Code Red: We're going Bankrupt... Trump Stimulus Checks.

Well, Donald Trump just reiterated

dividend checks or stimulus checks

coming to Americans next year, and it's

happening at the same time as it seems

like America is going bankrupt at almost

every different seam that we could

potentially look at. Uh, in this

segment, we're going to go through

multiple of these different seams that

are popping and they're going to cover

real estate, business bankruptcies,

personal bankruptcies, you name it. It's

not looking great right now except for

in the AI world. Although, even in the

AI world, we've got a code red to talk

about. So, I don't even know where to

start. Let's just get into it. Look at

this. Mom and pop bankruptcies have just

hit a record. Now, you might think, how

is this possible when we just crossed $8

trillion in money and money markets?

It's because that money and money

markets isn't your money. It's the

coffers of like Microsoft and Apple that

are putting all these big cash hordes

into savings accounts or Warren Buffett

going, "H, oh, we got cash, so if poop

hits the fan, doesn't matter to us." But

poop actually is starting to hit the

fan. Look at this. More than 2,200

people in small firms filed bankruptcy

this year so far via subchapter V or

five rules. Now, this is for smaller

businesses. Uh, and what they actually

did is they reduced the number of

businesses that could qualify for this

form of bankruptcy. The subchapter 5

program began in 2020 as a way to let

individuals and small businesses with

less than 7.5 million in debt avoid the

cost of using the larger restructuring

process like a chapter 11 bankruptcy or

chapter 13 for personal bankruptcies.

You know, chapter 7's liquidation,

right? Uh, and the debt limit was

actually reduced to $3 million. So they

more than haved the the limit that you

could use this program for, which would

mean you would think that the program

would shrink, but it's actually up 8%.

So they literally said, you know what?

We're going to cut the program's

eligibility by 60%.

And people using the bankruptcy program

for their small businesses are up 8%

this year. How does that make sense?

Crazy. But it's not just that. People

are again going right back to using

BNPL, which I personally wonder is going

to lead to this like personal bankruptcy

disaster because people are loading up

on all this personal debt. Uh, and it

keeps going like this surge of BNPL

continues. Look at this. BNPL services

have driven a 9% jump through Cyber

Monday with one of the biggest buy now

pay later days ever on Cyber Monday.

They're branding this as consumers are

just planning ahead. But like let's be

real, that's like industry way of saying

we're broke and we need to butter out

the payments into payment plans. Buy now

paid later transactions at PayPal. Shout

out to PayPal. Up 23% year-over-year uh

up to Black Friday. That's up to Black

Friday. And then of course, you know,

people spend even more money on Black

Friday and uh and Cyber Monday. Keep in

mind, people spend until they lose their

jobs. So spending isn't necessarily a

sign that people are not struggling.

There's so much struggling going on that

the Wall Street Journal editorial board

is literally talking about a bailout

coming to New York City because you have

so many businesses or developers that

end it up financing loans through, for

example, New York Community Bank, now

renamed Flagstar and backstopped by the

city of New York that because of a new

housing report out right here from the

New York Housing Conference, They

actually argue that there's a likelihood

we're going to see bankruptcies of

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below. They actually argue that there's

a likelihood we're going to see

bankruptcies of developers that are

going to need a bailout in New York

because unfortunately

the expenses, whether it's insurance

costs or uh just the cost to repair

buildings in New York have risen through

so much over the last few years of

inflation that if now you freeze rent on

top of this in New York, you're

basically just going to bankrupt

developers in New York and you're going

going to have to bail them out with a $1

billion rescue. But think about how this

all ties together. This isn't just you

might be thinking like, Kevin, what do I

care about Manhattan? I'm not in

Manhattan. Totally reasonable to think

that way, but understand how this all

ties together. So, on one hand, you've

got bankruptcy skyrocketing. On the

other hand, you've got people relying on

buy now pay later more than ever before.

