or using that coupon code that expires in two days for the Saint Patty's week sale. But anyway, look, I mean this is your QQQ right? We broke the massive downtrend.

we regularly bounce off the 200-day moving average from a Fib support. Short Line If we break 311 right here after this next Fomc meeting that is, let's say we get our 25 BP that we're expecting. and then J-pal comes out and he's a little bird pecking on the floor like a dove. Uh, and and you know he's he's super sad or like concerned, risk assets will probably rally.

uh I mean we're already seeing that in Bitcoin but we'll talk about that in a little bit. but uh, you don't actually see despite all this banking Madness Any real pain, at least not in the NASDAQ over here. That could be because so many people are just sitting this out on the sidelines, which is fantastic for the people who are actually in the market. Uh, and then here's your spy.

Even the spy is holding up pretty decently so. uh, somewhat somewhat remarkable. Uh, that, uh, that you're seeing this sort of behavior in markets while at the same time, you're having such a crisis. uh, in the banking sector now? uh at as all of this is happening I Thought this was a little bit mind-blowing, but as all of this is happening Credit Suisse apparently uh addressed the concerns their staff have and are now saying quote: there are no changes to payroll.

We will pay salary and bonuses. We're outstanding. As previously communicated, employees, salaries and any bonuses that are due will still be paid on March 24th per the memo. Well, that's two days after the expiration of the coupon codes.

Well, if you work for Credit Suisse and you need an extra couple days to get your final pay and then join the courses, just email me at Kevin me Kevin.com But otherwise price go up 22nd end of the day 1159 California time. So there's the latest on the banking crisis. It's worth noting what we'd heard about yesterday with the Fed you watch that video. Obviously that was a big deal.

seeing the FED come out on a Sunday to provide more liquidity. Don't kid yourself, it is a temporary it I'm calling it transitory QE That's what it is. It's transitory money Printing and I'm sure because it's transitory, it'll almost certainly be permanent. Uh, let's see here.

next up we have to um so we could touch on uh BTC a little bit which is very interesting. What is happening here? All right, All right, let's do that I Feel like companies could cut 30 of their Workforce depending on the type of work based on productivity increases we've seen from chat? GPT You're probably not wrong What? I wonder and I'm very curious I Want to? Okay, I'm gonna run a poll with y'all Okay, uh okay, let's try to pull. Here's the question. All right.

Ready for this: uh pull will Automation and AI like chat GPT uh effect in person or remote work more AKA or or another or like put another way, who gets laid off? who's more likely to get fired? Who's more likely fired, promote or in person? All right I have run the poll. So I'm curious I'm wondering and I'll give you my opinion on it, but will Automation and artificial intelligence replace more remote workers or in-person workers? That poll is now running? So let's go ahead and uh, run that poll and and see what y'all think. the reason I'm asking that question by the way is actually because of house hack I because see because I am doing so much in person exploring of Real Estate I'm picking up on on a lot of things. Uh, even outside our our little Vlog videos, the talking that I'm doing with people off cam is uh is extremely enlightening.

There's a there's a lot of value uh in in what? I'm what? I'm seeing and hearing uh from from just contacts in person and uh, it's leading me to ask that question. how is how are changes in remote and in-person work basically going to affect where the best real estate is in the country? Things to think about All right So we'll let that poll run for a little bit. Uh, and then while we do that, let's uh, let's talk about why Bitcoin is doing this insane stuff. Uh, Paul remote.

All right. And remember the uh, the deadline if you're an accredited investor to invest in house hack is in about 11 days. We do plan to have our reg a green lit by the SEC but we have no idea what they're gonna say. So if that doesn't work, then we start operating and then we don't have another funding round for non-accredited investors.

We hope so, but it's up. It'll be up to the SEC, not us. Okay, okay so Bitcoin Why the heck is Bitcoin rallying in the midst of a banking crisis and potentially walking into a recession? Yes, a Bitcoin is absolutely Going Bonkers And I have an idea as to why we're going to talk about it in this video Because it's something that you can pay attention to. This is the chart of Bitcoin's performance.

You can see that we bottomed at about 15 461 only to Now set at about 28 300 in less than five months. Four months and about 28 days ago, we hit bottom. and now we're basically well, I should say nearly double where we were had you perfectly timed the market and gotten in at the bottom. Right now, you would be up 83 on your Bitcoin But what we're more interested in is what's going to happen to Bitcoin next.

