The Japanese *JUST* Destroyed the U.S. Stock Market

Holy smokes. Nvidia stock just tanked

from the top of the morning down to

where it is today. Intraday 9%

which is insane.

Massive decline of worth probably half a

trillion dollar that just evaporated.

The NASDAQ 100 went from positive2%

to -2.3%.

which is a crash of over 4%

in the day. AMD AMD couldn't get much

over 237 in the pre-market, but look at

this. It's at 204 right now in the after

hours. This is insane. So, what the hell

happened? Was Michael Bur right? Well,

let me make it very clear in this video.

Michael Bur will be right in the future.

But I don't think Michael Bur is why

markets actually sold off today. I

actually think it has a lot more to do

with five different factors and we're

going to talk about those factors and

then we'll talk about the bur trade. So

one of those factors is the return or

the fear of the Japanese carry trade. We

need, we know, we need some like

dramatic music to go over that.

The Japanese carry trade and collapse

[music] in financial markets is back. Or

at least the fear of it is back with

people fearing margin calls in Japan

leading to a crisis in US stocks as

people rush to pay off their debt.

That was good. I like that. Okay, so now

let's actually get into why the market

sold off today. Uh, number one, I do

think the reveal of what we talked about

regarding Nvidia's documents had one

contributor to this. Remember the video

where we talked about the increase in

finished goods at Nvidia, the uh

accounts receivable at Nvidia, the

coreweave guarantee, the 12% decline in

prepaid capacity, all that stuff that

they didn't tell us about in the press

release or the earnings call that just

came out later in the SEC disclosure. I

think that's just one leg of this

problem and it's unrelated from the

depreciation issue. We'll talk about

that with Bur in a moment. That's just

one part. I think it's also just one

part that the same company that happens

to be doing financial statements for

OpenAI, you could see right here, Sam

Alman, Fontello, Dofield, and Otake,

also happens to have been the same exact

company right here that did Cisco's 2004

financial statements, which then makes

you wonder why is the same accountant

doing open AAI as Cisco? But but let's

just call that like a coincidence. Okay.

Then there's the possibility that we

just have institutional seasonal

weakness. We'll call that issue number

two. So issue number one, Nvidia issue

number two, institutional seasonalness.

Uh so weak seasonality. Uh CTA selling,

right? Institutions needing to sell to

raise some cash. You got a spike in the

volatility index which generally

triggers that very selling. You've got

liquidity issues, right? These these are

all real issues that could contribute to

this. But what we really want to focus

on is this potential Japanese carry

trade issue because something weird is

happening in Japan right now that could

accelerate people getting nervous

wanting to pay off their debt sooner

rather than later. And it's possible

that Bitcoin could actually be tracking

the very issue in Japan. Now, this is a

weird one. Look at this chart right

here. If you take Bitcoin and the

performance of Bitcoin and you turn it

upside down, then you get this orange

line right here. Here's Bitcoin up,

sorry, the blue line is Bitcoin. The

blue line is Bitcoin upside down. So,

Bitcoin is tanking. Well, in a weird

way, that is aligning perfectly with

what's happening to the yield on the

Japanese 30year bond. Okay. Well, what

the hell does the Japanese 30-year bond,

uh, which you could look up that yield,

you know, we just type in Japanese

30-year Treasury, pull it up. What is

this skyrocketing yield have to do with

the Japanese carry trade in US stocks?

So to understand this, let's try to set

up an example for you. Okay, let's say

Donald Trump taco trade is all the rage

and you're in Japan and you're like, you

know what, I'm going to go borrow

$100,000

USD denominated in yen, so I owe yen and

I'm going to go buy US stocks. Well,

that trade does great obviously until US

stocks start falling, right? which maybe

US stocks start falling because of

liquidity issues or weirdness in

Nvidia's financial statements, right?

Oh, we just evaporated half a trillion

dollars in Nvidia. Hm, that's odd. And

so now you're in margin in Japan and

everything's good while the market's

going up, right? Now, technically, what

happened in the last carry trade

disaster in last August? What happened

was

we saw the yen surge in value by 10%.

