A Massive Black Swan DISASTER *JUST* Hit Markets | Crash.

Well, the market had a heart attack

today and there are three reasons for

the heart attack. The first has to do

with a major black swan in private

credit, which is exactly what we talked

about yesterday that the Fed is trying

to solve. So, we got a black swan in

private credit. We got fake news maybe

on an Oracle delay that gave the market

a heart attack and then Oracle's like,

"No, that's fake news, bro." We'll talk

about that. and then

Fed. All three of these things are big

issues going on in the market right now

and you should know about all three of

them. So, let's break them all down one

by one. First, there's something that

you have to understand and it's a little

bit complicated, but I'm going to make

it as simple as possible. When a company

goes bankrupt, they take on something

known as debtor in possession financing.

It's called a DIP loan. Okay. Now, you

might be thinking, Kevin, like this this

seems so me like micro. Why do I care

about this? You're gonna see how this

relates to the Fed, how this relates to

the entire economy because what just

happened is a very rare black swan. This

is very bizarre. You don't see this

happen almost ever. And I'm going to

give you these facts.

A DIP loan is a debtor in possession

loan. Usually these loans are given to

bankrupt companies and and we usually

think like that sounds ironic like it

why would I lend money to a bankrupt

company? They're just going to screw me,

right? The way it works is you go hey

I'm going bankrupt. So companies come in

and they're like all right well it looks

like you have some assets. We'll get in

front of all of the other shareholders

and bond holders, all the other debt

holders. We'll help you get through

bankruptcy and we'll arrange financing

for you based on what you have left,

assuming we're in front of everybody

else. Usually, these loans sell for a

massive premium because they're

considered really good institutional

debt. Like, they're considered safe. May

maybe you shouldn't use the word safe,

but they're considered

safe. Okay. Now, take a look at this.

This gray line right here you're going

to see is the 100% value line for the

bonds. That means they were selling for

a premium, right? So, so the bonds were

selling for a premium. This is normal

for a dip loan. Okay. Well, what just

happened with First Brands on the day

that the Federal Reserve said we were

going to turn on the money printer? This

could be directly related to why the Fed

turned on the money printer. What

happened with First Brands? Look at

this.

Oopsies.

That 100% bond value collapsed 60%.

This is on a company that has 10 billion

in debt. This is not normal. It is not

normal to see this happen. Now, to

understand that it is not normal, I

think it's useful to look at research

from this company called ECGI.

ECGI put this paper together back in

2022 and they talk about DTOR and

possession financing and they literally

say that at first blush loans to

bankrupt companies may seem highly

risky. However, we show that all of the

545 DIP loan facilities raised between

22 to 2019 received full repayment on

principal and interest. Full repayment.

Moreover, evidence on repayment extends

the Moody's research, which suggests

that going back to 1988, there's only

been a there's only ever been one

bankruptcy or like failure on one of

these DIP loans, basically, which

suggests that repayment risk is no worse

than institutional grade or investment

grade loans. So, basically, DIP loans

are designed to overcolateralize and

inst like insulate risk, right?

But wait a minute, if these DIP loans

are so good, why all of a sudden are we

seeing a collapse of 60% on a DIP loan

in the private credit market? Now, two

things are possible here. One thing is

possible that maybe First Brands just

really sucks.

But look at this because this is really

sus.

The very company that goes in to say

that, "Oh, First Brands is a great

company. They just have a bad balance

sheet. You should support First Brands

in Private Credit." They're called

Marathon Asset Management. The same

company that said, "Oh, guys, it's a

great company. Don't worry." The same

company actually sold their entire stake

in the new money portion of the

bankruptcy loan at or above 105 cents on

the dollar and dumped it all right

before the collapse. So the same slime

bags that said, "Guys, everything is

fine. Join the dip party dumped right

here before the big dump."

Now, this sends two signals that either

Marathon is a scam or

First Brands is is just really, you

know, this was an oopsy dupy and First

Brands is really just worse than

everybody thought. But collectively, all

of this reiterates fear about private

credit stress. And remember what we

talked about with the Federal Reserve.

The Federal Reserve needs to print

money. Today is the day they start

running the money printer to try to

reduce some of the stress in private

credit markets because if they provide

funding for banks who are seeing money

leave the banks to go to the Treasury

General account because of tax

collections and the Fed is trying to

refill money at banks. What do banks do?

