this is actually scary

this is a little scary I want to read

you something and I want you to tell me

when this is from okay ready for this

these are the excerpts and then I'll

show it to you instead of the United

States being the world's engine of

growth the global economy could now

become the engine of American

growth except for the housing downturn

which fed officials admit is much more

severe than they had expected the

evidence of a recession in the real

economy is

ambiguous global economic growth is much

stronger than it was during thec bubble

so in other words this time is different

and American exports have climbed 14% so

far this year the labor department also

reported that producer prices fell by

1.4% in August much more than expected

because of slumping Energy prices just a

few hours before uh the FED spoke new

statistics did did come out though

suggesting the pace of home foreclosures

excuse me is accelerating realy track of

Irvine California reported that

foreclosure filings from default notices

and auction sales to bank repossessions

were 36% higher in August than in July

it's a massive explosion and

115% so more than double over a year ago

the only ammunition the consumer has

left now is from the labor market if

income growth is compromised here

because the labor market is weakening

then you've got a serious problem the

debate within the FED is now about the

possibilities inflation however Remains

the predominant concern of course we

don't want to compare to thec Bubble

because this time is different and after

today's Fed rate decision says this

article

gold a traditional investment Safe Haven

in times of inflation soared immediately

after the fed's decision was announced

the value of the dollar also touched a

new

low uh

so a lot of that sounds pretty dang

familiar doesn't it inflation being the

predominant concern the consumers

holding up the market this time is

different fed worried about how

housing when is this

from here it is New York Times markets

sore after fed Cuts rates by half a

point September

2007 that's scary that's a scary article

you know because look I mean look we

know there are differences okay uh let's

compare some of the differences but

that's scary I actually covered this on

uh this new project this Pet Project

project we have it's totally free a lot

of you have been asking for something

like this we're dumping all of our

research on ec.com uh and so I covered

this last night you can see here 11:56

p.m. California time I dropped this in

here and what's cool is uh you could get

our my opinions as well as data data

being the check marks my opinion being

the little Halo thing but if you click

on this you can actually just get the

PDFs of of what we're referring to uh

you can see we post a lot of stuff on

here latest uh GDP estimate uh crypto

news uh GPT news whatever so go to

ec.com and check it out it's pretty cool

uh but that's where we first posted this

and we're like oh man that's kind of

eerie and so what's worth looking at is

a few things here to try to compare uh

first of all back in uh 200 uh 6 and S

we had ninja and liar loans right no

income no job no assets we had horrible

credit standards most loans were

variable rate loans negative

amortizations and the entire real estate

market was just a straight up bubble now

we like to argue that well it's a bubble

today as well but then again a lot of

people say no real estate's just doing

really well because the 30-year mortgage

has insulated the real estate market

from crashing and it's proven to be a

good investment over the long term so

the people who bought in 11 made a lot

of money 2011 and so now people are

begging for a crash again so they have

another bite at the 2011 Apple so to

speak right uh and when we look at

delinquencies and foreclosures today

they're at about 1

48% uh 30 days or more past due that's

uh that's still lower than where we were

in 2019 and it's lower basically any

time since the global financial crisis

and uh when we consider inflation or

even GDP yeah we were fighting inflation

in 2007 and 2008 uh right over here

going into the recession the recession

actually solved our inflation problem

for us which that's why there are a lot

of people saying this time is not

different we are just walking up the

same tree so to speak or barking up the

same tree where basically we'll solve

our inflation problem but when we go

into this next big recession for

whatever reason it is which we don't

exactly know what it is but when it

happens oh we'll be in deflation all

right just like the early 1920s and the

late 1920s which was not a time to cheer

those were very depressing times the

reason those times were so depressing is

because the unemployment rate

skyrocketed just like you had in 2008

you had the unemployment rate double

from 5% all the way up to 10% that's a

lot of unemployed people uh and and

certainly if you go back into history

you can see we are at a very very low

unemployment rate right now but what's

the point of this well it's to say that

look the Federal Reserve started cutting

in

