You know, the world sort of changes gradually of a hard Landing If The Fed doesn't start cutting rates, you know pretty soon. Hey everyone, Me: Kevin Here in this video, we're going to talk about how to make hundreds of millions of dollars by tweeting and manipulating markets. Oh, scratch the manipulating part by tweeting. Yeah, in this video, we're going to talk about the importance of communication in markets.

What? Bill Amman Just pulled off with his treasury short and how much money he made and what he saw and how he did it. But we'll also talk about what the Federal Reserve just said. mostly because we've got to study the implications of communication now. Communication is pretty overrated by most.

In fact, most believe that markets are completely dictated by information that is readily available at the time. In other words, if GDP is strong and unemployment is still strong and inflation is trending down, and Company earnings are XY Z whatever they might be. It's believed that markets are efficient that talking about the markets doesn't actually make a difference. What makes a difference is new data.

But in this video, you're going to find how absolutely wrong that idea is and how easy it is to manipulate markets, especially when you're in a position of power. We'll start with what the Federal Reserve just did and we'll end with somebody not at the FED Mr Amman to show you that it's quite frankly, possible for anyone and quick reminder if you want to catch me. Live for the Stock Market Open every day the market is open. join me at the meet Kevin Live Channel We're going to be doing the live streams there as opposed to on this channel, so make sure to subscribe to the live Channel First let's take a look at the Federal Reserve Yesterday yesterday Mr Waller at the Federal Reserve suggested that we're encouraged by early signs of moderating economic activity and that inflation is trending down That even though it's still too high, we feel increasingly confident that policy is currently well positioned to slow and get inflation back to 2% In fact, if we continue to see inflation Trend down over the next 3 to five months, the FED might start lowering interest rates and this sort of bullish talk helped contribute the S&P 500 getting all the way back to basically its a summer highs look at that.

This is the Spy which tracks the S&P 500 basically all the way back to Summer highs, the S&P 500 rallying over 10% this month alone and yesterday's comments by the FED really starting yet another risk on rally Bitcoin up Tesla up mem stocks up GameStop up 10% followed by another 10% the next morning. This kind of communication can have a really big impact on how people feel. and the reality is, the stock market is not a place of perfect information equals perfect pricing. in other words, an efficient market hypothesis.

Instead, the stock market is more or less a graph of human emotions when we feel most in despair. like how we felt at the end of 2022 when we thought we were about to get the Pvar rug pole and were going into the depths of a dark recession with no end in sight for Rising inflation. Well, the market was at its lows, but of course those lows ended up being some of the best buying opportunities. Tesla At nearly $100 Nvidia at somewhere in the mid 100s, these were fantastic buying opportunities.

Those are exactly the buying opportunities that Warren Buffett And now the late Charlie Monger God bless Charlie Wer have said they have said they've been able to make billions of dollar in profits investing in markets because of people's emotion. In fact, I have a thesis regarding this sort of emotion that we tend to see I call it my rubber band thesis. the rubber band thesis, which is something we talked about in the meat Kevin Podcast yesterday is simply this: if you have a group of five stocks and all of a sudden four of them move up and let's say the stock that you went all in on because you thought it was the next greatest thing and you have the best fundamental thesis for it. Your stock is just that one.

Everybody else had all the other ones so everybody else is like hey, look, our portfolio is alltime highs. Your stock is here. It's very tempting for people to sell the stock here and buy these stocks because the belief is well. we were taught in school that the market is efficient and therefore I'm must be wrong about my thesis because my stock isn't going up like the other stocks.

Well, my belief is that these stocks are actually connected by a rubber band. so if you had for example, a pole right here in the middle, the more you go up, the easier it is to snatch right back down. And the lower you stay. when the entire bar on average goes up, the easier it is for your stock to snap up to that bar.

Now of course a lot of folks are going to hear this and they might think oh, but wait, like the FED is part of what the market needs to price in. So the market is just reacting to a Fed because that is new information, right? Well, maybe. and that's why we're going to talk about Bill Amman in just a moment. But first, it's worth wrapping up the idea that yes, the FED is indeed powerful.

This came across the tape just this morning right around the 7:00 hour California time and 10:00 hour eastern time We had bosk suggest that the path to 2% inflation will be bumpy. This is very different from that optimism we got from Waller yesterday. Probably a little texy doodle from Jerome Powell suggesting Hey Hey Listen, we rely on tight Financial conditions and Waller just hit the tape yesterday loosening Financial conditions. Bro, you're making it harder for us.

