Big Red Flags & Massive, Coming Market Crash.

hey everyone kevin here are we setting

up for a big market crash

the chungus of market crashes

folks we've got some stats to look at

and some of them are kind of bothering

me

and i would rather be transparent about

changes that i'm seeing in the market

then pretend or just make random

predictions or whatever and then pretend

they're always right i don't like to do

that when changes happen in the market

i tend to be very very quick at

identifying them and that's my goal and

if i'm not then i want to be wrong fast

like they say it's

it's better to fail fast and know that

something you're doing is wrong

than to fail to realize it and then

totally get screwed right

so i'm going to pull up a couple things

here but i want to start with this take

a look folks okay

look at this disposable income and

consumption

falling now just recently look at this

this disposable income chart is somewhat

explainable by stimulus

but we've had the biggest surge in in

really

boost to disposable income not from the

first stimulus check or the second one

but actually really this last set the

fourteen hundred dollars

we've got the child tax credit coming

starting in uh six days the child tax

credit goes out

we've got unemployment we've got lots of

money

propping up disposable income right now

but what's interesting is

we're seeing a larger decline that

is going to be accelerated in september

by the removal of

the state unemployment boost or the

federal unemployment boost for state

unemployment

now when some folks hear that they're

like ah come on like 300 bucks a month

is it really that much

it's not just the 300 the 300 is like

the icing on the cake

in california you could get up to 450

dollars of state unemployment benefits

that means you could literally get 750

per month i'm sorry

per week not working which if you think

about that

750 dollars not working per week

times four works out to three thousand

dollars per month

not working divided by uh 40

times four so divided by 160 if you

worked for 40 hour weeks

that works out to 18.75 cents an hour

not working yeah that is the maximum

potential amount of money that you could

be getting in california not working

and so when that goes away because it

actually still exists right now

and that goes away throughout the entire

country we expect

this this real disposable income to

potentially fall

even lower than where we were previously

because a lot of people still don't have

jobs they don't have the right skills

for the new jobs that they need to take

in this new economy that we need

we can potentially see the average real

disposable income actually drop below

where it was

previously which is scary but beyond

that take a look at this

real personal consumption we've been

blowing up

after our v-shaped recovery here we've

been blowing up with consumption people

buying buying

buying buying more and more and more and

more more and this makes sense but take

a look at this

we've had our first inflection point

here to the downside

after the last rounds of stimulus and

now obviously we've had these temporary

downsides before when we had other

stimulus

on the horizon but we really don't have

other stimulus on the horizon right now

we have actually less stimulus on the

horizon right now

not more see these other inflection

points we had more money expected

with stimulus stimulus stimulus twelve

hundred dollars

uh the six hundred dollars and the

fourteen hundred dollars now we we don't

we don't have this

vision of maybe oh fourteen hundred

dollars again is gonna come or two

thousand dollars a month is going to

come no no

we're not only not likely to get a

fourth stimulus check

but we're also likely to very soon see a

drop off here because those unemployment

boosts are going away

right then this matters this matters in

aggregate because take a look at what's

going on when we when we put some of

these factors together

so we have disposable income rotating

down and we're expecting that to go down

even more

we're already seeing consumption go down

oh but what about real estate

right yes okay so i made a video about

this you may not have seen it yet so i'm

going to just give you a quick little

catch up here

uh i made a much more detailed video on

this just type in meet kevin housing

market and you'll see it

but take a look at this folks usually

new home sales

start slowing down right about now you

start seeing

less listings hitting the market so far

we have not seen any inflection to the

downside in

how many new listings we have in the

market now usually also

a new listing median price goes

down in the summer months take a look at

this the blue and gray lines are the

baselines you really want to look at

because those are before covet right

and so you can see median listing prices

tend to go down in the summer

right before we get a boost around

august september and to me this is

potentially a sign of school related

like hey let's get this house sold

before

school starts and people are a little

more anxious to drop their prices

but what's actually happening right now

in the real estate market is prices are

going

up in fact asking prices are going up

more

and in no other year do we have a

precedent for that

in the last four years which is odd

asking prices are going up

new listings are stable so there are

a solid amount of new listings with

higher asking prices and how's the

market responding

pending home sales are falling at a

faster rate than we have actually seen

in prior years that's scary it's

something to keep an eye on

okay let's go back to this so disposable

income down real estate

down consumption down financial content

now i know this sounds

this seems odd but the consumption of

media content around

financial stuff is actually falling

maybe that's because people have less

disposable income so

they've got their stock positions and

they care less about new buying

opportunities

because they got less dollars

financial content going down so an

interest possibly in financial content

goes down potentially we see volumes go

down

we see volatility go down at least in

the short term which compresses let's

say

bot call option pricing because

volatility implied volatility goes down

and compresses

volatility crashes or crushes as we say

unemployment benefits going down we know

that's going to accelerate the decline

in disposable income and consumption but

potentially also financial related

investments from retail right we've got

the concern of this taper coming up

in either q4 q1 or q2 so we start

tapering that's less money in the system

then we have this fear that even though

right now

retail travel restaurants are booming

like crazy

remember the warnings that we got folks

the warnings we got

last year like in november december

where

