Economy Failing | Trump Reiterates $2,000 Stimulus Checks

Well, this morning we have a lot to

break down, including updates on the new

$2,000 stimulus/ dividend payments from

Donald Trump. Basset sending confusing

signals about it, but then Trump

reiterating them along with what's the

Fed trying to tell us about the economy,

and you'll be shocked with how much

certainty they're telling us what's

actually going on in the economy. Then

we'll also break down what's going on in

private credit because we just saw a

nice big fat black rock writedown on

those Renovo home uh uh project uh

loans. And so we'll talk about that. We

broke down their complete collapse uh

just a couple weeks ago uh following the

first brand andricolor collapse. All of

it telling us at least something about

what's going on in the economy. But

first, let's start here. So, Donald

Trump just truth the following. That all

the money left over from the $2,000

payments made to low and middle inome US

citizens from the massive tariff revenue

pouring into the country from foreign

countries will be substantial and will

be used to substantially pay down the

national debt. Thank you for your

attention to this matter, President

Donald J. Trump. Okay. Now, why is he

doing this? Well, one of the reasons

he's doing this is because the Wall

Street Journal editorial board just

lambasted Donald Trump's plan yesterday

evening. So yesterday evening, the Wall

Street Journal editorial board basically

said that Donald Trump was looking for a

Hail Mary to gain popularity again,

going as far as calling people fools who

are against tariffs and saying that

we're going to pay down the national

debt. Wall Street Journal editorial

board says that this is a logical

fallacy to argue that you could both pay

down the national debt and issue

stimulus checks when we're literally

running an annual federal budget deficit

of $1.8 trillion per year. So no, like

if you just spend one extra dime, you're

just deficit spending because we are

literally increasing our debt by $1.8

trillion per year. So the only way you

could pay down the debt is if you just

essentially take a 100% of tariff

revenue and apply it to the debt and

you're still growing the debt because we

have such an unbalanced budget uh in the

government. Uh and then of course the

Wall Street Journal goes as far as

saying hey like if people are so happy

about tariffs and everybody loves

tariffs then do we really need a tariff

dividend check to be happy about

tariffs? And I think the Wall Street

Journal is going a little off the rails

here because in fairness, people are

suffering. Like grocery prices, rent

prices, energy prices, home electricity

prices, all this stuff is through the

roof. And that's what people are

frustrated about and people are looking

for relief. So I don't think that the

idea here is that maybe people don't

like tariffs and therefore they need to

be coaxed into liking tariffs with a

check. I think people are like, "Yo, I'm

pissed. I'm struggling out here and I

need a little bit of help." That said,

the Wall Street Journal does have a fair

point saying that we got a lot of debt.

We're not paying down the debt and doing

stimulus checks. So, Donald Trump

announces these $2,000 stimulus dividend

or tariff dividend checks. Wall Street

Journal bags on him. At the same time,

Scott Besson is like, "Well, you know,

you could measure that $2,000 in many

different ways. It it doesn't actually

have to be a check," which is this clip

here.

>> You know, it could the $2,000 dividend

could come in lots of forms. in lots of

ways, George. U you know, it could be

just the the tax decreases that we are

seeing on the president's agenda. You

know, no tax on tips, no tax on

overtime, no tax on social security,

deductibility of auto loans. So, you

know, those are substantial deductions

that, you know, are being financed in

the tax bill.

>> So, that then turned around and pissed a

lot of people off because people are

like, "Wait, are you like lying to us?"

Like on one hand you're like, "Hey,

we're going to send these $2,000

checks." And then the Wall Street

Journal bags on you. Then all of a

sudden, Scott Besson walks back the idea

of $2,000 checks. And then all of a

sudden Trump is like, "That's all wrong.

We're definitely going to take the

$2,000 payments and send them to

citizens and we're going to pay off the

debt." Again, the Wall Street Journal

still has a point because we're in such

a deficit hole that we're definitely not

going to be paying off any debt. We're

still going to be adding to the debt by

paying the checks. But Donald Trump at

the very least is doubling down on

making the payments. In addition to

Trump doubling down on making $2,000

payments, he's also now promising or

that he wants to recommend a bonus of

$10,000 per person like air traffic

controller

who did not take time off during the

government shutdown. Because obviously

when people stop getting paid, they get

told like, "Hey, like you're not getting

paid. you know, you're supposed to show

up to work, but if you don't, like, I

don't fault you. But then there are some

people who are like, "No, man. You know,

my mission is showing up every day and

trying to keep America operating." And

they show up to work. And Trump is like,

"Hey, we want to reward those people."