Because all of a sudden the Japanese

central bank hiked rates suddenly. This

meant that all of a sudden it became

more expensive to pay back your original

loan. Now this is where things get a

little bit complicated. Okay? So I'm

going to try to simplify this. Everybody

is shell shocked about what happened in

Japan in last August. Okay, last August

you borrow money. You borrowed that 100

grand. All of a sudden the yen surges

and you're like, "Crap, it's going to

cost me a lot of extra money to go back

and pay off my debt." And if the

market's selling off in the US and I

want to get out and I get margin called,

I got to sell even more. It creates more

Japanese selling pressure in America.

But that's actually not what's happening

right now because right now the yen is

actually weakening. The yen is falling.

The opposite is true. So why would we

see, you know, a Japanese carry trade

2.0 fear? Well, because what generally

happens is the yen is weakening for a

reason. People are worried that the new

uh uh prime minister in Japan is running

too much stimulus in Japan and she's

going to be forced to raise rates and

strengthen the yen. So people are

actually trying to 4D chess this and

sell ahead of the next carry trade. So

the Japanese are like, well, may as well

get out now at a discount than suffer

the next carry trade. This is my

opinion, but let me show you some of the

facts around this. In a Reuters article

talking about the sale of Japanese

treasuries, you have quote, "You just

don't have many marginal buyers at the

moment." Hm. Sounds a lot like the

liquidity issues you have in America,

too. Nobody has damn cash. Everybody's

too levered up. Too much debt. Okay,

listen to this.

We're calling this I'm calling this, by

the way, the new prime minister in

Japan. She's she's a woman. Uh not that

that matters, but but people call it the

Mrs. Teachi trade. I don't know if I'm

saying her her name right, but that's

what I'm going with. So, the Mrs. Tekkai

trade or Prime Minister Tekki trade. And

the idea is that she wants to stimulate.

Not only that, she literally just

unleashed the largest stimulus package

since COVID. Okay, so so try to follow

this for a moment. Okay, you literally

have Japan printing money. They're

stimulating. So Japan is stimulating

biggest since CO. Okay, what does

stimulus make you fearful of?

Stimulus makes people fearful of

inflation. So what happens? Yields go

up. The market spikes rates for you.

So all So where do we see that

evidenced? That's evidenced in the

Japanese 30-year bond, which is the

yields are skyrocketing on this. Now,

the central bank in Japan isn't hiking,

but the market is freaking out that the

they're going to be forced to. So,

there's fear. That's what this trade is.

Okay? There's fear right now that the

Japanese central bank will be forced to

raise rates.

If the Japanese central bank is forced

to raise rates, then the yen will

strengthen

creating a potential uh creating the

potential carry trade 2.0. Now, that's

not happening right now because you

could actually get ahead of it right

now. So, the market says, "I don't want

that again. I'll pay off my JPY margin

now. I'll pay off my margin now because

the yen is weak. So I can, you know, get

out while people are fearful about

liquidity, seasonality, and Nvidia weird

financials, right? There's some weird

financial stuff in there. I'm going to

take all of that and a downtrend in in

US markets uh since, you know, end of

October. Really? You've had a downtrend

in US markets since the end of October.

So, why not use all of this as an excuse

to get ahead of the Japanese carry

trade? I'll go pay off my debt in Japan.

Now, how am I going to do that? I'm

going to go sell more stocks in America

right now. So, in other words, because

the Japanese like if I put this simply,

like bottom line, yo, Japanese yields

up, people like, "Oh crap, shit's about

to hit the fan. May as well sell before

it does. I'm not gonna get caught with

my pants down again like last year. And

so it's almost like people are FOMO. I

don't know if that's the right word, but

like pre-elling the carry trade, right?

So now if the carry trade actually

comes, then it's worse because then you

end up with what I call a trifecta.

So the trifecta for Japanese carry trade

hell is yields up suddenly. That's how

the carry trade happened last time. Last

time the central bank in Japan suddenly

raised rates in like an emergency manner

almost 25 bips. Nobody was expecting it.