we're going to see a spike at the

reopening in activity

but that is expected to be a temporary

spike we're in the spike right now

and it's very easy for us to over assume

that's

that what's happening right now is going

to continue to happen when we're in a

moment of seeing high inflation when

we're in a moment of seeing a lot of

busy retail

then we expect that that is going to

continue forever

but we were warned last year we talked

about this last year

that we would see a temporary spike in

activity at reopening

which if you combine the fact that we

expect people's disposable income and

their consumption to continue to go down

especially as those unemployment

benefits go down then all of a sudden

this retail explosion

wave that you're seeing could go away

we're also seeing

uh speculation go down speculation

based on and not everywhere i mean you

still got virgin galactic and things

like m ring

or new egg right like really speculative

things that have kind of blown up here

in the last few days i shouldn't call

virgin galactic really speculative but

you know what i mean

uh and uh and we're seeing a waning

of momentum like it used to be we could

just look at high short interest stocks

and go this is going to go to the moon

and then a few weeks later went to the

moon

that's gone like nobody cares anymore

about the short interest

so we're seeing a relaxation in

speculation

in addition to that why are we seeing

bond yields go

down it's because more people are

placing money into bonds

banks are flush with cash and they're

potentially expecting

lower levels of inflation so they're

okay with more cash

which well guess what wells fargo just

did they got rid of people's personal

lines of credit like

in an era when banks are supposed to be

lending

more money and they're supposed to be

trying to get rid of cash

wells fargo says we're just going to

kill a whole loan program that people

rely on

you've got to be kidding me that's odd

it's odd that banks want to hold this

much cash

it's odd that the repo markets are are

exploding the

reverse repo markets which means banks

have too much cash it's

odd that bond yields are falling the way

they are

if banks were expecting high inflation

that he wanted to get rid of this money

as soon as freaking possible

it's odd then folks if we were to expect

high inflation well then we would jump

into commodities and cyclicals

well since the middle of may those

numbers haven't been doing that well

those numbers have been a little boring

they've been falling we hit peak lumber

in the middle of may

cyclicals have been selling off for the

last couple months now sure they're

having a slightly green day today but

look at the chart

come on folks i don't even need to pull

it up

at the same time we're at a record high

stock market and we're at record high

prices

for real estate folks it's just

it just seems odd okay it's just odd and

so these are things that we have to

consider and then we have to think to

ourselves

how do we potentially prepare uh in in

markets like this

because a lot of folks are asking me

kevin well well what's the answer

i don't really know what the answer is

but i can tell you

what i'm doing what i'm doing is first

of all i'm not

i haven't been buying shares i have not

been buying shares

now i'm not going to go into this whole

put discussion again because i have been

selling

some puts on companies that i'd like to

own

and i've been closing call options on

companies that have shot up

but the point is i'm in addition to this

also open to well first of all not only

being completely out of margin i'm

completely out of margin i've

collateralized about 800 000 for

in inputs but i've gone from i've gone

from like six to seven million dollars

in margin in my portfolio to zero

somebody asked me uh they're like hey

well kevin you said your portfolio was

like 20 million dollars in january why

is it

why is it 19.5 now uh because then i had

like six to seven million dollars in

margin and now i don't

that's a big difference but anyway you

should check out that coupon code linked

down below for the amazing programs on

building your wealth that expires

july 22nd and then the price goes up

again but anyway

what else what's another thing that you

could do i mean i'm not going to go buy

bonds

folks i am very very tempted to just sit

here and start hoarding cash

and i i know that sounds kooky crazy

but hear this out for a moment because i

i think it makes sense

and it's just something that i'm

considering so

if i sit here and hoard cash what

happens well

first of all the cool thing about

hoarding cash

is i'm ready i'm ready for opportunities

if high inflation happens high inflation

will put high well then i can always

find something to invest in

in the event that happens over which

which i expect will happen

if you know this inflection point in

inflation where inflation's done this

will either go higher inflation or we'll

go lower inflation

probably september october i personally

think that we're going to go down

but either way i don't mind just

hoarding cash for a couple months and

then seeing what happens

see what happens with inflation chillax

a little bit

maybe maybe spend less money uh buying

stocks and making investments and focus

a little bit more on hoarding

again i know that sounds crazy uh

because you know we always hear uh

cash is trash cash is trash you know oh

well you should you know

buy this option or this option like you

know i don't mind

having more cash than i've ever had

before and just maybe taking a little

bit of a chill pill and

not trying to go spend money when money

comes in

now usually i always recommend hey when

you get money throw it into the market

right away

and invest that's like that's my problem

is i feel like i have this problem

of essentially money comes in and i buy

stocks right away

uh but uh i wouldn't mind actually

building up a little bit of a savings

account right now which i know is just

like

what like i hate savings i totally hate

savings

but i'm not doing it for the purpose of

a savings account if anything it's just

now it's

let me be on standby for opportunities

that's what i'm looking for big

opportunities

so that's what i'm excited about uh

right now i i understand that sounds

kooky crazy but

that's what i'm thinking about right now

and i wanted to share those thoughts

with you

so a little less enthusiastic about

making big buys

i will be posting a lot of selling

alerts

in the stocks and psychology of money

group so as i see things hitting highs

where i think you know what i'm good

here i've made money

i'm good for now i'm gonna stand by a

little bit

i'm game for that so uh anyway thank you

folks so much for watching this video

hopefully it was helpful and we'll see

in the next one bye

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