WTF Rug Pull | Interest Rates SKYROCKET on Stagflation

what the heck happened today because

treasury yields skyrocketed now this all

of a sudden means that the Federal

Reserve has actually loosened interest

rates by 50 basis points they're now

essentially 100% likely to give us

another 25 basis point cut even Nick T

reiterates that which means they will

have loosened policy monetary policy

within the next week by 75 basis points

and what did the market do in the face

of the Federal Reserve loosening

monetary policy by 75 basis points keep

in mind they're loosening policy to try

to motivate hiring so as the FED is

loosening to motivate hiring what

actually happened in markets what

actually happened was yields went up by

75 basis points this is insane and I

found why in this video we're going to

break down why whether this is a

long-term concern or this is destined to

correct and how there might be a

potential to play it from an investment

POV Oh and before we get into it

remember tonight is coupon code

expiration night so go to me kevin.com

join the courses join me in the course

member live streams every single morning

when we go through fundamental analysis

discuss trading and fundamentals and in

investing in any other questions you got

let's get started all right so in order

to start this I'm going to roll over

here and we're going to start with this

ISM report uh which is the PMI purchaser

manager index uh from the uh ISM

Institute for supply side management now

this is a really important report

because this report helped contribute to

the yield Spike today because prices

paid spiked and so we saw manufacturing

week weing a weaken again but then

prices paid when this report came out

that prices paid spiked people again

started the trade which has been popular

amongst the Trump trade as well that

says oh okay we're going to have

stagflation or longer term inflation

therefore the longer end of the yield

curve is going to go up at first glance

that sounds logical but when you

actually look at the details it is

deeply flawed let's first understand

what's actually in some the portions of

the report promise I won't read you all

of it let's keep it simple first US

manufacturing activity contracted again

in October and at a faster rate compared

to last month as demand continues to

weaken this is not good this is how

recessions begin output declined input

stayed accommodative now this is

actually really important I want you to

remember this for a moment inputs stayed

accommodative meaning that even if input

prices go up they're still accommodative

to manufacturing but in the face of that

accommodation demand continues to be

weak which is really bad but nobody

actually reads the reports people just

read the headline make a trending trade

because well that's the way markets are

trading and you know what they end up

doing they end up creating speculative

frenzies that are frankly misplaced and

are probably going to lead to a massive

correction in fact one of the favorite

things that I'm doing right now is uh in

addition to getting my Halloween green

off is I am reading on uh one of these

Kindles #n sponsor uh but I'm reading i'