People were expecting they were going to

hold rates at zero or negative. All of a

sudden they're like JK rugpull 25 bip

hike and people like oh crap margin

calls. Boom. You get three weeks of

hell. all culminates after people are

worried about a recession in the United

States where the dollar you know now all

of a sudden tanks because people think

you know we're going to cut yields in

the United States so dollar tanks makes

the Japanese uh uh carry trade even

worse that's a whole another aspect

don't let the dollar falling confuse you

with that right now okay this we could

get so deep on this currency trade and

I'm going to confuse myself if I keep

going on this so the point is we don't

have a carry trade implosion right now

what I think we have is fear that the

carry trade could happen again as the

central bank in Japan realizes, oh crap,

we need to raise rates because otherwise

we're going to have an inflation

problem. That I think is what the

markets are pricing in in Japan. On top

of the fact that you just don't have

liquidity. You don't have people sitting

around with excess cash to go buy these

Japanese bonds. But liquidity issues are

the same issues that we have in the

United States. We see the liquidity

issues in private credit. I mean, don't

even get me started on on the private

credit issues that we have. I'll give

you a quick summary just so you can sort

of remind yourself of some of these

issues, but I think it's actually kind

of wild. If I go to the Meet Kevin app

and I search for Tricoler, I'll get this

breakdown. Look at this. Look at this

crap show. So, what do I have right here

on September 10th, which was also the

day Charlie Kirk got shot, uh, we have

gets rugpulled by JP Morgan. JP Morgan

freezes an over $700 million warehouse

line of credit and Triricolor goes bust.

Now maybe they deserve to go bust, but

they got rug pulled on a line of credit.

JP Mirricolor collapses on September

10th. First Brand collapses on September

28th

and there are some really sus things

going on with the auditors there and

financing regarding the auditors. Maybe

it's a canary in the coal mine. That's

what the Bank of England says. The Bank

of England is laughing at us going, "H,

should have kept paying your stamp

taxes."

Uh, I Anyway, uh, October 10th, you have

the crypto liquidation event, which is

also a liquidity event. On November 1st,

UBS's two private credit funds with

exposure to First Brands Shudder. On

November 3rd, you have Black Rockck's

Renovo Homes going from November 2nd,

everything's fine. All our assets were

worth 100 cents on the dollar to

November 3rd. Actually, that 100 cents

on the dollar is actually worth 0 cents

on the dollar. Okay, that happened on

November 3rd. That's Black Rockck as

Renovo Home shuttered. Then you had on

November 4th the FiveStar Development

Bankruptcy, which was the Ritz Carlton

developer that went bankrupt after their

construction lender rugpulled them on a

$30 million loan in Arizona. And then

they went bankrupt. And then on November

10th, you had Sonder Holmes go bankrupt,

blaming Marriott, but they were out of

cash, bro. I mean, don't even get me

started on companies that are out of

cash. Like, if you want to know a

company that is out of cash and you just

want to look at something that looks

terrible, like if you want to make

yourself feel better with debt, just

look at fat brands. If you want like to

study a financial statement that is the

worst financial statement I think I've

ever seen in my life, go look at Fat

Brands. And maybe I'm missing something

here, but Fat Brands franchises a bunch

of restaurants like Twin Peaks and Hot

Dog on a Stick and stuff. We recognize a

lot of the brands that they finance, but

Fat Brands literally has $2 million of

cash. You can see it right here. See? 2

million. September 28th, Fat Brands,

Inc. in thousands, which makes that $2

million of cash. How much debt do they

have due right here? Long-term debt,

current portion, $1.2 2 billion,

folks. I don't think I have ever seen

a company with $1.2 billion of debt and

$2 million of cash. What the hell? But

the point of this is if you put all of

this together, what you're starting to

see is this is a liquidity crash. Okay?

Japan is bricks because

nobody's buying their bonds. So yields

are skyrocketing. Bitcoin's selling off

because Bitcoin's done nothing for us in

the last year. Okay? I mean, think about

that for a moment. I I'm not trying to

dump on Bitcoin. I won't buy I don't own

Bitcoin. And I I have told everyone in

my courses, I will not buy Bitcoin until

Michael Bur goes bankrupt. I think the

guy's a Ponzi scam. That's it. I think

he's a Ponzi. Okay, that's my opinion.

