fed RATE HIKES

Sudden panic volume. Look at that sudden

volume on the cues. Talked about the

Federal Reserve. Talked about exactly

what's going on in the economy. Why this

could be happening? What stocks are

doing well? Why is Tesla tanking? Why

did we see exactly this tank coming in

the Me Kevin Alpha report when yesterday

morning we said boys and girls 579 don't

get bullish on 500 the tops in we're

going back to 414. People thought I was

crazy. Look at it. We're at 420, almost

back at 414.

Wow. Damn that meat Kevin Alpha report.

But what's going on? Is this just a

temporary little volume panic or what

are the institutions reacting to? Well,

Fed Myin, who's like the resident Dove?

And when I say resident Dove, I mean he

is the epitome of Dove. a little bit of

a softening of his stance this morning

talking about, oh, you know, I might

have to flip-flop if rental inflation

comes up, which, you know, going into

this is actually a little problematic

because if you look at what's going on

with shelter inflation and the trend

we've been seeing, the trend has been

down on rental inflation. But look at

the last CPI read, rent of shelter last

the the last three months. 2 great 2

great then point 4 oh no what happened

here oh no rent of shelter sneaking up a

little bit as long as well as lodging

away from home though that significantly

less of a an impact what's a broad

impact here is that owner's equivalent

rent you're making up about 26% uh

shelter in total making up about 35% of

CPI 25% of PCE feds in preferred level

but take a look at this also a little

bit of rising gauge. Uh, and so we're

going to listen to Myron and see what he

says here because we don't really want

that flip. And and as a result, we've

just got the 10-year Treasury moving up

about a basis point and a half. Not

great, but what is great is that we

freaking nailed it. Double time today on

the Meet Kevin alpha report. Code

Daddy's back expiring today. Let me tell

you what we said in the alpha report the

last two days. expect institutions to

sell off in the morning and then a slow

schllo up on the cues because the

institutions go, "Oh my gosh, we didn't

get unemployment claims data." I

announced that right here and it's

exactly what happened. Slow schlog up

today. I'm like, "We didn't get jobs

data. Institutions might want to dump

again and then expect a slow schlo after

that." Literally exactly what happened

last two days. I also said yesterday in

the course member live, people were

like, "Kevin, Tesla's going to go to

500, right?" And I'm like, m pre-market

bump was your best chance of that. It's

fully priced in now. Traders are going

to exit. What's happened? Down 5%

yesterday. Absolutely nailed it. Down

1.5% today. Absolutely nailed it. And so

if you want to be part of that meet

Kevin membership, make sure you go get

it at meetke.com. You've got that coupon

code daddy's back expiring uh today. Get

all eight courses. Could be

taxdeductible. every trade alert, every

private liveream, every alpha report,

uh, and you get all the new lectures

that are coming out and like our tax

benefit, uh, lectures and our property

management and otherwise. So, it's

really great. So, check that out over at

mekevin.com. Killed it again with the

alpha report. Like, knock on wood, man.

This we're on a great trend. They're

really excited about this. Uh, so and

and the two stocks that we said

medium-term are really bullish, you

know, technical analysis wise,

fundamental analysis wise, they're doing

really well right now as well. Let's

listen in over here though to Myron

>> for joining us on this non-job day, jobs

day. Uh we get no government primary

economic data because

>> the only thing we got this morning were

ISMs and PMIs which the ISMs and PMIs

just to like like to get this out of the

freaking way cuz it just doesn't

freaking matter. They were pretty benign

honestly. There wasn't really anything

exciting in them. We did though see some

warning that we might start seeing a

sneak up uh in the um uh the inflation

impact of tariffs at some companies uh

like especially food importing

companies. We saw restaurants

complaining a little bit but broadly we

saw a little bit of a weakening of new

orders and a little bit of softening in

employment since we're still in

contraction on a lot of these surveys.

We didn't get any kind of smoking gun to

any direction. And broadly, if you look

at the um uh the S&P report, the S&P

report still indicates GDP growing at

2.4%. So, not bad for for the quarter.

Nothing really shocking out of those

reports that are a replacement for the

jobs data this morning because of the

shutdown right now. So, let me start by

asking uh if that continues, as a member

of the open market committee, would you

feel comfortable voting for a

significant cut in interest rates if you

don't have data on employment and on

inflation?

>> Good morning and thanks for having me.

Look, I think it's important to

recognize first of all that as you're

pointing out, access to highquality data

is

>> Love the tie, by the way. Love the tie.

I'm surprised it's not purple. It's

leaning a little left here, man. But

it's a great color

>> is of utmost importance when making

monetary policy decisions. However, it's

also the case that we don't make

monetary policy decisions every day.

Right? The FOMC meets to vote once every

6 weeks or so. Now, I think that's a bit

longer than most shutdowns have

historically lasted. So, I'm hopeful

that we'll get the data by the time we

actually have to make the decision.