See when treasury yields go down and stocks go up When that happens Financial Conditions go down. Uh, in other words, they become looser. The chart of financial conditions: tightness goes down when you have looser Financial Conditions People might be a little bit more optimistic at paying a little bit of a higher price and they might be less discriminatory in how they're uh, choosing what to pay for and that potentially could lead to more inflation. so the FED wants to be careful.

So what happens? No surprise the very next day Jerome Pow must have picked up the phone and said hey, fix the problem Waller caused So who do we send in? Boston bumpy path to inflation tighter Financial Conditions which we've had are going to start biting harder and and that is scary. So when we hear that things might start biting harder, what we're actually doing is suggesting stocks should go down, which then they do. Stocks going down tightens Financial conditions even more. It's manipulation is what it is.

now. it's this Fed speak is legal. They call it transparent. But let's be clear.

it is what it is. It's manipulating the market on a day-to-day basis. Then of course Barkin comes out. We will in the end have some kind of slowdown.

My forecast is that inflation will come down but stubbornly and once we get to 2% then we can have a conversation about changing the inflation Target Which is really interesting because really, there's no expectation that this target is ever actually going to get changed at the FED. But I feel like this is a way of bark and saying, well, look, we we might consider talking about changing the target, but first, we must get to 2% It's just a way of reiterating that they're going to 2% to lower rates. You'd need to be confident inflation is heading back to 2% So of course what happened to the markets immediately after this? Well, it's obvious you could see right here is where the market opened, rallied to and collapse to following right here in that early 10: A.m. hour.

The notes from the FED, but again, people might say Hey Kevin Kevin Look, the FED is part of what the market has to price in. In fact, the Federal Reserve speak was quite timely. Look at this treasury yields were plummeting on the tenure this morning down to about 4.25 and this is extending the greater collapse we've seen from 5% Of course, after Wallers and Bostick's discussion, we've seen rates Trend right back up. Not a horrible surprise though, because we know the Federal Reserve has accustomed markets to paying attention to things that are said.

Well, now, a market Market accustomed to the latest opinion from someone at the FED also turns into a market that's getting accustomed to the latest opinion from hedge fund traders who have made lots of money in the past and therefore you should pay attention to them because they're always right. Well then people wonder, Well, what came first the chicken or the egg And the reason I say that is because Amman's had good bets, but he's also had bad bets which is technically the average definition of an investor. Massive losses on the Herbal Life short sale, which have come to haunt him for a very long period of time. Also, paper handing Netflix when he bought Netflix the stock fell 35% he paper handed it and then the stock skyrocketed it.

so we have to take everything with a grain of salt. Bill Amman was also the person who during the Covid-19 pandemic said oh yeah, we're long stocks, but we should shut the economy down for 30 days to stop the spread only to find out that he had very short-term option bets against the market. So even though he may have been net long, the short-term option bets profit him over a billion dollars by potentially manipulating the market with communication. So is it possible that bill Amman is back at it again? Well, I Believe the answer is yes.

Fact. nothing's ever changed. Take a look at this bill Amman reveals he's shorting the 30-year treasury. This is back in August suggesting the 30-year yield could reach 5.5% soon.

In fact, he says it's hard to imagine how the market absorbs the large increase of supply of higher rates. and given de globalization, higher defense costs and energy costs and growing entitlements and growing debt. Oh my gosh, every potential fear somebody has treasure yields must go up quick. Note: Some folks have reached out requesting some additional lectures and content which is fantastic because I always like to add more lectures to the programs on building your wealth including the brand new gold course which is live now And what I'm going to do is I'm going to add those like I always do completely for free.

As a result, I'm going to just keep the Cyber Monday sale going for a few days longer as we get those extra lectures posted and I'll give everyone a heads up. once those are posted here. we literally see fund managers grouping up and teaming together to make sure to remind you that treasury yields are going to Skyrocket Here's a Business Insider piece: Bill Amman Larry Thinkink see US Treasury yields hitting 5% within literally weeks interest. So I would not be shocked to see you know 30-year rates? Well, you know well into the you know through the five barrier.

Uh, and you could see 10 the 10e approach. approach five J and that and that can happen in the very short term. Like like literally we weeks don't mind the short-term option positions we have betting that it's going to happen. We believe it's going to happen.

