The Next 50% Crash is Coming FAST | FLASHING Warning from Wall Street.

Gotta Give the bear report and there are

red flags in the bear report personally

I would just want to be up front I don't

think they're as Salient as the Bears

are making them out to be but I want to

tell you what the Bears are saying

because you know me I'm always looking

for the Achilles heel and I think every

investor and Company owner or startup

founder has to look at their Achilles

heels because if you're not you're going

to get blindsided so it's important that

we give some Credence to the Bears even

if we think they're loony you gotta

respect them and you still have to be

willing to go have a beer with the Bears

and I'm willing to have a beer with

anyone so let's get started nobody knows

beer like I do

anyway so Morgan Stanley says in their

opinion it's good news that earnings

estimates are finally moving in the

right direction down and are reflecting

the story of negative operating leverage

and the sign that earnings forecasts are

finally turning negative year over year

however Morgan Stanley and their bear

report tells us that the bad news is the

earnings estimates are well Off the Mark

as if our forecasts were to be correct

so Morgan Stanley is making the argument

that folks listen to Michael burry

Michael burry is right that's what

Morgan Stanley is saying Morgan Stanley

is shouting at you screaming and saying

earnings are going to come down and that

is going to crush equities and you

should be prepared because the second

half of the bear face is the crushing of

valuations because earnings are going

down now be very clear the first is your

multiple trading for 15x 18x right you

get a multiple compression you come down

from 25 times earnings to say 15 times

earnings that's a big Crush in terms of

valuation in fact going from 15 to 20

represents basically a 40 decline the

second half in other words the next 50

percent decline is when er like EPS goes

down because then you're multiplying a

smaller number by a smaller multiple and

boom you get your second half paying so

why does Morgan Stanley feel this way

well let's look at some of the sectors

from here we're going to jump around the

report a little bit and get to the best

part as noted last week EPS growth this

quarter is negative for the first time

since the coveted recession out of

quarter one estimates or uh out quarter

one estimates oh forward quarter one

estimates are falling at the fastest

Pace since 2020 and forward EPS growth

is now negative confirming the earnings

recession has arrived further the

decline in S P 500 margin estimates

since the start of the year is the worst

since the great financial crisis and

more of a macro cost context we also

highlight that the cross asset strategy

team so basically the people at Morgan

Stanley uh argue that we have just

entered the downturn phase which is

supportive of the notion that the macro

backdrop is deteriorating

bottom line we don't advise waiting for

the obvious signal the bear Market rally

is over we recommend positioning now in

anticipation of the Moment of Truth

before it's obvious and too late to move

in any real size in short timing is

everything okay this is like the most

bearish report I've seen in a while and

it like this is pretty bearish they're

basically it'll telling you like shit's

about to hit the fan you better start

shorting the market and part of me feels

like they're kind of like the frustrated

Bears who just haven't figured out their

identity yet and they're like damn it we

got caught offside so terribly in

January the market has to go down more

and they throw up charts like the

following see they say the hope for a

pet fed pivot is dwindling and

fundamentals are deteriorating they seem

to totally ignore that consumers have

12.8 thousand dollars of f excess

savings built up compared to the usual

two and a half to five thousand dollars

they seem to completely ignore that

analysis from Bank of America and

basically what they say we got to give

Credence to it okay what they say is

look the market rallied for a Fed pivot

in June of 2022 then crashed it hoped it

rallied for a Fed pivot in September and

then crashed in like August and

September and then crashed it rallied in

December and hope or in November for

hopes of a Fed pivot and then basically

crashed in December as a people were tax

loss harvesting as well now what I did

is I highlighted green circles showing

you kind of the bottoms in those areas

that they've highlighted for hopes for a

pet fed pivot you actually noticed at

the bottom in December was not as low as

the October bottom for the S P 500 but

they're making the argument that we're

basically just in another bear Market

rally and that it's going to come down

because the fundamentals are falling

because earnings are weaker than they

appear and everything's going to be end

up being worse Tech earnings were weaker

than appreciate dated this quarter and

they show you how negative everything is

look they're not wrong earnings are

going down and if it's just hopes of a

Fed pivot that's popping up the market