On the other hand, you've got all this

stress about uh private credit,

thericolor collapse after JP Morgan

Rugpulls, the first brands collapse, the

Renovo home renovations company, the the

private equity rollup that went

bankrupt. Remember the portaotti company

that went bankrupt. I mean, you're

seeing it across the board. Automotive

weakness and retail sales, lot of

bankruptcies. But it's not just that.

The concern is now that it's actually

going to spread because just the housing

uh disaster in Manhattan could end up

rolling into a banking crisis at New

York Community Bank, now Flagstar, which

then affects the entire broader banking

system. Now, fortunately, the one thing

that's propping everything up right now

is artificial intelligence. Of course,

the OECD is now warning that an AI

bubble is a key downside risk. That is

basically just the straw that would

break the camel's back. Although, at

this point, AI is probably like the legs

of the very camel. Axios is reporting

that things could get worse if an

AIdriven stock market bubble were to

burst. The OECD is citing that weakening

employment growth and the price impact

of tariffs uh as well as the inflation

that we've experienced is going to lower

growth and potentially put us near zero

growth. Uh and then of course that's

where we get this code red. Look at

this. Open AAI CEO declares code red to

combat threats to GPT. And basically the

Wall Street Journal is arguing uh along

with some of these other websites that

this the reason you have this code red

happening at OpenAI is not only because

Gemini is skyrocketing from 450 million

signups in July uh over to 650 million

in October, but Gemini is bankrolled by

Google. Google's got all the cash in the

world. I mean, we'll go pull it up

really quickly so you can see it, but

Google subscription for Gemini is

basically just rolled up into Google

Workspace. So, a lot of people who

already have Google Workspace at their

business basically get Gemini for free.

So, why pay for OpenAI? Now, why does

this matter? Well, it matters because if

OpenAI starts struggling and they start

running out of money and they stop

getting funding, then the circular

investments that OpenAI makes into like

Josh Kushner's fund at the Trump family,

Thrive, and into Nvidia, the circular

investments, the whole circle slows

down. Again, the cash companies like

Google, they'll be just fine. Look at

Google. Google's got 98

billion dollar almost a hundred billion

dollar in cash and marketable

securities. Those are current assets.

Well, plus their receivables and other

current assets are actually at $173

billion. Now, in fairness, they do have

current liabilities. SNS the uh um

deferred revenues over here. They've got

about 95 billion in bills, but compare

that to their accounts receivable.

They've got another clear

50 to60 billion of cash sitting around.

This is the opposite of OpenAI who's

desperately trying to raise their next

$100 billion funding round. Okay. Well,

that's a problem. Not only do you have

Sarah Frier, you remember when OpenAI

essentially de facto asked for a

government back stop for loans? That's

because they need their funding rate

round. I think it was the information

who talked about the hundred billion.

You hear it? GPT's performance will

impact OpenAI's ability to raise another

100 billion or so to weather to get

through the significant cash burn the

company is projecting. The company

projected this summer while it burns

tens of billions of dollars to develop

new technology and power GPT and other

products that chatbot will generate just

10 billion in revenue from

subscriptions. Hopefully 20 billion next

year. But wait a minute, if that growth

stops because GPT is eating or Gemini is

eating their lunch, then they might not

be able to raise the hundred billion

dollars. If they can't raise the hundred

billion dollars, now they can't invest

anymore in Thrive or the investment that

they've thrown into Thrive is worth less

money. Now they could buy fewer Nvidia

chips. Amazon and Google are both

competing with their chips, you know,

against Nvidia, obviously. But really

what you're doing is is you're slowing

the circular progression of the entire

AI boom. Now that's not to be bearish on

the entire AI stack. I think there are

value plays in AI as long as we soft

land. You know, we've got a big ADP

employment report tomorrow. We'll see.

That'll be a monthly report. Last

month's ADP employment report showcased

about 42,000 jobs. 37,000 of those in

the West Coast, mostly large companies.

