**MASSIVE Warning for U.S. Economy | Collapse BEGINS**

the stock market is selling off today

and I hate to say it but the Chicago m&

report might have something to do with

it as what's called a leading

indicator and folks in this video I want

to give you a trajectory

that whether this happens or not I think

is really important for you to take the

big takeaway out of it and apply it to

your life so we're going to have a big

life sort of lesson towards the end of

this video so if there's any video of

mine that you're going to watch to the

end I really encourage it be this one

because we're going to start with some

data that you know probably be old in a

few weeks but the rest of the video will

be really critical so when I start out

with talking about this m& report how

bad it is and we compare it to how good

some of the retail sales numbers are and

try to reconcile this or when I say that

we have an amazing new trade going in

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that at me kevin.com you get lifetime

access to all the courses on building

your wealth and with all that said let's

get into the video today first things

first take a look at this folks this is

the Chicago business barometer now they

measure this using the Chicago area but

they see it as sort of a basket that

could be a leading indicator for the

United States in fact they themselves I

mean maybe they're biased but they call

themselves a key leading indicator of

the US economy uh and this is a

diffusion report which basically says

when you have a survey at 50 everybody

thinks things are the same when the

survey is above 50 people think things

are growing when the survey is under 50

people think things are shrinking well

this report was actually sitting in a

pretty narrow range for the past 4

months and they said that themselves I'm

not creating you know a range with

technical analysis on their chart this

was their argument they said for the

past 4 months we were trading in a tight

range of 45.3 to

47.4 which is under 50 but it's it's

consistent in the tight range this

survey is not Q3 data a lot of the data

that we've been getting is Q3 which is

when you had a lot of pull forward

because of the port strikes that

happened on October first everybody's

like oh crap let's order let's build our

inventories let's do everything before

October 1st because then the port

strikes are going to screw everything up

this report was actually done between

October 1st and October

15th so for the first few days of the

Port strike like two or 3 days uh and

then the Port strike was over uh and

then the next basically two weeks

thereafter well take a look at this this

is the report and what do we have it

drops to

41.6 that's a really big drop listen to

some of the lines here lowest level

since May of 2024 a 1.6% or point below

the year-to-date average position the

decline was due to four out of five

subcomponents falling production falling

new orders falling order backlog falling

employment falling only deliveries were

Rising but deliveries are often from

orders from the prior month anyway so

that they lag anyway out of those uh

categories all the leading ones are

giving you a warning sign and this is

all happening mind you at the same time

as you're getting sort of this AI pop

right now a little bit I mean the

nasdaq's down 2% Nvidia is down 4%

Microsoft's almost down 6% Tesla's down

what 25% here yikes losing that 260 is

never good who knows maybe it's just a

day of a correction but let's look at

this report production fell 7.8 points

significantly below the year-to-date

average uh and this was due to nearly

40% of respondents reporting lower

production with half of respondents

nearly half of uh respondents reporting

smaller backlogs and 90% reporting the

same or smaller employment

90% this means in October almost

everybody's talking layoffs here or uh

or or stability like stable to down no

up now I know we had a volatile ADP

report that looked pretty exciting and

consumer spend seems to be up and

confidence is still up but you have to

kind of think a little bit about how the

trajectory of recessions play out and

then let's go let's go through that and

let's talk a little bit about life

lesson in this I also want to give you a

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the disclosures over there at

