The Market Plummet WORSENS | Fed FREAKS Out

you see that you see that right here on

the desk that is tesla tequila

and that's because if you're in tesla

you need some tequila right now

holy smokes folks the nasdaq is having

its

worst that day in the last two months

this market keeps going down and down

and we need to talk about what the heck

is going on it's not just

tech r k is down five percent arc g is

down five point six four percent tesla's

down five point five percent

we've got arc f down four point six

seven percent at the time of this

recording

it'll probably be even worse by the time

you actually watch this video which will

be a few minutes after i finish talking

oh my gosh let's talk about what is

going on

and what's in store going forward first

quick note

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that keep going down all right folks

let's talk about what the heck is going

on so first thing

is we have a culmination here of

multiple issues number one the fed is

freaking out because

their prediction of a cyber risk being

the greatest risk to our economy

is starting to come true two months ago

jerome powell mentioned

that the biggest risk that we need to

focus on is not valuations or inflation

it's actually

cyber risk which initially we're like

really like what

cyber risk really okay and uh yeah since

then well

i guess on friday i should say on friday

we had the colonial pipeline which

transports two and a half million

barrels of gasoline diesel and jet fuel

from the gulf coast

in texas through to new york shut down

because of what appears to be a

ransomware attack from

the ransomware as a service company

darkside

yeah you think there's software as a

service we also have ransomware as a

service

maybe they should spec and we can invest

in darkside

oh man but anyway this company sells

ransomware as a service and they're

suggesting that an affiliate of theirs

must have used that software

and crippled the colonial pipeline there

is no estimate yet as to when this

pipeline

will come back online and this is

creating some massive

fears in the market for not just rising

oil costs but potentially getting oil

tankers out to the east coast

so we could store more of the oil that

we already have so we can use that

but also this is going to lead and it

already has to rising gasoline prices

to rising jet fuel prices which and

rising diesel prices

all which are input costs in

transportation and manufacturing

which again push up prices in

manufacturing which can push up the

price of consumer products which

eventually ends up pushing up

prices which means inflation this is bad

at the same time

as this madness is happening which is

this is really like the ever given 2.0

it's just another supply shock that's

just what we need after covet

anyway what we hear now from the federal

reserve via president evans this morning

is that

it's going to be a while before we taper

bond purchases because the fed believes

the economy still needs more support for

longer

which is coming at the same time as the

media

and wall street are complaining that

biden won't end the unemployment boost

sooner leading to companies having to

raise the amount of money that they are

paying people which is another input

cost that goes up labor costs going up

not so good either

which is uh potentially because of and

this is debated but potentially because

of the unemployment boost

which basically pays you minimum wage to

not work now in fairness many people

need that

uh boost i'm not here to have a

political debate about that boost but

it kind of makes sense if you're working

for eight dollars an hour why not stay

home

if you have a choice and technically

you're not supposed to stay home if you

have a choice but

we all know how technicalities go with

the government anyway

the market is freaking out over the fact

that the fed evans

is saying hey we're not going to taper

anytime soon because the economy still

needs support in other words the

fed's going to keep printing money no

sign of stopping printing money we're

going to keep putting money

while at the same time wages are getting

pressured up input costs are going

through the roof and now we have the

supply costs making things

even worse and so when you tie all this

stuff together

on top of the fact that covid already

increased prices for

for example 40-foot containers latest

pricing is somewhere between 2500 to

3000

for companies willing to lock in a

12-month contract which is basically

double what people used to pay for a

40-foot container it's literally it's

everywhere

everything's getting pressured up but

when you combine all of this

containers commodity prices wage

pressures

more money printing higher taxation from

the biden administration the biden

administration not wanting to reduce

spending

uh the fed not wanting to reduce

spending and the market going

uh hello have you seen copper have you

seen the fact that

iron futures shot up 10 this morning

iron futures went up this morning as

much as my tesla options went down

okay like it sucks

now in fairness most of the companies

that are reporting like kimberly clark

or coca-cola or whatever a lot of the

manufacturing companies

