Foreign. Welcome back to meet Kevin Report 45 I Am traveling today so we're in a different set and if there are technical difficulties I apologize. but I'm going to do my best. So we've got a lot to cover.

We'll start with uh, the FED. Then we've got uh, a lot of updates on God good Lord North Southern We've got uh, uh, Trump Kushner We've got Elon Musk we're going to talk about does the recession even matter? Uh, Wall Street Analysts uh, commentary on this. We'll be talking potentially about China and some other items as well. So a whole lot to cover.

Uh, and I think the best way to start is just by hopping right into it. So uh, we'll go ahead and start with our uh, talk on what's going on with the FED because Jay pal talks again uh, over the next uh, um. Well, today. Uh, so we've got J-pal coming up again and we expect that to rhyme with yesterday, but we'll talk a little bit about that.

and then we'll also talk a little bit about expectations for the report coming out this morning. So we'll go ahead and start there. Let's start with the Federal Reserve The Federal Reserve is widely now believed to potentially reintroduce a 50 basis point hike. In fact, one of the best people to kind of give us a little bit of a heads up on this is my favorite mouthpiece of the Wall Street Journal Nick T Nick T is so wonderful because he actually gave us a video this morning talking about exactly some of his thoughts.

Let's look at his video. Let's comment on exactly that video. Remember Nick T is the guy who works for the Wall Street Journal and he's widely believed to be the guy who kind of gets a heads up of what the FED is going to do before they do it. Now, Right before the FED meeting yesterday in Congress Nick T warned that the Fed was likely to come out and talk about a higher terminal rate and that's exactly what the FED did.

So when Nick T says something, we generally pay attention to a much like we pay attention the FED. After we listen to what Nick T says, we're going to jump on into what Kenny G has to say. Kenny G's got some nice things to say about the FED as well. Actually, maybe not that nice, but we'll listen to both.

So let's see if I can make this technology function. and let's listen in to Nick t Powell Now sees what everybody else sees, which is that the market is priced in 50. and so this will be his opportunity to reset expectations if he wants to. Uh, but what he said yesterday was that the data is going to play an important role here and he doesn't know what the payroll report is going to be.

Friday We will get the Joltz Some Job Openings survey today and then of course the inflation report next week retail sales so there's still data that could make up their mind here. But what I thought was important yesterday was that Powell also pointed to the revision. So it wasn't just the January the hot January data we got, but it was the revisions that changed the profile of what the economy looked like late last year, and it seems unlikely that that's going to change in the next batch of data. so the revisions seem important here.

Yeah, this is could not be more true. So I want to actually talk specifically about that before we talk? Kenny G Because there's something important in this. First of all, the Jolts data, the job opening and labor turnover survey that we're going to be getting today. in my opinion, don't get too excited about it.

The reason you don't want to get too excited about it is because it's from January The Jolts data that's coming out now in March March 8th is actually relevant to January not February So there's a lag of an additional month in the Joltz report. so I would expect that Joltz report to be hot today, mostly because all the January data has been pretty dang hot, so I wouldn't put too much weight on that. Instead, one thing that I found that was very interesting about Nick T's comment here was that Jerome Powell was paying attention to the revisions. Now, Not only is he paying attention to the revisions of the end of last year, which the revisions of end of last year, were bad, right? They ended up telling us that oh, no, inflation was worse than expect affected.

That's not great, right? We thought inflation was a certain level of low, and that actually worsened in the fourth quarter. more so than we thought that it would, right? That's not ideal. We generally don't want to hear that inflation is revising into a worse direction, right? We don't want that. Now What's interesting though, is if Jerome Powell is paying attention to the revisions, what it actually means is the January revisions from the February data could be especially important.

Now that's something that we've started talking about over the last few days. I've started warning: When these reports start coming out, the Friday Jobs report which I'll be covering in two days and the CPI report next week, we really want to pay attention to how much was January revised? That'll be critical, so we'll pay attention to that. But uh, those are. those are two important things to keep in mind.

So the jolts? No. I personally. kind of casting that aside, pay attention to revisions like Nick T says the FED is paying attention to. Now let's take a listen to Kenny G here.

What does Kenny G tell us about the Federal Reserve? Let's listen in. But then, what's your take on what Germ Power said today that the Fed was prepared to increase the face of rate hikes and that the terminal rate is likely going to be higher than previously anticipated. A lot of people are reading that as a sign that they're going to go faster. so he created space today to move by 50 basis points on the next hike.

You know they'd come to this year, pretty clearly telegraphing that 25 basis points was going to be the per meeting rate hike for the early part of the year and then in some sense taking the foot off the brake and seeing where the economy lands. And and In fairness, the Fed. The interest rate tool as a means of controlling inflation is A. It's like a it's like having surgery with a Dull Knife It is a really difficult tool to get the job done with.

Now that's actually really interesting because remember yesterday when Jerome Powell was testifying before the Senate today, he'll testify before the house. Keep in mind that usually the purpose of these events is to get politicians who can then clip their hardcore questions for Powell and Powell's just deflecting them. So generally I don't pay much attention personally to the second day of Powell testifying because there's going to be the same answers as we got the day before. Generally, obviously I'll pay attention to potential differences, but but that's my expectation.

But anyway, this this idea about rates being a blunt policy instrument is something that Jerome Powell has himself said before. He says, look, the only tool we really have is changing interest rates to affect demand, but that's pretty blunt. It's pretty broad affects everything. It's not like a surgical tool like Kenny G Here is reiterating that creates some problems because we don't really know what the lag is of the Federal Reserve raising rates as much as they are.

Not only do we not know what the lag is, uh, but uh, it makes you wonder, hey, wait a minute. What about quantitative tightening? Don't even go there. The FED is almost arcanely lost when it comes to the impact of quantitative tightening, so we'll see. But let's keep going uh with Uh Kenny G's comments here Because you hit the housing sector, you hit the manufacturing sector, you hit Parts the economy that have a very high sensitivity to interest rates and you tend to leave the rest of the economy relatively untouched.