I'm not on Bitcoin here. I'm

saying I think Michael Sailor needs to

go bankrupt and then I'll buy Bitcoin.

That's the day I'll buy Bitcoin is after

Michael Sailor goes bankrupt. But the

problem is you look at the one-year

return on Bitcoin right now, you're

negative 5.8%. You could have you could

have bought house hack bonds, earned 5%

yield, positive yield, and all the

upside in the stock and the AI and the

stuff we're doing in that same time

frame. So like the the return profile on

Bitcoin has sucked over the last year,

but so is Ethereum. I mean, look at

Ethereum. Tom Lee is down three. People

gave Tom Lee like $10 billion or $13

billion to go buy Ethereum and he's

burned 30% of their money roughly.

Ethereum's down 7% here today. Tom Lee

was shopping at the top. Tom Lee was the

TOP. HE WAS THE EXIT LIQUIDITY. Tom Lee

was the exit liquidity. Wow. You take a

perma bull, give them a fund, promise

them some stock comp, and you turn their

face into exit liquidity for the

institutions who are dumping on you.

It's effed up.

But now add all of this crap together.

Okay, people are like and and I'm not

like I want to be very clear here.

People are looking at today's sell off.

They're like, "Oh my gosh, Michael Bur

was right. Michael Bur is making a very

long-term argument." I call it the BDT.

It's the Bur depreciation trade. We have

talked about this Bur depreciation trade

for 2 years and I have always said it's

not an issue now. it will be an issue in

the future. It doesn't make sense that

chips that are 6 to 8 years old are

still running at 100% utilization. The

only reason it makes sense is because we

have a supply shortage. It's just like

why the hell does it make sense that

Kevin got to fly around in a $13 million

jet for three years and then sold the

plane for a profit? Why does that make

any sense? The only reason it makes

sense is obviously because I'm a genius

investor. No, it has to do with the fact

that there's a supply shortage of those

aircraft. It's the same with the chips.

There's a supply shortage. So, the value

stays artificially high or even in a

weird way case goes up like the plane.

It goes up. What? This is crazy. It's a

depreciating asset. It should be going

down. No.

In the future, the value of those planes

will tank when supply catches up. In the

future, the value of the chips will tank

when supply catches up. Has anything

changed with depreciation curves today?

No,

no, no, no.

>> This has nothing to do with the bur

depreciation trade. The bur depreciation

trade has everything to do with an issue

that comes after the bubble bursts. It

has to do with after growth tops off.

That's when the bur depreciation trade

is a problem. Now, that's actually

scary. I wrote that here. That's

actually scary because it means the bur

depreciation trade is still ahead of us.

He's too early right now, but it means

it's still coming. So if the stock

market falls off a cliff now, you still

get to look forward to the bur

depreciation trade, which is all of a

sudden where the, you know, the mag

sevens go, "Oh crap, we actually got to

say uh that our um depreciation schedule

is 2 years or 3 years instead of the six

or eight years we chose.

Now, we're going to have to write off

more expenses and all of a sudden EPS

tanks at these companies and then the

stocks sell off." That is still to come.

That is actually scary if you think

about it. It's totally scary. So, so now

let's try to put it all together because

like this is crazy. Hopefully, this is

not the case. But let's try to put this

all together. Take a deep breath. We'll

put it all together cuz it's crazy.

Okay. Put it all together. Okay.

Liquidity and private credit hell. Okay.

That's where we stand right now. Then

you have

uh institutions selling on VIX. You know

this is CTA selling. Okay. Then you have

fear of Japanese carry trade coming.

Getting ahead of it by selling. And then

uh you have Nvidia weird financials.

Okay.

Then in the future the bur depreciation

trade.

Okay, we still get to look forward to

that, right? So that comes later. That's

the BDT, not to be confused with buy the

dip BTD,

right? But that is actually over here.

So what you also have right here, think

about this. You have the Fed uh

rugpulling on December rate cut.

Probably a big mistake, right? You have

this artificial pump in September jobs

while we hide October jobs data.

