This is a *DOUBLE* Shocking Recession Surprise.

everyone we kevin here so since january

we've been talking about a lot of pain

coming to markets that's one of the

reasons that i sold and rebought at

lower levels and i know i could have

bought a little bit lower but i played a

trade and i'm happy it mostly worked out

but one of the concerns about markets

continuing to potentially rotate down is

obviously the fear of recession and is

there the potential that the fear of a

recession could be overblown is it

possible that we're not actually in a

recession right now we're just in a

series of

deflationary or sort of should i say

disinflationary growth figures which is

also sometimes referred to as a growth

recession see there are a lot of things

to think about when it comes to

definitions but let's keep this simple

and straight a recession is negative gdp

for two quarters in a row a growth

recession

is negative growth for two quarters in a

row but still a positive read so what

does that look like well think about

this let's say the gdp number is a

hundred to make things simple and then

we have growth of 10 in the first

quarter followed by 10

in the second quarter when we compare

from the next year right so the next

year could be here and when we compare

over oh it's ten percent it's ten

percent okay well a growth recession

might be something like this

where we still have growth but that

difference right there is

two percent growth or one percent growth

so we're still growing we're just

growing a whole lot fast less fast than

what we did during the crazy pandemic

induced stimulus era of covid so it's

entirely possible that maybe we avoid a

recession completely and we just have a

growth recession and an earnings

recession but what data that came out

today might make us think that this is

possible well folks you know me i'm all

about data i'm not into cnbc headlines

and just summarizing crap i want to give

you the stuff that nobody else is giving

you the real data so that way you can

understand what to look for because if i

can teach you how to fish then you can

fish for food yourself and that's the

most important thing rather than spoon

feeding your headlines let's get into

the actual numbers we've got to

understand first retail sales came out

this morning and boy oh boy they were

actually impressive so retail sales okay

and we'll see this as a month-over-month

change right here came in at one percent

which is good now if we subtract out gas

we still had positive growth here that's

the white line if we now subtract some

of the volatile items like food autos

building materials and gas and we look

at this on a month-over-month chart what

do we get folks we get the firmest

retail sales data growth since january

now keep this in mind this data is

what's known as nominal data

nominal data means it's not yet adjusted

for inflation so absolutely inflation is

going to have an impact on this number

but that's what we saw in may see in may

retail sales came in at negative point

three percent that was actually revised

this month to oh wait may was actually

only negative point

one percent which is a whole lot better

than negative point three percent

because it gets us closer to zero or

positive which is good for gdp purposes

and making sure we stay out of a

technical recession again two quarters

of negative gdp we want to get core and

this is month-over-month data but we

want to get that quarterly retail sales

data to be positive now who knows maybe

it's rigged but what's important here is

that we went from a negative 0.1 percent

in may

to a positive 1

in june that's actually really really

good and this is a very good trajectory

and now does this align with what banks

and other institutions are telling us or

are we being blown and spoon fed smoke

and junk and crap well let's take a look

at some other charts and some of the

other data and then we've got to talk

about something really really important

and this has to do with something that's

really going to affect the fed okay

ready for this first what did jamie

dimon yesterday tell us from the

jpmorgan earnings

consumer really strong consumer not

showing signs of weakness what did wells

fargo tell us this morning in their

earnings even though their earnings

expectations were 80 cents and they had

an earnings per share of 74 cents and

even though they took about a hundred

million dollars more in allowance for

credit losses than were expected and

even though their stock turned red

what did the ceo and cfo tell us

no meaningful deterioration in the

consumer yet credit quality remains

strong and the consumer is in quite good

shape though they expect the lower

income consumer to get hurt first which

we've talked about forever that the

lower income

lower income consumers get hit by

inflation first and hardest but then

wait a minute we correlate that with

this chart and things don't line up here

because why is it and this is a chart we

looked at yesterday as well but why is

it that just in the last couple months

we're actually seeing all quartiles of

income see their median checking account

balances go up not down we're not seeing

the degradation of consumer balances in