yeah we're probably going to leg down

again the only counter that I have to

this is the belief that markets were

actually selling off for fear of a Paul

volcker experience in a wage price

spiral which in my other videos I've

already made very clear I do not think

we're running into a wage price spiral

but I will tell you I think that the

Bears are getting very frustrated

because Mike Wilson who's known as like

the most famous bear of Wall Street from

Morgan Stanley has to tell us a story to

make us feel more bearish I'm just going

to read you some parts of this

while scaling Mount Everest has some

highly technical aspects the most

dangerous feature is its sheer size the

peak is three thousand feet above the

start of the death zone the altitude at

which oxygen pressure is insufficient to

sustain human life for an extended

period of time many fatalities in the

High Altitude mountaineering area or

have been caused by the death zone

either directly through loss of vital

functions or indirectly by wrong

decisions made under stress or physical

weakening that led to accidents this is

the perfect analogy for where Equity

investors find themselves today and

quite frankly where they've been many

times over the past decades more

specifically either by choice or out of

necessity investors have followed the

stock market to dizzying Heights once

again as liquidity AKA oxygen allows

them to climb into a region where they

know they shouldn't go and can't live

very long the climb in pursuit of the

ultimate topping out of greed assuming

they will be able to descend without

catastrophic consequences but the oxygen

eventually runs out and those who ignore

the risk get hurt

in this most recent Ascent which we

began in October from a much safer place

of valuations at forward 15 times

earnings and then Equity risk premium of

270 bips was a much more reasonable rise

however by December the air started

getting thin again with multiples of the

S P 500 forward sitting at 18 times and

risk premium down to 225 bips and

remember we lose many climbers climbing

in the death zone so basically while the

narratives continue going that the FED

is going to pause at some point we

believe we've reached to Heights where

people are now so delusional that

they're talking about a no Landing

scenario and basically the bottom line

is the bear Market rally that began in

October from reasonable prices and low

expectations has morphed into a

speculative frenzy based on the fat

pivot that isn't coming while the

economic situation appears to have

improved that the margin

Lord uh like I hate to say it but these

Bears quite frankly sound desperate

like chill the F out like look I get it

you screwed up for January okay now

don't get me wrong I want to be very

clear yes the market can continue to

like lower

but I am making the bet that the reason

the market has collapsed as fast it is

as it did in 2022 is because everybody's

like oh my gosh we're about to get a

wage price spiral and we're about to get

Paul volckerd you know and and it's

gonna suck like nobody likes wants to

take you know take a beating from Paul

volcker nobody wants that uh and I think

that's why the Market's uh sold off as

much as they did just because we have a

slight break over the 200 a day moving

average I don't think makes the markets

a speculative frenzy or in thin air of

the Death Zone look if we were back to

like highs I'd be like yeah this is like

nutty and this is stupid but just

because we're you know back to like

maybe slightly above the 200-day moving

average which has collapsed uh I don't

think we're in a speculative frenzy I

mean quite frankly if we go to a

Fibonacci retracement and we try to go

to a top at about 405 and a bottom on

QQQ of 257 we're literally getting

rejected in the 30 percent range and

look at this here's here's the Fibonacci

curve and you could see us almost

perfectly getting rejected by the FIB

like we are still in the bottom third of

the Fibonacci retracement so I don't

think this is us in the Death Zone look

if QQQ was like 373 I'd be like yeah

okay maybe he's got a point but I don't

know it feels a little desperate to be

this this call for like the earnings

crash is going to crush you but don't

get me wrong I

mean cognizant that probably the worst

place to be right now is in Staples that

ran as much as they did last year

because Staples I think are going to get

hit hardest by by margin compression

because they're not going to have the

big PP the big pricing power uh that uh

that other companies will uh by the way

uh and that's this pissed people off so

uh because it pissed people off I'm

gonna play it anyway uh people got mad

at me for showing the shadow of my my

big peepee so now I'm just gonna play it

for you here on video there's really no

sound but there you go there's the

shadow sorry if you're listening on uh

audio that's gonna be a little awkward

but anyway there you go I I did it I

showed it I said I would show it and I

did all right anyway so uh so yeah I I

don't know I'm not that bearish I'm

really not that bearish