Well, despite what the president says,

as you well know, inflation is rising.

Uh food prices are up, gasoline prices

higher than when he took office. uh

those are the prices that Americans

notice and hate. So isn't it a risk to

cut rates significantly in an regime

where uh

>> there is also the psychology I'm telling

you I was just at like it just it the

best example I could give you about the

psychology is I'm at the AT&T store

dealing with some bull crap customer

service trash that I shouldn't have to

be dealing with. Damn you AT&T. I never

have these issues with T-Mobile Mentor

Verizon. Anyway, the gentleman was very

nice. He's like, "Oh, I just bought a

home. I just think it's, you know, I

hope rates come down. I just think it's

weird. You know, inflation's still so

high, but but I guess they're talking

about lowering interest rates." That was

sort of his like as a human reaction.

And I'm like thinking to myself, "Oh

man, that's exactly the inflation

psychology problem that Jerome Powell

has to fight. He has to fight this." Oh,

look, Bloomberg's talking about

statistics in the entire world. To your

point, Vishy, if we aren't going to have

those, it's problematic. Jamie,

>> this is Goulby talking about it's

problematic if we're not going to have

this data. So, a lot of Fed speak coming

out today. Uh, obviously, you know, Myin

flipping on on the dove script a little

bit. Less ideal. We We want the Dove to

continue being a dove, please.

Oops.

Oops. So my view is that policy should

be forward-looking, right? I don't

necessarily have a forecast that those

items are going to continue rising. In

fact, I'd think that a lot of them will

actually reverse somewhat. But my but

for my process, what matters most of all

is the cost of housing because that is

the single largest component of the

inflation process. And it's also one of

the things that people notice the most.

They notice when their rent surges. They

notice when the cost of shelter

increases and that's why it gets the

largest weight in the inflation indices.

And my expectation is that we've just

experienced, you know, the biggest

population shocks uh to both the upside

and the downside in my lifetime and I

think in most people's lifetimes. And to

me, it would be very surprising if that

>> that's a good point. I mean, you had a

population shock to the upside with

immigration and then a downside with the

reversal of that immigration

>> trace on the price of shelter. And so I

am expecting a significant disinflation

to the services component of the

inflation disease driven by shelter

which is affected to an extent by

changes in population. So he is

expecting shelter prices to continue to

fall.

>> Okay. Hopefully

>> growth. Well, we were talking before we

came on about your view of our star, the

neutral rate.

>> And and I should be clear, rent

inflation to fall, which doesn't mean

that rent prices fall. It just means

they stop rising at a rapid pace.

>> We've got inflation running at basically

3%. You've got unemployment at 4.3%

which is historically very low. The

Atlanta Fed says we're growing 3.8% or

grew 3.8% in the third quarter. Uh

there's no economic model that I know of

that would get you to a near zero uh

neutral rate with those kind of

conditions.

>> Yeah. So, first of all, uh I've have

seen some folks argue that they think

that my conception of the neutral rate

is zero. That's not the case. I think

that's a misreading of the speech. If

you read the speech carefully, you'll

notice that I do a weighted average of a

model implied Xanti and a market implied

uh Xanti rate and it gets to about a

half. And that's consistent with the dot

that I put down on the statement on the

summary of economic projections. And so

I basically thought, you know, sort of

going into things last year, there were

all these policies that were pushing our

higher like uh highest population growth

we'd seen. It's also worth remembering

that it is true that gas prices you know

have gone up uh a bit but and and those

are very very visible but really like

how much of a component is that that the

Fed cares about less because remember we

look at core so often right I'm just

looking at some of your comments

>> decades the largest fiscal you know

sustainable fiscal deficits we'd seen

sustained fiscal deficits we'd seen in a

really long time those are pushing our

star higher so last year I really

thought it was at the top of the range

of where everyone else in the committee

thought it was. And I think it's now

come down this year to the bottom end of

the range of of of where everyone else

thinks it is.

>> But you can't model that.

>> What do you mean I can't model?

>> The models, if you put in the numbers

that we have right now, it wouldn't spit

out near zero or or half a percent.

>> Oh, re real real rate. Well, no, but

what I've done what I've done is modeled

my

>> Yeah, people do this a lot. They get

really confused

between a real rate and and like a

neutral rate. Like for example, there

was another Fed speaker a couple days

ago and they're like, "Oh, I think you

know the neutral rate is 75 basis

points." Uh, like the real neutral rate

is 75 basis points. And the idea there

is the neutral rate is probably 2.75

because you add in the 2% inflation

target 2 and then you add in the 75

premium and then you get to a real

neutral rate of just 75 bips. That

confuses people. So when you hear that,

keep that in mind a little bit. It's

almost like designed to be confusing

when we think of a neutral rate. Uh and

and just looking at some other notes

here really quickly. Uh Myron does say

that he has not yet had an interview for

Fed chair. I'm actually surprised by

that because I feel like he's he's he's

actually a pretty solid I think

intellectually sound economist. I

thought he was on like frankly just

going to be like a Kevin Hasset shill.

