Hey everyone we kevin here, let's talk about what the heck is going on in the market and what i'm doing about it because here's the thing the market is a very red and usually i hold a to the moon, coffee mug in my right hand, but now I have to hold a buy the dip coffee mug, in my left hand, folks. Let's talk about this. We're going to talk about inflation, we're going to talk about oil, we're going to talk about energy food; we'll also talk about what i'm doing in terms of my investments as well as a little update on ever a grand and some of the other madness going on. Okay, folks, let's get into this, so one of the first causes for concern has to do with new reports out of brazil that we might expect to see substantially more inflation in food prices than ever before.

In fact, the u.n index on food prices is showing that we are up 33 for a lot of food sources. Year over year, brazil in particular got decimated with a horrible drought this year and then after the horrible drought killed off many plants. We got a crazy arctic frost that killed off even more. In other words, you had this double whammy of potentially well climate change, destroying crops and leading to massive increases in food pricing and more supply chain disruptions as you've got vendors around the world.

Looking for new potential exporters for orange juice, soy ingredients, sugar, coffee and corn, which are some of brazilian's biggest exports, in fact, or brazil apparently supplies 75 percent of our orange juice. 54 of our soy products, 50 percent of our sugar 32 percent of our coffee, 22 of our corn - that's crazy! So yeah you're going to see some food prices go up. It's not just food prices. Unfortunately, and remember anytime, we hear inflation.

The market kind of gets a little freaky right so that inflation report out of brazil, not so good. Now, some, you know local sources say this is just fud. Don't worry, we're a big season. We got plenty of uh or we're a big area for farming.

We're a big ag industry we've got plenty of water, we'll be fine. This is just a one-time event whatever it just happened to happen right after the covet pandemic, where supply chains are already screwed up, then you've got this energy crisis going on in the united kingdom. For example, can't get enough natural gas and they can't get enough energy from renewables. In the meantime, this means the price of natural gas is skyrocketing, as demand is going crazy in the united kingdom.

This has made commodity markets a lot more tenuous and essentially nervous and at the same time, in the united states, where, fortunately, we do have a diverse supply of energy sources, we're not so concerned about natural gas prices skyrocketing, but instead we have insanely high oil demand. As we're reopening at the same time as we're still recovering and suffering, essentially from strained oil production from the gulf's two hurricanes this year, that contributed to oil prices going up so now, you've got an energy crisis. In the united kingdom, you've got oil prices going up over here. In fact, if you look at uh brent, accrued oil and you look at the day, chart you'll see that we crossed eighty dollars for the first time uh in many years, so that we've crossed eighty dollars.

In fact, let's go out here to the ten year and just see when the last time was that we hit uh eighty dollars. The last time we broke 80 was briefly in 2018. Just very briefly, but you see we really haven't been sustained above 80 dollars since about 2014. so 80.

This is a pretty big recovery from the the bottom of the coved recession. Here, where, at one point we actually went negative on oil prices, but now we're seeing quite the opposite, and so this is obviously leading to pressure on the 10-year treasury yields and just treasury yields in general. If we look at the one month chart for treasury yields, we'll see that we've moved up nicely here on treasury yields, which is usually associated with uh. Oh, if treasury yields are going up, that means inflation.

Fears are going up, and that means the stock market sells off over inflation uncertainty. Now, interestingly, if you go down to the one day, we actually peaked around 1.56 we've since pulled back on this uh. This treasury yield the 10-year treasury yield. Here, we've also pulled back on this sort of peak crude pricing and so you'll see this is the day chart so we're at bottom of uh crude pricing for the day, we're at bottom of 10-year treasury for the day at the time of this recording.

But yet look at this. The dow jones industrial is also at bottom. You would think if brent was recovering and treasuries were recovering, because people were fearful of inflation that the dow jones would be going up again, so it kind of leads some of us to think. Maybe it's not just inflation that people are fearful of, in fact, if you look at something called the 10 year break even curve, let's do this type in saint louis fred, 10-year breakeven slap that into google here, pull it up.

Take a look at this. This is fascinating, what's happening here, we're going to zoom in to just the last few months over here. So what this chart here is is the 10-year break, even inflation rate and basically takes the 10-year treasury rate subtracts off tips which are treasury inflation-protected securities, which is basically a way of saying i'm just going to bottom line this and fast-forwarding a little bit here. Okay, the higher this chart goes the more the market's freaking out about inflation, so the lower it goes, the less the market's freaking out about inflation.

Well, it's been flat. So if we're really worried about inflation because of energy costs in the united kingdom, oil costs in the united states or throughout the world, a food costs in brazil or, oh no, you know treasury yields shot up but then came back down like. Why? Isn't the dow recovering it's probably because inflation is actually not the real concern that people have right now, even though jerome powell says supply bottlenecks are bigger and longer lasting than expected, and drone policy reiterated that this morning reiterating again that these inflation expectations uh are probably Temporary they're just lasting longer the issues of of where we're seeing inflation are in categories where we do expect them to be temporary. We think they'll last a little longer yes, but we think they'll go away and honestly, i think the market's starting to believe him.

In fact, when we look at these charts, it makes sense. This is actually not a sell-off due to inflation energy crude. I personally think all of that is just noise. It's noise, noise, noise, noise.

You know what i think is really happening. Folks, it's ever grand it's! My opinion there are lots of different opinions going on. People are like. Oh, it's, the debt ceiling.

Oh it's the budget deficit. Uh, you know get the united states budget getting extended. Oh it's going to be. Are we going to get the three and a half trillion dollar package and the tax increases or not sure? I think all of this noise can contribute to volatility and uncertainty? I do believe that, but i think the real catalyst here is actually evergrand because listen to this on october 3rd, which is a sunday so really october, 4th 260 million dollars of notes mature against evergrand from a company called jumbo fortune enterprises.

