This is a little scary I want to read you something and I want you to tell me when this is from. Okay, ready for this? these are the excerpts and then I'll show it to you instead of the United States Being the world's engine of growth, the global economy could now become the engine of American growth. Except for the housing downturn, which Fed officials admit is much more severe than they had expected. the evidence of a recession in the real economy is ambiguous.

Global economic growth is much stronger than it was during Thec bubble. So in other words, this time is different and American exports have climbed 14% so far this year. the Labor Department also reported that producer prices fell by 1.4% in August much more than expected because of slumping Energy prices just a few hours before uh, the FED spoke new statistics did did come out though, suggesting the pace of home foreclosures excuse me is accelerating realy track of Irvine California Reported that foreclosure filings from default notices and auction sales to bank repossessions were 36% higher in August than in July. It's a massive explosion and 115% so more than double over a year ago, the only ammunition the consumer has left now is from the labor market.

If income growth is compromised here because the labor market is weakening, then you've got a serious problem. The debate within the FED is now about the possibilities inflation. however: Remains The predominant concern. Of course we don't want to compare to Thec Bubble because this time is different and after today's Fed rate decision says this article: Gold a traditional investment Safe Haven In times of inflation soared immediately after the Fed's decision was announced.

The value of the dollar also touched a new low. Uh, so a lot of that sounds pretty dang familiar, doesn't it? Inflation being the predominant concern. The consumers holding up the market this time is different. Fed worried about how housing? when is this? from here it is New York Times Markets sore after Fed Cuts rates by half a point September 2007 That's scary.

That's a scary article, you know because look I mean look, we know there are differences. Okay, uh, let's compare some of the differences. but that's scary I actually covered this on uh, this new project. this Pet Project project we have.

It's totally free. A lot of you have been asking for something like this. We're dumping all of our research on Ec.com Uh and so I covered this last night. You can see here: 11:56 p.m.

California time I Dropped this in here and what's cool is uh you could get our my opinions as well as data data being the check marks. my opinion being the little Halo thing. but if you click on this, you can actually just get the PDFs of of what we're referring to. Uh, you can see we post a lot of stuff on here latest.

uh GDP estimate? uh crypto news? uh GPT news? whatever. So go to Ec.com and check it out. It's pretty cool. Uh, but that's where we first posted this and we're like, oh man, that's kind of eerie and so what's worth looking at is a few things here to try to compare.

Uh, first of all, back in Uh, 200, Uh, 6 and S we had ninja and liar loans, right? No income, no job, no assets. We had horrible credit standards most loans were variable rate loans, negative amortizations, and the entire real estate market was just a straight up bubble. Now, we like to argue that, well, it's a bubble today as well. But then again, a lot of people say no real estate's just doing really well because the 30-year mortgage has insulated the real estate market from crashing, and it's proven to be a good investment over the long term.

So the people who bought in 11 made a lot of money 2011 and so now people are begging for a crash again. So they have another bite at the 2011. Apple so to speak, right? Uh, and when we look at delinquencies and foreclosures today, they're at about 1 48% Uh, 30 days or more past due. That's uh, that's still lower than where we were in 2019.

And it's lower basically any time since the Global Financial crisis. And uh, when we consider inflation or even GDP yeah, we were fighting inflation in 2007 and 2008. Uh, right over here. Going into the recession.

The recession actually solved our inflation problem for us. Which that's why there are a lot of people saying this time is not different. We are just walking up the same tree so to speak, or barking up the same tree where basically we'll solve our inflation problem. But when we go into this next big recession for whatever reason, it is which, we don't exactly know what it is, but when it happens, oh, we'll be in deflation.

All right. Just like the early 1920s and the late 1920s, which was not a time to cheer. Those were very depressing times. The reason those times were so depressing is because the unemployment rate skyrocketed.

Just like you had in 2008. You had the unemployment rate double from 5% all the way up to 10% That's a lot of unemployed people. Uh, and and certainly if you go back into history, you can see we are at a very, very low unemployment rate right now. But what's the point of this? Well, it's to say that look, the Federal Reserve started cutting in 2007 because there were underlying problems in the economy.

So why is the Federal Reserve today considering cutting? Well, think about what Jerome Powell said yesterday. He said Kevin's courses have a price increase on the 14th. that's today. so make sure you check him out at Meetkevin.com and get lifetime access to all his perspectives, the course member, live streams, and everything else meetkevin.com Anyway, no Yesterday drone pal said well you know rate hikes are or raate Cuts rather are bad when they're being done because of an underlying problem in the economy versus a return to the normal or return to the norm.

