Biden & Fed DESTROYED by Home Depot Founder | Massive CRASH Coming.

to the co-founder of Home Depot

slamming and calling out Joe Biden and

the Federal Reserve let's go ahead and

play this because it's pretty in-depth

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right let's now get into this piece here

we go Democrat Senator Elizabeth Warren

went at it yesterday clashing on Capitol

Hill Warren is slamming the fed's

inflation strategy claiming that it will

get people fired watch

I would explain to people more broadly

that that inflation is extremely high

and it's hurting the working people of

this country badly and we are taking the

only measures we have to bring inflation

down and

two million people out of work is just

it's just part of the cost and

working people be better off if if we

just walk away from our jobs and and

inflation remains

do you want to be right yeah it's worth

noting before we get to the response of

the Home Depot co-founder that that is

actually exactly what drum Powell's

argument is that yes there will be pain

going through this tightening process

and you should prepare for it but some

job loss is better than a lot of job

loss it's basically the argument Jerome

Powell is making now Elizabeth Warren

they didn't show it all here she made a

fantastic historical comparison

suggesting that when the unemployment

rate Rises one percent

It generally goes on to raise another

one percent so in other words we're at

about 3.4 3.5 unemployment right now the

FED is projecting that's going to rise

to 4.5 percent which actually means

they're telegraphing it's probably going

to go up two percent

to five and a half percent which means

potentially as many as 3 million job

losses

yikes let's listen to the response

though from the co-founder of Home Depot

because he has some Choice things to say

let's go now to look at the economy the

macro story is the co-founder of Home

Depot Ken langone is here Ken it's great

to see you welcome back to the show

hi Maria how are you thanks for having

me I'm doing well and I hope you are too

I want to get your take on the current

business environment under the Biden

Administration Ken you've got

investments in a whole host of

Industries and have a great vantage

point to tell us what you're seeing on

the macro Story how do you assess

well first of all Maria I would classify

the FED as a gang that can't shoot

straight this goes back more than 18

months when they were saying that

inflation was transitory and smarter

people than them namely Stan drucken

Miller and people like Stan were all

saying the exact opposites so they got a

lot they got started late on the fight

against inflation

and now frankly they act like the gang

that can't shoot straight because we

should keep raising rates until we break

it now it's going to be some pain

Senator Warren she talks out of both

sides of her mouth what she doesn't

realize is the people who pay the most

for inflation

are the lower income people inflation is

the most regressive of all taxes ever

we don't like paying higher prices but

we can afford to pay higher prices

nothing changes in our life

but a family of four living from

paycheck to paycheck has to start asking

the questions do I go with meat or do I

go with a substitute and on and on and

on because these people are really being

impacted there's no simple way to snap

the back of inflation

the FED needs to be more aggressive and

needs to be determined to make it happen

wow my problem with

the FED overall there's too many

academics in the mix I think if you had

more business people involved or people

with business backgrounds I think you

might see a different dialogue and

different decisions yeah for sure yeah

for sure Maria yeah we will raise rates

a lot sooner a lot higher to get a

control of inflation it's not a lot of

control yeah and I think frankly I don't

know how you avert a serious financial

crisis where we are right now I don't

have any idea how you do it well and now

it's more a more distinct possibility

well there's also this issue around

wages and this tight employment market

right I mean what are you seeing in

terms of jobs because Jay Powell

yesterday called the labor market quote

extremely tight can this morning we get

news that President Biden is proposing a

5.2 percent raise for federal employees

in his budget so the budget's going to

be out tomorrow and you know going into

it they're linking this story that he's

going to propose a raise for federal

employees the largest salary boost can

in 43 years so if you're raising wages

right now what does that do for the

tight Market that we're already

suffering under I mean don't get me

wrong it's good that employees have seen

their rate their wages go up but it's a

problem for businesses look at Home

Depot just recently saying they have to

spend a billion dollars because of this

tight labor market yeah and keep in mind

the people getting wage increases right

now uh and by the way let me know if

this audio is any better uh or worse

the people getting wage increases right

now are generally the people working

under about twenty dollars an hour which

actually lowers your average wage since