Uh but he's pretty good. So, you know, I

I I I like listening to him as a result

of that. Uh he says that uh yeah, if

shocks if if shock pushes rents higher,

I would adjust my inflation view. Then

we've also got Goulsby seeing both sides

of the Fed mandate deteriorating but

wary of front loading interest rate cuts

because Fed data suggests the labor

market is still stable. So that's

interesting because it somewhat suggests

even though we're not getting the jobs

data, the Fed's just going to sort of

look through the lack of this jobs data

and go, "Ah, we'll just assume things

are still stable, which is fine

for now until obviously pooh hits the

fan and then the Fed will prove to be

too late and prove Trump correct."

expectations for inflation based on the

changes that I see happening from uh

from housing. As we talked about a

moment ago, I've modeled out changes to

the output gap that I expect to see from

policies that expand the supply side of

the economy and therefore expand

potential output faster than they would

expand actual output. And some policies

that we've seen enacted over the course

of this year would push out potential

and actual by the same amount or bring

in potential and actual by the same

amount. Other policies would push out

one more than the other. And so for an

example of one that would push out one

more than the other would be

deregulation, right? I think that uh the

regulatory state has been being peeled

back over the course of this year and

all indications are that will accelerate

particularly as uh the pace of conf of

of confirmations of of appointees has

just picked up as well. That in my mind

will accelerate the pace of deregulation

too. And when you remove regulations,

you expand the potential output of the

economy faster than actual output. And

so that

>> yeah, this is this in other words a way

to say that hey, we could actually be

supportive without necessarily just cuts

because we could potentially lean on uh

what we're getting with with

deregulation a little bit. All

interesting, you know, I think there are

a couple of other, you know, bullish

catalysts here. I think that's a little

bit of of like, okay, I would have loved

a little bit more of a dove, but then

again, you know, I mean, there there are

things that apparently seem very bullish

right now, such as investor sentiment. I

mean, look, Goldman Sachs uh and their

clients are the least bearish that

they've been since liberation, and they

are the most bullish that they've been

since the election. So, you definitely

have FOMO fever going on. In addition to

that, I will say something that's very

bullish is this is if we could actually

strike a deal with China. Game changer.

China pushes Trump to drop curbs as it

dangles investment. China is potentially

dangling, as we're just now hearing,

reported by Bloomberg, the potential for

a $1 trillion investment into America.

Now, this is essentially the Chinese

government printing money and throwing

it into Train America and the American

stock market directed by Trump

essentially, which is brilliant uh

because China just prints the money and

who cares and they get what they want.

But I have to say this would follow the

model of Japan and other countries that

are like, "Hey man, if we can get a good

deal on tariffs, can we just promise to

invest a bunch of money into the United

States cuz we'll make money on that

anyway cuz the US goes up basically."

Uh, you know, absent obviously a

recession. Looks like China's also

trying to push back on the US stamps on

Taiwan. But this would be great because

right now we've got a lot of problems

with our Chinese negotiations. I mean, I

think China is I've been saying this for

a while. They're basically spreading the

legs, you know, going, "Hey, anybody who

wants free trade, come to China. We'll

manufacture all your stuff for you."

They're smoking us on nuclear. You know,

I was talking about that a little bit

this earlier earlier this morning. You

know, China's main competitor or is the

main competitor to the US in innovation

and deployment. And now they are

prolific investor, the most prolific

investor in nuclear energy in the world.

China fuels robotics with government

spending and initiatives. are fueling

nuclear with government incentives and

initiatives. They're basically, you

know, saying, "Hey, forget about Trump,

you know, come work with us." And

they're killing it on their expansion. I

mean, look at this. While we have the

most nuclear capacity in the world right

now, it's all from the 1970s basically

and died at Chernobyl basically. Look at

this nuclear capacity under

construction.

China smoking the entire world. We have

nothing under construction. So, China

once again dominating us. And so,

getting on the same page with China

again where they're destroying our

soybean market is so critical. Ah, this

downtrend we called on the alpha report

continuing on Tesla. Uh, and the slow

slog up continuing on the cues. Both

things we were looking at uh in the

alpha this morning. Not bad. But but

what I really want to focus on is

why is it

that China's the last to make a deal? I

think China is stubborn because I think

they honestly benefit from Trump being a

little bit of a bully. I think China

benefits from that because it lets them

go advertise themselves as, you know,

the stable people in the relationship of

of world trade. Who knows? Uh, but

beyond that, there's there's like if

we're not going to have jobs data,

which, you know, this morning I'm

looking it's 5:30 a.m. I'm like, are we

going to get jobs? Are we going to get

jobs? Are we going to get No, no, no,

no. Of course not. So, it's like, all

right, whatever. So, absent data. I

mean, we said the S&P uh services uh

indicators and the ISM services this

morning. Not bad. Nothing nothing really

scary uh to report on either of those.