Ah, so this is where we kind of get back to the FED pivot argument fed pivot versus the U-turn argument if the Federal Reserve Let's just simplify this: If the Federal Reserve is cutting rates, it's usually because there's a problem. It's usually because the economy is weakening. It's usually because things are starting to get poopy doopy and maybe something's about to blow up in our face like a banking crisis or a real estate crisis or whatever it is. In those cases, a Fed pivot is really bad for stocks.

Stocks end up 25 to 35% down. It's really bad. A Fed Uturn, which is where they just unleash the money, printer, and cut rates as low as they can is what we got in the late 1980s. March of 2003, February of 2008, uh, December of 2018 March of 2020.

That's a buy time. That's when stocks have bottomed. Things are so painful and so bad it's basically just up from there. Okay, so where are we right now? Well, so we've kind of painted three pictures here.

and let's try to put these pieces of the puzzle together because it's a lot. We painted three pictures. What we said is there is the Fed pivot when pain. Okay, that's option one.

The FED pivots when there's pain. Option number two is the Fed u-turns when you're basically on life support. And this is when you need the bailout again. that was your March of 2020 and I'm not going to go through the whole list list again.

Just rewind right? And then there's what Jerome Powell talked about yesterday which is the difference between 1 and three and that's called the normalization. You won't believe it. but I actually saw this morning from the suits. You know what word starting to come up again.

Transitory. The word transitory is showing up again. People are starting to talk about oh My gosh, What if inflation truly is transitory? This is like the opposite of December of 2021 when the FED had to go dirty on us and now they're going positive on us. It's like that was a Christmas bucket of coal.

Now we're getting a Christmas gift. Oh My Gosh. Normalization. This is great.

This is great. so as to whether or not the FED planning to cut rates is bad ultimately comes down to whether you think we're in number one or number three. I Think we can all agree that at this point we are not at number two. I'm not saying we're not going to get to number two, right because number one can lead to number two.

But right now we are either in number one or number two or sorry, number one or number three, right? We're either in normalization, which normalization is good. That's your soft Landing What do you want here? Probably not personalized Financial Advice obviously. but what we've been talking about over the last few days on the channel has been: Large cap Growth Large caps. Now in normalization, large caps can do really well in U-turns The small caps can do excessively well.

Uh, in pivots, you want to be in like cash. Basically, cash and money markets, right? So it depends. are we in a pivot or are we in a normalization? Well, this is where it's kind of fun to look at this New York Times article again. and instead of looking at what's familiar, uh, or or what's similar, let's use a red X And look, let's look at what actually is different, right? We talked about what's the same when we started this video out.

You could rewind it. What is like, act different and is that a this time is different Or is it like legitimately different? That's for every individual to determine, right? So here, the FED made it clear that the risks of recession were too big to ignore. Okay, well, we know that is the opposite of what Jerome Powell said like it's not different. It's literally the opposite.

Yesterday Jerome Powell told us we don't have a recession in the forecast. That doesn't mean he's right I'm just saying at least what the FED is was saying. Then in 2007 where the session risks are too big to ignore and now they are the opposite. Okay, uh, let's see.

Uh, that was was our note here. Okay, so slipping into recession blahy blahy blahy Safe Haven We talked about that. A lot of these were similar. Inflation is the predominant concern.

Now this, this is an interesting one. Inflation was the predominant concern then. But what we have now is actually a dual concern of jobs and inflation. Jerome Powell Basically folded yesterday on the idea that Infl is really a big deal now.

I Thought that was interesting. We actually put that on Ec.com this morning. Uh, and that's that. Inflation maybe isn't uh, that big of a deal to the FED anymore? Look at this article we have on eack.