That could happen in the very short term. Like literally weeks says Mr Amman And then we get the Tweet thesis. Of course. I've been surprised of how low long-term Us rates have remained in light of structural changes.

This is implying that you wouldn't flip-flop off of a structural change, right? Because if you have a structural change, why would you flip-flop off of it? After all, it's a structural change, so it's going to last right. Especially if that's based on De Globalization, higher defense cost, energy transitions, growing entitlements which we just heard greater bargaining power of workers. Oh, the strikes. Strike people.

While they're fearful about the strikes see, it's it's perfectly perfectly timed. Uh, from a supply demand perspective, we have $32 trillion of debt and large deficits. As far as the I can see, when you couple this with quantitive tightening, it's hard to imagine how the market absorbs such such a large increase without materially higher rates. Okay, mind you, this is coming to you from August from Bill Lman.

Now this continues. You can see it right here: August 2nd 6:06 P.m But he's not done yet because he's still pleading his case. and I want you to ask yourself, do you think any of the things he's saying here greater uh, worker bargaining power or uh, the structural change of deglobalization or China uh or the long-term budget deficits of the United States are any of those things or the energy transition? Are any of those things going to flip flop and change in the span of three months? Four months? Probably not right. Let's keep going with the thesis though.

consider: China and other countries desire to financially decouple from the US. Oh, here we go. Let's go into the whole, the dollar is going to collapse narrative as well, right? So if long-term inflation is 3% instead of 2% in history holds, then we should see 5.5% interest rates. That's why we are short the 30-year treasury.

but it's just as a hedge. Folks, it's just a hedge. See the best Hedges are the ones you would invest in anyway, even if you didn't need the Hedge. But boys and girls I think we need the Hedge H Wow, those are some serious structural changes.

Those probably would endend up leading treasure yields to Skyrocket right? Well, and that is exactly what they did. So congratulations Bill Amman Thanks to the fear that in part Bill Amman created treasury yields skyrocketed right around the early August period to approximately 5% Now remember Bill Amman made these claims as highly structural and unlik liky to disappear. Now keep in mind if you are short treasuries, you make money when this line goes up. and Bill Amman made money as the line went up because after all, he must have correctly seen massive and true, truly impactful structural changes, right? Because I mean he was right And you know 5% is just right here.

so he must think they're going to keep going on forever, right? No, not even he believed that in fact the very next thing Bill Akman did as soon as we even got close to 5% Which means once again, he didn't make it to where he was suggesting we were going to go. Bill Amman right here closed his short position on treasuries. So by doing this, he took a delicious profit of yes, $200 million, $200 million making a 2 and 1 half month bet. You know the world sort of changes gradually by manipulating markets with communication.

Because obviously the fear that China and Bricks will take over the US dollar de globalization, worker pricing, power, and an energy transition are structural things that now are no longer structural and we should actually bet on treasuries instead because you know we covered our bond short. There's too much risk to remain short bonds. The economy is slowing more than recent data suggests. So from Full thesis to uh uh, JK forget everything I Just said yeah, That is how the market is 100% not efficient.

I Think there's a a risk of a hard Landing If The Fed doesn't start cutting rates. you know, pretty soon, so you know I Think the market expects sometime middle of next year I Think it's more likely probably as early as Q1. So not only is it the Fed's communic, but it's the fact that hedge fund investors can manipulate markets and quite frankly, people as well. The good news is we have some real data that shows Market expectations of inflation are the lowest they've been in virtually all year.

This is the 5-year Break Even Which is good news. It means yes, reality is inflation is probably trending away. Markets even though there's volatility, are also pricing in no more rate hikes. In fact, the blue line represents cuts and as you can see, we are pricing in up to five rate.

Cuts between now and January 2025, that's four for next year and this remains true even after the Feds speak earlier today. So what do we make of all of this? Well, I Think as an investor, you have to decide. Are you number one A Trader Uh, Who likes to use this information as sort of this breaking news and this talk to trade the market? And if you do, you probably have plenty of opportunities because markets do move a lot on people talking? Which somewhat proves markets aren't really efficient. Certainly not at least in the short term.

Like Warren Buffett mentions, though, in the shortterm, the stock market is a voting machine. In the long term, it's a weighing machine. Second thing to consider is if you're a long run investor, maybe it makes sense to be careful of how you get manipulated by the data or hedge fund managers. Uh, you're being presented with.