Now, one of the reasons Donald Trump is

doing this sort of like, "Hey, let me

throw cash at people, whether it's

$2,000 to low and middle inome

individuals and throw money at air

traffic controllers who are working for

their living every single day," is

probably because of what the economist

says. The Economist just did this great

breakdown of four groups that used to

support Donald Trump that are all all of

a sudden lacking based on the last

election. Those are ArabAmericans,

Hispanic Americans, younger Americans,

and women. So, these are groups that

were all voting for Donald Trump when he

was running against Kla Harris. But now

all of a sudden you're seeing these

minority communities and these other

groups tilting back towards Democrats

and those margins are getting flipped

towards the Democratic side. See both

count and they they they go granular

here and I'm going to give you the

summary of it but basically they go very

granular say counties with large

Hispanic populations were groups that

Trump previously wooed but that's now

being flipped over. Right? So now all of

a sudden what you have is Trump a little

bit freaking out going, "Hey, you know,

we need rate cuts at the Fed and we need

to really help out the people that we're

now losing. So let's offer them money

before midterms so we don't get

shellacked in midterms." The problem of

course with this is at the same time as

Trump is hoping for this, you also have

a Federal Reserve that's extremely

confused with what the hell they want to

do. And it a lot relates to what Academy

Securities is talking about regarding

interest rate hikes. Now, this is quite

interesting. So, Academy Securities put

out a piece and they argue that look, if

we actually looked at 2021 and 2022 when

we were printing stimulus checks, we saw

true inflation skyrocket. The problem

with true inflation skyrocketing is it's

an underused

guide for what's happening with

inflation because the Fed likes to use

CPI, but CPI lags massively. So, what is

surprised? We were about a year late on

inflation because it lagged massively

when the Fed uses CPI as a core

component of PCE, which is their

preferred gauge. Uh, and then all of a

sudden the Fed's late to raise rates. If

they listen to true inflation, no

problem. Well, what's happening with

trueflation now is we're slowly starting

to see a little bit of an uptick. In

fact, the writer here at Academy

Securities says true inflation is

creeping back above 2.5%. Now, that

extra.5% may be entirely because of

tariffs. So, it could be Trump's own

doing, but here you've got Academy

Securities warning that we've got to be

worried about inflation going back up.

And there's actually an argument for

higher yields instead of lower yields in

the near term. Now, of course, there's

plenty of data suggesting that the

economy is weakening, but this is where

you're getting this debate at a really

ins like a really sensitive time for the

economy between Fed officials and it's

creating a lot of problems and I'm going

to break down what some of those

problems look like and then I want to

break down what the Fed is saying here

because you could see the confusion. But

understand the problems here. So on on

one hand, so these are going to be like,

you know, negative supports. Okay,

negative supports are tariffs because

obviously they're going to at least

create a risk of perpetual inflation.

They create, as we hear, it's one-time

inflation. One-time inflation effects

though, one-time inflation effects can

create perpetual uh perpetual inflation

threats. So therefore, tariffs hurt, but

also a negative support for cutting

rates. So I'll say for cutting another

negative support for cutting is issuing

a $2,000 stimulus check. Right? those

won't actually encourage the Federal

Reserve to cut because they're both

going to be inflationary issues. But at

the same time, positive supports for

cutting are obviously what we're seeing

in the highest layoffs uh uh layoff

announcements year to date uh and in in

in a Q4

uh and in Q4 in, you know, over what 15

years, right? Going back to the the the

Great Recession, which isn't great. So

layoffs aren't doing very well. The ADP

3-month trend is basically zero for job

gains. We have job cut announcements.

Job cut announcements like to come,

right? To be like job cut announce

plans. They're called job cut plans.

Plan announcements. There we go. Plan

announcements. Those are the highest

since 2008. That's not good either,

right? Because it's not just the layoffs

that have been announced, but the fact

that companies are saying, "Yeah, we're

planning to announce layoffs. You know,

in the last ADP report, we saw those

were at 450 announcements." That's the

highest level of announcements that

we've seen, especially going into the

holiday season in quite a while. So,

these are positive supports for cutting

in addition to what we're seeing with,

you know, the K-shaped recovery, right?

So, K-shaped recovery of stock investors

and wealthy investors doing well with

spending. But the problem is that doing

well with spending isn't ubiquitously

felt for everybody. That's why so many

people are clamoring for some form of

relief like a $2,000 stimulus check. It

makes sense. But look at what the

federal or here let me tell you what the

Federal Reserve talked about today. And

this is where you're getting this

division. On one hand, you've got uh Mr.

who is saying that, hey,

rate cuts that we've made were insurance

for the labor market and we're going to

see a boom in the first quarter of 2026

because you're going to see a

combination of rate cuts, deregulation,

and the the government spending money

again as the government reopens. The

labor market's been cooling down, but

it's all orderly. Everything's fine. So,

you've literally got one guy at the Fed

going, "Hey guys, everything's fine.