So the FED doesn't have as much impact with their tool as you might hope. And although they've raised rates considerably, it's not clear how long the leg effects are for the impact. Bingo and once the impact starts to play out, how it how damaging that impact is, so they are, they're in Uncharted Territory It's a difficult place to be, might you know If I could? If I could tell one thing to the chairman, I would I would tell them to say less? I would just say write a message. We're going to put the inflations you need back in The Box No I actually I don't know if I agree with that I Actually really have enjoyed the Federal Reserve's mandate of more communication.

The reason for that is it creates substantially less uncertainty now. Kenny G Basically got even more Mega Rich last year shorting the market. so last year was a fantastic opportunity for short sellers to to short the market. That doesn't mean Kenny G is always a short seller right.

just means he played the market very well. I mean hats off. Do a fantastic job trading, but the problem is Jerome Powell Saying less could potentially activate substantially more fears that this Market is going to end up getting what I call Paul Volckert and getting Paul Volckert I think is actually the worst case scenario. Fear for the markets.

In fact, if you follow me on Twitter you'll see the thesis that I posted yesterday which I actually thought was a very well thought out see I'm complimenting myself here. but anyway, you could see my thesis on Twitter and take a look at it here. So what I posted was the following: I wrote my 2023 Market thesis. The Feds fight against inflation will take much longer than anyone expected.

This puts upward pressure on Treasury yields and downward pressure on housing. However, the stock market most fears Paul Volcker the punishment following an uncontrolled second explosion of inflation. Now, what's really important here is Jerome Powell regularly communicates to us the conditions of Paul Volcker. The conditions of Paul Volcker specifically are a wage price spiral and unanchored inflation.

Expectations By Jerome Powell continuously communicating those those requirements of Paul Volcker to us us as Market participants can determine how close are we to trending towards Paul Volcker. and regularly we hear inflation expectations are anchored. There is no side of a wage price spiral. In fact, there's less of a sign of a wage price file, right? And you know what's really also phenomenal is more and more now.

I'm actually seeing uh people talk about job loss rather than uh, than like all the benefits and perks of their job. like the job loss era is really happening now I Want to go back to that tweet? but I figure going out and building on tangent on tangent over here. but that's okay because these are actually quite interesting I have to give a shout out to this Tech talk because it was absolutely hilarious. Now generally I don't like watching tick tocks, but this one was great.

Hold on I'll play it for you ref to you. Okay, this is not my first recession so I'm going to explain the Circuit City Griff to you. Okay, if you're under 35, you don't know about this one. Okay, there was a store a national chain back in the day called Circuit City.

It was just like Best Buy It was basically the the same store but instead of their color being blue, their color was red. All right. I Will say one thing that was substantially different about Circuit City and Best Buy with Circuit City really paid extremely well for commissions. Uh, they.

they did a phenomenal job for their employees, but it's probably one of the reasons they went bankrupt because their their employee expense was so high. I Personally have found memories of actually going to Circuit City and then going to Best Buy like we would go to both my dad and I. That was right after eating at Quarterdeck in South Florida Anyway, let's keep listening to this because this is actually really interesting on we're talking about the wage price spiral. so I know you might be thinking what does Circuit City have to do with the wage price spiral? Watch, It's hilarious.

This is a great great argument and I'll summarize part of it at the end here, but let's keep going. It's called Circuit City It went out of business one day, it went out of business and it was right around the time of the Great Recession So all of my friends had gaps in employment. They had all these other issues and they were stuck in entry-level positions. They couldn't move up in anything, so what did they do? They all got together and they started covering each other's resumes that each of them had worked at different positions at.

Circuit City About covering means you you put somebody else's like your other colleague or your friend's phone number in as your HR reference or whatever right? That's what he means by covering because the company's bankrupt I wasn't Did they ever actually work there? No. were they been. Have they been a busboy for the last five years? Yes. But now on paper, they were a floor manager at Circuit City Boom They got more money.

Oh, actually I was the Director of Procurement for Circuit City Boom. Nobody could prove otherwise. There was no HR department to call. There was nothing.

You could verify this information against nothing. and the reason why I bring this up is because I Okay, then he talks about the how inefficient HR obviously is at Twitter and you could basically now say that you've worked at Twitter and you're just part of the 6 000 people who got laid off at Twitter and maybe you could land yourself a better job. I Think it's very interesting, but as Brandon Howard here says this is basically fraud. Uh, it is.

Uh, it's funny, but in some way it's kind of showing the pain that employees are going through right now like this is the second day in a row. now that I'm sharing. Imagine this. take Talks on YouTube of people complaining about how how difficult it is to find a new job and now basically it's so hard to find a new job.

people are resorting to fraud to get a new job. What? What To me What that actually says is this signal that yes, we do not have the conditions for the Paul Volcker Wage price spiral. That's probably the most important condition of this market, and that's why I say I Personally believe the stock market most fears Paul Volcker. It does not fear higher for longer.

In fact, that's what I say here the next line. Although as long as we don't face a Fed rugging I Believe the stock market will basically look through higher for longer is what I argue here. Therefore, absent of rapid and intense re-intensification of inflation or reanimation of inflation. I Believe in volatile's Nike Swoosh Recovery is ahead of us in stocks with 2022 representing the down, the down part of the swoosh right in.

English slow gradual uptrend for pricing Power stocks Slow gradual downtrend for real estate pricing. Power stocks are those that favor higher income individuals, higher income businesses, those with high free cash flow. Some SAS businesses included like for example, look at Bill.com they have negative net income, but in insanely High Free cash flow only once in a recession with inflation averaging. Note: averaging very important, not achieving.

that's very different C Flexible average Inflation targeting I Expect the Federal Reserve will fulfill. Basically a mission accomplished U-turn This is only likely to happen once excess savings evaporate. Yes, the savings rate is lower today, but excess savings may give businesses and consumers spending power for another three to 12 months. Unfortunately, by the time a recession is confirmed, Staples Industrials Commodities and the Dixie are likely to suffer.

That's my opinion, obviously. Especially Upon A Fed pivot as yields fall Staples which were stocks uh, some fled to Uh due to you know for to say it for safety. Whatever. Coca-Cola McDonald's Costco Walmart Johnson Johnson Procter Gamble IMO are likely to suffer suffer.