First, from a TA point of view, it is fantastic to see that the massive downtrend we've had appears to be broken. We can go to the weekly chart to see this downtrend substantially better. Well, we have to get out of the day chart to see it, and we could see that downtrend right here. It's not a perfect downtrend, but the downtrend has clearly been broken.

Uh, we are on an uptrend from hitting bottom here. and when we look at the Fibs the FIB retracement lines, we actually have an important number that we're sitting at right now. And that's because the FIB retracement Next Level about a 23 level is right here. We're trading right above it right now at about 28 200.

Right now, by being at 28 300, we're actually sitting on that retracement now. This candle just began, so we'll see if it actually holds up. But if this candle can hold up and we can close above 28.2 maybe it's a sign that that bottom 23 percent for Bitcoin is over. Now, why is this happening? Is it? Potentially Because now there are discussions underway to basically create a blockchain land registry in Ukraine.

Think about that. A land registry is a database that tracks the ownership of uh, and transfer rights of land. It's typically maintained by a government agency, but Ukraine is deemed to be at least according to the International Community and surveys not according to me. Okay, Ukraine is deemed to be the most quote corrupt country in Europe.

It may also be the most destroyed country so maybe you know one came before the other, but who knows. Point is: blockchain technology obviously being a distributed Ledger system that allows for the secure and transparent uh or and transparent transactions uh without the need for a government. or Banks could potentially actually be maintained in a decentralized manner without the odds of Putin just showing up and throwing up little children's play toys and pretending like everything's fine I Say that because that's literally what he just did. He just visited the besieged city of Marupal, which is essentially in Ruins and what they did was they set up some little play structures and then they paraded him around those play structures to make it seem like yes, children enjoy living in a ruined City while he looked at architectural renderings for the rebuilding of Marupal.

Apparently Putin took a helicopter in and uh and then drove around in a car with his Deputy Prime Minister But anyway, some people are saying oh, it's news like this that's is actually leading to excitement over Bitcoin I Don't think so. Actually, in my opinion, the recovery that we're seeing has everything to do with simply an algorithm. Yeah, and it's not a very difficult algorithm to look at. All you have to do is look at the Federal Reserve's balance sheet and when it goes up, Bitcoin tends to go up when it goes down Bitcoin tends to go down I Think this is mostly algorithmic.

Take a look. This is the Federal Reserve's balance sheet and as soon as we realize that the Fed's balance sheet thanks in part due to the banking crisis started ticking up again. which basically is what I call transitory QE All of a sudden, Bitcoin Traders and Algos are having a field day and Bitcoins going up. Now will it last? We'll see because technically it's transitory QE that's bailing out the banks now I'll briefly explain that since some people are going to freak out for me saying, you know, maybe I'm gonna get I See all the comments already.

the FED can't pay money. this isn't QE Man, this is just a loan. It's very, very simple. Very, very simple.

The reason I call it transitory QE is because when the FED bails out Banks and increases access to liquidity swaps Basically Dallas when you increase access to Dollars, you could only increase access to Dollars by having more dollars. So here's the cool thing that J-pow can do. J-pow Uh, can say hey, this is my balance sheet. Okay, Assets and liabilities.

All right. This is my balance sheet. It's gonna balance. Yes, I know I'm not putting equity in here.

Don't worry about that right now. Assets: If Jpow says I have a hundred dollars in assets and 100 in cash, well then maybe the FED has debt of a hundred dollars. well now if Jay Powell gets a call from you know, a bank and they're like yo, we need some dollars. Uh, can we borrow some Jpal? might be like, well we don't have any more dollars to give you, but uh, if we just happen to add a zero over here.

uh, this will show that we you know we just basically created money out of thin air to balance the balance sheet. We'll just add a zero to our cash position over here. and we basically just digitally created money. Hey now we have an extra 900 that we could send you.

Hey, but you need to pay that back. My goal is into actually permanently expand the money supply. So when you pay that 900 back, I could go back to my QT quantitative tightening. but in the meantime in a transitory way they have now given the banking system means balance sheet go up as in total assets go up the amount of money.

the FedEx credit goes up when that goes up. The Algos go. Oh ding ding ding ding. Last time this happened during the stimulus era, the Bitcoin went to the moon and it kind of makes sense.

Bitcoin was supposed to be an inflation hedge that's probably highly debatable, especially since it mostly trades along with tech and risk assets. but that's okay. Uh, we know it has properties that make it resistant to inflation in the long term. Maybe once it stabilizes, it's less of a trading Tool Uh, because of, well, the fact that it has a finite Supply.