So presumably like the AI Silicon Valley

stack. Well, what happens if that ends

up slowing down? Well, oopsy dups. So,

you've got a lot of cracks that are

really brewing that we have to get

through. Not only do you have these

cracks at OpenAI, which is really the

big sort of puppet for excessive

spending without having the money, which

you know, the Wall Street Journal front,

it's front page of the Wall Street

Journal. It's literally the front page

of the Financial Times as well. You go

to the front page of the Financial

Times, it was top top story right here.

Most read story, Sam Alman declares code

red, right? So at the same time as

bankruptcies are rising, Open AI, the AI

puppet is faltering. The OECD is warning

about an AI burst or bubble burst to the

economy. It makes sense why you've got

some nervousness. Now, we have

bullishness between now and December

10th, right? Probably December 9th.

That's because we're pricing in that

we're expecting a December rate cut for

um uh for the Federal Reserve. So, we'll

get our December rate cut. But what

happens after that? Well, we're hoping

to get the Kevin Hasset wet blanket

announcement. We get a bunch of rate

cuts. Donald Trump just delayed that,

mind you, to um 20 early 2026. He said

it might come as soon as this week. Now

it's delayed, but we're basically now

just hanging our hats on tax cuts, tax

refunds, and stimulus, which here's

Donald Trump reiterating just that.

>> Nice uh dividend to the people in

addition to reducing debt.

>> Listen to that again. I'll give you a

little bit more of it so you could hear

the full context of it.

>> Be smart, but if we're smart, they're

not going to be able to catch us. They

know that. They told me that next year

is projected to be the largest tax

refund season ever. And we're going to

be giving back refunds out of the

tariffs because we've taken in literally

trillions of dollars. And

>> remember, Donald Trump is really trying

to promote the uh Oh, look, even CNBC is

talking about Code Red right now. Uh

yeah, $1.4 trillion of AI commitments,

but dude, you literally have $13 billion

of revenue. You don't have the cash pile

that Google has. So literally if open AI

falters, $1.4 trillion of commitments

and forecasts at companies fall apart.

Like Google killing GPT

collapses the AI bubble.

Kind of scary. But anyway, Donald Trump

here is setting up for this idea that,

hey, Supreme Court, please don't kill my

tariffs. I actually think the Supreme

Court killing the tariffs would be the

best possible thing for the economy. you

would juice the economy with a task tax

cut at Costco, Target, Walmart, uh

grocery, everything gets cheaper if you

kill these tariffs. And hopefully you

can soft land then, right? Uh the

Supreme Court has already said, "Hey, if

we just rule on the AIPA tariffs, we

probably also need to rule on all of the

other avenues Donald Trump could utilize

tariffs because obviously people think

this is logical. If they kill the AIPA

tariffs, Trump will just find a

different way to tariff." Okay. Okay.

Well, the Supreme Court already realizes

that they're not dumb. And so, my

suspicion is the Supreme Court maybe in

February or so will rule and end up

saying all tariffs need to be cleared by

Congress. And if at that point we

haven't fallen off an employment ledge

yet, could be bullish. But for now,

Trump is talking up his STEMI checks

conditioned on tariffs. Downside, if you

don't get tariffs removed, you pro

almost certainly won't get a tariff

dividend check, stimulus check. and

we're going to be given uh a nice uh

dividend to the people in addition to

reducing debt. We as you know I inherit

a lot of debt but uh it's peanuts

compared to the kind of numbers we're

talking about. So, we're going to be

making a dividend to the people and uh

additionally, we're going to be able to

reduce debt and as time goes by over the

next 2, three, four years, those numbers

are going to go up and I believe that at

some point in the not too distant

future, you won't even have income tax

to pay because this is totally marketing

for tariffs. Do not believe this. Do not

get your hope up. Trust me, if we if

this happens, we'll all jump up and

down, okay? But it is so unlikely to

happen. All this is is a marketing for

tariffs so the Supreme Court doesn't

take it away because then Donald Trump

is going to go, "Well, you know, the

Supreme Court took away my tariffs. You

know, if it weren't for the Supreme

Court, we could have gotten rid of the

income tax." This is all

pre-manipulation.