Do not make the mistake of course of confusing a Fed pivot with a market correction. While it's possible that something breaks and the FED will only pivot if they're if something does break, in my opinion, the FED will only pivot once they're convinced inflation is under control. and that is after all. the pain point of this recession.

This recession is being caused because inflation is out of control. So if inflation is under control, then the only reason for really forcing the recession goes away. That's that's the point now. I Do still believe that uh Staples in certain companies will suffer, whereas higher income individuals and businesses will will succeed because they'll be able to spend through this recession longer.

Apple Nvidia Trade Desk Tesla Taiwan Semiconductors To some extent, some of the housing stocks and Face Solar Edge And of course, layoffs are now hitting those white collar jobs potentially more than blue collar jobs. However, personally, I I'm I I don't know that that's actually going to have a dramatic impact because you're really just you're shaving off almost off the top of the tech sector if you will. It's not like the entire Tech sector is getting laid off. there's still massive amount of investment going in, of course.

Then I get some general rules like stay out of margin and we'll likely look back in seven years and wish we bought more now. Uh, invest in the down cycle of the real estate cycle. Good idea. Consider using ETS blah blah blah blah.

Anyway, so I tweeted this on on Twitter of course. Uh, so I recommend you follow me on Twitter But but the point of this is really to say I am a big believer that the Federal Reserve or or the concern of the stock market today is a fear of Paul Volcker. And if the fear is Paul Volcker, then as long as we get more communication, we actually avoid Paul Volcker. And that's what's what.

Kenny G I Think here is missing is that Italian drum Powell To communicate less is a problem because what you're doing is you're actually enhancing the likelihood for something to break in markets because you're not properly communicating markets that we're not going into a Paul Volcker style scenario. If we are going into a Paul Volcker style scenario I would like to know that as well because then I will flip flop and sell faster than a flip-flopper on YouTube Anyway, let's keep going with what Kenny G says bottle. We're going to do what it takes to make that happen and we're going to raise rates consistently until we see very clear evidence that we put this behind us. Because every time they take the foot off the break or the market perceives they're taking the foot off the break and the job's not done, they make their work even harder.

and at the same time, remember, they're impacting in a very, very harsh way a very small part of the economy and that's really tough for those businesses that live in that part of the economy. Yeah, so he's making this argument that hey, if the FED like basically pumps the market, they're making their job harder. With the FED affecting the stock market at least according to economic literature, has little to do with what actually happens. What matters more is what happens in the Bond market.

With financial conditions, not so much the stock market, housing market and Bond market, those two have much more of an impact. Now, there's some good comments here that are worth talking about. So Daniel Uh, here a member writes one to nine or sorry. 1.9 to one jobs available so they may be proud to temporarily work at a lower paying job.

Okay, so really, when we make this argument about the jobs and labor turnover survey which we will be getting today by the way of course. uh, but again, for January data, 1.9 to one jobs available implies that the labor market has so many available jobs. The problem is, we have a substantial mismatch of jobs, right? So, and I think that's what Daniel is alluding to here is that look, you know you you may be skilled in Tech But now you have to go work in a restaurant just to be able to pay your bills because you signed up for a lease that's more expensive than what you can now afford, right? That's unfortunate. But I Do think that the covet pandemic has created such weird dislocations in the job market that it is true.

You just don't have enough people to fill the jobs and the roles where we actually need them. I Don't know that this is necessarily trying to say this is the tightest labor market ever, even though that is what Jerome Powell says I Think we we just literally don't have people either willing or able to work in certain Fields especially in Hospitality or Health Care Uh, you know Health Care is is nine hundred thousand jobs short of where they should be according to Trend So it's very, very interesting in my opinion. Someone else here writes, but hire for longer will affect EPS Hence, lower multiples lower Market Yeah, potentially. uh, I mean I think the multiples have already been priced in, but you're right.

If you multiply a lower multiple by lower EPS you, you end up getting a lower stock price. However, I am personally under the impression and this is just my opinion that the bottom like 38 percent of the Fibonacci retracement that we've seen for the NASDAQ and the Spy or whatever is actually representative of Paul Walker Fear. and it's really the top 60 percent that is representative of Eps fear and multiple compression fear. Uh, like at in October of last year, markets were actually legitimately worried that inflation was never going to go back down.

Remember, we've had the luxury over the last six months of actually seeing inflation Trend Down right? We did not have that luxury in October That's really important. Uh, somebody's asking if I have a comment on someone else's video, but I actually don't watch other people's videos to the extent that I'm capable of resisting. So I have no idea when somebody else makes a video about me. Most of the time it takes somebody else asking me about it and then I'm also generally not very interested in looking.

That's a psychological thing and I also don't know why we're talking about that on sort of a Fed topic, but you know what? Let me put it this way, it's a lesson to everyone. I Actually the very first video that I made on YouTube that brought me from 12 subscribers to a thousand subscribers where I was talking about real estate in 2017. I Talked about this concept of the toxicity of Relativity of comparing yourself to the opinions of others and I've warned myself like the most dangerous thing is doing that in real estate and Business and Entrepreneurship and it's even worse and more toxic on YouTube because YouTube is so easy to measure views, subscribers growth rates. it's so toxic.

But unfortunately, as the I believe the Bible says, a comparison is the the thief of Joy don't don't do it. And what I like to do is I like to purposely not watch other people's commentary in my space because I don't want to start rhyming like other people I like to provide a very unique perspective. Uh, you know that's not to say I don't study all day long of course I do uh, but uh, but not not other content creators. Oh God no.

Anyway, so when it comes to the Federal Reserve uh I actually I am very very uh look I hate to say I like I don't want to sound you know dare I say like a clown who's always bullish because I'm not always bullish I think everybody who watches me knows I when I turn bearish was the right time to turn bearish I became bullish too early I admit my fault. Uh, but uh, but the point is like no, if if I see the conditions of going bearish, I'm gonna flip very fast. but I don't see that In fact I think most of the feds speak yesterday and today is really just clickbait I mean no drum pal sorry I shouldn't say that because some people watch this with children. but like real, if the data comes in hot, you're going to go 50.

duh right? Like, But that's what we I mean we've been talking about that since before the FED meeting. Who I've been saying on the channel look I I think the FED would shoot themselves in the foot in terms of credibility. Uh, if they go 50, the data would have to be so ridiculously intensely high for them to go 50 that I don't think they're going to do it. In fact, it's hilarious.