But this isn't to talk about the basics of Bitcoin. It's simply to say why Bitcoin up during Panic Well, probably because QE up and when QE up, even if that's transitory, uh, Bitcoin tend to go up. Kind of simple, but now technically it's supposed to be transitory. So technically the fed's supposed to pay that down Again, nobody's sure if that is going to end up happening.

and it depends on the depth of the recession. Uh, and the banking crisis. Now, what's actually interesting is most people say because Bank credit standards will tighten. The biggest damage from a recession will actually end up being in company earnings.

But what's fascinating about that is there are no earnings for Bitcoin So is it possible Bitcoin could actually decouple from the stock market? Yes, it is possible because if we go into a QE period while corporations end up getting reamed in earnings, maybe it's possible that Bitcoin escapes. However, there's a counter argument to this. It's the Goldman Sachs earnings or argument that generally stocks bottom about six to nine months before earnings bottom. So maybe they could.

Actually, you could see those massive earnings hits, but you don't actually hit new Bottoms in stocks because a bottom in earnings usually occurs six to nine months after a bottom in. uh, um, in the stock prices. It's interesting, but in case you're wondering why Bitcoin up My opinion is very clear. It is simply algorithmic trading that sees QE up push Bitcoin invest in bit by Bitcoin I Think there are plenty of institutional programs that make these sorts of trades on on a regular basis and the cool thing is you can actually operate them 24 7.

you don't just have to wait for the the closing and opening Bells right or the opening and closing Bells You should say that way. Anyway, if you want more of my perspectives, make sure to check out the programs of building your wealth. Link down below. We've got a coupon expiring on the 22nd that is the Fomc Day 11 59 PM Prices will be going up.

You get a price guarantee always going forward making sure you get the best price. Get lifetime access to all the member live streams today. We will be analyzing and phase in detail because finally it's getting closer to my price. Target My price target for end phase has been gloriously waiting for it to get closer to 164.

and it's almost there. We got to talk about it all right? So let's go back to that poll here. Let's see what we got here. All right, let's see I'm curious to see what y'all voted so we're just now running a poll here.

Will automation like Ai and chat GPT affect in-person or remote more? Um, all right, let me see here. What should we say? Uh, yes. Okay, the results of the poll are in of the 2 000 of you that voted in the very few minutes that have actually been operating this poll and the question being will automation like artificial intelligence such as chat GPT and other options for automation uh, or even robotics affect in-person or remote work more? Obviously the Assumption here is this would be in the more near term right? what's going to get hit first? Eventually, automation robotics will affect all jobs right? But what do we think will be affected first in the near term And the poll result is 69 percent of you believe that remote work will be affected more and uh, it's about 31 of you believe in person will be affected more. So let's go through the arguments for these and how they could end up affecting housing.

and then of course make sure to leave your comments because I'm running a real estate startup and I want to find out how is housing going to be affected from Trends then maybe we haven't actually thought about yet. Consider this: Apple is trying to rein in spending across all of their teams and even though Apple doesn't want to lay off workers because they rake in tens of billions of dollars in profits and it would be politically unpopular for Apple to do so. although Apple was also fortunate and that they didn't go on a massive hiring binge like Google Meta Microsoft So so far, they've been able to limit. some of you know, their layoffs.

What is Apple doing well? instead of laying off people, they've cut their contractors. Which that's the point of a contractor anyway is when work slows down, you kind of them out. Uh, they've cut their recruiting contractors and then for existing employees, what are they doing? They're getting more tough about office attendance and see that ties into this poll. Managers are now forcing office attendance at the Apple campuses and in retail stores becoming more tough on people's sick, leave sick pay.

They're limiting transfers when people leave because they got pushed out or don't want to come into work or they're playing hooky too often. Well, then they get showing the door without having to do layoffs, people get fired and then those positions aren't being filled per Bloomberg. Apparently, Apple is also limiting transfers within the company because those increased costs and they're really limiting the ex the the flexibility their employees used to have. Now this is being called part of the perk session.

that's a Wall Street Journal analogy to basically a recession just by saying people's perks are getting cut. but it's really a way to not only protect margins at companies, but it's also a shadow way to basically fire people because if you start taking away things people like they might leave. But the companies are kind of looking at that going, please leave because if you leave then technically we didn't lay you off anyway. What's fascinating about that and how it relates to the poll is that wait a minute.

