Nicki Leaks is BACK with More Fed Leaks.

hey everyone me Kevin here so I'm about

to leave DC and I want to give you a

breakdown of what the heck just happened

with some of these numbers because we

got a hint from Nick T Nikki leaks over

at the Wall Street Journal we got a

little bit of data and a recession

revised away this is this is crazy uh so

let's go through some of this data I'm

I'm unfortunately still on the iPhone 15

so uh hopefully we're able to reduce

some of the sound here but let's get

this done before I take off so I can

upload and go um but first of all GDI

that's gross domestic income was

suggesting that in 22 and 23 maybe we

should have been in a recession because

gross domestic income was so low but uh

compared to GDP because GDP was still

doing well well that Gap was just

revised Away by the Bureau of economic

analysis along with the decline in the

personal savings rate which was as low

as

2.9% uh just uh uh in July and all of a

sudden it's revised up to 4 .9% now it's

still above the 5% level uh or sorry

it's still below the 4% level God I

can't even speak correctly right now uh

it's still below the 5% level that

people like to look at as like all right

now we're starting to get into this like

really low personal savings environment

which isn't good because usually when

you see personal savings come down so

much it's a lead into a recession

because people spend the rest of the

money they have and it imp that they've

already gone through their household

savings buffers now this is actually

good news that it's revised up if we

believe the numbers now I'm I'm slightly

jaded I'm not heavily jaded so I

actually lean towards saying this is

good news that hopefully there's some

truth to this data it should help us

with our GDP estimate or the Atlanta fed

GDP numbers which will get revised today

maybe but it all depends on how much the

pce numbers weigh in this morning the

pce uh uh personal consumption

expenditures inflation gauge F preferred

measure this basically came in at

expectations so there's something really

important here even though personal

income missed by 20 basis points and

personal spending missed by 10 basis

points which isn't good there is

actually a bigger warning is that plane

going to start up now too oh it's going

to get way too noisy over here okay uh

there was a bigger warning the bigger

warning was that you were in a POS oh

this is actually better anyway uh I

didn't know the AC was on the AC's on

this is great uh the bigger warning that

came was that you actually had Nick T

post a story this morning saying I uh

that that I personally think Drome

Powell may have had some you know little

nudge nudge Winks Winks involved in and

he says the question now is how much

weakness is under the hood Bank lending

has slowed to a crawl over the past year

something usually not seen outside of

recession

and even though the Topline Mor uh

interest rates will come down it'll take

a while for people to actually get a

benefit from higher or lower interest

rates because the average mortgage today

is 3.9% a lot of Corporations and

household balance sheets have lower

interest rates so even if you drop

interest rates 1 or 2% now you still

have cheaper debt in the bank or in your

household than what you could be getting

in the market today and that means that

stimulative effect that you're hoping to

get from the fed's cuts may come way

later than expected which is not good

here's just an example oh yeah this

guy's starting up big oh man uh here's

just another way to think about this so

uh last year inflation PC sat at about

3.4% man all it's getting so noisy boys

and girls um that guy's starting up I

don't know if you can see him see the

lights over there it's kind of cool but

anyway uh in all the curtains are on the

way over here I'm trying to move through

with my laptop I'm going to hit the

parking brake I'm going to screw stuff

up over here there we go so um what's

Wild here is that uh the

2.9% uh oh sorry uh we're talking about

the inflation number so a year ago we

were sitting at pce inflation of about

3.4% well today the 3month annual PC

inflation report is sitting at 1.9% Nick

T talked about this morning uh about

this this morning and what's remarkable

about that is that means that we've

actually tightened by keeping interest

rates stable by 190 basis points now

we're going to minus 50 basis points off

of that because we just cut by 50 basis

points but in plain English the FED just

crimp down on the economy more by 140

basis points 1.4% of BAS basally

effective interest rate hikes over the

last year and so now the question is

hurry up fed can you cut quickly enough

to prevent the r word Nobody Knows the

problem with recessions we talked about

this yesterday is they come suddenly

right it's no recession no recession no

recession no recession oh my gosh we're

in a recession and so it's really hard

what what what drives me nuts though

right now is that stocks are pricing in

an 88% chance of a soft land

listen to some of these Peg ratios and

and and I've got them written out over

here they're just absolutely crazy

you've got uh Costco at a 4.4 PEG ratio

right now with a 50p that's insane and

the way I do this is I take the end of

the year EPS uh divide that into the

price to get PE obviously and then I go

uh divide in the forward four years of

average growth so Costco is at a 4.4 Peg

price to earnings growth that's very

high they should be at like under a two

pal teers at a 4.65 they should be at

like 2 and 1/2 so they're they're at

least two Peg too high which is very bad

uh they're almost almost twice as high

as they should be uh Tesla's at a 3.38

they should be at like a 1.67 that's way

too high uh n phase is low Nvidia is

decently low as long as their growth

holds up uity is doing okay Wing Stops

at a 5.17 that's insane Microsoft's at a

two Peg a 2.17 that's actually pretty

good for Microsoft because their margins

are so high a three peg on wall walart

is Rich and I know super micro is only

on 1.74 Peg but I don't trust that

company not because of the accounting

issues but because their margins are so

low and then they kind of deceive us on

how they're giving away AI server racks

I think it's a cooky dookie so anyway uh

this is interesting this is all these

are all things to that sort of evidence

that there's a gradual slowing going on

out there and it's not good uh now of

course the University of Michigan

sentiment the final read today came in a

little bit better than expected uh which

is good compared to the preliminary 2

weeks ago uh as as sentiment is

improving a little bit uh which is

fantastic you know potentially the best

that we've had in the last four or five

months which is great and it suggests

that maybe there's some hope now after

the 50 basis point cut that maybe we can

actually start going in an upward

trajectory we'll see and that's the

tough part here is where do we go from

here my positioning is that we'll have a

lot more information by the election and

then we evaluate do we think that uh the

Q4 sales are going to lead to layoffs in

q1 or did we Dodge the recession the

next few months are the tell in my

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