*Shocked* at this Shift | Inflation Danger.

me kevin here most of twitter is up in

arms right now over inflation mostly

things like let's go brandon dems voted

for this prices will keep going up and

hmm weird corporate profits are at

all-time highs yet wages are not and

while it's true that uh corporate uh

prices and pro corporate profit taking

are at all-time highs and a lot of this

is happening under biden's watch we are

starting to see a shift that the

mainstream media is blind to right now

you've got folks on the left making

excuses for why inflation is what it is

and you've got folks on the right like

fox news reporting that 70 of americans

are unhappy with the state of the

economy but what is the inflection that

we're seeing right now well let's talk

about that quick note this video is

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first inflection point that we need to

pay attention to

the manheim used vehicle report now if

we first look at the manheim used

vehicle report we're and a lot of folks

do this and this is one of the problems

with unfortunately mainstream media is

the headline

indicates that prices for used cars are

still going up and when we look at this

headline we think to ourselves okay well

as expected prices are continuing to go

up inflation is still here

what else is new nothing manheim used

vehicle price index going up

but when we actually look under the

curtain of what's happening

we learn a whole lot more and this is

something that's very very important we

always want to find inflection points

take a look at this this is the index we

look at it here like oh no straight up

continuing up but this little circle

there covers what's actually going on

and it's another inflection point that's

really important to pay attention to

here's a summary of the manheim and its

inflection point

we saw weekly price declines in december

that actually accelerated in the final

weeks of the month

the three-year-old index declined 1.7

percent those are for three-year-old

vehicles these are things like ford

f-150s uh corolla some of the most

popular vehicles and they all saw all of

them saw declines in prices of 1.7

percent year over year we're still up

there's no doubt about that but market

prices were lower than last month and

average daily sales conversions declined

to 53

indicating that we nearly have a balance

between buyers and sellers in the market

as opposed to a big unbalanced to one

side which was many more buyers and not

enough sellers we're getting to a

balanced point again

as a result more vehicles are showing

price depreciation again year over year

all of them saw price increases with

vans having the best performance and

prices going up

but according to cox automotive total

u.s vehicle sales were actually down

four percent year over year in december

and retail supply which peaked in april

of 2020 at 114 days

ended at 54 days just uh now slightly

above normal levels which means we're

finally building supply again where

we've been having these shortages and

this is helping drive vehicle prices

at least temporarily to the downside

especially worth noting

that the inflection point is

accelerating or this this change is

accelerating or has accelerated towards

the end of december that is prices

started falling more towards the end of

december than they were falling at the

beginning of december and so we expect

that this pace could continue in january

and what's also important to note is

that retail sales are trending

down from their peak in spring if you

look at research from manheim and the

manheim institute you're going to find a

an almost straight decline

from about april

of this year

to december in used and new vehicle

sales and this is going to continue to

add to pricing pressure

for new and used vehicles on a month

over month basis again

top selling vehicles on the

three-year-old index so that's the

2018-2019 models all showed declines

every single one of them

and prices seem to have really peaked in

august and november so despite the fact

that sales have been going straight down

since uh april where we had a sales peak

we did have price peaks in august and

november but those have all consistently

been on a downward trend uh since these

price peaks and uh that is in august we

had a peak then we trended down with a

brief little revisit in november but now

we're trending we're on that same

downtrend where prices are rotating down

so this is actually really good and this

kind of data is maxed by the overarching

or the overall chart where if you just

look at the chart on sort of a zoomed

out basis and you see this you're like

oh my gosh used car prices are going up

inflation's going to the moon it's the

democrats fault you know all that kind

of nonsense but when we actually look

under the hood it's like wait a minute

we're actually starting to see an

inflection point in the manheim market

report and this is a big deal

but not only is this a big deal there

are other things that are inflecting as

well listen to this the personal savings

rate is now back at pre-pandemic levels

around seven percent jp morgan found

that lower incomes have already

exhausted their savings and working in

middle class families are expected to

have exhausted their additional savings

by the early part of this year now

what's important to note here is that

indeed.com conducted a survey in the

last 30 days about why people aren't

searching for jobs why it's taking

longer to fill some positions why in the

beige book we're hearing

that folks in dallas texas have to hire

five people just to keep one of them

because they're finding such a mismatch

in the employees that are actually

applying for jobs compared to the work

and skill sets that they need so it's

becoming so hard to find folks one of

the reasons is because according to

indeed.com folks aren't really that

motivated to find jobs right now because

they've got a good financial cushion but

again going back to jpm that financial

cushion could be evaporating in the next

few months meaning that businesses could

maybe finally start actually finding the

workers they need without necessarily

having to raise wages even more now

don't get me wrong i think wages have

some catching up to do but wages going

up obviously create pressures for uh

manufacturing input costs uh and supply

input costs

and so this uh is another place where

we're actually seeing inflection points

to the downside in inflation listen to

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back to this inflection point services