the average wage in America is about 32

dollars uh but yeah wages have gone

across up across the board I mean just

yesterday uh the Wall Street Journal was

reporting on how much wages have gone up

at uh at construction jobs uh wages

Rising substantially at construction

jobs across the industry massive demand

for for construction uh specifically

you're seeing uh uh the the individuals

uh individual workers seeing massive

wage increases from in some cases

specialized contractors seeing their

wages go from 35 an hour to potentially

as high as as a 45 or 50 an hour so

massive wage increases uh now

fortunately there's been a massive

increase in available labor Supply

that's helped that's been evidenced by

what we've seen at companies like uber

Lyft McDonald's chipotle but the

construction industry for example is

looking to hire an additional half

million workers just to get back to

normal Pace in 2023 so there's still

massive demand for workers and so you

are still seeing some inflationary

pressures and that is going to keep some

of these Services inflation somewhat

sticky now the Home Depot co-founder

here is suggesting hey we need to

increase uh how much we we tighten the

news basically on the market to contain

this inflation because average working

people can't afford this stuff anymore

hourly wages for General construction

workers are up 42 from 2019 to today

that's incredible absolutely incredible

all right let's keep going here

well we want to make sure our people are

taking care of Maria

to me the first obligation you have in

business is taking care of your people

and make sure they're treated fairly and

make sure they're living in a way that

they're comfortable we made that

decision I wish I was there to be part

of it but I'm retired but thank God the

company under under Ted Decker's

leadership made the decision we have to

do something for all people so we've we

by the way we did it all at once yeah we

did it at the end of January it's one

billion dollars it's a lot of money but

all people need it and with with Biden

let me say this to you about Joe Biden

in my opinion and I'm going to be very

very direct

he thinks he's the smartest guy in the

room

if that's the case we're really in

trouble

because the American people are a lot

smarter than that and they see it yeah

and I'm afraid Maria the American people

need to understand there's no pain no

gain

maybe we're going to put two million

people out of work but I don't know any

way around dealing with a problem of

inflation and the and the tragedy of

what comes with inflation as they say

the poor people the little people the

people living for paycheck to paycheck

they're the ones that get hurt the most

yeah which you want to think about them

which is like umpteen times you've said

in the past I don't need Social Security

I need these checks do something about

it try to make sure Social Security is

solvent it's about to go insolvent in 10

years and yet there's no plan to fix it

we're waiting on the president's budget

tomorrow and we're also waiting for this

debt Showdown to take place right the

debt ceiling has to go up at this point

we have to pay our bills but will they

come up with any boundaries to spending

Ken

no what they'll do is they're already

talking about raising rates look Maria

I've said since the day I got a social

security check this is outrageous

I did so well in this system I did so

well under capitalism it would be a

travesty for Elaine and me to take any

money from the government any at all

and very frankly what we do is we give

those checks to charity every month nice

why because if you're trying to give it

back to the government forget it and if

you gave it back to them they'd only

burn it more but I think politicians

this is why we need term limits Maria

because until we have term limits and

people understand their goals

people are not going to touch the

so-called third rail of politics which

are like entitlements

my my social security check last month

mine alone not a Lanes was 3 500 this is

crazy yeah that was three quarters of

what my starting pay was when I went to

work uh 65 years ago but look what you

and Elena are doing giving it all away

you're giving it to NYU langone Medical

Center you're giving it to the Arts

you're giving it to cancer research

you're giving it to to to you know

animal hospitals you're giving your

money away you don't see that all the

time but you're doing it and I'm glad

you brought up term limits Ken we've

spoken about this in the past how is it

possible that a politician goes into

washing Goes to Washington and ends up

spending 40 50 years they forget who

they're working for and I want you to

know that I spoke with West Virginia

senator Joe manchin on the phone the

other day he came on the shower before

he came on I talked to him on the phone

and he said to me a very good friend of

mine Maria and he said to me people are

not going to like what I'm going to say

but you know what I'm for term limits

and I said wow Ken langone told me the

same thing he wants term limits you even

have a sitting Senator Joe manchin

calling for term limits but the people