This is crazy. So, let's try to let's

try to put it all together

cuz I could get excited about this, but

how do I consolidate all of this? I put

it all together by saying this is at

first and foremost a liquidity issue.

Liquidity issues are driving all of

this. Liquidity issues are causing the

private like people don't have cash.

They're levered to the tits. Okay, so

giant bottom line, giant bottom line,

too much damn debt. Margin all-time

high. Uh leveraged ETFs all-time high.

SPVS, special purpose vehicles or

acquisition whatever all-time highs, you

know, debt way too high. That leads to a

lack of debt that you can now get like

new debt. So you get liquidity issues

which cause it p causes private credit

hell which leads to institutional

selling which causes the stock market to

sell start trickling over which leads to

fear of the Japanese trade coming again

the carry trade coming again. So you're

trying to get ahead of it. Then you get

weird Nvidia financials, which I'm like,

"Oh my gosh, this is terrible. This is

some weird stuff."

Marco Morales just donated $10 to say

made $15,000 worth your calls this week.

I would donate more, but I have a credit

card to pay. Pay off your credit card,

man. I appreciate the 10 bucks. I

appreciate you saying that. Thank you so

much. Really appreciate that. Uh why

don't we go ahead and pin your message?

Oh, I can't I can't pin donation. Oh,

because they're autopinned when you

donate. They're autopinned. Oh, that's

why. Anyway,

uh then you have this Fed rug pull. You

know what? What are the odds of a rate

cut right now? I'll pull it up. Uh and

then of course you got this this data

issue of us not getting I mean, you know

what Kevin Hasset was just saying? Kevin

Hasset, he was just saying this on

Reuters. Kevin Hasset. Dude, my blood

pressure is too high right now. Uh Kevin

Hasset, I get so excited about this

stuff. I don't know. My fault. I

apologize. It says Kevin Hasset says,

"Oh, the the the shutdown uh had a much

bigger negative effect than anyone

expected." Oh, uh growth growth is going

to fall because of the shutdown. Uh the

September jobs data though was a hit out

of the park. This is funny. So now you

actually have politicians going

Everything was fine until the Democrat

shutdown.

[laughter]

That's the cover.

Damn, man.

Damn.

I had I don't know. I mean, I I could be

wrong about some of this stuff, but when

I put all of this together, yeah, we

have a 34.9% chance of a cut. When I put

all of this together, it kind of makes

sense.

It kind of makes sense. You know, why is

this happening?

>> It's because that's why.

>> So, you know,

I don't know. I mean, I guess if I had

to say anything,

>> Kevin is much more interested than most

people, by the way, in the balance

sheet.

>> I think that Kevin's a brilliant guy,

and I think that we'd we'd we' we'd all

be very lucky to have him.

>> The balance sheet's screwed. And if this

balance sheet correction continues,

then

the unfortunate reality is there might

not be a lot of places to hide for a

while. And this is why I've been such an

advocate for raising cash, you know,

like I say it all the time, not because

I'm trying to shill House hack, although

I will say I'm going through our AI app

this morning on House Hack and I'm like,

"Oh my god, this is actually really

good." Uh, like I'm looking here and I

could sort by uh most likely to be a

wedge deal. I see I could pick the zip

code. I could pick whatever city I want.

Uh, I type a city in, uh, like here,

Davy, Florida. Uh, 19 19 options. I

click update and then I get wedge deals

in the areas I want. Dave, Florida,

wedge score A. Oh, damn, that's good.

So, like instantaneously,

uh, picks up a deal that I'm looking at

here that's got trash carpet. Looks

nasty. Some of the bedrooms don't even

have flooring. That's great. Cooper

City, Florida, blue carpet deal. Oh,

that's hot.