Like, it's good. We're going to go back

to the moon next year. which is great. A

lot of people, especially in the stock

market, want to hear that because you

want to keep making money. And you have

other people at the Fed like this as

well, like Schmid, who's like, "Dude, we

don't even need to rate cut rates

anymore." This is why a rate cut in

December is basically a coin toss right

now. It's sitting at 63%.

63% odds of a rate cut in December is

like, "We don't know. We're 50/50 on

whether we're going to get a rate cut or

not." Daily this morning spoke. She

says, "The tariff effects so far have

been contained to goods." Okay. Okay.

Well, remember how I said that risk of

perpetual inflation? The risk of

perpetual inflation is as soon as the

tariff effects get uncontained from

goods. That's why she's saying it cuz

she's like, "Hey, so far we're good.

Hopefully, it stays that way. As soon as

it spills over, you got a problem. It's

hard to put the uh inflation genie back

in the bottle as people say." So, this

is why people are like, "I don't know.

Should we be cutting right now?" And

then, of course, you get Myron. Myron's

like, "Hey, Fed policy really lags."

Now, this is the Trump shill, but he's

also pretty good. I like him. So, he

says, "If you look at financial

conditions and private credit and

housing, you have a whole host of issues

that suggest we should be cutting, maybe

even 50 basis points in December, at

minimum 25. The labor market data we

have so far is stale, but everything we

have so far is saying we should be

cutting. And yeah, of course, is there a

risk of overstimulating in 12 to 18

months?" His argument is, listen, if

you're making policy using today's data,

you're looking backwards 12 to 18

months. You got to make policy based on

where we're going. And the trend is

falling employment, softer ADP, higher

layoffs,

and more layoff announcements coming.

That is the trend. He's right about

that. So, it probably makes sense for

the Federal Reserve to cut. But the

problem is Donald Trump is kind of

shooting this potential for rate cuts in

his own foot. like Trump wants the rate

cuts, but tariffs make rate cuts harder

because they create this uncertainty

around perpetual inflation. And then of

course stimulus checks also create a

risk of substantially more inflation,

which again then says, well, maybe the

Fed shouldn't cut. So Trump's policies

don't really align with encouraging the

Fed to cut, even though Donald Trump is

demanding the Fed cut. Now Myin also

talks about private credit, which is a

big deal. I mean, Black Rockck, listen

to this. This is crazy. A month ago,

Black Rockck deemed the private credit

it had extended to Renovo Home Partners,

a struggling home improvement company,

to be worth a hundred cents on the

dollar. As of last week, the firm had a

new assessment. It's actually worth

zero. I mean, this is literally like the

South Park meme where you go into the

bank and you go, "Hey, man, how much my

my how much is my $100 worth right now?"

$100. And then it's gone. What do you

mean it's gone? It's gone. All of it.

It's gone. In fact, you can't even sit

here anymore because this seat is only

for customers of the bank and because

you don't have any money. You're not a

customer anymore. So, leave. That's

scary. Now, then again, I'm a little bit

skeptical on how bad this private

private credit issue really is because

it turns out that you remember the whole

collapse that we covered on the channel.

You know, they were given loans to

undocumented immigrants in Texas. Since

it's probably not a surprise that when

the border got shut down and and you

know new loans dried up and other people

were getting deported, it's probably not

a surprise that all of a sudden went

bankrupt. Well, apparently they were

actually sort of they flagged by this

company called Waterfall Asset

Management. And what's interesting is if

Waterfall Asset Management reported them

and they just took on another

750 million pounds

uh of of funding basically bringing the

new total of funding to 3 billion

pounds. It doesn't seem like they're

actually terribly worried about private

credit. But then what did they do

toricolor? Well, what happened was

Waterfall Asset Management Per Bloomberg

per Bloomberg Waterfall Asset Management

actually called up JP Morgan and said,

"Hey, we think something sus is going on

over here at Tricolor."

JP Morgan then calls him up, the CEO,

and then very rapidly rug pulls their

warehouse line of credit and then wow,

what a surprise, the company collapses.

So, it's really interesting because like

what we heard, right? So, we heard

collapsed, Jamie Diamond says there are

cockroaches.

Uh, you know, and then and then all of a

sudden, Renovo collapses. Oh my gosh,

Jamie must be right.

Right. That's that's what we heard.