house.com okay so this is what's really

important and I want you to watch this

very carefully path to

recession the first thing that happens

is consumers become more choosy okay

we've heard this already companies start

discussing value more oh we need to

provide more value everybody's getting

more choosy then pricing power wains few

companies actually have pricing power

basically everybody's PP goes soft not

good pricing power goes away they're

like damn we can't really price anymore

so if we do take price our volume goes

down paton's doing well today I don't

think it'll last they're doing some

pretty great J they're doing a lot of

cost cutting though which actually feeds

into what we're talking about here but

their trajectory of Revenue growth is

negative of their existing customers

they bump the prices a bit though and

then they're cutting costs so they're

doing their best I'll give them that but

anyway as pricing power wanes one of the

first things that you start seeing

happen is manufacturing and production

start

constricting now think about some

companies that have told us about

this Tesla with the exception of their

um uh mega pack facility and the semi

facility they're not expanding facility

lines for manufacturing more cars but

we've known that for the past few years

what's something new that we don't know

about UPS is starting to constrict their

supply chains they're reducing the

shipping lanes that they have because

they're starting to see tempered

forecast of demand for the holiday

season it's a problem in Europe what do

you have in Europe in Europe Europe you

have manufacturers closing Volkswagen

and others I mean Europe's near

recession and China you have straight up

bankruptcies for supply chain so now

what you're actually doing is you're

starting to constrict Supply chains now

you might think oh Kevin that's going to

be deflation or sorry that could be

inflationary right no because volumes

are plummeting way faster then these

Supply chains are constricting so think

about it like the economy got really fat

and Bloated

and we're like a you know a 600 lb life

and then all of a sudden we lose weight

really rapidly we've got a lot of extra

skin kind of gross I know the analogy

but like even if you take or like

surgically remove some of that extra

skin some of those Supply chains you

still got extra cuz you've just lost a

lot of weight you just you're just not

filling that package that 600b package

up anymore it's

shrinking so you're starting to see this

Manufacturing constraining Supply chains

constraining and while I was on my

vacation I was studying this and I was

really looking I go oh my gosh Supply

chains constricting are actually a

deflationary warning not an inflationary

warning because it's a sign that demand

is falling so quickly that they have to

cut Supply chains

scary then what happens well then all of

a sudden earnings per share beats are no

longer Topline driven now this is really

important because when earning per share

are no longer Topline driven you have to

drive it through efficiency so everybody

drives a little bit of AI efficiency uh

or they fire some people and when they

do that they get a little bit more

efficiency they get a little bit of a

boost sorry I had to go close the noisy

door they get a little bit more of a

boost but it's temporary it doesn't do

you much because you you can only make

your workers so much more productive hey

workers use AI cool you're 10 20% more

productive now what are you going to do

on the next earning cycle uh well AI

isn't you know an order of magnitude

better than it was last

year so maybe you had an 18% efficiency

the first time and the next time you

have a 2% efficiency like your

efficiency gains Peter out so what

happens after the efficiency push well

you start firing people I mean Visa just

laid off 1400 people to you know

consolidate and cost cut it's kind of

like the Challenger jobs report we saw

this morning cost cutting cost cutting

cost cutting then job openings plummet

we're now at a level of 1.1 job openings

per unemployed person and a lot of those

job openings are probably not real job

openings anyway because people sort of

just leave them open on indeed or or

whatever uh you know the LinkedIn

whatever recruiting pages and you kind

of have a misleading look at job

openings and once these job openings

fall and the labor market really turns

it's really hard to stop the fall which

the FED has told us about before

then all it takes is losing a prop of

your economy that could be the housing

market in 2008 it's not this time uh how

there's way too much equity in homes uh

there's there with the exception of like

Florida and Texas where you're starting

to see some short sales actually could

be an opportunity for house Haack to buy

the dip in some of those areas

eventually but we invested in areas

where prices are higher now than they

were in the last 2 to 3 years even last

year uh are are you know where we've

invested property values have gone up

but that's you know because we're on the

ground we do the research that's that's

house act like I'm a real estate guy you

want to learn all about my systems and

everything remember me kevin.com I teach

you what we do and how you could do it

too pretty low cost if you think about

it you get one wedge deal and it makes

you 100 Grand and you spent you know 400