love how easy it is to read on this but

I'm reading uh Securities analysis again

and I love this line right here you

ready for it it is always difficult to

approach a contrarian approach oh it is

always difficult to take a contrarian

approach even highly capable investors

can wither under the Rel Relentless

message from the market that they are

wrong you need to have balls of steel to

huddle because the pressures to succumb

are

enormous okay I may have added the Balls

of Steel part but the pressures to the

succumb part is there and this is

important because look at the

data panelists continue to site efforts

by companies to rightsize their

workforces okay wait a minute so

accommodative input price conditions

demand

slowing there are continued pressures to

right siiz workforces which means more

layoffs I want you to add this together

for a moment okay add this together

let's just write it right here for a

moment okay uh right size employment

layoffs that's recessionary right

accommodative

inputs there's an extra M there I got to

spell it correctly there you go

accommodative inputs what does that mean

means you should have plenty of

capability uh of

producing whatever uh and and what's the

next

thing well weak demand which is also

recessionary all of these things point

to the same things that we've been

seeing at companies companies have been

regularly comp complaining about this

it's not a a matter of Supply chains

with the exception of certain AI chips

being so tight anymore it's a matter of

demand broadly in the economy that's

failed here's some quotes right sizing

continues and we're going to talk about

prices in just a moment market demand

has significantly increased in the

second uh sorry significantly decreased

in the second half well that's not good

we we don't want to see that uh and is

expected to be softed through the first

quarter of 2025 don't even get to be

started with how 2025 is going to look

General pessimism in the economy is

driving customers to be more restrictive

business is picking up but not not great

uh that's in computers and Equipment

products sales have been very slow the

past 6 months though inquiries are up

more than 30% this indicates pent up

demand but people are skittish business

levels remain depressed as people are in

this wait and see environment more

quotes over here report strikes blah

blah blah blah blah okay now I want you

to get to this category this is the

prices paid category and this is really

important watch this raw material prices

increased in October after decreasing

the month before energy and

transportation costs which

Transportation costs are directly

related to oil and gas prices were the

what was that secondary driver tertiary

driver no they were the primary driver

the primary driver in why the prices

paid index expanded was energy with it

literally says crude oil and natural gas

increasing somewhat offset by weakness

and steel so like materials a lot of

materials actually went down but it was

energy that went up now wait a minute

can we see those Energy prices on a

chart so we can get a better picture of

what's going on absolutely in fact I

pasted it right here on purpose because

this is where ISM says that these

surveys go out at the first part of

every month some companies respond right

at the beginning of the month the

majority of them respond right at the

end of the month or late in the month to

give the best picture on pricing

okay well what happened in October well

this right here is the price of oil at

the beginning of the month and this

right here is the price of oil at the

end of the month compare that to where

you were in September where all of

September it was basically lower than

where we were in October so no duh there

was an increase in prices paid driven by

oil but this was not driven by the

economy you know stag flating this was

driven by fears that Israel was about to

go to nuclear war with Iran and don't

get me wrong they're still playing Tit

for Tat but holy smokes those fears have

substantially quelled and that's why

oil's down at 73 on Brent so in other

words what are you left with okay well

you're left with like think about this

for a moment the market says prices paid

up stagflation that's what the market is

saying okay but if you actually look at

the data the data the data the data if

you actually look at the data what is it

actually telling you it's telling you

things are

slowing employment down Supply available

demand low for whatever reason action

demand you know uncertainty whatever the

reason is these are recessionary

indicators and as yields go up all

you're actually doing is increasing the

odds of re session which is crazy

because you're doing the opposite quite

frankly of what you should be doing now

I want to also show you something that

is pretty important as well and it is

this

misunderstanding of what's going on with

the jobs data now I already broke down

the jobs report this morning so you

already know my opinion on that uh which

is that it's bad okay the household

survey is basically

undoing uh the the excitement that we

had last month okay the August and

September revisions are bad August

basically we only created 78,000 jobs

which is terrible that is almost a third

of what our normal run rate is around

188 to 190,000 jobs okay so really bad

September was really hot but now stared

to come in negative and the household

survey is coming in negative as well now

why does it matter that the household

survey is coming in negative because I

want I wrote this in red right here

striking workers remember we had strikes

at the beginning of October and we had

hurricanes

striking workers are still counted as

employed on the household report as long

as they expect to return to work at some

point the same is true for hurricanes as

long as they're expected to return to

work uh then they are counted on the

household report now if a business was

completely destroyed then yes obviously

they could show up as uh well quite

frankly being you know oopsy doopsy and

being counted as fully unemployed

because the business was destroyed but

when you look at American Express this

is via Fox News Post American Express

announced a program to help 1,000

businesses located in Florida Georgia

North Carolina and South Carolina and

Tennessee that meet eligibility

requirements to receive up to $5,000

each first of all let me tell you $5,000

each ain't going to do Jack honies but

you know it's a nice little PR move by

American Express but the second thing is

okay even if you have a thousand small

businesses how many employees do they

each have five 10 we're talking about 5

or 10,000 employees well how many how

many workers did we lose in the

household survey this month over

380,000 workers vanished in the

household survey probably because it way

overcounted workers in the September

report and now we're adjusting for it

remember if it weren't for government

workers we would actually be negative on

this unemployment or or employment