It's kind of interesting. So, pretty

impressive. The app. This is getting

pretty good. I just put a random zip

code in there. Uh, that's awesome. So,

like I'm really excited about this, but

I don't know. Where was I going with

this? Uh, the reason I brought this up

is because like we're just like

stay out of debt, no margin. Uh, you

could buy the dip. Like, don't get me

wrong, I bought some of the dip today,

too. But I also sold over $2 million. I

actually probably sold like $2.7 million

of stock in the last 6 weeks because I

put my money where my mouth is. And uh,

and then I maybe I've bought like 200

grand back. And so I'm reallocating to

different positions. But as you can see,

I've raised cash. So it's like me

personally raising cash. No personal

debt raising cash. House hack has cash.

focusing on our AI product, focusing on

where we can make money. Yeah, we just

opened escrow on a 12th deal, but we're

we're not going to go crazy on

speculation here because liquidity is a

premium right now. If you have cash,

you're golden. So, makes sense why

people are raising cash. You know, now I

should say it just so I don't get in

trouble. If if you're interested in

investing in Houseack, just go to house

hack.com. It's a 5% yield through

conversion and then you get all the

upside in the stock. That's the only way

the stock converts is if you're up on

the stock. You can read about it at

houseack.com. You get 5%. It's paid on a

monthly basis. It's open to nonacredit

investors. Read the offering circular.

And uh yeah, we're pretty we're pretty

excited about what we're doing. But as

far as this liquidity hell, do I think

it's fair to say that Bur was right

today? No. I actually think that Bur is

early on the depreciation trade.

all of these other things to a very

basic kind of like Twitter surface title

reader user. The title readers drive me

nuts. But I think that's why people come

to my channel because we go deep into

nuance. I don't think I get as many

views because like I I I don't do

surface level stuff. I try to go as deep

as possible on things. I love going

deep. Okay. I got seven kids. Okay.

Anyway, I got to go. Okay. Bur will be

right in the long term. I don't think

he's right right now. We've got

liquidity issues that are causing hell,

not just in Japan or in private credit,

but here at home. And Nvidia's funky

disclosures

were really sus.

Uh, somebody here donated $50 to say

check Nvidia.

Are you going to Is this a reference to

Peter The selling? I think it might be,

but uh somebody donated $50

to say go to Nvidia, check the sale of

securities on October 29th, the SEC

filing. Scroll down to the last three

months of sales to see who's selling.

Okay. Oh, yeah. It's Jensen. I mean,

it's true. I mean, but this is also in

fairness. He gave his 10B5 or 51. I

don't know what the hell it's called.

Yeah, 10B51 plan. He did issue that in

March. So, he has been transparent about

that. And in fairness, that sale just

ended. Now, maybe it happened to

conveniently time the top. Honestly,

maybe he did. But yeah, Jensen's been

dumping shares and but he's been jump

dumping shares basically since you know

what? Yeah, July. Now, let's see here.

Uh wouldn't that be interesting if that

aligned with the top? Because I think

the top was like 10 days ago. 210,

right?

212.

Oh my gosh, look at that. October 29th

was was the top, dude. October 29th was

the top. And when was his last sale?

Oh my god. October 28th.

Dude, the guy the leather jacket is

going to go down in infamy. I'm from

Europe. Somebody says, "I'm from Europe.

Can I invest in house?" Like, yes, you

you could be anywhere except Bulgaria or

Iran

or North Korea. I don't know why

Bulgaria is on that list, but you just

have to not get caught up by the what is

it called? The OFAC terrorism checks.

And I do not know why Bulgaria is part

of that. Don't ask me. Ask the SEC. But

anyway, that's crazy, dude. Jensen

finished selling his stock the day

before the freaking top. Max just picked

up 10 house hack convertible bonds.

Excited for that. LET'S GO, MAX. WOO.

What up, Mo? That's awesome, dude. Thank

you so much. And donating here to say

that. I love you guys. I And I'm sorry I

get like heated sometimes with this

stuff. It's It's really because I love

this stuff. Like

I have a headache right now from

screaming and I uh like I need to look

at my aura thing. It's probably off the

charts. I'm burning. This is how I burn

calories. So I apologize. Daytime stress

stressed.

Yeah. Yeah. That that's appropriate. Um

it says I'm max stressed. I'd love to

show it here. my max my stress peaked

around market close.

That's when we started filming this.

I think there's only one thing left to

say.

>> You are not prepared.

>> 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 Praat there, financial analyst and

YouTuber. Meet Kevin. Always great to

get your take.