And when it comes to the PMIs, we've

actually got most sectors of the economy

expanding. You know, we brought Jack in

this morning to read out that six out of

seven sectors were expanding this

morning uh per the S&P. And again, the

ISM, the ISM showing us going into a

contraction a little bit here with uh

weakness in business activity and

continued weakness in employment. It

still line us up for moderate or weak

growth. starting to see the impact of

tariffs. Construction's getting hit. AI

demand continues to remain strong.

That's where money is flowing. AI demand

and financing around AI deals. That's

where the money is going. No doubt about

that. Uh and then you know again US

services over here still you know GDP

growing at an annualized rate of two and

a half%. I actually I think I said 2.4%

earlier. So it's great. And yeah, the

index is representing a slowdown from

this peak that we had in July and hiring

activity is only increasing marginally.

We're in like molasses in terms of most

of the economy outside of AI, which

isn't great that most of the economy is

in molasses, but it's not falling off a

cliff. And I think that's where Gouls is

probably right when he says, "Hey, our

Fed data is indicating jobs data isn't

coming off a cliff just yet." Now, the

ADP numbers were absolute trash. It'd be

nice to have the jobs data, but based on

this, I don't know that two cuts are

still a foregone conclusion until we

actually get data here, and it explains

why Treasury markets are as stable as

they are right now, sitting at about

4.11 on the 10. Now, yes, you have this

fear about like the economist pointing

out, hey, credit markets look

increasingly dangerous. And this has to

do with private credit, how the

potentially masking dangers underneath

because of financing receivables at like

thericolor bankruptcy. But I mean,

broadly, you know, none of this is

suggestive that private credit or the

amount of debt in private markets is

going to lead to some kind of 2008

recession. I think it's actually more

likely that you have a labor market

recession that eventually hits and then

those sectors will get, you know,

destroyed. You'll see a lot of pain in

private credit. It'll really suck, but I

don't think those are going to be the

start of the disaster, so to speak. So,

we'll see. Uh, anyway, uh, then, uh,

what else do we have here? Delays to UAE

chip deal frustrate JSON swang. No, we

want Nvidia to keep going. Uh, so take a

look at this. This I thought was an

interesting column that's also worth

paying attention to when we look at

economic datam. So you've got Greg over

here writing on AI piece on behind jobs

weakness are hints of a productivity

revival. It's funny. I've actually got a

whole it's part of the meet Kevin

membership. I have a whole course on on

productivity and and people always

wonder like Kevin how are you so

productive? You should see the new

productivity lectures that we have

queued up that are coming out and

they're going to be great. Remember when

you join the Map membership you get

these extra lectures for free. So you

get that lifetime access. You get that

those free extra lectures. So anyway,

the economy is either booming or on the

brink of recession. Honestly, you can

make the case for either. Totally right.

You really can. This is where I I

teeter. I'm like sort of in the middle

here. You know, I'm I'm in the fours on

the bare bulls scale just because

valuations are relatively euphoric. That

doesn't mean I'm not buying. You know,

I've got my list of top 10 stocks to buy

for the next 10 years. We're on number

five, working on number six now. We've

got near-term trades we're looking at.

And I've also got a lot of like Nvidia

stock or whatever that I'm waiting to

sell, but like I don't really want to

sell it now because it's like every day

you wake up almost to make more money.

Anyway, so what do they say here? There

are possible explanations. First,

consumption, investment, and trade data

that goes into GDP for the past months

might be wrong and could be revised. So,

this is something else that I talked

about this morning is this risk that you

could see revisions to all this Atlanta

Fed GDP,

you know, these readings or the data

that we're getting. As we get data that

gets reported down the road, which

sometimes takes, you know, waiting for

tax filings and it just it takes 3 to 6

to 12 months sometimes to get the data.

You can see GDP get totally revised

down. So all this enthusiasm that we

have right now about the Atlanta Fed,

real GDP or whatever, we have to be

careful just like we don't want to be

overly pessimistic as with the numbers

that we had that were negative for for

Q1 which we recognized was just a you

know a trade situation and we were

justifying and arguing that it's wrong

like this will be revised back up. You

know we don't actually have negative -2%

GDP. Uh even though they made all the

headlines it's probably way too high

right now at 3.8%. to the revisions

that'll come. Anyway, that said,

Bitcoin's rallying right now, 1233,

which is awesome. Let's see here.

Second, the gap is anomalous and will

probably close through slower GDP, more

jobs, or both. And this is also true.