who are going to do decide this are the

very people who are going to get

impacted so I don't see it happening Ken

what about you

well I don't see it happening Maria

unless the American people get so fed up

I mean we need turn by the way Marie

with all due respect thank you for your

kind words about what Elaine and I are

doing with our Good Fortune but I'd be

less than honest though I didn't say

we're also keeping enough to live well

thank God but but uh really we need term

limits I had an argument pushed at me

last week

two people two elected officials in

Washington together

said well you know if if you go to term

limits the staffs are going to run the

government I said what the hell are you

guys talking about the staffs are on the

government now right these guys haven't

got the slightest idea what the hell

they're doing yeah

and Maria I'm serious

if and when the big crash comes

it is not going to be pretty it's not

going to be pretty and if we worry about

China we have to worry about China

vis-a-vis a weakened American economy a

very weakened American economy that's

right that's where you really run the

risk so Ken real quick we just talked to

Larry McDonald he said there's going to

be a stock market crash within 60 days

he's talked to his institutional

contacts to come up with that but I want

to get your take on market performance

and what's priced in here you're a big

investor if you expect we're going to

see a recession if you expect things are

going to slow down quite a bit this year

does the stock market fall off or is it

priced it

Maria let me say this I'm impervious to

that argument for one reason I'm a very

long-term investor my average holding

that's a weighted average of all my

positions is 41 years wow I've owned my

Lily now it'll be 45 years this November

Home Depot of course we founded it in 79

yum brands 25 years uh Parker Hannaford

one of the new editions

13 14 years okay

bad times come and bad times go my

advice to people is own great companies

Great managements strong balance sheets

a history of periodically raising

dividends and go fishing yeah I like to

go fishing I put money with strand

Ruckus by the way put money with Stan

brockenmiller if you can you've never

had a losing a year wow and uh about the

Good Fortune to be an investor is since

he had less than a million dollars in

assets that's pretty impressive but but

Maria I'm not smart enough these pundits

are the same we're going to have a

creation 60 or not they may be right but

they also may be wrong all right not

that against America yeah

bet on America we're the greatest

country on Earth we always will be we're

going through a rough patch we will get

it right not without a lot of pain but

we'll get it right

it's great to see you thanks so much God

bless you thank you jono please and have

a great day I will thank you

all right so let's add some commentary

on that wow well first of all super

admirable uh the guy's donating his

social security check uh that's awesome

it's also really cool I mean I'm sure he

donates more than that he's got plenty

of wealth you know there's really no no

need not to donate more than that at

that point uh so so but good for him

that's not to try to minimize what he's

doing but he makes two really good

arguments uh that number one he he

amplifies amplifies how important it is

to handle inflation because if we don't

handle inflation then

as he said the little person gets

screwed especially the people who work

at Living paycheck to paycheck and

that's why as an investor I hate to say

it but I'm purposefully trying to avoid

investing where regular people are

buying things right now the the Nike the

McDonald's the Costco the Staples the

target the Walmart the the restaurants

I'm trying to stay away from all of that

let me put it this way when you go to

Cheesecake Factory or Red Robin gourmet

burgers right now you're eating at a

charity because they lose money they

lose money you sit down and eat you make

them lose more money

that's how bad costs have gotten at

restaurants I really want to be exposed

to Staples even like Home Depot or

Lowe's that that are that are you know

raising uh all of their their employee

wages which is fantastic for them but

their costs have exploded so much I

don't think they can make any money here

in the in the near term now I love his

argument about investor the long term

investing companies with great balance

sheets but my answer to that right now

is pricing power stocks that appeal to

the higher income business or consumer

think about business businesses need

servers they need data centers they need

artificial intelligence invest in my

opinion in those sorts of options look

my license financial advisor I can't

give you personalized Financial advice

or run an active ETF you can learn more

about it at meet kevin.com I've got

courses on building your wealth you can

now use buy now later platforms to pay

for it I don't recommend you do but if

you want to you can people have been

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extended the coupon code to today

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that by now later platform if you want