And I'm not trying to say like oh, you know, JP Morgan's watching my videos and like Pat myself on the back. As much as I would like to be able to say that, I'm not going to say that uh, JP Morgan released a piece on exactly that just yesterday and what they wrote was uh, they're basically that they're like, look, the FED will confuse markets if they go 50. if they go 50, they will send such a confusing signal to markets that they have no control that you could actually cause more damage to markets. Here it is.

It was JP Morgan's Chief investment officer Bob Michelle two first names. If employment data is very strong, you've got 50 BP pack on the table, but that's a pretty high hurdle. Once downshifted, if you go back to 50, it would be pretty confusing to the market I Hope they don't do it. They were really willing to run a strong or sorry.

a string of 25 BP increases exactly. It's like just add another 25. BP But don't confuse the market with a 50. Uh, I think I Think that would be silly.

Uh, somebody here writes uh, somebody who's watching on Twitch says data says 50 Now No data says between now and May 50 is in the bag. but that's two rate hikes, right? We we are sitting at about 50 50 for a 50 in March Boy, that sounds very confusing. Uh, now you're saying Futures leaning slightly 50. Okay, all right, that's a better clarification.

Yes, they're teetering on the 50 50 level. Last night, they were teetering towards Uh 25 by about a 52 margin. Maybe they flipped a tiny little bit with Futures this morning. Either way, I Don't think it terribly matters.

Let's wait for the data. We'll see that. But but again, what we're hearing from the FED here is very important. It's no public or but yes it is.

It is a volatile path forward and that's very, very important. A 50 50 when it was just 15. You are correct. Yes, yes, you are correct.

Don't get me wrong. I'm not saying Mike trades here is wrong. You're correct. We have substantially moved towards 50.

but in a weird way. I Actually think that could be bullish. Because think about it. I think the hurdle to go 50 much like what JPM says is very, very high.

So the Market's pricing at 50. Give me a rally baby. Give me a rally on the 25. Uh, so so yes, the market is trying to price that in.

uh, my two week old won't stop saying sh9t thanks Kevin two week old? Congratulations. That's that's awesome man. I want to have a baby? Dude I don't have a baby anymore. like I Look, you have a two week old I know you're going through hell right now.

uh, probably lack of sleep and all the crap that goes along with that. Enjoy it man! Like everybody always told me that when I had a two-year-old I didn't believe him I'm like ah come on man, this is like I got plenty of time looking at these like tiny hands and tiny feet and stuff I have a seven-year-old and five-year-old now and I'm like dude I literally don't have a baby anymore like I want babies I want I want like 10 more babies so we gotta get we gotta get to work. but but I'm just house hacking so much you know I'm not fulfilling my duties here. Uh, anyway.

okay, we're gonna get off that now. So all right, let's talk about something else. How about we talk about Trump and Fox and Dominion I don't know. We'll keep this one short because some people get mad at me when I talk politics, but some of the politics stuff is very interesting.

So per Bloomberg Rupert Murdoch is now testifying that Donald Trump's son-in-law Jared Kushner was potentially given some inside information during the 2020 election and you won't believe what Tucker Carlson had to say about Donald Trump based on new information revealed in the Dominion lawsuit. apparently Rupert Murdoch is uh, quote unquote friends with Jared Kushner and basically as debates approached, uh, or debates passed or a Biden's team submitted ads in the 2020 election, Rupert Burdock would kind of give Jared Kushner a little bit of uh, friendly advice like hey, don't be too much of a bully on Biden hey, this is what the Biden ads are going to look like going forward. Now keep in mind Dominion is the Dominion voting machines company Dominion is actually suing the Fox Corporation Rupert Murdock is the owner of that. He was actually seen at the Super Bowl with Elon Musk they were sort of in the box together.

but anyway, along with Rupert Murdoch's wife, apparently Fox is being sued for potentially amplifying The Conspiracy Theory related to the rigging or stealing of the election Dominion is claiming defamation, saying that a lot of districts have now canceled the use of Dominion voting machines and that their money their income has basically been negatively impacted because of the work of Fox News Despite overwhelming evidence that the election was not rigged and there wasn't a fraud, If if you were watched me back in 2020, you remember I actually covered this quite well. Uh, in my opinion, quite well. Quite a lot. I should say more generically, but you know what I covered.

For example, the Georgia phone call with Donald Trump which Donald Trump suggested was a perfect phone call. It was not a perfect phone call. Okay, it was really clear that Donald Trump was basically begging to quote unquote, find just an extra 12 000 votes. That's all he needed was twelve thousand votes, right? And the pressure was pretty pretty blunt and pretty obvious it was actually a really interesting phone call to cover.

You could probably still find it on YouTube if it's not censored. meet: Kevin Uh, Donald Trump Georgia Phone call something like that. But anyway, what's interesting is you're getting a lot of these quotes coming out. uh, like Sean Hannity calling Sydney Powell and her theories about the election.

Uh, basically crazy calling your quote an effing lunatic, then parineet? uh, sorry. Dana Perino is saying that uh, these these election theories are total BS insane and nonsense Sean Hannity Saying you have to be careful though you don't want to quote unquote piss off the base. That's actually something that I fail I feel like a lot of on on Twitter is I feel like my my The people who watch me are very much in the middle right? like the 80 of people in the middle But I do worry because the people on the far left and far right get pissed off when I try when I cover you know things I think matter to to the middle uh and uh sorry about that but I think it's important and that's probably the curse of being in the middle. But anyway, there's a trial set for April here and what's actually very interesting is information that's that's coming that just came out last night was the following two months after the election and just days before January 6th this is before January 6th uh Fox News Host Tucker Carlson texted with an unknown Fox employee about how badly he wanted to stop covering Trump saying quote we are very very close to being able to ignore Trump most nights Carlson texted on Jan 4th I truly can't wait I hate him passionately Carlson added Now that's actually really interesting because Tucker Carlson has regularly been seen as as basically like this this extreme uh Fringe uh by by especially people on the left and I actually a couple years ago made videos on Tucker Carlson saying dude, like some of the stuff you're saying about like the Cares act or the stimulus programs or whatever is just wrong and and I was really confused as to why why and narratives were really spun in One Direction I actually think I have to say I think he's kind of come back or his his department or whatever have come a little bit more towards the middle from from the fringes.