Banks lend to companies like Blackstone

or Black Rockck or these management

companies so they can go make these

risky loans. But the problem is even

they are bailing out on these private

credit loans to where what's considered

safe lending is becoming unsafe.

That's a black swan. And I think that's

why the Fed is turning on the money

printer because it is so incredibly rare

to see what is considered safe in

private credit flip on its head. And

this is exactly why people are nervous

about what's going on with this Oracle

nonsense and the Oracle rumor that

started circulating. So first of all, I

want to mention a couple things here.

This morning in our alpha report I said

that there is a rotation happening out

of hardware plays for artificial

intelligence and I specifically named

bearishness on Oracle, Corewave, Nvidia

and AMD and I said that we really need

to maintain the 79 line on Coreeave. We

briefly lost that line. Fortunately,

we've recovered that. Well, you'll find

that we are well lower than where we

were when I gave that warning to people

in the alpha report this morning. Even

after this little popup recovery on

Oracle saying the news that came out was

fake news, we're still lower. And you're

seeing that on NBIS, you're seeing it on

Nvidia, on AMD, you're seeing it on

AVGO. Like if you were in the alpha

report this morning and you listened to

me say there is a rotation out of

hardware be careful you would have been

out at Broadcom at 387 versus the 364

where it sits now.

So now Broadcom isn't necessarily a bad

company. I mean look at the balance

sheet for for or uh Broadcom. It's

actually phenomenal. You know Broadcom

has $30 billion in cash and receivables.

They have $18 billion of of bills. And

sure, they have 71 billion of long-term

debt, but this is a cash flow machine.

Like, this company not only generates

massive revenues in net income, you

know, their net income is fantastic. In

the quarter, they generated $8 billion

of net income, but they literally have

$30.8 billion of cash flow per year.

They could pay off all their debt in

like two years with this cash flow and

they're not spending a lot on capex. So,

some of this selloff is likely very

overblown. But why is it overblown? It's

overblown again because of private

credit concerns. Look, folks, Deutsche

Bank is telling you what could go wrong

in the investment bubble. Debt. Debt.

Debt. Debt. Debt. Debt. Debt. Debt. Now,

we're going to talk about debt and how

this relates to private credit. I want

to mention this is exactly why my real

estate startup has zero bank debt and we

do now have a deadline to invest. So, if

you want to invest in my real estate

startup, we are closing the fund raise.

I talked to the board. We decided that

now we are profitable so far Q4 through

December 12th profitable paying any, you

know, interest on our convertible bonds.

We don't have any bank debt, so there's

no interest to pay there. Depreciation,

like all of that included, our revenues

are greater than our expenses. We just

went profitable in Q4, which is great.

Uh, but we don't need to pay, we

believe, this 5% plus upside anymore.

And so, we're going to close that round.

Obviously, anybody who invests before

December 31st locks that in, you know,

real estate backed, invest with credit

card, a wire, no fees. Obviously, I

encourage you a and wire. I don't think

people should take on debt to invest.

Read the offering circular. There's risk

with every investment, but the board

decided we're going to close this

because we're dropping our artificial

intelligence software this month. Uh the

revenues we're already seeing from our

artificial intelligence pre-sale are

really good. Like people are buying this

and the sales are great. And we're like,

we're going to end this this fundraising

round and get a new valuation and and

raise at a higher valuation maybe in the

future. But anyway, you can check that

out. But the point is debt kills

companies in a recession. Debt kills

growth. And it's not that people are

really worried that Broadcom has a lot

of debt because again in two years of

cash flow they can pay off their debt.

It's the fact that the entire industry

is backed by debt right now. In fact, I

want you to see this. There is literally

an information piece from the

information that reports that private

credit bankers are working overtime

right now to get debt allocations.

The information says bankers are working

overtime to find money for data centers.

Construction of data centers used to be

done primarily by big banks. However,

now the construction of data centers is

actually being supported by what's

called 42A private debt investments.

That's a problem. Blackstone is doing

this through their QTS fund. They just

raised $ 1.75 billion in November.

They're raising another 1.65 in August.

And Morgan Stanley predicted in July,

now this is a big deal, too. Morgan

Stanley predicted in July that private

credit would be responsible for $800

billion

of the $2.9 trillion in data center

investments. I want you to put this to

perspective for a moment.