That's what we were told like in in the

public. the uh you know us uh us

peasants in the public compared to the

suits who have all the insights. But

what actually happened

which is so interesting because it's

sort of like expectation versus reality.

But anyway, what actually happened is

you actually saw Tricolor gets uh thrown

under the bus by Waterfall who's

borrowing like crazy in private credit,

you know. So, it's like they haven't

slowed down at all. They just throwric

under the bus. JP Morgan rugpulls

theirricolor uh warehouse line of

credit. This is why I've been warning

like you got to be careful with these

big banks, right? Like they they will

rug pull you and not even care. Uh and

then, you know, we we see uh Jamie

Diamond, you know, come out about

cockroaches, but he's actually part of

the reason

that thisolor collapse happened because

sure like either is possible, right?

It's possible was a fraud or it's

possible they got thrown under the bus.

Maybe they weren't a fraud and JP Morgan

just got a little, you know, scared for

whatever reason and just rugpulled them.

It kind of makes you nervous about

having having debt with JP Morgan. Now,

it's funny. I was mentioning this this

morning in the course member live stream

in the alpha report, but you know people

make this quote or or or circulate this

quote on uh mostly on X and stuff like

that. They say things like this. If you

borrow $100 million or sorry, if if you

borrow if you borrow, you know,

$500,000, let's call it, the bank owns

you, right? People make this quote all

the time. And then they say, if you

borrow $100 million, you own the bank.

And then I follow this up and go, "Uh,

no. When JP Morgan has over $1.4

trillion dollars in assets, a hund00

million is literally like you having

$250,000 in a bank account and your

child asks you for $17.85 for their book

club." In other words, JP Morgan doesn't

give a flying crap about your $100

million. It's pennies to them.

So JP Morgan will be more than happy to

rugpole you whether or not any of the

allegations are founded or not. So it

kind of makes me wonder like is there

really a private credit issue or is this

just JP Morgan being the jerks that JP

Morgan is? They go around rugpole

people. I don't know. The lesson to me

is you got to be really cautious

trusting the big the big banks because

they can rug pull you at any time. I

don't think we hate the big banks

enough. Now, don't get me wrong, I do

think there are risks with these private

credit rating agencies. You know,

Financial Times has this whole piece

today about like this growing risk of

Morning Star or Croll or HR ratings or

Egan and Jones. Basically, these

companies issuing private credit rate

letters that are not publicly disclosed

and it's like, hey, they could all be

bad. I agree. They could all be bad

because you have to understand how

private credit really works like these

ratings.

If you go shop them up and you go call

them and go, "Hey, we're looking to get

a, you know, a rating on this pile of

shit." Basically, uh, we're looking to

get a rating on this, you know, how much

are you going to charge? How much are

you going to charge? How much are you

going to charge? Like on the phone, some

of these companies are going to be like,

"Hey man, we might be a little more

expensive, but but we'll get you that

AAA." You know, like we don't know

that's happening for sure, but we could

guess that's happening because these

rating agencies, they don't really care

if the loans go bad because it'll just

be like a whole systemic shock and

crisis and how could anybody have known,

whatever. They want their money now,

baby. So, if you try to put all this

together,

you're in a really teeter totter

position in the economy. This is why,

you know, if you go to meet

Kevin.com/data, this is free, okay? You

go to meet me.com/data,

I put the um uh the bare bull scale. And

so I update this every so often. It's by

the way also where you could sign up if

you want for the totally free daily

wealth email. If you put your email in

here, we'll send you that daily wealth

email all the time. I also have the taco

scale for Trump, you know, always

chickens out score. But anyway, which

has been very supportive for the market

so far. But I mean like if you put all

of this together, it's really hard to

say, "Oh, we should be 10 out of 10

bullish." And it's also really hard to

say we should be one out of 10 bearish,

right? Because think about it. You have

you have true evidence that says, yeah,

there are really actually inflationary

effects in the economy. You know,

stimulus checks are inflationary.

tariffs are at least short-term

inflationary and those could become

perpetual inflationary issues. Okay.

Then on the flip side, you got all this

jobs data that basically says our jobs

market is utterly collapsing and the

consumer is completely destroyed. You

know, but then you have people like

Muslim over at the Fed who are like,

"Oh, but financial conditions are are,

you know, very very loose. Like this is

very supportive." But then Meyer

encounters and says, "Yeah, but that's

because you're looking at stock

valuations which are at all-time highs."

