The Fed is Lying | The Coming Horrible Recession.

well folks in my opinion the fed is

either panicking or lying to us about

the coming recession and the stock

market realizes it that's why stocks are

falling as the fed meeting once again

ends and once again bond yields are

rising with the 10-year now rising up to

3.45

now maybe that's just because uh you

know last year the fed spent the entire

year telling us that inflation was

transitory while the delta variant was

destroying our supply chains and we

printed even more money but don't worry

now any kind of recession is sure to be

transitory because after all the

consumer and markets are very strong

consider what the fed told us yesterday

the fed told us yesterday the consumer

is strong and the economy is doing very

well you look at this chart it's a chart

of consumer sentiment in the united

states being at 22 year lows it is

literally at the lowest point since the

dot-com bubble didn't even bother people

and it is not even as low as the 2008

recession that's right we are the lowest

point in the last 22 years on the chart

people are worried and they're worried

because they realize that not only do we

have the hottest inflation that we've

had in four decades but they realized

the fed

might not know what the hell they're

doing and so as you can see with

inflation we had a peak in march

followed by a decline in april which was

good

but unfortunately another higher peak in

may in terms of inflation and so while

jerome powell talks about strength we're

kind of scratching our heads going wait

a minute why then is inflation going the

wrong way and why is consumer sentiment

so

low and on top of that you've got the

u.s savings rate as a percentage of

personal disposable income at just 4.4

percent yet again another metric that is

at a low since

2008 where it was actually slightly

lower but also quite freaking low

and so

it does make you wonder why does the fed

jerome powell and their bodies why do

they all think that gdp is going to end

at 1.7 at the end of the year it doesn't

quite make sense

even the atlanta fed's gdp now tracking

indicator doesn't seem to agree with the

federal reserve themselves

the gdp now indicator went negative in

q1

and guess what we ended up having for

gdp in q1

a negative read

guess what the gdp

now data hit again today

negative we are once again

negative you can see it here on the

chart

now according to this chart on screen

if the gdp now chart is correct

we will fall into a recession because

after all two quarters of negative gdp

is a recession

and see the fed is telling us oh but

don't worry don't worry

we have no plans of inducing a recession

in fact they want to be very clear that

we have no plan to induce a recession

not trying to reduce induce a recession

now let's be clear about that we're

trying to achieve uh two percent

inflation consistent with a strong labor

market that's that's what we're trying

to do well the stock market doesn't

believe that the fed can avoid this and

the stock market knows that if we

compare all the way back to 1929 and all

the crashes that have happened since

1929

in times of a recession

at least with how mature we are in terms

of this crash now

we have at least two more large lows to

hit before we can actually say we've hit

bottom now if we don't have a recession

maybe we're already at the bottom the

markets aren't convinced that we're

going to be able to avoid a recession

especially as we get sledge hammered by

the federal reserve with a 75 basis

point hike now consider this

the federal reserve told us in may

that 75 basis points of an increase for

the fomc of federal funds rate was off

of the table

and yesterday what did we get 75 basis

point now

we believe this was leaked to the media

on monday via like a text or a phone

call because the fed was in their

blackout period and they wanted to kind

of prep the markets and so then they

prep the markets markets priced in the

75 and sure enough here's your 75.