bucks or whatever 500 bucks on a course

like that's a good deal but anyway uh

then what happens is the prop of the

economy somehow

Falls uh

so what you end up with here is you end

up with potentially AI popping okay well

this is not good now we've been talking

about that potential for a

while but now it's starting how is it

starting it's starting

because you're seeing a slight Miss on

guidance from Microsoft and AMD now I'm

not saying that's fair I love the cash

flow generation at AMD I love how much

money Microsoft makes as mostly a

service business these are amazing

businesses Nvidia is a great company uh

Apple is a great company these are all

amazing contest is a great company the

problem is the valuations are broken and

so all it takes when you have high

valuations is a slight Miss Boom stocks

down if stocks go

down what do you end up with with stocks

down well then you get people that start

fleeing big names when people start

fleeing big names they end up going to

smaller riskier companies like root or

pelaton whatever they often end up in

money losing companies and low cash flow

companies they stay away from value I

personally in these sort of markets like

companies with high cash flow yields as

a percentage of their market cap this

morning in my uh course member live

stream you know I think we've had over

1,500 people already watch it maybe

2,000 at this point uh we talked about a

company that has an over

88.8% free cash flow yield that's

trading for 13 times earnings and a PEG

ratio of uh like less than 6 it's

amazing in my opinion uh and and I think

there's an opportunity like those are

the things that I think are better in

this sort of situation but people sort

of flee the bigger names as they do that

companies get more pressure to lay off

UPS temper expectations Wells Fargo

warns of a scary Christmas Visa lays off

that's just the start people don't want

to feel bad though so they spend their

last breath while the economy is still

somewhat at highs stock markets are

still somewhat at highs they spend their

last bits of savings so to speak because

they got to keep Impressions up they

want to feel good about the economy they

want to feel good about themselves so

they blow some more money going into the

holiday season what do you think that

hangers hangover is going to feel like

in January then you get volume that

continue to plummet at Starbucks and

start plummeting at Walmart Amazon

companies then spend less on capex

because stocks have gone down look at

the cost of artificial intelligence

chips like the h100s rentals for these

per hour

plummeting too much of them and when the

value of these per hour goes down the

value of the actual underlying chips is

going to go down which creates balance

sheet risk for these companies which

creates potential write down risk for

these companies which just contributes

to the potential pain that the company's

stocks end up experiencing stocks end up

falling more as the efficiency growth

you know hits basically diminishing

returns Topline

Falls now you end up with more layoffs

so really when people are so worried

about like the jobs reports coming in

with dirty numbers you have to go

through this whole cycle first and then

you confirm a recession when job Cy when

layoffs get bad usually when the yield

curve is inverted 50 to 90 basis points

that's when you're at a recession we're

only at 12 right now so we got a ways to

go so what's the life lesson of this

folks please please please I beg of you

prepare for one thing okay prepare for

massive wage deflation please I beg of

you look I run a real estate company

it's house you invest in house.com you

know I've got courses on building your

wealth at me kevin.com but I'm also a

financial adviser that's at stock.com

and the people that we're talking to we

are analyzing their tax returns their

tax situations their business structures

their their entity structures what

they're doing to maximize their chance

of getting through the next recession

whether there is one or not because

guess what if there's not a recession

you just made yourself stronger if there

is a recession you enabled yourself to

survive you can book an intro call if

you want over at stock act.com

but anyway prepare for massive wage

deflation not just because of a

softening economic cycle but also

because of AI it is going to cause wage

deflation people are used to wages going

up all the time the opposite is going to

happen people are going to start bidding

against each other to get wages

down scary that's my take so prepare do

what you can save

minimize your risk diversify your

Investments uh evaluate paying down debt

maybe look at the stock market still

mostly at alltime

highs and and maybe be a little cautious

I me look at this the q's hit 500 we hit

an all-time a near all-time high over

here 50135 we were at 502 in July

okay it's Rich right now

nvidia's near alltime highs

paler

Tesla

whatever just buckle up that's all

anyway thank you so much for watching I

hope this is helpful for you check out

house hack.com meetkevin.com and

stack.com see you all in the next one

thanks so much remember that coupon

expires tomorrow at 11:59 p.m. you get

to see that trade I'm working thanks bye

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 PA there financial analyst and

YouTuber meet Kevin always great to get

your take