This is what people are hoping for is

that hopefully we will have a soft

landing in jobs. Here's a Renaissance

macro researcher who says consumer

spending has been driven by a drop in

savings. And according to credit card

data has already softened. This is bad

and it kind of goes with the challenger

job cuts report that suggests retailers

are hiring a lot less than they usually

do, which is seasonably very odd.

Usually

they don't uh see a drop in hiring and

the challenger job cuts report showed

some of the largest firing in in retail

uh for the last challenger read for

September. Third possibility is more

interesting. A productivity boom might

be in the works. This is you know

typically the bull argument that says oh

well everybody's so much more

productive. You don't need as many

people at jobs. I mean I get that. You

know, we we employ anything any cold

task.

This is my sort of quick productivity

tangent. Any cold task you should use AI

for. Any warm task you should not use AI

for in the work. Any warm task would be

like negotiating with a human or

providing care for a human or empathy

for a human. Stay away for for from you

know the AI for these purposes because

you're going to get more hallucinations.

You know, creativity. I I get it for

like video and picture generation, but

like business planning and things like

that, you be careful because of the

hallucinations. AI is really good at

patterns and then commenting on

patterns. So, if it's seen something

before, it can give you an answer.

Historical factecking of AI, great. Like

quick Wikipedia resources, you know,

doing black and white things over and

over again. These are cold temperature

tasks, great. We do this a lot at house

hack and frankly we we don't need the

staff that we used to. And I've been

saying it for a while. Like we could

consolidate so much and our like spoiler

alert like our numbers for Q4 and even Q

coming up on Q1 even not even

considering our Q1 are going to be

amazing for for like our I think our our

P&Ls. That's my you know my opinion so

far on what what I'm seeing. But part of

it is because we are also becoming so

much more efficient in in our processes

and part of it is you have to give

credit at least to some part to

artificial intelligence. And I'm not

even talking about the fact that we're

running Blackwell chips for our

artificial intelligence that we're going

to release in Q4Q1.

Uh the beta will be Q4 and then broader

release, you know, um for uh uh Q1. But

more just talking about even just

consumer related products that we could

use to be more productive with uh

editing videos or posting videos or

workflows uh with with business or

accounting uh reconciling you know into

it. By the way they are I think like a

hidden play for artificial intelligence

because now they're they're offering AI

to help you figure out why your stupid

bank account won't reconcile. Anybody

who's ever reconciled a bank account in

QuickBooks notice the knows it is the

worst part of accounting. And you know

now they'll sell you AI upgrades to do

it for you to tell you where maybe

there's an oopsie dupsies. Dude, I've

spent

hundreds of hours trying to figure out

where my stupid reconciliation errors

are, you know, over over my career. It's

a pain in the ass. Now AI can help you

do it in a fraction of the time. It's

amazing. So uh but do keep in mind GDP

gets revised many times. Not only do you

get after your initial release, you get

two other releases. You could even go in

the past and revise some some data like

as much as a year back. Looking at just

some of your your numbers here. Uh but

um but yes, you know, consumer spending

data has really been aligning with the

decline

in savings. Eventually, you hit the

floor. So, you know, an interesting

piece so far. Increased output with no

increase in hours means output per hour

or labor productivity grew at 3.5% at an

annualized pace which is actually yeah

that's very good because of the

divergence between GDP and employment

and this divergence won't likely be

sustained neither will productivity

performance even so including third

quarter estimate productivity has grown

2% annualized for two years now that's a

decent pickup from the 1 to one and a

half we've had before that's bullish

that's fantastic as long as you don't

get layoffs something very likely has to

do with technology. One candidate is

generative AI embodied in LLM, GPT.

Okay. Adoption has been remarkably fast.

Walmart recently said it would keep

employment flat for the next few years

as AI literally transforms every jobs. I

don't know that it transforms every job.

I think of it as augments almost every

job. You know, even in construction, you

go to Lowe's and you're like, "Oh, man.

Should I use uh the Santi or should I

use the Y for, you know, my my, you

know, sink drain? Oh, you should use a

sanitary tea." Okay, great. Like little

things like that. If you're like a newer

plumber or a newer electrician or or

whatever, that's fantastic

because it's just black and white. It's

easy and just gives you those resources

right there in your face. It's

fantastic. Uh so very very excited about

how AI could even affect the nonAI

businesses. I mean I was I was uh you

know with all my fans yesterday uh and

and I really appreciate uh all of my

fans, but I was grateful because I

didn't have to load up all my fans. Uh I

had full self-loading loading up all my

fans. This was Jack and I yesterday we

were negotiating with the uh the manager

of Lowe's. Shout out to the manager of

Lowe's over there. But um you know, it

was amazing because I was using my pro

membership and like what would have in

the store been like $2,800.