2007 because there were underlying

problems in the economy so why is the

Federal Reserve today considering

cutting well think about what Jerome

Powell said yesterday he said Kevin's

courses have a price increase on the

14th that's today so make sure you check

him out at meetkevin.com and get

lifetime access to all his perspectives

the course member live streams and

everything else meetkevin.com anyway no

yesterday drone pal said well you know

rate hikes are or raate Cuts rather are

bad when they're being done because of

an underlying problem in the economy

versus a return to the normal or return

to the norm ah so this is where we kind

of get back to the FED pivot argument

fed pivot versus the U-turn argument if

the Federal Reserve let's just simplify

this if the Federal Reserve is cutting

rates it's usually because there's a

problem it's usually because the economy

is weakening it's usually because things

are starting to get poopy doopy and

maybe something's about to blow up in

our face like a banking crisis or a real

estate crisis or whatever it

is in those cases a Fed pivot is really

bad for stocks stocks end up 25 to 35%

down it's really bad a Fed uturn which

is where they just unleash the money

printer and cut rates as low as they can

is what we got in the late 1980s March

of 2003 February of 2008 uh December of

2018 March of 2020 that's a buy time

that's when stocks have bottomed things

are so painful and so bad it's basically

just up from there okay so where are we

right now well so we've kind of painted

three pictures here and let's try to put

these pieces of the puzzle together

because it's a lot we painted three

pictures what we said is there is the

Fed pivot when pain okay that's option

one the FED pivots when there's pain

option number two is the Fed u-turns

when you're basically on life support

and this is when you need the bailout

again that was your March of 2020 and

I'm not going to go through the whole

list list again just rewind right and

then there's what Jerome Powell talked

about yesterday which is the difference

between 1 and three and that's called

the

normalization you won't believe it but I

actually saw this morning from the suits

you know what word starting to come up

again transitory the word transitory is

showing up again people are starting to

talk about oh my gosh what if inflation

truly is transitory this is like the

opposite of December of 2021 when the

FED had to go dirty on us and now

they're going positive on us it's like

that was a Christmas bucket of coal now

we're getting a Christmas gift oh my

gosh normalization this is great this is

great so as to whether or not the FED

planning to cut rates is bad ultimately

comes down to whether you think we're in

number one or number three I think we

can all agree that at this point we are

not at number two I'm not saying we're

not going to get to number two right

because number one can lead to number

two

but right now we are either in number

one or number two or sorry number one or

number three right we're either in

normalization which normalization is

good that's your soft Landing what do

you want here probably not personalized

Financial advice obviously but what

we've been talking about over the last

few days on the channel has been large

cap growth large caps now in

normalization large caps can do really

well in u-turns the small caps can do

excessively well uh in pivots you want

to be in like cash basically cash and

money markets right so it depends are we

in a pivot or are we in a normalization

well this is where it's kind of fun to

look at this New York Times article

again and instead of looking at what's

familiar uh or or what's similar let's

use a red X and look let's look at what

actually is different right we talked

about what's the same when we started

this video out you could rewind it what

is like act

different and is that a this time is

different or is it like legitimately

different that's for every individual to

determine right so here the FED made it

clear that the risks of recession were

too big to ignore okay well we know that

is the opposite of what Jerome Powell

said like it's not different it's

literally the opposite yesterday Jerome

Powell told us we don't have a recession

in the forecast that doesn't mean he's

right I'm just saying at least what the

FED is was saying then in 2007 where the

session risks are too big to ignore and

now they are the

opposite okay uh let's see uh that was

was our note here okay so slipping into

recession blahy blahy blahy Safe Haven

we talked about that a lot of these were

similar inflation is the predominant

concern now this this is an interesting

one inflation was the predominant

concern then but what we have now is

actually a dual concern of jobs and

inflation Jerome Powell basically folded

yesterday on the idea that infl is

really a big deal now I thought that was

interesting we actually put that on

ec.com this morning uh and that's that

inflation maybe isn't uh that big of a

deal to the FED anymore look at this

article we have on eack we wrote the end

of hire for longer Bloomberg Simon white