Uh, you know I I Don't know if anybody agrees with that, but that's sort of a thesis that I have. Apparently a producer uh, who works with a Tucker Carlson also wrote The Following quote Dominion machines were used in Ohio and Florida Trump won those states. Did they forget to rig those machines or was that all part of the plan? Uh, and then of course Tucker has also complained about this idea that people actually believe this election rigging stuff and this is bad for the country. In fact, these are his quotes that the election rigging is quote bad for the country history to have this much doubt and suspicion.

This is exactly why people believe in conspiracies. We need some sort of audit to settle it to the extent that it can be settled. Now remember, defamation would really require proof of malice by the Fox News company. And as long as there is some kind of belief that people within Fox actually believed at least to some degree some of the election fraud stuff they were covering, it'll be very hard for a Dominion lawsuits to actually, in my opinion, win a defamation lawsuit against a news company organization.

unless of course it could be proven. Beyond A Reasonable Doubt Uh, although this is civil, so it doesn't, it doesn't go to the level of reasonable doubt. You just have to get to the preponderance of evidence. But anyway, if you could get enough evidence to say that Fox knew the election rigging story was fake, yet they were still covering as if it was true Dominion could actually win, but that's sort of the burden they face in a civil case So that trial is in April and that trial should be extremely interesting, especially since Rupert Murdoch When as far as saying that if uh, the election was overturned, the 2020 election was overturned, we would see riots like we have never seen before.

So it's almost kind of like the owner of Fox News knew that covering uh, the election, and potentially leading to an overturning could lead to basically, like, almost a near collapse of democracy as sort of what he was implying I thought that was that was pretty, uh, pretty remarkable. Uh, so we'll see someone here writes Carlson will put anything in his mouth so long as it makes him money. I mean I Do think there's there's an element of of reputation that's very important too, right? I Mean if you say something that's wrong I Think most people are reasonable and you kind of want to sort of align back to the truth because if you keep getting exposed as being wrong, then then eventually people can't trust what you're saying anymore. Uh, and that becomes an even larger issue, right? So anyway, I think this is interesting because I have to say his coverage Tucker Carlson's coverage of what's been going on of uh, sort of with with uh Jan six has been interesting and enlightening.

you know I I imagined some of it of the Jan 6 footage is is potentially picked uh in you know and certain things are shown and certain things aren't I mean that's just journalism and media. same thing as like the Twitter files. you know I would expect that in the Twitter files like we only see the juicy stuff, not necessarily everything that was actually going on at Twitter right? But that's okay because sometimes that juicy stuff alone could be all we need to be like wait a minute. this is a little sus uh and so I do think I mean if you probably saw my Tucker Carlson coverage yesterday, I actually went a step further and when it came to that quote-unquote you Anon Shaman I actually picked up the Uh indictment and the allegations of fact for why the Q Anon Shaman was sentenced to 41 months in jail.

that's actually not something from Fox or from any mainstream media I just thought, hey, look if he went to jail I can pull up the Justice Department files on that so that's what I did and when I covered that yesterday I actually did find something very strange that it seems like yes, he shouldn't have been on the capitol grounds I said that in my video yesterday the Q and on Shaman should not have been on the capitol grounds I agree. But that in my opinion, being on the capitol grounds does not justify a 41 month sentence Now violent entry into the capital? that might. But the Justice Department's documents say oh, the Q on Shaman was charged essentially with violent entry, but in the actual document it shows he just walked into the building and I'm like that's not really consistent with what seems righteous, right? I Don't really care if you're on the left or the right? I Agree with you: you shouldn't have been on the inside the Capitol building, right? I I Feel like I can agree with most Americans on that, but to say he violently entered when in the same Justice Department complaint? You're saying he didn't seems a little odd. Now another thing that is also very interesting: Uh, is this the first breach occur was near where the members of Congress would be locked in? we initial let me let me actually back up just a little bit more because I think just two minutes of this is interesting and then we'll move back into some Finance tops.

But anyway, take a look at this if anyone was Tark Johnson was. Here's more of our sit down interview with him: Ms Johnson Thank you for joining us and thank you for having me. So from the outside, here's how it looked. We now know that huge parts of the Federal government were aware that there was going to be something big happening at the Capitol on January 6th, they knew they were going to be big demonstrations there.

Um, and they prepared for that. But the Capitol Police on which you served for 22 years did not seem prepared at all. And of course that would be the front line in preparedness was the Capitol Police prepared for that day. The front line officers and supervisors were not prepared for that at all.

I By the way, completely agree with that. Remember: I covered the election uh, or sort of the the riots rather on Jan 6 for 10 hours that day and I was blown away with how unprepared the Capitol Police was. so you had no idea it was coming. Uh, we knew that there was going to be a demonstration that day, but we had no idea that we were going to be facing what we face on that actual day.

So things start to fall apart. people stream in the building, you call upwards in the command chain. help me, you don't get a response. what do you do next? So around two o'clock um, it may have been a little bit after two o'clock I hear a officer say that the capital was breached.

so I ran inside of the building I ran you know to to assist I knew that um, that location of where the that first breach occurred was near where the members of Congress would be locked in We initiated. Now that's also really important. Now, while this is not the officer who shot Ashley Babbitt it's worth noting that through what we're hearing from this Capitol police officer, we know that the Capitol Police know where the congressmen and women are holed up basically. and it's basically in the case of Ashley Babbitt one person or one or two people potentially with a firearm versus you know, an unknown number of people with an unknown Uh weapons cache so to speak.