My pro membership got to $2,300

and then I negotiated with the manager

and they took it down to $2,100. And I'm

like, let's go. This is all house hack,

by the way. You know, Jack was loading

it all up for me. Be careful, by the

way. If you load the tunnel too much

over here, it'll get jammed and so ours

got jammed, so I have to be careful

about that. But, um, yeah, dude. I mean,

we got a lot of house hack renovations

going on right now. It's fun. I love

this. So, this was us at 10 p.m.

yesterday. 1000 p.m. yesterday. I I got

to show you this clip of Jack. Uh, he's

uh this poor guy. Uh we uh you know we

were dealing with a fixer upper and I

think uh we've primed this floor now

probably like three times or so uh beam

this over here. But anyway, we've got

we've got a concrete floor that at some

point, you know, we've already

chemically treated and and and um to

deal with some cat urine issues and it's

it's like a pain to deal with. But so

you we we we treat it. They're actually

technically not more natural products.

You don't want to use certain chemicals.

Anyway, long story short, we go treat

this floor. Uh, and we use some

expensive primer on it, multiple coats,

and finally, uh, it's smelling better.

Uh, it's actually, you can't even tell

anymore. It's great. I was there at like

10 p.m. yesterday. I'm like, this is

fantastic. We've solved the problem. Uh,

but this is the stuff that we do, you

know, for Houseack and and I love it. I

mean, it's my job. I'm the CEO, right?

So, I'm a little biased, but we think

we're contributing to the economy, you

know. Here's this is Jack. I make him

carry it.

I got to put him to work. I tell him I

pay him. So, I put him to work. But

anyway, this is the floor. It's just

concrete, right? And he's got his

flashlight on on his watch. And he

actually ends up saying like, "Oh, it

smells better in here." Uh, I actually I

think you could probably hear him say

that.

>> Is this the cat? Can you smell?

>> Yeah.

>> It smells better.

>> Good.

>> It smells better. I love the guy. Great

worker. I pay him, you know, but but you

got to put them to work. So, uh anyway,

so so that's pretty fun. But anyway, you

know, going on with this productivity

thing, uh like I see it like the

productivity all the time and there's so

many tools that we could use in

artificial intelligence is really really

fun. Uh so really big fans uh of of

this, you know, as you saw at a truck

full of fans. Uh but anyway, take a look

at this. uh one widely widely cited

report by NANDA uh an AI initiative at

MIT found that 95% of 52 organizations

surveyed had zero return on their AI

investments. This suggests AI has yet to

make enough impact for the economy's

aggregate productivity to move. Right?

So you're seeing it on the individual

level, but like are you able to like put

the dollars on it a lot harder?

You know, this makes sense because a lot

of these are like Wikipedia rappers

basically. That's what I call them,

chatbot rappers. Like, it's very rare

that you're seeing real artificial

intelligence products. My opinion, I'm

biased. Don't sue me, bro. Investments

can go down in value. There's risk with

every investment. Full disclaimer, none

nothing in this video is personalized

financial advice. But like what we're

doing with with our house hack AI for

example is we want to enable agents to

be able to and and consumers to rank the

best real estate deals available at any

market at any given time. So rather than

you looking at, you know, 100 or 200 new

listings every day, you just open up the

house hack AI, you pay us a few hundred

bucks a month or whatever, and it

automatically with your branding sends

to your clients the best deals in a

market using Kevin's analysis fueled by

AI. In other words, like I train the AI

and the AI does this for you

automatically in your market. Uh, you

know, we think that is actually

productive. No more clients calling you

going, "Yo, why didn't you send me this

deal?" Right?

Uh

that is a form of efficiency. That's

huge, you know, and and yeah, like we

don't know. Maybe maybe people won't buy

it, right? Like maybe people won't be

interested. I don't know. That's why I

have to, you know, sort of limit some of

my optimism, but I look at it and I'm

like, you know, if if that takes off,

it's a game changer for revenue for

House Hack. But uh you know we'll

probably I mean if it does really well

we'll we'll end our reggga round which

is at househack.com.

uh you could invest you get 5% per year

through conversion 100% of the upside in

the stock and really this the valuation

of the company has it's at the low end

of its Wall Street valuation because

we're you know we want to give a good

deal to our our uh subscribers and fans

but we think that you know once if

venture capitalists see the AI that

we're doing this round's going to close

like yesterday uh so we're pretty

excited about this once we release it

but we don't have any VCs because you

know it's just so far we've only been

selling this as just a real estate buy

and huddle company. Uh, and and the fact

that we have this AI cooking is really

exciting, but it also gives me in my

opinion so much insight into what's

going on with productivity because I

don't just use AI as much as possible as

as a CEO, as a business owner, as a

YouTuber in real estate. I see it in

construction. I see it in all these

different levels. But we're also

developing, you know, so we see the

demand for chips and GPUs. This is why I

haven't sold the millions of dollars I

have in Nvidia yet. I can't wait to

because I'm nervous because I think, you

know, the market's a little frothy, but

I also see why they have such large PP

right now.

>> Big PP.