If if if if it's possible that we are shifting away from remote work and going back to in person on a greater basis, is it then more important to invest in homes or real estate or apartment buildings around where those jobs actually are as opposed to where Covid took people. Think about that for a moment. Covet took a lot of people for example to Idaho But is that where the mega jobs are? Where are companies like Apple or manufacturers? Uh, whether it's Intel Taiwan Semiconductors Google Microsoft Where are those offices being built or where are they? and I actually think where are they is more important than where they're being built Because consider this: Amazon and Google are actually pausing the development of a lot of Office Buildings That is terrible for commercial real estate. Commercial real estate still has a massive crash ahead of it my expectation specifically office.

And that's because at the same time as yes, you have some return to work, you you have a consolidation of return to work whereas companies were originally planning on exponentially growing their employee base. Now you're not seeing that anymore. So you don't really care about where offices or or basically businesses are being planned to go unless they're something that you know they've already broken ground like I Actually think the Taiwan Semiconductor's manufacturing plant in Arizona will actually end up showing there showing up there I Actually think that uh Intel will end up putting their menu their Fabs where they say they're going to put them I think it's Ohio and and somewhere else. but the point is those are likely going to break ground and actually go there.

But more important, that white collar position those offices. Are they going to stick in areas like maybe Austin South, Florida and California Uh, to the demise of remote Work. See, if you're a tech professional and you move to Idaho and all of a sudden you can't find remote work anymore, it might mean you might have to move back into a small crappy apartment in Silicon Valley rather than the nice five bedroom, four and a half bath pool home you might have in Idaho or Texas right? Certain parts of Texas So this goes back to the poll question. The poll question is: will automation like chat GPT affect in-person or remote work more? The vast majority of you think it'll affect remote work more I Personally agree with the majority and that's why I ran the poll I ran the poll to see am I missing something Now 30 of you have a different opinion.

Uh, and maybe that's because we are in agreement that probably both will be affected, right? Eventually both will be affected. But my concern is, is it possible that over the next decade, any job that's remote can be the first to be automated away? Think about it, receptionists. or potentially, you know, uh, people who who can do things remotely can that job be automated away? Can that job become a church apt job? Now that's no offense to somebody who's a receptionist now. I'm just saying like that that writing is on the wall.

just like at some point, the writing is on the wall that people aren't going to drive cars anymore. So there's some risk for Ubers and taxis and and truck drivers. That risk might be further down the road uh, than even for example, uh, reception work, right? What about computer programming? Is it possible that China GPT could take over Now there's a lot of, uh, of course realization that we're not there today, right? A Lot of the stuff that we see with automation is confidently wrong. Okay, but the point is, we're in 2023.

I Want you to think about where are we going to be in 2020? Like 2030? I Should say. And so in seven years, where are we going to be? Well, if in seven years, we can actually automate any job that could be remote if it could end up getting automated away. Whether even if that's like design architecture, coding, whatever, Well, then oopsie. Loopsy Companies don't have to pay for remote jobs anymore because they might be suggesting hey, we only want to pay people to be in person with us because in person is kind of where we can get away from that autonomy and be creative together.

As humans, you don't get that so well over. Zoom You don't get the water cooler, talk, the lunch, the dinner, the coffee, the experience of being with people in person. It's very different. I Think everybody's tired of Zoom by now and you know what I mean, You know that difference I'm talking about.

and if you're watching this and you're a remote worker and you're like, damn it, you're making a point. But I want to stay remote I'm not saying you should not be remote, just saying there could be some risks from a real estate investing point of view. remember: I Have a real estate startup for accredited investors. We have a deadline of the end of this month to invest uh and uh.

and maybe we'll have a non-accredited round in. uh, two to three months if the SEC gives us a thumbs up. which we can't guarantee that they will. But the point is, our startup is going to involve buying real estate.

And so the question is, do you buy the dip? Uh, and you, of course we're going to diversify, right? So we're going to be in multiple different states? That's the plan. So the question though, is, do you buy the dip in the areas that have already gotten reamed in terms of work from home? Or do you buy in areas where people are attracted to live outside of whether they're working remote and in person? Or like? for example, you buy in areas where people really want to be regardless of if there's a job there or not? Or do you just buy around where the actual workforces are? So you want to buy around manufacturing? buy where the new plants are? Uh, chip? Fabs or uh. You know, if you want to buy around office space, buy uh, you know, a Miami Austin whatever. right? It's a question.