He's pre-manipulating you to blame the

Supreme Court. The money we're taking in

is so great, it's so enormous that

you're not going to have income tax to

pay.

>> Which is total by the way.

Like the money that we're taking in from

tariffs would barely cover a $2,000

stimulus check to maybe 150 million

Americans. You know, that'd be like $300

million. The tariffs basically would

cover that one time.

Zero income taxes. Come on, man. The

math ain't mathing.

Whether you get rid of it or just keep

it around for fun or have it really low,

>> but nobody's keeping it around for fun.

It's

>> lower than it is now, but you won't be

paying income tax. We've slashed $1

trillion in costly job killing

regulations, saving Americans an

estimated $2,100

for

>> it's marketing. And this is how Trump

does it, right? Like this is also like

that sort of hope is also how he won the

election, right? Like it's really smart.

Like if you're a marketing person, like

you look at the way Trump markets and

it's brilliant because he thinks like

five steps ahead of how he's going to

market himself. So that way if his

opponents do something he doesn't like,

he could just blame them, you know, oh,

we were going to do all these wonderful

things, but the Democrats. Oh, we were

going to do all these wonderful things,

but the Supreme Court. and all it does

is just reiterate support for him even

though he didn't fulfill what you know

he said he was going to try to do

because he's able to point the finger.

It's it's brilliant marketing but just

know it as that. What's not brilliant

marketing is the scam of alt 5. Uh so

and and ABTS. Let's briefly talk about

this. So Alt 5 is a stock that I've been

dumping on since it was about $9. is

basically a WLFI trading treasury

company where they buy Donald Trump's

World Liberty financial token and the

whole premise is we're going to issue

stock to go buy WLFI. It just provides

exit liquidity for the Trump family so

they can cash out. So Eric Trump and and

you know the Trump family, they go do

the circuit. They hit Fox News. They hit

people who are literal idiots on crypto.

They literally know nothing about crypto

other than like, "Hey, I could use this

to market my fund." Okay, let me show

you the epitome of crypto idiot. Okay,

ready for crypto idiot? Wow, crypto

idiot. You watch the video, you were

like, "Wow, this guy is dumb." If this

guy can be so successful by running

that, you know, his real estate fund and

and his, you know, conferences or

whatever, it should give you the

greatest optimism that you too can be

great. Cuz if this guy could do it, you

could do it. But this guy knows nothing

about crypto. And he's getting shilled

by these guys to buy the American

Bitcoin company or frankly alt five

because they're doing that circuit. And

I mean, look at this. All five since $9

is trending towards my $0 support line

because it's a scam. Okay. American

seniors are getting ripped off thinking

they're getting exposure to some future

fintech assets because these people go

on Fox News and shill this crap. And the

other one is this the American Bitcoin

Corporation. Okay, it is down 38% today.

It is going full U-turn here. It's a

spin-off. HUD basically dumped their

server stacks to these people to go mine

Bitcoin. And then, you know, the Trump

family is like, "Oh, we'll use this to

go get some more liquidity for our bull

crap.

What a surprise. It's collapsing."

Anyway, so be careful. People are good

at marketing, but it's not a surprise.

You're also getting this crypto firm

tied to Trump's see share price have in

30 minutes. Wow. 50% of your money gone

in 30 minutes.

Great.

co-founded by Eric Trump wiped out more

than half of its value in 30 minutes on

Tuesday. I mean, now it's only down 38%.

So, I don't know if that's any kind of

like consolation, but it shows you like

there like our economy isn't really

strong. It's faux strong. So, this

Atlanta Fed real GDP thing, I think, is

a little bit of an illusion right now.