And now we ended up finding out that basically none of the rioters were actually armed. some people were Silly and walked into the capital with like zip ties and and bulletproof vest. But but at least from the extent of coverage we could see nobody actually had weapons. We know that now, in hindsight, right? But if you're one officer standing in front of what appears to be a mob breaking down your door uh and and your task with protecting congressmen and women who were holed up in in a room, a door right behind you, you know it sets up a really difficult moment Because it's like now, do you have to potentially take somebody's life to send the signal like that is the line that you don't cross and uh, it's it.

you know, Obvi. Obviously we we can never know what it's like to have been in that exact moment situation because you know Ashley Babbitt was somebody who's in the air force. uh uh, somebody who. you know it's it's one person, uh one woman compared to to a man and their arguments are made on both sides about like should her life have been taken.

you know I'm not gonna go into to depth on that because it's really a different video topic. but I find it's very very interesting when this particular Officer says we like the area that was breached was basically where everybody was hiding and and the level of fear there combined with a lack of preparation is a disaster. That's probably the real issue in my opinion is it comes down to if if the capital had properly prepared for this, maybe that severe loss of life that happened not only at the actual Riot with one person being uh, basically trampled, one person being shot, but then multiple people afterwards either committing suicide or having heart attacks. Uh, maybe a lot of that could have been prevented.

So I think the preparation was a disaster I think that's really where the finger gets pointed. Anyway, let's keep listening. Lockdown: So that means the chamber doors on the center side of the house I would lock. So that means the members of Congress will be safe inside that those locked rooms.

Yes! So I ran over to the house side first to make sure that those those were locked. Then I ran over to the Senate side to make sure those doors were locked. So I asked over the radio and I say something to the effect that um, we need direction. We have hundreds of people inside of the building.

What do you want us to do? We need some direction I got I heard no response, no response. So you know, Um at that particular time, how could nobody respond to this? Nobody responded. at some point you put on a Maga hat. Yes Now um I think we have it I think we have the actual magnet.

Yes, we actually do have the mega hack I have it here in plastic. So here it is Um J6 it says High label the J6 so tell us why you put the hat on and how that was related to your suspension. That's what got me national attention was the win of the mega hat. They were officers that we had a distress call that they were um approximately 10 or 11 officers I can't remember the exact number were trapped at the top of the Rotunda steps.

So um I elicited the help of some CDU officers to help me go up the steps and I kept yelling that all the way up the steps, giving people high fives, trying to make it up steps to get to the guys. And as I was going down there was a Um demonstrator on I believe he was on my right side of me so he reached over I didn't know what he was doing I didn't know if he was going to hit me and he put the mega hat on my head. So um so as I was still trying to walk down the steps then he asked for the hat back and I said well I would like to keep it because you know the hats want to help me Yes, your passport through the crowd. Yeah, exactly.

So the capital places by definition nonpartisan that serves both parties in the Congress it protects members of both parties 100 and it has to be that way. In the wake of January 6th, you saw what looked like partisanship at the Capitol. So I'm just going to summarize the rest here out of respect for your time. Basically, this officer was not interviewed by the January 6 committee and Tucker Carlson's like wait a minute.

Like why is there a partisanship? Why didn't you get interviewed blah blah blah blah Okay fine so look. Bottom line: out of all this Jan Six was a complete F in disaster. That officer is freaking brilliant for putting on a Maga hat Basically because as stalker said, it's like his passport through the crowd to not to basically not potentially get killed. I mean he doesn't know what he's up against I Mean this hasn't happened before.

There's no precedent for this. Like if you're a cop and your job is to protect a building and all of a sudden there are you know, 500 people, uh, inside of your building and thousands of people outside your building and windows are being broken. and and you know congressmen and women are putting on evacuation hoods and hiding under desks. You know it.

It makes for a little bit of a stressful day. I Think we could all agree with that? Uh, but anyway, some of this I think it's very interesting. Very interesting insights. I'm fast excited to see what's going to happen with the April Dominion lawsuit, so we'll pay attention to that.

We will Also, as more information comes out or whatever we can learn, we'll touch on J6 mostly because it's it for me. It was such an impactful day and uh I I'm I feel very conflicted. Uh, because I I Personally, you know when I covered the J6 riots on the day it occurred I felt, uh, very offended, right? I I Thought this was sort of an attack on on America on our institutions. but then again, you know I saw it through the coverage that I was able to see on Twitter and the mainstream media and now seeing at least some of the perspectives of officers from the inside or footage from the inside.

I I'm kind of I've catch myself feeling confused so you know by no means do I want anybody to think that I you know I'm like a Magna apologist here or on the other hand, you know I'm calling this for sure like oh my God it's the Insurrection You know like I'm not trying to take a stance there, trying to cover sort of in the middle. Here it it just it feels conflicting, right? and it just it makes me feel more jaded towards both the media and the government. And and I I feel sad about that because I don't want to be more jaded. But anyway.

Uh, so let's move on. So now we're going to talk about: does the recession even matter? Does our session even matter now? I Think this is actually a particularly interesting piece. It's a little, it's on the shorter side, but we'll do some commentary on it. Standby four is a piece.

All right, All right, the mobile Studios actually working pretty well knock on wood and once I say that something's going to break All right. Ready for this. Here we go does. Does a recession even matter? Now we're going to cover whether or not a recession actually matters in the eyes of TS law important I Think this is very interesting and they give some fascinating perspective.

So let's take a look at this. 2020 has given investors a false sense of security about the recession impact. Now look, most of you know I'm I'm pretty bullish right now, mostly because the conditions that we see in the market today are highly the opposite of the conditions that we saw in January of 2022. Where in January of 2022, the conditions of a wage price spiral were in place.

everybody was Raising prices, pricing Powers Insane supply chain shortages were chained. We're saying we knew the worst was ahead of us. Now, a lot of those conditions have really started their reversal path. Even though that reversal is taking substantially longer than expected, we're not facing the sort of Paul Valkyrie scenarios uh, that we were potentially facing in January of 2022.