that are talking about inflation and

seeing inflation

are saying that they can believe that

they believe they can offset a lot of

the inflationary impact that we are

seeing because it's here but they think

they can offset a lot of it

by going digital traveling less and

focusing on more efficiencies

so you kind of have this struggle where

you see these deflationary forces and

these inflationary forces fighting each

other right now

but the point is the market's like yo

this

sucks and so the market's dumping

anything

that's higher valuation anything that

has earnings coming in the future

so low earnings company low earning

companies like spax or newer companies

genomics companies uh pharmaceuticals

whatever

anything that doesn't prove yoga big

cash flow right now is

is just selling off these people just

don't want to hold these during the the

short-term inflationary bout now usually

if we have longer-term consistent

inflation and persistent inflation

we tend to see stocks actually rise but

right now there's this rotation away

from the higher value companies which

has been going on for two and a half

months and anytime inflation

expectations shoot up

we see these sell off because people

like oh my gosh

everything is literally happening to

make this worse and worse and worse

now as of this morning we still hadn't

even seen inflation expectations

realized yet in terms of going up

in the 10-year treasury yields uh in

fact if we go back

about to the one-month chart here

everything has continued kind of

trending down and even this morning

we're at about 1.65

but folks if i zoom into the three day

here we've had a little bit more of a

jump look at this we're at 1.60 percent

now we're up

about uh five uh well about uh

0.05 a percent here so we've jumped up

a little bit today on sort of the drama

and the news that's going on

on top of that look at this this is uh

bloomberg's report on five-year

inflation outlook

climbing to its highest level since

2005. folks

everybody thinks that's it we've got

supply shortages

biden's printing money fed's printing

money people can't find workers because

they're stuck

at home literally everything that you

need

like if you were gonna bake an inflation

cake

this is literally these are the

ingredients you would use

fed printing more president and congress

printing

more uh supply chain disruptions that

are leading input costs to go

up and how about we just shut down a

freaking pipeline while we're at it to

make

gas and transport costs go up even more

then on wednesday we got cpi data coming

out which

thing is cpi data remember that's

consumer price inflation so it doesn't

include these input costs

and we don't actually don't really

expect the cpi

month over month to go up that

substantially but that can lag

year over year it's going to be high

it's going to be like 3.5 3.6

it's going to be some of the highest

inflation year over year that we've seen

but we're coming out of a hole so the

year-over-year number is not going to

matter so much the month-over-month

number is going to matter

if that's up like half a percent it'll

be like okay whatever

if it's up like one percent or one and a

half percent people are going to lose

their freaking mind you think you had a

sell-off now there's gonna be even more

of a sell-off

this is the bloodbath i was talking

about at the end of last year december

and january

when i was saying folks people are going

to freak the f out when once we start

seeing higher inflation numbers

and here it is and this freakout is not

going anywhere

anytime soon now a lot of folks are like

hey i'm hedging during this i'm going to

buy puts i'm going to short we're seeing

short interest go up at some of our

favorite companies

certainly it's facts as well you're

seeing the shorts go up

uh you're seeing more put options

and it makes sense because hedge funds

are trying to protect themselves against

this madness

me though i'm the madman that's like i

take all the extra freaking money

i can get my hands on and i throw it

into my highest conviction names my end

phase my etsy my tesla

my palantir my square i don't care

about the short-term crap it's a problem

it's a big problem and i don't think

this problem is going away until at

least september october

we are going through hell this is what

it feels like to go through hell

unless of course you're investing in

like the dow jones industrial then

you're at all-time highs

or the s p 500 then you're okay so

really

if you're investing in arc or any high

growth strategy

congratulations you suck in right now

but you got a great buying opportunity

so do you have the diamond hands to buy

the dip or you're going weenie baby out

and go buy something else that's already

doubled to dribble the value

like i don't know i won't say like what

but there's plenty of other stuff

that's doing well so anyway there's a

little bit of an update on what

is going on and it's a lot it's a lot to

digest but no

these issues they're not going to go

away in the short term they can continue

to get

worse in the short term before they get

better so buckle up folks

thanks so much for watching we'll see in

the next one

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