their checking accounts that we would

ordinarily expect in a recession we're

not seeing the defaults you ordinarily

would expect to see in a recession and

we're still not seeing consumer spending

after six months of titanic warnings

remember i made that titanic video of

people hodling on and paper-handed okay

we have still and then of course other

people copied it we have still not seen

that degradation

with

negative

growth in consumer spending what we have

seen is a deceleration of spending and

that's very very important to understand

the difference of take a look at this

this is a chart that i'm going to show

you from barclays

and barclays provided us the following

they said that actual

year-over-year sales growth per quarter

is this uh sort of orange align that we

have right here forecast with the dotted

line

uh and then we have this worst case

scenario what barclays thought was right

here this is sort of this dark purple

line that's a little hard to see and

they believe that even though markets

are expecting a certain consensus that

is either this orange line here or

potentially this purple line

what barclays thinks is actually going

to happen to year-over-year consumer

discretionary spending is this line

right here now what's remarkable about

this is this line goes all the way to

december 22 and notice what it does not

do folks it does not cross this right

here why is that important because this

line right here is the zero percent

growth line and it does not cross that

which means even though growth over and

above last year might be nominal

even in worst case scenario outlooks

from barclays we still don't see

negative

retail spent which is really interesting

that people continue to spend i mean i'm

in europe i'm spending money i'm seeing

other people spend money i'm talking to

the store owners of samsonite

restaurants hotels and i'm figuring out

hey what's going on and you know what

i'm consistently being told and then i

got to tell you about the important data

that just came out about the fed they're

all telling me the same thing it's a

whole lot better than q

one remember january was omicron

feb and early march was

putin right

q2

it's like all right we know omicron

putin inflation we got it we got the

story people out there spending money

it's kind of crazy it's kind of crazy

people are still spending money paying

for those courses linked down below as

well you don't believe it but i get

comments every single day from people

going dude i saved so much more money

than your course costs with the lowe's

benefits alone with all the benefits

that you get in the program you provide

more value than any course member or

course i've ever bought in my in my life

is what people tell me that's my goal is

i want to be the person who's known for

providing more value in fact i

trademarked the slogan providing more

because of that but what's this

important fed data that just came out

that's so critical for us

that uh well at least it's data that

will influence the fed that also relates

to

well our favorite the consumer well

folks it has to do with inflation

expectation numbers if you watch my

videos you already know that inflation

expectations per the bond market have

been plummeting and you already know

that inflation expectations are

absolutely

critical to what the federal reserve

does as soon as it looked like in june

inflation expectations were going to run

away from the federal reserve they hiked

75 when the market was initially

thinking 50 bp as soon as those consumer

expectations came out the fed's like

uh-uh 75 going 75 because they need

consumer expectations and the market's

expectations for inflation to remain

what's known as

anchored now this is actually what's

very different from the 70s the late

1970s to today in the late 1970s

expectations for inflation by both the

market and the consumer

skyrocketed that means everybody thought

that inflation was going to run away and

we were going to basically debase the

dollar more than even the way we feel

it's being debased today

and basically the dollar would become

worthless so you're better off buying

any kind of potential junk out there

because anything you buy is going to do

better than inflation uh or or leaving

essentially your your wealth in cash

because it's just going to get destroyed

by inflation that was the thesis in 1979

and the early 80s and that was measured

by inflation expectations absolutely

running away from us fortunately today

we have both two things going on one we

have market expectations for inflation

remaining relatively

stable and the way we measure those is

we look at what are called break even

yields

this is the market's expectation set for

inflation as you can see it's absolutely

been plummeting so what about the

consumer well we just got some new

consumer data out this morning and this

is going to be critical for the federal

reserve

first it's worth noting that the last

set of numbers that we had were that one

year expectations for inflation would be

5.3 percent the 5 to 10 year

expectations for inflation

last read were 3.1 percent

the

expectations today were that we were

going to see five point three percent