Uh, however, I'd like to read sort of the more bearish pieces and I Think it's very interesting that they start off by saying you know 2020 gives people a false sense of security. that basically in 2020, as they say, was a joke basically about how the market responded because and I Remember this during the covert pandemic. the stock market I mean the entire economy basically got shut down in March and then in April May everything is a disaster. Everybody's afraid of covid, everything's hell, and the stock market's just going straight up because the Fed's printing money like crazy.

Uh, and I remember the the memes of the child on the swing uh, smiling and laughing being labeled the stock market and in the background the whole town is on fire. Uh, being labeled the economy right? and that disconnect those memes I'll never forget of 2020. And so they bring up basically this: this joke. They don't say it's a funny joke, but basically a joke about how the stock market is not the economy because back then we really had this element of Tina there.

There is no alternative to investing in the stock market. And so what they argue here was that the big thing about the fake 2020 recession is that if you if your only real experience of a recession uh, like this, this is if you're maybe like in your early 20s or before, like if you you weren't essentially of adult age in the 2008 9, 10 sort of depths of the recession or potentially even seven six. They make the argument here that the 2020 my recession might be people's only actual experience of a recession and that was really a fake recession because the government knew they were shutting down economies and they preemptively printed so much money to backstop financial markets. we basically didn't actually have a real recession.

Yes, GDP went negative, but we didn't actually allow real damage to occur from the lingering of a recession. Now what I think is interesting here is it somewhat relates to me What? Uh, what? some of what Elizabeth Warren said yesterday Now we know that Elizabeth Warren is pretty far relatively. Dare I say extreme on the left? Uh, as somebody who who enjoys financial and political coverage in the middle, I I see Elizabeth Warren is quite left, not not just left quite left. Uh, but anyway, she she made this argument that hey, look, once you start seeing layoffs in the economy, you're going to create this quote: runaway train of more damage occurring.

How are you going to prevent that continued damage And she actually has a really good point that we don't know what is going to happen in terms of how long the damage of the recession could actually last. you know the FED could U-Turn When inflation is under control. But then you look at the pieces of the economy and you go well. What did you just do to the economy? What if now we go into a real and deep recession.

Now we we don't know. We don't know. We haven't had these sort of experiences before. So we don't We don't have a very clear precedent of of war and pandemic in a pandemic that was responded to with the money printing that we've seen, right? We've had Wars and we've had pandemics separately, but not both together.

Combined with these modern supply chain issues, we haven't been in these situations before, But anyway, the stock market. uh, the stock market performed during an artificial environment during 2020 and 2022 is not necessarily a helpful guide where sessions they say are a process, not just a period of two consecutive quarters of falling. GDP In Fairness in 2021. Oh sorry.

Last year in 2022, we had two quarters of negative GDP but we did not have the recessionary process Now That actually led to a lot of complaining that Joe Biden was trying to re-jaker the definition of a recession like hey, a recession isn't actually just two quarters of negative GDP And everybody's like, of course you're saying that you're the White House But to some extent, the White House isn't necessarily wrong. like we didn't really have the quote unquote process of a recession in 2022. even though we did have two quarters of negative GDP It didn't really feel like we were in a recession unless the only thing you cared about is the stock market. but stock market as we know is not the economy.

But anyway, recessions are a process it says here: not just two quarters of falling GDP and they Center on deployments in the labor market. particularly in the United States when U.S companies start to fight fire people. It sets off a highly unstable and reflexive process because falling employment in turn kills consumer confidence, reduces spending, and feeds back into a decline in corporate revenues which could lead to further job losses now. I Find it very interesting, but this is literally what Elizabeth Warren was talking about and I can't believe.

I Somewhat find myself finding basically an Institutional piece of evidence that reiterates what Elizabeth Warren says because I generally don't like to amplify what people on the extreme say, but she's right, she's not wrong. We don't know what happens when employment unemployment starts to rise and then we get that potential runaway train and here T.S Lombard is telling us like, yeah, like the 2020 recession didn't matter, but this recession we're about to go through, you know this could actually be a really big problem. Falling unemployment in turn kills consumer confidence. I mean think about it, you lose your job all of a sudden you're like oh, damn.

I I'm not going on vacation this year now In Fairness to myself. Okay, well, I'm not trying to sound conceited here, but I've been pounding the table since like March of 2022 uh and January of 2022 around that region. The reason I say barge is because I did an interview with uh, a good friend of mine Matt Reisinger I love the guy I got to go visit him in Texas and I remember going on his podcast and I said if you're a contractor right now, just get ready I Don't know when, but probably over the next one to two years you're going to be in a recessionary environment and you want to get ready. Start saving more money now, right? And I'm trying to provide that warning like get ready Uh now.

I'm glad I did, because you know the building permits are starting to fall. We're starting to wreck. Recognize that there could be lagging effects that affect the construction. Market In fact, I thought it was very fascinating.

There's this researcher who put together a phenomenal piece this morning on on the lags of construction data and how that potentially affects real estate. I'm going to go ahead and pull that up right here because it's and I'll give you some bottom lines on it too. We're not going to go through the whole thing on it, but uh, let's see if I could find the darn thing here. Here it is.

EPB Research Okay, and I'm going to bottom line this because it's It's a little bit long-winded and that's no offense to him. he's providing data, but we're going to just keep it simple for the sake of YouTube here. Although usually I go into more detail on YouTube this one is not as necessary I Could sum it up faster. So basically he talks about construction being a major driver of recessions.

and essentially what he's saying is construction is really broad. It's really residential construction that leads recessions. And the Really fascinating part here is he talks about how building permits are one of the most reliable indicators of construction because obviously you need a building permit before you can build. And he talks about right here: Building Permits Blue Line Recession Gray bars.

Okay, so what do you have before the recession of the early 70s? What do you have? A massive drop off in permits? What do you have before the late 70s recession? Massive drop-off and permits. What do you have before the 82 Paul Volcker era Massive drop in permits? What do you have before the late 80s recession? 89 Recession Drop in Permits: Not not very soon before or not very early. It's not like a super leading indicator of recession, but what do you have over here before the housing recession? obviously? Massive drop in permits and look at what you have now. Massive drop in building permits and I thought it was a really fascinating piece because he's really saying hey, like Hello uh the leading indicators are screaming that we're basically barreling towards a recession.