but the point is

I think you want pricing power stocks

and the way what you want to look for in

the balance sheet is you want to look

for companies with massive free cash

flow that is the opposite of what you're

seeing at companies like a coinbase

right now or a Roku these are cash

burning businesses let me give you an

example just by showing you Roku and we

do stuff like this in the course member

live streams on almost a daily basis

where we go through cash flow statements

uh balance sheets you name it let me

show you Roku okay so here's Roku this

is the balance sheet for Roku what do we

see on the balance sheet for Roku well

right now we see that they have negative

free cash flow of

172 actually I did that math slightly

wrong uh it was actually 11 if they have

a negative cash flow about 150 million

dollars that's because they have a

slight positive on operating activities

but they're only able to get this slight

positive of almost 12 million dollars

here thanks to their purchases of plant

property and equipment so you've got a

negative cash flowing business over here

and unfortunately you've got a business

that does have a net run of about uh you

know they've got about 1.1 billion

dollars in free cash available after

their current liabilities but when you

consider that they're burning about 150

mil here or you know per quarter and

they're barely making money on the

business you go okay well at some point

they might have to raise money now Roku

a little bit more insulated than other

businesses for example if we divide that

they've got about a six year run rate

that's not bad maybe Roku could end up

going profitable but then you have to

ask yourself do they actually have

pricing power on uh on their business

well they have a business that went from

profitable in 2021 to income losing in

2022 they went from making 21 million

dollars to losing 250 million dollars

that's because they're SG a they're

sales General and administrative

expenses basically doubled their r d

nearly doubled at the same time their

revenue barely went up you went from

about 700 million dollars in 2021 up

about four percent to 731 million

dollars their devices revenue is barely

uh their devices Revenue actually shrunk

now their devices are lost leaders

anyway because they want more

subscription Revenue but the point is on

top of that they're also seeing their

costs explode their costs exploded 500

basis points so their their revenue is

growing four percent their operating

costs are doubling their margins are

shrinking

and yeah they've got a six-year run rate

because they made a lot of money during

the boom Market selling their stock and

that's fantastic but is it actually a

profitable business well I don't know

it's not something I want to be exposed

to now look when the fed's money

printers turned back on everything's

gonna go back to the moon so maybe it

doesn't matter you know maybe it's

unfair to bag on one company but

personally I want to be looking at

companies that have massive free cash

flow

very very very massive amount of free

cash flow that's what I care about big

free cash flow big PP is what I call it

pricing power stocks so uh look that's

just my opinion right now again I want

to be very clear if you think that big

recession is coming like we just heard

uh akan the co-founder of Home Depot

talk about then you just don't want to

be in stocks

but if you want to invest like can then

you look for high quality companies that

you think could be here uh for 40 years

like he mentioned his average hold is 40

years that's that's admirable

now there are possibilities you could

walk into value traps for example I

think one that potentially is is a value

play right now is Intel but Intel could

be bankrupt in five years if they're

their investment into new Fabs fails you

know they're they're exposing themselves

to both uh the risk architecture arm and

x86 which is fantastic they're being

very smart they're basically becoming

chip agnostic we don't care what chip

you want we'll just make it for you

which is fantastic very very smart uh

and with all the subsidies from the

government for the chip sacks I I can't

see that going wrong uh but that might

be more risky than potentially investing

and well I should say just like uh

Taiwan semiconductors could be risky in

the event there is some drama between

China and Taiwan that that extends I

think that's highly unlikely I think

it's very unlikely that China ends up

invading Iran I think that's Taiwan I

think that's their last case scenario

worst case scenario but uh what American

companies are probably here to stay at

least for now for the long term probably

your Teslas your Apple your end phase

your your Nvidia your AMD these are

fantastic American companies that appeal

to a higher net worth business or

individual and that I think is where you

want to be positioned that's just my

take uh and so I'm a big fan of pricing

power style stocks like that uh learn

more about uh you know my courses and

and uh some of the other services that

we do like even the ETF by going to meet

kevin.com okay well something anyway

basically here's a Wall Street Journal

article I'll give you this sort of as a

little bonus here so I went through this

Wall Street Journal article I it wasn't

as great as I thought but there were

some fantastic arguments within it

Renovations now take 79 days on average

longer than they did in 2019. uh or

sorry they take an average of 79 days up

259 from 2019.

uh a lot of people are frustrated about

how things were going over budget how

hard it is to find workers people are

becoming a do-it-yourselfers out of

necessity yeah it was interesting I mean

I like reading a lot so I sometimes I

read stuff that isn't great it's not

worth you know its own little video but

I thought I'd make a mention on it

so anyway

um yeah some thoughts here I gotta go

now I gotta go to the course member live

stream and get another cup of coffee

from right behind me and then I'll go to

the course member live stream so I'll

see in the next one thank you all so

much for being here it was a blast a

little tougher with the mobile Studio

but uh I think we still did our best

appreciate you all for being here we'll

see you soon bye