that was after the cpi data showed a

meaningful and broad-based increase in

inflation data not a decrease and this

wasn't just certain categories it was

literally everything

and we saw a bump in consumer

expectations for inflation before the

cpi read even came out which means our

next read for consumer expectations for

inflation will probably be even worse

now powell of course says this was him

adapting

well markets aren't convinced that he's

done adapting

and even though yesterday jerome powell

promised that well i shouldn't say

promised but set the expectation that

quote

we do not expect moves of this size to

be common and that this is an unusually

large hike

the fed may have lost some credibility

because again here we are looking at

consumers and looking at the economy in

a much substantially weaker position

than what the fed seems to be telling us

about and so how can we believe that

they're going to be credible to say that

75 basis points are unusually large when

it's entirely possible in the july

meeting we could end up with a 75 or

even 100 basis point hike and that'll

just have to say well

we had to adapt

folks there's no cheering with the fed

until inflation actually starts coming

down but it gets worse because the

federal reserve changed its tune

a little bit on something else as well

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so

what's another reason that the fed is

freaking markets out right now well

yesterday we kind of brushed this off it

had to do with the federal reserve kind

of dropping their mention that they want

to keep a strong labor market the

market's finally realizing however now

and i kind of mentioned that this was

odd in my summary video yesterday market

is finally realizing that jay pal is

giving up on the dual mandate remember

maximum employment and stable prices

well we've got maximum employment in

fact we've got more than maximum

employment so jpr's kind of like yeah

that's not really our goal right now our

goal right now is just

inflation getting inflation down so we

don't really have a central bank

that has a dual mandate right now we

have a single mandate federal reserve

and that is to crush inflation and the

easiest way to crush inflation is by

destroying demand and quite frankly

inducing a recession even though japan

tells us don't worry that's not the goal

we know this is pretty much what it's

going to take and that's unfortunate and

that's what the market is pricing in now

now even if

the fed tells us

they want to see

you know

drops in cpi for them to relax on their

rate hike cycle

just a few months ago the federal

reserve was telling us you know we're

really just looking at the

month-over-month data and core cpi as

long as core cpi and the month over

month data comes down

okay maybe we could pause on our rate

hikes

well jerome powell once again

flip-flopped on this and now he's

telling us that no we actually want

headline inflation numbers to come down

sure core and month over month data

matters but we really want that core to

come down

this is really i'm sorry the headline

number to come down this is really bad

because if powell wants the headline

number to come down the only way to

achieve that is by

you know with monetary policy since we

can't really control commodities

and control supply the only way to

achieve that is with straight-up demand

destruction like folks if you are tired

of high oil prices and gas prices which

i'm sure you are in high energy prices

and the fed is as well and we want to

see that headline inflation go down

which is heavily driven by energy prices

and food prices bonding prices the only

way to drive that down is with straight

up demand destruction and the fed has to

get people to drive less spend less

money now california seems to have a

different opinion california seems to

think we should give everybody 400

so they can go buy more gas and continue

having demand so why drive less when you

could just get free money from the state

of california

oh freaking california

folks like it's so idiotic it's so

moronic i'm sorry i just had to take a

little tangent there to say that

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folks let's keep going over here with

the fed

see

the problem with the fed right now is

that the stock market is not just pissed

that the fed is you know dropping labor

from their arguments and focused on uh

inflation so heavily but it's that

the fed doesn't even realize that by

creating the well i'm sure they realize

but they're certainly not talking about

it but by creating the kind of demand

destruction that they need to get

inflation down we will maybe not have a

recession fine maybe they're right about

that but we'll have an earnings

recession which is just as bad if

anything it's actually worse for stocks

quite frankly i'd rather have a not

earnings recession and a regular

recession than have an earnings

recession

and uh well i'm confusing myself here

the point is i don't want an earnings

recession on stocks because then stocks

plummet you have a regular recession but

you still have earnings going up eps is

going up well maybe that's not that bad

because eps is strongly correlated with

long-term gains for stocks the problem

is stocks are just getting reamed and so

is the bond market i mean look at for

example peloton a stock that's already

down 90

now their bonds are selling for 70 cents

on the dollar revlon just filed for

bankruptcy and to add insult to injury

people are still raising prices

contributing to inflation yes that

includes tesla but folks it's not just

the united states germany just saw the

biggest increase in five-year yields

since 2011. the swiss national bank just

dropped a bombshell surprise of a 50

basis point hike nobody was expecting

that the ecb just had an emergency

meeting where they're planning on

announcing a new tool to announce or you

know something to basically help deal

with surging bond yields because they

realize the bond market's collapsing

they also

had the following to say which was not

good they said quote inflation

may end up being more entrenched than we

think and sentiment is worsening

great last thing we want is central

banks telling us uh maybe inflation's

more entrenched than we thought it was

on top of that the bank of england is

expected to hike rates today the uh

reserve bank of australia is signaling a

period of substantial rate increases

ahead

but folks don't worry we won't be

hearing a lot from the fed for a while

right

we should be good i mean we just had the

fed meeting right wrong the fed speak

calendar is back

so i've got it written down let's see

here fed speak calendar powell talks at

a conference tomorrow on saturday waller

speaks on tuesday mester and barkinspeak

on wednesday powell speaks in the senate

and evans barkin and hardest being

then on thursday powell speaks before

the house

oh my gosh

i kind of like the blackout period

better because this is a disaster but

then again maybe ben bernanke was right

the federal reserve thinks that monetary

policy is 98 talk and 2 action and folks

this is all a complete disaster and the

fed is in my opinion either just

panicking

entirely wrong

about the strength of the markets or the

economy

or they're just straight up lying to us

because that summary of economic

projections sure was a revision

but it wasn't a real revision