27 out of every dollar that backs data

center debt is coming from private

credit. Do you see how this like links

together all of a sudden? So all of a

sudden you have this real risk that if

we have a black swan in private credit,

which you're literally seeing happening

at First Brands, well maybe maybe it's

unique, you know, maybe maybe First

Brands is just a fraud, but you

literally have this collapse of private

credit happening in a way that we just

don't see happening at First Brands. And

at the same time you see this private

credit collapse, you literally have

Morgan Stanley telling you that 27 cents

out of every dollar that funds data

centers is coming from private credit.

So like I'm trying to make it as simple

as possible because these institutions

like nobody's going to tell you this

stuff in a simple way and that's why I

think I exist to try to give people

perspective in a simple way and of

course shill my own stuff cuz that's my

job. Okay? I love house hack. I love my

startup. I love the stuff we sell.

Can you fault me? I feel like that's

entrepreneurship. But look at this.

Goldman Sachs writes this like really

nasty piece right here about how like

the sensitivity of global yields to

public debt has already started to

inflect higher. You don't even bother

reading this bulk. Like I I have trouble

understanding what they write here

because they speak in this jargon that's

just like can you please speak in

American. So I translated this to

freedom units and I wrote that in

English in freedom as government debt

goes up yields go up because investors

think they're getting diluted by the

government. They are by money printing.

This is true. This is a fact. The Fed is

printing $60 billion per month. Okay,

they're back to printing. And now look

at this. which increases the premiums

sought or demanded on bonds due to

inflation risks rising as well. That's

the third problem today. Schmidt,

Goulby, Hammock, all of them are are

complaining like little weeny babies

about inflation.

So that's the third problem today. More

on that in a bit. That makes debt harder

to get or less desirable because you

have to demand a higher premium which

increases the sensitivity of markets to

higher yields which means data centers

want more debt and then investors get

nervous because when you go over here

to Deutsche Bank, Deutsche Bank has this

giant piece on would the real AI bubble

please stand up and they actually make

it clear that a risk to uh this whole

data center boom isn't necessarily

Clearly this, you know, circular nature

of all this crap, you know, that's a

factor as well. But it's right here,

debt. Investment costs could spiral,

forcing companies into debt more so than

really ever before.

So this makes sense like this is all

logical and it also comes at the same

time that we are stepping up against

what what is really this you know this

is a log chart right here of the

progress that generative AI is making

and they call it a red flag and I

actually think that this is very

accurate. I think that GPT releases were

really a step change towards

encyclopedic AI not generative AI. I I

think that AI is really good at telling

you

uh data based on historic data. Like

yesterday I was looking at this historic

data on our investments like people

investing into house hack and it was

really interesting because we're getting

quote unquote more whale investors. Let

me see if I could find this. you could

and I asked Gemini and GPT to uh I like

take our data uh on investor amounts not

people's private information just like

the day they invested and uh and then

align it with um how should I put it uh

uh the day they invested oh and then the

size of their investment right and so

what they decided is they made a cut off

at $50,000 invest I'm trying to find the

darn thing oh there I found it uh They

separated uh they said anybody investing

more than 50k is a whale and anybody

investing more than uh or less than 50k

is is considered retail. And what they

said is at the beginning when we

launched our reggga

ah this is so blurry. Why is this so

chart so blurry? At the beginning when

we launched our reggga we had uh the

blue is more retail under 50k investors.

we were almost exclusively retail right

here. And what they're saying over here

is that we've had these like larger

checks come in relative to retail. And

uh you know the conclusions the AIs were

making on this sort of historic data

were like oh you know people with bigger

checks are like oh crap like you guys

are like on to something with this AI

and so you're getting substantially more

big checks. But they also said there

could also be a sign in there that you

know the smaller check folks are

struggling more in this economy and so

you're seeing a higher percentage of

richer people relative to the smaller

check. I don't I don't know. I thought

it was interesting. Who knows, right?

But when you align it with uh with what

I'm trying to say here with this sort of

hitting the wall, I personally think

that AI and this is where I was going

with this. era is really good at

analyzing patterns of the past but not

so good at generating future decisions.