We wrote the End of Hire for Longer Bloomberg Simon White calls the Fed's decision yesterday the green light for the end of the Global Hire for Longer said the FED has liberated other de domestic Market central banks from maintaining Hire for Longer. The bank must then be pretty sure that inflation is done and dusted to allow for another significant easing of financial conditions. And so then obviously in the little Halo face. I I Wrote very interesting conclusion on Bank Must be pretty sure inflation is done I Actually agree Rising Stocks falling yields would promote growth If The Fed was concerned that this would actually induce inflation.

that is, you know, uh, falling yields and Rising stocks would induce inflation. They would Hawk instead. and They certainly wouldn't be this dovish. Other things we talked about over here: I I mean I encourage you to just go to Hack.com We talked about a bear argument from Robo Bank we talked about The Ledger Hack a few times.

the Cruise layoffs. We actually just broke over here through uh leaks that we became aware of at ehack uh, we just broke nphase layoffs, reports uh, and rumors coming through about maybe a 133% layoff at Uh N phase. Which Uh is is, you know, partly cost cutting, probably. And since they do a lot of contract manufacturing and the co-ceo thinks they're going to go back to 2022 level growth, 2025 could actually be near-term bullish not only for margin, but the stock, it just sucks for the employees.

Okay, so back to what's different over here. Like different or opposite, right? So uh, let's see. Earlier this month, the Labor Department reported the first loss of jobs in four years. Okay, well, this is exactly the opposite that's happening right now.

We're not actually worried about recession. We're almost the opposite. Uh, worried about a recession right now. In fact, the Atlanta fed Real.

GD P Oh look, that's also on eack. I'm telling you yall going to love this and and support it. Share it. It's totally free and it's going to be free forever.

I Made it because you all have been asking for my research and I know you're busier these days. You don't have time for as many videos and you just want to be able to scroll when you're on the pooper or whatever. eack. Okay, so next time you're on the pooper I Just want you to hear Kevin saying pooper and go eack.

It's that simple. Anyway, latest GDP estimate is out Atlanta Fed GDP estimate skyrocketed from 1.2% to 2.6% this morning. This is the opposite of the FED being worried about a recession right or or falling growth. It's also the opposite of jobs I mean continuing claims came in weaker this morning.

The Jobs report came in stronger this month and what did we have? then the opposite. Literally the opposite. We lost jobs. Now when you start losing jobs, that's bad.

That's bad. And that's why Jpow is starting to Dove Because I think he realizes if he keeps going, he's going to cause a recession. he'll overtighten. So that's why he went as Doish as he did yesterday.

And I mean obviously in the near term here. the stock market likes this. but some of these similarities are Eerie to say the least. Uh, the debate within the FED is what are the odds of a twin meltdown in the housing and mortgage markets that would tip the economy into a recession? Well, apparently 100% Uh, since we're looking, we have.

We have hindsight bias, right? Only ammunition the consumer has left is the labor market that's actually very similar. And that's why we have the uh blue X when we mentioned in the beginning because even Japal mentioned hey, you know how are people going to pay higher prices? Well hopefully they'll make more money in August yeah the the jobs decline number. We know that's basically the opposite of what's going on. So look there are opposites and there are similarities and So based on those opposites and similarities we as educated investors or consumers or whomever you are, we kind of have to to ask ourselves okay, how do we want to position our portfolio for this right You could be Allin on normalization Allin normalization is like growth stocks and real estate baby.

let's fing go to the Moon okay like like literally just close the door, close the door. Yeah okay yes that's that's an option. If you are pivot and you think the 30% correction which we actually had in 2022 is still ahead of us your cash and your money markets and then maybe you're in between. well then honestly what you could do and again this is not personalized Financial advice for you okay it's just general idea is you could go well I think there's a 20% chance that's a pivot and 80% chance it's normalization is that then potentially your allocation, maybe your 20% money markets and 80% long, then just an example right? Uh I Do want to mention that uh, some stocks are seeing massive historic volatility bumps today.

Good time for selling options, Whether it's puts her calls look at like Alpha Quy or whatever to find the historic volatilities. All right, Thanks so much for watching. We'll see you the next one goodbye. Why not advertise these things that you told us here? I Feel like nobody else knows about this? We'll We'll try a little advertising and see how it goes.

Congratulations man, you have done so much. People love you people. look up to you Kevin P there financial analyst and YouTuber meet Kevin Always great to get your take even though I'm a licensed financial adviser, real estate broker and becoming a stock broker. This video is neither personalized Financial advice nor real estate advice for you.

It is not tax, legal, or otherwise personalized advice tailor to you. This video provides generalized perspective, information and commentary. Any thirdparty content I show should not be deemed endorsed by me. This video is not and shall never be deemed reasonably sufficient information for the purpose of evaluating a security or investment decision.

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