He says when you see a big decline in building permits, you know some number of months later, the number of units under construction will Decline And this is sort of aligning with sort of my idea that like if you're a contractor like get ready and I've been saying that for like a year now. but I mean it when the number of units under construction starts falling. Construction Employment Falls Almost instantly remember construction employment has residential and non-residential components. Residential labor tends to react more uh, clearly with the actual economy because you could have you know, institutional, uh well I should say like government for example, construction like roads or highways or whatever, those tend well.

I shouldn't say 10, but maybe more recession agnostic. Uh, and and they're not as as you don't turn those projects as quickly as you do a house right, you could build a house in in, you know, three months. You know, building a highway could take you three years. so that's why you get more responsiveness for residential construction.

But anyway, basically he talks about how going back to the 70s, there have only been a certain number of times where building permits decline twenty percent. Uh, and and pretty much at all of those times we've seen a recession and we've had We have basically that showing up again. And then he talks about how there's about a six month lag between when permits fall and when construction jobs start falling. and I think that's that's a fascinating warning because he's basically giving us a leading indicator that like hey, like this could actually reiterate what Janet Yellen is saying here.

And maybe we should be careful on how much we tighten because if we do get this right away train, there are a lot of actual lagging indicators that suggest we're running into problems. look uh, Minecraft Steve uh is here as Jack described you yesterday? uh, saying lumber prices probably or an early indicator as well. Uh, Steve here says construction is the number two GDP driver in Canada after real estate. Oh, look at that.

Steve what part of Canada are you in? I'm going to come visit you and then we can talk about uh, garages? eh? Okay, sorry bad Canadian jokes. Uh, we'll trade loonies and toonies instead. Okay, so investors can be sure. remember my family is half Canadian so I I feel like I I we we get to make those jokes and then have beer we'll go to LCBO if you're in the Ontario area.

Uh, just as long as it's in accordance with their hours because they have weird operating hours. Anyway, investors can't be sure how deep the recession will be, when it will end, or whether there will be a strong and full recovery. But we can agree that a recession should be in the mind of investors, right? And we want to be aware because uh, you know right now the assumption is that the recession is going to be mild. but a big red flag that you want to pay attention to is every recession is assumed to be mild now.

I Think that that was actually really interesting. What's up Max I'll come visit you in Toronto that's only like 30 40 minutes from vary depending on traffic anyway. uh this I thought was really interesting because yeah everybody right now is like okay, if you have a recession it's going to be mild. Well dude I remember 2006 and you know what Realtors said in 2006 they're like ah, we're just gonna have a leveling off of home prices.

It's just going to be leveled off. It's just going to be mild. Dude, it was not mild. It was hell.

It was hell. Some condos in many markets fell as much as 55. It was insane. If true recessionary Dynamics kick in at which point people start to feel uncomfortable with the mild recession thesis.

There will be a particular point of danger for risk assets and will be particularly dangerous if the response from policy makers is less preemptive than everyone has been assuming. In other words, well, inflation is still up, We aft, and we're just gonna have to keep hiking. So in other words, every recession is supposed to be mild until it isn't. This is like, uh, quite frankly, like chilling this this piece right here.

especially when you combine it with with, you know, leading indicators Elizabeth Warren and Jerome Powell. And and this piece, here. it's it's. this is bear bearish I Don't like this, right? Even if it lasts only a matter of weeks, the combination of rapidly deteriorating economic data and residual monetary hawkishness could substantially deep stabilize Global Markets Investors are focusing on the softness of the soft Landing but even a soft Landing could be disturbingly bumpy.

Corporate earnings could. Okay, So then we get into one final thing about a normal recession is we don't know what sort of economy will merge on the other side. Often the whole trajectory of nominal GDP turns lower, which means corporate earnings are permanently reduced compared to what investors expect before the downturn. More subtle point is that sectors that performed well during the previous expansion might not be the growth leaders of the news cycle.

take famously the mid-2001 recession Manufacturing in the developed World Never fully recovered with many of these industries migrating to China and developing economies out of the US U.S tech companies suffered years of structural derating, with Europe and Emerging Markets expering the best period of outperformance in decades. It is possible we could see another big rotation after the next recession, particularly if underlying inflation pressures were to linger and there was no return to quantitative Easing and the Uh. this is basically near zero interest rate policies of the 2010s, which had previously given stocks distinct advantages. So we can tell ourselves the next recession doesn't matter, but it is like and that it is likely to be mild, especially if we manage our own jobs.

But that view could well be tested at some point this year. Oh, that is. this is a pretty damning piece on the recession, and uh, and and you know, how does this affect my likelihood of flip-flopping Well, uh, right now it doesn't I'm going to be as the FED says, data dependent I think our trajectory is substantially different than that again of where we were in January of 2022. However, this is a very good point and this is something that I'm going to put on my bear belt.

So I like to say I have a bear belt and so that way if I need to reach down to my tool belt and go I got a gun I mean I gotta I got bear information I can go down and go Oh this is starting to align and so every so often I kind of like to look and go. Hmm Okay, the Bear's argument. You know they have a point here here and here. This is a really good point.

I Think this is a fantastic bear argument is that we don't know how dirty this recession could be. We have no idea. uh and so we just have to see, hey, how, how's our, how's our progress growing and uh, what is the likelihood that the amount of wealth and excess savings that has been built up uh, will actually sustain us through the recession? Now somebody left a comment yesterday which I thought was actually a very fair comment. They're like Kevin can you clarify why Everybody keeps saying that you know the savings rate is down and uh, a credit spending like Consumer Debt is up.

But somehow people have excess savings and this is actually a very weird phenomenon. So let's say you have twenty thousand dollars of excess savings, but you're saving zero right now. Your savings rate is zero so that could be explained away. We can explain a way that you have more money while the savings rate is lower than usual.

That's fair. But then why is debt going up? Well, it's financially stupid, but a lot of people do this. They will actually look at money in their bank account and say yeah, I'm going to keep that. That's my, That's my.

safety net now. I'm going to go spend on my credit card and