This is why I don't think we have uh

such strong gen AI that that is prone to

hallucination and that's why I think on

forwardlooking stuff like artificial

general intelligence I think we're very

far away on that. The problem with that

is if it's true that we're going to hit

sort of this wall. I mean, if you look

at the data right here, if you look at

this step change up of what the GPT30

moment and 35 moment was on a

logarithmic scale, you know, we're not

making that much progress. That's a red

flag that Deutsche Bank is arguing. You

know, without getting too granular here,

right? And so that's the problem when 27

cents out of every dollar that's going

into data center expansion is driven by

private credit that's now hitting a

black swan at first brands. That's

really bad. The Fed is trying to bail

out private credit. At the same time as

you've got institutions going, "Yeah, AI

is great. We could do a lot of things

with this. Like we could do a lot to be

practical today with machine learning."

You know, like I think our real estate

AI is like it's pattern recognition.

It's it's machine learning that we

trained and we tuned to create real

productivity today. That's great. But if

people are investing as if we need data

centers for artificial general

intelligence, we're in a bubble, right?

Because I don't think we're getting to

artificial general intelligence. And if

it's supported by debt that is now

getting questioned, then that's a

problem. See here, Goldman says, "We're

also keeping NI a progress on or we're

keeping our eyes on AI progress and

doubts. AI related hardware shipments to

the US continue to increase. At the same

time, AI bubble concerns continue to

linger following Oracle's disappointing

uh earnings with investors now parsing

Broadcom's results. While we still

believe that we were are not yet in AI

bubble territory, we see the value in

regional and style diversification. I

think it's really smart to argue for

diversification right now. Like I I'm

not trying to say this to be like, "Oh,

please go diversify to house hack."

Like, that's not my point. My point is,

please, please, please, please, please.

Like, I'm I and I say it almost every

video. I'm mid-range. I'm like 5.6 or

5'8 or whatever on the Bear Bull scale.

The reason I'm not like go yolo margin.

Somebody in my live stream this morning,

they're like, Kevin, you know, there's a

dip. should I go yolo up on margin? And

like I was so disappointed that they

said that I sent out this tweet. I'm

like, let's put this into perspective.

You know, somebody's asking me to go

into margin here. Like when you zoom out

on the cues, like what the hell? No, no,

please, please, please, please, please,

please don't go into debt. Look at

what's going on with the 10 two. We are

we are like we just skyrocketed on the

10 two. Why are we skyrocketing on the

102? We're skyrocketing on the 10 two

because the two-year yield is staying

stable and the 10-year is going up. So,

we're bear steepening. What does that

mean? It means markets are saying, "Oh

crap." To save private credit, the Fed's

going to have to run the money printer

more, which means we have a greater risk

of more inflation, which means 10-year

yield premiums demanded up because you

have to compensate for potentially

higher inflation in the future because

the money printing they're doing now to

prop up the AI bubble because the Fed

realizes the only thing keeping this

economy alive right now is the AI

bubble. And if the AI bubble goes

because private credit support for this

market is going away, then you got

problems. So obviously today when Oracle

is like uh we're delaying data centers,

that was a rumor apparently. Oracle says

fake news, right? Oracle's like hey

we're delaying our open AI data center

from 2027 to 2028. Oracle tanked. You

know then it comes out that oh it's

actually just fake news. Is it though?

Is it fake news? I've I mean like don't

get me wrong, I love my Teslas, but I've

seen Elon Musk say, "Oh, that's fake

news to reporting plenty of times." Only

for it to be exactly what was actually

going on. And like I look at OpenAI and

call me jaded, but this is what I wrote.

Okay, the Oracle, this report says

Oracle has pushed back the completion

date for some models of data centers

it's developing for the artificial

intelligence model developer uh OpenAI

to 2028 from 2027. I wrote in response

to this, the delays are largely due to

labor and material shortages. By the

way, all of this is in the Meet Kevin

app by the way. Uh so like if you

download the Meet Kevin app, which is

totally free, you download the Meet

Kevin app, you could see this

you know, right here. So, you can kind

of see that data and you can kind of

like see where I get the stuff from and

my citations, my sources or whatever.

But anyway, so what did I write to this?

I go, what if this is a lie? The delays

are largely due to labor and material

shortages. What if that's a lie? What if

Oracle is delaying OpenAI data centers

because OpenAI's code red is real

despite what Altman says? And

ultimately, OpenAI is signaling that

their growth slowdown is coming. Like I

canceled my GPT subscription and I went

to Gemini a few months ago. Now what are

they doing? GPT is offering me 100% off.