>> So, LLMs are building on existing

investments in e-commerce, software, big

data, cloud computing, machine learning.

Recent analysis by Goldman found that

the pickup in productivity has been

concentrated in technology. Yeah,

totally. Uh, in related sectors such as

research, engineering, and consulting,

it's also more evident amongst the fast

growing superstar companies. While it's

premature to ascribe all of the

acceleration to AI, uh, industries have

some of the strongest use cases for AI.

Well, certainly like logistics, right?

Oracle. I'm nervous about the Oracle

debt bubble. I actually love that Amazon

is financing

uh less of their expansion.

Uh,

whereas Oracle is using a lot of debt.

You know, I personally don't like using

a lot of debt. Uh you I I personally I

for example like I just paid off my

house because I'm like I I don't want to

go into a recession if there's you know

if we go into a debt situation I if we

go into a recession I'd rather have my

house paid off and use that as a as a

piggy bank. I treat house hack the same

way. Like I put my money where my mouth

is. House hack is very little debt. It's

bond debt that's convertible. Uh and you

know we've got over probably around $64

million in assets cash and real estate

that's that has no debt at all. no bank

debt, nothing. Uh the company overall

somewhere knocking on the door of 80

million assets. These are rough

ballparks off the top of my head. And

you know, I think that's why we raised

over a million dollars in August. I

think we crossed a million dollars in

September. I think we raised like

$80,000 yesterday alone is people are

like, "Ah, here's a low debt company."

Uh that that is an opportunity to

diversify from like an Oracle, which is

just like take on more debt. Take on

more debt. Take on more debt. It's

crazy. It's scary to me the amount like

I I I posted a short on TikTok where I'm

like realize that the biggest risk is

assuming you can refinance because

people think that oh if I just if I just

go into debt right now it's 6 and a

half% I could always refinance if

there's a recession but what happens if

the lending standards change or the

banks are nervous to lend or you can't

get an appraisal you're screwed you

don't want to get screwed you know

bubbles can genu genu generate genuine

productivity benefits true I mean Jeff

Bezos I guess this morning. He's like,

"Oh, yeah. AI is a bubble, but it's a b

bubble that's going to have

productivity." All right, that's an

interesting line. Remember the Alamo, by

the way. It's my Alamo mug today. I'm

actually also wearing an Alamo sweater.

Alamo

sweater and mug today. We're full Alamo

today. All right, what else here?

Certainly true of the internet boom.

First five years of the boom, annual

internet related investment rose by

1.25% of GDP. Wow. Yeah, most of GDP

growth annual productivity average 2.9%

double the rate of the past two decades.

That's exciting. That rate per capita

income doubles in 24 instead of 47

years. Wow. Ah productivity is a good

thing. It just helps everyone. Raises

the standard of living for everyone.

City estimates that annual spending on

AI equipment has risen by 0.9% of GDP. A

bigger surge than the equivalent period

of the 1995 to 2004 boom. Wow. Even more

of Oh yeah, look at that. Investment in

AI overlaid. Yikes.

Yikes. Yeah, it's a bubble.

Several academics have estimated AI's

boost to productivity by measuring how

many tasks AI could automate and the

resulting cost savings. City concludes

from those estimates that AI could raise

productivity by point 2.5 to 1.5

percentage points, less than the

internet, except uh in the most bullish

scenario. That would boost growth but

push downward pressure on inflation.

Yes, that's also true. Shift towards del

deglobalization will reverse earlier

disinflation. Yeah, but we we will

reglobalize. We'll go back to

globalization. So, yeah, I mean like I I

do think there are very valid arguments

around productivity. The the only thing

we don't want is a normalization of the

beverage curve. That's the only downside

to this economy right now. If we could

verify that we are not going to

normalize the beverage curve, uh, which

is, you know, going to be fueled by

large layoffs where our unemployment

rate skyrockets to,

you know, 10%. As long as that doesn't

happen, we're good. Like there there

just aren't that many negative

catalysts. It's just that. And that's

why it's such a pisser that today we

don't get the data. Oh, damn. Our uh

medium-term one of our medium-term

trades right now is up four and a half%.

That's on top of the percentage gains

it's already had over the last couple

days that we've been talking about one

of these medium-term trades. Sweet.

Let's go. Uh Tesla's still down 19 and

uh Q's are still slogging. Slow

schlogging away. The slow schlog. Yeah,

he just not that much bad data

cuz Trump's hiding it all. Which then

also makes you wonder like does Trump

kind of want this shutdown to keep going

on? Well, partly yeah, because it's

allowing vote, Russ Vote to to go crazy.

You know, I wrote down some notes on

Vote. Vote is the chief author behind

Project 2025.

Uh he basically wants to cut everything

except social security and Medicare

because those are entitlement programs

that are huge with the Republican base.

Like actually any base. Anyone who says

they're going to cut those programs

loses elections because those are people

who actually vote.