It's something that we all have to consider. So let's listen for a moment to some of the comments that you have here: Computer generated design? Exactly. My sister loves her job and does accounting for a Lab company remote. Yeah, I mean accounting is very important today.

and I don't know how much collaboration that we need in in Accounting? That's actually a really good question. I I Haven't thought about the collaboration potentially necessary in accounting? Uh, but uh. I Would expect a lot of the tedious work that we do today in Accounting. Big respect for the people who do it.

Uh, in terms of journalizing. Uh, receipts, sorting reconciling. Oh my gosh, So much of that could be automated away in time, right? Uh, short-term low-income work will be automated away. So that's another idea, right? Is it possible that lower income work ends up getting replaced by Uh by robots? essentially fast food cashier shelf stalking? Now it's a good point.

Let's build near the new Tesla plant. See, there's there's another option. Uh, so uh, something something to think about and I I Really Think that we don't know is is the ultimate answer, right? We don't really know what's going to happen, but what we do know is covid led to a massive Trend in One Direction And that's everybody going towards remote work. Well, what happens when the remote work bubble that's been expanding and has already started deflating? What happens if even when the housing market recovers as yields fall and markets get more comfortable? What happens if that bubble continues to shrink? Could it be possible that an area or let's say a state like Idaho could Potentially, which was a huge remote work from home? uh, destination? Could they continue to shrink while other areas actually start booming again? Could you see this bifurcation and real estate? And I think if you're someone who's thinking about investing in real estate, uh, you? uh, you really want to pay attention to that.

Uh, so somebody here says maybe non-accredited investors can invest? Yeah, I Have no idea as to whether or not the SEC is going to give us the green light, right? You know? I I Expect that they will. Uh, we have a a reg D filing right now for accredited investors and we're good. Like accredited investors can invest, but we don't know. uh.

if so, if we'll end up getting the approval, we hope you know. We've got all our ducks in a row and we've got a beautiful audit for the entire company. We've got a beautiful PPM for the reggae uh. attorneys have have, uh, pretty much finalized all of that I think maybe we got a few more days left of uh of a final Crossing of teas and dawning of eyes.

but you just never know, You know? so so fingers crossed. Uh I I Just like while I think it's 80 plus percent likely will be good. Uh, you know there's always a non-zero chance that we're not. So I don't know we'll see.

So anyway, that's why I'm mentioning it. Okay, so uh, that is. uh, that is my thesis. uh for uh, remote jobs and real estate? Something to pay attention to.

Okie dokie. So that was the poll on housing. All right, let's do a quick check and then we're gonna go to the course member livestream after this and we're gonna go to. we're gonna do a deeper dive on end phase.

Uh, let's see here so let's see where we sit pre-market here. Okay, I'm really curious about yields too because they've been falling okay. all indices just went positive UBS up five percent now. oil down yet again 66.7 on WTI Brent's at 73.

Wow. I mean you're like 13 bucks lower than where you were? It's incredible. Uh, Bond yields 10 years sitting. Uh, up about one and a half basis points.

It's nominal though still at 3.4 Pretty good. and uh, yeah. pre-market Actually trying to go green here, so we'll see you've got UBS sitting up five percent right now. That's a total flip-flop from the negative six percent that we saw earlier.

Uh, Credit Suisse uh, sitting at 90 cents, which is about eight cents more than uh, what's? actually, uh, likely to close for reflecting either some sort of trading or speculating here in the pre-market Maybe people don't know that's getting acquired for 82 cents in their life. Oh down. 55 Probably the tip? Yeah, so you get these sort of temporary dislocations in the market is very normal. There'll be some arbitraging happening there, probably to bring that right back in line.

and uh, short it down to 82 cents. Uh, and a quick look around open door I was open to orbit I'm surprised they're not closed door yet. They had a bucks 57 57. They had a low of 91 cents.

Wow watching Kevin since March of 2020 at least once a day. Oh that's awesome. Thank you so much. You know you repeat long same time.

Do long same time dates. Do you repeat long same dates I Know I Don't really know what you mean with the dates here. Did you see the spike in this kind of window barring? Yep. Biggest Spike ever.

But it's weekly. You know you're looking at a weekly chart for tech jobs. The employer will adapt to the employee. haha.

It depends on what the market is. man if it's uh, if it you know we use we always say in real estate is it a landlord Market or a tenant Market The same thing with jobs Man if if labor has pricing power, sure the employer will adapt. That's why we had a remote work boom. But if employees lose pricing power, employees make sure I said that right.

If employees lose pricing power, their PP shrinks. Uh then the employees will adapt to the employer. So it it all depends on the market cycle there. All right going to course member live now.

Thanks so much for being here. We'll see you soon! Bye.