You've got 100% off plus for a month. So

they're giving me 100% off to try to get

me to come back. And I'm like I don't I

don't know. You know this incredible.

That's incredible.

So uh then you know I saw these comments

from David Sachs. Now, sorry guys and

girls. Uh, I I am not going to read this

out loud, but this is what I call him.

David Saxs of I'm not going to read it

out loud. Somebody left me a comment

yesterday said, "Kevin, I try to watch

your videos with my family. You said a

bad word. I don't know if I could keep

watching." I'm like, "Okay, I won't say

poopy dupy words." So, so anyway, um,

David Saxs says, "More jobs are being

created than lost by AI." I think he's

smoking dope. Like I think he's smoking,

you know, some like deregulated cannabis

here. Like I don't know. He's on

something. I think he's he's delusional

to say that. Uh and then see China not

accepting H200s as they're an old

generation. I don't know if that's true.

I don't really have a comment here

maybe. Uh but I think this is convenient

shilling for Donald Trump and it's

likely untrue.

That's my opinion. Uh okay. So, like

when we put all of this together,

understand that Oracle CDS's just hit an

all-time high. The previous high was

12814 on 122 for Oracle. We briefly hit

the 120s during the chip recession of

2022 uh during that that Q4 time uh Q3

Q4 period. But we are now at the highest

CDS pricing, credit default swap pricing

for Oracle since 2008.

insane.

Uh, mind you, what I also think is

really cool about our machine learning

is our machine learning that we do with

our AI at house hack, you know, it's not

just some like crewappy rapper or

whatever. We don't actually rely on a

lot of server uh capacity because we can

we can analyze properties throughout the

nation once and then deliver that

analysis you know to people paying for

the service without rerunning the server

compute multiple times for each person.

So it's kind of like we have to run the

compute once and then we could feed the

answers through our SAS and just we're

like that keeps cost way down.

It's kind of clutch. Uh, sorry. I I I I

I get excited because I'm like, I see

the problems. Okay, the problems are in

debt, but that doesn't make all AI bad.

It's the problems are in private credit.

And so, this is why, you know, people

are concerned about the 102 rising and

debt because that's the only thing

propping this up right now. Uh, let's

look at some other institutional pieces

because this is bullish. Also, Goldman

Sachs actually sees an acceleration of

AI adoption supporting earnings per

share in 2026 and 27. This is bullish.

They forecast an S&P 500 growth of 12%

year-over-year in 2026.

Uh, and they think that 46% of that EPS

contribution is driven by Nvidia, Apple,

Microsoft, Google, Amazon, Broadcom, and

Meta. Now I personally am partial to um

uh the advertisers in this Meta, Google,

Netflix, you know Netflix calls their

advertising revenue insignificant. I

think that has a huge upshot and Meta

and Google are huge advertisers and I

think they all need to advertise their

products. You know I think uh there was

another piece about uh here was another

piece from Goldman about cyclical

sectors should see an acceleration next

year. They had real estate tied for

second next year for growth. That was

cool. Mostly, I think, because they see

the middle income people sort of like

actually getting back to real wage

growth next year, which I think is

supportive to rents going up. But

anyway,

uh they think that um productivity

baskets for AI come from banking,

insurance, retail, warehouse,

transportation, logistics, healthcare,

and restaurants. My favorite plays there

are things like but Palanteer's

valuation's too high. But I think rather

than picking banks or finance companies,

I like picking the companies that

support those companies. So a basket of

those would be like Palanteer,

Salesforce, UiPath. Uh those I'm excited

about. You know, one of those I think is

very cheap and is a very good

opportunity. Uh it's on our top 10

stocks to buy uh for the next 10 years

list in the alpha report. Uh remember

the alpha reports, that report I do

every morning where I'm like, "Hey, here

are the risks for the day." And uh you

get that at meet.com. And what a lot of

people are doing is they're buying the

membership uh which now includes the

Reinvest course cuz we just dropped

that. They're buying the membership with

the nine courses, the trade alerts, the

private live streams and everything.