calls the fed's decision yesterday the

green light for the end of the global

hire for longer said the FED has

liberated other de domestic Market

central banks from maintaining hire for

longer the bank must then be pretty sure

that inflation is done and dusted to

allow for another significant easing of

financial conditions and so then

obviously in the little Halo face I I

wrote very interesting conclusion on

Bank must be pretty sure inflation is

done I actually agree Rising stocks

falling yields would promote growth If

the Fed was concerned that this would

actually induce inflation that is you

know uh falling yields and Rising stocks

would induce inflation they would Hawk

instead and they certainly wouldn't be

this dovish other things we talked about

over here I I mean I encourage you to

just go to hack.com we talked about a

bear argument from Robo Bank we talked

about The Ledger hack a few times the

cruise layoffs we actually just broke

over here through uh leaks that we

became aware of at ehack uh we just

broke nphase layoffs reports uh and

rumors coming through about maybe a 133%

layoff at uh n phase which uh is is you

know partly cost cutting probably and

since they do a lot of contract

manufacturing and the co-ceo thinks

they're going to go back to 2022 level

growth

2025 could actually be near-term bullish

not only for margin but the stock it

just sucks for the employees okay so

back to what's different over here like

different or opposite right so uh let's

see earlier this month the labor

department reported the first loss of

jobs in four years okay well this is

exactly the opposite that's happening

right now we're not actually worried

about recession we're almost the

opposite uh worried about a recession

right now in fact the Atlanta fed real

GD P oh look that's also on eack I'm

telling you yall going to love this and

and support it share it it's totally

free and it's going to be free forever I

made it because you all have been asking

for my research and I know you're busier

these days you don't have time for as

many videos and you just want to be able

to scroll when you're on the pooper or

whatever eack okay so next time you're

on the pooper I just want you to hear

Kevin saying pooper and go eack it's

that simple anyway latest GDP estimate

is out Atlanta fed GDP estimate

skyrocketed from 1.2% to 2.6% this

morning this is the opposite of the FED

being worried about a recession right or

or falling growth it's also the opposite

of jobs I mean continuing claims came in

weaker this morning the jobs report came

in stronger this month and what did we

have then the opposite literally the

opposite we lost jobs now when you start

losing jobs that's bad that's bad and

that's why jpow is starting to Dove

because I think he realizes if he keeps

going he's going to cause a recession

he'll overtighten so that's why he went

as doish as he did yesterday and I mean

obviously in the near term here the

stock market likes this but some of

these similarities are Eerie to say the

least uh the debate within the FED is

what are the odds of a twin meltdown in

the housing and mortgage markets that

would tip the economy into a recession

well apparently

100% uh since we're looking we have we

have hindsight bias right only

ammunition the consumer has left is the

labor market that's actually very

similar and that's why we have the uh

blue X when we mentioned in the

beginning because even japal mentioned

hey you know how are people going to pay

higher prices well hopefully they'll

make more money in August yeah the the

jobs decline number we know that's

basically the opposite of what's going

on so look there are opposites and there

are similarities and So based on those

opposites and similarities we as

educated investors or consumers or

whomever you are we kind of have to to

ask ourselves okay how do we want to

position our portfolio for this right

you could be Allin on normalization

Allin normalization is like growth

stocks and real estate baby let's fing

go to the Moon okay like like literally

just close the door close the

door yeah okay yes that's that's an

option if you are pivot and you think

the 30% correction which we actually had

in 2022 is still ahead of us your cash

and your money

markets and then maybe you're in between

well then honestly what you could do and

again this is not personalized Financial

advice for you okay it's just general

idea is you could go well I think

there's a 20% chance that's a pivot and

80% chance it's

normalization is that then potentially

your allocation maybe your 20% money

markets and 80% long then just an

example right uh I do want to mention

that uh some stocks are seeing massive

historic volatility bumps today good

time for selling options whether it's

puts her calls look at like alpha quy or

whatever to find the historic

volatilities all right thanks so much

for watching we'll see you the next one

goodbye 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 P there financial analyst and

YouTuber meet Kevin always great to get

your

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