So if you take the peg leg of the stock

market away, you got really tight

financial conditions overnight. You

could have really tight financial

conditions, which is really bad because

it, you know, could lead to a lot of

pain very rapidly. So that's the teeter

that you're on. On one hand, you got a

really seriously slowing down labor

market. You know, people don't pay

attention to this as as much as they

should. But remember what I broke down

in that ADP report. The ADP report was

above trend. That was fantastic. It was

above that 3-month trend we wanted. Nick

T pointed that out. I've been pointing

that out. This was great. The 3-month

trend stayed positive. The break even

labor report is probably closer to 0 to

20. We got 40. That's great. But the

concentration was what nobody paid

attention to that it was basically just

West Coast. Well, what happens when all

of a sudden that West Coast hiring

stops? Now labor falls off a cliff. Then

financial conditions tighten at the same

time as you have lingering inflation

because then almost certainly you're

going to get your stimulus checks of

$2,000 because if the economy goes into

recession, Trump's just going to print

money. That's going to be his goal. It's

going to he's going to print checks. So

debt's going to go through the roof even

more. But stock values then collapse.

So, you have this insane

uh uh position you're in in the economy

right now. And it's so hard to say which

way are we going to blow. Like the wind

could blow in one direction and that's

it. Labor recession or Q1 boom,

everything's skyrocketing again.

Everybody's hiring again. It's all going

to be predicated on hiring again and us

not, you know, tipping over. But put all

of this together,

man, this is a very, very, very, very,

very bizarre place to be in. And so it

makes sense why people are like, I I

don't know. Are we going to get a rate

cut in December or not? It makes sense

why you got half Fed members going, we

want the rate cut and the other half

going that we don't want the rate cut

cuz nobody freaking knows.

And that's why I like my point of view

and my bottom line recommendation, which

obviously isn't personalized financial

advice for you because I don't know your

situation, but my personal my personal

bottom line recommendation when you're

in this sort of crap environment where

we could blow either way where the bears

are right or the bulls are right. The

best thing to do in that sort of middle

ground is get the hell out of debt cuz

as much as you can. Okay, top priority

number one, no margin debt. get rid of

these lines of credit that the banks

could rug pull you on. Like imagine

this. Imagine you just took out a

$500,000 home equity line of credit. You

put it all in the stock market. You put

it all into Tesla stock at 450. Okay?

Then we get a bad jobs report or

whatever. Tesla goes to 200. Now your

500 grand is 250. And then JP Morgan,

because they're scumbags and you should

never trust this bank, calls you up and

goes, "Hey guess what? you owe me

500 grand back right now. And you're

like, what are you talking about? It's

it's a 10-year home equity line of

credit and and and you know, I thought I

was able to pay this back over 30 years

after it goes into the amortization

period. And they're like, "Yeah, bro.

Read the fine print. We could call it at

any time." I mean, I don't know if your

loan says that, but you just got to be

careful. Certainly, that's true on

margin loans. Apparently, it's true on

on uh um what's it called? These um

warehouse lines of credit for

businesses. is exactly what they did

toricolor and that's why they went BK.

Uh or at least contributed to it. Who

knows? Maybe they were a fraud, too. I I

don't know. [clears throat] And then,

you know, this is the same thing that

when I bought my plane, they tried to do

to me. And I'm like, hell no, I'm going

to fall for that. See, when I bought my

plane, I got a plane loan at another

lender that was a 20-year fixed rate

loan. No margin provision. Like, you

can't margin call it. It's 20-year fixed

rate. You make your payment every month,

you pay it off. Doesn't matter what the

value of the asset is. JP Morgan is

like, "Oh, we want an annual right to

remar, which means every single year

they could have their own opinion of

value and they go, "Yeah, now we want an

extra 2 mil." Out of the blue and then

what? You got to raise money when the

stock market. It's insane. I think JP

Morgan just sort of like like rests on

their laurels of the name of being

baker, whatever. But that's all it takes

for the banks to like imagine when the

banks start rugpulling more businesses.

Jeez, I hope they don't. But that's why

I I try to stress that to my audience,

to you, whether you're a course member

or not. Like I appreciate you watching

me. I just don't think that people uh uh

caution enough how dangerous these

margin loans are because all it takes is

the DTCC changing collateral

requirements and all the broker dealers,

M1 Finance, Robin Hood, all of them

calling you up and going, "Hey, you

know, you used to borrow up to this much

on Tesla. Now you can only borrow a

fraction as much." And then you get

rugpulled and that can happen overnight.

And it always happens at the worst time.

So that's it. That's it. That's that's

my take. Now, hey, you know, we got an

update on the checks, but ironically,

the checks

pressure inflation, which probably gives

the Fed even more pause. It's a bizarro

environment. I can't handle it.

>> Why not advertise these [music] 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 Praath there, financial

analyst and YouTuber, Meet Kevin. Always

great to get your [music] take.