Uh then you've got, you know, I mean, we

know he's super anti- Department of

Education, housing. He hates the food

assistance programs. Uh you've got, you

know, recently we saw, I mean, yesterday

we saw the big cuts, $8 billion in the

green energy programs to blue states. It

was all blue state governors.

And we also saw him destroy 90% of the

Consumer Financial Protection Bureau,

which is your DoddFrank ability to

replay

ability to repay uh agency, which is

scary because I, in my opinion, I don't

think we're in a housing bubble because

we've had such stable housing loans for

the past, you know, 15 years. Uh

especially because of DoddFrank ability

to repay. If you've ever gotten taken

like a lending test or whatever, you'll

know about that. But

this could actually unlock even more

crazy creative financing to where if we

don't have uh an employment bubble pop,

then we end up with crazy, you know,

arcane loan terms that allow people to

get into real estate with terms that'll

be really, really bad in a recession.

Mind you, I also tweeted, and I totally

agree with this. I'm agreeing with

myself here, but I totally think this is

valid, and I just want to reiterate it

and highlight it. I think one of the

best jobs if you were looking for a job

right now, one of the best things to

potentially get into is the lending

industry. Uh so if you could right now

get a real estate license and then get

your MLO endorsement, your mortgage loan

originator endorsement, best combo for

the next 10 years because if we go into

a jobs recession, you're going to have a

lending boom. If we go into a soft

landing, you'll have a lending boom.

That's more creative financing probably.

Uh but you also have a real estate boom

again. So real estate and lending, you

know, I think you if you got in now,

you'd be getting in at the bottom uh uh

for for that. So very very interested uh

in that. So we'll see. Uh very very

exciting. But yeah, otherwise again like

monkey see no evil monkey hear no evil.

We got we got good things going on and

the AI productivity is awesome. I mean,

if you didn't see it, I posted this

yesterday. This was a 30se second 32

second clip, entirely edited by AI, like

all of it. The music they put over this,

this icon,

the the children, uh, well, the children

aren't AI, but the the angles, it was a

360 degree camera. It's the Insta 360,

and it's just I push a button in the

app. See, Ella's holding the camera. So,

I'll give the kids the camera. Ella's

holding the camera.

And basically like it I I it was like a

4-minute recording. I press AI record

and it does the whole 30 second clip.

I'm like this is great. This is

fantastic. I could post that on our

family share because we have like a an

Apple photos family share where we have

like path kids and so that way like our

in-laws or parents or you know friends

or whatever they could post

photos of the children in that category.

So that way it's always consolidated

there and we could always just look at

pictures of the kids there and we think

it's really you know and the kids love

looking at pictures of the other kids as

well. They get exceptionally happy. uh

about that which I I think is like the

sweetest thing in the world. You know,

we had uh I had Jack yesterday uh as I

was getting ready to take him to dinner

uh before we went to go do our sort of

midnight fan work. Uh I took him to I

took him in the car and I showed him

that video clip and it was so cute

seeing his face because he loves looking

at pictures of the kids. And uh I took

this photo with my Meta glasses. Uh here

he is. You can see how excited he is

there. Uh so that's that's really always

nice to see happy children. Uh and then

I think after that, oh yeah, we went to

Wood Ranch and I had I had a ton of

bread rolls. I have way too many bread

rolls, man. It's the problem with going

to Wood Ranch.

Oh, it's the death of me. But uh yeah,

let me see here. So, I also looked up

the NIT Sloan Management Review report

found only 5% of surveyed organizations

achieved significant financial benefits

from AI, meaning 95% achieved little

return. You're not going to see it for a

while. You know, it's hard to to like

quantify this. It's going to take time

for people to really actually see this

in my opinion. China concludes AI raises

productivity. Uh and and so does city.

Yeah, well, we know that. So, uh anyway,

very exciting.

very exciting. Uh so we'll see we'll see

what happens but otherwise there's

there's nothing in the data right now

that suggests bearishness and that's

probably in part I mean obviously you

look we called the buy the rumors sell

the news on Tesla. This this was not a

surprise but that's also not even

bearish Tesla. That's just sort of like

that's called trader momentum. So I know

people like I saw a bunch of people

leaving comments like go why is Tesla

down? I'm like well apparently you

didn't read the alpha report or you're

not a member. Uh but that's okay. But uh

I think that's one of the reasons why

you're also right now seeing some of

that nice push in Bitcoin and Ethereum

which is really taking oh babies are

back in which is really taking off right

now. We're going parabolic over here in

just the last hour and it's awesome but

it's really in my opinion because well

probably Michael Sailor's buying but

there's just a lack of a downside

catalyst right now. So anyh who, good

news is you can still use coupon code

daddy's back at meetke.com.

>> 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 Praath there, financial analyst

and YouTuber. Meet Kevin. Always great

to get your take.