Now this company holds bonds in evergreen uh, one of their owners, which is such a weird loop, is actually uh, also an owner or a subsidiary of evergrand, which is this like really bizarro lupo. It's a disaster what's going on over there and the transparency is horrible, but the point is 260 million dollars of bonds mature come due on october 3rd, which is a sunday so october, 4th and folks october. 4Th is like next monday. It's crazy.

This friday is already october 1st we're not getting jobs data. This week, though, we get jobs data next week and we get cpi data next week, and you know if you thought, maybe the market was being tenuous, because jerome powell and janet yellen were talking. Maybe they blabbered and we kind of saw the market fall, but it didn't really either recover afterwards and they didn't say anything. You know super spectacular.

They said a lot about a different many different things, but if anything, i thought some of the things that jerome powell was saying about. Interest rates were actually potentially bullish, go watch, my video watch, your own power and what janet yellen just said. If you haven't seen that yet go watch it, but what's more important folks, i think these ever grand due dates, i'm going to put something on screen here from my ipad. Look at this okay! These are the evergrand due dates.

Please take a moment and screenshot this! Okay, i put this together uh, you know from from research uh. I think the source here is bloomberg for what it's worth uh, but uh. I put this into a little chart here. No, it's not really a chart.

It's a bubble! It's a circle anyway, screenshot this! Okay, evergrand due dates: china, evergreen march 23rd, 2.03 billion dollars. These are the 2022 due dates so here hold on before you screenshot uh, and this comes after the uh, the remaining catalyst of 2021. So the 2021 catalyst is the 260, so i'm gon na put after 260, mil in october or on october 4, 2021.. Okay, there that'll that'll be a little better for you to take a screenshot of okay, alright ready so take a screenshot of this right here.

So you've got evergrand 2022 due dates after the 260 billion due on october 4th 2021, you have china evergrand march 23rd, 2, 2 billion april 11th, 1.4 billion dollars hanged da real estate, which is owned by evergrand, and that is for july, 8th 8.2 billion renminbi uh, Which is the chinese currency uh about 1.269 billion usd, so the top two are denominated in usd the that july. 8Th ones are nominated in redmond b. That's why we're changing currencies since the currencies fluctuate, uh scenery journey journey, and then you get these these others. Here: 2 billion in october 645 million in november anyway, this company's going gon na go bankrupt.

Like i don't see this company not going bankrupt, some people say: oh it'll get federalized uh, some people say no, their contracts will get distributed to other developers and the other developers will get really sweetheart deals and partnerships with local governments. The point is things just aren't good for evergrand. I personally think if things get better with evergrand the market's going to perform a lot better, and i really believe that inflation is not the sole concern here and we start training below the yellow line, which is the 50-day moving average. Sometimes we can get continued pain, uh or continued bouts of pain, not always, but just go ahead and look at this year, for example, trade below the 50 over here.

It kind of signals a little bit of pain to come two to three weeks later, where we get a bigger dip in february. You get this dip over here. You get these other dips. Now, obviously dips happen, but look sometimes you get these dips above the 50-day.

Moving average, it's really not a big deal. It's when you break that 50-day moving average. Sometimes it can kind of forecast a bigger dip, see even a small dip forecast, a bigger dip uh here you didn't really get that. So it's not foolproof, obviously, but we're trading substantially under the 50-day moving average.

And so that's i think, what's worth noting is that we really haven't traded this substantially below the 50-day since september of last year or october of last year, and those are really good dips to buy in hindsight, and so in my opinion, since we rarely do trade With the s p, 500, under the 50 day moving average, it's a buy the dip opportunity, that's just what i'm a fan of i'm a big fan of uh buying this dip, i'm buying my favorites end phase a firm palantir. Now these are uh tech exposure, fintech exposure, high higher valuation right uh. You know energy exposure, things that uh, you know uh can tend to sell off when there's uncertainty in the markets, but that's great because it creates an opportunity for me, so i'm buying this dip. I would keep an eye on that 50-day moving average for the s p.

500, though, i think it's a perfect buy-the-dip signal for you uh when you're shopping, but uh that doesn't necessarily mean the dips are going to get you a better deal than if you bought uh sort of at least for the s p's purposes. On a green day. I mean sir, look if you bought on a green day. Let's say right here, depending on when you bought within that day, you'd probably be below the biggest dip over here right, so it just gives you an example.

You know time in the market beats timing. The market generally right, but i like buying the dips i like when there's fear buying, i don't see massive fear catalysts outside evergreen and the way i'm going to judge that selloff is by looking at evergrand stock 3333.hk, just type that into google or 6666.hk. That's the ev division. I'm going to watch those i'm going to watch the bond payments, i'm going to watch the crypto markets and i'm going to watch real estate prices in china.

That is going to give me sort of a heads up in terms of potential issues. Here now crypto is falling here today, and that could be why we're also seeing a red market, because that is a warning sign for our market. So in my opinion this is evergrand fear uh. I am not going all in with my cash, but i may be deploying about seven percent of the available cash that i have in buying the dip.

So just for example, if i have uh you know three million dollars, i probably deployed about 250 000. Roughly, that's roughly what i deployed so just to give you a thought as to where i am and if we keep dipping with throughout the rest of today, i might even buy a little bit more, but i'm bullish on kind of buying this dip, because that's kind Of what our markets have been really good at it's just buying the day, alright, folks, thanks for watching and we'll see in the next one, you.