report rather okay fine so what do TS

Lombard says well this is the first time

Mr Steven Blitz that I'm vomiting a

little bit because I'm like bro how lazy

do you have to be to put together a

document like this and I generally

respect TS Lombard and I'm sorry Stephen

you're probably a nice person we could

probably have an alcohol-free beer or

some you know coffee together which

reminds me oh boy I got a long night

ahead of me but dude this was just

straight up lazy all right we're going

to go through it one moment hold on this

is

an great this is a great cup to drink

from you have to kind of get him like

where's ear is it's weird all

right what can we take away from this

hurricane strike addled employment

report or what we can take away is that

the FED is cutting 25 BP next week in 25

in December that's all they say he's

basically casting shade on the

unemployment report going oh well

strikes and hurricanes screwed this one

up and basically markets are just

looking through it going ah that was the

strike and hurricane report dude did you

look at the household survey no cuz

you're lazy and you're looking at

headline and the market is being

irrationally exuberant it's it's fully

stupid and while this person just casts

it aside what does he argue well the

downward adjustments to August and

September are meaningful because these

are completed surveys which uh results

more in line with the anecdotes in the

September beige report and confirms why

the FED cut 50 duh thank you so you're

acknowledging the weakness but then what

do you do then you go on to say hey but

uh you know what everything's okay

because uh you know even though the uh

actual Market rates are the ones that

really matter when it comes to whether

or not the economy is uh you know

nearing a recession uh it's really

important to remember that right now uh

the FED is cutting rates and uh what

really matters is not forward pricing

it's actually the cost of real money

that's what really matters and since the

FED is cutting we're good

and I'm like are you fully stupid do you

realize what you just said you literally

just said hey man it's it's not really

what the fed's doing that matters it's

what people are actually paying have you

not looked to see what actual yields

have done since the FED has cut it's a

disaster it's gone straight up what are

you smoking buddy so you're literally

telling me Oh it's it's everything's

okay cuz the fed's cutting people are

paying lower rates no they're not

they're paying higher rates have you

seen mortgage rates this is stupid

equipment financing rates You Want To Go

finance a car come on it's all gotten

worse unless of course dealers are doing

buy Downs which just eats them in the

margin so now you're basically saying oh

50 basis points and another 25 and 25 is

going to help that's the same thing

people thought in 2007 this is stupid

and then you make this argument that oh

well you know uh temporary layoffs are

usually a reason for concern but this

time is different because temporary

layoffs might not matter as much anymore

because 20 to 24 year olds usually align

with temporary layoffs and maybe

staffing agencies are just a thing of

the past so we can't really look at the

stat anymore and that's why there's this

Divergence and I'm like I don't know man

they both seem to be trending down

together on the right side at almost the

same slope I guess it depends really

where you start the slope from but it

doesn't look very good so point of this

being I think it's a little rough for

you to just say this time is different

and even though temporary workers are

plummeting and we are seeing more

permanent job

losers this idea that we're just going

to ignore data that has been very

consistently recessionary in the past

because this time is different seems a

little ludicrous especially without an

acknowledgement of that now with that it

gets even worse because I want you to

look at what Bank of America says

regarding the flow show and where the

crowded trades are remember I told you

we talk about where the trades are and

what's going on uh in terms of uh

people's anticipation so let's go to the

flow show the latest one from haret and

when you look at it it'll tell you

exactly where not to have been an

investor basically the last 30 days

because they're going to tell you where

frankly the most unpopular trades have

been and essentially where the least

crowded trades are and the most

contrarian trades

now what I personally think is really

neat about these is I generally like

being the contrarian and when somebody

says nobody is investing in XYZ it's a

sign that I want to be investing in XYZ

because that's probably the next trade

you just have to have the balls of

steel and a Kindle to respect it now

look I'm not a tech reviewer kind of guy

uh but if you'd like uh some tech videos

for me even though I know they'll get

like 5,000 views it's okay out of

respect for you I'm more than than happy

like I I have all of little gadgets and

stuff I'm a big fan of productivity

maybe we could do a productivity video

on gadgets and Tech but this is amazing

uh I I I really have to say I I've only

had this for like the last like I don't

know I think it came in yesterday yeah

it did I don't know why that camera

can't focus uh I guess that'll work I

might have it on manual there you go

this is really cool that's the off

screen by the way it sort of keeps it on

your book cover it's awesome anyway all

right you ready for this look at this

sist nobody going into this election

long 30-year treasury short gold and

short Nvidia well guess what I just did

I just closed my position that was long

gold because I think gold has topped out

I already closed my Nvidia position and

I kind of think it's probably top two

and I may be going long the 20 year so

look maybe I'm an idiot for doing the

contrarian trade but they literally call

it the contrarian trade the most

contrarian trade is buy bonds yes that's

because nobody's there and in my opinion

that's one of the best times to buy I'm

not saying my timing is perfect it isn't

but I think I'm going to be right in the

long term and in a year from now people

are going to be like holy smokes we

dealing with inflation unemployment

we're probably in the depths of a

recession and bonds are just

skyrocketing value could be the best

trade of 2025 we'll see anyway that's my

take if you want more of my inside every

single day join us in the course member

live streams every day over at

meetkevin.com if you have questions or

want to bundle up email us at staff

meetkevin.com and tomorrow morning we'll

be doing a breakdown live stream for

house hike investors if you have a Q&A

it's the best place to ask me questions

thanks so much we'll see you the next

one goodbye and good luck 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 go

congratulations man you have done so

much people love you people look up to

you Kevin PA there financial analyst and

YouTuber me Kevin always great to get

your take