Look at this. It's got us at 3.9% for

GDP. That's ordinarily really great, but

think about it. People are stretching

their personal finances with buy now pay

later. They're still clinging on to a

job, so paycheck to paycheck spending

works, but bankruptcies are rising.

Private credit issues are brewing.

You've got people talking about bailing

out developers in Manhattan because it's

gotten so damn expensive to deal with

Manhattan's idiotic uh uh rent control

program. Mind you, when you hear rent

control, I just want you to be clear.

When you hear rent control, you should

think real estate prices up. Okay? The

more you do rent control, the more you

squeeze prices up because you

disincentivize building. It's econ 101.

Well, it's probably econ 102 cuz a lot

of people haven't taken the class. I And

I love the comment section here cuz it's

like, you think housing is expensive?

Just wait until it's quote free.

[laughter]

Or like this is a good one. Only the

advocates of government is always the

answer could be so idiotic as to presume

that more government intrusion intrusion

is the answer to the problems caused by

government intrusion in the first place.

Bam. It's a mic drop. It's so good. So,

we have serious problems in the economy.

I pray that somehow open AI doesn't take

us down.

Open AAI alone could be the straw that

breaks the entire economy's back because

all of that $1.4 trillion dollar of

spending that they are projecting shows

up at all of the other companies going,

"Oh yeah, we're projecting all this

growth." Lisa Sue at AMD. She projects

growth based on Open AI committing to

partner and buy AMD chips to partner

with Lisa Sue in Q3 of 2026. So, she's

forecasting year-over-year growth based

on those orders. If those orders don't

show up because OpenAI goes bankrupt

because Google effed them, then AMD's

forecasts are wrong. And so maybe it's

no surprise that when I go to Google

Trends and I compare Tesla stock to

Google stock to bankruptcy,

people are literally searching the word

bankruptcy as much as they are searching

Tesla stock and Google stock.

Take that for what it's worth.

This this is it's just a crazy time

we're in. And so

my my play and and I I just want to be

clear. I'm not saying run away and sell

everything, okay? Like in the short

term, I've been very bullish that

between now and December 9th, we see

green market. you know, this morning in

our alpha report, I'm like, guys, the

trend's probably going to keep going up

today through December 9th, short-term

up, and I think there are actually good

plays that are cheap where I'm like,

look, if we go into recession, whatever,

I'm I'm putting money in that I don't

care about for the next 10 years, and

I'm not in margin, no debt, paid off all

my personal debt. Uh, my real estate

company has no bank debt. You know, we

just had an amazing fundraising year. I

mean, knock on wood. Great. Okay, cool,

Kevin. Things are great for you, right?

But my point of this is, first of all,

to be grateful. But second of all, to

say there's a reason I'm not sitting

here going, boys and girls, yolo up on

debt and margin. And the reason there's

a reason I've been saying for the last

few months, just be cautious. That's

all. And debt is what kills every single

time. It's exactly what's killing Micro

Strategy, by the way. Uh, I cannot wait

for Micro Strategy to go bankrupt

because that will be your bottom in

Bitcoin. Now, they're bouncing today,

especially on this talk about maybe

we'll lend Bitcoin, but when they go

bankrupt, that will be your bottom in uh

uh in Bitcoin. Okay. Uh, shout out to

SoFi, by the way. Regains 30. Uh, I use

SoFi as a personal account. I love it.

It's really good. Um, #notsponsored.

Uh, and then for a business account

though, I prefer go to mekevin.com/bank

cuz it's free. It's it's kind of like

the SoFi of business versions. That's

what I'm going to call it. Anyway, this

is a little side note. Shout out to

them. Anyway, that's what I got. Thanks

for being here, folks. We'll uh we'll

see you in the next one.

>> Why not advertise [music] these things

that you told us here? I feel like

nobody else knows about this.

>> We'll we'll try a little advertising and

see how it goes.

>> Congratulations, man. You have done so

much. People love you. People look up to

you. Kevin Pafra there, financial

analyst and YouTuber, Meet Kevin. Always

great to get your take.