They're buying this. Then they're using

the course member coupon to buy the

Reinvest AI. Not a solicitation. Read

the authoring circular before investing

in Reinvest. But anyway, um you know

what I thought was notably missing from

their list was the amount of

productivity potential for real estate

that you can get with AI. And I actually

think I'm ahead of a lot of the

institutions on that because I see how I

could turn AI into real productivity

uh in in in analyzing the net worth

potential boosts that you could get from

renovating real estate or acquiring real

estate and prioritizing deals and doing

that for agents as well. uh you know

automatic alerts from your agent on net

worth deals. I mean like agents would

love to pay for that and it's a tax

write off for them, right? So anyway, I

actually think I'm ahead of institutions

on that, but if you disagree with me,

that's okay. Look at these other

categories. That's what Goldman is at

least saying. But I also agree with

Goldman on that. Like that is where I

think EPS growth comes from. And that's

why I said in the alpha report this

morning that I think that you're seeing

a fade away from uh the chip sector uh

from hardware. I mean, what did I

specifically write in the alpha report

this morning? I said that Cororeweave

needs to hold up 7927

otherwise that's bearish. Uh and then as

far as uh I wrote quote I expect profit

taking in the physical chip exposure to

continue and then parenthetically I

wrote ago Eric uh Ericle Oracle AMD

Nvidia

and then I also pointed out the

amplification of the private credit

stress uh which is that first brand's

problem. So like there are issues. Some

of these things though, they're going to

create buy the dips in like the

downstream profit potential uh that you

could get from artificial intelligence.

So that's why I kind of maintain like as

long as the Fed's money printing can

kind of save the private credit problem,

you could plug this debt problem at

these data center places in place and

you can actually meaningfully recover.

So, we're really relying on the Fed to

bail us out right now because this first

brand stuff is bad. Very bad. Very bad.

Black swan. And that's Look at this. The

102 spread just shot up to 67. No, not

67. No.

No.

Oh, no. It's a sign. Okay. Historically,

why why does this matter? People ask me

like, "Kevin, why does historically this

matter?"

Okay, so historically the 102 matters

for the following reason. The 102 has

never ever gone into inversion uh and

and come out without a recession. So

understand that risk, right? And and

this is why I said to course members

this morning, companies like Carvana and

SoFi are actually or or even like

companies that don't have revenue like

um Archer Aviation have a very unique

recession risk because they don't have

cash flows to sustain the business. Like

you know we went we just went Q4

profitable. This is great because like

with house this applies to all

companies. Use this as a lesson for all

companies but like we've got 9 mil in

the bank. We got, you know, what 80 70

80 million of paid off real estate with

no bank debt. Uh we've got uh cash flow

to support our operations. Like that's

what you want. But like SoFi, for

example, I love SoFi, don't get me

wrong. I'm a member of SoFi, but they

rely on selling their stock to generate

loans. A company like Archer Aviation

relies on selling their stock because

they have no revenue. They're

pre-revenue. Carvana relies on insiders

selling the stock to buy the debt that

Carvana generates when they sell cars.

So you're kind of like creating this

cyclical, you know, debt infused stock

reliant

like process there. All of that

collapses in a recession, right? So you

want to be recession resilient. So

ironically, that's actually why I mean

like Broadcom with these these margins,

dude, they are recession resilient.

They're selling at a discount. Uh so is

Oracle. Oracle's got a lot of debt

though. I get it. I get why their CDS's

are going up, but uh you know these

companies,

their stocks can tank because of these

debt fears because the cycle might not

continue. Uh and then you have to write

down growth rates and then all of a

sudden their valuations look expensive.

That's I think why Nvidia is selling for

a discount. Why is Nvidia selling for

you know a 40% discount on their peg?

they should be worth $300 today. Well,

it's because the market goes if private

credit plumbing doesn't get solved that

future growth collapses. So, going back

to the 102, the historical significance

of the 102 is that we have never had an

inversion of the 102 yield curve and

then recovered without a recession. We

came close in 1995

and we went to shock level in in 1995.

You know, we went to about 0.55 on the

102 spread, but usually once we're

over.5, we're at shock level. And then

all it takes is a straw to break the

camel's back. So why is the 102 at 67

today? Well, because you just had a

black swan in private credit, which is

the very thing supporting

these data center buildouts, which is

the very thing supporting the whole

cycle of this this chip euphoria. I mean

again look at Deutsche Bank's piece on

the cyclical investments of the AI

bubble right so they here say that you

know Deutsche Bank JP Morgan Goldman

Sachs all of them by the way agree that

the bubble is still ahead will the real

bubble please stand up okay all of them

look at they've got a robot blowing a

bubble here and they're like it's true

that you know we have a red flag that

we're at these high valuations uh and

that maybe we hit a wall in terms of how

good this AI actually is. All of it

comes down to debt. Where is the

cyclical this there? Like yes, all this

can keep going as long as private credit

gets plugged. I mean, look at this.