pmi

is now at a three month

low that is price pressures on the

services pmi has hit a three month low

this is a good sign for inflation

the purchasing price index

today came in with a lower month over

month

inflation read than expected we were

expecting a 0.4 percent read or about a

four point eight percent annualized

inflation rate we actually came in at

point two percent or only a two point

four percent annualized inflation rate

of course year over year we're still uh

prices have gone up about nine point

seven percent which also came in

slightly weaker than expected and it's a

big year-over-year number but on the

month-over-month data the data that is

most important now

we're seeing a decline substantial

decline from the 0.4 percent expected to

0.2 percent

that's the ppi but on top of that we

also had the manufacturing pmi report

from ihs market surveys

and they showed that manufacturing

growth came in at 55.5 anything over a

read of 50's growth but the big tell

quote input cost inflation softened to a

three month low we're still above long

run averages but we did have a softening

to three months low so on manufacturing

and services and producer price index on

all three of these here we have an

inflection to the downside in inflation

combined with the uh manheim vehicle

report showing a downside to inflation

combined with

a

a sort of a return to normal in the

personal savings rate in other words

people have less money

probably or likely to contribute to a

future decline

or a continued decline rather in

inflation

because now if people have less money to

spend then that again could potentially

imply that we're going to see a uh an

overall rotation

uh to the downside in inflation but it's

not just that uh because we do have this

sort of dual impact of omicron see

omicron

could actually make inflation worse just

like the delta variant ended up making

inflation more long lasting and

persistent because of the supply chain

disruptions it's worth noting that

omicron right now which could end up

having those or causing those same sorts

of supply chain disruptions which would

not be good that would hurt inflation so

far that's not happening too severely

with the exception of little instances

in china where this is occurring but

what's more important in my opinion

right now is actually looking at

the the apple and google mobility index

to see hey

what's happening in markets are

individuals actually spending more money

are they getting out there spending more

money or are we seeing less activity

which potentially implies less spending

take a look at it right here this is the

apple mobility driving index right here

ending today january 13th

and so it's indexed from a year ago

right but uh this report is from today

and you can see the u.s data is this

light blue line here or the americas

data on a four-week mobility path we are

actually down 20.5 percent

uh and take a look at this this is kind

of that mobility data we're down here so

we've fallen a little bit relative to

even levels where we were in august so

we've got substantially less mobility

than we had even during the delta surge

right now which could potentially imply

less spending to come so that's the

apple mobility data this is the google

mobility index you can clearly see this

decline here i mean we are at levels

that we last saw in april of 2020 when

we were really just starting to have the

spring reopening uh sorry april of 2021

after the coveted winter

tomtom congestion index also showing

that we are at low levels

likely back to about january of 2021

according to this so clearly seeing a

decline in mobility and this this is

definitely something where wait a minute

decline in mobility combined with people

having less savings means potentially

less spending which potentially means

less price pressures combined again

with the inflection point in the mann

heme the inflection in the pmi ppi

services ppi or pmi rather

all of these things combined together

along with likely substantially less

fiscal spending in 2021 and increase

borrowing costs from the federal reserve

as rates go up bar and costs will go up

we could potentially see all of these

things doing the same exact thing

pushing inflation

down less money to spend because of

higher borrowing costs or because you

have less that you got from the

government because you have less for any

reason less financial cushion means

you're spending less money you're going

back to work you're providing

potentially more supply to the labor

market which reduces that that price

pressure on wages

along with all of these other input

costs sort of starting to inflect to the

downside

this is a good sign for inflation all of

these things are pointing to

lower inflation now the big risk though

of course is china china has seen kovitz

spread rapidly the good news right now

though is in areas where covet is

beginning to spread rapidly we notice a

peak usually somewhere between two to

four weeks after the surge look at the

united kingdom cases rotating down look

at new york city cases flat for the last

four days

china again seeing a rapid spread of

covet multiple cities have gone into

lockdown ahead of the winter olympics in

beijing but over 20 million people are

being confined by these lockdowns and

and this could unfortunately negatively

affect inflation if we end up seeing

more supply chain constraints in fact

one city in china one of the with one of

the world's largest shipping ports and a

production hub for foreign businesses

ordered a half-day break solely for

covet testing this again brings fears

that omicron could disrupt supply chains

but we don't expect to see the same

disruption that we saw with delta if

anything these should be recoverable

supply chain in interruptions as long as

omicron does not stay

too long to end up damaging supply

chains uh for longer periods of times

but anyway uh all of this together here

i have to say as sort of a bottom line

i'm very optimistic i'm optimistic that

yes inflation did last longer and was

more last long or was more persistent

than expected but that that inflection

point in inflation is coming and that

we're going to more broadly see that

inflection point over the next two to

three months which in my opinion is not

only bullish for technology stocks but

is also bullish for cryptocurrencies

which i'm very very excited about so uh

again manheim uh personal savings rates

going down increased borrowing costs

lower fiscal spending

probably an inflection point coming for

omicron which should put less pressure

on supply chains pmi services pmi ppi

all of these things inflecting down good

news for inflation good news for the

future of cryptocurrencies and tech

stocks and i'm super excited remember

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