again and uh that's on the one year and

that on the five to ten year we would

see three percent that was the

expectation well folks that's not

actually what we got here's what we got

we got one year consumer expectations

for inflation coming in at 5.2 percent

that's really good that's in the

direction that we want to go

and the 5 to 10 year came in at 2.8

this is great not only are consumer

expectations for inflation

stable but now they're actually

declining just a day after we got a

horrible cpi print

and following june's a terrible release

of cpi for the month of may which we

thought that inflation expectations

would actually skyrocket after last

month's cpi read but now we got this

information here that consumer

expectations for inflation have actually

gone

down

not up their consumers are almost

matching what the bond market is

thinking and we don't know if this is

because the federal reserve is directly

appealing to consumers now and speaking

directly to americans that inflation is

just too high and they'll stop at

nothing to get it down they're trying to

establish the credibility that the fed

didn't have back in the 70s right and

that's why we had to get volcker

involved well folks whatever the fed is

doing it seems to be working because

retail sales are coming in stronger

people are expecting inflation to go

down in the future whether it's in the

market or it's consumers jp morgan wells

fargo we're seeing the consumer is still

strong we're seeing cash balances go up

worst case scenario reads by barclays

show that consumer spending is still

expected to be positive by the end of

the year and sure we could get a bunch

of misses on earnings or earnings per

share in here q2 earnings because we're

going into earnings season we could get

a ton of garbage from this and we could

have a plummet in the stock market with

some major capitulation but when it

comes to the actual consumer and what's

actually happening in the market it

doesn't look like the consumer really

cares so much about this idea of a

recession coming they're still spending

money and what's remarkable about that

is

if the consumer actually prevents us

from falling into a recession well maybe

that means we've actually hit a bottom

in the stock market remember this chart

folks this is a critical one see this

one here shows us

that

if we are to go through a recession we

need to look at this white line here and

this white line says that we still have

a couple bottoms to go if we are going

to end up being in a recession which

that definition comes in hindsight

if we do not have a recession then the

low that we've already experienced in

the nasdaq of uh well i like to use qqq

of 268

might potentially end up being the

bottom as we follow this no recession

gray line and we

approximately have a bottom here that's

in play

that is entirely a potential now no

guarantees but obviously if we don't

actually hit a recession market should

be a whole lot happier than if we really

do hit a recession and i hate to say it

but if the banks really thought

oh

man we're about to go through a nasty

recession don't you think their

allowances for credit losses would be

substantially higher than what they are

now now we talked about this yesterday

so i don't want to sound redundant i

already know that you know the courses

are linked down below and there's a

coupon code and the price goes up every

couple weeks by about 50 bucks and

that's okay because we keep adding value

and you all appreciate that so you know

to get in before the coupon expires

but even though that coupon expiration

is sneaking up on us again we're going

to have another big

boost of the prices before our series a

launch which you have to be a course

member to get in the first round of the

series a launch on august 1st you may as

well use this coupon code before it

expires what do we have here we have the

banks telling us this is jpmorgan that

no we're not actually going to take that

crazy amount of allowance for doubtful

accounts for credit losses this was

covet when everything really hit the fan

and we thought consumers were just going

to absolutely drop everything this is

what we're doing now folks in relation

this is

nothing and so maybe

maybe

i don't want to be the person that says

the word so i'm just going to write it

on screen here okay i don't want to

necessarily say that but i wouldn't want

to be sitting out the market right now

because personally i think that if folks

are just reading cnbc headlines and

they're not actually looking at these

charts they're going to have a lot of

fear they're going to write comments

about how they are living in montana now

living with cash and they've sold

everything

and

they're going to miss

what is potentially a once in a decade

opportunity to invest because you have

to think to yourself hey in 2024 2025 6

7 8 9 10. are we really if we just went

through a near recession or even

recession are we really going to have a

better opportunity to buy in 24 25 26 27

maybe nobody knows we don't have a

crystal ball but my opinion the odds are

quite unlikely

good luck out there check out the

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