Let's just follow one of these. Okay,

Oracle. So, Oracle buys 800,000 Nvidia

GPUs

and buys 50,000 MI450 GPUs from um from

AMD. Okay. Oracle then purchases

uh 300 billion worth of compute. Oh,

sorry. Open AAI purchases compute from

OpenAI. Oh my gosh. OpenAI purchases

compute from Oracle. But OpenAI gets

investments from Nvidia and AMD. And

then OpenAI spends money

on compute from Oracle who's buying

these chips. Like the basic premise is

that it's all a big cycle. It's all a

big circle, right? And the better Open

AI does, the more uh uh the valuation of

OpenAI rises, which props up the stakes

that companies have taken in OpenAI for

Nvidia or whatever. That's why when you

hear Oracle saying, "Hey, you know,

there's a rumor that maybe our data

center expansion will slow at the same

time as people are freaking out about

private credit." Wait, is it because

of labor and material shortages, or is

this actually just a lie? and OpenAI's

code rev is true and their user growth

is stalling. So they're like, "Hey,

maybe we don't need that 2027 data

center. Maybe kick the can down the road

a little bit on that." And then because

of OpenAI's request, Oracle delays the

data center. And then that gets leaked

as OpenAI is delaying the data center

because of labor and material issues

because they would never want to say

that OpenAI delayed it because the whole

Sam Alman Ponzi will collapse.

So yeah, we're at like a a precipice of

of a pile of poopy dupy.

That's why there's so much nervousness

in the markets right now. And the Fed is

literally printing money to try to stop

this and prop this up. Now,

unfortunately, we just rejected 617 on

the cues. Not great.

Not great.

Somebody's Freudian slip. They're all

the same company at this point.

That's a good one. I mean, hey, you

know, like I don't blame you saying

that. Like, it does almost feel that

way, doesn't it? It's it's kind of wild.

It's absolutely wild right now. David

writes, "Excited to be invested in

house." Well, thank you for saying that.

Uh, private equity, private investments,

and credit are intertwined through

co-investments. Private equity vehicles

generally have a 5 to sevenyear runway

for funds, which means real pain could

be unrealized for years. Yeah. But but

it's not just the potential for, you

know, the bankruptcies down the road.

The the real problem is that you got to

keep getting new debt. It's not the old

debt that's the problem. It's we need

all the new debt to come in. That's the

problem, right? So, uh

I don't know. That's why that's why when

people are like, "Kevin, is now the time

to yolo on margin?" I go, "No,

don't do that." You know, I'd much

rather turn garbage to gold and uh, you

know, in take a little Ben Mal infusion

there. You know, here's a property we

just bought at a massive discount, for

example, and we will turn this massive

turd into something beautiful just like

we just did. Like we just scanned this

property two days ago, two or three days

ago. Uh and we just removed this

kitchen. I'm about to go film it and

I'll show you a video of it later. But

we're going to And then we just leased

this property out which we just

transformed. Uh you can see new kitchen,

beautiful cabinets, lazy susans,

beautiful backyard, blahy blahy blahy.

Look at our little candalabbras. How

nice. Uh but that's what we do, you

know. and then AI on top of it

obviously. So anyway, you want to learn

more about that, go to reinvest.co. Uh

we are ending the fund raise at the end

of the month. The board decided that I

called him up. We have a board meeting

next week, but I actually I thought it

was prudent to call them up and go, "We

need to decide on this now." And so I

put all the uh you know, I put I I pled

my case to our board members and they're

like, "Kevin, you should end it. End it

December 31st." So that's what we're

doing.

All right, folks. Appreciate y'all being

here. Seriously, good luck out there. I

love y'all. And uh no matter what

happens, always remember that your boy

Meet Kevin's here with you. And we'll

make money together and we'll lose money

together. But I'll be reporting on

everything together with you. We'll see

you.

I'll call them.

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

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

be very lucky.

>> He's very talented, but I don't know

it's going to be him, but he's a very

talented guy. Kevin is much more

interested than most people, by the way,

in the balance.

>> 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.